Document:

Exhibit 10.11

 

***Text Omitted and Filed Separately with

the Securities and Exchange Commission.

Confidential Treatment Requested Under

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

 

LICENSE AGREEMENT

 

THIS LICENSE AGREEMENT (the “Agreement”) is entered into as of March 3, 2014 (the “Effective Date”) by and between SANTEN PHARMACEUTICAL CO., LTD., a company organized under the laws of Japan (“Santen”) and TRACON PHARMACEUTICALS, INC., a corporation organized under the laws of the State of Delaware (“Tracon”).

 

RECITALS

 

WHEREAS, Tracon has rights to the Antibody (as defined below) known as TRC105, currently being developed for oncology applications;

 

WHEREAS, Santen is engaged in the research, development and commercialization of pharmaceutical products; and

 

WHEREAS, Santen desires to obtain from Tracon, and Tracon desires to grant to Santen, an exclusive license under the Licensed Technology to develop and commercialize Products in the Field in the Territory (each as defined below), subject to the terms and conditions of this Agreement.

 

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

 

1.                                    DEFINITIONS

 

1.1       “Affiliate” shall mean any company or entity controlled by, controlling, or under common control with a Party or another entity.  For the purpose of this definition, an entity shall be deemed to “control” another entity, if it owns directly or indirectly, more than fifty percent (50%) of the outstanding voting securities, capital stock, or other comparable equity or ownership interest of such entity, or exercises equivalent influence over such entity.

 

1.2       “Alternate Compound” shall mean the [...***...] version of TRC105 or any fragment, modification or variant of TRC105 that is developed as an alternative, or in addition, to TRC105.

 

1.3       “Alternate Product” shall mean any pharmaceutical product that comprises or contains any Licensed Form of an Alternate Compound, including any such product that is incorporated into a Delivery Device, alone or in combination with one or more other active ingredient(s), whether packaged together or in the same therapeutic formulation.

 

1.4       “Antibody” means a molecule or the gene encoding such a molecule comprising or containing at least one immunoglobulin variable domain or parts of such domain.

 

1.5       “Applicable Laws” shall mean the applicable provisions of any and all national, supranational, regional, state and local laws, treaties, statutes, rules, regulations, administrative codes, guidance, ordinances, judgments, decrees, directives, injunctions, orders, permits (including Regulatory Approvals) of or from any court, arbitrator, Regulatory Authority or 

 

***Confidential Treatment Requested

 

1.

 

governmental agency or authority having jurisdiction over or related to the subject item or subject person, including the FCPA, Export Control Laws and other comparable laws.

 

1.6       “Bankruptcy Laws” shall have the meaning provided in Section 9.5.

 

1.7       “Base Sales” shall have the meaning provided in Section 4.3(b)(ii).

 

1.8       “BLA” shall mean a biologics license application as described in 21 CFR Part 601, et seq. (and any amended or successor regulations), including all amendments and supplements thereto, that is filed with the FDA in order to gain the FDA’s approval to market a Product in the U.S.

 

1.9       “Business Day” shall mean any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by law to close in the State of California, U.S. or Japan.

 

1.10     “Change of Control” shall mean either: (a) a sale of all or substantially all of the assets of Tracon, including but not limited to those relating to anti-endoglin Antibody, in one or a series of integrated transactions not in the ordinary course of business to a Third Party; or (b) the acquisition of Tracon by a Third Party by means of any transaction or series of related transactions (including, any stock acquisition, merger or consolidation); in either case, in which transaction or series of transactions the holders of outstanding voting securities of Tracon immediately prior to such transaction do not beneficially own, directly or indirectly, at least fifty (50) % of the combined outstanding voting power of the acquiring entity (or of Tracon if it is the surviving entity in such transaction described in subsection (b)), or its direct or indirect parent entity, immediately after such transaction or series of related transactions.

 

1.11     “Co-Promotion Right” shall have the meaning provided in Section 3.8.

 

1.12     “Combination Product” shall mean any Product that contains or comprises both (a) any Compound, and (b) at least one other active ingredient(s), whether packaged together or in the same therapeutic formulation.

 

1.13     “Commercial Launch” shall mean the first sale by Santen, its Affiliate or Sublicensee to a Third Party for end use or consumption of a Product in a country in the Territory after the governing Regulatory Authority of such country has granted Regulatory Approval of such Product.  For the avoidance of doubt, any sale of a Product for compassionate use, named patient use, clinical trial purposes or other similar uses will not constitute a Commercial Launch.

 

1.14     “Commercially Reasonable Efforts” shall mean that level of efforts and resources consistent with commercially reasonable practices of a similarly situated specialty pharmaceutical company to perform any activity for a compound or product at a similar stage of research, development or commercialization, taking into account measures of patent coverage, relative safety and efficacy, product profile, the competitiveness of the marketplace, the proprietary position of such compound or product, the regulatory structure involved, the market potential of such compound or product, industrial standard in manufacturing and supplying 

 

2.

 

pharmaceutical products and its components, and other relevant factors, including comparative technical, legal, scientific or medical factors.

 

1.15     “Competing Product” shall mean a pharmaceutical product containing either (a) the Compound or (b) an Antibody (other than the Compound) having [...***...], in either case of clause (a) or (b) with or without one or more other active ingredients, which pharmaceutical product is marketed by a party other than Santen or its Affiliates or Sublicensees, and used in the Field

 

1.16     “Compound” shall mean (a) TRC105, or (b) any Alternate Compound.

 

1.17     “Compound Manufacturing IP” shall mean all Information and Patents Controlled by Tracon or its Affiliates as of the Effective Date or during the Term that relate to the manufacture of any Compound, excluding [...***...].  Notwithstanding the foregoing, Compound Manufacturing IP shall not include any Information or Patents Controlled by any acquirer of Tracon, or any Affiliate of such acquirer, except for any Information or Patents that are developed by such acquirer or Affiliate through use of Information or Patents that relate to the manufacture of any Compound Controlled by Tracon or its Affiliates (excluding such acquirer or its Affiliates).

 

1.18     “Compound Manufacturing Patents” shall mean the Patents included in the Compound Manufacturing IP.

 

1.19     “Confidential Information” shall mean all Information and other proprietary scientific, marketing, financial or commercial information or data, which is generated by or on behalf of a Party or its Affiliates and which one Party or any of its Affiliates has furnished or made available to the other Party or its Affiliates, whether in oral, written or electronic form.

 

1.20     “Control” (including any variations such as “Controlled” and “Controlling”) shall mean, with respect to any Information, Patents or other intellectual property rights, possession by a Party or Third Party of the right, power and authority (whether by ownership, license or otherwise, other than by virtue of any rights granted under this Agreement) to grant access to, to grant use of, or to grant a license or a sublicense to such Information, Patents or intellectual property rights without violating the terms of any agreement or other arrangement with any Third Party

 

1.21     “Delivery Device” shall mean any device for the delivery of a product in the Field (excluding syringes or other similar devices that are generally available for purchase).

 

1.22     “Development Plan” shall have the meaning provided in Section 3.1(b).

 

1.23     “Disclosing Party” shall have the meaning provided in Section 6.1.

 

1.24     “Dispute” shall have the meaning provided in Section 11.1.

 

1.25     “EMA” shall mean the European Medicines Agency and any successor entity thereto.

 

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1.26     “EU” shall mean the European Union.

 

1.27     “Export Control Laws” shall mean all applicable U.S. laws and regulations relating to (a) sanctions and embargoes imposed by the Office of Foreign Assets Control of the U.S. Department of Treasury or (b) the export or re-export of commodities, technologies, or services, including the Export Administration Act of 1979, 24 U.S.C. §§ 2401-2420, the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701-1706, the Trading with the Enemy Act, 50 U.S.C. §§ 1 et. seq., the Arms Export Control Act, 22 U.S.C. §§ 2778 and 2779, and the International Boycott Provisions of Section 999 of the U.S. Internal Revenue Code of 1986 (as amended).

 

1.28     “FCPA” shall mean the U.S. Foreign Corrupt Practices Act (15 U.S.C. Section 78dd-1, et. seq.) as amended.

 

1.29     “FDA” shall mean the U.S. Food and Drug Administration and any successor entity thereto.

 

1.30     “Field” shall mean the treatment, amelioration, mitigation or prevention of diseases or conditions of the eyes, excluding systemic treatment of cancers of the eye (ocular tumors).

 

1.31     “First Product” shall have the meaning provided in Section 4.3(e).

 

1.32     “GAAP” shall mean generally accepted accounting principles in the U.S., or internationally, as appropriate, consistently applied and shall mean the international financial reporting standards (“IFRS”) if a Party uses IFRS.

 

1.33     “ICC” shall have the meaning provided in Section 11.2(a).

 

1.34     “IND” shall mean an investigational new drug application, clinical study application, clinical trial exemption, or similar application or submission for approval to conduct human clinical investigations filed with or submitted to a Regulatory Authority in conformance with the requirements of such Regulatory Authority, including any such application filed with the FDA pursuant to 21 CFR Part 312.

 

1.35     “IND Filing Date” shall have the meaning provided in Section 3.7(a).

 

1.36     “IND Milestone” shall have the meaning provided in Section 4.2(a).

 

1.37     “Indemnitee” shall have the meaning provided in Section 10.3.

 

1.38     “Indemnitor” shall have the meaning provided in Section 10.3.

 

1.39     “Information” shall mean tangible and intangible techniques, technology, practices, trade secrets, inventions (whether patentable or not), processes, formulations, compounds, products, biological materials, cell lines (it being understood that any rights to use “Information” include the rights to use such cell lines), samples of assay components, media, designs, formulas, ideas, programs, software models, algorithms, developments, experimental 

 

4.

 

works, protocols, methods, knowledge, know-how, skill, experience, test data and results (including pharmacological, toxicological and non-clinical and clinical data and results), compilations of data, other works of analytical and quality control data, results, descriptions, compositions of matter, regulatory submissions, minutes, correspondence and strategy.

 

1.40     “Initial Product” shall mean any pharmaceutical product that comprises or contains any Licensed Form of TRC105,  including any such product that is incorporated into a Delivery Device, alone or in combination with one or more active ingredient(s), whether packaged together or in the same therapeutic formulation.

 

1.41     “Initiation” shall mean, with respect to any Phase II Clinical Trial or Phase III Clinical Trial, the first enrollment of a human subject in the respective trial.

 

1.42     “JDC” shall have the meaning provided in Section 3.3(a).

 

1.43     “Joint Inventions” shall have the meaning provided in Section 8.1.

 

1.44     “Joint Patents” shall have the meaning provided in Section 8.1.

 

1.45     “License” shall mean the license granted under Section 2.1(a) and the sublicense granted under Section 2.1(b).

 

1.46     “Licensed Form” shall mean any and all dosage forms of a Compound in concentrations and quantities suitable for administration in and around the eyes, even if the same concentration is usable for other purposes.  For clarity, Licensed Form excludes any and all dosage forms of a Compound for administration through systemic delivery, including intravenous, subcutaneous, oral and pulmonary administration.

 

1.47     “Licensed Know-How” shall mean all Information with respect to any Compound or Product, which Information is Controlled by Tracon as of the Effective Date or by Tracon or any of its Affiliates during the Term and is necessary or useful for (a) the practice of the Licensed Patents, (b) preparing and prosecuting any IND or Regulatory Approval for the Licensed Form of any Compound or for any Product in the Field in the Territory, (c) the development of the Licensed Form of any Compound in the Field in the Territory or the use of the Licensed Form of any Compound in the development, manufacture, marketing, use or sale of any Product in the Field in the Territory, or (d) the development, manufacture, marketing, use or sale of any Product in the Field in the Territory, including all Information included in Compound Manufacturing IP, but excluding all Information [...***...].  Notwithstanding the foregoing, Licensed Know-How shall not include any Information Controlled by any acquirer of Tracon, or any Affiliate of such acquirer, except for any Information that is developed by such acquirer or Affiliate through use of Licensed Technology Controlled by Tracon or its Affiliates (excluding such acquirer or its Affiliates).  For clarification, Licensed Know-How does not include any Information, which relates to any active ingredient(s), other than a Compound, in any Combination Product.

 

1.48     “Licensed Patents” shall mean (a) all Patents set forth on Exhibit A-1, A-2, A-3 and A-4, and (b) all other Patents Controlled by Tracon (including by virtue of the license granted under the RPCI Agreement) or its Affiliates during the Term, which (i) claim the 

 

***Confidential Treatment Requested

 

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composition of matter, manufacture or use in the Field of any Compound or Product or (ii) in the absence of a license or similar right, would be infringed (assuming issuance thereof in the case of any patent application) by (A) the development of the Licensed Form of any Compound in the Field in the Territory or the use of the Licensed Form of any Compound in the development, manufacture, marketing, use or sale of any Product in the Field in the Territory or (B) the development, manufacture, use, import, export, offering for sale or sale of any Product in the Field in the Territory, including all Patents included in Compound Manufacturing IP but excluding [...***...].  Notwithstanding the foregoing, Licensed Patents shall not include any Patents Controlled by any acquirer of Tracon, or any Affiliate of such acquirer, except for any Patents developed by such acquirer or Affiliate through use of Licensed Technology Controlled by Tracon or its Affiliates (excluding such acquirer or its Affiliates).  Licensed Patents include Tracon’s ownership interest in Joint Patents. For clarification, Licensed Patents do not include any Patents with respect to any active ingredient(s) in any Combination Product other than a Compound.

 

1.49     “Licensed Technology” shall mean the Licensed Know-How and Licensed Patents.

 

1.50     “Lonza” shall mean Lonza Sales AG, a company incorporated and registered in Switzerland, or its successor-in-interest to the Lonza Agreement.

 

1.51     “Lonza Agreement” shall mean that certain License Agreement, dated June 29, 2009, by and between Lonza and Tracon, as amended in accordance with its terms, attached as Exhibit 1.51.

 

1.52     “Losses” shall have the meaning provided in Section 10.1.

 

1.53     “MAA” shall mean an application for the authorization for marketing of a Product, including all amendments and supplements thereto, filed with any Regulatory Authority outside the U.S. (including any supranational agency such as the EMA), to gain approval to market a Product in a given country or group of countries outside the U.S.

 

1.54     “Net Sales” shall mean the gross amounts invoiced for sales or other dispositions of Products by or on behalf of Santen or any of its Affiliates or Sublicensees (each, a “Selling Party”) to Third Parties (other than Sublicensees), less deductions [...***...] by the Selling Party using GAAP applied on a consistent basis for:

 

	
(a)
    	
[...***...];
    
	
 
    	
 
    
	
(b)
    	
[...***...];
    
	
 
    	
 
    
	
(c)
    	
[...***...];
    

 

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(d)
    	
[...***...];
    
	
 
    	
 
    
	
(e)
    	
[...***...], and
    
	
 
    	
 
    
	
(f)
    	
[...***...].
    

 

In no event shall any particular amount, identified above, be deducted more than once in calculating Net Sales (i.e., no “double counting” of reductions).  Sales of Products [...***...] shall be excluded from the computation of Net Sales, provided that the [...***...] are included in the computation of Net Sales.  Sale, disposal or use of Products for [...***...], shall not be deemed a sale hereunder.

 

In the event that a Product is sold in the form of a Combination Product, Net Sales of the Combination Product shall be determined by multiplying actual Net Sales of the Combination Product (determined by reference to the definition of Net Sales set forth above) during the applicable calendar quarter by the fraction [...***...] where A is the [...***...], and B is the [...***...], in each case during the applicable reporting calendar quarter in the country in which the sale of the Combination Product was made, or if sales of both the Product and the other active ingredient(s) did not occur in such period, then in the most recent calendar quarter in which sales of both occurred.  If the other active ingredient(s) in the Combination Product is not sold separately in said country, Net Sales of the Combination Product shall be determined by multiplying actual Net Sales of such Combination Product (determined by reference to the definition of Net Sales set forth above) during the applicable calendar quarter by the fraction [...***...], where A is the [...***...], and D is the [...***...].  If neither the Product nor the other active ingredient(s) in the Combination Product is sold separately in a given country, the Parties shall determine Net Sales for such Combination Product by mutual agreement based on the relative contribution of the Product and the other active ingredient(s) in the Combination Product.

 

In the event that a Product is sold together with a Delivery Device for a single sale price, Net Sales of such Product shall be determined by [...***...].  If the Delivery Device is not sold separately in a given country, the Parties shall determine Net Sales for such Product sold together with a Delivery Device by mutual agreement based on the relative contribution of the Product and the Delivery Device to the final aggregate value of the Product and Delivery Device sold together.  In no event will less than [...***...] percent ([...***...]%) of the total amounts invoiced for a Product and Delivery Device sold together be allocated to the Product. For the avoidance of doubt, with 

 

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respect to the Combination Product sold together with a Delivery Device for a single sale price, the preceding paragraph shall further apply to determine Net Sales thereof.

 

1.55     “Nondisclosure Agreement” shall mean the Mutual Confidentiality Agreement between the Parties dated December 14, 2011.

 

1.56     “Party” shall mean Santen or Tracon individually, and “Parties” shall mean Santen and Tracon collectively.

 

1.57     “Patents” shall mean patents and patent applications, including provisional applications, continuations, continuations-in-part, continued prosecution applications, divisions, substitutions, reissues, additions, renewals, reexaminations, extensions, term restorations, confirmations, registrations, revalidations, revisions, priority rights, requests for continued examination and supplementary protection certificates granted in relation thereto, as well as utility models, innovation patents, petty patents, patents of addition, inventor’s certificates, and equivalents in any country or jurisdiction.

 

1.58     “Phase I Clinical Trial” shall mean a study in humans which provides for the first introduction into humans of a Product, conducted in normal volunteers or patients to generate information on product safety, tolerability, pharmacological activity or pharmacokinetics, as more fully defined in 21 CFR §312.21(a) or comparable regulations in any country or jurisdiction outside the U.S. (and any amended or successor regulations).

 

1.59     “Phase II Clinical Trial” shall mean a human clinical trial, the principal purpose of which is to gather an initial assessment of safety and efficacy of one or more particular doses in patients being studied, as more fully defined in 21 C.F.R. §312(b) or comparable regulations in any country or jurisdiction outside the U.S. (and any amended or successor regulations).

 

1.60     “Phase III Clinical Trial” shall mean a human clinical trial, the principal purpose of which is to gather safety and efficacy data of one or more particular doses in patients being studied that is needed to evaluate the overall benefit and risk relationship of the product and to provide adequate basis for labeling, as more fully defined in 21 C.F.R. §312(c) or comparable regulations in any country or jurisdiction outside the U.S. (and any amended or successor regulations).

 

1.61     “Phase III Costs” shall have the meaning provided in Section 3.8.

 

1.62     “PMDA” shall mean the Japanese Pharmaceuticals and Medical Devices Agency and any successor entity thereto.

 

1.63     “Primary Detail” shall have the meaning provided in Section 3.8(b).

 

1.64     “Product” shall mean the Initial Product or any Alternate Product.

 

1.65     “Receiving Party” shall have the meaning provided in Section 6.1.

 

8.

 

1.66     “Regulatory Approval” shall mean any and all approvals, licenses, permits, registrations or authorizations of or from any Regulatory Authority that are necessary to market and sell a pharmaceutical product in any country or other jurisdiction.

 

1.67     “Regulatory Authority” shall mean any country, federal, supranational, state or local regulatory agency, department, bureau or other governmental or regulatory authority having the administrative authority to regulate the development or marketing of pharmaceutical products in any country or other jurisdiction.

 

1.68     “Royalty Term” shall have the meaning provided in Section 4.3(e).

 

1.69     “RPCI Licensor” shall mean Roswell Park Cancer Institute and Health Research, Inc.

 

1.70     “RPCI Agreement” shall mean that certain Exclusive License Agreement, dated November 1, 2005, by and between RPCI Licensor and Tracon, as amended in accordance with its terms, attached as Exhibit 1.70.

 

1.71     “RPCI Patents” shall mean any Patents licensed to Tracon by RPCI Licensor under the RPCI Agreement, which (i) claim the composition of matter, manufacture or use in the Field of any Compound or Product or (ii) in the absence of a license or similar right, would be infringed (assuming issuance thereof in the case of any patent application) by (A) the development of the Licensed Form of any Compound in the Field in the Territory or the use of the Licensed Form of any Compound in the development, manufacture, marketing, use or sale of any Product in the Field in the Territory or (B) the development, manufacture, use, import, export, offering for sale or sale of any Product in the Field in the Territory, including, without limitation, as set forth on Exhibits A-1 and A-3 attached hereto.

 

1.72     “Santen Fiscal Year” shall mean the twelve (12) month period from April 1 to March 31.

 

1.73     “Santen Indemnitees” shall have the meaning provided in Section 10.2.

 

1.74     “Santen Know-How” shall mean all Information relating to (a) the manufacture of any Compound, (b) the development of a Licensed Form of any Compound or the use of the Licensed Form of any Compound in the development, manufacture, marketing, use or sale of a Product, (c) the development, manufacture, marketing, use or sale of any Product, (d) the Santen Patents or (e) the preparation or prosecution of any IND or Regulatory Approval for the Licensed Form of any Compound or for any Product, which Information is Controlled by Santen or its Affiliates during the Term, including all such Information that is developed or generated in the course of development, manufacturing, regulatory or commercialization activities contemplated by this Agreement, provided however, that Santen Know-How shall not include any Information (i) relating to any Delivery Device, (ii) that is Controlled by Santen or its Affiliates prior to the Effective Date or is developed or generated by or on behalf of Santen or its Affiliates outside of the course of development, manufacturing, regulatory or commercialization activities contemplated by this Agreement and without use of any Licensed Technology, or (iii) relating to the use of any active pharmaceutical ingredient other than any Compound or of any excipient to manufacture, develop or use a Compound or a Product.  If Santen or its Affiliate engages a Third 

 

9.

 

Party to perform development, manufacturing, regulatory or commercialization activities relating to any Compound or Product as contemplated by this Agreement, Santen and its Affiliates will use commercially reasonable efforts to obtain Control of Information developed or generated by such Third Party through such activities so that it is included in Santen Know-How.

 

1.75     “Santen Patents” shall mean all Patents Controlled by Santen or its Affiliates during the Term, which Patents claim the composition of matter, manufacture or use of any Compound or Product, including all Patents that claim any discovery or invention relating to (a) the manufacture of a Compound, (b) the development of a Licensed Form of a Compound or use of the Licensed Form of a Compound in the development, manufacturing, marketing, use or sale of a Product or (c) the development, manufacture, marketing, use or sale of a Product, provided however, that Santen Patents shall not include any Patents (i) relating to any Delivery Device, (ii) that are Controlled by Santen or its Affiliates prior to the Effective Date or that claim any discovery or invention developed or generated by or on behalf of Santen or its Affiliates outside of the course of development, manufacturing, regulatory or commercialization activities contemplated by this Agreement and without use of any Licensed Technology, or (iii) claiming the use of any active pharmaceutical ingredient other than a Compound or of any excipient to manufacture, develop or use a Compound or a Product.  If Santen or its Affiliate engages a Third Party to perform development, manufacturing, regulatory or commercialization activities relating to any Compound or Product as contemplated by this Agreement, Santen and its Affiliates will use commercially reasonable efforts to obtain Control of Patents that claim any discovery or invention developed or generated by such Third Party through such activities so that they are included in Santen Patents.  Santen Patents include Santen’s ownership interest in Joint Patents.

 

1.76     “Santen Technology” shall mean the Santen Know-How and Santen Patents.

 

1.77     “SEC” shall have the meaning provided in Section 6.4(a).

 

1.78     “Section 365(n)” shall have the meaning provided in Section 9.5.

 

1.79     “Selected Sublicense Consideration” shall have the meaning provided in Section 4.4.

 

1.80     “Sublicensee” shall mean any Third Party to whom Santen has directly or indirectly granted a sublicense under all or any portion of the License.

 

1.81     “Subsequent Date” shall have the meaning provided in Section 2.3(c).

 

1.82     “Supply Agreement” shall have the meaning provided in Section 3.4.

 

1.83     “Term” shall have the meaning provided in Section 9.1.

 

1.84     “Terminated Countries” shall have the meaning provided in Section 9.2(e).

 

1.85     “Territory” shall mean all countries of the world.

 

1.86     “Third Party” shall mean any entity other than Santen and its Affiliates and Tracon and its Affiliates.

 

10.

 

1.87                    “Third Party Claims” shall have the meaning provided in Section 10.1.

 

1.88                    “Tracon Product” shall mean any pharmaceutical product that comprises or contains any form of a Compound other than a Licensed Form of a Compound, alone or in combination with one or more active ingredient(s), whether packaged together or in the same therapeutic formulation.

 

1.89                    “Tracon Indemnitees” shall have the meaning provided in Section 10.1.

 

1.90                    “TRC105” shall mean the chimeric anti-endoglin Antibody known as TRC105, comprising the amino acid sequences set out in Exhibit B.

 

1.91                    “U.S.” shall mean the United States of America and its territories and possessions.

 

1.92                    “U.S. Diligence Obligation” shall have the meaning provided in Section 3.7(b).

 

1.93                    “U.S. Percentage” shall have the meaning provided in Section 3.8(a).

 

1.94                    “Valid Claim” shall mean a claim contained in (a) an issued and unexpired Patent, which claim has not been found to be unpatentable, invalid, revocable or unenforceable by a decision of a court or other authority of competent jurisdiction in the subject country, which decision is unappealable or unappealed within the time allowed for appeal, and has not been admitted to be invalid or unenforceable through abandonment, reissue, disclaimer or otherwise, or (b) a Patent application that has not been irretrievably cancelled, withdrawn, abandoned or rejected.  A Patent application pending for more than [...***...] years shall not be considered to have any Valid Claim for purposes of this Agreement unless and until a Patent with respect to such application issues with such claim.

 

1.95                    “Withdrawal Notice” shall have the meaning provided in Section 3.3(f).

 

2.                                    LICENSE

 

2.1                            License Grant.  Subject to the terms and conditions of this Agreement, Tracon hereby grants to Santen:

 

(a)                              during the Term, (i) an exclusive (even as to Tracon), royalty-bearing license under the Licensed Technology, other than the RPCI Patents and the Compound Manufacturing IP, solely to develop, make, have made, use, promote, sell, offer to sell, import and export Products in the Field in the Territory, and (ii) an exclusive (even as to Tracon), royalty-bearing license under the Compound Manufacturing IP, other than the RPCI Patents, solely to make and have made the Compound for use in the manufacture of Products for development and commercialization uses in the Field in the Territory, subject to the provisions of the Supply Agreement and Exhibit D; and

 

(b)                             during the Term (or, the term of the RPCI Agreement if such term ends prior to the Term), (i) an exclusive (even as to Tracon, subject to Section 2.2(a)), royalty-bearing sublicense under the RPCI Patents, other than the Compound Manufacturing Patents, solely to 

 

***Confidential Treatment Requested

 

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develop, make, have made, use, promote, sell, offer to sell, import and export Products in the Field in the Territory, and (ii) an exclusive (even as to Tracon, subject to Section 2.2(a)), royalty-bearing sublicense under the RPCI Patents included in the Compound Manufacturing Patents (if any) solely to make and have made the Compound for use in the manufacture of Products for development and commercialization in the Field in the Territory, subject to the provisions of the Supply Agreement and Exhibit D.

 

Santen acknowledges that the License with respect to the RPCI Patents is subject to the applicable terms and conditions of the RPCI Agreement, and Santen shall comply, and shall cause any of its Affiliates or Sublicensees who are granted a sublicense under the License with respect to RPCI Patents to comply, with the applicable terms and conditions of the RPCI Agreement.

 

If Santen elects to have the Compound [...***...], and Santen agrees to [...***...] in manufacturing the Product for development and commercialization in the Field in the Territory under the terms of this Agreement.

 

Santen acknowledges that the License does not [...***...], and that Santen may need to [...***...].  In such event, Tracon shall use commercially reasonable efforts to [...***...].

 

2.2                            Sublicense Rights.

 

(a)                              Right to Sublicense.  Subject to the terms and conditions of this Agreement, Santen shall have the right to grant sublicenses under the License (including, to the extent permitted under the RPCI Agreement, rights sublicensed to Santen under Section 2.1(b)) to (i) any Affiliates of Santen (which sublicenses shall permit the further grant of sublicenses, subject to Section 2.2(a)(ii) with respect to any further sublicense to a Third Party) or (ii) any Third Parties with whom Santen or its Affiliate has a binding written agreement to collaborate on the development and commercialization of Products in the Field in the Territory or the manufacture of Products or the Compound used in the manufacture of Products for use in development and commercialization in the Field in the Territory (which sublicense shall not permit the further grant of sublicenses).  [...***...], however, at Santen’s written request, [...***...].  Tracon acknowledges and agrees that Santen will control all aspects of the relationship with any Sublicensee, including, without limitation, the terms and conditions of the sublicense granted by 

 

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12.

 

Santen to such Sublicensee, provided that such sublicense shall comply with the requirements of this Agreement.  Tracon agrees to use commercially reasonable efforts to [...***...], within [...***...] months of the Effective Date, to [...***...].

 

(b)                             Sublicense Terms.  Any sublicense granted by Santen under this Agreement (directly or indirectly through its Affiliate or [...***...] shall be (i) in writing, (ii) subject and subordinate to, and consistent with, the terms and conditions of this Agreement and, with respect to the RPCI Patents, the RPCI Agreement, and (iii) provide that so long as a Sublicensee is in compliance with the sublicense agreement as of the date of termination of this Agreement and the termination of this Agreement was not caused by any act or omission on the part of the Sublicensee, [...***...].  Santen shall provide Tracon with a copy of any sublicense agreement entered into with a Sublicensee, and any amendment thereto, within thirty (30) days of its execution [...***...]).  Santen shall be liable for the failure of its Affiliates and Sublicensees to comply with the relevant obligations under this Agreement and shall, at its own cost, enforce compliance by its Affiliates and Sublicensees with the terms of the sublicense agreement.

 

2.3                            Negative Covenants, Other Antibody Products.

 

(a)                              Licensed Technology.  Santen hereby covenants not to practice, and not to permit or cause any Affiliate, Sublicensee or other Third Party to practice, any Licensed Technology for any purpose except as expressly authorized in this Agreement.  Tracon hereby covenants not to practice, and not to permit or cause any Affiliate, licensee or other Third Party to practice, any Santen Technology for any purpose other than as expressly authorized in this Agreement.

 

(b)                             Other Antibody Products.

 

(i)                                  During the Term, Santen hereby covenants not to, itself or through any Affiliate or Third Party, develop, have developed, manufacture, have manufactured, sell, have sold or promote any product in the Field in the Territory that achieves its therapeutic result primarily through binding endoglin, other than Products.  The Parties agree that, upon a Change of Control, the covenants set forth in this Section 2.3(b)(i) shall automatically terminate.

 

(ii)                              During the Term, Tracon hereby covenants not to, itself or through any Affiliate or Third Party, develop, have developed, manufacture, have manufactured, sell, have sold or promote any anti-angiogenic Antibody, including any Antibody that achieves its therapeutic result primarily through binding endoglin, and any product comprising or containing any such Antibody, in the Field.  The grant of licenses and sublicenses by Tracon pursuant to Section 2.1 and 2.2 and Tracon’s exercise of the Co-Promotion Right pursuant to Section 3.8 of this Agreement will not be considered a breach of the covenant in this Section 2.3(b).  Notwithstanding the foregoing, Tracon shall have the right, itself and through Affiliates and 

 

***Confidential Treatment Requested

 

13.

 

Third Parties, to develop, have developed, manufacture, have manufactured, sell, have sold or promote any anti-angiogenic Antibody, including any Antibody that achieves its therapeutic result primarily through binding endoglin, and any products comprising or containing any such Antibody, including Compounds and Tracon Products, outside the Field, and any off-label use of any such products shall not be a violation of this Section 2.3(b) but shall be subject to Section 4.3(b).  The Parties agree that upon a Change of Control, the covenants set forth in this Section 2.3(b)(ii) shall automatically terminate, and for avoidance of doubt, in no event will this Section 2.3(b)(ii) apply to any acquirer of Tracon or any Affiliate of such acquirer; provided that Section 4.3(b) shall apply with respect to any Competing Products sold by Tracon or its Affiliates after a Change of Control.

 

(c)                               Notice of Change of Control of Tracon.  Tracon shall notify Santen of any Change of Control within twenty (20) days of such event. If, in such Change of Control, Tracon is acquired by an entity, which develops, manufactures, markets or sells [...***...] on the effective date of such Change of Control, then the license granted by Santen to Tracon under Section 2.5 shall only include Santen Technology developed prior to the Change of Control (including all Patents arising in the course of prosecution or maintenance of Santen Patents existing as of such date) and not Santen Technology developed after the Change of Control. If the entity that acquired Tracon in such Change of Control develops, manufactures, markets or sells [...***...] as of a date after the effective date of such Change of Control (“Subsequent Date”), then (i) such entity shall provide prompt written notice to Santen when it starts such development, manufacturing, marketing or sale, and (ii) the license granted by Santen to Tracon under Section 2.5 shall only include Santen Technology developed prior to the Subsequent Date (including all Patents arising in the course of prosecution or maintenance of Santen Patents existing as of the Subsequent Date) and not Santen Technology developed after the Subsequent Date.

 

2.4                            No Implied Licenses; Retained Rights.  No right or license under any Patents or Information of either Party is granted or shall be granted by implication.  All such rights or licenses are or shall be granted only as expressly provided in the terms of this Agreement.  Tracon hereby expressly reserves all rights under the Licensed Technology not expressly licensed to Santen in Section 2.1, including all rights with respect to Tracon Products, all rights outside the Field and all rights to make and have made Compounds for use for any purpose other than in the manufacture of Products in the Field for the Territory.  With respect to the RPCI Patents, RPCI Licensor and the U.S. government have retained rights to use the RPCI Patents as provided in the RPCI Agreement.  Santen hereby expressly reserves all rights under the Santen Technology not expressly licensed to Tracon in Section 2.5 (including the limitations set forth in Section 2.3(c)) and, except as set forth in Section 9.3(c)(i), all rights under the Santen Technology to manufacture Products or the Compound used in the manufacture of Products for use in development and commercialization of Products in the Field in the Territory.

 

2.5                            Grant-Back License to Tracon.  Subject to the terms and conditions of this Agreement including Section 2.3(c), Santen hereby grants to Tracon a non-exclusive, worldwide license, with the right to (a) sublicense to (and permit further sublicenses by) Tracon’s other licensees (including Tracon’s Affiliates) of Licensed Technology outside the Field who agree to grant Tracon a comparable license, with the right to sublicense to Santen (and permit further 

 

***Confidential Treatment Requested

 

14.

 

sublicenses by Santen subject to Section 2.2), to Information, Patents or other intellectual property rights related to the Compound or Product under the Control of such licensee (if any) and (b) sublicense to (but not permit further sublicenses by) any Third Party contract manufacturer of Compounds and Tracon Products for Tracon and its Affiliates and licensees, under the Santen Technology solely to develop, make, have made, use, promote, sell, offer to sell, import and export Tracon Products outside the Field and to make and have made Compounds for use in the manufacture of Tracon Products for development and commercialization uses outside the Field.  Such license shall be perpetual and irrevocable (except in the case of termination by Santen pursuant to Section 9.2(a), 9.2(b) or 9.2(c)) and shall be fully-paid and royalty-free unless Tracon’s practice of such Santen Technology creates any payment obligation by Santen to a Third Party, in which case Tracon shall be liable for such payments unless Tracon advises Santen in writing that it does not want a license to the Santen Technology that would create such payment obligation to a Third Party.  Tracon shall provide Santen with a copy of any such sublicense agreement, and any amendment thereto, within thirty (30) days of its execution (provided that Tracon may redact any confidential information contained therein that is not necessary to disclose to ensure compliance with this Agreement).  Tracon shall be liable for the failure of its sublicensees to comply with the relevant obligations under this Agreement and shall, at its own cost, enforce compliance by its sublicensees with the terms of the sublicense agreement.

 

2.6                            Technology Transfer.

 

(a)                              Documentation.  During the thirty (30) day period following the Effective Date, Tracon, at its expense, shall provide to Santen one (1) electronic copy of documents, data or other information in Tracon’s possession as of the Effective Date that describe or contain Licensed Know-How.  Tracon shall provide and transfer to Santen in the same manner all additional information that describes or contains Licensed Know-How that may from time to time come into Tracon’s possession and has not previously been provided to Santen (and in any event at least semi-annually).

 

(b)                             Access to Personnel.  Upon Santen’s request and prior written consent, Tracon shall provide Santen access to Tracon employees and consultants, and those of its contractors (including its contract manufacturers) and licensors, as reasonably necessary to assist in technology transfer to Santen or its contract manufacturer.  Such assistance shall be provided remotely or on-site at Santen’s or its contract manufacturer’s facilities.  Tracon by itself (including its consultants who perform such work for Tracon) shall provide up to a total of [...***...] hours of such assistance free of charge, and Santen shall reimburse Tracon for assistance provided by itself (including its consultants who perform such work for Tracon) beyond such [...***...] hours at a rate of [...***...] U.S. dollars (U.S.$ [...***...]) per hour within thirty (30) days after receipt of an invoice therefor, such invoice to be issued by the tenth (10th) day of the month following the end of each calendar quarter.

 

(c)                               Research and Development Supplies.  Tracon will supply Santen, without cost, with a reasonable quantity of biological materials and chemical reagents necessary for Santen’s research and development of Product provided that such supply does not unreasonably interfere with Tracon’s development and commercial activities.  Materials requested by Santen in writing to be purchased from a Third Party will be reimbursed by Santen 

 

***Confidential Treatment Requested

 

15.

 

within thirty (30) days after receipt of an invoice therefor, with reasonable additional supporting documentation as may be requested by Santen.

 

3.                                    DEVELOPMENT, REGULATORY AND COMMERCIALIZATION MATTERS

 

3.1                            Development.

 

(a)                              Conduct of Development Activities.  Santen (itself and through its Affiliates and Sublicensees, as applicable) shall be solely responsible, at its own expense, for all development activities with respect to Products in the Field in the Territory.

 

(b)                             Development Plan.  As of the Effective Date, the Parties have agreed to a written plan for development of Products in the Field in the U.S., Japan, United Kingdom, France and Germany by Santen (itself and through its Affiliates and Sublicensees, as applicable), including [...***...] (such plan, as may be amended in accordance with this Section 3.1(b), the “Development Plan”).  Santen, at its own discretion, may amend the Development Plan from time to time after the Effective Date, depending on the progress of necessary development activities or for business reasons.  Until [...***...], Santen will provide Tracon a copy of any amendment to the Development Plan promptly, and in any event within thirty (30) days, after such amendment.  Santen (itself and through its Affiliates and Sublicensees, as applicable) shall use Commercially Reasonable Efforts to develop Products in the Field in the Territory in accordance with the Development Plan.

 

3.2                            Regulatory.

 

(a)                              Conduct of Regulatory Activities.  Santen (itself and through its Affiliates and Sublicensees, as applicable) shall be solely responsible, at its own expense, for all regulatory activities with respect to the Products in the Field in the Territory, including formulating regulatory strategy and preparing, filing, obtaining and maintaining Regulatory Approvals for the Products in the Field in the Territory.  Santen shall be the holder of all Regulatory Approvals for Products in the Field in the Territory and shall have responsibility for interactions with Regulatory Authorities with respect to the Products in the Field in the Territory. Santen shall keep Tracon regularly and fully informed of the preparation of, and Regulatory Authority review and approval of, submissions and communications with Regulatory Authorities with respect to the Products in the Field in the Territory.  In addition, Santen shall promptly provide Tracon with copies of all material documents, information and correspondence received from a Regulatory Authority and upon reasonable request, with copies of any other documents, reports and communications from or to any Regulatory Authority relating to Compounds, Products or activities under this Agreement.

 

(b)                             Access to Regulatory Filings.  Tracon hereby grants to Santen (and its Affiliates and Sublicensees, as applicable) the right to access and cross-reference filings made by Tracon or its Affiliates, by Tracon’s licensors or suppliers (who have granted Tracon cross-

 

***Confidential Treatment Requested

 

16.

 

reference rights to their filings, which Tracon will use commercially reasonable efforts to obtain), and by licensees (who have agreed to reciprocal rights of reference for the benefit of Tracon, which Tracon will use commercially reasonable efforts to obtain) with Regulatory Authorities and Regulatory Approvals relating to Tracon Products (or Compounds included in Tracon Products) (including any drug master files) solely to the extent necessary in connection with regulatory activities with respect to Products in the Field in the Territory.  Santen hereby grants to Tracon and its Affiliates and licensees (who have agreed to reciprocal rights of reference for the benefit of Santen, which Santen will use commercially reasonable efforts to obtain) the right to access and cross-reference filings made by Santen and its Affiliates and Sublicensees and by Santen’s licensors or suppliers (who have granted Santen cross-reference rights to their filings, which Santen will use commercially reasonable efforts to obtain), with Regulatory Authorities and Regulatory Approvals relating to Products (or Compounds included in Products) (including any drug master files) solely to the extent necessary in connection with regulatory activities with respect to Tracon Products.  Each Party shall, promptly upon request of the other Party, file with applicable Regulatory Authorities such letters of access or cross-reference as may be necessary to accomplish the intent of this Section 3.2(b).

 

(c)                               Safety Data Exchange.  Within twelve (12) months following the Effective Date, but at the latest before the start of a clinical trial by Santen, the Parties shall negotiate in good faith and enter into a safety data exchange agreement regarding Compounds and Products and Tracon Products, which shall set forth standard operating procedures governing the collection, investigation, reporting, and exchange of information concerning adverse drug reactions/experiences sufficient to permit each Party to comply with its regulatory and other legal obligations within the applicable timeframes.  Such safety data exchange agreement shall identify which Party shall be responsible for the timely reporting of all relevant adverse drug reactions/experiences, Product quality, Product complaints and safety data relating to Compounds and Products and Tracon Products to the appropriate Regulatory Authorities in the Territory in accordance with all Applicable Law.  Such agreement shall allow each Party to comply with all regulatory and legal requirements regarding the management of safety data by providing for the exchange of relevant information in the appropriate format within applicable timeframes.  Unless otherwise mutually agreed by the Parties, Tracon shall maintain a global safety database for Compounds and Tracon Products, and Santen shall maintain one or more safety database(s) for Products covering the entire world.

 

3.3                            Governance

 

(a)                              Joint Development Committee.  The Parties will form a joint development committee (the “JDC”) to serve as a forum for information exchange and discussion with respect to development and regulatory activities relating to Compounds and Products in the Field in the Territory.

 

(b)                             Composition.  The JDC will be comprised of an equal number of members appointed by each of Santen and Tracon, which members shall be employees of the applicable Party with appropriate experience and authority.  Each Party will notify the other Party of its initial JDC members within thirty (30) days after the Effective Date.  Each Party may change its JDC members at any time by written notice to the other Party, which may be delivered at a scheduled meeting of the JDC.  Any member of the JDC may designate a substitute to attend 

 

17.

 

and perform the functions of that member at any meeting of the JDC.  The JDC shall appoint one (1) of its members as chairman, whose role shall be to convene and preside at meetings of the JDC, but the chairman shall not be entitled to prevent items from being discussed.  Each Party may, with the consent of the other Party, such consent not to be unreasonably withheld or delayed, invite non-member representatives of such Party to attend meetings of the JDC. Santen may dissolve the JDC with a written notice to Tracon any time upon the latest date of receipt by Santen or its Affiliate or Sublicensee of Regulatory Approval for the first Product among the U.S., Japan, and the first of United Kingdom, France or Germany.

 

(c)                               Responsibilities.  The JDC shall, unless as otherwise agreed to by the Parties:

 

(i)                                  periodically review the results of the Development Plan to ensure, to the extent reasonably practical, compliance with obligations under this Agreement;

 

(ii)                              review protocols for any clinical studies and regulatory filings for Compounds and Products in the Field in the Territory;

 

(iii)                          facilitate the exchange between the Parties of information regarding development and regulatory activities with respect to Products and Tracon Products;

 

(iv)                          review the publication strategy with respect to Products and Tracon Products in the Field in the Territory; and

 

(v)                              perform such other duties as are specifically assigned by the Parties to the JDC in this Agreement.

 

(d)                             Meetings.  The JDC will hold a meeting every six (6) months or sooner, if needed, as reasonably agreed to by the Parties.  Such meetings may be in person, via videoconference, or via teleconference.  The location of in-person JDC meetings will be determined by the Parties.  At least seven (7) Business Days prior to each JDC meeting, each Party shall provide written notice to the other Party of agenda items proposed by such Party for discussion at such meeting, together with appropriate information related thereto.  Reasonably detailed written minutes will be kept of all JDC meetings.  Meeting minutes will be prepared by the Party at whose office such meeting is held and sent to each member of the JDC for review and approval within ten (10) Business Days after the meeting.  Minutes will be deemed approved unless a member of the JDC objects to the accuracy of such minutes within fifteen (15) Business Days of receipt.

 

(e)                               Decisions.  The Parties agree that the JDC shall have no decision-making authority with respect to any matters related to this Agreement, the Development Plan or Santen’s development and commercialization activities.

 

(f)                                Withdrawal.  At any time during the Term and for any reasonable reason, Tracon shall have the right to withdraw from participation in the JDC upon written notice to Santen, which notice shall be effective immediately upon receipt (“Withdrawal Notice”).  Following the issuance of a Withdrawal Notice and subject to this Section 3.3(f), Tracon’s representatives to the JDC shall not participate in any meetings of the JDC.  If, at any time, 

 

18.

 

following the issuance of a Withdrawal Notice, Tracon wishes to resume participation in the JDC, Tracon shall notify Santen in writing and, thereafter, Tracon’s representatives to the JDC shall be entitled to attend any subsequent meeting of the JDC and to participate in the activities of, the Committees as provided in this Article 3 as if a Withdrawal Notice had not been issued by Tracon.  Following Tracon’s issuance of a Withdrawal Notice, unless and until Tracon resumes participation in the JDC in accordance with this Section 3.3(f):  (i) all meetings of the JDC shall be held at Santen’s facilities; and (ii) Tracon shall have the right to continue to receive the minutes of the JDC meetings, but shall not have the right to approve the minutes for any JDC meeting held after Tracon’s issuance of a Withdrawal Notice.  In any event, Tracon’s withdrawal shall not impair Santen’s rights to receive technology transfer under Section 2.6.

 

3.4                            Manufacture and Supply.  During the Term, Tracon shall, or shall cause [...***...], to supply the Compound to Santen as ordered by Santen from time to time, subject to the terms of this Section 3.4.  Santen agrees to purchase Compounds manufactured by [...***...] for use in manufacturing Products for [...***...], pursuant to a written supply agreement, which shall be separately discussed and agreed in good faith by the Parties (the “Supply Agreement”), and will include the terms set forth on Exhibit D.  Santen may purchase Compounds manufactured by [...***...] for use in manufacturing Products for [...***...], pursuant to a written supply agreement, which shall be separately discussed and agreed in good faith by Santen with Tracon or [...***...].

 

3.5                            Commercialization.  Santen (itself and through its Affiliates and Sublicensees, as applicable) shall be solely responsible, at its own expense, for commercialization of Products in the Field in the Territory.

 

3.6                            Compliance with Applicable Laws.  Each Party shall conduct, and shall require its Affiliates and Sublicensees and other licensees, and if applicable Third Party contract manufacturers, including Lonza, to conduct, all development, regulatory, manufacturing and commercialization activities with respect to Compounds and Products or Tracon Products (as applicable) in the Territory in compliance with all Applicable Laws, including good scientific and clinical practices under the Applicable Laws of the country in which such activities are conducted.

 

3.7                            Diligence.

 

(a)                              Development and Regulatory.  Santen (itself and through its Affiliates and Sublicensees, as applicable) shall use Commercially Reasonable Efforts to develop a Product in the Field in the Territory, including conducting development activities in accordance with the Development Plan, and to obtain Regulatory Approvals of Products in the Field in the Territory.  Without limiting the foregoing, Santen and Tracon will agree on a date by which Santen will file an IND for the Initial Product in the Field with the FDA (the “IND Filing Date”), based on an agreed upon set of activities to be undertaken collaboratively by the Parties following the Effective Date.  In the event that Santen does not file such IND by the IND Filing Date, Santen can extend the date provided that Santen can show reasonable progress toward meeting the IND Filing Date.

 

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(b)                             Commercialization.  Following receipt of Regulatory Approval for any Product in the Field in any country or other regulatory jurisdiction in the Territory, Santen (itself and through its Affiliates and Sublicensees, as applicable) shall use Commercially Reasonable Efforts to commercialize such Product in the Field and meet market demand for such Product in the Field in such country or other jurisdiction.  Without limiting the foregoing, Santen (i) agrees to establish and maintain sufficient resources to be able to commercialize Products in the Field in the Territory, and (ii) with regards to commercialization of Products in the Field in the U.S., will put in place and maintain the personnel as described in Exhibit C (the “U.S. Diligence Obligation”).

 

3.8                            Tracon Co-Promotion Right.  If Santen does not meet the U.S. Diligence Obligation, then Tracon shall [...***...] have the right to co-promote Products in the Field in the U.S. with Santen (the “Co-Promotion Right”), as set forth in this Section 3.8.  Tracon may exercise the Co-Promotion Right at any time during the period commencing [...***...] months prior to the Estimated BLA Filing Date and ending [...***...] months following the Actual BLA Filing Date, as such terms are defined in Exhibit C, by notifying Santen of such exercise in writing.  Santen shall notify Tracon in writing of the Estimated BLA Filing Date at least [...***...] months prior to the Estimated BLA Filing Date and of the Actual BLA Filing Date within [...***...] days after the Actual BLA Filing Date.  Santen shall provide Tracon written notice, as promptly as possible following the Estimated BLA Filing Date and in any event no later than the Actual BLA Filing Date, a reasonably detailed summary of the Phase III Clinical Trial development costs that enabled filing of a BLA in the U.S. (the “Phase III Costs”).  In the event that Tracon does not exercise the Co-Promotion Right as provided in this Section 3.8, Tracon shall have no right to promote Product in the Field in the U.S. with Santen, and Santen shall have no further obligation with respect to the Co-Promotion Right.  In the event that Tracon exercises the Co-Promotion Right as provided in this Section 3.8, within [...***...] days following such exercise of the Co-Promotion Right, Tracon and Santen shall negotiate in good faith and enter into a co-promotion agreement incorporating the following terms and such other terms agreed to by the Parties (such negotiation period may be extended upon mutual written agreement):

 

(a)                              Tracon shall pay to Santen (or reimburse Santen for, if Phase III Clinical Trial development is complete) a specific percentage up to [...***...] percent ([...***...]%) as specified in the written notice from Tracon exercising the Co-Promotion Right (the “U.S. Percentage”) of Phase III Costs ; provided that [...***...].  At the JDC meetings, Santen will keep Tracon informed on such planned and actual costs.  In the event Santen conducts [...***...], and Tracon elects to exercise its Co-Promotion Right, Tracon shall reimburse Santen the U.S. Percentage of Santen’s costs of such trials according to a mutually agreed budget for such costs;

 

(b)                             Tracon shall have the right to co-promote Product in the Field in the U.S. by making the U.S. Percentage of total Primary Details annually with respect to Products in the Field in the U.S., as measured on a per physician call basis.  A “Primary Detail” shall mean, with respect to a Product, a face-to-face one-on-one presentation regarding the features and benefits of such Product, its contraindications, approved uses and other pertinent information by 

 

***Confidential Treatment Requested

 

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a sales representative to a vitreo-retinal specialist, during which a promotional message involving such Product is the most prominent item presented and comprises approximately [...***...] of the time and cost of such presentation.  For the avoidance of doubt, a Primary Detail shall not include (i) a reminder presentation or a sample drop or (ii) a presentation to groups, medical conventions or institutions;

 

(c)                               the Parties shall prepare a marketing plan regarding co-promotion of Products in the Field in the U.S. within a reasonable amount of time after Tracon’s exercise of the Co-Promotion Right as provided in this Section 3.8;

 

(d)                             the Parties shall govern the co-promotion relationship through a joint commercialization committee to be established within a reasonable amount of time after Tracon’s exercise of the Co-Promotion Right as provided in this Section 3.8, the details of such committee to be agreed upon by the Parties;

 

(e)                               upon the exercise of the Co-Promotion Right, [...***...] shall bear [...***...] in connection with the performance of its obligations under this Section 3.8 and the obligations set forth in the co-promotion agreement, and [...***...] shall bear [...***...] in connection with marketing and sales of Products in the Field in the U.S., including but not limited to, cost relating to post-Regulatory Approval clinical trials of a Product in the Field, whether or not required by the FDA, but subject to Section 3.8(a);

 

(f)                                Tracon shall receive the U.S. Percentage of profits from sales of Products in the Field in the U.S., but shall not also receive royalties on such sales;

 

(g)                              Tracon shall pay its share of Phase III Costs (as described in Section 3.8(a) above) with [...***...] percent ([...***...]%) paid [...***...], and the remainder [...***...]; provided, however, that the entire amount of Tracon’s share of Phase III Clinical Trial development costs must be paid to Santen within [...***...] years of [...***...]; and

 

(h)                             If Tracon fails to meet any of its obligations set forth in this Section 3.8 or any other obligations set forth in the co-promotion agreement (after notice and a reasonable cure period), Tracon shall have no right to co-promote Product in the Field in the U.S. with Santen, and Santen shall have no further obligation with respect to the Co-Promotion Right.

 

3.9                            Disclosure of Santen Efforts.  Until receipt by Santen or its Affiliate or Sublicensee of Regulatory Approval in the U.S., Japan, and the first of United Kingdom, France or Germany, Santen shall keep Tracon appropriately informed about Santen’s research, development, clinical trial progress and commercialization efforts with respect to Products (including Compounds contained in such Products) in the Field in those countries.  Without limiting the generality of the foregoing, Santen shall provide Tracon with prompt written notice of the following:

 

(a)                              Filing of an IND for any Product;

 

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(b)                             initiation of a Phase II Clinical Trial or Phase III Clinical Trial of any Product;

 

(c)                               termination of development of any Product;

 

(d)                             filing of any BLA or MAA for any Product;

 

(e)                               receipt of approval of any BLA or MAA for any Product; and

 

(f)                                any other significant development or commercialization plans, activities or results with respect to Products in the Field.

 

4.                                    PAYMENTS

 

4.1                            Upfront Fee.  Santen shall make a one-time, non-refundable, non-creditable payment to Tracon of U.S.$10,000,000 within five (5) Business Days after the Effective Date.

 

4.2                            Milestone Payments.

 

(a)                              Initial Product.  Within thirty (30) days following the first occurrence of each of the events set forth below for the first Initial Product (and, as applicable pursuant to Section 4.2(b) and (c), Alternate Product), Santen shall pay to Tracon each of the non-refundable, non-creditable milestone payments set forth below when such milestone is achieved by Santen or any of its Affiliates or Sublicensees:

 

	
Milestone Event
    	
 
    	
Milestone   Payment
    	
 
    
	
[...***...]
    	
 
    	
U.S.$[...***...]
    	
 
    
	
[...***...]
    	
 
    	
U.S.$[...***...]
    	
 
    
	
[...***...]
    	
 
    	
U.S.$[...***...]
    	
 
    
	
[...***...]
    	
 
    	
U.S.$[...***...]
    	
 
    
	
[...***...]
    	
 
    	
U.S.$[...***...]
    	
 
    
	
[...***...]
    	
 
    	
U.S.$[...***...]
    	
 
    
	
[...***...]
    	
 
    	
U.S.$[...***...]
    	
 
    
	
[...***...]
    	
 
    	
U.S.$[...***...]
    	
 
    
	
[...***...]
    	
 
    	
U.S.$[...***...]
    	
 
    

 

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[...***...]
    	
 
    	
U.S.$[...***...]
    	
 
    
	
[...***...]
    	
 
    	
U.S.$[...***...]
    	
 
    
	
[...***...]
    	
 
    	
U.S.$[...***...]
    	
 
    
	
[...***...]
    	
 
    	
U.S.$[...***...]
    	
 
    
	
[...***...]
    	
 
    	
U.S.$[...***...]
    	
 
    
	
Total Potential Milestone   Payments
    	
 
    	
U.S.$155,000,000
    	
 
    

 

* If Santen [...***...], Santen will notify Tracon in writing no later than sixty (60) days after the date of the [...***...] whether Santen (a) will [...***...] or (b) will [...***...].  If such notice indicates that Santen will [...***...], then such notice shall be deemed as an achievement of milestone for [...***...] for the purpose of this Section 4.2(a).

 

(b)                             Replacement of Initial Product with Alternate Product.  If Santen or its Affiliate or Sublicensee terminates development of the Initial Product and commences development of an Alternate Product as a replacement for the Initial Product, then Santen shall pay to Tracon the milestone payments corresponding to the milestone events with respect to such replacement Alternate Product only for those milestone events that have not already been achieved with respect to the Initial Product.

 

(c)                               Milestone Payments for Alternate Products.  If Santen or its Affiliate or Sublicensee develops an Alternate Product in addition to the Initial Product, then Santen shall pay to Tracon all applicable milestone payments as set forth in Section 4.2(a) for both the first Alternate Product and the first Initial Product.

 

4.3                            Royalty Payments.

 

(a)                              Royalty Rate.  Subject to the terms and conditions of this Agreement, Santen shall pay to Tracon royalties as set forth below on aggregate annual Net Sales in a Santen Fiscal Year (whether such aggregate annual Net Sales are achieved by Santen or any of its Affiliates or Sublicensees), provided however, for so long as Tracon receives the U.S. Percentage of profits from sales of Product in the U.S. under Section 3.8, Santen shall not pay to Tracon royalties on such sales and the Parties will discuss and agree in good faith to an appropriate adjustment to the tiers of aggregate annual Net Sales to take into account the fact that sales of Product in the U.S. are excluded:

 

***Confidential Treatment Requested

 

23.

 

	
Aggregate Annual Net Sales
    	
 
    	
Royalty   Rate
    	
 
    
	
For   that portion of aggregate annual Net Sales in a Santen Fiscal Year that is   less than or equal to U.S.$[...***...]
    	
 
    	
[...***...]%
    	
 
    
	
For   that portion of aggregate annual Net Sales in a Santen Fiscal Year that is   greater than U.S.$[...***...] and less than or equal to U.S.$[...***...]
    	
 
    	
[...***...]%
    	
 
    
	
For   that portion of aggregate annual Net Sales in a Santen Fiscal Year that is   greater than U.S.$[...***...]
    	
 
    	
[...***...]%
    	
 
    

 

(b)                             Adjustment for Competing Product.

 

(i)                                  On a country-by-country basis and Product-by-Product basis, if:

 

(A)                          as of the anticipated date of Commercial Launch in a given country, there are or expected to be sales of any Competing Product(s) by anyone other than Santen or its Affiliates or Sublicensees, and

 

(B)                           Santen provides written documentation to Tracon demonstrating that (I) such Competing Product(s) is approved and marketed for use in the Field in such country or is being prescribed for use in the Field in such country, as measured by reputable published data for such country (e.g. by reference to prescription data collected by IMS) or as otherwise mutually agreed and that (II) [...***...],

 

then the Royalty Rate with respect to such Product in such country shall be reduced by [...***...] percent ([...***...]%) for purposes of calculating the royalty payment under Section 4.3(a); provided that any such reduction based on any sales of a Competing Product that contains a Compound by anyone other than Santen or its Affiliates or Sublicensees shall end at the time any of the Licensed Patents is enforced to stop sales of such Competing Product.

 

(ii)                              On a country-by-country basis and Product-by-Product basis, if:

 

(A)                          after the Commercial Launch in such country, sales of any Competing Product(s) by anyone other than Santen or its Affiliates or Sublicensees,

 

(B)                           Santen provides written documentation to Tracon demonstrating that such Competing Product(s) is approved and marketed for use in the Field in such country or is being prescribed for use in the Field in such country, as measured by reputable published data for such country (e.g. by reference to prescription data collected by IMS) or as otherwise mutually agreed, and

 

(C)                          such sales of all Competing Products result in a reduction by [...***...] percent ([...***...]%) or more in gross sales of the applicable Product by Santen and 

 

***Confidential Treatment Requested

 

24.

 

its Affiliates and Sublicensees compared to Base Sales in such country for [...***...], as measured by reputable published marketing data for such country (e.g. by reference to sales data collected by IMS) or as otherwise mutually agreed,

 

then thereafter the Royalty Rate with respect to such Product in such country shall be reduced by [...***...] percent ([...***...]%) for purposes of calculating the royalty payment under Section 4.3(a); provided that any such reduction based any sales of a Competing Product that contains a Compound by anyone other than Santen or its Affiliates or Sublicensees shall end at the time any of the Licensed Patents is enforced to stop sales of such Competing Product.  The term “Base Sales” shall mean the average amount of total quarterly gross sales of such Product by Santen and its Affiliates and Sublicensees for the [...***...] immediately preceding such given calendar quarters.  In addition to the foregoing, in the event that [...***...], as measured by reputable published data for such country (e.g. by reference to prescription data collected by IMS) or as otherwise mutually agreed, [...***...].

 

(c)                               Existing Third Party Payment Obligations.  In addition to the royalties payable by Santen pursuant to Section 4.3(a), Santen agrees to pay to Tracon all royalty payments due and payable by Tracon under the RPCI Agreement and under the Lonza Agreement with respect to the manufacture, use, marketing, distribution, import, export, offer for sale, promotion or sale of Products in the Field in the Territory by Santen and its Affiliates and Sublicensees in accordance with the terms of the RPCI Agreement and the Lonza Agreement, respectively.  For the avoidance of doubt, Santen has no obligation to pay royalties due and payable by Tracon under (i) the RPCI Agreement if Santen does not use any RPCI Patents or any Licensed Patents described on Exhibit A-2 and (ii) the Lonza Agreement if Santen does not use any Information or Patents licensed to Tracon under the Lonza Agreement.  [...***...], and if Tracon amends the RPCI Agreement or the Lonza Agreement to [...***...], whether for inside or outside the Field, or both, [...***...].  For the avoidance of doubt, royalty payments under the RPCI Agreement shall be payable until the expiration of the last-to-expire of the Patents on Exhibits A-1, A-2 and A-3 that covers, in whole or in part, the developing, making, using, selling, offering to sell or importing any Product then being sold by Santen, its Affiliates or Sublicensees, or the Compound therein.

 

(d)                             Payments to Third Parties.  Santen shall be responsible for all payments owed to any Third Party for any Patents, Information or other intellectual property rights licensed or acquired after the Effective Date (other than under the RPCI Agreement and the Lonza Agreement), which are necessary or useful to use, sell, offer for sale or import any Product in the Field in the Territory.  If, during the Term, Santen determines that it is necessary to license or acquire from any Third Party any issued patent in order to practice the Licensed Patents for the development, manufacturing or commercialization of any Product in the Field in any country, an amount up to [...***...] percent ([...***...]%) of any royalties paid to such Third Party in respect of a Product in such country shall be deducted from royalties otherwise due to Tracon with respect to such Product in such country under this Agreement; provided that in no event 

 

***Confidential Treatment Requested

 

25.

 

shall the effect of such deduction and the adjustment in Section 4.3(b) reduce the royalties otherwise payable to Tracon in respect of such Product in such country (prior to giving effect to any such deduction and adjustment) by more than an amount equal to [...***...] percent ([...***...]%) in any calendar quarter.  Any amount of royalties paid to such Third Party which is entitled to be deducted under this Section 4.3(d) but is not deducted as a result of the foregoing limitation shall be carried over and applied against royalties payable to Tracon in respect of such Product in such country in subsequent calendar quarters until the full deduction is taken.

 

(e)                               Royalty Term.  Royalty payments pursuant to this Section 4.3 shall be payable beginning upon Commercial Launch of the First Product (as defined below) in a given country and continuing on a country-by-country basis with respect to all the Products containing TRC105 (with respect to the First Product containing TRC105) or all the Products containing Alternate Compound (with respect to the First Product containing Alternate Compound), as applicable, sold by Santen or its Affiliates or Sublicensees until the later of (i) 12 years after the date of Commercial Launch of the applicable First Product in the applicable country or (ii) expiration of the last-to-expire Valid Claim within the Licensed Patents that covers Products or the Compound contained therein, or the use of such Product or Compound in the Field, in such country (the “Royalty Term”).  For purposes of calculating Royalty Term under this Section 4.3(e), the “First Product” shall mean with respect to (i) all the Products containing TRC105 in a given country, the first Product containing TRC105 that is Commercially Launched in such country, and (ii) all the Products containing Alternate Compound in a given country, the first Product containing Alternate Compound that is Commercially Launched in such country.

 

(f)                                Adjustment for Joint Patents.  On a country-by-country basis and Product-by-Product basis, if, after royalties have been paid with respect to a Product in a country for the full Royalty Term (excluding for this purpose only Valid Claims of any Joint Patents), and the only Patents that cover such Product or the Compound contained therein, or the use of such Product or Compound in the Field, in such country are Joint Patents, then the royalty rate payable with respect to such Product in such country for the remaining Royalty Term (i.e. until expiration of the last-to-expire Valid Claim within such Joint Patents) shall be reduced by [...***...] percent ([...***...]%) for purposes of calculating the royalty payment under Section 4.3(a).

 

4.4                            Sublicense Fees.  Santen shall pay to Tracon [...***...] percent ([...***...]%) of up-front payments [...***...], and of payments for achievement of milestones [...***...] other than [...***...], received by Santen or its Affiliates from a Sublicensee for a sublicense granted under all or any portion of the License (“Selected Sublicense Consideration”).  No payment shall be due from Santen to Tracon with respect to any other amounts received by Santen from a Sublicensee.  Payments based on Selected Sublicense Consideration shall be made to Tracon within thirty (30) days following the receipt of such Selected Sublicense Consideration.  If Santen receives from any Sublicensee any Selected Sublicense Consideration in a form other than cash payments, Santen shall pay Tracon the payment required by this Section 4.4 in cash based on the fair market value of such payment as of the date of receipt.  In the event that Selected Sublicense Consideration is paid for the [...***...]), 

 

***Confidential Treatment Requested

 

26.

 

Santen shall pay Tracon the greater of (a) the payment due under this Section 4.4 with respect to such Selected Sublicense Consideration, or (b) the [...***...], but not both.

 

5.                                    PAYMENT; RECORDS; AUDITS

 

5.1                            Payment; Reports.  Royalties shall be calculated and reported for each calendar quarter.  A report of Net Sales in sufficient detail to permit confirmation of the accuracy of the payment due, including, on a country-by-country basis, the number of Products sold, the gross sales and Net Sales of such Products, the royalties payable, the method used to calculate the royalties, the exchange rates used and any adjustments to royalties payable in accordance with Section 4.3 shall be due to Tracon within forty five (45) days of the end of each calendar quarter, and all payments due to Tracon under this Agreement shall be paid within thirty (30) days after the date of such report, unless otherwise specifically provided herein, including Section 4.3(c).

 

5.2                            Exchange Rate; Manner and Place of Payment.  All payments hereunder shall be payable in U.S. dollars. When conversion of payments from any foreign currency is required, such conversion shall be at an exchange rate equal to the average of the daily rates of exchange for the currency of the country from which the royalty payments are payable based on the TTM rate of Tokyo Mitsubishi UFJ bank, during the calendar quarter for which a payment is due.  All payments owed under this Agreement shall be made by wire transfer in immediately available funds to a bank account designated in writing by Tracon, unless otherwise specified in writing by Tracon.

 

5.3                            Income Tax Withholding.  Tracon will pay any and all taxes levied on account of any payments made to it under this Agreement.  If any taxes are required to be withheld by Santen from any payment made to Tracon under this Agreement, Santen will (a) deduct such taxes from the payment made to Tracon, (b) timely pay the taxes to the proper taxing authority, and (c) send proof of payment to Tracon and certify its receipt by the taxing authority within thirty (30) days following such payment. For purposes of this Section 5.3, each Party agrees to provide the other with reasonably requested assistance to enable the due deduction by the paying Party and appropriate recovery by the other Party, which assistance includes, but is not limited to, provision of any tax forms and other information that may be reasonably necessary in order for the paying Party not to withhold tax or to withhold tax at a reduced rate under an applicable bilateral income tax treaty.

 

5.4                            Restrictions on Fund Transfers.  In the event that, by reason of Applicable Law in any country, it becomes impossible or illegal, after reasonable efforts by Santen to do so, for Santen or its Affiliate to transfer, or have transferred on its behalf, payments owed Tracon hereunder, Santen will promptly notify Tracon of the conditions preventing such transfer and such payments will be deposited in local currency in the relevant country to the credit of Tracon in a recognized banking institution designated by Tracon.

 

5.5                            Records; Audits.  Santen shall keep, and require Sublicensees to keep, complete, fair and true books of accounts and records for the purpose of determining the amounts payable to Tracon pursuant to this Agreement.  Such books and records shall be kept for such period of time required by law, but no less than four years following the end of the calendar quarter to 

 

***Confidential Treatment Requested

 

27.

 

which they pertain.  Tracon shall have the right to cause an independent, certified public accountant reasonably acceptable to Santen to audit such records to confirm Net Sales, royalties and other payments for a period covering not more than four (4) years following the calendar quarter to which they pertain.  Such audits may be exercised during normal business hours upon reasonable prior written notice to Santen.  Prompt adjustments shall be made by the Parties to reflect the results of such audit.  Tracon shall bear the full cost of such audit unless such audit discloses an underpayment by Santen of more than five percent (5%) of the amount of royalties or other payments due under this Agreement for any applicable calendar quarter, in which case, Santen shall bear the cost of such audit and shall promptly remit to Tracon the amount of any underpayment. Any overpayment by Santen revealed by an audit shall be fully-creditable against future payment owed by Santen to Tracon (and if no further payments are due, shall be refunded by Tracon at the request of Santen).

 

5.6                            Late Payments.  In the event that any payment due under this Agreement is not made when due, the payment shall accrue interest from the date due at the prime rate (as defined in the U.S. Federal Reserve Bulletin H.15 or any successor thereto) on the last business day of the applicable quarter prior to the date on which such payment is due, plus [...***...] percent ([...***...]%) per annum; provided, however, that in no event shall such rate exceed the maximum legal annual interest rate.  The payment of such interest shall not limit Tracon from exercising any other rights it may have as a consequence of the lateness of any payment.

 

6.                                    CONFIDENTIALITY AND PUBLICATION

 

6.1                            Confidential Information.  Except to the extent expressly authorized by this Agreement or otherwise agreed in writing by the Parties, each Party (in such capacity, the “Receiving Party”) agrees that, during the Term and for [...***...] years thereafter, it shall keep confidential and shall not publish or otherwise disclose to any Third Party, and shall not use for any purpose, other than as expressly provided for in this Agreement or any other written agreement between the Parties, any Confidential Information furnished or made available to it by or on behalf of the other Party (in such capacity, the “Disclosing Party”).  The Receiving Party shall use at least the same standard of care as it uses to protect proprietary or confidential information of its own (but in no event less than reasonable care) to ensure that its, and its Affiliates’, employees, agents, consultants and other representatives do not disclose or make any unauthorized use of the Confidential Information.  The Receiving Party shall promptly notify the Disclosing Party upon discovery of any unauthorized use or disclosure of the Disclosing Party’s Confidential Information.

 

6.2                            Exceptions.  Confidential Information shall not include any information which the Receiving Party can prove by competent evidence: (a) is now, or hereafter becomes, through no act or failure to act on the part of the Receiving Party, generally known or available; (b) is known by the Receiving Party and/or any of its Affiliates at the time of receiving such information, as evidenced by its records; (c) is hereafter furnished to the Receiving Party and/or any of its Affiliates by a Third Party, as a matter of right and without restriction on disclosure; or (d) is independently discovered or developed by the Receiving Party and/or any of its Affiliates, without the use of Confidential Information of the Disclosing Party.

 

***Confidential Treatment Requested

 

28.

 

6.3                            Authorized Disclosure.  Notwithstanding the provisions of Section 6.1, the Receiving Party may disclose Confidential Information of the Disclosing Party as expressly permitted by this Agreement, or if and to the extent such disclosure is reasonably necessary in the following instances:

 

(a)                              filing or prosecuting Patents as permitted by this Agreement;

 

(b)                             enforcing such Party’s rights under this Agreement;

 

(c)                               prosecuting or defending litigation as permitted by this Agreement;

 

(d)                             complying with applicable court orders or governmental regulations;

 

(e)                               disclosure to Affiliates, actual and potential licensees and Sublicensees, employees, consultants, contractors or agents of the Receiving Party who have a need to know such information in order for the Receiving Party to exercise its rights or fulfill its obligations under this Agreement, provided, in each case, that any such Affiliate, actual or potential licensee or Sublicensee, employee, consultant or agent agrees to be bound by terms of confidentiality and non-use comparable in scope to those set forth in this Article 6;

 

(f)                                in the case of Tracon as the Receiving Party, disclosure to RPCI Licensor to the extent required to comply with the RPCI Agreement and to Lonza to the extent required to comply with the Lonza Agreement, provided such parties are bound by terms of confidentiality and non-use comparable in scope to those set forth in this Article 6 and Tracon shall be responsible for the acts and omissions of such parties with respect thereto; and

 

(g)                              disclosure to Third Parties in connection with due diligence or similar investigations by such Third Parties, and disclosure to potential Third Party investors in confidential financing documents, provided, in each case, that any such Third Party agrees to be bound by similar terms of confidentiality and non-use comparable in scope to those set forth in this Article 6.

 

Notwithstanding the foregoing, in the event a Party is required to make a disclosure of the other Party’s Confidential Information pursuant to Section 6.3(c) or Section 6.3(d), it will, except where impracticable, give reasonable advance notice to the other Party of such disclosure and use efforts to secure confidential treatment of such information at least as diligent as such Party would use to protect its own confidential information, but in no event less than reasonable efforts.  In any event, the Parties agree to take all reasonable action to avoid disclosure of Confidential Information hereunder.

 

6.4                            Public Announcements.

 

(a)                              Press Releases.  As soon as practicable following the date hereof, the Parties shall each issue a mutually agreed to press release announcing the existence of this Agreement.  Except as required by Applicable Laws (including disclosure requirements of the U.S. Securities and Exchange Commission (“SEC”) or any stock exchange on which securities issued by a Party or its Affiliates are traded), neither Party shall make any other public announcement concerning this Agreement or the subject matter hereof without the prior written 

 

29.

 

consent of the other, which shall not be unreasonably withheld or delayed; provided that each Party may make any public statement in response to questions by the press, analysts, investors or those attending industry conferences or financial analyst calls, or issue press releases, so long as any such public statement or press release is not inconsistent with prior public disclosures or public statements approved by the other Party pursuant to this Section 6.4 and which do not reveal non-public information about the other Party.  In the event of a required public announcement, to the extent practicable under the circumstances, the Party making such announcement shall provide the other Party with a copy of the proposed text of such announcement sufficiently in advance of the scheduled release to afford such other Party a reasonable opportunity to review and comment upon the proposed text.

 

(b)                             Filing of this Agreement.  The Parties will coordinate in advance with each other in connection with the filing of this Agreement (including redaction of certain provisions of this Agreement) with the SEC or any stock exchange or governmental agency on which securities issued by a Party or its Affiliate are traded, and each Party will use reasonable efforts to seek confidential treatment for the terms proposed to be redacted; provided that each Party will ultimately retain control over what information to disclose to the SEC or any stock exchange or other governmental agency, as the case may be, and provided further that the Parties will use their reasonable efforts to file redacted versions with any governing bodies which are consistent with redacted versions previously filed with any other governing bodies.  Other than such obligation, neither Party (or its Affiliates) will be obligated to consult with or obtain approval from the other Party with respect to any filings to the SEC or any stock exchange or other governmental agency.

 

6.5                            Publication.  At least ten (10) Business Days prior to publishing, publicly presenting, and/or submitting for written or oral publication a manuscript, abstract or the like that includes Information relating to any Compound or Product that has not been previously published, each Party shall provide to the other Party a draft copy thereof for its clinical review (unless such Party is required by law to publish such Information sooner, in which case such Party shall provide such draft copy to the other Party as much in advance of such publication as possible).  The publishing Party shall consider in good faith any comments provided by the other Party during such ten (10) Business Day period.  In addition, the publishing Party shall, at the other Party’s reasonable request, remove therefrom any Confidential Information of such other Party.  The contribution of each Party shall be noted in all publications or presentations by acknowledgment or co-authorship, whichever is appropriate.  Notwithstanding the foregoing, after the Commercial Launch, Santen may, without providing a draft copy to Tracon, publish any Information relating to the Product in the Field, which is not provided by Tracon hereunder.

 

6.6                            Prior Non-Disclosure Agreement.  As of the Effective Date, the terms of this Article 6 shall supersede any prior non-disclosure, secrecy or confidentiality agreement between the Parties (or their Affiliates) dealing with the subject of this Agreement, including the Nondisclosure Agreement.  Any information disclosed pursuant to any such prior agreement shall be deemed Confidential Information for purposes of this Agreement.

 

6.7                            Equitable Relief.  Given the nature of the Confidential Information and the competitive damage that would result to a Party upon unauthorized disclosure, use or transfer of its Confidential Information to any Third Party, the Parties agree that monetary damages would 

 

30.

 

not be a sufficient remedy for any breach of this Article 6.  In addition to all other remedies, a Party shall be entitled to seek specific performance and injunctive and other equitable relief as a remedy for any breach or threatened breach of this Article 6.

 

7.                                    REPRESENTATIONS AND WARRANTIES; LIMITATION OF LIABILITY

 

7.1                            Mutual Representations and Warranties.  Each Party represents and warrants to the other that, as of the Effective Date:

 

(a)                              it is duly organized and validly existing under the laws of its jurisdiction of incorporation or formation, and has full corporate or other power and authority to enter into this Agreement and to carry out the provisions hereof;

 

(b)                             it is duly authorized to execute and deliver this Agreement and to perform its obligations hereunder, and the person or persons executing this Agreement on its behalf has been duly authorized to do so by all requisite corporate or partnership action; and

 

(c)                               this Agreement is legally binding upon it, enforceable in accordance with its terms, and does not conflict with any agreement, instrument or understanding, oral or written, to which it is a party or by which it may be bound, nor violate any material law or regulation of any court, governmental body or administrative or other agency having jurisdiction over it.

 

7.2                            Additional Tracon Representations, Warranties and Covenants.  Tracon represents, warrants and covenants to Santen, as of the Effective Date, as follows:

 

(a)                              Tracon has (i) sufficient legal or beneficial title, ownership or license rights in or to the Licensed Technology to grant the License to Santen as purported to be granted pursuant to this Agreement, including Santen’s rights to sublicense as described in Section 2.2(a); and (ii) no Third Party (other than the RPCI Licensor) has taken any action before the United States Patent and Trademark Office, or any counterpart thereof outside the U.S., claiming legal or beneficial ownership of or license to any of the Licensed Patents; there is no Compound Manufacturing IP as of the Effective Date;

 

(b)                             Tracon has not as of the Effective Date, and will not during the Term, grant any right to any Third Party under the Licensed Technology in the Field or that would otherwise conflict with the rights granted to Santen hereunder;

 

(c)                               Tracon has not received any notice from a Third Party alleging that (i) the practice of the Licensed Technology infringes or may infringe such Third Party’s intellectual property right, or (ii) any research, development or manufacture of the Products by Tracon prior to the Effective Date infringed or misappropriated the intellectual property rights of such Third Party;

 

(d)                             Tracon is not aware, as of the Effective Date, of any issued patent or published patent owned by a Third Party (other than RPCI and Lonza) that may be infringed by the development or manufacture of TRC105 or the [...***...] version of TRC105 or by the development, manufacture and commercialization of any Product containing TRC105 or the 

 

***Confidential Treatment Requested

 

31.

 

[...***...] version of TRC105, provided however, that Tracon makes no representation with respect to the infringement of any Third Party use Patents in the Field;

 

(e)                               (i) the Licensed Patents that are issued as of the Effective Date are, to Tracon’s knowledge, valid and in force, and (ii) no Third Party has asserted in writing that such issued Licensed Patents are invalid or unenforceable in the Territory;

 

(f)                                there are no pending actions, claims, investigations, suits or proceedings against Tracon or any of its Affiliates, at law or in equity, or before or by any Regulatory Authority, and Tracon has not received any written notice regarding any pending or threatened actions, claims, investigations, suits or proceedings against Tracon or any of its Affiliates, at law or in equity, or before or by any Regulatory Authority, in either case with respect to the Licensed Technology, and no Licensed Patent is the subject of any interference, opposition, cancellation or other protest proceeding;

 

(i)                                  The Licensed Patents listed on Exhibits A-1 and A-3 are all Patents licensed from RPCI or Health Research, Inc. with respect to the Compounds, and there are no other agreements or understandings between RPCI or Health Research, Inc. and Tracon with respect to the Compound; and

 

(ii)                              Tracon has provided Santen a true and complete copy of the RPCI Agreement, and the RPCI Agreement is in full force and effect in accordance with its terms;

 

(iii)                          Tracon is in compliance in all material respects with its obligations under the RPCI Agreement and, to Tracon’s knowledge, (A) RPCI has not breached the RPCI Agreement in any material respect, and (B) there is no basis for termination of the RPCI Agreement;

 

(iv)                          no Information licensed by RPCI to Tracon is necessary or useful for the exercise by Santen of its rights hereunder; and

 

(v)                              Tracon has the full rights to grant the sublicense under the RPCI Patents to Santen, including those Licensed Patents listed on Exhibit A-1 as jointly owned by Tracon and Health Research, Inc., without consent of RPCI or Health Research, Inc.;

 

(vi)                          Tracon (i) has provided Santen a true and complete copy of the Lonza Agreement, and the Lonza Agreement is in full force and effect in accordance with its terms; and (ii) is in compliance in all material respects with its obligations under the Lonza Agreement; to Tracon’s knowledge, (A) Lonza has not breached the Lonza Agreement in any material respect, and (B) there is no basis for termination of the Lonza Agreement; and there are no other agreements or understandings between Lonza and Tracon with respect to the Compound;

 

(g)                              No authorization, consent, approval of a Third Party, nor to Tracon’s knowledge, any license, permit, exemption of or filing or registration with or notification to any court or Regulatory Authority is or will be necessary for the (i) valid execution and delivery of this Agreement by Tracon; or (ii) the consummation by Tracon of the transactions contemplated hereby as of the Effective Date (provided however that nothing in this Section 7.2(g) shall be 

 

***Confidential Treatment Requested

 

32.

 

deemed to be a representation or warranty by Tracon that the exercise of its rights under this Agreement will not infringe the intellectual property rights of any Third Party);

 

(h)                             Tracon has complied with all Applicable Laws in connection with Tracon’s prosecution of the Licensed Patents other than the RPCI Patents, including the duty of candor owed to any patent office pursuant to such laws;

 

(i)                                  Neither Tracon nor any of its Affiliates has received any written notice of any unauthorized use, infringement, misappropriation, or dilution by any person, including any current or former employee or consultant of Tracon or its Affiliates, of the Licensed Technology, and to Tracon’s knowledge, no Third Party is infringing or misappropriating or has infringed or misappropriated the Licensed Technology;

 

(j)                                 The Licensed Technology includes all intellectual property rights Controlled by Tracon as of the Effective Date, which are reasonably necessary for the development and commercialization of the Products in the Field;

 

(k)                             The Patents listed on Exhibit A are the only Patents relating to the Compounds or Products, including the methods of use in the Field or manufacture of the Compounds or Products, which Tracon or a Tracon Affiliate has an ownership or license interest (other than any Patents [...***...]), either alone or jointly with any Third Party, as of the Effective Date;

 

(l)                                  The inventors named in the Licensed Patents (excluding the RPCI Patents) are all of the inventors of the inventions claimed in such Licensed Patents and each of such inventors has assigned, or is under a written obligation to assign, to Tracon or its Affiliates all of his or her right, title and interest to such Licensed Patents (excluding the RPCI Patents) and the inventions described therein;

 

(m)                         all of Tracon’s and its Affiliates’ employees or contractors acting on its behalf performing research, development, manufacturing, regulatory or commercialization activities with respect to TRC105 are and will be obligated under a binding written agreement to comply with obligations of confidentiality and non use no less restrictive than those set forth in Section 6;

 

(n)                             neither Tracon nor any of its Affiliates is debarred or disqualified under the United States Federal Food, Drug and Cosmetic Act or comparable Applicable Laws in the Territory and it does not, and will not during the Term, employ or use the services of any person who is debarred or disqualified, in connection with activities relating to TRC105 outside the Field; and in the event that Tracon becomes aware of the debarment or disqualification or threatened debarment or disqualification of any person providing services to Tracon, including any of Tracon and its Affiliates or Sublicensees, which directly or indirectly relate to TRC105 outside the Field, Tracon shall immediately notify Santen in writing and Tracon shall cease employing, contracting with, or retaining any such person to perform any services relating to TRC105 outside the Field;

 

***Confidential Treatment Requested

 

33.

 

(o)                              in the performance of its obligations under this Agreement, Tracon shall comply and shall cause its and its Affiliates’ employees and contractors to comply with all Applicable Laws;

 

(p)                             Tracon and, to its knowledge, its and its Affiliates’ employees and contractors have not and shall not, in connection with the performance of their respective obligations under this Agreement directly or indirectly through Third Parties, pay, promise or offer to pay, or authorize the payment of, any money or give any promise or offer to give, or authorize the giving of anything of value to a Public Official or Entity or other person for purpose of obtaining or retaining business for or with, or directing business to, any person, including Tracon (it being understood that, without any limitation to the foregoing, Tracon, and to its knowledge, its and its Affiliates’ employees and contractors, has not directly or indirectly promised, offered or provided any corrupt payment, gratuity, emolument, bribe, kickback, illicit gift or hospitality or other illegal or unethical benefit to a Public Official or Entity or any other person in connection with the performance of Tracon’s obligations under this Agreement, and shall not, directly or indirectly, engage in any of the foregoing);

 

(q)                             Tracon and its Affiliates, and their respective employees and contractors, in connection with the performance of their respective obligations under this Agreement, shall not cause Santen or its officers, directors, employees or agents to be in violation of the FCPA, Export Control Laws, or any other Applicable Laws or otherwise cause any reputational harm to the Santen or its officers, directors, employees or agents; and

 

(r)                               Tracon shall immediately notify the other Party if it has any information or suspicion that there may be a violation of the FCPA, Export Control Laws, or any other Applicable Laws in connection with the performance of its obligations under this Agreement or its other activities with TRC105.

 

7.3                            Additional Santen Representations and Warranties.  Santen represents and warrants to Tracon, as of the Effective Date:

 

(a)                              Santen (i) has the right to grant the license in Section 2.5 as of the Effective Date; and (ii) has not as of the Effective Date, and will not during the Term, grant any right to any Third Party that would conflict with the rights granted to Tracon hereunder;

 

(b)                             no authorization, consent, approval of a Third Party, nor to Santen’s knowledge, any license, permit, exemption of or filing or registration with or notification to any court or Regulatory Authority is or will be necessary for the (i) valid execution and delivery of this Agreement by Santen; or (ii) the consummation by Santen of the transactions contemplated hereby as of the Effective Date (provided however that nothing in this Section 7.3(b) shall be deemed to be a representation or warranty by Santen that its exercise of its rights under this Agreement will not infringe the intellectual property rights of any Third Party);

 

(c)                               all of Santen’s and its Affiliates’ employees or contractors acting on its behalf performing research, development, manufacturing, regulatory or commercialization activities with respect to Compounds and Products in the Field in the Territory as contemplated 

 

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by this Agreement are and will be obligated under a binding written agreement to comply with obligations of confidentiality and non-use no less restrictive than those set forth in Section 6;

 

(d)                             neither Santen nor any of its Affiliates is debarred or disqualified under the United States Federal Food, Drug and Cosmetic Act or comparable Applicable Laws in the Territory and it does not, and will not during the Term, employ or use the services of any person who is debarred or disqualified, in connection with activities relating to Compounds or Products in the Field in the Territory; and in the event that Santen becomes aware of the debarment or disqualification or threatened debarment or disqualification of any person providing services to Santen, including any of Santen and its Affiliates or Sublicensees, which directly or indirectly relate to Compounds or Products in the Field in the Territory, Santen shall immediately notify Tracon in writing and Santen shall cease employing, contracting with, or retaining any such person to perform any services relating to Compounds or Products in the Field in the Territory;

 

(e)                               in the performance of its obligations under this Agreement, Santen shall comply and shall cause its and its Affiliates’ employees and contractors to comply with all Applicable Laws;

 

(f)                                Santen and, to its knowledge, its and its Affiliates’ employees and contractors have not and shall not, in connection with the performance of their respective obligations under this Agreement directly or indirectly through Third Parties, pay, promise or offer to pay, or authorize the payment of, any money or give any promise or offer to give, or authorize the giving of anything of value to a Public Official or Entity or other person for purpose of obtaining or retaining business for or with, or directing business to, any person, including Santen (it being understood that, without any limitation to the foregoing, Santen, and to its knowledge, its and its Affiliates’ employees and contractors, has not directly or indirectly promised, offered or provided any corrupt payment, gratuity, emolument, bribe, kickback, illicit gift or hospitality or other illegal or unethical benefit to a Public Official or Entity or any other person in connection with the performance of Santen’s obligations under this Agreement, and shall not, directly or indirectly, engage in any of the foregoing);

 

(g)                              Santen and its Affiliates, and their respective employees and contractors, in connection with the performance of their respective obligations under this Agreement, shall not cause Tracon or its officers, directors, employees or agents to be in violation of the FCPA, Export Control Laws, or any other Applicable Laws or otherwise cause any reputational harm to Tracon or its officers, directors, employees or agents;

 

(h)                             Santen shall immediately notify Tracon if Santen has any information or suspicion that there may be a violation of the FCPA, Export Control Laws, or any other Applicable Laws in connection with the performance of its obligations under this Agreement or the performance of research, development, manufacturing, regulatory or commercialization activities with respect to Compounds and Products in the Field in the Territory; and

 

(i)                                  Santen has in place an anti-corruption and anti-bribery policy and in connection with the performance of its obligations under this Agreement, Santen shall comply and shall cause its and its Affiliates’ employees to comply with Santen’s policy.

 

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7.4                            Performance by Affiliates, Sublicensees and Subcontractors.  The Parties recognize that each may perform some or all of its obligations or exercise some or all of its rights under this Agreement through one or more Affiliates or subcontractors or, in the case of Santen, Sublicensees; provided, however, that each Party shall remain responsible for the performance by its Affiliates, subcontractors and Sublicensees and shall cause its Affiliates, subcontractors and Sublicensees to comply with the provisions of this Agreement in connection with such performance.  In particular, if any Affiliate, subcontractor or Sublicensee participates in research, development, manufacturing or commercialization activities under this Agreement or with respect to Products, the restrictions of this Agreement which apply to the activities of such Party with respect to Products shall apply equally to the activities of such Affiliate, subcontractor or Sublicensee.

 

7.5                            Disclaimer.  Except as expressly set forth in this Agreement, THE TECHNOLOGY AND INTELLECTUAL PROPERTY RIGHTS PROVIDED BY EACH PARTY HEREUNDER AND THE ASSISTANCE TO BE PROVIDED BY ANY OF THE PARTIES TO THE OTHER HEREUNDER ARE PROVIDED “AS IS,” AND EACH PARTY EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING THE WARRANTIES OF DESIGN, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OBTAINING SUCCESSFUL RESULTS, OR NON-INFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES, EXCEPT AS REPRESENTED ABOVE IN THIS ARTICLE 7, OR ARISING FROM A COURSE OF DEALING, USAGE OR TRADE PRACTICES.

 

7.6                            Limitation of Liability.  EXCEPT FOR PAYMENTS UNDER ARTICLE 4 OR LIABILITY FOR BREACH OF ARTICLE 6, NEITHER PARTY SHALL BE ENTITLED TO RECOVER FROM THE OTHER PARTY ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES IN CONNECTION WITH THIS AGREEMENT OR ANY LICENSE GRANTED HEREUNDER; provided, however, that this Section 7.6 shall not be construed to limit either Party’s indemnification obligations under Article 10.

 

8.                                    INTELLECTUAL PROPERTY

 

8.1                            Ownership.  As between the Parties, Tracon is the owner or, in the case of RPCI Patents, exclusive licensee, of all right, title and interest in and to the Licensed Technology, and Santen is the owner of all right, title and interest in and to the Santen Technology.  A Party shall have and retain all right, title and interest in any discovery or invention, whether or not patentable, relating to any Compound or any Product or its manufacture or use made in the course of research, development, manufacturing, regulatory or commercialization activities as contemplated by this Agreement solely by one or more employees or agents of such Party and/or its Affiliates or other persons acting under their authorities.  The Parties shall jointly own rights in any discovery or invention, whether or not patentable, relating to any Compound or any Product or its manufacture or use made in the course of research, development, manufacturing, regulatory or commercialization activities as contemplated by this Agreement jointly by one or more employees or agents of each Party and/or its Affiliates or other persons acting under their authorities (“Joint Inventions”) and Patent rights therein (“Joint Patents”).  As joint owners, each Party shall be entitled to use, and grant licenses to use, Joint Inventions and Joint Patents 

 

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without the consent of or any duty of accounting to the other Party, and Tracon’s interest in such Joint Inventions and Joint Patents shall be part of the Licensed Technology and shall be subject to the License granted to Santen. Inventorship shall be determined in accordance with U.S. patent law.

 

8.2                            Patent Prosecution and Maintenance.

 

(a)                              Licensed Patents.  Tracon shall have the sole (subject to Section 8.2(a)(ii)) right, but not the obligation, at its own expense, to control the preparation, filing, prosecution (including any interferences, reissue proceedings and reexaminations) and maintenance of the Licensed Patents.  Tracon shall keep Santen reasonably informed of progress with regard to the preparation, filing, prosecution and maintenance of Licensed Patents including the countries in the Territory in which it intends to file, maintain or abandon a given Licensed Patent.  Tracon will notify Santen of all warning letters, conflict proceedings, reexaminations, reissuance, oppositions, revocation proceedings or any other material challenge relating to a given Licensed Patent. Tracon will consult with, and consider in good faith the requests and suggestions of, Santen with respect to strategies for filing and prosecuting Licensed Patents.  In the event that Tracon desires to abandon or cease prosecution or maintenance of any Licensed Patent, Tracon shall provide reasonable prior written notice to Santen of such intention (which notice shall, in any event, be given no later than sixty (60) days prior to the next deadline for any action that may be taken with respect to such Patent with the applicable patent office), and upon Santen’s written election provided no later than thirty (30) days after such notice from Tracon, Tracon shall continue prosecution and/or maintenance of such Patent at Santen’s direction and expense; provided, that Santen shall be allowed to offset its out-of-pocket costs for prosecuting and maintaining such Patents from the royalty and other payments due to Tracon under this Agreement.  If Santen does not provide such election within thirty (30) days after such notice from Tracon or fails to pay for prosecution or maintenance of any Licensed Patent, if any, with respect to which it has previously made such election, Tracon may, in its sole discretion, continue prosecution and maintenance of such Patent or discontinue prosecution and maintenance of such Patent.  The provisions of this Section 8.2(a) are subject to the rights of RPCI Licensor under the RPCI Agreement with respect to the RPCI Patents. With respect to Licensed Patents that have issued or may issue, a statement referencing the exclusive license granted to Santen pursuant to Section 2.1 shall be registered with the patent office in the countries designated by Santen, at Santen’s cost, as soon as is practically possible after the issuance of the respective Licensed Patents.  Tracon shall execute, and shall use Commercially Reasonable Efforts to cause RPCI Licensor to execute, such documents and instruments as may be required to effect the registration of such statement or otherwise cooperate with Santen in connection with the registration of such statement with the respective patent offices where required or permitted by Applicable Laws.

 

(b)                             Santen Patents.

 

(i)                                  Santen shall have the sole (subject to Section 8.2(b)(ii)) right, but not the obligation, at its own expense, to control the preparation, filing, prosecution (including any interferences, reissue proceedings and reexaminations) and maintenance of the Santen Patents.  Santen shall keep Tracon reasonably informed of progress with regard to the preparation, filing, prosecution and maintenance of Santen Patents, including the countries in the 

 

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Territory in which it intends to file, maintain or abandon a Santen Patent.  Santen will notify Tracon of all warning letters, conflict proceedings, reexaminations, reissuance, oppositions, revocation proceedings or any other material challenge relating to a Santen Patent. Santen will consult with, and consider in good faith the requests and suggestions of, Tracon with respect to strategies for filing and prosecuting such Santen Patents.

 

(ii)                              In the event that Santen desires to abandon or cease prosecution or maintenance of any Santen Patent, Santen shall provide reasonable prior written notice to Tracon of such intention (which notice shall, in any event, be given no later than sixty (60) days prior to the next deadline for any action that may be taken with respect to such Santen Patent or Joint Patent with the applicable patent office), and upon Tracon’s written election provided no later than thirty (30) days after such notice from Santen, Santen shall continue prosecution and/or maintenance of such Santen Patent at Tracon’s direction and expense.  If Tracon does not provide such election within thirty (30) days after such notice from Santen or fails to pay for prosecution or maintenance of any Santen Patent with respect to which it has previously made such election, Santen may, in its sole discretion, continue prosecution and maintenance of such Santen Patent or discontinue prosecution and maintenance of such Santen Patent.

 

(c)                               Joint Patents.

 

(i)                                  Santen shall have the first right, but not the obligation, to control the preparation, filing, prosecution (including any interferences, reissue proceedings and reexaminations) and maintenance of the Joint Patents, using a patent counsel selected jointly by the Parties.  Santen shall keep Tracon reasonably informed of progress with regard to the preparation, filing, prosecution and maintenance of Joint Patents and shall consult with Tracon regarding the countries in the Territory in which to file, maintain or abandon a Joint Patent.  Santen will provide Tracon with (A) a copy of the final draft of any proposed application for a Joint Patent at least thirty (30) days prior to filing the same in any patent office worldwide, (B) a copy of each patent application for a Joint Patent as filed, together with a notice of its filing date and serial number, (C) a copy of any action, communication, letter, or other correspondence issued by the relevant patent office within ten (10) days of receipt thereof, (D) a copy of any response, amendment, paper, or other correspondence filed with the relevant patent office within ten (10) days of receipt of the as-filed document, and (E) prompt notice of the allowance, grant, or issuance of any Joint Patents.  Santen will also notify Tracon of all warning letters, conflict proceedings, reexaminations, reissuance, oppositions, revocation proceedings or any other material challenge relating to a Joint Patent.  Santen will consult with, and consider in good faith the requests and suggestions of, Tracon with respect to strategies for filing and prosecuting Joint Patents.  The Parties shall share equally the expenses of the foregoing for Joint Patents.  Santen shall invoice Tracon periodically, but not more often than monthly, for such expenses with respect to Joint Patents, and payment shall be due thereon within thirty (30) days.  If Tracon declines or fails to pay for its share of expenses for any Joint Patent, then such patent shall be automatically assigned to Santen without any charge and it shall be owned by Santen but shall neither be considered a Licensed Patent nor a Santen Patent hereunder.

 

(ii)                              In the event that Santen desires to abandon or cease prosecution or maintenance of any Joint Patent, Santen shall provide reasonable prior written notice to Tracon of such intention (which notice shall, in any event, be given no later than sixty (60) days prior to 

 

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the next deadline for any action that may be taken with respect to such Joint Patent with the applicable patent office), and upon Tracon’s written election provided no later than thirty (30) days after such notice from Santen, Santen shall assign such Joint Patent to Tracon.  If Tracon does not provide such election within thirty (30) days after such notice from Santen, Santen may, in its sole discretion, continue prosecution and maintenance of such Joint Patent or discontinue prosecution and maintenance of such Joint Patent.  If Santen fails to pay for its share of expenses for any Joint Patent, then such patent shall be automatically assigned to Tracon without any charge and it shall be owned by Tracon but shall not be considered a Licensed Patent hereunder.

 

(d)                             Cooperation of the Parties.  Each Party agrees to cooperate fully in the preparation, filing, prosecution and maintenance of Licensed Patents, Santen Patents and Joint Patents under this Section 8.2 and in the obtaining and maintenance of any patent extensions, supplementary protection certificates and the like with respect thereto respectively at its own costs.  Such cooperation includes, but is not limited to: (a) executing all papers and instruments, or requiring its employees or contractors, to execute such papers and instruments, so as to enable the other Party to apply for and to prosecute patent applications in any country as permitted by this Section 8.2; and (b) promptly informing the other Party of any matters coming to such Party’s attention that may affect the preparation, filing, prosecution or maintenance of any such patent applications.

 

8.3                            Infringement by Third Parties.

 

(a)                              Notice.  In the event that either Tracon or Santen becomes aware of any infringement or threatened infringement by a Third Party of any Licensed Patent, Santen Patent or Joint Patent, it shall notify the other Party in writing to that effect.

 

(b)                             Licensed Patents.  Tracon shall have the first right, but not the obligation, to bring and control any action or proceeding with respect to infringement of any Licensed Patent at its own expense and by counsel of its own choice, and, to the extent any such infringement is in the Field, Santen shall have the right, at its own expense, to be represented in any such action by counsel of its own choice.  If Tracon fails to bring any such action or proceeding with respect to infringement of any Licensed Patent within ninety (90) days following the notice of alleged infringement (or sooner, if failure to take such action would adversely affect Santen’s ability to exercise its right under this Section 8.3(b) and provided that Santen gives Tracon at least three (3) Business Days’ notice of such fact), Santen shall have the right to bring and control any such action at its own expense and by counsel of its own choice but only to the extent such infringement is in the Field, and Tracon shall have the right, at its own expense, to be represented in any such action by counsel of its own choice.  The provisions of this Section 8.3(b) are subject to the rights and obligations of RPCI Licensor under the RPCI Agreement with respect to patent infringement actions and proceedings regarding the RPCI Patents.

 

(c)                               Santen Patents.  Santen shall have the first right, but not the obligation, to bring and control any action or proceeding with respect to infringement of any Santen Patent at its own expense and by counsel of its own choice, and, to the extent any such infringement is outside the Field, Tracon shall have the right, at its own expense, to be represented in any such action by counsel of its own choice.  If Santen fails to bring any such action or proceeding with 

 

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respect to infringement of any Santen Patent within ninety (90) days following the notice of alleged infringement (or sooner, if failure to take such action would adversely affect Tracon’s ability to exercise its right under this Section 8.3(c) and provided that Tracon gives Santen at least three (3) Business Days’ notice of such fact), Tracon shall have the right to bring and control any such action at its own expense and by counsel of its own choice but only to the extent such infringement is outside the Field, and Santen shall have the right, at its own expense, to be represented in any such action by counsel of its own choice.

 

(d)                             Joint Patents.  Santen shall have the first right, but not the obligation, to bring and control any action or proceeding with respect to infringement of any Joint Patent at its own expense and by counsel of its own choice, and Tracon shall have the right, at its own expense, to be represented in any such action by counsel of its own choice.  If Santen fails to bring any such action or proceeding with respect to infringement of any Joint Patent within ninety (90) days following the notice of alleged infringement (or sooner, if failure to take such action would adversely affect Tracon’s ability to exercise its right under this Section 8.3(d) and provided that Tracon gives Santen at least three (3) Business Days’ notice of such fact), Tracon shall have the right to bring and control any such action at its own expense and by counsel of its own choice, and Santen shall have the right, at its own expense, to be represented in any such action by counsel of its own choice.

 

(e)                               Cooperation; Award.  In the event a Party brings an infringement action in accordance with this Section 8.3, the other Party shall cooperate fully, including, if required to bring such action, the furnishing of a power of attorney or being named as a party.  Neither Party shall enter into any settlement or compromise of any action under this Section 8.3 which would in any manner alter, diminish, or be in derogation of the other Party’s rights under this Agreement without the prior written consent of such other Party, which shall not be unreasonably withheld.  Except as otherwise agreed by the Parties in connection with a cost-sharing arrangement, any recovery realized by a Party as a result of any action or proceeding pursuant to this Section 8.3, whether by way of settlement or otherwise, shall be applied first to reimburse the Parties’ documented out-of-pocket legal expenses relating to the action or proceeding in proportion to their expenses, and any remaining amounts shall be [...***...] and, in the case Santen brought and controlled such action or proceeding, such remaining amounts that [...***...].

 

8.4                            Infringement of Third Party Rights.  Each Party shall promptly notify the other Party in writing of any allegation by a Third Party that the activity of either Party pursuant to this Agreement infringes or may infringe the intellectual property rights of such Third Party.  In such event, the provision of Section 10.2 and 10.3 shall govern the rights of the Parties, as applicable.

 

8.5                            Marking.  To the extent required by law, Santen shall, and shall cause its Affiliates and/or Sublicensees to, mark all Products sold under this Agreement with the number of each issued Licensed Patent that applies to such Product.

 

8.6                            Trademarks.  Santen shall own and be responsible for all trademarks, trade names, branding, or logos related to Products in the Field in the Territory, and will be 

 

***Confidential Treatment Requested

 

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responsible for selecting, registering, defending, and maintaining the same at Santen’s sole cost and expense.

 

9.                                    TERM; TERMINATION

 

9.1                            Term.  This Agreement shall commence on the Effective Date, and unless terminated earlier as provided in this Article 9 or by written agreement of the Parties, shall expire upon the expiration of all payment obligations of Santen under Article 4 of this Agreement (the “Term”).

 

9.2                            Termination.

 

(a)                              Material Breach.  A Party shall have the right to terminate this Agreement upon written notice to the other Party if such other Party is in material breach of this Agreement and has not cured such breach within ninety (90) days (or thirty (30) days with respect to any payment breach) after notice from the terminating Party requesting cure of the breach.  Any such termination shall become effective at the end of such ninety (90) day (or thirty (30) day with respect to any payment breach) period unless the breaching Party has cured such breach prior to the end of such period or if not curable within such ninety (90) day period, has taken and continues to take good faith steps to commence the cure and has cured such breach within one hundred eighty (180) days after notice from the terminating Party requesting cure of the breach (or such later date as agreed in writing by the Parties).

 

(b)                             Bankruptcy.  A Party shall have the right to terminate this Agreement upon written notice to the other Party upon the bankruptcy, dissolution or winding up of such other Party, or the making or seeking to make or arrange an assignment for the benefit of creditors of such other Party, or the initiation of proceedings in voluntary or involuntary bankruptcy against such other Party, or the appointment of a receiver or trustee of such other Party’s property that is not discharged within thirty (30) days.

 

(c)                               Patent Challenge.  Tracon shall have the right to terminate this Agreement immediately upon written notice to Santen if Santen or any of its Affiliates or Sublicensees, directly or indirectly through any Third Party, commences any interference or opposition proceeding with respect to, challenges the validity or enforceability of, or opposes any extension of, or the grant of a supplementary protection certificate with respect to, any Licensed Patent.  Santen shall have the right to terminate this Agreement, or only the licenses granted under Section 2.5 of this Agreement, immediately upon written notice to Tracon if Tracon or any of its Affiliates or sublicensees, directly or indirectly through any Third Party, commences any interference or opposition proceeding with respect to, challenges the validity or enforceability of, or opposes any extension of, or the grant of a supplementary protection certificate with respect to, any Santen Patent.

 

(d)                             Santen Termination At Will.  Santen shall have the right to terminate this Agreement in its entirety or on a country-by-country basis, for any reason or for no reason, upon at least ninety (90) days’ (or thirty (30) days’ notice if subsequent to a Change of Control) prior written notice to Tracon, specifying the countries with respect to which this Agreement is 

 

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terminated (the “Terminated Countries”).  In such event, absent a breach by Santen, no compensation or damages shall be due to Tracon solely due to the termination of this Agreement.

 

(e)                               Termination with Respect to RPCI Patents.  Upon early termination of the RPCI Agreement, all rights under the License with respect to RPCI Patents shall automatically terminate, and if Santen is in compliance with this Agreement as of the date of such termination and termination of the RPCI Agreement was not caused by any act or omission on the part of Santen or any of its Affiliates or Sublicensees, the sublicense under RPCI Patents granted by Tracon to Santen pursuant to this Agreement may, at Santen’s option, remain in effect between Santen and RPCI Licensor in accordance with the provisions of the RPCI Agreement, except that RPCI shall not be obligated to incur any obligation to Santen not already incurred to Tracon by RPCI Licensor in the RPCI Agreement, and further Santen shall not be obligated to incur any obligation to RPCI Licensor already incurred to Tracon hereunder.  Upon expiration of the RPCI Agreement, the License with respect to RPCI Patents shall survive on a fully-paid, royalty-free, non-exclusive, irrevocable and perpetual basis.

 

9.3                            Effect of Expiration or Termination.

 

(a)                              Effect of Expiration.  Upon expiration (but not earlier termination) of this Agreement and provided that Santen has paid all undisputed payments payable under this Agreement, the License shall survive on a fully-paid, royalty-free, irrevocable, perpetual basis, and all other rights and obligations of the Parties under this Agreement shall terminate, except as provided elsewhere in this Section 9.3 or in Section 9.4.

 

(b)                             Effect of Termination.  Upon any termination of this Agreement (but not expiration under Section 9.1), the License shall automatically terminate and revert to Tracon, and all other rights and obligations of the Parties under this Agreement shall terminate, except as provided elsewhere in this Section 9.3 or in Section 9.4.  If Santen terminates this Agreement pursuant to Section 9.2(d) with respect to specific Terminated Countries, then (i) this Agreement shall remain in full force and effect in all countries other than the Terminated Countries, (ii) all of the consequences set forth in this Section 9.3 and Section 9.4, including references to Territory (but not to remaining Territory), shall apply solely with respect to the Terminated Countries, (iii) Santen’s rights under Section 2.1 to develop, manufacture and have manufactured Products in the Terminated Countries shall continue on a non-exclusive basis solely for development or commercialization of such Product in the Field in the remaining Territory and references to the Territory in this Agreement shall thereafter exclude the Terminated Countries, and (iv) Tracon shall have the right, itself and with its Affiliates and licensees, to develop, manufacture and have manufactured Products in the Territory outside the Terminated Countries on a non-exclusive basis solely for development and commercialization of such Products in the Field in the Terminated Countries.

 

(c)                               Additional Effects of Termination.  Upon any termination of this Agreement (but not expiration under Section 9.1), except termination of this Agreement by Santen under Section 9.2(a), Section 9.2(b) or Section 9.2(c), the following provisions shall apply:

 

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(i)                                     Effective as of such termination, Santen shall, and it hereby does, effective as of such termination, grant to Tracon an exclusive (except for Santen and its Affiliates), royalty-free, fully-paid, irrevocable and perpetual license, with the right to sublicense through multiple tiers of sublicense, under the Santen Technology, solely to develop, manufacture, have manufactured, use, promote, sell, offer to sell, import and export Compounds and Products in the Field in the Territory, or in the case of a partial termination under Section 9.2(d) only for the Terminated Countries, and the license granted under Section 2.5 outside the Field shall become exclusive (except for Santen and its Affiliates).

 

(ii)                                 Santen shall, and it hereby does, effective as of such termination, assign to Tracon all of Santen’s right, title and interest in and to any and all Product-specific trademarks used by Santen and its Affiliates in the Territory, or the Terminated Countries in the case of a partial termination under Section 9.2(d), including all goodwill therein, and Santen shall promptly take such actions and execute such instruments, assignments and documents as may be necessary to effect, evidence, register and record such assignment, at Tracon’s cost.

 

(iii)                             As promptly as practicable (and in any event within 90 days) after such termination, Santen shall:  (A) to the extent not previously provided to Tracon, deliver to Tracon true, correct and complete copies of all regulatory filings and registrations (including Regulatory Approvals) for Products in the Field in the Territory, or the Terminated Countries in the case of a partial termination under Section 9.2(d), and disclose to Tracon all Santen Know-How not previously disclosed to Tracon; (B) transfer or assign, or cause to be transferred or assigned, to Tracon or its designee (or to the extent not so assignable, take all reasonable actions to make available to Tracon or its designee the benefits of) all regulatory filings and registrations (including Regulatory Approvals) for Products in the Field in the Territory, or the Terminated Countries in the case of a partial termination under Section 9.2(d), whether held in the name of Santen or its Affiliate; and (C) take such other actions and execute such other instruments, assignments and documents as may be necessary to effect, evidence, register and record the transfer, assignment or other conveyance of rights under this Section 9.3(c)(iii) to Tracon.  Notwithstanding the foregoing, in case of partial termination hereof by Santen in Terminated Countries, pursuant to Section 9.2(d), Santen may refer to or use such regulatory filings and registrations for the development, manufacture or commercialization of the Products in the remaining Territory, and Tracon or its Affiliates or licensees may refer to or use such regulatory filings and registrations in the Territory other than the Terminated Countries for the development, manufacture or commercialization of the Compound and/or the Products in the Terminated Countries.

 

(iv)                          Santen shall, as directed by Tracon, either wind-down any ongoing development activities of Santen and its Affiliates and Sublicensees with respect to any Products in the Field in the Territory, or the Terminated Countries in the case of a partial termination under Section 9.2(d), in an orderly fashion or promptly transfer such development activities to Tracon or its designee, in compliance with all Applicable Laws.

 

(d)                             Confidential Information.  Upon expiration or termination of this Agreement in its entirety, except to the extent that a Party retains a license from the other Party as provided in this Article 9, each Party shall promptly return to the other Party, or delete or destroy, all relevant records and materials in such Party’s possession or control containing 

 

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Confidential Information of the other Party; provided that such Party may keep one copy of such materials for archival purposes only subject to a continuing confidentiality obligations.

 

9.4                            Accrued Obligations; Survival.  Neither expiration nor any termination of this Agreement shall relieve either Party of any obligation or liability accruing prior to such expiration or termination, nor shall expiration or any termination of this Agreement preclude either Party from pursuing all rights and remedies it may have under this Agreement, at law or in equity, with respect to breach of this Agreement.  In addition, the Parties’ rights and obligations under Sections 2.5 (except in the case of termination by Santen pursuant to Section 9.2(a), 9.2(b) or 9.2(c)), 5.4, 5.5, 7.5, 7.6, 8.1, 9.3 and 9.4 and Articles 1, 6, 10, 11 and 12 of this Agreement shall survive expiration or any termination of this Agreement.

 

9.5                            Rights Upon Bankruptcy.  All rights and licenses granted under or pursuant to this Agreement are, and shall otherwise be deemed to be, for purposes of Section 365(n) of Title 11 of the United States Code (“Section 365(n)”) and other similar laws in any jurisdiction outside the U.S. (collectively, the “Bankruptcy Laws”), licenses of rights to be “intellectual property” as defined under the Bankruptcy Laws.  If a case is commenced during the Term by or against a Party under the Bankruptcy Laws then, unless and until this Agreement is rejected as provided in such Bankruptcy Laws, such Party (in any capacity, including debtor-in-possession) and its successors and assigns (including a trustee) shall perform all of the obligations provided in this Agreement to be performed by such Party, including with respect to the RPCI Patents.  If a case is commenced during the Term by or against a Party under the Bankruptcy Laws, this Agreement is rejected or not assumed as provided in the Bankruptcy Laws and the other Party elects to retain its rights hereunder as provided in the Bankruptcy Laws, then the Party subject to such case under the Bankruptcy Laws (in any capacity, including debtor-in-possession) and its successors and assigns (including a Title 11 trustee), shall provide to the other Party copies of all Information necessary for such other Party to prosecute, maintain and enjoy its rights under the terms of this Agreement promptly upon such other Party’s written request therefor, including, without limitation, with respect to the RPCI Patents.  In a bankruptcy of RPCI Licensor, Tracon shall use commercially reasonable efforts to exercise all rights under Section 365(n) to the extent required to continue to sublicense the RPCI Patents to Santen in accordance with this Agreement.  In a bankruptcy of Tracon, Tracon shall assume the RPCI Agreement and shall use commercially reasonable efforts to obtain any consent from the RPCI Licensor to such assumption if consent is required.  All rights, powers and remedies of the non-bankrupt Party as provided herein are in addition to and not in substitution for any and all other rights, powers and remedies now or hereafter existing at law or in equity (including, without limitation, the Bankruptcy Laws) in the event of the commencement of a case by or against a Party under the Bankruptcy Laws.  Section 365(n) and the terms of this Section 9.5 shall apply and shall be enforced in and by every court, tribunal, arbitrator, regulatory body or official resolving disputes between the Parties with respect to rights in intellectual property, whether such court, tribunal, arbitrator, regulatory body or official is located in the U.S. or in any other nation or jurisdiction.

 

10.                            INDEMNIFICATION

 

10.1                    Indemnification of Tracon.  Santen shall indemnify and hold harmless each of Tracon and its Affiliates and their respective directors, officers, employees, consultants, agents and successors and assigns of any of the foregoing (the “Tracon Indemnitees”) from and against 

 

44.

 

any and all losses, damages, liabilities, expenses and costs, including reasonable legal expense and attorneys’ fees (“Losses”), incurred by any Tracon Indemnitee as a result of any claims, demands, actions, suits or proceedings brought by a Third Party (“Third Party Claims”) arising directly or indirectly out of:  (a) the practice by Santen of the Licensed Technology or the practice of any sublicense granted by Santen under the Licensed Technology; (b) the research, development, manufacture, use, handling, storage, sale or other disposition of Compounds and Products by Santen or its Affiliates or Sublicensees; (c) the negligence or willful misconduct of any Santen Indemnitee (as defined below); or (d) any breach of any representations, warranties or covenants by Santen under this Agreement; except, in each case, to the extent such Third Party Claims fall within the scope of the indemnification obligations of Tracon set forth in Section 10.2, including, without limitation, indemnification for any breach of any representations and warranties by Tracon under this Agreement.

 

10.2                    Indemnification of Santen.  Tracon shall indemnify and hold harmless each of Santen and its Affiliates and their respective directors, officers, employees, consultants, agents and successors and assigns of any of the foregoing (the “Santen Indemnitees”), from and against any and all Losses incurred by any Santen Indemnitee as a result of any Third Party Claims arising directly or indirectly out of: (a) the practice by Tracon of the Santen Technology or the practice of any sublicense granted by Tracon under the Santen Technology; (b) the development, manufacture, use, handling, storage, sale or other disposition of the Compound and Products by Tracon or its Affiliates or licensees (other than Santen and its Affiliates and Sublicensees); (c) the negligence or willful misconduct of any Tracon Indemnitee; or (d) any breach of any representations, warranties or covenants by Tracon under this Agreement; except, in each case, to the extent such Third Party Claims fall within the scope of the indemnification obligations of Santen set forth in Section 10.1.

 

10.3                    Procedure.  A Tracon Indemnitee or Santen Indemnitee that intends to claim indemnification under this Article 10 (the “Indemnitee”) shall promptly notify the indemnifying Party (the “Indemnitor”) in writing of any Third Party Claim, in respect of which the Indemnitee intends to claim such indemnification, and the Indemnitor shall have sole control of the defense and/or settlement thereof.  The indemnity arrangement in this Article 10 shall not apply to amounts paid in settlement of any action with respect to a Third Party Claim, if such settlement is effected without the consent of the Indemnitor, which consent shall not be withheld or delayed unreasonably.  The failure to deliver written notice to the Indemnitor within a reasonable time after the commencement of any action with respect to a Third Party Claim shall only relieve the Indemnitor of its indemnification obligations under this Article 10 if and to the extent the Indemnitor is actually prejudiced thereby.  The Indemnitee shall cooperate fully with the Indemnitor and its legal representatives in the investigation of any action with respect to a Third Party Claim covered by this indemnification.

 

10.4                    Indemnification of RPCI Licensor.  Santen shall defend, indemnify and hold harmless RPCI Licensor, its affiliates and their respective officers, trustees, employees and agents as provided in the RPCI Agreement with respect to any and all matters set forth therein to the extent arising out of or resulting from any actions or omissions of Santen or any of its Affiliates or Sublicensees.

 

45.

 

10.5     Insurance.  Each Party, at its own expense, shall maintain product liability and other appropriate insurance (or self-insure) in an amount consistent with sound business practice and reasonable in light of its obligations under this Agreement during the Term.  Each Party shall provide a certificate of insurance (or evidence of self-insurance) evidencing such coverage to the other Party upon request.

 

11.                            DISPUTE RESOLUTION

 

11.1     Disputes.  Subject to Section 11.3, upon the written request of either Party to the other Party, any claim, dispute, or controversy as to the breach, enforcement, interpretation or validity of this Agreement (a “Dispute”) shall be referred to a senior executive of Tracon and a senior executive of Santen.  In the event that such senior executives are unable to resolve such Dispute within sixty (60) days after referral to them, the Dispute shall be referred to the Chief Executive Officer of Tracon and the Chief Executive Officer of Santen (or such executive’s designee with decision-making authority) for attempted resolution.  In the event such Chief Executive Officers (or designees) are unable to resolve such Dispute within sixty (60) days after referral to them, then, upon the written demand of either Party, the Dispute shall be subject to arbitration, as provided in Section 11.2, except as expressly set forth in Section 11.3.

 

11.2     Arbitration.

 

(a)        Claims.  Subject to Section 11.3 below, any Dispute that is not resolved under Section 11.1 within thirty (30) days after a Party’s initial written request for resolution, shall be resolved by final and binding arbitration before a panel of three neutral experts with relevant industry experience.  The arbitration proceeding shall be administered by the International Court of Arbitration of the International Chamber of Commerce (the “ICC”) in accordance with its then existing arbitration rules or procedures regarding commercial or business disputes, and the panel of arbitrators shall be selected in accordance with such rules.  The arbitration and all associated discovery proceedings and communications shall be conducted in English, and the arbitration shall be held in San Francisco, California.  Except to the extent necessary to confirm an award or as may be required by law, neither a Party nor an arbitrator may disclose the existence, content, or results of arbitration without the prior written consent of both Parties.

 

(b)       Arbitrators’ Award.  The arbitrators 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 decision or award rendered by the arbitrators shall be final and non-appealable, and judgment may be entered upon it in any court of competent jurisdiction.  Either Party may apply for interim injunctive relief with the arbitrators until the arbitration award is rendered or the controversy is otherwise resolved.  The arbitrators shall be authorized to award compensatory damages, but shall not be authorized (i) to award non-economic damages, (ii) to award punitive damages or any other damages expressly excluded under this Agreement, or (iii) to reform, modify or materially change this Agreement or any other agreements contemplated hereunder; provided, however, that the damage limitations described in subsections (i) and (ii) of this sentence will not apply if such damages are statutorily imposed.

 

46.

 

(c)        Costs.  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 arbitrators; provided, however, the arbitrators shall be authorized to determine whether a Party is the prevailing Party, and at their discretion, 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, travel expenses, etc.), and/or the fees and costs of the ICC and the arbitrators.

 

11.3     Court Actions.  Nothing contained in this Agreement shall deny either Party the right to seek, upon good cause, injunctive or other equitable relief from a court of competent jurisdiction in the context of an emergency or prospective irreparable harm, and such an action may be filed and maintained notwithstanding any ongoing dispute resolution discussions or arbitration proceedings.  In addition, either Party may bring an action in any court of competent jurisdiction to resolve disputes pertaining to the validity, construction, scope, enforceability, infringement or other violations of Patents or other intellectual property rights, and no such claim shall be subject to arbitration pursuant to Section 11.2.

 

12.                            MISCELLANEOUS

 

12.1     Governing Law.  This Agreement and any disputes, claims, or actions related thereto shall be governed by and construed in accordance with the laws of the State of California, U.S., without regard to the conflicts of law provisions thereof.

 

12.2     Entire Agreement; Amendment.  This Agreement, including the Exhibits hereto, together with the Development Plan, sets forth all of the agreements and understandings between the Parties with respect to the subject matter hereof and thereof, and supersedes and terminates all prior agreements and understandings between the Parties with respect to the subject matter hereof and thereof.  There are no other agreements or understandings with respect to the subject matter hereof, either oral or written, between the Parties.  Except as expressly set forth in this Agreement, no subsequent amendment, modification or addition to this Agreement shall be binding upon the Parties unless reduced to writing and signed by the respective authorized officers of the Parties.

 

12.3     Relationship Between the Parties.  The Parties’ relationship, as established by this Agreement, is solely that of independent contractors.  This Agreement does not create any partnership, joint venture or similar business relationship between the Parties.  Neither Party is a legal representative of the other Party, and neither Party can assume or create any obligation, representation, warranty or guarantee, express or implied, on behalf of the other Party for any purpose whatsoever.

 

12.4     Non-Waiver.  The failure of a Party to insist upon strict performance of any provision of this Agreement or to exercise any right arising out of this Agreement shall neither impair that provision or right nor constitute a waiver of that provision or right, in whole or in part, in that instance or in any other instance.  Any waiver by a Party of a particular provision or right shall be in writing, shall be as to a particular matter and, if applicable, for a particular period of time and shall be signed by such Party.

 

47.

 

12.5     Assignment.  Except as expressly provided hereunder, neither this Agreement nor any rights or obligations hereunder may be assigned or otherwise transferred by either Party without the prior written consent of the other Party (which consent shall not be unreasonably withheld); provided, however, that either Party may assign this Agreement and its rights and obligations hereunder without the other Party’s consent:

 

(a)        in the case of either Party, in connection with the transfer or sale of all or substantially all of the business of such Party to which this Agreement relates to a Third Party, whether by merger, sale of stock, sale of assets or otherwise; provided, however, that in the event of such a transaction (whether this Agreement is actually assigned or is assumed by the acquiring party by operation of law (e.g., in the context of a reverse triangular merger)), intellectual property rights of the acquiring party to such transaction (if other than one of the Parties to this Agreement) (i) existing prior to the transaction, or (ii) developed after the transaction without use of such Party’s intellectual property, shall not be included in the technology licensed hereunder or otherwise subject to this Agreement; or

 

(b)       to an Affiliate, provided that the assigning Party shall remain liable and responsible to the non-assigning Party hereto for the performance and observance of all such duties and obligations by such Affiliate.

 

The rights and obligations of the Parties under this Agreement shall be binding upon and inure to the benefit of the successors and permitted assigns of the Parties, and the name of a Party appearing herein will be deemed to include the name of such Party’s successors and permitted assigns to the extent necessary to carry out the intent of this Section 12.5.  Any assignment not in accordance with this Agreement shall be void.

 

12.6     No Third Party Beneficiaries.  This Agreement is neither expressly nor impliedly made for the benefit of any party other than those executing it, except as expressly provided with respect to RPCI Licensor.

 

12.7     Severability.  If, for any reason, any part of this Agreement is adjudicated invalid, unenforceable or illegal by a court of competent jurisdiction, such adjudication shall not affect or impair, in whole or in part, the validity, enforceability or legality of any remaining portions of this Agreement.  All remaining portions shall remain in full force and effect as if the original Agreement had been executed without the invalidated, unenforceable or illegal part.  The Parties shall use their commercially reasonable efforts to replace the invalid, illegal or unenforceable provision(s) with valid, legal and enforceable provision(s) in a way that, to the extent practicable and legally permissible, implements the original intent of the Parties.

 

12.8     Notices.  Any notice to be given under this Agreement must be in writing and delivered either in person, by any method of mail (postage prepaid) requiring return receipt, or by overnight courier or facsimile confirmed thereafter by any of the foregoing, to the Party to be notified at its address(es) given below, or at any address such Party has previously designated by prior written notice to the other.  Notice shall be deemed sufficiently given for all purposes upon the earliest of: (a) the date of actual receipt; (b) if delivered by overnight courier, the three (3) Business Days after delivery; or (d) if sent by facsimile, upon electronic confirmation of receipt.

 

48.

 

	
if to Tracon:
    	
 
    	
TRACON   Pharmaceuticals, Inc.

8910 University   Center Lane

Suite 700

San Diego, CA   92122 USA

Attention:  Chief Business Officer

Facsimile No.:   +1 858-550-0786
    
	
 
    	
 
    	
 
    
	
with a copy to:
    	
 
    	
Cooley LLP

4401 Eastgate   Mall

San Diego, CA   92121 USA

Attention: L.   Kay Chandler

Facsimile No.:   +1 858-550-6420
    
	
 
    	
 
    	
 
    
	
if to Santen:
    	
 
    	
Santen   Pharmaceutical Co., Ltd.

4-20, Ofuka-cho,   Kita-ku

Osaka 533-8651

Japan

Attention: Head   of Global Business Development

Facsimile No.:   +81-6-6321-7256
    
	
 
    	
 
    	
 
    
	
with a copy to:
    	
 
    	
Santen   Pharmaceutical Co., Ltd.

4-20, Ofuka-cho,   Kita-ku

Osaka   530-8552Japan

Attention: Head   of Intellectual Property Group

Facsimile No.: +81-6-6359-3858
    

 

12.9     Force Majeure.  Each Party shall be excused from liability for the failure or delay in performance of any obligation under this Agreement by reason of any event beyond such Party’s reasonable control including but not limited to acts of God, fire, flood, explosion, earthquake, or other natural forces, war, civil unrest, acts of terrorism, accident, destruction or other casualty, or any other event similar to those enumerated above.  Such excuse from liability shall be effective only to the extent and duration of the event(s) causing the failure or delay in performance and provided that the Party has not caused such event(s) to occur.  Notice of a Party’s failure or delay in performance due to force majeure must be given to the other Party within ten (10) days after its occurrence.  All delivery dates under this Agreement that have been affected by force majeure shall be tolled for the duration of such force majeure.  In no event shall any Party be required to prevent or settle any labor disturbance or dispute.

 

12.10   No Use of RPCI Licensor Name.  Nothing contained in this Agreement shall be construed as granting any right to Santen or any Affiliate or Sublicensee to use in advertising, publicity or other promotional activities any name, trade name, trademark or other designation of RPCI Licensor or any of its affiliates or their respective employees or units (including contraction, abbreviation or simulation of any of the foregoing) without the prior written consent of RPCI Licensor.

 

49.

 

12.11   Interpretation.  The headings of clauses contained in this Agreement preceding the text of the sections, subsections and paragraphs hereof are inserted solely for convenience and ease of reference only and shall not constitute any part of this Agreement, or have any effect on its interpretation or construction.  All references in this Agreement to the singular shall include the plural where applicable.  Unless otherwise specified, references in this Agreement to any Article shall include all Sections, subsections and paragraphs in such Article, references to any Section shall include all subsections and paragraphs in such Section, and references in this Agreement to any subsection shall include all paragraphs in such subsection.  The word “including” and similar words means including without limitation.  The word “or” means “and/or” unless the context dictates otherwise because the subject of the conjunction are mutually exclusive.  The words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Section or other subdivision.  All references to days in this Agreement shall mean calendar days, unless otherwise specified.  Ambiguities and uncertainties in this Agreement, if any, shall not be interpreted against either Party, irrespective of which Party may be deemed to have caused the ambiguity or uncertainty to exist.  This Agreement has been prepared in the English language and the English language shall control its interpretation.  In addition, all notices required or permitted to be given hereunder, and all written, electronic, oral or other communications between the Parties regarding this Agreement shall be in the English language.

 

12.12   Counterparts.  This Agreement may be executed in counterparts, including by transmission of facsimile or PDF copies of signature pages to the Parties or their representative legal counsel, each of which shall be deemed an original document, and all of which, together with this writing, shall be deemed one instrument.

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

50.

 

IN WITNESS WHEREOF, the Parties hereto have duly executed this LICENSE AGREEMENT as of the Effective Date.

 

	
TRACON PHARMACEUTICALS, INC.
    	
 
    	
SANTEN PHARMACEUTICAL CO., LTD.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Charles Theuer
    	
 
    	
By:
    	
/s/ Akira Kurokawa
    
	
 
    	
 
    	
 
    
	
Name:
    	
Charles Theuer
    	
 
    	
Name:
    	
Akira Kurokawa
    
	
 
    	
 
    	
 
    
	
Title:
    	
President and CEO
    	
 
    	
Title:
    	
President and CEO
    
									

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SIGNATURE PAGE TO LICENSE AGREEMENT

 

 

Exhibit A-1

 

Patents and Applications [...***...]

 

	
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***Confidential Treatment Requested

 

A-1

 

Exhibit A-2

 

Patents and Applications [...***...]

 

	
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Application No.
    	
 
    	
Filing Date
    	
 
    	
Publication /
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Issue Date
    	
 
    	
Status
    
	
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***Confidential Treatment Requested

 

A-2

 

Exhibit A-3

 

Patents and Applications [...***...]

 

	
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Application No.
    	
 
    	
Filing Date
    	
 
    	
Publication /
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Issue Date
    	
 
    	
Status
    
	
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[...***...]
    	
 
    	
 
    	
 
    	
[...***...]
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
[...***...]
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    	
 
    	
 
    	
 
    	
 
    	
 
    	
[...***...]
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
[...***...]
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
[...***...]
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
[...***...]
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
[...***...]
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
[...***...]
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
[...***...]
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

***Confidential Treatment Requested

 

A-3

 

Exhibit A-4

 

Patents and Applications [...***...]

 

	
[...***...]
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Country
    	
 
    	
Application No.
    	
 
    	
Filing Date
    	
 
    	
Publication /
   Patent No.
    	
 
    	
Issue Date
    	
 
    	
Status
    
	
[...***...]
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    	
 
    	
 
    	
 
    	
 
    	
 
    	
[...***...]
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
[...***...]
    	
 
    	
[...***...]
    	
 
    	
[...***...]
    	
 
    	
 
    	
 
    	
 
    	
 
    	
[...***...]
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

***Confidential Treatment Requested

 

A-4

 

Exhibit B

 

Sequence of TRC105

 

 

TRC105 [...***...]

 

[...***...]

 

 

TRC105 [...***...]

 

[...***...]

 

***Confidential Treatment Requested

 

B-1

 

Exhibit C

 

U.S. Commercial Diligence Obligations

 

 

 

Santen shall [...***...] according to the timelines as further described below.  “Estimated BLA Filing Date” shall mean the anticipated date of the first filing of a BLA for the first Product in the Field in the U.S. and “Actual BLA Filing Date” shall mean the date of the first BLA for the first Product in the Field in the U.S. is accepted for filing by the FDA.

 

[...***...] prior to Estimated BLA Filing Date :

 

[...***...]

1.            [...***...]

2.            [...***...]

3.            [...***...]

4.            [...***...]

5.            [...***...]

 

A commercial plan will be completed that outlines the structure and timing of [...***...].

 

 

As of Actual BLA Filing Date:

 

[...***...]:

1.            [...***...]

2.            [...***...]

3.            [...***...]

4.            [...***...]

 

 

[...***...] after Actual BLA Filing Date:

 

[...***...]:

1.            [...***...]

2.            [...***...]

3.            [...***...]

4.            [...***...]

 

***Confidential Treatment Requested

 

C-1

 

Exhibit D

 

Supply Terms For [...***...]

 

Application to Drug Substance

 

·                 Supply terms on this Exhibit D only pertain to supply of TRC105 drug substance (“Drug Substance”)  for [...***...], and do not apply to supply of [...***...], or for supply of Drug Substance for [...***...].  Santen will be responsible for finding a [...***...] manufacturer (but Tracon can assist in this process)

 

CMC Development Activities and Costs

 

·                 Tracon currently has planned a number of development activities that will support continued development of the Drug Substance manufacturing process, including [...***...].

 

·                 Because these activities will support both the [...***...] and [...***...] programs, Santen will pay for [...***...]% of the costs of the [...***...] and [...***...] up to a maximum of $[...***...] and [...***...]% of the costs of the remaining development activities (Items 2-10 in Exhibit D-1) up to a maximum of $[...***...], as long as Tracon continues TRC105 development in [...***...].  For clarity, Santen’s cost sharing for development activities conducted by Tracon with regard to TRC105 or [...***...] version of TRC105 shall be limited up to $[...***...]. Tracon will regularly update the JDC with the status of these development activities, including the budget and request reimbursement from Santen for these costs once Tracon has been billed.

 

[...***...] Drug Substance Supply Terms

 

·                 Tracon agrees to set aside [...***...]L (approx [...***...]g) of Drug Substance out of its current batch manufactured by Tracon’s contract manufacturer to support Santen for [...***...], [...***...].

 

·                 Any additional request for Drug Substance for development use will be subject to the following notice and forecast provisions:

 

o                [...***...] months of notice required before Drug Substance needed [...***...]

o                Santen to provide Tracon a rolling updated forecast of Drug Substance needs every [...***...] months at the JDC

 

·                 Any additional quantities of Drug Substance requested by Santen and provided through Tracon will be at Cost of Goods plus [...***...]%

 

o                “Cost of Goods” means the cost of Drug Substance shipped to Santen.  As used 

 

***Confidential Treatment Requested

 

D-1

 

herein, the cost of Drug Substance means (i) in the case of products and services acquired from Third Parties, payments made to such Third Parties, and (ii) in the case of manufacturing services performed by Tracon or its Affiliates, including manufacturing services in support of Third Party manufacturing, the actual unit costs of manufacture, plus the variances and other costs specifically provided for herein.  Actual unit costs shall consist of [...***...], all calculated in accordance with reasonable cost accounting methods, consistently applied, of Tracon or its Affiliates.  [...***...] shall include the costs incurred in [...***...].  [...***...] shall include the cost of [...***...].  [...***...] shall include a reasonable allocation of [...***...] (not previously included in [...***...]), a reasonable allocation of [...***...], and a reasonable allocation of [...***...].  Such allocations shall be in accordance with reasonable cost accounting methods, consistently applied, of the party performing the work.

 

·                 Tracon will not be obligated to provide any representations or warranties with respect to supply of Drug Substance manufactured by its contract manufacturer beyond those representations or warranties provided by its contract manufacturer and will be entitled to all disclaimers of warranties, limitations of liability and other limitations on liability applicable to its contract manufacturer with regard to supply of Drug Substance, provided that all such representations and warranties provided by its contract manufacturer are enforceable by Santen or enforced by Tracon for the benefit of Santen.

 

·                 Any additional work (development and/or Drug Substance manufacturing) that Santen requests outside of planned [...***...] activities (ie, [...***...]) will be [...***...] funded by [...***...].

 

·                 Quality agreement between Tracon and Santen to be negotiated and executed between the contract manufacturer, Tracon and Santen prior to [...***...].

 

·                 If Tracon stops development of [...***...], Tracon will have no obligation to continue to supply Drug Substance to Santen but will use commercially reasonable efforts to facilitate Santen obtaining supply of Drug Substance directly from Tracon’s contract manufacturer and shall provide to Santen [...***...] (i) all inventory of Compound, biological materials, chemical reagents and other materials and (ii) all information, including but not limited to, information relating to Compound or product containing the Compound, which are in the possession or control of Tracon or its Affiliates.

 

***Confidential Treatment Requested

 

D-2

 

Drug Substance Supply [...***...]

 

·                 Santen may, in its discretion obtain supply of Drug Substance for [...***...] and [...***...] from a contract manufacturer, and Tracon agrees that Santen may enter into a direct relationship/contract with [...***...] for such supply of Drug Substance.

 

·                 If Santen does not use [...***...] for supply of Drug Substance for [...***...] and [...***...], Tracon and Santen agree to negotiate in good faith an agreement for the supply of Drug Substance for [...***...] and [...***...] prior to initiating [...***...].

 

Other Supply Terms

 

·                 Compliance with cGMP, ICH-guidelines etc.

 

·                 Delivery terms;

 

·                 Quality assurance and acceptance/rejection terms;

 

·                 Regulatory;

 

·                 Specifications;

 

·                 Product liability; and

 

·                 Term and termination.

 

***Confidential Treatment Requested

 

D-3

 

Exhibit D-1

 

Budgeted CMC Development Activities

 

	
Item
    	
Activity
    	
Rationale
    	
Budgeted
   Cost
    	
Timing
    
	
1
    	
[...***...]
    	
[...***...]
    	
[...***...]
    	
[...***...]
    
	
2
    	
[...***...]
    	
[...***...]
    	
[...***...]
    	
[...***...]
    
	
3
    	
[...***...]
    	
[...***...]
    	
[...***...]
    	
[...***...]
    
	
4
    	
[...***...]
    	
[...***...]
    	
[...***...]
    	
[...***...]
    
	
5
    	
[...***...]
    	
[...***...]
    	
[...***...]
    	
[...***...]
    
	
6
    	
[...***...]
    	
[...***...]
    	
[...***...]
    	
[...***...]
    
	
7
    	
[...***...]
    	
[...***...]
    	
[...***...]
    	
[...***...]
    
	
8
    	
[...***...]
    	
[...***...]
    	
[...***...]
    	
[...***...]
    
	
9
    	
[...***...]
    	
[...***...]
    	
[...***...]
    	
[...***...]
    
	
10
    	
[...***...]
    	
[...***...]
    	
[...***...]
    	
[...***...]
    
	
 
    	
Total Estimated Cost   
    	
$[...***...]
    	
 
    

 

***Confidential Treatment Requested

 

D-4Exhibit 10.12

 

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

the   Securities and Exchange Commission.

Confidential   Treatment Requested Under

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

 

EXCLUSIVE LICENSE AGREEMENT

 

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

 

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

 

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

 

 

ARTICLE 1 – DEFINITIONS

 

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

 

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

 

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

 

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

 

1.2                            “Field” means all fields of use.

 

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

 

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

 

Proprietary & Confidential - Do Not Redistribute

 

 

TRACON Pharmaceuticals, Inc.

 

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

 

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

 

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

 

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

 

1.7.1                Usual trade discounts to customers actually taken;

 

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

 

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

 

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

 

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

 

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

 

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

 

Proprietary & Confidential - Do Not Redistribute

 

 

TRACON Pharmaceuticals, Inc.

 

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

 

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

 

1.10                    “Territory” means the world.

 

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

 

 

ARTICLE 2 – GRANT

 

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

 

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

 

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

 

Proprietary & Confidential - Do Not Redistribute

 

 

TRACON Pharmaceuticals, Inc.

 

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

 

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

 

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

 

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

 

ARTICLE 3 - COMMERCIALIZATION

 

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

 

***Confidential Treatment Requested

 

Proprietary & Confidential - Do Not Redistribute

 

 

TRACON Pharmaceuticals, Inc.

 

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

 

 

ARTICLE 4 - ROYALTIES AND OTHER CONSIDERATION

 

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

 

4.2                            Intentionally deleted.

 

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

 

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

 

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

 

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

 

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

 

***Confidential Treatment Requested

 

Proprietary & Confidential - Do Not Redistribute

 

 

TRACON Pharmaceuticals, Inc.

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE 5 - REPORTS AND RECORDS

 

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

 

***Confidential Treatment Requested

 

Proprietary & Confidential - Do Not Redistribute

 

 

TRACON Pharmaceuticals, Inc.

 

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

 

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

 

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

 

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

 

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

 

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

 

5.2.5                Names and addresses of all Sublicensees and Affiliates; and

 

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

 

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

 

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

 

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

 

***Confidential Treatment Requested

 

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

 

ARTICLE 6 - PATENT PROSECUTION AND MAINTENANCE

 

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

 

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

 

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ARTICLE 7 – TERMINATION

 

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

 

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

 

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

 

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

 

7.5                            Upon termination of this Agreement for any reason, nothing herein shall be construed to release either party from any obligation that matured prior to the effective date of such termination, including under Articles 4, 5, 8, 10, 13, and 15.  Company, Affiliate, and/or any Sublicensee may, however, after the effective date of such termination and continuing for a period not to exceed twelve (12) months thereafter, complete any Licensed Products in the process of manufacture at the time of such termination and sell them and all completed Licensed Products, provided that Company shall pay or cause to be paid to Licensor the amounts due thereon and shall submit the reports required by Article 5 on such sales.

 

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

 

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ARTICLE 8 – DISPUTE RESOLUTION

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE 9 - INFRINGEMENT AND OTHER ACTIONS

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE 10 - LIMITATION OF LIABILITY, INDEMNITY, INSURANCE

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE 11 – ASSIGNMENT

 

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

 

ARTICLE 12 – COMPLIANCE WITH LAWS

 

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

 

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

 

ARTICLE 13 - USE OF NAMES; NO AGENCY; PUBLICATION

 

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

 

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

 

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

 

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

 

ARTICLE 14 - NOTICE

 

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

 

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Licensor:

 

Roswell Park Cancer Institute

Elm and Carlton Streets

Buffalo, NY  14263

Attention:  General Counsel

Telephone:  (716) 845-8717

Facsimile:  (716) 845-8057

 

Company:

 

TRaCON Pharmaceuticals, Inc.

4510 Executive Drive, Suite 206

San Diego, CA  92121

ph.  858.550.0780 x222

fax  858.550.0786

Attn: President

 

 

With a copy to:

 

Paramount BioSciences, LLC

787 Seventh Avenue

48th Floor

New York, NY 10036

Attn: General Counsel

Tel: 212. 554.4300

Fax: 212.554-4355

 

 

ARTICLE 15 - CONFIDENTIALITY

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE 16 - MISCELLANEOUS PROVISIONS

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE 17-REPRESENTATIONS AND WARRANTIES AND COVENANTS

 

17.1                    Licensor represents and warrants that:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

Proprietary & Confidential - Do Not Redistribute

 

 

TRACON Pharmaceuticals, Inc.

 

EXHIBIT 1.8

 

Patent Rights

 

 

[...***...]

 

***Confidential Treatment Requested

 

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TRACON Pharmaceuticals, Inc.

 

EXHIBIT 2.4

 

Disclosure Exhibit 2.4

 

Licensor Obligations To Certain Third Parties

 

None.

 

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TRACON Pharmaceuticals, Inc.

 

EXHIBIT 2.6

 

Disclosure Exhibit 2.6

 

Government Funding Support For Inventions

 

[...***...]

 

***Confidential Treatment Requested

 

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TRACON Pharmaceuticals, Inc.

 

EXHIBIT A

 

Sponsored Research Agreement

 

Health Research, Inc.

Roswell Park Division

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

***Confidential Treatment Requested

 

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TRACON Pharmaceuticals, Inc.

 

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

 

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

 

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

 

8.         INTELLECTUAL PROPERTY.

 

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

 

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

 

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

 

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

 

***Confidential Treatment Requested

 

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TRACON Pharmaceuticals, Inc.

 

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

 

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

 

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

 

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

 

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

 

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

 

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TRACON Pharmaceuticals, Inc.

 

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

 

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

 

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

 

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

 

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TRACON Pharmaceuticals, Inc.

 

In witness whereof, the parties have signed this Agreement.

 

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

 

Proprietary & Confidential - Do Not Redistribute

 

 

TRACON Pharmaceuticals, Inc.

 

EXHIBIT A

 

Scope of Research

 

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

 

***Confidential Treatment Requested

 

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TRACON Pharmaceuticals, Inc.

 

EXHIBIT B

 

Payment Terms

 

I.                                        INFORMATION FOR WIRE TRANSFERS TO HEALTH RESEARCH

 

 

 

Bank Name:

 

 

Bank Address:

 

 

Bank Phone Number:

 

 

Bank SWIFT Code:

 

 

Bank ABA Number:

 

 

HRI Account Number:

 

 

HRI Account Type:

 

 

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

 

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TRACON Pharmaceuticals, Inc.

 

EXHIBIT C

 

Roswell Invention Assignment Agreement

 

ROSWELL PARK CANCER INSTITUTE CORPORATION (RPCIC) AND

HEALTH RESEARCH, INC. (HRI)

 

PATENT AND TECHNOLOGY TRANSFER AGREEMENT FOR EMPLOYEES

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Proprietary & Confidential - Do Not Redistribute

 

 

TRACON Pharmaceuticals, Inc.

 

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

 

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

 

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

 

	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Date
    	
 
    	
Signature
    	
 
    

 

Proprietary & Confidential - Do Not Redistribute

 

 

AMENDMENT No.1 to LICENSE AGREEMENT

 

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

 

WITNESSETH:

 

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

 

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

 

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

 

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

 

2.            Amendments

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

***Confidential Treatment Requested

 

 

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

 

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

 

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

 

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

 

4.            Representations and Warranties.

 

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

 

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

 

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

 

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

 

***Confidential Treatment Requested

 

 

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

 

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

 

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

 

 

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

 

 

Exhibit 1.11

 

[...***...]

 

[...***...]

 

***Confidential Treatment Requested

 

 

AMENDMENT No.2 to LICENSE AGREEMENT

 

 

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

 

WITNESSETH:

 

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

 

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

 

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

 

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

 

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

 

 

2.           Amendments

 

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

 

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

 

 

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

 

 

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

 

 

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

 

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

 

 

3.  Representations and Warranties.

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

 

 

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

 

 

APPENDIX A

 

[...***...]

 

***Confidential Treatment Requested

 

 

AMENDMENT NO. 3 TO LICENSE AGREEMENT

 

THIS AMENDMENT NO. 3 (“Amendment No. 3”) is made and entered into as of September 18, 2014 (“Amendment Effective Date”) by and between HEALTH RESEARCH, INC., a New York corporation, with a principal place of business at Elm & Carlton Streets, Buffalo, New York 14263 (“HRI”) and ROSWELL PARK CANCER INSTITUTE, with a principal place of business at Elm & Carlton Streets, Buffalo, New York 14263 (“Roswell”) (HRI and Roswell are collectively referred to as “Licensor”) and TRACON PHARMACEUTICALS, INC., a Delaware corporation, with offices at 4500 Executive Drive, Suite 300, San Diego, California 92121 (“Company”).

 

WITNESSETH:

 

WHEREAS, Company and Licensor executed a License Agreement dated November 1, 2005 (as amended, the “License Agreement”);

 

WHEREAS, the parties executed Amendment No. 1 to the License Agreement, dated November 12, 2009 (“Amendment No. 1”), and Amendment No. 2 to the License Agreement, dated February 11, 2010; and

 

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

 

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

 

1.         Definitions.  Unless otherwise set forth in this Amendment No. 3, each capitalized term and abbreviation has the meaning set forth in the License Agreement.

 

2.         Sublicenses.  Section 2.2 of the License Agreement is hereby deleted and replaced by the following:

 

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

 

3.         Net Sales.  The first sentence of Section 1.7 of the License Agreement is hereby deleted and replaced by the following:

 

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

 

1.

 

4.         Sublicensee.  Section 1.9 is hereby deleted and replaced by the following:

 

““Sublicensee” means a third party that has entered into an agreement with Company or its Affiliate, or with a third party to which Company has sublicensed its rights under this Agreement as permitted under Section 2.2 or such third party’s affiliate, granting the right to make, have made, use, lease and/or sell the Licensed Products and/or to practice and have practiced the Licensed Processes.”

 

5.         Exhibits.

 

(a)        Exhibit 1.8 to the License Agreement is hereby deleted and replaced by Exhibit 1.8 to this Amendment No. 3.

 

(b)        Exhibit 1.11 to Amendment No. 1 is hereby deleted and replaced by Exhibit 1.11 to this Amendment No. 3.

 

6.         Representations and Warranties.

 

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

 

(i)         This Amendment No. 3 has been duly executed and delivered on behalf of such party, and constitutes a legal, valid, binding obligation, enforceable against such party in accordance with its terms.

 

(ii)        All necessary consents, approvals and authorizations of all governmental authorities and other entities required to be obtained by such party in connection with this Amendment No. 3 have been obtained.

 

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

 

(i)         The License Agreement is in full force and effect in accordance with its terms.  After giving effect to this Amendment No. 3, there exist no known breaches, defaults or events which would (with the giving of notice, the passage of time or both) give rise to a breach, default or other right to terminate or modify the License Agreement.

 

7.         Effectiveness of the License Agreement.  Except as expressly amended by this Amendment No. 3, all of the terms and conditions of the License Agreement shall continue in effect.

 

2.

 

IN WITNESS WHEREOF, Company and Licensor, intending to be bound, have executed this Amendment No. 3 by their duly authorized representatives, and this Amendment No. 3 shall be part of the License Agreement between the parties as of the date first written above.  This Amendment No. 3 may be executed in counterparts, each of which shall be deemed to be an original and together shall be deemed to be one and the same agreement.

 

	
TRACON   PHARMACEUTICALS, INC.
    	
ROSWELL PARK CANCER INSTITUTE
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Charles Theuer
    	
 
    	
By:
    	
 /s/ Michael B.   Sexton
    
	
 
    	
 
    	
 
    	
 
    	
 
    

                                                

	
Name:
    	
 Charles Theuer
    	
 
    	
Name:
    	
Michael B.   Sexton, Esq.
    
	
 
    	
 
    	
 
    	
 
    	
 
    

 

	
Title:
    	
  CEO
    	
 
    	
Title:
    	
Chief Institute   Operations Officer/Secretary
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    

 

	
 
    	
HEALTH RESEARCH, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 /s/ John Blandino
    
	
 
    	
 
    

 

	
 
    	
Name:
    	
  John Blandino,   MS, CRA
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
  Director, Health Research, Inc.,
    
	
 
    	
 
    	
  Roswell Park Division
    
				

 

 

EXHIBIT 1.8

 

Patent Rights

 

[...***...]

 

 

***Confidential Treatment Requested

 

 

EXHIBIT 1.11

 

[...***...]

 

 

***Confidential Treatment Requested

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