Document:

Unassociated Document

Exhibit 10.4

EXCLUSIVE LICENSE AND OPTION AGREEMENT

 

This Exclusive License and Option Agreement (“Agreement”) is made effective as of September 23, 2011 (“Effective Date”) by and between Health Research, Inc., Roswell Park Institute Division, a domestic not-for-profit corporation (“HRI”), Roswell Park Cancer Institute Corporation, a New York corporation (“RPCI”) (HRI and RPCI are, collectively, “RPCI”), and Panacela Labs, Inc., a Delaware corporation (“Panacela”).  The parties hereto are additionally referred to individually as a “Party”, and collectively, the “Parties”.

 

WHEREAS, RPCI is a National Cancer Institute designated Comprehensive Cancer Center, which sponsors and conducts basic research and clinical trials relating to the causes, treatments, and prevention of the various forms of cancer and related diseases;

 

WHEREAS, RPCI possesses certain rights in and to certain patents, products, technology, and know-how, including the Licensed Rights (as defined below);

 

WHEREAS, Panacela is focused on development of a new generation of pharmaceutical drugs, including an initial focus on innovative oncology therapies; and

 

WHEREAS, RPCI desires to grant, and Panacela desires to accept, a license under the Licensed Rights.

 

NOW, THEREFORE, in consideration of the promises in this Agreement, the mutual covenants and agreements set forth below, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

 

	
1.

	
DEFINITIONS

 

In addition to the other terms defined herein, this Agreement uses the following defined terms:

 

	
  

	
1.1.

	
  “Affiliate” means any individual or entity directly or indirectly controlling, controlled by or under common control with, a Party.  For purposes of this Agreement, (i) the direct or indirect ownership of fifty-one percent (51%) or more of the outstanding voting securities of an entity, (ii) the right to receive fifty-one percent (51%) or more of the profits or earnings of an entity, or (iii) the power to direct or cause the direction of the management or policies of an entity shall be deemed to constitute control. Such other relationship as in fact results in actual control over the management, business and affairs of an entity shall also be deemed to constitute control.

 

	
  

	
1.2.

	
  “Application” means the intended use for a Licensed Product, including the diagnosing, treating, curing, mitigating, and/or preventing a disease or other condition in a human or other animal, such as small cell lung cancer, large cell lung cancer, or other specific disease state, for which such Licensed Product is being developed, and/or tested by a Party hereto or any Affiliate or Sublicensee(s) of such Party or has been approved by the FDA or foreign body licensing equivalent for commercial sale.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Exchange Act of 1934, as amended.

 

  

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1.3.

	
“Employee” means employees, contractors, leased employees and agents of RPCI or Panacela.

 

	
  

	
1.4.

	
  “Improvement Invention” means RPCI’s rights in any improvement, enhancement, addition, or adaptation to any Licensed Patent, which is owned by RPCI, actually assigned to RPCI, or is subject to an obligation to assign such to RPCI pursuant to an agreement with RPCI, that is sufficiently different from the scope of a Licensed Patent to be separately patentable, and covered by the claims of Licensed Patents that is conceived and reduced to practice during the five (5) years after the Effective Date.

 

	
  

	
1.5.

	
“including”, “include”, and variants of the foregoing mean including but not limited to.

 

	
  

	
1.6.

	
“INDA” means an investigational new drug application also known as a “Notice of Claimed Investigational Exemption for a New Drug” or a therapeutic biologic application (“BLA”) filed with the FDA, as defined, respectively, in 21 CFR Part 312 and 21 CFR Part 600-680, or any and all foreign equivalents.

 

	
  

	
1.7.

	
“Indication” means the United States Federal Drug Administration (“FDA”), or foreign licensing body equivalent, approved labeled usage for a Licensed Product.  For purposes of this Agreement, Indication shall exclude Supplemental New Drug Application (“SNDA”) approvals that solely permit changes in dosage form or strength or administration method, e.g., pill to injection.

 

	
  

	
1.8.

	
“Know-How” means, to the extent owned by RPCI (i) all unpatented or unpatentable subject matter disclosed within the Licensed Patents described in Exhibit B and all patents anywhere in the world issued thereon; and (ii) unpatented or unpatentable Project Information created by or under the direction of a Scientist during the five (5) years after the Effective Date and made available to Panacela.

 

	
  

	
1.9.

	
  “Licensed Field” means all fields of use.

 

	 	
1.10.

	
“Licensed Patents” means RPCI’s rights in and to: (i) the patent applications described in Exhibit B and all patents anywhere in the world issued thereon; and (ii) all continuations, continuations in part to the extent the claims are directed to subject matter specifically described in such corresponding parent application, divisionals, reexaminations, extensions, and reissue applications thereof, and all foreign applications and patents corresponding thereto, with respect to any of the foregoing applications.

 

	 	
1.11.

	
  “Licensed Products” means any and all products and processes that contain, employ or are in any way made or produced using, or by the practice of the Licensed Patents, licensed Improvement Inventions, the Technology, or the Know-How.

 

	 	
1.12.

	
  “Licensed Rights” means the Licensed Patents and Know-How.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Exchange Act of 1934, as amended.

 

  

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1.13.

	
“NDA” shall mean a new drug application, as defined by 21 CFR Part 314, or a BLA as defined by 21 CFR Part 600-680, submitted to the FDA or an equivalent foreign regulatory agency.

 

	 	
1.14.

	
“Net Sales” means the aggregate gross invoice prices of Licensed Products sold by Panacela, its Affiliates and its Sublicensee(s), to or on behalf of one or more independent third parties in bona fide, arm’s-length transactions, less the following actual, reasonable, and customary deductions where applicable: (i) trade and quantity discounts, (ii) returns and allowances, (iii) chargebacks and rebates mandated by law or contract, (iv) governmental surcharges on particular sales, such as custom duties, tariffs, and sales and excise taxes, and (v) separately stated and paid out-of-pocket transportation and insurance charges 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”), 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 a non-Affiliate third party, 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 a non-Affiliate third party.

 

If a Licensed Product is sold, used, or otherwise disposed of but not in an arm’s length transaction for fair market value, Net Sales shall mean Panacela’s open market price for such Licensed Product in the country and on the date of such disposition after taking into account the exclusions in Sections 1.12(i) – (v). Alternatively, if there is no market price, Net Sales shall mean an imputed price determined on a commercially reasonable basis, which shall be no less than the price of commercially available products materially similar to Licensed Products.

 

	 	
1.15.

	
“Non-Improvement Invention” means RPCI’s rights in: (i) any invention comprising Technology, which is conceived or reduced to practice under the direction of a Scientist that is not an Improvement Invention, and which is owned by RPCI, actually assigned to RPCI, or is to be assigned to RPCI pursuant to an agreement with RPCI; or (ii) any invention comprising Technology conceived or reduced to practice jointly by Employees of both Panacela and RPCI that is not an Improvement Invention, and with respect to (i) and (ii), rights which are owned by RPCI, are actually assigned to RPCI, or are to be assigned to RPCI pursuant to an agreement with RPCI.

 

	 	
1.16.

	
“Patents” means any patent or patent application, whether domestic or foreign, and all divisions, provisional applications, continuations, continuations-in-part, reissues, reexaminations or extensions of any of the foregoing, and any letters patent that issue on any of the foregoing.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Exchange Act of 1934, as amended.

 

  

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1.17.

	
“Phase II clinical trial” means that portion of the clinical development program which provides for the initial trials of a product on a limited number of patients for the primary purpose of evaluating safety, dose ranging and efficacy in the proposed therapeutic indication, as more precisely defined by 21 CFR Part 312.21(b) and corresponding rules and regulations in other countries.

 

	 	
1.18.

	
“Project Information” means RPCI’s rights in all inventions, data, results, trade secrets, methods, developments, materials, compositions of matter of any type or kind, expertise, formulas, technology and processes, whether patentable or not, arising during and in the course of carrying out those projects described in Exhibit B, which may be amended from time to time by mutual consent of the Parties.

 

	 	
1.19.

	
“Project Information Licensed Field” means for the purposes of (i) research and development; and (ii) regulatory, export control, and other government filing.

 

	 	
1.20.

	
“RPCI Intellectual Property” means the Licensed Patents, Technology, Know-How, and any Improvement Inventions licensed or optioned to Panacela pursuant to this Agreement.

 

	 	
1.21.

	
“Scientist” means those Employees of RPCI listed in Exhibit C, which list may be updated from time to time by the mutual consent of the Parties.

 

	 	
1.22.

	
“Technology” means RPCI’s rights in all inventions, data, results, know-how, trade secrets, techniques, methods, developments, ideas, creations, concepts, materials, compositions of matter of any type or kind, expertise, formulas, technology, process, or discoveries, whether patentable or not, directly relating to or involving the use or development, of four lines of drug candidates, namely Revercom, Mobilan, Antimycon and Arkil (as further described on Exhibit A) during the five years after the Effective Date.

 

	 	
1.23.

	
“Territory” means worldwide.

 

	 	
1.24.

	
“Valid Claim” means, on a country-by-country basis, either an unexpired claim in a patent application or an issued unexpired patent within the Licensed Patents that has not been revoked, abandoned, disclaimed or withdrawn, or held unenforceable, unpatentable or invalid by a court of competent jurisdiction in a final judgment that has not been appealed within the time allowed by law or from which there is no further appeal.

 

	
2.

	
GRANT

 

	
  

	
2.1.

	
Exclusive License.  Subject to the terms and conditions of this Agreement, RPCI hereby grants to Panacela an exclusive license under the Licensed Patents in the Territory to: make, have made, develop, use, practice, import, export, distribute, market, promote, offer for sale, and sell Licensed Products in the Licensed Field.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Exchange Act of 1934, as amended.

 

  

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2.2.

	
Non-Exclusive License.  Subject to the terms and conditions of this Agreement, RPCI hereby grants to Panacela a non-exclusive license in the Territory under RPCI’s rights in the Know-How to use and practice any method, process, or procedure within the Know-How and otherwise use and exploit the Know-How; all in the Licensed Field; provided however, that with respect to Project Information, such non-exclusive license shall be limited to the Project Information Licensed Field.

 

	
  

	
2.3.

	
Retained Rights.  Notwithstanding the foregoing or anything else herein to the contrary, RPCI shall retain a non-exclusive right to use and practice the RPCI Intellectual Property, Licensed Patents and Non-Improvement Inventions for research, education, and teaching purposes, including licensing to other non-profit research organizations..

 

	
  

	
2.4.

	
Affiliates.  Panacela may, subject to the terms and conditions of this Agreement and with the prior written approval of RPCI, which shall not be unreasonably withheld, conditioned or delayed, extend the right and license granted to Panacela under Sections 2.1 and 2.2, or part thereof, to any Panacela Affiliate by contract, provided that such Affiliate consents to be bound by the terms of this Agreement to the same extent as Panacela.  Such approval shall not be unreasonably withheld, conditioned or delayed and RPCI shall provide such approval or denial to Panacela within fifteen (15) days of RPCI’s receiving any proposed extension documentation from Panacela after the Effective Date.  Each such contract with a Panacela Affiliate shall include all the protections provided to RPCI under this Agreement and provisions designating RPCI as a third party beneficiary with full right and authority to enforce such contract against the Panacela Affiliate if Panacela fails or refuses to do so.  Notwithstanding the foregoing, the Parties acknowledge that Panacela plans to extend this Agreement to Panacela’s wholly-owned subsidiary Panacela Labs, a limited liability company formed under the laws of the Russian Federation (“PLLLC”) by contract on or shortly after the Effective Date (the “Extension”).  The Extension shall be subject to the prior written approval requirements of this Section 2.4 or Section 2.5, depending on the nature of the relationship delineated in the Extension Agreement, and Panacela shall obtain RPCI’s prior written approval, which shall not be unreasonably withheld, conditioned or delayed, to the Extension in the ordinary course following the Effective Date.  However, for a period of one year from the Effective Date or until the Extension is executed consistent with the terms of this Agreement, whichever is shorter, RPCI hereby consents to Panacela allowing PLLLC to act on Panacela’s behalf solely within the Commonwealth of Independent States, understanding that all of PLLLC’s efforts will be on Panacela’s behalf and under Panacela’s contractual rights under this Agreement and that all acts and omissions of PLLLC shall be the responsibility of Panacela as though carried out by Panacela itself.  For the avoidance of doubt any contracts addressing the subject matter of this Agreement and PLLLC shall have Panacela as a party and all of PLLLC’s Affiliates shall be considered Panacela’s Affiliates for purposes of obligations under this Agreement.  Further, Panacela agrees to bind PLLLC to all terms of this Agreement as though it were Panacela and such obligations were carried out by Panacela.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Exchange Act of 1934, as amended.

 

  

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2.5.

	
Sublicenses.  Panacela or an Affiliate may, subject to the terms and conditions of this Agreement, with the prior written approval of RPCI, grant sublicenses to third parties (“Sublicensee(s)”) under the License (“Sublicenses”).  Such approval shall not be unreasonably withheld, conditioned or delayed and such approval or denial shall be provided to Panacela by RPCI within fifteen (15) days of RPCI’s receiving any proposed Sublicense from Panacela after the Effective Date.  Each Sublicense shall include all the protections provided to RPCI under this Agreement and provisions designating RPCI as a third party beneficiary with full right and authority to enforce the Sublicense against the Sublicensee(s) if Panacela fails or refuses to do so. Subject to the terms and conditions of this Agreement, upon expiration or termination of this Agreement for any reason, any and all Sublicenses with Sublicensee(s) that are in substantial compliance with the terms of such Sublicenses shall survive such termination, provided, however, RPCI shall not incur any obligation to any Sublicensee(s) not already incurred to Panacela by RPCI under this Agreement.

 

	
3.

	
OPTION

 

	
  

	
3.1.

	
Grant of Option.  RPCI hereby grants to Panacela an exclusive option to exclusively license any and all Improvement Inventions and an option to negotiate an exclusive license to all Non-Improvement Inventions (the “Option”) that are conceived and reduced to practice up until the fifth anniversary of the Effective Date. RPCI will provide Panacela written notice (each, an “Option Notice”) of any Improvement Invention or Non-Improvement Invention within thirty (30) days of the actual knowledge of the Director of RPCI’s Technology Transfer Office’s of the existence of such Improvement Invention or Non-Improvement Invention, which Option Notice shall include information submitted to RPCI’s Technology Transfer Office for Panacela to assess the patentability of the applicable Improvement Invention or Non-Improvement Invention.

 

	
  

	
3.2.

	
Exercise.  Panacela may exercise the Option with regard to the applicable Improvement Invention or Non-Improvement Invention by providing written notice thereof to RPCI upon the earliest of: (i) sixty (60) days after receipt of the Option Notice, (ii) sixty (60) days after an executive officer or Board member of Panacela becomes aware that an Improvement Invention or Non-Improvement Invention exists; and (iii) one hundred eighty (180) days after Panacela becomes aware that an Improvement Invention or Non-Improvement Invention exists under all other circumstances.

 

	
  

	
3.3.

	
Improvement Invention.  Upon exercise by Panacela of an Option to an Improvement Invention pursuant to Section 3.2, the Patents disclosing such Improvement Invention shall immediately be deemed to be Licensed Patents and shall be governed by the terms and conditions of this Agreement, but in no event shall any Improvement Invention, even when deemed within Licensed Patents, be the basis for characterizing subsequent technological advances of any sort as Improvement Inventions under this Agreement.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Exchange Act of 1934, as amended.

 

  

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3.4.

	
Non-Improvement Invention.  Upon exercise by Panacela of an Option to a Non-Improvement Invention pursuant to Section 3.2, the Parties will negotiate in good faith for up to one hundred twenty (120) days (“NII Option Negotiation Period”) an exclusive license agreement to such Non-Improvement Invention (“Optioned NII”) which exclusive license agreement shall include the non-financial terms of this Agreement with financial terms to be agreed upon by the Parties during the NII Option Negotiation Period. After the expiration of the NII Option Negotiation Period, RPCI may license the Optioned NII to any third party.

 

	
  

	
3.5.

	
Limitation.  The rights granted pursuant to this Article 3 shall be subject to any obligations of RPCI existing prior to the Effective Date, subject to the limitations set forth in the Cleveland BioLabs, Inc. waiver, and to any obligations to the U.S. federal or New York state government associated with funding now or later in effect.

 

	
4.

	
CONSIDERATION.  In partial consideration of rights granted by RPCI to Panacela under this Agreement, Panacela will pay RPCI as follows:

 

	
  

	
4.1.

	
[***]

 

	
  

	
4.2.

	
Royalties.

 

	
  

	
4.2.1.

	
Royalty Rate.  On a country-by-country basis, Panacela shall pay RPCI a running royalty rate, as follows:

 

	
  

	
4.2.1.1.

	
[***] percent ([***]%) of Net Sales for each of the first and second Licensed Products approved for commercial sale for use in humans or other animals by the FDA or foreign licensing body equivalent (“Initial Products”) covered by a Valid Claim, and with such percentage to be decreased by [***] percent ([***]%) for the first and second Initial Products not covered by a Valid Claim; and

 

	
  

	
4.2.1.2.

	
[***] percent ([***]%) of Net Sales for all Licensed Products sold before approval for commercial sale for use in humans or other animals by the FDA or foreign licensing body equivalent and/or the third and each subsequent Licensed Product (e.g., receiving FDA approval after the Initial Products) approved for commercial sale for use in humans or other animals by the FDA or foreign licensing body equivalent, covered by a Valid Claim and with such percentage to be decreased by [***] percent ([***]%) for any such Licensed Product not covered by a Valid Claim.

 

	
  

	
4.2.1.3.

	
For clarity, each additional Indication for a Licensed Product shall be considered a separate Licensed Product under Section 4.2.1.1 or Section 4.2.1.2, as applicable.

 

	
  

	
4.2.2.

	
Royalty Term.  Panacela shall pay royalties on Net Sales for as long as a Valid Claim exists in the applicable country at the rate specified above in Section 4.2.1. Panacela shall also pay royalties on Net Sales for a period of twenty (20) years following the Effective Date where there is not a Valid Claim covering the Licensed Product in a given country. If the sale of a Licensed Product is covered by more than one Licensed Patent, multiple royalties shall not be due. At the end of the royalty term in any country, Panacela shall have a fully paid-up license for the Licensed Products in such country.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Exchange Act of 1934, as amended.

 

  

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4.2.3.

	
The obligation to pay royalties shall be waived and excused to the extent that statutes, laws, codes, or government regulations (including currency exchange regulations) of any foreign country in which Licensed Products are sold prevent such royalty payments. In such event, the Parties shall negotiate a mutually acceptable arrangement that preserves the benefit of this Agreement for each of the Parties, e.g., by increased royalties in another country.

 

	
  

	
4.2.4.

	
The amount of royalties shall be reduced proportionately on a country-by-country basis by the amount of royalties paid to non-Affiliate third parties by Panacela, an Affiliate, or a Sublicensee(s) of either for a license to patent rights necessary for Panacela, its Affiliate, or a Sublicensee(s) or either to make, have made, use, offer to sell, sell, or import Licensed Products pursuant to arm’s length agreements entered into in good faith with such unaffiliated third parties owning or controlling patent rights which, but for such agreements, would bar the manufacture, use, sale, or import of a Licensed Product (“Blocking Technology”), provided, however, the minimum royalty due under this Section 4.2 shall not be less than the royalty rates set forth in Section 4.2.1.1 and Section 4.2.1.2, as applicable. Panacela shall promptly inform RPCI if Panacela becomes aware of any potential Blocking Technology. In addition, if any seller of Licensed Products enters into any agreement with the owner or controller of any such Blocking Technology, Panacela shall insure that RPCI is treated no worse than such owner or controller with respect to a deduction or other offset of royalties or other compensation in connection with any Blocking Technology.

 

	 	
4.2.5.

	
Furthermore, if a compulsory license is granted to a third party with respect to a Licensed Product, the royalty rate to be paid by Panacela to RPCI for sale of such Licensed Product in that country shall be reduced to the rate paid under the compulsory license. Panacela shall provide RPCI all reasonably requested evidence regarding any such compulsory license, as allowed under applicable law.

 

	
  

	
4.2.6.

	
Sublicense Fees.  Panacela will pay the following sublicense fees in connection with sublicensing rights regarding Licensed Products:

 

	
  

	
a)

	
Where a Sublicense has been granted prior to the filing of an INDA for a Licensed Product covered by such Sublicense, Panacela shall pay to RPCI: [***] percent ([***]%) of any and all fees received from such Sublicensee(s) by Panacela or any Affiliate;

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Exchange Act of 1934, as amended.

 

  

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b)

	
Where a Sublicense has been granted after filing of an INDA for a Licensed Product covered by such Sublicense, Panacela shall pay to RPCI: [***] percent ([***]%) of any and all Sublicense fees received by Panacela or any Affiliate from such Sublicensee(s); or

 

	
  

	
c)

	
Where a Sublicense has been granted after final approval of the relevant NDA for a Licensed Product covered by such Sublicense, Panacela shall pay to RPCI: [***] percent ([***]%) of any and all Sublicense fees received by Panacela or such Affiliate from such Sublicensee(s).

 

	
  

	
d)

	
For the avoidance of doubt, in no event shall such Sublicensee(s) fees be deemed to include any royalties payable by a Sublicensee(s) on sales of a Licensed Product.

 

	
  

	
4.2.7.

	
Milestone Payments.

 

	
  

	
a)

	
As each Licensed Product progresses through developmental milestones in the United States, Panacela shall pay to RPCI milestone payments, as follows:

 

	
  

	
1)

	
For the first Licensed Product(s) related to the drug candidates described as Mobilan, Antimycon and Arkil in Exhibit A:

 

	
  

	
i.

	
For any INDA filing requesting approval for clinical trials: (1) in the United States, $[***]; or (2) when a similar milestone is reached in any other country(ies) in the world (“Other Country”), $[***];

 

	
  

	
ii.

	
Upon commencement of the first Phase II clinical trial under the INDA for which a milestone is reached to Section 4.2.7(a)(1)(i); (1) in the United States, $[***]; or (2) when a similar milestone is reached in an Other Country, $[***];

 

	
  

	
iii.

	
Any NDA filing requesting approval for sales and marketing of Licensed Product to consumers, (1) in the United States, $[***]; or (2) when a similar milestone is reached in an Other Country, $[***]; and

 

	
  

	
iv.

	
Upon regulatory approval of Licensed Product permitting it to be manufactured, marketed and sold either singly or in combination with another product, (1) in the United States, $[***]; or (2) when a similar milestone is reached in an Other Country, $[***];

 

	
  

	
2)

	
For the second and subsequent Licensed Products for new or additional Indications of each of the drug candidates described as Mobilan, Antimycon and Arkil in Exhibit A:

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Exchange Act of 1934, as amended.

 

  

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i.

	
Any NDA filing requesting approval for sales and marketing to consumers of a Licensed Product, (1) in the United States, $[***]; or (2) when a similar milestone is reached in an Other Country, $[***]; and

 

	
  

	
ii.

	
Upon regulatory approval of a Licensed Product permitting it to be manufactured, marketed and sold either singly or in combination with another product, 1) in the United States, $[***]; or (2) when a similar milestone is reached in an Other Country, $[***];

 

	
  

	
3)

	
For the first Licensed Product related to the drug candidate described as  Revercom in Exhibit A:

 

	
  

	
i.

	
For any INDA filing requesting approval for clinical trials, (1) in the United States, $[***]; or (2) when a similar milestone is reached in an Other Country, $[***];

 

	
  

	
ii.

	
Upon commencement of the first Phase II clinical trial under the INDA for which a milestone is reached pursuant to Section 4.2.7(a)(3)(i), (1) in the United States, $[***]; or (2) when a similar milestone is reached in an Other Country, $[***];

 

	
  

	
iii.

	
Any NDA filing requesting approval for sales and marketing of a Licensed Product to consumers, (1) in the United States, $[***]; or (2) when a similar milestone is reached in an Other Country, $[***]; and

 

	
  

	
iv.

	
Upon regulatory approval of Licensed Product permitting it to be manufactured, marketed and sold either singly or in combination with another product, (1) in the United States, $[***]; or (2) when a similar milestone is reached in an Other Country, $[***];

 

	
  

	
4)

	
For the second and subsequent Licensed Products for new or additional Indications of each such Licensed Product related to the drug candidate described as Revercom in Exhibit A:

 

	
  

	
i.

	
Any NDA filing requesting approval for sales and marketing of a Licensed Product to consumers, (1) in the United States, $[***]; or (2) when a similar milestone is reached in an Other Country, $[***]; and

 

	
  

	
ii.

	
Upon regulatory approval of a Licensed Product permitting it to be manufactured, marketed and sold either singly or in combination with another product, (1) in the United States, $[***]; or (2) when a similar milestone is reached in an Other Country, $[***]; and

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Exchange Act of 1934, as amended.

 

  

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5)

	
For FDA regulatory approval or foreign licensing body equivalent applications for all other Licensed Products (i.e., excluding Licensed Products related to the drug candidates described as Mobilan, Antimycon, Arkil and Revercom in Exhibit A):

 

	
  

	
i.

	
For any each INDA filing requesting approval for clinical trials, $[***];

 

	
  

	
ii.

	
Upon commencement of the first Phase II clinical trial under each INDA for which a milestone is reached pursuant to Section 4.2.7(a)(5)(i), $[***];

 

	
  

	
iii.

	
For each NDA filing requesting approval for sales and marketing of Licensed Product to consumers, $[***]; and

 

	
  

	
iv.

	
Upon regulatory approval of Licensed Product permitting it to be marketed either singly or in combination with another product, $[***];

 

in each case provided that the applicable milestone for such Licensed Product has not previously accrued for the same Indication.  Also, no new milestone payment shall be due where the submission or approval of any SNDA pertains to a variance in the drug product formulation or dosage form, strength or administration method, e.g., pill to injectable form.  For clarity, new milestone payments shall be due where a new Indication for the same Licensed Product is applied for or approved, e.g., previous approved Indication was small cell lung cancer and new applied for or approved Indication is for large cell lung cancer.

 

	
  

	
b)

	
If a milestone that was first reached in an Other Country is subsequently achieved or surpassed in the United States, such as by relying on foreign clinical trials to support an NDA filing, Panacela shall pay RPCI the difference between what was paid for the milestone in all Other Countries, if any, and what would have been due under the applicable section if the milestone had first occurred in the United States.

 

	
  

	
4.2.8.

	
Patent Costs.  Following the Effective Date, RPCI shall invoice Panacela for previously incurred patenting costs of $[***] actually paid by RPCI prior to the Effective Date, and shall provide supporting documentation thereof. Panacela shall pay such invoice within thirty (30) days following receipt of investment funds in connection with the investment into Panacela by Open Joint Stock Company “Rusnano”, provided, however, that in no event shall Panacela provide such reimbursement payment later than six (6) months following the invoice date.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Exchange Act of 1934, as amended.

 

  

11

  

 

	
5.

	
COMMERCIALIZATION. At its expense and consistent with sound and reasonable business practices and judgment, Panacela shall use commercially reasonable efforts to bring Licensed Products to market as timely and efficiently as possible, which in any event shall not be less than the efforts Panacela uses with respect to its own proprietary products for the same Application.  Such program must include the preclinical and clinical development of Licensed Products, including research and development, laboratory and clinical testing, applying for all applicable governmental approvals, and marketing and sales (“Level of Effort”).  Provided such decisions are commercially reasonable and subject to the Level of Effort required, all business decisions shall be within the sole discretion of Panacela. Panacela shall have the exclusive right to prepare and present all regulatory filings necessary or appropriate in any country to obtain and maintain any regulatory approval required to market any Licensed Product in any such country. Panacela shall plan and implement appropriate research and development, testing and production efforts directed toward commercialization of Licensed Products at a commercially practicable date and shall provide RPCI a copy of such plan and any amendments thereto.  Panacela will provide RPCI detailed written reports on a semi-annual basis detailing Panacela’s clinical, regulatory, and financial progress, except that if there is any material communication from the FDA or any other government agency related to this Agreement or the occurrence of any adverse event, Panacela shall promptly notify RPCI regardless of whether a semi-annual report is due. RPCI understands that these reports may contain material non-public information and that to such extent such reports will be considered Confidential Information pursuant to Section 12.  If Panacela fails to adhere to its diligence obligation with respect to a Licensed Product, RPCI may, in its discretion with respect to said Licensed Product: (i) terminate the License Agreement, with regard to the Product that Panacela failed to fulfill its diligence obligations hereunder, pursuant to Section 11, or (ii) terminate the exclusivity of the rights granted for such Product hereunder, in either case, if Panacela has not cured such breach within ninety (90) days of the date Panacela receives notice from RPCI of such breach, provided, however, if such breach is not capable of being cured within such ninety (90) day period, Panacela may request a reasonable extension to such period, not to exceed one hundred and eighty (180) days, which request shall not be unreasonably denied by RPCI.

 

	
6.

	
REPORTS, PAYMENTS, AND RECORDS

 

	
  

	
6.1.

	
Records.  Panacela shall keep at its respective principal place of business full, true, and accurate books of account kept in accordance with generally accepted U.S. accounting principles consistently applied and the supporting data containing all particulars that may be necessary for the purpose of showing and confirming its diligence and the amounts payable to RPCI (“Records”).  Panacela shall require its Affiliates and Sublicensee(s) to keep at their respective principal places of business full, true, and accurate books of account kept in accordance with generally accepted U.S. accounting principles or comparable international accounting principles (e.g., I.F.R.S., the International Financial Reporting Standards) consistently applied and the supporting data containing all particulars that may be necessary for the purpose of showing and confirming its diligence and the amounts payable to RPCI (such records of such Affiliates and Sublicensee(s) shall also be deemed "Records"). RPCI or a designated auditor selected by RPCI, except one to whom the applicable entity has reasonable objection, may inspect the Records not more than once per year upon reasonable notice for six (6) years following the end of the calendar year to which the Records pertain for the purpose of verifying payments or compliance in other respects with this Agreement. If an inspection shows an underreporting or underpayment, the applicable entity shall promptly pay such amount within thirty (30) days after the date the applicable entity receives from RPCI written notice of the payment due, together with a late charge equal to the amount set forth in Section 6.5 accrued on the unpaid amount until paid in full. In addition to any other rights of RPCI, if the underpayment is greater than [***] percent ([***]%) of the amount actually owed or exceeds $[***] for any twelve (12) month period, Panacela or the applicable entity shall also reimburse RPCI for the reasonable cost of the inspection within thirty (30) days after receipt of the invoice for such cost, which shall contain appropriate supporting documentation evidencing such costs.  Any Records provided or made available to RPCI hereunder shall be delivered accurately in English.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Exchange Act of 1934, as amended.

 

  

12

  

 

	
  

	
6.2.

	
Payment.  Royalties shall be paid in United States dollars by wire transfer at such place as RPCI may reasonably designate consistent with the law controlling in the United States and, if applicable, in any foreign country. If, despite RPCI’s tax-exempt status under U.S. law, Panacela or any applicable Sublicensee(s) or Affiliate is required by law to withhold and pay any taxes on payment of a royalty or any other amount due hereunder, such amount may be deducted from such payment. However, to the extent that such deducted taxes are capable of being recouped or refunded as a result of any administrative, tax, or other filing or submission, such recouped or refunded amount shall be paid to RPCI promptly upon such filing or submission by Panacela or the applicable Sublicensee(s) or Affiliate. Panacela shall (i) furnish RPCI with the original copies of all official receipts for such taxes; (ii) use commercially reasonable efforts to seek such recoupment or refund to the fullest extent reasonably possible; and (iii) cooperate to the fullest extent reasonably possible, including by causing Sublicensee(s) and Affiliates to cooperate with Panacela and RPCI, to allow Panacela and RPCI to contest such tax determination and otherwise for RPCI to receive a refund of such taxes. If any currency conversion shall be required in connection with the payment of any amount due hereunder, 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 payment(s) relate. Panacela shall be responsible for, and shall not deduct from any payment made, any exchange, collection, wire transfer, or other charge of such nature.

 

	
  

	
6.3.

	
Further Assurances. From time to time during the Term, each Party shall execute and deliver to the other such documents and take such other action as the other Party may reasonably request to consummate more effectively the transactions contemplated hereby. Panacela shall reimburse RPCI for its reasonable costs incurred in connection with such cooperation.

 

	
  

	
6.4.

	
Reports. Within sixty (60) days from the end of each semi-annual period following June 30, 2012, Panacela shall deliver to RPCI complete and accurate reports (“Reports”); provided that after the first commercial sale of a Licensed Product the Reports shall be delivered within sixty (60) days from the end of each calendar quarter following the then current semi-annual period, giving such particulars of the business conducted during such quarter as shall be pertinent to Panacela’s diligence obligations and payment accounting hereunder and sufficient to compute and verify amounts due and compliance with diligence obligations hereunder. With each such quarterly Report, Panacela shall pay (or cause the payment of) the amounts due and payable to RPCI. Each Report due after a calendar year shall include relevant information for the most recent calendar quarter and an annual summary for each Licensed Product on a country-by-country basis. Reports from or about Panacela shall be deemed to be Confidential Information and shall include at least the following:

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Exchange Act of 1934, as amended.

 

  

13

  

 

	
  

	
6.4.1.

	
progress in meeting diligence obligations and efforts to commercialize Licensed Products directly or indirectly, including the results of research and experimentation to date;

 

	
  

	
6.4.2.

	
the number of Licensed Products manufactured, the number of Licensed Products disposed of, by, or for Panacela, any Sublicensee(s), or Affiliate; and the first commercial sale of a Licensed Product in any country shall be reported within sixty (60) days thereof to RPCI;

 

	
  

	
6.4.3.

	
total amounts invoiced for Licensed Products disposed of, by, or for Panacela, any Sublicensee(s), or Affiliate;

 

	
  

	
6.4.4.

	
gross receipts and a calculation of Net Sales for the applicable reporting period(s), including a listing of deductions;

 

	
  

	
6.4.5.

	
total amounts due based on Net Sales, together with the exchange rates used for conversion, if any;

 

	
  

	
6.4.6.

	
names and addresses of all Sublicensee(s) and Affiliates;

 

	
  

	
6.4.7.

	
a progress report on Patent filings in each country, including the serial number, name of Patent application, name of inventors and status of each Patent application relating to the Licensed Field; and

 

	
  

	
6.4.8.

	
on an annual basis, year-end financial statements.

 

	
  

	
6.5.

	
Late Charge.  Any amount not paid when due to RPCI shall be subject to a late charge from the due date until paid at the annual rate of twelve percent (12%). If any such amount is disputed in good faith, Panacela shall pay all undisputed amounts when due and work diligently with RPCI to resolve the dispute. Any amount which is ultimately determined to be due from either Party to the other Party shall be subject to the late charge from: (i) the date such amount was due until it is paid; or (ii) in the event of an overpayment by, five (5) business days after the date Panacela properly informed RPCI of such overpayment.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Exchange Act of 1934, as amended.

 

  

14

  

 

	
  

	
6.6.

	
Sublicensee(s)/Affiliate Records.  Panacela shall require Sublicensee(s) and applicable Affiliates to keep comparable records and to submit comparable quarterly and annual reports, in English, and shall forward to RPCI a copy of all such reports, together with all other documents received from any Affiliate or Sublicensee(s), as RPCI may reasonably request.

 

	
7.

	
REPRESENTATIONS AND WARRANTIES.

 

	
  

	
7.1.

	
Representations and Warranties of RPCI.  RPCI represents and warrants to Panacela that:

 

	
  

	
a)

	
RPCI has the full right and authority to enter into this Agreement;

 

	
  

	
b)

	
Except for existing agreements with Cleveland BioLabs, Inc. or its Affiliates or licensees of either, to the knowledge of RPCI’s General Counsel and Director of Technology Transfer, it is not aware of any impediment that would inhibit its ability to perform the terms and conditions imposed on it by this Agreement;

 

	
  

	
c)

	
Except for obligations under existing agreements with Cleveland BioLabs, Inc. or its Affiliates or licensees of either and except for the agreement set forth on Schedule 7.1.c, RPCI has the legal right and power to extend the rights and licenses granted to Panacela in this Agreement, and to fully perform its obligations hereunder.;

 

	
  

	
d)

	
Except for existing agreements with Cleveland BioLabs, Inc. or its Affiliates or licensees of either, RPCI has not made nor will it knowingly make any third-party agreements to others in conflict with or in derogation of such rights or this Agreement.

 

	
  

	
e)

	
It is the policy of RPCI that all scientific and medical employees of RPCI are required, as a condition of employment, to assign patentable inventions to RPCI;

 

	
  

	
f)

	
To the knowledge of RPCI’s General Counsel, there are no litigation proceedings, oppositions, interferences or other challenges (other than proceedings in the U.S. Patent and Trademark Office or other national patent office) against rights of RPCI pursuant to the Licensed Patents or enforcement actions brought by RPCI against any third party in connection with the Licensed Patents;

 

	
  

	
g)

	
To the knowledge of RPCI’s General Counsel, RPCI has not received any notice or other communication from any third party of infringement of third party patent rights that may affect the discovery, development, making, using or selling of Licensed Products;

 

	
  

	
h)

	
Other than the Licensed Patents, to the knowledge of its Director of Technology Transfer, RPCI is not aware of any invention disclosure filed with RPCI’s Technology Transfer Office or patent application filed by or on behalf of RPCI that would block Panacela or its Sublicensee(s) from fully exercising its rights to make, use, sell, offer to sell or import the Licensed Products;

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Exchange Act of 1934, as amended.

 

  

15

  

 

	
  

	
i)

	
The inventors of those Licensed Patents filed with the U.S. Patent and Trademark Office by RPCI (the “Inventors”) under the employment of RPCI have executed assignments transferring all rights in the Licensed Patents to RPCI and with the United States Patent and Trademark Office; and

 

	
  

	
j)

	
Except as set forth on Schedule 7.1.j, to the knowledge of RPCI’s Vice-President of Corporate Ethics and Research Subject Protection, the Scientists have not requested approval of a conflict of interest between RPCI and a third-party.

 

	
  

	
7.2.

	
Representations and Warranties of Panacela.  Panacela represents and warrants to RPCI that:

 

	
  

	
a)

	
Panacela has the full right and authority to enter into this Agreement;

 

	
  

	
b)

	
Panacela is not aware of any impediment that would inhibit its ability to perform the terms and conditions imposed on it by this Agreement;

 

	
  

	
c)

	
Panacela has the legal right and power to extend the rights and licenses granted to RPCI in this Agreement, and to fully perform its obligations hereunder;

 

	
  

	
d)

	
Panacela has not made nor will it knowingly make any commitments to others in conflict with or in derogation of such rights or this Agreement;

 

	
  

	
e)

	
Neither Panacela nor any Affiliate is aware of any potential, pending, or threatened impediment, claim, cause of action, or restriction that would inhibit RPCI’s ability to grant the rights granted hereunder or otherwise to perform its obligations hereunder;

 

	
  

	
f)

	
Panacela and its Affiliates are unaware of any pending or threatened claim or cause of action, or restriction on exportation, by any third party, whether a private or governmental entity, regarding any Licensed Patents, Licensed Product, Technology, or Know-How, including regarding this license, and performance of this Agreement;

 

	
  

	
g)

	
Panacela will ensure that all Know-How, Project Information, Improvement Inventions, Non-Improvement Inventions, Technology and any other data or technological information of any sort provided by RPCI under this Agreement (“Data”) will be received and reviewed by an employee of Panacela who is a U.S. citizen or U.S. permanent resident and that Panacela with perform all necessary and appropriate export control evaluations, and secure any necessary export control licenses, before providing any such Data to any non-U.S. national or non-U.S. entity; and

 

	
  

	
h)

	
Panacela will perform all necessary and appropriate export control evaluations, and secure any necessary export control licenses, before providing any Data or rights under this Agreement to any Affiliate or Sublicensee(s) or any employee or agent of either.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Exchange Act of 1934, as amended.

 

  

16

  

 

	
  

	
7.3.

	
EXCEPT AS PROVIDED IN SECTION 7.1, RPCI MAKES NO REPRESENTATION AND EXTENDS NO WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED.  FURTHERMORE, NOTWITHSTANDING THE FOREGOING, RPCI MAKES NO REPRESENTATIONS TO THE MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, VALIDITY AND ENFORCEABILITY OF ANY PATENT RIGHT AND ANY CLAIM THEREOF ISSUED OR PENDING, AND THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE. IN NO EVENT SHALL RPCI, OR ITS AFFILIATES AND THEIR RESPECTIVE TRUSTEES, DIRECTORS, OFFICERS, EMPLOYEES AND AFFILIATES BE LIABLE FOR INCIDENTAL, INDIRECT, PUNITIVE, CONSEQUENTIAL, OR OTHER DAMAGES OF ANY KIND, INCLUDING ECONOMIC DAMAGES AND INJURY TO PROPERTY AND LOST PROFITS. RPCI DOES NOT WARRANT THAT IT HAS PERFORMED OR HAD PERFORMED ANY “FREEDOM TO OPERATE” SEARCH REGARDING THE SUBJECT MATTER OF THIS AGREEMENT. ALL RPCI INTELLECTUAL PROPERTY, INFORMATION, AND DATA PROVIDED BY OR ON BEHALF OF RPCI UNDER THIS AGREEMENT IS PROVIDED “AS-IS”.

 

	
  

	
7.4.

	
EXCEPT AS PROVIDED HEREIN, PANACELA MAKES NO REPRESENTATION AND EXTENDS NO WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING A WARRANTY THAT ANY LICENSED PATENT WILL LEAD TO THE DEVELOPMENT OF A LICENSED PRODUCT.

 

	
  

	
7.5.

	
With the exception of Sections 7.1(d), (c), 7.2 (c), (d), (g) and (h), no representations and warranties above shall survive the Effective Date.

 

	
8.

	
INDEMNIFICATION; INSURANCE

 

	
  

	
8.1.

	
Panacela Indemnification Obligations.  Panacela shall defend, indemnify, and hold each of RPCI, its Affiliates, and their respective officers, trustees, employees, agents, successors, and assigns (“Indemnitees”) 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 or exercise of the rights granted hereunder by Panacela  or any Affiliate or Sublicensee(s); (ii) any material breach or failure by Panacela (or any Affiliate or Sublicensee(s)) in the performance or non-performance of the obligations or covenants under this Agreement or any Sublicense; (iii) any breach by Panacela of any representation or warranty hereunder; (iv) the testing, manufacture, marketing, possession, use, sale or other disposition by Panacela  or any Affiliate or Sublicensee(s) of any Licensed Product or the failure of any of the foregoing (or any contract manufacturer of any of the foregoing) to manufacture Licensed Products in accordance with good manufacturing processes; (v) FDA enforcement actions, inspections, product recalls or market withdrawals relating to a Licensed Product or Licensed Process; (vi) any personal or bodily injury, including death, illness, or property damage caused directly or indirectly by Panacela  (or any Affiliate or Sublicensee(s)); and (vii) failure to comply with any law or regulation. Panacela shall not be obligated to indemnify an Indemnitee under this Section 8.1 after any unappealed or unappealable order of a court of competent jurisdiction holds that the claim was legally caused solely by the gross negligence or willful misconduct by such Indemnitee. Panacela shall insure that every Sublicense contains a covenant by the Sublicensee(s) providing for the indemnification of the Indemnitees as provided in this Article.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Exchange Act of 1934, as amended.

 

  

17

  

 

	
  

	
8.2.

	
Notice.  With respect to all third party claims, each Party shall promptly give notice of each such claim to the other and shall cooperate fully with the other Party in the defense of such claim.

 

	
  

	
8.3.

	
Procedure.  RPCI or the applicable Indemnitee will provide Panacela with prompt notice of any claim, suit, action, demand, or judgment for which indemnification is sought. At its expense, Panacela shall provide counsel reasonably acceptable to the affected Indemnitee to defend against any such claim. The Indemnitees shall reasonably cooperate with Panacela in such defense and will permit Panacela 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 Panacela, if, under the standards of professional conduct applicable to Panacela’s counsel without a waiver, representation of such Indemnitee by the counsel retained by Panacela  would be inappropriate (a “Conflict”), provided however, such counsel selected by such Indemnitee shall be reasonably acceptable to Panacela (such counsel the “Conflict Counsel”) and provided, further, however, that Conflict Counsel’s representation of the Indemnitee in any matter shall be restricted solely to those issues where there is a Conflict. Conflict Counsel and Panacela 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 Section 8.3, and the Indemnitee shall be responsible for such expenses. In no event shall Panacela 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 jurisdiction arising out of the same general allegations unless there are multiple Indemnitees and representation by Panacela counsel or the initially engaged Conflict Counsel would be inappropriate. The Indemnitees may not settle any action or claim affected pursuant to this Section 8.3 without the written consent of Panacela, such consent not to be unreasonably conditioned, withheld, or delayed.

 

	
  

	
8.4.

	
Failure to Indemnify.  If Panacela fails to promptly and adequately defend and indemnify, as may be determined by a court of competent jurisdiction, any applicable Indemnitee pursuant to this Article, Panacela shall not thereafter deny or disclaim its liability hereunder to any Indemnitee for any consequent Loss.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Exchange Act of 1934, as amended.

 

  

18

  

 

	
  

	
8.5.

	
Insurance.  Beginning not less than one hundred and twenty (120) days after the Effective Date, Panacela and all Sublicensee(s) shall maintain in full force and effect with a commercial insurance carrier commercial general liability insurance, written on an occurrence basis, having individual and aggregate limits appropriate to the conduct of Panacela’s and the applicable Sublicensee(s)’s business; covering the testing, marketing, sale and distribution of Licensed Products; and reasonably satisfactory to RPCI. Such insurance: (i) shall be issued by an insurer licensed to practice in the State of New York or an insurer pre-approved by RPCI having an A.M. Best rating of at least A- (A minus), such approval not to be unreasonably withheld, conditioned or delayed; (ii) shall list RPCI and its Affiliates, as specified by RPCI, as additional named insureds, (iii) shall be endorsed to include product liability coverage; and (iv) shall require thirty (30) days’ written notice to be given to RPCI prior to any cancellation or material change thereof. Panacela shall, upon request, provide RPCI with Certificates of Insurance evidencing compliance with this Section. Panacela shall continue to maintain such insurance after the expiration or termination of this Agreement during any period in which Panacela or any Affiliate or Sublicensee(s) continues to make, use, perform, or sell a product that was a Licensed Product under this Agreement and for a period of five (5) years thereafter.

 

	
9.

	
PATENT PROSECUTION AND MAINTENANCE; COSTS

 

	
  

	
9.1.

	
Prosecution by Panacela.

 

	
  

	
9.1.1.

	
Licensed Patents.  Panacela shall, at its full expense, diligently prosecute and maintain the Licensed Patents, in any jurisdiction, and any continuations, continuations-in-part, divisions, reissues, reexamined patents, and extensions of any patents that issue as a result of such applications, which Panacela determines in good faith may be required to advance the purposes of this Agreement or otherwise to protect the rights and licenses granted hereunder and otherwise to reasonably procure the broadest patent protection. All costs and expenses of all such patent work, including preparation fees, filing fees, taxes, annuities, working fees, issuance fees, maintenance fees, and/or renewal and extension charges shall be paid by Panacela. Panacela shall promptly provide RPCI with copies of all correspondence relating to the filing, prosecution and maintenance of patents and patent applications addressed within this Agreement, including patent applications and patents covering Improvement Inventions; and shall keep RPCI informed with respect to the status and progress of all such applications, prosecutions, and maintenance activities and will consult in good faith with RPCI and take into account RPCI’s comments and requests with respect thereto. Both Parties shall reasonably cooperate with each other to facilitate the application and prosecution of patent applications pursuant to this Agreement.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Exchange Act of 1934, as amended.

 

  

19

  

 

	
  

	
9.1.2.

	
Improvement Inventions.  Panacela shall, in its full expense, responsibility, and control, diligently prepare and file patent applications covering the Improvement Inventions, which shall be included within the Licensed Patents pursuant to Section 3.3.

 

	
  

	
9.1.3.

	
Notice and RPCI Right.  If Panacela elects not to file any patent application within the Licensed Patents, or thereafter elects not to continue prosecution of any such patent application, or elects not to maintain any patent that may issue therefrom (together, the “Abandoned Rights”), Panacela shall provide RPCI with reasonable notice thereof, and RPCI shall have the right, at RPCI’s option and expense, in its own name, to file for and prosecute such patent application and maintain such patent using patent counsel selected by RPCI. Panacela shall cooperate therewith, and all rights of Panacela under the Abandoned Rights shall be terminated.

 

	
10.

	
PROTECTION OF LICENSED RIGHTS

 

	 	
10.1.

	
Notification and Procedure.  Panacela and RPCI shall notify each other in writing of any infringements by others of any intellectual property rights in the Licensed Rights. Following receipt of such notice, the Parties shall engage in meaningful consultation between themselves as to the means of preventing such infringements and shall cooperate in any preliminary steps, short of filing a lawsuit, including preliminary investigations, engagement of counsel and/or sending cease-and desist letters, that the Parties may mutually determine are required prior to the filing of any lawsuit. Unless otherwise agreed in writing between the Parties, Panacela shall have the right, but not the obligation, at Panacela’s expense, to: (i) defend any of Licensed Patents against infringement by other parties in any country, including by bringing any legal action for infringement, or defending any counterclaim of invalidity or action of a third party for declaratory judgment of non-infringement, and (ii) join RPCI as a party thereto at Panacela’s expense. No such action may be settled without RPCI’s consent, which consent shall not be unreasonably withheld, conditioned or delayed. Panacela shall indemnify and hold the Indemnitees harmless against any Losses that may be found or assessed against RPCI or any of the foregoing in connection with any such action. Panacela acknowledges and agrees that should Panacela decline or fail to promptly commence or prosecute such claims or suits within six (6) months after notice thereof, RPCI may institute such claims or suits in its own name and join Panacela as a party thereto at RPCI’s expense. Panacela shall cooperate and assist fully in any claims, suits or other actions commenced, prosecuted and/or defended by RPCI pursuant to this Section, and RPCI shall keep any recovery or damages awarded or recovered in connection therewith.

 

	 	
10.2.

	
Any recovery of damages in any suit defended or prosecuted by Panacela shall be applied: (a) pro rata, in satisfaction of any unreimbursed expenses and legal fees of the Parties relating to the suit; (b) to ordinary damages, which shall be equal to: (i) Panacela’s lost profits, and (ii) royalties on the lost Net Sales, all of which shall be payable to Panacela, and Panacela shall pay to RPCI royalties due based upon lost Net Sales, and (c) the balance, including whatever other measure of damages the court shall have applied to compensate for damages (e.g., willful conduct) shall be divided evenly between Panacela and RPCI. However, notwithstanding the foregoing, if RPCI has defended or prosecuted a suit after Panacela has declined or been unsuccessful in a suit against the alleged infringer, then all damages and other recovery shall be retained by RPCI; provided that RPCI shall reimburse Panacela out of such damages and recovery for any expenses reasonably incurred by Panacela in connection with its participation in the suit.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Exchange Act of 1934, as amended.

 

  

20

  

 

	 	
10.3.

	
In any suit to enforce and/or defend the 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.

 

	
11.

	
TERM: TERMINATION.

 

	 	
11.1.

	
Unless terminated earlier pursuant to this Article 11 and subject to the performance of any then outstanding obligations, the term of this Agreement shall continue for the longest period allowed pursuant to Section 4.2.2 (“Term”).

 

	 	
11.2.

	
This Agreement may be terminated by Panacela, in whole or in part, for any or no reason, upon sixty (60) days’ written notice.

 

	 	
11.3.

	
This Agreement may be terminated by RPCI, upon the occurrence of any of the following:

 

	
  

	
a)

	
Failure by Panacela to pay any amount due hereunder more than $25,000, which amount is not the subject of a bona fide dispute, within thirty (30) days of receipt of written notice that such amount is overdue, in which case RPCI may terminate this Agreement immediately (without further notice) if Panacela has not paid the applicable amount (with any late charge accrued thereon) within such thirty-day period. It shall not be necessary for RPCI to specify an exact amount due if RPCI does not know it, e.g., Panacela has Net Sales but has not paid royalties due on time.

 

	
  

	
b)

	
Material breach by Panacela of this Agreement other than as set forth above, and failure to cure such breach within ninety (90) days of receipt of written notice of the breach; provided, however, (i) if such breach is not capable of being cured within such ninety (90) day period, Panacela may request a reasonable extension to such period, not to exceed one hundred and eighty (180) days, which request shall not be unreasonably denied by RPCI; or (ii) if Panacela disputes such breach in good faith within such cure period, RPCI, shall not have the right to terminate this Agreement unless and until a tribunal of competent jurisdiction has determined that this Agreement was materially breached.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Exchange Act of 1934, as amended.

 

  

21

  

 

	
  

	
c)

	
Panacela (i) has instituted or has instituted against it any insolvency, receivership, bankruptcy or other proceeding and such proceeding has not been dismissed for ninety (90) days, (ii) makes an assignment for the benefit of creditors, or (iii) has ceased to conduct business or dissolves. The licenses granted to Panacela for use of RPCI Intellectual Property are and shall otherwise be deemed to be, for purposes of Section 365(n) of the United States Bankruptcy Code (the “Code”), licenses of rights to “intellectual property” as defined under Section 101(35A) of the Code. Panacela, as the licensee of such rights under this Agreement, is entitled to retain and fully exercise all of its rights and elections under the Code. The foregoing provisions of this Section 11.3(c) are without prejudice to any rights Panacela may have arising under the Code or other applicable law.

 

	
  

	
d)

	
If Panacela fails to market, promote, and otherwise exploit the Licensed Rights so that RPCI has not received any royalty payment during any twelve (12) month period after the first commercial sale of a Licensed Product, in which case this Agreement shall automatically terminate with respect to such Licensed Product, without further notice from RPCI to Panacela. Notwithstanding the foregoing, if Panacela’s failure to generate royalty payments is directly related to a hold placed on the sale of the Licensed Product by a regulatory or other government authority and if Panacela is using commercially reasonable efforts to resolve such issue, this Agreement with respect to such Licensed Product shall not automatically terminate.

 

	 	
11.4.

	
Upon termination of this Agreement, other than by expiration in accordance with Section 11.1, all Sublicenses shall survive and shall be assigned to RPCI, but RPCI shall not be obligated to perform or incur any obligation to any Sublicensee(s) not already required to be performed or incurred to Panacela by RPCI in this Agreement. Notwithstanding the foregoing, RPCI shall not be obligated to perform or incur any obligation to any Sublicensee(s) under Articles 3 and 8 or Section 16.13, regardless of whether RPCI was obligated to perform or incur such obligations to Panacela prior to termination of this Agreement.

 

	 	
11.5.

	
Upon termination or expiration 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 or expiration. Panacela and any Affiliate may, however, after such date and for a period not to exceed six (6) months thereafter, complete and dispose of any applicable Licensed Products in the process of manufacture at the time of such termination, provided that Panacela shall pay or cause to be paid to RPCI the amounts due thereon and shall submit the Reports required by Article 6 on such dispositions. Furthermore, upon termination or expiration of this Agreement in whole or in part for any default of Panacela with respect to any Licensed Product(s), Panacela and its Affiliates and Sublicensee(s) perpetually and irrevocably covenant not to sue RPCI or any direct or indirect licensee thereof for infringement or misappropriation of any Patents or other intellectual property rights of any kind owned by assigned to, or under the control of Panacela or any of its Affiliates or Sublicensee(s) or any of their respective assigns or successors in interest with respect to such Licensed Product(s). This covenant and right of RPCI will survive any termination or expiration of this Agreement.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Exchange Act of 1934, as amended.

 

  

22

  

 

	 	
11.6.

	
The express provisions regarding termination in this Agreement are in addition to, and do not limit, any other rights and remedies a Party may have.

 

	 	
11.7.

	
Challenge.

 

	 	
11.7.1.

	
If Panacela or any Affiliate or Sublicensee(s) challenges, directly or indirectly, or supports any unaffiliated party in any such challenge based on an assertion or claim that any claim of a Licensed Patent is invalid, unenforceable, or should be invalidated (collectively, “Challenges”), Panacela shall give RPCI not less than one hundred eighty (180) days’ prior written notice of any proposed Challenge.

 

	 	
11.7.2.

	
If a Challenge occurs by or on behalf of Panacela or any Affiliate (“Panacela Challenge”), RPCI shall have the option, at its sole discretion, to terminate this Agreement, make the license rights granted non-exclusive, and/or limit such rights in scope, Territory, and/or Licensed Field, as RPCI deems appropriate, and/or require Panacela to immediately pay RPCI an additional non-refundable lump sum payment in the amount of one million dollars ($1,000,000.00).

 

	 	
11.7.3.

	
In the case of a Panacela Challenge, upon presentation of applicable invoices and supporting documentation, Panacela shall reimburse RPCI for all reasonable attorney fees and expenses incurred in connection with defending the Challenge. Panacela shall continue to pay to RPCI any amounts owed pursuant to the terms of this Agreement.

 

	 	
11.7.4.

	
In the event of a final and unappealable decision on the Panacela Challenge in the favor of RPCI, all future royalties due under Section 4.2 of this Agreement shall be increased by multiplying the applicable royalty rate by a factor of five (5) (but provided that such rate shall in no event exceed six percent (6%)).  If any Sublicensee(s) initiates such a Challenge without the approval or cooperation of Panacela, Panacela shall fully cooperate with RPCI in any such defense and shall terminate the applicable Sublicense.

 

	 	
11.7.5.

	
Any Challenge, other than a proceeding brought in the U.S. Patent & Trademark Office, must be brought in the district court for the Western District of New York. Panacela shall not challenge, and hereby irrevocably consents to, the exclusive personal jurisdiction and venue of such court, and further so consents to the transfer to that court of any Challenge brought elsewhere.  Further, if a Sublicensee(s) initiates a Challenge, the provisions of this Section 11.7 applicable to Panacela shall be applicable to such Sublicensee(s) for the benefit of RPCI.

 

	 	
11.8.

	
In addition to any obligations existing upon termination or expiration of this Agreement, the following Sections shall survive any such termination or expiration: 2.5, 4, until the obligations set forth in the Section and matured prior to the effective date of termination or expiration are met, 8, 11.4, 11.5, 11.7.2, 11.7.3, 11.7.4, 11.7.5, 12, 15, and 16.2.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Exchange Act of 1934, as amended.

 

  

23

  

 

	
12.

	
CONFIDENTIALITY

 

	 	
12.1.

	
Disclosure of confidential information.  The Parties acknowledge that a Party (the “Disclosing Party”) may disclose Confidential Information (as defined below) to the other Party (the “Receiving Party”) pursuant to the terms of this Agreement. Accordingly, the Receiving Party agrees to keep the Disclosing Party’s Confidential Information in confidence and not to use or disclose the Disclosing Party’s Confidential Information except pursuant to the terms of this Agreement.

 

	 	
12.2.

	
Confidentiality Obligations.  The Receiving Party agrees to keep confidential for a period of five (5) years from the date of disclosure any information identified as confidential by the Disclosing Party using methods similar to those used by the Receiving Party to protect its own Confidential Information of a like nature. “Confidential Information” of RPCI shall include all Technology and any other information disclosed by RPCI to Panacela that is marked confidential or is accompanied by correspondence indicating such information is confidential. “Confidential Information” of Panacela shall include Licensed Products and other information disclosed by Panacela to RPCI that is marked confidential or is accompanied by correspondence indicating such information is confidential. Except as may be authorized in advance in writing by the Disclosing Party, the Receiving Party shall grant access to the Disclosing Party’s Confidential Information only to its own employees involved in research relating to the Licensed Rights and/or manufacture or marketing of the Licensed Products, and each Party shall require such employees to keep such information confidential. The Receiving Party agrees not to use any Confidential Information of the other party to its advantage and to the Disclosing Party’s detriment, including, in the case of Panacela, claiming priority to any application serial numbers of any Licensed Patents in any patent prosecution by RPCI. The confidentiality and use obligations set forth above apply to all or any part of the Confidential Information disclosed hereunder except to the extent that:

 

	
  

	
a)

	
The Receiving Party can show by written record that it possessed the information prior to its receipt from the Disclosing Party;

 

	
  

	
b)

	
The information was already available to the public or became so available through no fault of the Receiving Party;

 

	
  

	
c)

	
The information is subsequently disclosed to the Receiving Party by a third party that has the right to disclose it free of any obligations of the Disclosing Party; or

 

	
  

	
d)

	
The information is required by law or regulation to be disclosed; provided, however, that the Receiving Party has provided written notice to the Disclosing Party promptly to enable the Disclosing Party to seek a protective order or otherwise prevent disclosure of such Confidential Information.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Exchange Act of 1934, as amended.

 

  

24

  

 

	 	
12.3.

	
Notwithstanding the foregoing, RPCI shall have the right to disclose any information related to this Agreement to any body or entity to which RPCI is subject or to whom it owes a duty of disclosure, whether or not in the ordinary course, but if such disclosure is of Panacela’s Confidential Information, RPCI shall provide written notice of such disclosure requirement, including a copy of the information to be disclosed, to Panacela promptly after learning of the required disclosure and work with Panacela to minimize the amount of such information to actually be disclosed and take such steps, including filing of provisional patent applications, as may be necessary to protect such information prior to disclosure. In addition, RPCI shall have the right to disclose, pursuant to a written confidentiality agreement, information related to this Agreement  to a third party principally in the business of buying royalties, investment banking, financial services, or any similar business in connection with any effort to monetize any amounts due hereunder, and Panacela shall reasonably cooperate with RPCI and any potential buyers in such efforts; provided, however, in the event the disclosure is to a Person whose principal business is not financial services, then RPCI shall obtain Panacela’s written consent, which shall not be unreasonably withheld, conditioned or delayed, to prior to such disclosure.

 

	
13.

	
SPONSORED RESEARCH AGREEMENT.  During the five (5) years after the Effective Date, Panacela and RPCI may enter into a commercial sponsored research pursuant to which RPCI may supply services to Panacela.  At this time it is expected that this will initially include, but not be limited to services provided by RPCI’s core facilities, such as Department of Laboratory Animal Resource, Small Molecule Screening Core, PK-PD Core, Histopathology Core, Genomics and Gene Expression Analysis Core, and Proteomics Core, which shall provide services to Panacela at a price equal to the price that RPCI charges for such services to investigators employed by RPCI, but not more than a fifteen percent (15%) overhead reimbursement rate.

 

	
14.

	
ASSIGNABILITY.  Neither Party may assign this Agreement without the prior written consent of the other Party, which shall not be unreasonably withheld or delayed, except that either Party may assign this Agreement without the prior written consent of the other Party in connection with the sale or other transfer of substantially all of that part of the assigning Party’s business to which this Agreement relates, provided that the assigning Party provides written notice within thirty (30) days to the non-assigning Party of such assignment and the assignee thereof agrees in writing to be bound as such assigning Party by the terms of this Agreement.

 

	
15.

	
DISPUTE RESOLUTION

 

	 	
15.1.

	
Initial Mediation. Any dispute arising under or in connection with this Agreement shall initially be attempted to settled by negotiation between the Parties. The Party seeking relief shall promptly advise the other Party 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 the Party received such notice, each Party shall select a representative(s)(“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, Panacela shall select a mediation firm located within the State of New York, reasonably acceptable to RPCI, and the Representatives shall meet with such firm for a mediation hearing within thirty (30) days within one hundred (100) miles of Buffalo, New York and in the United States. The Parties shall participate in such mediation in good faith and shall share the costs of the mediation firm equally. If Panacela does not select a firm within such time, RPCI may do so.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Exchange Act of 1934, as amended.

 

  

25

  

 

	 	
15.2.

	
Resolution.  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 Section 15.1), either Party shall be free to bring an action as permitted under Section 16.2.

 

	 	
15.3.

	
Tolling; Language.  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. The language to be used in any mediation or arbitration shall be English.

 

	 	
15.4.

	
No Party shall terminate this Agreement during the pendency of the resolution of a dispute pursuant to this Article 15 and Section 16.2 if the reason for termination is the subject of the pending dispute resolution.

 

	
16.

	
MISCELLANEOUS PROVISIONS

 

	 	
16.1.

	
Notice.  Any notice or other communication pursuant to this Agreement shall be sufficiently made or given on the date of mailing if sent to such Party by facsimile or electronic mail on such date, with a paper copy being sent by certified first class mail, postage prepaid, or by next day express delivery service, addressed to it at its address below (or such address as it shall designate by written notice given to the other Party).

 

If to RPCI, to:

 

Roswell Park Cancer Institute

Elm and Carlton Streets

Buffalo, NY 14263

Attention:  General Counsel

Telephone: (716) 845-8717

Facsimile:  (716) 845-8057

Email: Michael.Sexton@roswellpark.org

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Exchange Act of 1934, as amended.

 

  

26

  

 

With a copy (which shall not constitute notice) to:

Nixon Peabody LLP

1100 Clinton Square

Rochester, New York  14603

Attention: Peter H. Durant

Telephone: (585) 263-1227

Facsimile: +1(866) 947-1223

Email: pdurant@nixonpeabody.com

 

If to Panacela, to:

 

Panacela Labs, Inc.

73 High Street

Buffalo, NY 14203

Attention: Chief Executive Officer

Telephone: (716) 849-6810

Facsimile: (716) 849-6820

DTyomkin@cbiolabs.com

 

With a copy (which shall not constitute notice) to:

Polsinelli Shughart PC

161 N. Clark Ave., Suite 4200

Chicago, IL 60601

Attention: Teddy C. Scott, Jr., Ph.D.

Telephone: (312) 819-1900

Facsimile: (312) 873-2913

Email: tscott@polsinelli.com

	 	
16.2.

	
Choice of Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to its conflict of laws principles. Any claim or lawsuit hereunder, other than a proceeding brought in the U.S. Patent & Trademark Office, must, subject to Article 15, be brought in the Federal District Court for the Western District of New York. The Parties shall not challenge, and hereby irrevocably consent to, the exclusive personal jurisdiction and venue of such court, and further so consent to the transfer to that court of any claim or lawsuit brought elsewhere.

 

	 	
16.3.

	
Export Control Compliance.  Panacela will comply with all applicable export laws, regulations, and restrictions. In connection with the exercise of Panacela’s rights hereunder, RPCI does not represent that an export license will not be required nor that, if required, such a license will be issued. It is also understood that the transfer of certain technical data and commodities may require a license from the United States Government. RPCI will reasonably cooperate with and assist Panacela to obtain any required export licenses. However, and notwithstanding anything to the contrary herein, Panacela will be solely responsible for ensuring that all export control regulations, laws, and restrictions (“Export Laws”) are complied with in connection with this Agreement, including overseeing the activities of its Affiliates and Sublicensee(s) in connection with any right exercised under this Agreement. If any transfer under this Agreement to any person or entity, whether private or governmental, violates any U.S. export control regulation, law or restriction, such transfer shall be void at its inception, but any such violation shall be subject to Panacela’s indemnity obligation under Article 7. Upon request, and in any event with each Report due hereunder, an officer of Panacela shall certify that Panacela and each Sublicensee(s) and Affiliate are in compliance with and have not violated any Export Law.

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Exchange Act of 1934, as amended.

 

  

27

  

 

	 	
16.4.

	
Headings; Interpretation.  The headings of Articles and Sections of this Agreement are for convenience of reference only and shall not affect the meaning or interpretation of this Agreement in any way.

 

	 	
16.5.

	
Waiver.  The failure of either Party in any instance to insist upon the strict performance of the terms of this Agreement will not be construed to be waiver or relinquishment of any of the terms of this Agreement, either at the time of the Party's failure to insist upon strict performance or at any time in the future, and such terms will continue in full force and effect.

 

	 	
16.6.

	
Counterparts.  The Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

	 	
16.7.

	
Use of Names.  Neither Party will, without prior written consent of the other Party, use the name or any trademark or trade name owned by the other Party, or owned by an Affiliate of the other Party, in any publication, publicity, advertising, or otherwise.

 

	 	
16.8.

	
Independent Contractors.  Nothing contained in this Agreement shall be deemed to constitute a joint venture, partnership or employer-employee relationship between the Parties, or to constitute one as the agent of the other. Each Party shall act solely as an independent contractor, and nothing in this Agreement shall be construed to make one Party an agent, employee or legal representative of the other Party for any purpose or to give either Party the power or authority to act for, bind, or commit the other Party.

 

	 	
16.9.

	
Severability.  If any provision of this Agreement is held to be invalid or unenforceable, all other provisions will continue in full force and effect, and the Parties will substitute for the invalid or unenforceable provision a valid and enforceable provision which conforms as nearly as possible to the original intent of the Parties.

 

	 	
16.10.

	
Entire Agreement.  This Agreement constitutes the entire agreement and understanding between the Parties with respect to the subject matter hereof, and supersedes all proposals, oral or written, and all other communications between the Parties with respect to such subject matter [***].

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Exchange Act of 1934, as amended.

 

  

28

  

 

	 	
16.11.

	
Force Majeure.  Each Party shall be excused from any breach of this Agreement to the extent such breach is caused by governmental regulations, act of war, strike, act of God, or other similar circumstance normally deemed outside the control of such Party (“Force Majeure”), but the affected Party shall work continuously and diligently to remove the cause of such Force Majeure and shall keep the other Party reasonably advised of its efforts and progress.

 

	 	
16.12.

	
Modifications.  The terms and conditions of this Agreement may not be amended or modified, except in a writing signed by the Parties.

 

	 	
16.13.

	
Publication.  The rights granted to Panacela hereunder are subject to the reserved, irrevocable, exclusive right of RPCI to publish its scientific findings, but RPCI shall cooperate with Panacela so that it may file for protection of any intellectual property rights to any Improvement Invention or Non-Improvement Invention before such publications are published, provided patent applications and other filings are diligently pursued so as not to unduly delay timely publication of such findings. Therefore, RPCI shall submit to Panacela, at least thirty (30) days prior to submission for publication or disclosure materials intended for publication or disclosure relating to such an Improvement Invention or Non-Improvement Invention. Panacela shall notify RPCI within thirty (30) days of receipt of such materials whether Panacela desires to file a patent application on any invention disclosed in such materials. If Panacela desires to file such a patent application, RPCI shall withhold publication and disclosure of patentable information for a period not to exceed thirty (30) days from the date of receipt of such materials by Panacela. Further, if such material contains Confidential Information that Panacela has provided to RPCI, RPCI agrees to remove such Confidential Information from the proposed publication or disclosure. Notwithstanding the foregoing, RPCI shall have no obligation under this Section 16.13 with respect to any publication of a Scientist or anyone under the direction or control of any Scientist.

 

[Signatures follow]

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Exchange Act of 1934, as amended.

  

29

  

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.

 

	
PANACELA LABS, INC.

	  	
HEALTH RESEARCH INC., ROSWELL

	  	  	  	
PARK CANCER INSTITUTE DIVISION

	
By:

	
  /s/ Dmitry Tyomkin

	  	
By:

	
  /s/ John Blandino

	
Name: Dmitry Tyomkin

	  	
Name: John Blandino

	
Title: Chief Executive Officer

	  	
Title: Director

 

ROSWELL PARK CANCER INSTITUTE

CORPORATION

By:  /s/ Michael B. Sexton                                                

 

Name:   Michael B. Sexton, Esq.                                                                           

 

Title:   Chief Institute Operations Officer/Secretary                                                                                                                                          

 

Date  9/23/11                                                

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Exchange Act of 1934, as amended.

 

  

2

  

SCHEDULE 7.1.d

 

	
  

	
1.

	
American Cancer Society grant to Dr. Nikiforov regarding research targeting C-MYC with small molecules as a novel anti-melanom.

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Exchange Act of 1934, as amended.

  

  

  

 

Schedule 7.1.j

	
RPCI Employee

	
Outside Employment

	  	  
	
[***]

 

	
[***]

 

	  	  
	
[***]

 

	
[***]

 

	  	  
	
[***]

 

	
[***]

 

	  	  
	
[***]

 

	
[***]

 

	  	  
	
[***]

 

	
[***]

 

	  	  
	
[***]

 

	
[***]

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Exchange Act of 1934, as amended.

  

  

  

 

EXHIBIT A

 

Description of Drug Candidates

 

	
1.

	
REVERCOM

	
·

	
Drug summary: Liposome-packaged combination of proprietary molecule, inhibitor of multidrug resistance transporter, and conventional chemotherapeutic agent.

 

	
·

	
Potential use: adjuvant applied as part of chemotherapy of cancer patients.

 

	
·

	
[***]

 

	
2.

	
MOBILAN

	
·

	
Drug summary: Adenovirus-based treatment inducing immune response. Ready for final stage of preclinical development.

 

	
·

	
Potential use: Universal anti-cancer vaccine.

 

	
·

	
[***]

 

	
3.

	
ARKIL

	
·

	
Drug summary: Androgen receptor inhibitor, prepared for Hit-2-Lead optimization studies.

 

	
·

	
Potential use: Nanodrugs for treatment of prostate cancer (both hormone (androgen)-dependent and –independent/refractory forms).

 

	
·

	
[***]

 

	
4.

	
ANTIMYCON

	
·

	
Drug summary: MYC inhibitor.

 

	
·

	
Potential use: Drugs for treatment of a broad range of solid tumors (breast, prostate, colon, non-small cell lung carcinoma, etc.) and hematological malignancies.

 

	
·

	
[***]

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Exchange Act of 1934, as amended.

  

  

  

EXHIBIT B

 

Projects and Licensed Patents

 

	
  

	
1.

	
Projects

 

 

	
Drug

	
Definition

	
Mobilan

	
 Research, development and support of an immunotherapeutic drug candidate based on recombinant adenovirus vector, stimulating immune response in humans as a vaccine-like treatment for cancer or other indications.

	
Revercom

	
Research, development, formulation and support of a drug candidate based on proprietary Reversan compound as an adjuvant for chemotherapy.

	
Antimycon

	
Research, development, lead optimization, formulation and support of a drug candidate regulating cMyc transcription factor for cancer indications.

	
Arkil

	
Research, development, lead optimization, formulation and support of a drug candidate regulating androgen receptor for prostate cancer.

	
Xenomycin

	
Research, development, lead optimization, formulation and support of a drug candidates based on proprietary Curaxin family of compounds for anti-infective/anti-biotic/anti-fungal applications.

 

	
  

	
2.

	
Licensed Patents

 

	
Product

	
Title

	
Inventors

	
Country

	
Application No.

	
Patent No.

	
MOBILAN

	
Use of Toll-Like Receptor and Agonist for Treating Cancer

	
Andrei Gudkov (RPCI, CBLI)

	
U.S.

	
61/249,596

	
n/a

	
MOBILAN

	
Toll-like receptor 5 agonist produced and secreted by mammalian cells

	
Andrei Gudkov (RPCI), Venkatesh Natarajan (RPCI)

	
U.S.

	
61/423,842

	
n/a

	
MOBILAN

	
Functional bacreriophage-based nanoparticles coated by Toll-like receptor 5 agonist

	
Andrei Gudkov (RPCI, CBLI), Venkatesh Natarajan (RPCI)

	
U.S.

	
61/423,825

	
n/a

	
ANTIMYCON

	
Small molecules inhibiting oncoprotein MYC

	
Andrei Gudkov (RPCI), Catherine Burkhart (CBLI), Mikhail Nikiforov (RPCI), Michelle Haber (CCIA), Murray Norris (CCIA)

	
U.S.

	
61/392,296

	
n/a

	
ANTIMYCON

	
Small Molecules Inhibiting Oncoprotein MYC

	
Andrei Gudkov (RPCI), Catherine Burkhart (CBLI), Mikhail Nikiforov (RPCI), Michelle Haber (CCIA), Murray Norris (CCIA)

	
U.S.

	
61/423,832

	
n/a

	
ARKIL

	
Method for treating androgen receptor positive cancers

	
Katerina Gurova (RPCI), Natalia Narizhneva (CBL)

	
U.S.

	
61/254,395

	
n/a

	
REVERCOM

	
Dual cargo nanoparticles combining MRP1 inhibitors with chemotherapeutic drugs

	
Andrei Gudkov (RPCI, CBLI), Aridam Sen (RPCI), Catherine Burkhart (CBLI), Padmaja Kunapuli (RPCI)

	
U.S.

	
61/423,838

	
n/a

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Exchange Act of 1934, as amended.

  

  

  

EXHIBIT C

 

Scientists

 

Andrei Gudkov, Ph.D., D.Sci.

 

Mikhail Nikiforov, Ph.D.

 

Katerina Gurova, Ph.D.

 

Brahm Segal, Ph.D.

 

Arindam Sen, Ph.D.

 

Elena A. Komarova

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Exchange Act of 1934, as amended.

 

  

  

  

EXHIBIT D

 

[***]

 

Exhibit D pg. 1 of 6

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Exchange Act of 1934, as amended.

 

  

  

  

[***]

 

Exhibit D pg. 2 of 6

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Exchange Act of 1934, as amended.

 

  

  

  

 

[***]

 

Exhibit D pg. 3 of 6

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Exchange Act of 1934, as amended.

  

  

  

[***]

 

Exhibit D pg. 4 of 6

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Exchange Act of 1934, as amended.

  

  

  

[***]

 

Exhibit D pg. 5 of 6

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Exchange Act of 1934, as amended.

 

  

  

  

 

[***]

 

Exhibit D pg. 6 of 6

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 24b-2 of the Exchange Act of 1934, as amended.Exhibit 10.5

 

AMENDED AND RESTATED EXCLUSIVE SUBLICENSE AGREEMENT

 

This Exclusive Sublicense Agreement (“Agreement”) is made effective as of September 23, 2011 (“Effective Date”) by and between Cleveland BioLabs, Inc., a corporation organized and existing under the laws of the State of Delaware (“CBLI”), and Panacela, a corporation organized under the laws of the State of Delaware (“Panacela”).  The parties hereto are additionally referred to individually as a “Party”, and collectively, the “Parties”.

 

WHEREAS, CBLI, the Open Joint Stock Company “RusNano” (“RusNano”), and others have entered into that certain Investment Agreement dated as of September 19, 2011 (the “Investment Agreement”), pursuant to which, among other things, Panacela was formed as a joint venture for the purpose of developing a new generation of pharmaceutical drugs, including an initial focus on innovative oncology, immunology and anti-microbial therapies;

 

WHEREAS, CBLI has a license to the Licensed Rights (as defined below) from (i) The Cleveland Clinic Foundation, a non-profit Ohio corporation (“CCF”) pursuant to that certain Exclusive License Agreement between CBLI and CCF effective July 1, 2004, and as amended on March 22, 2010, and as amended on September 22, 2011, which second amendment includes rights from Children’s Cancer Institute Australia for Medical Research, a not for profit medical institute formed under the laws of Australia with registration number ACN 072 279 559  (“CCIA”), and attached hereto as Appendix A (“Exclusive License Agreement”) related to oncology and other areas, and (ii) Incuron, LLC, a limited liability company organized under the laws of the Russian Federation (“Incuron”) pursuant to Section 6 of that certain Assignment Agreement dated as of May 11, 2010, a copy of which is attached hereto as Appendix D;

 

WHEREAS, CCF and CCIA entered into a Letter Agreement on September 23, 2011, pursuant to which CCF irrevocably assigned its rights to receive 50% of the payments related to the patents listed under the Revercom title on Appendix C to CCIA;

 

WHEREAS, CBLI desires to grant, and Panacela desires to accept, a sublicense to Panacela under the Licensed Rights under the terms of this Agreement, pursuant to the Exclusive License Agreement; and

 

WHEREAS, the execution and delivery of this Agreement is required by the Investment Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth below, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

 

I.         DEFINITIONS

 

For the purpose of this Agreement, the following definitions shall apply.  Any capitalized terms not defined herein or therein, shall have the meaning contained in the Exclusive License Agreement.

 

A.            “Licensed Fields” means, collectively, the Licensed Mobilan Field and the Licensed Inhibitor and Modulator Field and the Licensed Xenomycin Field.

 

  

  

  

 

B.            “Licensed Mobilan Field" means medical and nonmedical uses of a bifunctional expression system containing genetic elements encoding flagellin and toll-like receptor 5.

 

C.           “Licensed Mobilan Patents” means any and all rights in and to:

 

	
  

	
1.

	
the patents and patent applications described in Appendix B hereto and all patents anywhere in the world issuing thereon;

 

	
  

	
2.

	
any patent or patent application of any kind anywhere in the world that claims any of the Licensed Mobilan Rights; and

 

	
  

	
3.

	
all divisions, continuations, continuations-in-part, patents of addition, patents, substitutions, registrations, reissues, reexaminations or extensions of any kind with respect to any of the foregoing applications and patents.

 

D.           “Licensed Mobilan Rights” means, collectively, inventions, discoveries, and information covered by the Licensed Mobilan Patents.

 

E.           “Licensed Inhibitor and Modulator Field” means the discovery, development, and commercialization of methods, techniques, devices, systems, animals, and therapeutics in the field of oncology and immunotherapy.

 

F.           “Licensed Inhibitor and Modulator Patents” means any and all rights in and to:

 

	
  

	
1.

	
the patents and patent applications described in Appendix C hereto and all patents anywhere in the world issuing thereon;

 

	
  

	
2.

	
any patent or patent application of any kind anywhere in the world that claims any of the Licensed Inhibitor and Modulator Rights; and

 

	
  

	
3.

	
all divisions, continuations, continuations-in-part, patents of addition, patents, substitutions, registrations, reissues, reexaminations or extensions of any kind with respect to any of the foregoing applications and patents.

 

G.           “Licensed Inhibitor and Modulator Rights” means, collectively, inventions, discoveries, and information covered by the Licensed Inhibitor and Modulator Patents.

 

H.           “Licensed Xenomycin Field” means the Field of Use as defined in that certain Assignment Agreement, dated May 11, 2010, by and between Incuron, a limited liability company organized under the laws of the Russian Federation (“Incuron”) and CBLI, and attached hereto as Attachment B.

 

I.           “Licensed Xenomycin Patents” means any and all rights in and to:

 

	
  

	
1.

	
the patents and patent applications described under the heading “Xenomycin” on Appendix C hereto and all patents anywhere in the world issuing thereon;

 

  

2

  

 

	
  

	
2.

	
any patent or patent application of any kind anywhere in the world that claims any of the Licensed Xenomycin Rights; and

 

	
  

	
3.

	
all divisionals, continuations, continuations-in-part, patents of addition, patents, substitutions, registrations, reissues, reexaminations or extensions of any kind with respect to any of the foregoing patent applications and patents.

 

J.           “Licensed Xenomycin Rights” means, collectively, inventions, discoveries and information covered by the Licensed Xenomycin Patents.

 

K.           “Licensed Xenomycin Products” means any and all products and processes that contain, employ or are in any way made or produced using, or by the practice of the Licensed Xenomycin Rights.

 

L.           “Licensed Patents” means, collectively, the Licensed Mobilan Patents, the Licensed Inhibitor and Modulator Patents and the Licensed Xenomycin Patents.

 

M.           "Licensed Rights" means, collectively, the Licensed Mobilan Rights, the Licensed Inhibitor and Modulator Rights and the Licensed Xenomycin Rights.

 

II.         GRANT

 

A.           Exclusive Sublicense.

 

1.           Licensed Mobilan Rights.  Subject to the terms and conditions of this Agreement, CBLI hereby grants to Panacela an exclusive sublicense under the Licensed Mobilan Rights to: (a) make, have made, develop, use, import, export, distribute, market, promote, offer for sale and sell Products, (b) practice any method, process or procedure within the Licensed Mobilan Patents, and (c) otherwise exploit the Licensed Mobilan Rights, each within the Licensed Territory for use within the Licensed Mobilan Field; and to have any of the foregoing performed on its behalf by a third party.

 

2.           Licensed Inhibitor and Modulator Rights.  Subject to the terms and conditions of this Agreement, CBLI hereby grants to Panacela an exclusive sublicense under the Licensed Inhibitor and Modulator Rights to (a) make, have made, develop, use, import, export, distribute, market, promote, offer for sale, and sell Products, (b) practice any method, process, or procedure within the Licensed Inhibitor and Modulator Patents, and (c) otherwise exploit the Licensed Inhibitor and Modulator Rights, each within the Licensed Territory for use within the Licensed Inhibitor

 

3.           Licensed Xenomycin Rights.   Subject to the terms and conditions of this Agreement, CBLI hereby grants to Panacela an exclusive sublicense under the Licensed Xenomycin Rights to (a) make, have made, develop, use, import, export, distribute, market, promote, offer for sale, and sell Products, (b) practice any method, process, or procedure within the Licensed Xenomycin Patents, and (c) otherwise exploit the Licensed Xenomycin Rights, each within the Licensed Territory for use within the Licensed Xenomycin Field; and to have any of the foregoing performed on its behalf by a third party (collectively, with the rights granted to Panacela under Section II.A.1 and II.A.2, the “License”).

 

  

3

  

 

4.           Panacela hereby consents to be bound by the terms of the Exclusive License Agreement.

 

5.           From time to time during the term of this Agreement, upon request by either Party, CBLI and Panacela shall update Appendix B and Appendix C hereto to include all patent applications and patents that are within the Licensed Patents.

 

B.           Affiliates. Panacela may extend the License, or any part thereof, to any Panacela Affiliate; provided that such Affiliate consents to be bound by the terms of this Agreement to the same extent as Panacela.

 

C.           Right to Sublicense.  Panacela and its Affiliates may grant and authorize sublicenses to third parties (“Sublicensees”) within the scope of the License (“Sublicenses”).  Subject to the terms and considerations of this Agreement, upon expiration or termination of this Agreement for any reason, any and all existing sublicenses shall survive; provided that such Sublicensees promptly agree in writing to be bound by the terms of this Agreement.

 

D.           Option to Improvements.  Panacela will have an option to license additional inventions, which are not covered under Existing Patent Rights as follows:

 

1.           CBLI shall promptly provide Panacela with a written, enabling disclosure (“Invention Disclosure Report”) with respect to any improvement, enhancement, addition, or adaptation to any Licensed Patent in the applicable in the Licensed Field, which is owned by CBLI, actually assigned to CBLI, or is subject to an obligation to assign such to CBLI pursuant to an agreement with CBLI, that is sufficiently different from the scope of a Licensed Patent to be separately patentable, and covered by the claims of Licensed Patents (an “Option Invention”), during the term of this Agreement.

 

2.           Panacela shall have the option to include any Option Invention within the Licensed Rights for all purposes of this Agreement.  To exercise such option with respect to any particular Option Invention, Panacela shall notify CBLI within sixty (60) days after receiving an Invention Disclosure Report and a written request from CBLI as to whether Panacela wishes to acquire a license to such Option Invention.  If Panacela elects to acquire such a license, the Option Invention shall be included within the License Rights and all worldwide patents rights disclosing the Option Invention shall be included with the Licensed Patents, both under this Agreement.  Panacela and CBLI agree promptly to update Appendix C hereto upon request by either party from time to time, to reflect all patents and patent applications then within the Licensed Patents.

 

E.           Control of Patent Prosecution.

 

1.           Licensed Mobilan Patents.  CBLI shall retain all control of patent prosecution regarding the Licensed Mobilan Patents.

 

  

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2.           Licensed Xenomycin Patents. Incuron shall retain all control of patent prosecution regarding the Licensed Xenomycin Patents.

 

3.           Licensed Inhibitor and Modulator Patents.

 

a.          Panacela shall have primary responsibility to (a) file and prosecute any domestic and/or foreign patent application within the Licensed Inhibitor and Modulator Patents, and (b) maintain any patent that may issue therefrom. All costs and expenses of all such patent work, including preparation fees, filing fees, taxes, annuities, working fees, issuance fees, maintenance fees, and/or renewal and extension charges shall be paid by Panacela.

 

b.          Panacela shall give CBLI, CCF and CCIA a reasonable opportunity to review (a) the text of all such applications before filing, and (b) the content of any proposed responses to official actions of the United States Patent and Trademark Office and foreign patent offices during prosecution of such patent applications; and shall consult with CBLI, CCF and CCIA with respect thereto.  For purposes of this Section II.D.2(b) "reasonable" shall mean sufficiently in advance of any decision by Panacela or any deadline imposed upon written response by Panacela so as to allow CBLI, CCF and CCIA to meaningfully review such decision or written response and also to provide comments to Panacela in advance of such decision or deadline to allow comments of CBLI, CCF and CCIA, or either, to be considered and incorporated into Panacela's decision or written response.

 

c.          In consultation with CCF, CBLI and CCIA, Panacela will file patent applications within the Licensed Inhibitor and Modulator Patents, prosecute patent applications within the Licensed Inhibitor and Modulator Patents, and maintain patents within the Licensed Inhibitor and Modulator Patents, in each case pursuant to Panacela’s rights under this Section II.D.2 in such countries as Panacela may desire from time to time by notice to CBLI , CCF and CCIA.  In the event Panacela does not file for or continue prosecution of any such patent application within the Licensed Inhibitor and Modulator Patents or maintain any such patent pursuant to Panacela's rights under this Section II.D, in any country, (a) Panacela shall notify CBLI in writing pursuant to Section II.D.2.d.below, and in such event CBLI may at its discretion pursue such filing, prosecution and/or maintenance, and (b) Panacela's license with respect to such patent application and/or such patent in such country shall terminate.

 

d.          Panacela agrees to keep CBLI, CCF and CCIA informed in a timely manner of the contents, status and progress of all patent applications within the Licensed Inhibitor and Modulator Patents filed and prosecuted by Panacela, and to provide copies of such patent applications and documents relating thereto to CBLI, CCF and CCIA; Panacela shall copy CBLI on all correspondence with CCF and/or CCIA related to the Licensed Inhibitor and Modulator Patents.  Panacela agrees to provide CBLI, CCF and CCIA with such information and documentation with respect to all Licensed Inhibitor and Modulator Patents, as CBLI , CCF or CCIA, respectively, shall reasonably request.  Panacela further agrees that Panacela will not allow any such patent application or any patent that may issue therefrom to become abandoned until CCF, CBLI and CCIA have each determined, and informed Panacela, that it does not desire to continue prosecution or appeal(s) or maintenance of such patent application or patent in accordance with such party’s rights pursuant to Section II.D.2.c.above; provided that Panacela’s obligations to continue prosecution or appeals(s) or maintenance of any such patent application or patent will not extend beyond the three (3) month anniversary of Panacela’s written notice of Panacela's election pursuant to Section II.D.2.c. above.

 

  

5

  

 

e.          In the event that Panacela elects not to file any patent application within the Licensed Inhibitor and Modulator Patents, or thereafter elects not to continue prosecution of any such patent application, or elects not to maintain any patent that may issue therefrom pursuant to Section II.D.2.c. above, CBLI shall have the right, at CBLI's option and expense and on its own make, to file for and prosecute such patent application and maintain such patent using patent counsel selected by CBLI, and Panacela shall cooperate therewith.

 

F.           Research Use Right.  Pursuant to Section 2.G of the Exclusive License Agreement, this Agreement does not include the exclusive, fully-paid up non-assignable right of CCF and Other Institution to make and use, for academic or research purposes only, the Licensed Rights (the “Reserved Rights”) to the extent that the Reserved Rights are based on the rights granted by CCF or Other Institution, as the case may be.

 

G.           Right to Publish. The License is subject to a reserved, irrevocable, exclusive, fully-paid up non-assignable license back to CCF and Other Institution, as the case may be, to publish the general scientific findings from such parties’ research related to the Licensed Rights.

 

H.           Ownership of Innovations.  Innovations shall be either jointly owned or solely owned by the party for whom ownership can be established under the provisions of U.S. patent law and licensed as provided herein.  Unless otherwise agreed in writing between the Parties, and subject to CCF’s and Other Institution’s rights under Sections II.E and II.F of this Agreement, Panacela shall own absolutely and exclusively immediately upon their creation all rights, title and interest in and to any and all Innovations created solely by employees or agents of Panacela or Affiliates thereof (“Panacela Innovations”), including, but not limited to, all patents, trade marks, design rights (whether registrable or otherwise), copyright, database rights, trade secrets, know-how and all other intellectual property rights and equivalent rights or similar forms of protection existing anywhere in the world.  Panacela shall have the sole and exclusive discretion regarding whether to seek protection (including, without limitation, patent protection) for Panacela Innovations.

 

III.          COMMERCIALIZATION; REGULATORY APPROVALS

 

A.           Commercialization.  Panacela shall, at its expense, use its commercially diligent efforts, which in any event shall not be less than the efforts Panacela uses with respect to its own proprietary products not derived from the Licensed Rights, to bring Products to market as timely and efficiently as possible consistent with sound and reasonable business practices and judgments.  Such program shall likely include the preclinical and clinical development of Products at Panacela’s expense, including research and development, laboratory and clinical testing, and marketing and sales.  This Agreement shall not provide to CBLI any ownership rights to any developments of Panacela not otherwise provided by separate agreements between the Parties, if any.  Notwithstanding the foregoing, all business decisions shall be within the sole discretion of Panacela.  CBLI acknowledges that Panacela is in the business of developing, manufacturing, marketing and selling biopharmaceutical products.  Panacela shall provide CBLI written reports necessary for CBLI to satisfy its reporting obligations under the Exclusive License Agreement, including written reports on at least on a semi-annual basis detailing Panacela’s clinical, regulatory, and financial progress.  CBLI understands that these reports may contain material non-public information and that to such extent such reports will be considered “Confidential Information” pursuant to Section XVIII.  Nothing in this Agreement shall be construed as restricting Panacela's conduct of such business or imposing on Panacela the duty to market and/or sell Products for which royalties are payable hereunder to the exclusion of, or in preference to, any other Panacela product, or in any way other than in accordance with its normal commercial practices.

 

  

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B.           Regulatory Approval.  Panacela shall be solely responsible for securing any federal, including U.S. Food and Drug Administration ("FDA"), state, local or foreign Regulatory Approval necessary for commercial sale of Products.  Each Regulatory Approval shall be made in Panacela's name or in the name of an Affiliate or lawful designee of Panacela unless applicable law requires otherwise, or CBLI and Panacela otherwise agree that a particular approval be made in the name of CBLI or an Affiliate or lawful designee of CBLI.  CBLI agrees that, any such Regulatory Approval made in its name will not affect the rights granted to Panacela in this Agreement.  CBLI will lend assistance, including involving CCF or Other Institution as necessary, on a reasonable basis to facilitate Panacela’s acquisition of necessary Regulatory Approvals. Such assistance will include the provision to Panacela as promptly as reasonably practicable of scientific and clinical data obtained by CBLI (including from CCF or Other Institution) relating to the Licensed Rights and the Products. Panacela shall be responsible for reimbursing CBLI for any reasonable direct costs associated with such activity, including costs incurred by CBLI to CCF or Other Institution.

 

IV.         CONSIDERATION

 

A.           For any amounts owed to CCF under Section 4.B of the Exclusive License Agreement (the “CCF Milestones”) on account of activities under the Licensed Rights (the “Panacela Activities”), Panacela shall pay the CCF Milestones directly to CCF or its designee, as applicable,  in the name of CBLI.

 

B.           Earned Royalties.  For any amounts owed to CCF under Section 4.C of the Exclusive License Agreement (the “CCF Royalties”) on account of Panacela Activities, Panacela shall pay the CCF Royalties directly to CCF or its designee, as applicable, in the name of CBLI.

 

C.           Sublicense Royalties.  For any amounts owed to CCF under Section 4.D of the Exclusive License Agreement (the “CCF Sublicense Royalties”) on account of Panacela Activities, Panacela shall pay the CCF Sublicense Royalties directly to CCF or its designee, as applicable, in the name of CBLI.

 

D.           Xenomycin Consideration.  In consideration of the rights and licensed granted by CBLI to Panacela under this Agreement, Panacela agrees to pay $5,000,000 in cash or shares, as determined by Panacela’s board of directors, to CBLI upon the commencement of the first Phase III clinical trial for a Licensed Xenomycin Product. The share price, if shares are issued, shall be based on the post-money valuation of the immediately preceding equity investment transaction.

 

  

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E.           Accounting.  Panacela shall provide CCF, CCIA and/or CBLI, as applicable, a full accounting showing how any amounts owing under this Section IV have been calculated on the date of each such payment and paid.  Such accounting will be on a per-country and product line, model, or trade name basis and shall be summarized in a reporting format that contains substantially similar information to the information obligations of CBLI as set out in Section 4. to the Exclusive License Agreement.  Should failure by Panacela to make a required payment when due hereunder cause interest to accrue against CBLI under the Exclusive License Agreement, the corresponding balance due by Panacela hereunder shall accrue interest until paid at the same rate.

 

F.           Currency.  Except as otherwise directed, all amounts owing under this Agreement shall be paid in U.S. dollars by wire transfer to an account specified by the designated recipient.  If any currency conversion shall be required in connection with the payment of royalties hereunder, such conversion shall be made at the rate used by Panacela in calculating Panacela's own revenues for financial reporting purposes.

 

G.           Withholdings.  Any withholding or other tax that Panacela or an Affiliate thereof is required by law to withhold shall be deducted from said royalties and promptly paid to the taxing authority.  If royalties paid to Panacela or an Affiliate thereof by a Sublicensee on Net Sales of Products are reduced for withholding or similar taxes, the Sublicense Royalties due shall be correspondingly reduced, and Panacela shall furnish CCF, CCIA and/or CBLI, as applicable with proper evidence of the taxes paid.

 

V.          REPRESENTATIONS AND WARRANTIES.

 

A.           CBLI represents and warrants as of the Effective Date that:

 

	
  

	
1.

	
CBLI has all requisite authority to execute and deliver this Agreement and perform its obligations hereunder, including, without limitation, the right to grant the License;

 

	
  

	
2.

	
CBLI has not previously assigned, transferred, conveyed or otherwise encumbered any of its right and interest in the Licensed Rights;

 

	
  

	
3.

	
to the best of CBLI’s knowledge, each of the inventors of the Licensed Patents has signed a full and effective assignment of his or her rights to either CCF, Other Institution or CBLI as applicable, and such assignments have been duly recorded with the United States Patent and Trademark Office;

 

	
  

	
4.

	
to the best of CBLI’s actual knowledge, there are no assignments by inventors of the Licensed Patents other than those assignment recorded with the United States Patent and Trademark Office;

 

	
  

	
5.

	
to the best of CBLI’s actual knowledge, there are no third party pending patent applications which, if issued, cover the development, manufacture, use or sale of Products;

 

	
  

	
6.

	
to the best of CBLI’s actual knowledge, the government of the United States of America does not have any rights in or to the Licensed Patents, whether derived from the provision of research funding or otherwise;

 

  

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7.

	
there are no claims, judgments or settlements against or owed by CBLI or pending or, to the best of its knowledge, threatened claims or litigation relating to the Licensed Rights;

 

	
  

	
8.

	
all application and renewal fees and other steps required for the maintenance or protection of the Licensed Rights have been paid on time or taken;

 

	
  

	
9.

	
there are no collaborative, licensing, transfer, supply, distributorship or marketing agreements or arrangements or other kinds of agreements to which CBLI or any of its Affiliates are party relating to any of the Licensed Rights or Products except those previously disclosed to Panacela in the Disclosure Schedules to the Investment Agreement;

 

	
  

	
10.

	
neither CBLI nor its Affiliates shall enter into any oral or written agreement or arrangement that would be inconsistent with CBLI’s obligations under this Agreement;

 

	
  

	
11.

	
to the best of CBLI’s knowledge after reasonable investigation, CCF does not own or hold any rights in any other patent or patent application, the claims of which would dominate the claims of a patent or patent application within the Licensed Patents as applied to the applicable Licensed Field; and

 

	
  

	
12.

	
to the best of CBLI’s knowledge after reasonable investigation, CBLI does not own or hold any rights in any other patent or patent application, the claims of which would dominate the claims of a patent or patent application within the Licensed Patents as applied to the applicable Licensed Field.

 

Provided that:

 

	
  

	
1.

	
except as set forth above in this Section V.A., CBLI makes no warranty or representation as to the validity or scope of any of the Licensed Patents;

 

	
  

	
2.

	
except as set forth above in this Section V.A, CBLI makes no warranty or representation that anything made, used, sold or otherwise disposed of under the license granted in this Agreement will or will not infringe patents of third parties; or

 

	
  

	
3.

	
nothing in this Agreement shall be construed as an obligation to furnish any know-how not provided in the Licensed Rights or any services, other than those specified in this Agreement.

 

B.           CBLI MAKES NO REPRESENTATIONS, EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, AND ASSUMES NO RESPONSIBILITIES WHATSOEVER WITH RESPECT TO USE, SALE, OR OTHER DISPOSITION BY PANACELA OR ITS VENDEES OR OTHER TRANSFEREES OF PRODUCTS INCORPORATING OR MADE BY USE OF THE LICENSED RIGHTS.

 

C.           Panacela represents and warrants that:

 

  

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1.

	
Panacela and its Affiliates are unaware of any pending or threatened claim or cause of action, or restriction on exportation, by any third party, whether a private or governmental entity, regarding any Licensed Patents, Products, CCF Technology, including regarding this license, and performance of this Agreement.

 

	
  

	
2.

	
Panacela will ensure that all CCF Technology and any other data or technological information of any sort provided by CBLI under this Agreement (“Data”) will be received and reviewed by an employee of Panacela who is a U.S. citizen or U.S. permanent resident and that Panacela with perform all necessary and appropriate export control evaluations, and secure any necessary export control licenses, before providing any such Data to any non-U.S. national or non-U.S. entity.

 

	
  

	
3.

	
Panacela will perform all necessary and appropriate export control evaluations, and secure any necessary export control licenses, before providing any Data or rights under this Agreement to any Affiliate or Sublicensee or any employee or agent of either.

 

	
  

	
4.

	
No Product will be developed by Panacela or its Affiliates for biodefense purposes.

 

	
  

	
5.

	
Products produced under the License granted herein shall be manufactured in accordance with all material respects with applicable international, foreign, federal, state and local laws, rules and regulations, including, without limitation, in accordance in all material respects with all applicable rules and regulations of the FDA and all applicable regulatory bodies.

 

VI.         RECORDKEEPING

 

A.           Panacela shall keep books and records sufficient to verify the accuracy and completeness of Panacela's accounting referred to above, including without limitation inventory, purchase and invoice records relating to the Products or their manufacture. In addition, Panacela shall maintain documentation evidencing that Panacela is in fact pursuing development of Products as required herein.  Such documentation may include, but is not limited to, invoices for studies advancing development of Products, laboratory notebooks, internal job cost records, and filings made to the Internal Revenue Service to obtain tax credit, if available, for research and development of Products. Such books and records shall be preserved for a period not less than three (3) years after they are created during and after the term of this Agreement.

 

B.           Panacela shall take all reasonable steps necessary so that the accounting firm representing Panacela, or any other registered CPA mutually agreeable to CBLI and Panacela, may within forty-five (45) days of request by CBLI review and copy all the books and records to allow CBLI to verify the accuracy of Panacela's royalty reports and Development Reports. Such review shall be performed at the expense of CBLI upon reasonable notice and during regular business hours at a single U.S. location of Panacela's choice.

 

  

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VII.         LICENSE TERM AND TERMINATION PROVISIONS

 

A.           The term (the "Term") of this license shall begin on the date of this Agreement and continue until the earlier of the expiration of exclusive rights pursuant to the Licensed Patents, or twenty (20) years after the commencement of Sales of Products, unless this Agreement is earlier terminated as provided herein.

 

B.           The License is strictly subject to Panacela's diligent efforts to develop and commercialize Products. CBLI may, at its option, terminate this Agreement ninety (90) days after giving written notice of termination to Panacela during the continuation of any of the following events by Panacela:

 

1.           commission of any breach in any material respect of any other covenant herein contained, including without limitation (a) failure to satisfy its diligence obligations pursuant to Article III; (b) failure to timely pay any monies due hereunder; (c) failure to timely submit to CBLI any Development Report; (d) offering any component of the Licensed Rights to its creditors or any other third party in violation of this Agreement; or (e) raising or allowing to be raised any challenge of or regarding the validity of any of the Licensed Patents; or

 

2.           committing any act of bankruptcy, becoming insolvent, or unable to pay its debts as they become due, filing a petition under any bankruptcy or insolvency act, or having any such petition filed against it which is not dismissed within sixty (60) days.  Should Panacela, or a new entity which is an Affiliate of Panacela subsequently emerge from bankruptcy, CBLI shall negotiate in good faith with such entity to enter into a new license agreement between CBLI and such party containing substantially the same material terms as this License;

 

provided that Panacela may avoid such termination if before the end of such sixty (60) day period Panacela cures such breach or default.  This paragraph shall not suspend any obligation of Panacela to compensate CBLI for any undisputed amount, as provided for under any term of this Agreement, during the pendency of any determination of breach.

 

C.           Panacela may terminate this Agreement in its entirety or as to any particular patent application or patent within the Licensed Patents at any time by giving at least ninety (90) days written notice of such termination to CBLI.  A brief statement of the reasons for termination shall accompany such a notice.  From and after the effective date of a termination under this Paragraph with respect to a particular patent application or patent, such patent application and patent in the particular country shall cease to be within the Licensed Patents for all purposes of this Agreement.  Upon a termination of this Agreement in its entirety under this Paragraph, all rights and obligations of CBLI and Panacela shall terminate, except as provided in Section VII.F.

 

D.           Notwithstanding the foregoing, the obligations of Panacela with respect to the commercialization of Products under this Agreement are expressly conditioned upon the continuing absence of a materially adverse condition which results in a delay in the commercialization of the Products, including, but not limited to, a substantially adverse condition or event relating to the safety or efficacy of a Product or unfavorable pricing, pricing reimbursement, labeling or lack of Regulatory Approval, and the obligation of Panacela to develop or market any such Product, and CBLI’s right to terminate this Agreement set forth in this Section VII.B, shall be delayed, tolled or suspended so long as such condition or event exists as mutually agreed by CBLI and Panacela.

 

  

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E.           Upon termination of this Agreement, Panacela’s rights to the Licensed Rights granted hereunder and all use thereof shall terminate and any and all rights in the Licensed Patents shall revert back to CBLI and, if requested by CBLI, Panacela shall destroy or return, at CBLI’s sole option, all copies of any media or materials which are the property of CBLI, CCF or Other Institution, including but not limited to all documentation, notes, plans, drawings, copies, samples and computer code.  Notwithstanding the termination of this Agreement, Panacela shall remain obligated to provide an accounting for and to pay royalties earned up to the date of the termination and post-termination (as permitted by Section VII.H), subject to Section IV.B.

 

F.           Expiration or termination of the Agreement shall not relieve the Parties of any obligation accruing prior to such expiration or termination, and the provisions of Section VI, VII.E, XIV, XV.A, XVII and XVIII shall survive the expiration or termination of this Agreement and remain in full force and effect regardless of the cause of termination. Any expiration or early termination of this Agreement shall be without prejudice to the rights of either party against the other accrued or accruing under this Agreement prior to termination.

 

G.           Waiver by either Party of a single breach or default, or a succession of breaches or defaults, shall not deprive such Party of any right to terminate this Agreement in the event of any subsequent breach or default.

 

H.           In the event that this Agreement is terminated for any reason, Panacela and Affiliates thereof and customers of either may, after the effective date of such termination, sell or otherwise dispose of all Products and parts thereof that Panacela, Affiliates thereof, and customers of either may have on hand on the effective date of such termination, subject to Panacela’s payment to CBLI of royalties pursuant to Section IV of this Agreement.

 

VIII.        ASSIGNABILITY

 

This Agreement may not be assigned by Panacela without notification of CCF and the prior written consent of CBLI, which will not be unreasonably withheld provided that such assignee or transferee promptly agrees in writing to be bound by the terms and conditions of this Agreement.  Panacela may assign its right to receive payments hereunder.

 

IX.          CONTEST OF VALIDITY

 

In the event Panacela or a third party contests the validity of any Licensed Patent, Panacela shall continue to pay royalties with respect to that patent as if such contest were not underway to an escrow agent mutually agreed to by the parties, to be held in a separate interest bearing account in accordance with the terms of a mutually acceptable escrow agreement between the parties in form and substance as is customary for such purposes, until such time as a court of last resort adjudicates the validity or invalidity of such patent. If such court of last resort confirms the invalidity or unenforceability of such patent, then all royalties previously paid by Panacela into escrow pursuant to this paragraph, together with all interest accrued thereon and any other amounts earned in respect thereof (collectively, the “Escrow Funds”), shall be promptly paid to Panacela.  If such court of last resort confirms the validity or enforceability of such patent, then the Escrow Funds shall be promptly paid to CCF and/or CCF and CCIA, as applicable.

 

  

12

  

 

X.          PROTECTION OF LICENSED RIGHTS

 

CBLI and Panacela agree to assist each other to the extent necessary to protect any of Panacela’s rights in the Licensed Rights.  CBLI and Panacela each shall notify the other in writing of any infringements by others of the Licensed Rights.  Following receipt of such notification, CBLI and Panacela shall engage in meaningful consultation as to the means of preventing such infringements and shall cooperate in any preliminary steps, short of filing a lawsuit, including but not limited to preliminary investigations, engagement of counsel and/or sending cease-and-desist letters, that CBLI and Panacela shall mutually determine are required prior to the filing of any lawsuit.  Pursuant to Section XI below, Panacela may commence or prosecute any claims or suits in its own name or join CBLI as a party thereto.  However, should Panacela decline or fail to commence or prosecute such claims or suits, CBLI may itself institute such claims or suits in its own name and join Panacela as a party thereto, except that CBLI shall not institute such claims or suits without first obtaining the written consent of Panacela to do so, which consent shall not be unreasonably withheld, conditioned or delayed.  CBLI and Panacela shall cooperate fully in any claims or suits commenced and prosecuted by either Party pursuant to this Section X.

 

XI.          ENFORCEMENT OF LICENSED RIGHTS

 

A.           Panacela has the right, but not the obligation, to defend the Licensed Rights (the “Enforced Rights”) against infringement, interference or opposition by other parties in any country, including by bringing any legal action for infringement or opposition or defending any counterclaim of invalidity, notice of opposition or action of a third party for declaratory judgment of non- infringement or interference.  Panacela may bring or defend, or subject to CBL’s approval, which approval shall not be unreasonably withheld, conditioned or delayed, may settle any such actions solely at its own expense and through counsel of its selection; provided, however, that CBLI, CCF and the Other Institution, to the extent that the Enforced Rights are based on the rights granted by CCF or Other Institution, as the case may be, shall be entitled in each instance to participate through counsel of its selection and at its own expense. CBLI has no obligation or responsibility with respect to any such infringement action or interference except to provide reasonable assistance to Panacela as requested, and Panacela shall reimburse CBLI and Other Institution, as the case may be, for its reasonable out-of-pocket expenses in connection with any such assistance.  Panacela shall be entitled to credit against royalties payable to CBLI hereunder to the same extent that CBLI shall be entitled to credit against royalties payable to CCF or CCIA, as applicable.  Any amounts entitled to be so credited and not previously credited may be carried forward.  In the event of a favorable settlement or award of damages, any amounts owed to CCF under Section 11.A of the Exclusive License Agreement shall be paid directly to CCF or CCIA, as applicable, in the name of CBLI.  CCF’s or CCIA’s sole financial obligation, as applicable, with respect to such litigation will be limited to the right of Panacela to credit fifty percent (50%) of its costs and expenses against royalties as provided herein.

 

  

13

  

 

B.           In the event Panacela is permanently enjoined from exercising any of the License Rights granted hereunder pursuant to an infringement action brought by a third party, or if Panacela elects not to undertake the defense or settlement of such a claim of alleged infringement for a period of six (6) months from notice of such claim or suit, then Panacela’s rights and obligations under this Agreement with respect to said License Rights will terminate upon written notice from CBLI, subject to Section VII of this Agreement.  If Panacela elects to defend any such action, then Panacela shall be entitled to credit against royalties payable to CBLI hereunder fifty percent (50%) of its out-of-pocket costs and expenses incurred in connection with such action at a rate not to exceed fifty percent (50%) of the royalties due CBLI in any Half Year. Any amounts entitled to be so credited and not previously credited may be carried forward.

 

XII.         PATENT MARKING

 

Panacela shall mark all Products or Products’ packaging with the appropriate patent number reference in compliance with the requirements of United States law (see 35 U.S.C. §287).

 

XIII.        PRODUCT LIABILITY AND CONDUCT OF BUSINESS

 

A.           Panacela shall, at all times during the term of this Agreement and thereafter, indemnify, defend and hold CBLI, CCF, and Other Institution and each of its respective trustees, officers, employees, consultants, and agents of each, as the case may be, harmless against all claims and expenses, including legal expenses and reasonable attorneys fees, arising out of the death of or injury to any person or persons or out of any damage to property and against any other claim, proceeding, demand, expense and liability of any kind whatsoever (other than infringement claims) resulting from the production, manufacture, sale, use, lease, consumption or advertisement of Products arising from any right or obligation of Panacela hereunder with respect to CBLI, CCF or Other Institution, as the case may be , provided that Panacela shall not be obligated to indemnify CBLI, CCF or Other Institution under this Section XIII.A after any unappealed or unappealable order of a court of competent jurisdiction holds that the claim was legally caused solely by the gross negligence or willful misconduct of CBLI, CCF or Other Institution.  CBLI, CCF and Other Institution at all times reserve the right to select and retain counsel(s) of their own to represent CBL’s, CCF’s and Other Institution’s interests in any such action, subject to Panacela’s sole control of the defense thereof and all related settlement negotiations.

 

B.           CBLI hereby agrees to indemnify, defend, and hold harmless Panacela and its current, former, or future stockholders, non-Panacela investors, officers, employees, consultants, and agents (each, an “Indemnified Person”) for, from, and against any and all claims, expenses (including attorneys’ fees), damages, losses, judgments, fines, amounts paid in settlement, and any other amounts that any Indemnified Person suffers, sustains, incurs, or becomes subject to arising out of or in connection with any breach of this Agreement or any inaccuracy of the representations contained in Section V.A.4 and V.A.11 of this Agreement.

 

  

14

  

C.           Neither Party shall be liable to the other Party for any indirect, special, consequential, or other damages whatsoever, whether grounded in tort (including negligence), strict liability, contract or otherwise.  Except as provided in this Agreement, CBLI shall not have any responsibilities or liabilities whatsoever with respect to Product(s).

 

D.           Panacela shall at all times comply in all material respects, through insurance or self-insurance, with all statutory workers’ compensation and employers’ liability requirements covering any and all employees with respect to activities performed under this Agreement.

 

XIV.       USE OF NAMES

 

Other than as required by law or regulation, Panacela shall not use the name, logo, likeness, trademarks, image or other intellectual property of CBLI, CCF, Other Institution, or employees thereof for any advertising, marketing, endorsement or any other purposes without the specific prior written consent of an authorized representative of CBLI, CCF or Other Institution, as the case may be, as to each such use.  For purposes of the foregoing provision, an authorized representative of CCF means a representative of CCF’s Department of Media Relations and/or CCF’s Office of General Counsel, or comparable personnel.

 

XV.        MISCELLANEOUS

 

A.           Choice of Law.  This Agreement shall be governed, construed, and interpreted in all respects in accordance with laws of the State of New York without regard to the conflict of laws provisions of such.

 

B.           Notices.  Any notice required to be given pursuant to the provisions of this Agreement shall be in writing and shall be deemed to have been given at the earlier of the time when actually received as a consequence of any effective method of delivery, including but not limited to hand delivery, transmission by telecopier, or delivery by a professional courier service or the time when sent by certified or registered mail addressed to the Party for whom intended at the address below or at such changed address as the Party shall have specified by written notice, provided that any notice of change of address shall be effective only upon actual receipt.

 

	
  

	
(i)

	
If from Panacela to CBLI:

 

Cleveland BioLabs, Inc.

Attn: General Counsel

73 High Street

Buffalo, NY 14203

Fax: (716) 849-6820

 

With a copy to:

 

Polsinelli Shugart PC

Attn: Teddy C. Scott, Jr., Ph.D.

161 N. Clark Ave., Suite 4200

Chicago, IL 60601

Fax: (312) 873-2913

 

  

15

  

 

	
  

	
(ii)

	
If from Panacela to CCF:

 

Commercialization Counsel

CCF Innovations / ND20

9500 Euclid Avenue

Cleveland, OH  44195

With a copy to:

 

Legal Department

3050 Science Park Dr.

AC3-231

Beachwood, OH 44122

Payments to:

The Cleveland Clinic Foundation

Re: CCF-CBL License

P.O. Box 931532

Cleveland, OH  44193-5007

Attn: Barbara Honeey

The CCF Federal Tax ID Number is 34-0714585.

 

	
  

	
(iii)

	
If from Panacela to CCIA:

 

Children’s Cancer Institute Australia

PO Box 81

Randwick NSW2031 Australia

Attention: Managing Director

Telephone: 0293853140

 

	
  

	
(iv)

	
If from CBLI to Panacela:

 

Panacela Labs, Inc.

73 High Street

Buffalo, NY 14203

Fax: (716) 849-6820

Attention: Chief Executive Officer

With a copy to:

 

Polsinelli Shugart PC

Attn: Teddy C. Scott, Jr., Ph.D.

161 N. Clark Ave., Suite 4200

Chicago, IL 60601

Fax: (312) 873-2913

 

  

16

  

 

C.           Counterparts.  This Amendment may be executed in counterparts with the same effect as if both parties had signed the same document. All such counterparts shall be deemed an original, shall be construed together and shall constitute one and the same instrument.

 

XVI.       INTEGRATION

 

This Agreement constitutes the full understanding between the parties with reference to the subject matter hereof, and no statements or agreements by or between the Parties, whether orally or in writing, except as provided for elsewhere in this Section XVII, made prior to or at the signing hereof, shall vary or modify the written terms of this Agreement. Neither Party shall claim any amendment, modification, or release from any provisions of this Agreement by mutual agreement, acknowledgment, or otherwise, unless such mutual agreement is in writing, signed by the other Party, and specifically states that it is an amendment to this Agreement.

 

XVII.       SEVERABILITY

 

If any provision of this Agreement is held to be invalid, the other provisions will not be affected to the greatest extent possible consistent with the parties’ intent.

 

XVIII.      CONFIDENTIALITY

 

A.           Panacela acknowledges that CBLI may disclose valuable confidential information of CCF, Other Institution or CBLI to Panacela pursuant to the terms of this Agreement.  CBLI acknowledges that Panacela may disclose valuable confidential information to CBLI pursuant to the terms of this Agreement. Accordingly, the Parties agree to keep any Confidential Information in confidence and not to use or disclose the same except in pursuance of the terms of this Agreement.

 

B.           Both Parties agree to keep any information identified as confidential by the disclosing Party, confidential using methods at least as stringent as each Party uses to protect its own confidential information. “Confidential Information” shall include plans and reports of Panacela, Panacela’s books and records maintained pursuant to Section VI, the Licensed Rights and all information concerning them and any other information marked confidential or accompanied by correspondence indicating such information is confidential exchanged between the parties hereto.  Except as may be authorized in advance in writing by the other Party, each Party shall grant access to the Confidential Information only to its own employees involved in research relating to the subject matter of the Licensed Patents and/or manufacture or marketing of the Products, and each Party shall require such employees to be bound by confidentiality obligations substantially similar to those set forth in this Article XVIII. Each Party agrees not to use any Confidential Information to its advantage and the other Party’s detriment, including, but not limited to, in the case of Panacela, claiming priority to any application serial numbers of any Licensed Mobilan Patents in any patent prosecution by Panacela.  The confidentiality and use obligations set forth above apply to all or any part of the Confidential Information disclosed hereunder except to the extent that:

 

	
  

	
1.

	
The recipient party can show by written record that it possessed the information prior to its receipt from the other Party;

 

  

17

  

 

	
  

	
2.

	
The information was already available to the public or became so through no fault of the recipient party;

 

	
  

	
3.

	
The information is subsequently disclosed to the recipient party by a third party that has the right to disclose it free of any obligations of the disclosing party; or

 

	
  

	
4.

	
The information is required by law or regulation to be disclosed; provided, however, that the Party subject to such disclosure requirement has provided written notice to the other Party promptly to enable such other Party to seek a protective order or otherwise prevent disclosure of such Confidential Information.

 

C.           The Parties agree to keep the nature, existence and terms of this Agreement confidential until first publicly announced by the Parties pursuant to a joint press release mutually approved by the Parties.  The content and timing of all press releases and similar public communications regarding this Agreement and the subject matter hereof will be mutually agreed to in writing by the Parties, and neither Party may make or issue any public announcement or press release that refers to the other Party or describes any aspect of this Agreement without having first received the prior written consent of the other Party.  Notwithstanding the foregoing, either Party may make any public announcement or disclosure that it reasonably believes is required by law, rule or regulation of any governmental authority or other regulatory body (including, without limitation, the SEC or the FDA).

 

D.           Notwithstanding the provisions of this Section XVIII, Panacela shall have the right to disclose Confidential Information to its sublicensees, agents, vendors consultants, Affiliates or other third parties (collectively, “Agents”) in accordance with this paragraph.  Such disclosure shall be limited only to the Agents involved in the research, development, commercialization, manufacturing, marketing or promotion of Products.  Any such Agents must agree in advance and in writing to be bound by confidentiality and non-use obligations substantially similar to those contained in this Agreement.  In addition, Panacela and its Agents may make disclosure of such Confidential Information of CBLI as may be necessary in order to obtain or maintain any Regulatory Approvals, including, in connection with clinical trials, regulatory applications and filings, and otherwise.

 

XIX.        ANTI-KICKBACK STATUTE AND STARK LAW COMPLIANCE

 

By entering into this Agreement, the parties specifically intend to comply with all applicable laws, rules and regulations, including (i) the federal anti-kickback statute (42 U.S.C. §1320a-7b) and the related safe harbor regulations; and (ii) the Limitation on Certain Physician Referrals, also referred to as the “Stark Law” (42 U.S.C. §1395nn).  Accordingly, no part of any consideration paid hereunder is a prohibited payment for the recommending or arranging for the referral of business or the ordering of items or services; nor are the payments intended to induce illegal referrals of business.  In the event that any part of this Agreement is determined to violate federal, state, or local laws, rules, or regulations, the parties agree to negotiate in good faith revisions to the provision or provisions that are in violation.

 

  

18

  

 

XX.         ELIGIBILITY TO PARTICIPATE IN FEDERAL HEALTH CARE PROGRAMS

 

By signing this agreement, Panacela hereby represents and warrants the following: (a) that is has not been debarred, excluded, suspended or otherwise determined to be ineligible to participate in any federal health care programs (collectively, “Debarment” or “Debarred”, as applicable); and (b) that it shall not knowingly employ or contract with, with or without compensation, any individual or entity (singularly or collectively, “Program Agent”) listed by a federal agency as Debarred.  To comply with this provision, Panacela shall make reasonable inquiry into the status of any Program Agent contracted or arranged by Panacela to fulfill the terms of this Agreement.  In the event that Panacela and/or an Program Agent thereof either (i) becomes Debarred or (ii) receives notice of action or threat of action with respect to its Debarment during the term of this Agreement, Panacela agrees to notify CBLI immediately.  Panacela agrees to timely notify CBLI in the event that Panacela has identified or reasonably suspects potential violations associated with its performance under this Section, and the nature of such potential violation, to enable CBLI to take prompt corrective action.  Further, in the event that Panacela or a Program Agent thereof becomes Debarred as set forth above and such Debarment shall have become final and non-appealable, this Agreement relative to such entity or individual’s participation hereunder may be terminated upon written notice.

 

XXI.      AUTHORITY

 

The persons signing on behalf of each of CBLI and Panacela hereby warrant and represent that they have authority to execute this Agreement on behalf of the Party for whom they have signed.

 

XXII.        PUBLICATION

 

To avoid loss of patent rights as a result of premature public disclosure of patentable material, CBLI will extend to Panacela and allow Panacela to exercise all of CBLI’s benefit and rights regarding intended publication or disclosure pertaining to the Licensed Rights.

 

XXIII.        DISPUTE RESOLUTION

 

A.           Disputes.  The Parties recognize that disputes as to certain matters arising under or relating to this Agreement or either Party’s rights and/or obligations hereunder may arise from time to time.  It is the objective of the Parties to establish procedures to facilitate the resolution of such disputes in an expedient manner by mutual cooperation and without resort to litigation.  To accomplish this objective, the Parties agree to follow the procedures set forth in Section XXIII.B if and when such a dispute arises between the Parties.

 

B.           Procedures. The Parties shall attempt in good faith to resolve any dispute arising out of or relating to this Agreement promptly by negotiation between executives who have the authority to settle the controversy.  Either Party may give the other Party written notice of a dispute not resolved in the normal course of business.  If the matter has not been resolved by such executives within sixty (60) days of a disputing Party’s notice, the Parties agree to submit the matter to mediation unless mediation is waived upon written consent of the Parties.  If the matter is submitted to mediation but is not resolved through negotiation or mediation, or if the Parties waive mediation, either Party may initiate binding arbitration as provided in Section XXIII.C.

 

  

19

  

 

C.           Arbitration.  Arbitration of disputes or claims (each, a “Claim”) between the parties under this Section XXIII.C shall be administered by JAMS in accordance with its Comprehensive Arbitration Rules and Procedures.  The arbitration shall be held in New York, New York.  The arbitration shall be conducted by one arbitrator who is knowledgeable in the subject matter at issue in the dispute.  The arbitrator will be selected by written agreement of the Parties.  The arbitrator shall, within fifteen (15) days after the conclusion of the arbitration hearing, issue a written award and statement of decision describing the essential findings and conclusions on which the award is based, including the calculation of any damages awarded.  The arbitrator shall be authorized to award compensatory damages, but shall NOT be authorized (a) to award non-economic damages, such as for emotional distress, pain and suffering or loss of consortium, (b) to award punitive or multiple damages, or (c) to reform, modify or materially change this Agreement or any other agreements contemplated hereunder; provided, however, that the damage limitations described in subsections (a) and (b) of this sentence will not apply if such damages are statutorily imposed.  The arbitrator also shall be authorized to grant any temporary, preliminary or permanent equitable remedy or relief the arbitrator deems just and equitable and within the scope of this Agreement, including, without limitation, an injunction or order for specific performance.  The decision of the arbitrator shall be final and binding upon the Parties.  The award of the arbitrator shall be the sole and exclusive remedy of the Parties.  Judgment on the award rendered by the arbitrator may be entered in any court having competent jurisdiction thereof.  This Section XXIII.C shall not apply to any dispute, controversy or claim that concerns (i) the validity or infringement of a patent, trademark or copyright; or (ii) any antitrust, anti-monopoly or competition law or regulation, whether or not statutory.  Notwithstanding the foregoing, claims for injunctive relief shall not be subject to the requirements of arbitration. English shall be the language of any arbitration proceeding.

 

D.           Costs and Awards.  Each Party shall bear its own attorneys’ fees, costs, and disbursements arising out of the arbitration, and shall pay an equal share of the fees and costs of the arbitrator; provided, however, that the arbitrator shall be authorized to determine whether a Party is the prevailing Party, and if so, to award to that prevailing Party reimbursement for its reasonable attorneys’ fees, costs and disbursements (including, for example, expert witness fees and expenses, photocopy charges, and travel expenses), and/or the fees and costs of the arbitrator.

 

E.           Waiver and Acknowledgement.  By agreeing to this binding arbitration provision, the Parties understand that they are waiving certain rights and protections which may otherwise be available if a Claim between the Parties were determined by litigation in court, including, without limitation, the right to seek or obtain certain types of damages precluded by this provision, the right to a jury trial, certain rights of appeal, and a right to invoke formal rules of procedure and evidence.

 

XXIV.      CONFLICT OF INTEREST

 

CCF maintains and adheres to a Conflict of Interest Policy.  In connection therewith, Panacela represents that no CCF employees, officers or directors are consultants, employees, officers or directors of Panacela or any of its Affiliates serve on any boards or committees of or in any advisory capacity with Licensee or any of its affiliates.

 

  

20

  

 

XXV.       COMPLIANCE WITH LAWS

 

A.           Panacela agrees to comply with all applicable US and Foreign laws, rules, regulations and restrictions.  Without limiting the foregoing, by entering into this Agreement, Panacela will comply with all applicable laws, rules and regulations including, the Foreign Corrupt Practices Act, export/import laws, security laws and regulations, currency restrictions, and tax and other applicable treaties. In the event that any part of this Agreement is determined to violate any such U.S. or foreign, federal, state, or local laws, rules, or regulations, the Parties agree to negotiate in good faith revisions to the provision or provisions that are in violation.  In the event the Parties are unable to agree to new or modified terms as required to bring the entire Agreement into compliance, either Party may terminate this agreement upon sixty (60) days' written notice to the other Party.

 

F.           Export Control Compliance. Panacela will comply with all applicable export laws, regulations, and restrictions. In connection with the exercise of Panacela’s rights hereunder, CBLI does not represent that an export license will not be required nor that, if required, such a license will be issued. It is also understood that the transfer of certain technical data and commodities may require a license from the United States Government. CBLI will reasonably cooperate with and assist Panacela to obtain any required export licenses. However, and notwithstanding anything to the contrary herein, Panacela will be solely responsible for ensuring that all export control regulations, laws, and restrictions (“Export Laws”) are complied with in connection with this Agreement, including overseeing the activities of its Affiliates and Sublicensees in connection with any right exercised under this Agreement. If any transfer under this Agreement to any person or entity, whether private or governmental, violates any U.S. export control regulation, law or restriction, such transfer shall be void at its inception, but any such violation shall be subject to Panacela’s indemnity obligation under Article 13. Upon request, and in any event with each Report due hereunder, an officer of Panacela shall certify that Panacela and each Sublicensee and Affiliate are in compliance with and have not violated any Export Law.

 

 [Signatures follow.]

 

  

21

  

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on the dates indicated below.

 

CLEVELAND BIOLABS, INC.:

 

	
By:

	
/s/ Michael Fonstein, Ph.D.

	
Date: September 23, 2011

	  	  	  
	
Name: Michael Fonstein, Ph.D.

	  
	  	  
	
Title: Chief Executive Officer

	  

 

PANACELA LABS, INC.

 

	
By:

	
/s/ Dmitry Tyomkin

	
Date: September 23, 2011

	  	  	  
	
Name: Dmitry Tyomkin

	  
	  	  
	
Title: Chief Executive Officer

	  

 

Signature Page to Amended and Restated Exclusive Sublicense Agreement

 

  

  

  

Appendix B

 

Licensed Mobilan Patent Applications and Patents

 

Mobilan

 

	
Country/Region

	
App. No.

	
Assignee/Owner

	
PCT

	
PCT/US04/040753

	
CCF

	
Australia

	
2004296828

	
CCF

	
Canada

	
2,547,869

	
CCF

	
China

	
200480041259.5

	
CCF

	
EAPO

	
200601079

	
CCF

	
EPO

	
04813124.7

	
CCF

	
Hong Kong

	
07108097.8

	
CCF

	
Israel

	
175974

	
CCF

	
India

	
3112/DELNP/2006

	
CCF

	
South Korea

	
10-2006-7010934

	
CCF

	
Singapore

	
200809013-6

	
CCF

	
Ukraine

	
a200607304

	
CCF

	
USA

	
12/617,653

	
CCF

	
USA

	
12/617,639

	
CCF

	
USA

	
11/421,918

	
CCF

	
Japan

	
2006-542849

	
CCF

	
Malaysia

	
PI 20062641

	
CCF

	
PCT

	
PCT/US05/046485

	
CCF/CBLI

	
US

	
11/722,682

	
CCF/CBLI

	
Europe

	
05855104.5

	
CCF/CBLI

	
Japan

	
2007-548451

	
CCF/CBLI

	
Israel

	
184140

	
CCF/CBLI

	
Pakistan

	
0680/2006

	
CCF/CBLI

 

Appendix A

  

  

  

  

Appendix C

 

Licensed Inhibitor and Modulator Patent Applications and Patents

 

Revercom

 

	
Country/Region

	
App. No.

	
Assignee/Owner

	
PCT

	
PCT/US2005/016832

	
CCF/CCIA

	
US

	
11/579,779

	
CCF/CCIA

	
EPO

	
05748307.5

	
CCF/CCIA

	
Ireland

	
05748307.5

	
CCF/CCIA

	
Germany

	
05748307.5

	
CCF/CCIA

	
France

	
05748307.5

	
CCF/CCIA

	
Switzerland

	
05748307.5

	
CCF/CCIA

	
Great Britain

	
05748307.5

	
CCF/CCIA

	
New Zealand

	
551424

	
CCF/CCIA

	
Australia

	
2005244872

	
CCF/CCIA

 

Akril

 

	
Country/Region

	
App. No.

	
Assignee/Owner

	
PCT

	
PCT/US06/38440

	
CCF / CBLI

	
US

	
11/992,874

	
CCF / CBLI

 

Licensed Xenomycin Patent Applications and Patents

 

	
Country/Region

	
App. No.

	
Assignee/Owner

	
US

	
61/102,913

	
Incuron

	
PCT

	
PCT/US2009/059558

	
Incuron

	
Georgia

	
12213/01

	
Incuron

	
Belarus

	
a20110597

	
Incuron

	
US

	
13/121,051

	
Incuron

	
Kazakhstan

	
2011/2005.1

	
Incuron

	
Japan

	
2011-530291

	
Incuron

	
Vietnam

	
1-2011-00846

	
Incuron

	
OAPI

	
1201100107

	
Incuron

	
Cuba

	
2011-0078

	
Incuron

	
Brazil

	
Not yet known 

	
Incuron

	
Ukraine

	
a201105704

	
Incuron

	
Russia

	
2011108932

	
Incuron

	
ARIPO

	
AP/P/2011/005637

	
Incuron

	
Canada

	
2,736,097

	
Incuron

	
Mexico

	
MX/a/2011/003416

	
Incuron

	
New Zealand

	
591516

	
Incuron

	
Singapore

	
201102290-2

	
Incuron

	
China

	
200980140333.1

	
Incuron

	
EPO

	
09793304.8

	
Incuron

	
Australia

	
2009302546

	
Incuron

	
South Korea

	
10-2011-7009438

	
Incuron

	
South Africa

	
2011/01513

	
Incuron

	
Vietnam

	
1-2011-00846

	
Incuron

	
Israel

	
211430

	
Incuron

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