[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

 

30

---

 

13.5

The Licensee shall, as between the parties, be responsible for the application and own or control all Marketing Authorizations and other regulatory submissions or filings in the Territory and act as the national representative for the Licensed Products-related medical affairs and drug safety matters in the Territory. The Licensee shall inform the Licensor regularly, but at least at the end of each calendar quarter on the status of the application and the progress with regard to the Licensee Clinical Development Plan in general. The Licensee shall promptly notify Licensor of the issuance of each Marketing Authorization. Furthermore the Licensee shall inform the Licensor of any adverse events or other events material to the development, marketing and/or sale of Licensed Products as soon as reasonably possible and within the internationally recognised time period appropriate to the severity of the adverse event. Licensor, or at Licensor's discretion, Licensor's licensees or sublicensees shall act as the national representative for the Licensed Products-related medical affairs and drug safety matters outside the Territory.  Licensor shall report to Licensee any adverse events or other events material to the development, marketing and/or sale of Licensed Products as soon as reasonably possible, but in any event no later than within the internationally recognised time period appropriate to the severity of the adverse event.

13.6

The Licensee shall comply with all laws, rules and regulations, and, to the extent commercially reasonable, pharmaceutical industry trade association guidelines applicable to the marketing and distribution of the Licensed Products in the Territory; Licensor shall comply with all laws, rules, regulations, and, to the extent commercially reasonable, pharmaceutical industry trade association guidelines applicable to the marketing and distribution of Licensed Products outside the Territory. For clarification, this includes, but is not limited to, pharmacovigilance and drug safety monitoring, product promotion, product quality and product recall. Each party shall inform the other promptly in writing in the event it becomes aware of any matter which may reasonably precipitate a product recall, market withdrawal, or field correction, whether or not required by law.

 

31

---

 

14.	Costs, Validity, and Prosecution of Patents

14.1.

Licensor shall, at Licensee's expense as described in Clause 14.3 below, diligently file, prepare, prosecute and maintain the Patents and Improvements developed by Licensor in the Territory, including, but not limited to, the filing of patent applications, extensions, continuations, continuations in part, divisionals, reexaminations, or re-issue applications that may be reasonably required or advisable to advance the purposes of this Agreement or otherwise to protect the rights and licenses granted hereunder. Licensor shall control such prosecution and maintenance, at Licensee's expense, using counsel of its choosing (but approved by Licensee, such approval not to be unreasonably withheld). Licensor agrees to keep Licensee reasonably informed with respect to the status and progress of any such applications, prosecutions and maintenance activities for the Patents and Improvements developed by Licensor in the Territory and in all foreign counterparts of said Patents and Improvements outside the Territory and to consult in good faith with Licensee and take into account Licensee's reasonable comments and requests with respect thereto prior to the filing of any such documents. Licensee shall file, prosecute, and maintain Patents claiming any Improvements developed by Licensee to the extent commercially reasonable. Both parties agree to provide reasonable cooperation to each other to facilitate the application and prosecution of Patents pursuant to this Agreement. Notwithstanding anything to the contrary, Licensor shall not abandon prosecution of any pending Patent or maintenance of any issued Patent without first giving Licensee notice at least sixty (60) days prior to the date on which such patent application or patent will become abandoned, and shall allow Licensee to assume prosecution of any such patent application, or maintenance of any such patent, at Licensee's own expense and with counsel of its choosing, provided that the claims of any such patent or patent application shall thereafter not be considered Valid Claims for purposes of this Agreement, including but not limited to the determination of payments due hereunder.

 

32

---

 

14.2.

Where reasonably possible and reasonably useful or valuable in the commercialization of Licensed Products, Licensor shall, at Licensee's cost, use commercially reasonable efforts to apply for or enable Licensee to apply for a patent term extension, adjustment or restoration, supplementary protection certificate, or other form of market exclusivity conferred by applicable laws, rules, or regulations (collectively, "Patent Term Extensions") in the relevant country of the Territory. Licensee shall, to the extent reasonably possible, assist Licensor in pursuing Patent Term Extensions.

14.3.

Starting as of the Effective Date, Licensee shall pay, in connection with the preparation, filing, and prosecution, issuance and maintenance of the Patents (including Patent Term Extensions) in the Territory (i) all reasonable attorney fees for the services performed to obtain the issuance of the Patents and Patent Term Extensions, (ii) all government fees and all maintenance fees relating to the Patents and Patent Term Extension, to the extent such payments become due at or after Effective Date.

14.4.

Licensee shall not contest the ownership of Licensor of the Patents and the Technology as existing, in either case. If Licensee challenges in a court of law the validity of the Patents or the ownership of Technology as existing, in either case, then Licensor shall be entitled to terminate this Agreement with immediate effect upon written notice to Licensee.

 

33

---

 

15.	Trademarks and Improvements

 

15.1.

Licensor will inform Licensee promptly in writing and in reasonable detail of all Improvements.

15.2.

Licensee shall inform Licensor promptly in writing and in reasonable detail of all Licensee Improvements and Licensor shall inform Licensee promptly in writing and in reasonable detail of any Improvements. Licensee hereby grants Licensor (i) a free non exclusive license outside the Territory under all Licensee Improvement solely to make, have made, and use products (but not sell) and (ii) a free exclusive license outside the Territory under all Licensee Improvements solely to sell products incorporating Licensee Improvements, provided, however, that in the case of both (i) and (ii), such products incorporating Licensee Improvements are used solely in the development and/or commercialization of Anoheal or Incostop.

15.3.

Licensee is entitled without obligation to use in the Territory the Trademarks listed In Exhibit 4.

15.4.

Licensee, its Affillates, and their sublicensees may elect to use or license additional trademarks for the Licensed Products in the Territory. Such trademarks shall be registered and paid for by Licensee or its Affiliates, sublicensees or licensors, and shall remain the sole property of Licensee or its Affiliates, sublicensees or licensors, as the case may be.

16.	Infringement, Validity Challenges and Litigation

16.1.

Infringement and Validity Challenges

16.1.1.

The Parties to this Agreement shall inform each other promptly of any potential, actual, alleged, or reasonably suspected infringement of the Patents (or in the case of patents claiming Licensee Improvements, such patents), and/or challenge to the validity or enforceability of any claims of any of the foregoing, and provide each other with any available evidence of such infringement or challenge.

 

34

---

 

16.1.2.

During the term of this Agreement, the Licensee shall have the first right, but not the obligation, to take (or refrain from taking) appropriate action to enforce Patents, to defend any declaratory judgments seeking to invalidate or hold the Patents unenforceable, to control any litigation or other enforcement action and to enter into, or permit, the settlement of any such litigation, declaratory judgments or other enforcement action pertaining to Patents, with respect to any potential, threatened, alleged, or actual infringement of, or challenge, to the Patents, at its own expense and with counsel of its choosing, in the Territory. In furtherance of such right, Licensor hereby agrees that the Licensor may join Licensee as a party in any such suit (and will join at the Licensee's request), provided that the Licensee pay all of Licensor's reasonable, documented out-of-pocket expenses with respect thereto. If, within twelve (12) months of the written notice above, the Licensee (i) shall have been unsuccessful in persuading the alleged infringer to desist, (ii) shall not have brought and shall not be diligently prosecuting an infringement action, or (iii) has not entered into settlement discussions with respect to such infringement, or if the Licensee notifies Licensor that it has decided not to undertake any of the foregoing against any such alleged infringer, then Licensor shall then have the right to bring suit to enforce such Patents, at its own expense, provided, however, that, within thirty (30) days after receipt of notice of Licensor's intent to file such suit, Licensee shall have the right to jointly prosecute such suit and to fund up to one-half (1/2) the costs of such suit In exchange for a commensurate share of the proceeds of such suit. Subject to the effects of the foregoing in the event the Licensee exercises the aforementioned right, any recovery of damages or amounts received in settlement pursuant to this Clause 16.1.2 shall be allocated pursuant to Clause 16.1.4 below.

 

35

---

 

16.1.3.

The party controlling any action, suit, or defense under Clause 16.1.1 (the "Controlling Party") shall be free to enter into a settlement, consent judgment, or other voluntary disposition of any such action, provided, however, that (i) the Controlling Party shall consult with the other party (the "Secondary Party") prior to entering into any settlement thereof and (ii) any settlement, consent judgment or other voluntary disposition of such actions which (1) materially limits the scope, validity, or enforceability of any patents or, if the Licensee is the Secondary Party, patents or patent applications owned or controlled by the Licensee, (2) subjects the Secondary Party to any non-indemnified liability, payment obligation, or injunction, or (3) admits fault or wrongdoing on the part of Secondary Party, it then must be approved in writing by Secondary Party, such approval not to be unreasonably withheld. Secondary Party shall provide the Controlling Party notice of its approval or denial of such approval within twenty (20) business days of any request for such approval by the Controlling Party, provided that in the event Secondary Party wishes to deny such approval, such notice shall include a written description of Secondary Party's reasonable objections to the proposed settlement, consent judgment, or other voluntary disposition and (ii) Secondary Party shall be deemed to have approved such proposed settlement, consent, judgment or other voluntary disposition in the event it fails to provide such notice within such twenty (20) business day period.

 

36

---

 

16.1.4.

Any damages, recoveries, or settlement amounts Licensee obtains .as a result of the matters contemplated by Clause 16.1.2, when Licensee is prosecuting or defending any action, shall first be applied to payment of each of the parties' costs related to any actions taken by the parties with respect to such matters, with the remainder, to the extent attributable to infringement of the Patents, deemed Anoheal Net Sales or Incostop Net Sales, as elected by Licensee in its sole discretion for book keeping purposes, and subject to the applicable royalty obligation under Clause 7 of this Agreement. Any recovery of damages or amounts received in settlement by Licensor under Clause 16.1.2, when Licensee is prosecuting or defending any action, shall be applied first in satisfaction of any unreimbursed expenses and legal fees of each of Licensee and Licensor relating thereto, with the balance remaining from any such recovery being allocated as follows: (i) any amounts reasonably attributable to any intellectual property rights of Licensee (other than those licensed to Licensee hereunder) being paid to Licensee and (ii) the remaining balance shall be retained by the Licensor.

16.1.5.

To the extent there is no recovery of damages or amounts received in settlement by Licensee, its Affiliates, or Licensor with respect to any matter contemplated by Clause 16.1.2 above, or such amounts are insufficient to fully reimburse the Licensee for any amounts incurred by the Licensee with respect to such matter (including but not limited to attorneys' fees, out-of-pocket costs, and all amounts paid as judgments, damages, or in settlement) (such amounts, "Infringement Costs"), the Licensee may, to the extent not deducted from amounts due under this Agreement pursuant to Clause 7.6, credit [*] percent ([*]%) of Infringement Costs (such [*] percent ([*]%), the "Infringement Cost Credit") against royalties or other amounts thereafter payable to Licensor under this Agreement. If the Infringement Cost Credit exceeds [*]% of the amounts payable to Licensor under this Agreement in any calendar quarter in which the relevant Infringement Costs are incurred, then the amount of such Infringement Cost Credit in excess of the amounts payable to Licensor shall be carried over and credited against payments due in future calendar quarters. In no event shall the deduction of Infringement Cost under this clause 16.1.5 and the deduction under clause 7.6. added together exceed [*]% of the total amount due Licensor under this Agreement In any particular calendar quarter. Notwithstanding the foregoing, If any action or suit is initially brought by Licensee under this Clause 16 (as opposed to Licensee defending an action or suit pursuant to this Clause 16.1.5), then this Clause 16.1.5. shall not apply.

---

[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

 

37

---

 

16.1.6.

In any suit or other action contemplated by Clause 16.1.2, the Secondary Party 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.

17.	Third Party Rights

17.1.

If either party is charged with the actual or alleged infringement of Third Party rights based on the exploitation of the Patents, the Technology, or the use, manufacture, sale, or import of Licensed Products or any other products incorporating Anoheal API or Incostop API, such party shall immediately inform the other party about this allegation.

17.2.

The Licensee may, in its sole discretion, modify Licensed Products to avoid such infringement and/or may settle on terms that it deems advisable in its sole discretion, provided that any final disposition of the litigation that will restrict the claims in or admit any invalidity of any Patents shall not be made without consultation with and approval by Licensor, such approval not to be unreasonably withheld. Otherwise, the Licensee shall have the first right, but not the obligation, to defend or settle any such claim or suit. If the Licensee has not exercised such right to defend or entered into settlement discussions concerning such alleged infringement within the sooner of (i) twelve (12) months of the assertion of such a claim or (ii) thirty (30) days of the filing of such a suit, or if the Licensee notifies Licensor that it has decided not to undertake such defense or enter into settlement discussions with respect to its alleged infringement, then Licensor shall then have the right to defend such alleged infringement, at its sole expense, provided however that no settlement affecting Patents will be agreed upon without Licensee's written consent.

 

38

---

 

17.3.

If (i) Licensee by a final judgment is ordered to stop manufacturing, using, selling, or importing any Licensed Product or (ii) a judgment is rendered which would reasonably preclude Licensee's manufacture, use, sale, or import of any particular Licensed Product, and Licensee or Licensor does not secure sufficient rights under such Third Party patents to continue or resume such use, manufacture, sale, or import, Licensee shall have no further obligations under this Agreement to make, use, or sell such Licensed Product and shall not be in breach of this Agreement with respect to any failure to make, use, or sell such Licensed Product thereafter, and Licensor shall not be entitled to terminate this Agreement for any reason related to Licensee's failure to make, use, or sell such Licensed Product.

17.4.

In any suit to defend any alleged infringement of Third Party intellectual property rights by the manufacture, use, sale, or import of a Licensed Product, Licensor shall, at the request and expense of Licensee, 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.

18.	Representations and Warranties

Licensor hereby represents and warrants that:

 

39

---

 

18.1.

It is not aware of any legal deficiencies of the Patents, Know-How, or Technology. Licensor assumes no liability for the lack of such unknown deficiencies.

18.2.

It has full authority to grant the licenses provided hereunder and that all necessary corporate actions have been taken.

18.3.

Licensor owns all right, title, and interest in and to the Patents and the Material free and clear of all liens, encumbrances or other restrictions or limitations whatsoever.

18.4.

The US and foreign patent applications and patents itemized on Exhibit 2 set forth all of the patents and patent applications necessary or useful for practicing the Technology, manufacturing, using or selling Licensed Products, or manufacturing, using, or selling products incorporating Anoheal or Incostop in the Field in the Territory, in each case owned or controlled by Licensor.

18.5.

Licensor is not aware of any licenses, options, restrictions, liens, rights of third parties, disputes, royalty obligations, proceedings or claims relating to, affecting, or limiting Licensor's rights or the rights of the Licensee under this Agreement, or which may lead to a claim of infringement by or invalidity regarding, any part or all of the Patents, Technology, or Know-how or their use except as disclosed in Exhibit 6 (A).

18.6.

Licensor is not aware of any claim, pending or threatened, of infringement, interference or invalidity regarding any part or all of the Patents, Technology, or Know-how or their use in the Territory except as disclosed in Exhibit 6 (B).

18.7.

The Licensor is not aware of any inventors of Patents other than those listed as inventors on applications filed for such Patents.

 

40

---

 

18.8.

The development of the Technology, Patents, and Know-how were not supported in whole or part by funding or grants by any governmental agency or philanthropic or charitable organization.

18.9.

The Licensor is a corporation duly organized, validly existing and in good standing under the laws of Switzerland. The Licensor has the requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the performance and consummation of the transactions contemplated hereby by the Licensor have been duly authorized by all necessary action on the part of the Licensor and will not result in any violation or breach of, constitute (with or without notice or lapse of time or both) a default under or conflict with/or give rise to a right of termination, amendment, cancellation or acceleration of any agreement which is material for the performance of the present Agreement.

18.10.

This Agreement has been duly executed and delivered by the Licensor and, subject to the due authorization, execution and delivery of this Agreements by the Licensee, this Agreement constitutes a valid and binding obligation of the Licensor, enforceable against the Licensor in accordance with its terms, except as such enforcement may be affected by bankruptcy, reorganization, insolvency, moratorium or similar laws affecting creditor's rights generally and except for general principles of equity.

18.11.

The execution and delivery of this Agreement does not, the consummation of the transactions contemplated hereby and the performance of Licensor's obligations hereunder will not, (i) conflict with, or result in any violation or breach of any provision of the organizational documents of the Licensor, (ii) conflict with or violate any applicable statutes, judgments, decrees, laws, ordinances, rules, regulations, injunctions and orders ("Laws") of any Swiss federal, canton, or local government or any Swiss court, tribunal, administrative agency or commission or other governmental or regulatory authority, body or agency, including any self-regulatory organization ("Governmental Authorities") applicable to the Licensor.

 

41

---

 

18.12.

No consent, approval or authorization of, or declaration or filing with, any Swiss Governmental Authority or other Third Party (a "Consent") is required on the part of the Licensor in connection with its execution, delivery, and performance of this Agreement or the consummation of the transactions contemplated hereby.

18.13.

Exhibit 8 hereto sets forth a true and complete list of each license, contract or other agreements (together with certain other agreements and any amendments to any of the foregoing) to which the Licensor is a party and which relates to the Licensed Products or the Patents in the Territory, including but not limited to the clinical trial agreements (collectively, the "Material Agreements"). True and complete copies of all Material Agreements have been previously delivered to the Licensee. To the best knowledge of the Licensor each of the Material Agreements is valid, binding and in full force and effect, and enforceable by the Licensor, or has expired, in each case in accordance with its respective terms. No person or entity (other than the Licensor) that is a party to any Material Agreement or is otherwise bound thereby is, to the knowledge of the Licensor, in default or breach thereof and, to the Licensor's knowledge, no event, condition or act exists that, with the giving of notice or the lapse of time or both, would give rise to such a default or breach thereof or a right of cancellation by the Licensor thereunder. The Licensor is not in default or breach in any material respect of any of the Material Agreements and, to the knowledge of the Licensor, no event, condition or act exists that, with the giving of notice or the lapse of time or both, would give rise to a default or breach by the Licensor thereof or a right of cancellation thereunder by any other party thereto.

 

42

---

 

18.14.

No written communication has been received by the Licensor, and to the knowledge of the Licensor no investigation, regulatory enforcement action (including seizure, injunction, civil penalty or criminal action) or any related Governmental Authority review is or, in respect of any Licensed Product was at any time pending or is threatened by any Governmental Authority with respect to (i) any alleged or actual violation by the Licensor of any permit, Law or other requirement or any Governmental Authority relating to the operations conducted by the Licensor with respect to any Licensed Product or the Technology or (ii) any alleged or actual failure to have or maintain in effect all permits required in connection with the operations conducted by the Licensor with respect to any Licensed Product or the Technology. The Licensor has not received from the FDA, the U.S. Drug Enforcement Administration ("DEA"), or any similar state, local, federal, or foreign Governmental Authority any written notice regarding the approvability or approval of any of the Licensed Products. No Licensed Product has been withdrawn, suspended or discontinued by the Licensor as a result of any action by the FDA, the DEA or any similar state, local, federal, or foreign Governmental Authority, either within or outside the U.S. (whether voluntarily or otherwise). To the best knowledge of the Licensor with respect to any Licensed Products, no officer, employee or agent of the Licensor has made any untrue statement of a material fact or a fraudulent statement to the FDA, DEA or any similar state, local, federal, or foreign Governmental Authority.

18.15.

The Licensor is not aware of any suits or actions, administrative, arbitration or other proceedings, or governmental investigations pending or threatened against or affecting the Licensor with respect to Licensed Products, Technology, Know-How, or the Patents other than pending oppositions to European Patents corresponding to the Patents. No Entity has notified the Licensor in writing of any material claim against the Licensor alleging any personal property or economic injury, loss or damage incurred as a result of or relating to the use of the Technology, Know-How, or any Licensed Products. The Licensor is not aware of any judgment, order, Injunction, decree, writ or award against the Licensor that is not satisfied and remains outstanding with respect to the Technology, Patents, Know-How, or any Licensed Product.

 

43

---

 

18.16.

The Licensor has not received any notice of infringement of, or conflict with, any license, patent, copyright, trademark, service mark or other intellectual property right of any Third Party relating to the Territory. Except as provided herein, the validity or enforceability of any of the Patents and or the title of the Licensor thereto has not been questioned in any litigation, governmental inquiry or proceeding to which the Licensor is a party and, to the knowledge of the Licensor, no such litigation, governmental inquiry or proceeding is threatened except as disclosed in Exhibit 6 (B).

18.17.

To the knowledge of the Licensor, the Licensor has taken all reasonable actions necessary or appropriate to preserve the confidentiality of all trade secrets, proprietary and other confidential information material to the Licensed Products, Know-how, Technology, and Patents.

18.18.

Licensor is not aware of any Third Party activities which would constitute misappropriation or infringement of the Patents in the Territory.

18.19.

These are the only representations and warranties given by Licensor to the exclusion of all others.

Licensee hereby grants and warrants that:

18.20.

The Licensee is a limited liability company duly organized, validly existing and in good standing under the laws of New York. The Licensee has the requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the performance and consummation of the transactions contemplated hereby by the Licensee have been duly authorized by all necessary action on the part of the Licensee. This Agreement has been duly executed and delivered by the Licensee and, subject to the due authorization, execution and delivery of this Agreements by the Licensor, this Agreement constitutes a valid and binding obligation of the Licensor, enforceable against the Licensee in accordance with its terms, except as such enforcement may be affected by bankruptcy, reorganization, insolvency, moratorium or similar laws affecting creditor's rights generally and except for general principles of equity.

 

44

---

 

18.21.

The execution and delivery of this Agreement does not, the consummation of the transactions contemplated hereby, and the performance of Licensor's obligations hereunder will not, (i) conflict with, or result in any violation or breach of any provision of the organizational documents of the Licensee, (ii) conflict with or violate any applicable statutes, judgments, decrees, laws, ordinances, rules, regulations, injunctions and orders ("Laws") of any government or court, tribunal, administrative agency or commission or other governmental or regulatory authority, body or agency, including any self-regulatory organization in the Territory ("Governmental Authorities") applicable to the Licensee.

18.22.

No consent, approval or authorization of, or declaration or filing with, any Governmental Authority or other Third Party (a "Consent") is required on the part of the Licensee in connection with its execution, delivery, and performance of this Agreement or the consummation of the transactions contemplated hereby, that has not been received or filed by Licensee.

19.	Limitation of Liability

NEITHER PARTY SHALL BE LIABLE FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, OR INDIRECT DAMAGES ARISING OUT OF THIS AGREEMENT, HOWEVER CAUSED, UNDER ANY THEORY OF LIABILITY, subject to compulsory Swiss law regarding damages caused intentionally or in a grossly negligent manner.

 

45

---

 

 

20.	Indemnification

20.1.

Licensee shall indemnify, hold harmless and defend Licensor and its directors, officers, employees and agents against any and all losses, expenses, cost of defense (including without limitation attorney's fees, witness fees, damages, judgments, fines and amounts paid in settlement) and any amounts Licensor becomes legally obligated to pay because of any claim or claims against it to the extent that such claim or claims arise out of the development, manufacture, sale or use of the Licensed Products by Licensee, its Affiliates or its sublicensees, except to the extent such losses, expenses, costs and amounts are due to Licensor's, its Affiliates', or their sublicensees' (i) development, manufacture, use, or sale of Licensed Products or other products incorporating Anoheal API or Incostop API, (ii) negligence or intentional misconduct, (iii) breach of this Agreement, or (iv) failure to comply with all applicable laws, rules, and regulations, except to the extent such loss was due to Licensor's gross negligence, willful misconduct or fraud.

20.2.

Licensor shall indemnify, hold harmless and defend Licensee and its directors, officers, employees and agents against any and all losses, expenses, cost of defense (including without limitation attorney's fees, witness fees, damages, judgments, fines and amounts paid in settlement) and any amounts Licensee becomes legally obligated to pay because of any claim or claims against it to the extent that such claim or claims arise out of Licensor's, its Affiliates', or their sublicensees' (i) development, manufacture, use or sale of the Licensed Products or other products incorporating Anoheal API or Incostop API, (ii) negligence or intentional misconduct, (iii) breach of this Agreement, or (iv) failure to comply with all applicable laws, rules, and regulations, except to the extent such loss was due to Licensee's gross negligence, willful misconduct or fraud.

20.3.

In the event that either party intends to seek indemnification for any claim under Clause 20.1 or 20.2, it shall inform the other party of the claim promptly after receiving notice of the claim.

 

46

---

 

20.4.

In the case of a claim for which Licensor seeks indemnification under Clause 20.1, Licensor shall permit the Licensee to direct and control the defense of the claim and shall provide such reasonable assistance as is reasonably requested by the Licensee (at the Licensee's cost) in the defense of the claim, provided that nothing in this clause 20.4 shall permit the Licensee to make any admission on behalf of Licensor, or to settle any claim or litigation which would impose any financial obligations on Licensor without the prior written consent of Licensor, such consent not to be unreasonably withheld or delayed.

In the case of a claim for which the Licensee seeks indemnification under Clause 20.2, the Licensee shall permit Licensor to direct and control the defense of the claim and shall provide such reasonable assistance as is reasonably requested by Licensor (at Licensor's cost) in the defense of the claim, provided that nothing in this Clause 20.3 shall permit Licensor to make any admission on behalf of the Licensee, or to settle any claim or litigation which would impose any financial obligations on the Licensee, without in either case the prior written consent of the Licensee, such consent not to be unreasonably withheld or delayed.

21.	Product Liability

21.1.

Licensee agrees that Licensor shall have no liability to Licensee or to any purchasers or users of Licensed Products made or sold by Licensee for any claims, demands, losses, costs, or damages suffered by Licensee, or purchasers or users of such Licensed Products, or any other party, which may result from personal injury, death, or property damage related to the manufacture, use, or sale of such Licensed Products, except to the extend such claims, demands, losses, costs, or damages are a result of Licensor's gross negligence or willful misconduct.

 

47

---

 

21.2.

Each party shall maintain insurance coverage in types and amounts reasonably sufficient to cover its obligations under Clause 20 and provide evidence thereof to the other party upon written request. At such time as a party or its sublicensees, as applicable, begins to sell or distribute Licensed Products (other than for the purpose of obtaining regulatory approvals), such party or sublicensee, as applicable, shall at its sole expense, procure and maintain policies of comprehensive general liability insurance naming the other party as an additional insured. Such comprehensive general liability insurance shall provide product liability coverage. Each party shall provide the other with written evidence of such insurance and shall inform the other party with notice at least fifteen (15) days prior to any cancellation, non-renewal or material change in such insurance, to the extent such party receives advance notice of such matters from its insurer.

22.	Force Majeure

Neither party shall be liable to the other for any inability to perform any obligation under this Agreement (except monetary obligations of either party) due to, events beyond its reasonable control, including, but not limited to, fire, storm, flood, earthquake, explosions, riots, strikes, transportation embargoes or delays, shortages of materials or machinery, or acts of the government.

23.	Termination

23.1.

This Agreement shall come into force upon signing by both parties and shall continue in force for each country of the Territory for Anoheal and Incostop, respectively, until the sale of Licensed Products incorporating Anoheal API or Incostop API, respectively, is terminated, subject to termination pursuant to this Clause 23. For the avoidance of doubt it is stated that the Agreement also ends if the sale of products containing Anoheal or Incostop continues provided such products are not covered by Valid Claims and do not incorporate or use Technology or Know-How (including but not limited to clinical studies) as defined in Clauses 2.19 and 2.27 above.

 

48

---

 

23.2.

The Licensee shall have the right to terminate the Agreernent, in its entirety or with respect to its rights and obligations with respect to Licensed Products incorporating Anoheal or Incostop, respectively, in any country, on ninety (90) days written notice. Upon termination of either the Incostop Project or the Anoheal Project pursuant to this Clause 23.2, all rights to the Patents relating to Incostop Project or the Anoheal Project, as applicable, shall revert to the Licensor, except to the extent such rights (i) are needed by Licensee for the development and commercialization of the unterminated project, if any, and (ii) relating to Licensee Improvements (except Licensor shall retain rights relating to Licensee Improvements to be used solely in the development and/or commercialization of Anoheal or Incostop).

23.3.

In the event either party (the "Insolvent Party") becomes bankrupt or files a petition in bankruptcy, or if the business of a party shall be placed in the hands of a receiver, assignee or trustee for the benefit of creditors, whether by the voluntary act of such party or otherwise, such party shall provide notice thereof to the other party and the other party may, subject to the effects of and protections of any applicable bankruptcy-related laws, rules, or regulations (including but not limited to Section 365(n) of the United States Bankruptcy Code, which shall apply to the rights granted Licensee under this Agreement), terminate this Agreement upon notice to the Insolvent Party given within thirty (60) business days of the other party's receipt of such notice.

23.4.

Upon any material breach or material default of this Agreement by either party (the "Breaching Party"), the other party (the "Non-Breaching Party") shall have the right to terminate this Agreement and the rights, privileges and license granted hereunder by giving sixty (60) days prior written notice to the Breaching Party. Upon the expiration of the sixty (60) day period, if Breaching Party shall have not cured such breach or default, this Agreement shall, at the option of the Non-Breaching Party, terminate upon written notice of Non-Breaching Party given within ten (10) business days of the expiration of such sixty (60) day period. Notwithstanding anything herein to the contrary, if the nature of the breach is such that additional time is reasonably needed to cure such breach, and Breaching Party has commenced with good faith efforts to cure such breach, then Non-Breaching Party shall provide Breaching Party with reasonably sufficient additional time in which to cure such breach, provided such time shall not in any event exceed ninety (90) days. For the avoidance of doubt, failure of the Licensee to timely remit to the Licensor monies due under this Agreement shall be deemed a "material breach" of this Agreement.

 

49

---

 

23.5.

Upon the termination of this Agreement pursuant to this Clause 23, Licensee may notify Licensor of the amount of Licensed Products that Licensee has in its possession, under its control, or in the process of manufacture and Licensee may then, notwithstanding anything to the contrary, be entitled to sell that amount of Licensed Products, but no more, subject to the royalties provided for in this Agreement. Licensee shall stop using the Know How and the Technology and the right to make reference to the Materials or data contained in the Know How, including but not limithd to clinical studies, shall end.

23.6.

Sublicenses: In the event this Agreement is terminated pursuant to Clause 23.2, 23.3, or 26.4, any sublicense granted by Licensee to the extent concerning the rights subject to such termination shall remain in effect and be assigned to Licensor and Licensor shall assume all rights and obligations of Licensee applicable after termination of this Agreement.

23.7.

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, and the following provisions shall survive such termination: Clauses 2, 10.3, 16 (with respect to infringement occurring prior to such termination), 17 (with respect to infringement occurring prior to such termination), 19, 20, 21, 23, 24, 25, 26, and 27.

 

50

---

 

23.8.

In the event Licensee terminates the development and sale of either Anoheal or Incostop then upon written request of the Licensor the Licensee shall transfer and assign at no cost, any and all pre-clinical data, human safety data, preliminary efficacy data, INDs and other regulatory data and filings that are in its possession related to the Licensed Product affected .by such stop, and shall provide Licensor with the right to reference with respect to such data and regulatory filings.

23.9.

In the event Licensor terminates the development and marketing efforts for either Anoheal or Incostop then upon written request of the Licensee the Licensor shall transfer and assign at no cost, any and all pre-clinical data, human safety data, preliminary efficacy data, INDs and other regulatory data and filings that are in its possession related to the Licensed Product in the European Union affected by such stop, and shall provide Licensee with the right to reference with respect to such data and regulatory filings.

24.	Confidentiality

24.1.

Each party agrees to retain in strict confidence and not to disclose to any other person or entity any Confidential Information of the other party, whether disclosed prior to or after the date of signature of this Agreement or of prior secrecy agreements. The parties further agree not to use any such Confidential Information for any purpose, except pursuant to, and in order to carry out, the terms and objectives of this Agreement.

24.2.

Each party agrees to undertake all necessary and appropriate precaution to prevent and restrain the unauthorized disclosure of such Confidential Information. Each party warrants that each of its employees or representatives to whom any Confidential Information is revealed shall previously have been informed of the confidential nature of the Confidential Information and shall have agreed to be bound by the terms and conditions substantially similar to this confidentiality obligation.

 

51

---

 

24.3.

The provisions of this section 24 shall not apply to any Confidential Information disclosed hereunder which:

24.3.1.

was known by the receiving party prior to its disclosure to the receiving party by the other party, as evidenced by the prior written records of the receiving party, or

24.3.2.

either before or after the date of disclosure to the receiving party by the other party is lawfully disclosed to the receiving party without obligation of confidentiality or limitation on use by an Third Party rightfully in possession of the Confidential Information, or

24.3.3.

Confidential Information that was developed before the Effective Date independently by the receiving party without use or benefit of the Confidential Information of the other party, as evidenced by written records; or

24.3.4.

is required to be disclosed by the receiving party to comply with applicable laws, to defend or prosecute litigation or to comply with governmental laws or regulations, provided that the receiving party provides prior written notice of such disclosure to the other party and takes reasonable and lawful actions to avoid and/or minimize the degree of such disclosure, subject to the reasonable advice and comment of disclosing party.

24.4.

The provisions of this section 24 shall not apply to any Confidential Information. disclosed hereunder

24.4.1.

to Solvay Pharmaceuticals, Inc., pursuant to the Termination Agreement listed in Exhibit 6 A

 

52

---

 

24.4.2.

to the inventors M.A. Kamm and R.S. Phillips under the Assignment Agreement listed in Exhibit 6 A.

24.5.

The confidentiality obligations of the parties contained in the foregoing paragraphs of this section 24 shall remain binding on both parties during the term of this Agreement and for a period of ten (10) years after the termination of this Agreement, regardless of the cause of such termination.

25.	Paramount Guarantee

Until the closing of the Financing, in consideration of Licensor's execution of and performance under this Agreement, Paramount hereby agrees (in the event of assignment of this Agreement to NewCo) to be jointly and severally liable for all amounts due under Clauses 6, 7, 8, 12, 14.1, and 18 hereof. Paramount's guarantee obligation under this Clause 25 shall continue in full force and effect until the Financing, at which time Paramount shall have no further obligations or liabilities under this Clause 25, regardless of any existing, uncured nonpayment existing as of the Financing, and Paramount shall be hereby released by Licensor and NewCo of any liability with respect thereto upon the closing of the Financing (including any such liability with respect to, any previously unpaid amounts due Licensor). NewCo shall reimburse Paramount in full for any amounts incurred or paid by Paramount under this Clause 25 upon request by Paramount, including but not limited to amounts paid Licensor by Paramount and any reasonable, documented fees and expenses (including attorneys' fees) incurred by or on behalf of Paramount with respect to any dispute related to NewCo's nonpayment of amounts due hereunder.

53

---

 

26.	Miscellaneous

26.1.

Affiliates of the Parties: Each party is responsible that all their Affiliates, to the extent exercising rights or performing obligations under this Agreement, comply with the terms of this Agreement.

26.2.

No Agency: Neither party is, nor will be deemed to be, an employee, agent or representative of the other party for any purpose. Each party is an independent contractor, not an employee or partner of the other party. Neither party shall have the authority to speak for, represent or obligate the other party in any way without prior written authority from the other party.

26.3.

Notices: Any notice or other communication given or made under or in connection with the matters contemplated by this Agreement shall be delivered or sent by registered mail, over night courier or facsimile message to the party to be served at the address or facsimile number appearing hereafter or such other address as the party may substitute for such purpose by notice given to the other party.

To Licensor:

David Slagel

S.L.A. Pharma AG

Rebgasse 2

Liestal, Switzerland

Office: [*]

Fax: [*]

to Licensee:

Mr. Jay Lobell

Paramount BioSciences, L.L.C.

54

---

 

787 Seventh Avenue, 48th Floor

New York, NY 10019, USA

Office: [*]

Fax: [*]

26.4.

Entire Agreement: This Agreement together with its Exhibits constitute the whole and only Agreement between the Parties relating to the matters contemplated by this Agreement and supersedes and extinguishes any prior agreements, undertakings and arrangements of any nature whatsoever whether or not in writing relating thereto.

26.5.

Severability: Should one of the provisions of this Agreement be or become invalid or unenforceable or should a gap become apparent, the validity of the other provisions in this Agreement shall remain unaffected. The parties shall replace the invalid or unenforceable provision or fill the gap with a valid and enforceable provision, to the extent legally possible and permissible, which comes as close as possible to what the parties would have agreed upon at conclusion of this Agreement if the necessity of such an adjustment had been known to them at that time.

26.6.

Modifications: This Agreement and its Exhibits shall only be amended in writing, provided that (i) Exhibit 2 shall be automatically amended from time-to-time without further agreement by the parties as items may be included and excluded from Patents pursuant to the definition thereof and the terms of this Agreement and (ii) Exhibit 1 may be amended, and will be amended from time to time, at the discretion of the Committee.

26.7.

No Waiver: The failure by any Party to this Agreement to enforce at any time or for any period of time any provision of this Agreement shall not be construed as a waiver of such provision or of the right of such Party thereafter to enforce each and every such provision of this Agreement.

 

55

---

 

26.8.

Assignment: Neither Party shall assign this Agreement or any rights or obligations hereunder to any third party without the written consent of the other Parties hereto, provided that, notwithstanding the foregoing, each Party may assign this Agreement without the consent of the other party (i) to a purchaser, merging, or consolidating corporation, or acquirer of all or substantially all of that party's assets or business (or that portion thereof to which this Agreement relates) and/or pursuant to any reorganization of the respective party or (ii) to an Affiliate of the respective party.

26.9.

Counterparts: This Agreement may be executed in counterparts and all counterparts shall constitute an original, and all counterparts shall together constitute one and the same instrument.

27.	Governing Law and Dispute Resolution

27.1.

This Agreement is subject to and governed by the laws of Switzerland without reference to its principles of conflicts of law.

27.2.

All disputes arising out of or in connection with the present agreement including disputes on its conclusion, binding effects, amendment and termination shall be resolved by the ordinary courts of Zurich, Switzerland, without limiting the right of recourse.

 

56

---

 

For the Licensor:		For the Licensee:
S.L.A. Pharma AG		Paramount BioSciences, LLC.

By:	/s/ D. Slagel		By:	/s/ Jay Lobell
Name:	D. Slagel		Name:	Jay Lobell
Title:	President		Title:	President
Date:	20/03/07		Date:	23/03/07

 

57

---

 

EXHIBIT 1

 

LICENSEE CLINICAL DEVELOPMENT PLAN

Anoheal Development Program

[*]

Incostop Development Plan

[*]

 

---

 

EXHIBIT 2

PATENTS

Anoheal

USA-

Application number 09/355928 - filing (PCT) date 26/02/1998 - pending

Application number 10/214333 (Publication No. 2004-0028752) - filing (PCT) date 23/02/1998 - pending

Canada-

Application number 2281755 - filing (PCT) date 23/02/1998 (published as W098/36733) - pending

Mexico-

None

Incostop

USA-

Patent number 6635678 (Application number 09/331163) - filing (PCT) date 23/12/1997 - granted 21/12/2003

Application number 10/389773 (Publication No. 2003-0216420) - filing (PCT) date 23/12/1997 - pending

Canada-

Application number 2275663 - filing (PCT) date 23/12/1997 (published as W098/27971) - pending

Mexico-

None

 

---

 

EXHIBIT 3

MATERIAL

ANOHEAL

[*]

INCOSTOP

[*]

 

 

---

 

EXHIBIT 4

TRADEMARKS

Anoheal

USA-

Registration number 2767016 (Application number 75/634497) - filing date 05/02/1999 - registration date 23/09/2003 - granted

Canada-

Application number 890193 - filing date 14/09/1998 - pending to be abandoned (use requirements) Application number 1302465 - filing date 15/05/2006 - pending

Mexico-

Registration number 887847 (Application number 377132) - filing date 28/05/1999 - registration date 24/06/2005 - granted

Incostop

USA-

Application number 76/344233 - filing date 22/06/2000 - registration number 2697369 - registration date 18/03/2003 - granted

Canada-

Application number 1123564 - filing date 29/11/2001 - pending

Mexico-

Application number 521828 - filing date 05/12/2001 - pending

 

---

 

EXHIBIT 5

LICENSOR IND(S)

NONE

 

---

 

EXHIBIT 6 (A)

DISCLOSED AGREEMENTS

Termination Agreement between Licensor and Solvay Pharmaceuticals signed 6/20/05 and 4/08/05

M.A. Kamm and R.S. Phillips under the Assignment Agreement dated March 1997 (See attached.)

EXHIBIT 6 (B)

Anoheal

The European Patent (EP 0969813 B1) in respect of Anoheal has been Opposed by Tecnimede Sociedade Tecnico-Medicinal, S.A. The Opposition Division issued a verbal Decision at the end of a Hearing on January 29, 2007 revoking the Patent. As usual, no reasons for the Decision were given at that time but those reasons will be stated in due course in a Written Decision. It is assumed that the ground is lack of novelty over WO-A-95/06466 (Lubowski). As at February 8, 2007, neither the Hearing Minutes nor the Written Decision had issued. An Appeal against the Decision will be filed within a period specified in the Written Decision but it is unlikely that the Appeal will be heard before 2009.

Incostop

The European Patent (EP 0946155 B1) in respect of Incostop has been Opposed by Norgine BV. The Opposition was filed on December 21, 2006 and an extendable period expiring May 26, 2007 has been allowed for the filing of the Defence. It is unlikely that the Opposition will be heard before 2009. It is believed that Norgine’s primary objective is to obtain amendment of the granted claims to exclude the use of Methoxamine as an active in a topical formulation for the treatment of fecal incontinence or anal itch.

 

---

 

6.3.3

Notwithstanding the above, it is agreed between the PARTIES that in case SLA was to pay any down payment to GEBRO according to the Cooperation Agreement assigned to SLA as per this AGREEMENT, the next TERMINATION FEES normally due to SOLVAY as described under this Clause 6.3 shall not have be paid by SLA to SOLVAY. The TERMINATIONS will only become due again as from the moment SLA shall be considered as having received from LICENSEE(S) or ASSIGNEE(S) an aggregate amount of up-front and/or milestone payments as well as of SLA ROYALTIES equal to the amount of the down payment paid to GEBRO.

6.4.

SOLVAY shall have the .right to require payment of any TERMINATION FEES directly from SLA's LICENSEE(S) or ASSIGNEE(S) for NET SALES in case of a default in payment by SLA, and SLA's LICENSEE(S) or ASSIGNEE(S) shall specifically agree in their agreement with SLA that in the event of such requests it shall make all TERMINATION FEES payments and furnish reports and documents directly to SOLVAY.

6.5.

The TERMINATION FEES according to this Clause 6 shall be paid to SOLVAY as long as the PRODUCTS are sold by SLA and/or its successors and/or its LICENSEE(S) or ASSIGNEE(S) and/or their successors in the TERRITORY.

6.6.

Accounting and payment of the TERMINATION FEES shall be effectuated on a quarterly basis in accordance with internationally recognised accounting principles. SLA shall submit the statement of accounts April, July, October and January of each year, and pay the TERMINATION FEES for each quarter within thirty (30) days after the end of the calendar quarter.

6.7.

The TERMINATION FEES shall be paid in USD to the bank account indicated by SOLVAY.

6.8.

SLA shall always keep up-to-date and correct records of the sales of the PRODUCTS so that SOLVAY or its accounting expert is able to verify the NET SALES and the SLA ROYALTIES.

6.9.

SOLVAY is entitled to have these figures verified by an accounting expert at any time upon its first request not more than once a year; in such case SLA shall permit the accounting expert delegated by SOLVAY to inspect its books and other accounts relating to the PRODUCTS as well as relevant documents to the extent required for that purpose upon reasonable prior written notice and during normal business hours.

7.           Applicable Law and Jurisdiction

7.1.

This Termination Agreement shall in all parts exclusively be construed under, governed by, interpreted under, and made subject to the laws of Switzerland.

7.2.

Any dispute arising out of or in connection with this Termination Agreement shall be solved amicably. If the PARTIES do not come to a mutual understanding, then it is hereby agreed that any dispute shall be settled exclusively by the Commercial Court of Zürich.

 

---

 

8.           Miscellaneous

8.1.

If any provision thereof is or becomes invalid, the existence of this AGREEMENT and the validity of the remaining provisions shall not be effected thereby. The contracting PARTIES shall immediately and by mutual agreement replace the invalid provisions by a valid provision which is as consistent as possible with the original intent of the contracting PARTIES.

8.2.

Any amendment to and/or modification of this AGREEMENT shall only be valid if made in writing and signed by both PARTIES.

8.3.

Neither this AGREEMENT nor any interest under this AGREEMENT shall be assignable by either PARTY without the written consent of the other, provided, however, that either PARTY may assign this AGREEMENT or any part thereof to any AFFILIATE or to any corporation with which it may merge or consolidate, or to which it may transfer all or substantially all of its assets to which this AGREEMENT relates, without obtaining the consent of the other PARTY.

IN WITNESS WHEREOF the PARTIES hereto have duly executed this AGREEMENT in a legally binding manner

S.L.A. Pharma AG		Solvay Pharmaceuticals, Inc
/s/ D. Slagel		/s/ Harold H. Shelvin
		Harold H. Shelvin
Liestal,		President & CEO
		Solvay Pharmaceuticals, Inc.
4/08/05		6/20/05

 

---

 

ASSIGNMENT AGREEMENT

THIS AGREEMENT is made the        day of March 1997

BETWEEN

Dr Michael A. Kamm of [*] and Mr Robin K S Phillips of [*] (hereinafter together called "the Assignors")

and

Slaco Phanna AG, a Swiss company incorporated under the laws of Switzerland having its principal office at Oristalstrasse 87a, 73 Postfach, CH-4410 Leistal, Switzerland (hereinafter called "the Assignee")

WHEREAS the Assignors have agreed to assign the First Invention and Second Invention to the Assignee in accordance with the terms and conditions hereinafter mentioned.

THEREFORE in consideration of the mutual understanding set out below IT IS HEREBY AGREED AS FOLLOWS:

1	In consideration of the matters set out below the Assignors assign all world-wide rights to and in:

1.1

patent application numbers 9626750.5, 9626739.8 and 9703750.1 which applications relate to compounds for treating anal incontinence by means of a pharmaceutical composition (hereinafter called "the First Invention")

1.2

patent application number 9703309.6 which application relates to a compound which has an effect on the longitudinal muscle for treating anal disorders (hereinafter called "the Second Invention")

2

The Assignors will provide the Assignee with all necessary know-how and in return the Assignee will involve the Assignors in all future development of the compounds covered by this Agreement and will keep the Assignors fully informed of the status of all developments including but not limited to clinical trials. The Assignee shall be responsible for conducting all relevant clinical and other trials relating to the development of the First and Second Inventions and will appoint independent centres to conduct certain of the clinical or other trials. However, before instructing any independent centre to conduct such trials the Assignee shall always first offer the Assignors the right to conduct such trial on commercial terms to be agreed and the Assignors may accept or reject the offer as they see fit.

  

---

[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

 

---

 

3

The Assignee will be responsible for all filing of patents and all costs that are incurred and shall at its own cost diligently prosecute to grant all patent applications made or to be in respect of the First Invention and the Second Invention. The Assignee will be responsible for maintaining the validity of the patents when they issue for the fall terms thereof and will be responsible for the enforcement of the patents when they issue and the assignee covenants to use its reasonable endeavours to enforce the patents against infringers.

4	The Assignee shall make all diligent efforts to develop the First Invention and the Second Invention and will meet all development costs in those counties where patents are granted or pending.

5

The Assignors receive [*] percent ([*]%) of the Net Sales Value shared equally in respect of world-wide sales where products comprising the compounds which form the subject matter of the First or Second Invention are marketed by the Assignee. This level of royalties shall continue for the duration of the patent where granted (as extended by any supplementary protection certificate if obtained in any particular country), or in the event of a patent application not being granted royalties shall continue for the life of the products and be reduced by mutual consent if the sales are adversely affected by competitor products.

6

The Assignee undertakes that it will assign unconditionally to the Assignors [*] ([*]) percent of any royalty payment shared equally (less all applicable credits) payable to the Assignee accruing out of the rights and obligations contained in any licence or assignment agreement(s) between the Assignee and any other party.

7

The Assignee undertakes that it will assign. unconditionally to the Assignors [*] percent ([*]%) of all up-front and sell-off payments shared equally which have been negotiated by the Assignee and a third party in respect of the sale to such third party of all or any of the patents or patent applications resulting from the First or Second Invention..

8

The Assignee when conducting negotiations with a third party, when any patent or patent application is proposed to be licensed or assigned to the third party, shall use its best endeavours to achieve an agreement which ensures that the same percentage of royalties payable to the Assignors in accordance with clause 5 above shall continue without interruption.

9

MARKETING

The Assignee shall use its reasonable endeavours to market products resulting from the First or Second Inventions and to ensure that an equivalent provision is included in any licence or assignment that it proposes to enter into with any third party.

10	PAYMENT TO THE ASSIGNORS

10.1

The Assignee will supply to the Assignors all royalty reports, sales, figures and other relevant information and will allow the Assignors or their duly appointed agents to inspect at the Assignee's place of business all records relating to the sales and transactions of the compounds covered by the agreements.

 

---

[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

 

---

 

10.2

All royalty payments payable by any company in respect of net sales of the compounds in any territory shall be apportioned between Assignee and the Assignors in accordance with the above and said amounts are paid directly to the Assignors by electronic fund transfer to the Assignors' accounts the details of which shall be provided to the Assignee. This shall also apply to all up-front and sell-off payments.

10.3

As from the date of issue of a product licence in respect of products containing the compounds disclosed in the First or Second Invention on a country by country basis, the Assignee shall pay the Assignors a royalty as specified in this Agreement.  Payments shall be made quarterly in arrears, allowing up to three weeks following the quarter-end.

10.4

Royalty payments shall be paid in pounds sterling and shall be calculated in the currency in which the sales are made and where conversions of currency are necessary shall be converted at the rate of exchange at the date when payment is due. All bank charges and exchange expenses shall be at the expense of the Assignee.

11

NOTICES

11.1	Any notice to be given hereunder shall be sent by first class mail with recorded delivery to the other party at the addresses contained herein or at such other addresses as each party shall have indicated to each other and shall be deemed to be given two (2) days following the date of mailing.

11.2

In the event that the Assignee proposes to assign, change or licence any or all of the patents granted or applied for in any country in the world in respect of the composition, they will negotiate with the third party on an arms' length basis so as to secure the best commercial terms possible, and they will promptly notify the Assignors of the terms and conditions of the proposed transactions and prior to the entering into of any contractual commitment obtain the Assignors prior approval; such approval not to be unreasonably withheld save that the Assignee agrees that it will be reasonable for the Assignors to withhold their approval to any proposed licence, assignment or other agreement which does not ensure that they continue to receive the same level of royalties as provided for in clause 5 above unless there are any legal or commercial circumstances applicable in a particular country or countries to which the proposed agreement relates which prevent such level of royalty being achieved.

11.3	The Assignors shall be kept informed of all distribution and marketing arrangements entered into by the Assignee.

 

---

 

12	GOVERNING LAW

Disputes in relation to this Agreement which arise between the Assignors and the assignee shall be governed by the laws of England and shall be subject to the exclusive jurisdiction of the English Courts.

13

WAIVER

A waiver by one party of a breach by the other party of any terms of this Assignment shall not prevent the subsequent enforcement of the terms and shall not be deemed a waiver of any subsequent breach.

14	DEFINITIONS

The singular includes the plural and vice-versa where the context so admits or requires reference to the Assignors and Assignee shall include their respective employees or agents.

"Territory" means any country or state in which the First or Second Invention is sold.

"Net Sales Value" for the purposes of this Agreement means the price paid by third parties (including but not limited to distributors or agents) to the Assignee in respect of any product comprising the First or Second Invention in an arm's length transaction exclusively for money after deduction of normal (not special or promotional) trade discounts actually granted and of any credits actually given by the Assignee for returned or defective goods and excluding or making proper deductions for any costs of packing, insurance, carriage and freight and Value Added Tax or other sales tax and applicable governmental levies or subject in all cases to the same being separately charged on customer invoices. In any sale or other disposal of any products or part thereof otherwise then in any arm's length transaction exclusively for money, the fair market price (if higher) shall be substituted for the Net Sales Value.

15	EFFECTIVE DATE

This Agreement shall be effective from the date of the signed signature.

 

---

 

IN WITNESS whereof the parties have caused this Agreement to be signed by themselves or their duly authorised representatives on the date below written.

SIGNED by Dr Michael A. Kamm				)
in the presence of:				)			/s/ Michael Kamm
							Dr Michael A Kamm
Witness Name	:	L. Flack
Witness Address	:	[*]
		[*]
Witness Signature	:	/s/ L. Flack
SIGNED by Mr Robin S Phillips				)
in the presence of:				)			/s/ Robin Phillips
							Mr Robin S Phillips
Witness Name	:	P. Shawyer
Witness Address	:	[*]
Witness Signature	:	/s/ P. Shawyer
SIGNED by				)
duly authorized on behalf of				)	/s/ D. Slagel
SLACO PHARMA AG				)
in the presence of:				)
Witness Name	:	Joan N. Goldston
Witness Address	:	[*]
Witness Signature	:	/s/ Joan N. Goldston

 

---

[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

 

---

 

EXHIBIT 7

SUBSCRIPTION AGREEMENT

(SEE ATTACHED)

 

---

 

EXHIBIT 7

FORM OF STOCK PURCHASE AGREEMENT

THIS STOCK PURCHASE AGREEMENT ("Agreement") is entered into as of _____, 2007, by and between the undersigned (the "Purchaser") and __________, Inc. a Delaware corporation having a business address at 787 Seventh Avenue, New York, NY 10019 (the "Corporation").

RECITALS

WHEREAS, the Corporation desires to sell shares of common stock, par value $.001 per share, of the Corporation (which class of shares is referred to herein as "Common Stock") to Purchaser, and Purchaser desires to purchase these shares, upon the terms and conditions herein specified; and

WHEREAS, Purchaser is willing to subject the Stock (as defined herein) to the restrictions contained herein.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing recitals and of the mutual promises herein contained, the parties hereby agree as follows:

1.            Issuance and Acquisition of Stock.

(a)           Immediately after the execution of this Agreement by the parties, the Corporation shall transfer to the Purchaser, and the Purchaser shall acquire from the Corporation, the number of shares of Common Stock listed beside the Purchaser's name on the signature page hereto (the "Stock"), at the purchase price of $.001 per share, for the total purchase price listed below the Purchaser's name on the signature page hereto (the "Purchase Price").

(b)          As soon as reasonably practicable after the execution of this Agreement, the Corporation shall deliver to the Purchaser a certificate or certificates evidencing the Stock, registered in the name of the Purchaser and concurrently therewith the Purchaser shall make payment for the Stock by delivering to the Seller a check payable to the Corporation in the amount of the Purchase Price.

2.            Violation Of Transfer Provisions.  The Corporation shall not be required (i) to transfer on its books any shares of Stock which shall have been sold, transferred, assigned or pledged in violation of any of the provisions of this Agreement or (ii) to treat as owner of such shares or to accord the right to vote as such owner or to pay dividends to any transferee to whom such shares shall have been so sold, transferred, assigned or pledged.

 

---

 

3.           Rights as Shareholder.  Except as otherwise provided herein during the term of this Agreement, the Purchaser shall exercise all rights and privileges of a shareholder of the Corporation with respect to the Stock.

4.           Representation and Warranties by the Corporation.

The Corporation represents, warrants and covenants with the Purchaser as follows:

(a)           The Corporation has all necessary power and capacity to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transaction contemplated hereby.  This Agreement has been validly executed and delivered by the Corporation and constitutes the legal, valid and binding obligation of the Corporation, enforceable against the Corporation in accordance with its terms.  The execution and delivery of this Agreement by the Corporation do not and the performance of its obligations under this Agreement will not conflict with or result in any breach or constitute a default under any contracts to which the Corporation is a party or by which the Corporation or any property or asset of the Corporation is bound or affected.

(b)           The Corporation has good title to the Stock and owns the Stock free and clear of any security interests, liens, claims, pledges, options, rights of first refusal, agreements, limitations on voting rights, charges and other encumbrances of any nature whatsoever (collectively, "Liens") other than restrictions on transfer imposed under the Securities Act of 1933, as amended (the "Securities Act").  Upon delivery thereof to the Purchaser, the Purchaser shall acquire good title to the Stock, free and clear of any Liens other than the restrictions set forth in this Agreement and under the Securities Act.  The Stock is validly issued, fully paid and nonassessable.  The Corporation is transferring the Stock to the Purchaser hereunder pursuant to a valid exemption from registration under the Securities Act.

5.           Representations and Warranties by the Purchaser.

The Purchaser represents, warrants and covenants with the Corporation as follows:

(a)           The Purchaser has all necessary power and capacity to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transaction contemplated hereby.  This Agreement has been validly executed and delivered by the Purchaser and constitutes the legal, valid and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms.  The execution and delivery of this Agreement by the Purchaser do not and the performance of its obligations under this Agreement will not conflict with or result in any breach or constitute a default under any contracts to which the Purchaser is a party or by which the Purchaser or any property or asset of the Purchaser is bound or affected.

 

---

 

(b)           The Stock will be acquired by the Purchaser for his own account with the Purchaser's own funds for investment purposes and for the Purchaser's own account, not as a nominee or agent for any other person, firm or corporation, and not with a view to the sale or distribution of all or any part thereof, and the Purchaser has no present intention of selling, granting any participation in, or otherwise distributing, any or all of the Stock.  The Purchaser does not have any contract, undertaking, agreement or arrangement with any person, firm or corporation to sell, transfer or grant any participation to any person, firm or corporation with respect to any or all of the Stock.

(c)           The Purchaser understands that the Stock will not be registered under the Securities Act of 1933, as amended, (the "Securities Act"), and that the Stock is being issued and sold to the Purchaser based upon an exemption from registration predicated in part on the accuracy and completeness of the Purchaser's representations and warranties appearing herein.

(d)           The Purchaser agrees that in no event will the Purchaser sell, transfer, assign or pledge all or any part of the Stock or any interest therein, unless and until (i) the Purchaser shall have furnished the Corporation with an opinion of counsel satisfactory in form and content to the Corporation to the effect that (A) such disposition will not require registration of the Stock under the Securities Act or compliance with applicable state securities laws, or (B) appropriate action necessary for compliance with the Securities Act and applicable state securities laws has been taken; (ii) the Corporation shall have waived, expressly and in writing, its right under clause (i) of this subsection; and (iii) the proposed transferee of the Stock shall have provided the Corporation with a written agreement or undertaking by which such transferee agrees to be bound by all terms, conditions and limitations of this Agreement applicable to such transferee's transferor as if such transferee were a party hereto.  The requirement of subparagraph (iii) shall not apply to any transfer (A) pursuant to an offering registered under the Securities Act, (B) pursuant to Rule 144 under the Securities Act or (C) effected in a market transaction otherwise exempt from registration under the Securities Act.

(e)           The Purchaser is able to fend for itself in connection with the transactions contemplated by this Agreement, has such knowledge and experience in financial and business matters (including investments in development stage biotechnology companies) as to be capable of evaluating the merits and risks of its investment in the Corporation, has the ability to bear the economic risks of its investment for an indefinite period of time and can afford a complete loss of its investment and has had the opportunity prior to the Purchaser's purchase of the Stock to ask questions of and receive answers from representatives of the Corporation concerning the finances, operations and business of the Corporation.  The Purchaser acknowledges and agrees that (i) it is not relying upon any statement, promise or assurance of the Corporation or any investor in the Corporation (or any representative of the Corporation or any such investor) in arriving at the Purchaser's decision to purchase the Stock, and has not otherwise been induced to purchase the Stock by the Corporation or any such investor (or any representative of the Corporation or any such investor); and that (ii) it has decided to purchase the Stock based upon the Purchaser's own analysis of the merits and risks of investing in the Corporation without the intervention or assistance of any other person, firm or corporation.

(f)           The Purchaser understands and acknowledges that the Purchaser will not be permitted to sell, transfer, assign or pledge the Stock until it is registered under the Securities Act or an exemption from the registration and prospectus delivery requirements of the Securities Act is available to the Purchaser, and that there is no assurance that such an exemption from registration will ever be available or that the Purchaser will ever be able to sell any of the Stock.

 

---

 

(g)          All certificates representing the Stock and, until such time as the Stock is sold in an offering which is registered under the Securities Act or the Corporation shall have received an opinion of counsel satisfactory in form and content to the Corporation that such registration is not required in connection with a resale (or subsequent resale) of the Stock, all certificates issued in transfer thereof or substitution therefor, shall, where applicable, have endorsed thereon the following (or substantially equivalent) legends:

(i)

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE NOT TRANSFERABLE WITHOUT THE EXPRESS WRITTEN CONSENT OF __________, INC., (THE "COMPANY") AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, OR HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OF SUCH ACT.  ANY SUCH TRANSFER MAY ALSO BE SUBJECT TO APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS.

(ii)

Any legend required to be placed thereon by any applicable state securities law.

(h)          The Corporation shall not be obligated to transfer any of the Stock if counsel for the Corporation determines that any applicable registration requirement under the Securities Act or any other applicable requirement of federal or state law has not been met.

6.           General Provisions.

(a)          No Assignments.  The Purchaser shall not transfer, assign or encumber any of its rights, privileges, duties or obligations under this Agreement without the prior written consent of the Corporation, and any attempt to so transfer, assign or encumber shall be void.

(b)          Notices.  All notices and other communications which are required or permitted to be given pursuant to the terms of this Agreement shall be in writing and shall be sufficiently given (i) if personally delivered, (ii) if sent by telex or facsimile, provided that "answer-back" confirmation is received by the sender or (iii) upon receipt, if sent by registered or certified mail, postage paid return receipt requested in any case addressed as follows:

 

---

 

	(i)	If to the Corporation:
		____________________________________
		____________________________________
		____________________________________

 

(ii)

If to the Purchaser, to the address set forth on the signature page of this Agreement.

The address of a party, for the purposes of this Section 6(b)(ii), may be changed by giving written notice to the other party of such change in the manner provided herein for giving notice.  Unless and until such written notice is received, the addresses as provided herein shall be deemed to continue in effect for all purposes hereunder.

(c)          Standoff Agreement.  The Purchaser agrees that, in connection with each underwritten public offering registered under the Securities Act of shares of Common Stock or other equity securities of the Corporation by or on behalf of the Corporation, the Purchaser shall not sell or transfer, or offer to sell or transfer, any shares of Common Stock or other equity securities of the Corporation for such period as the managing underwriter of such offering or the Corporation determines is necessary to effect the underwritten public offering.

(d)          Choice of Law; Consent to Jurisdiction.  This Agreement shall be governed by and construed in accordance with the internal laws (without giving effect to the conflicts of law principles) of the State of New York.

(e)          Severability.  The parties hereto agree that the terms and provisions in this Agreement are reasonable and shall be binding and enforceable in accordance with the terms hereof and, in any event, that the terms and provisions of this Agreement shall be enforced to the fullest extent permissible under law.  In the event that any term or provision of this Agreement shall for any reason be adjudged to be unenforceable or invalid, then such unenforceable or invalid term or provisions shall not affect the enforceability or validity of the remaining terms and provisions of this Agreement, and the parties hereto hereby agree to replace such unenforceable or invalid term or provision with an enforceable and valid arrangement which, in its economic effect, shall be as close as possible to the unenforceable or invalid term or provision.

(f)           Successors.  All references in this Agreement to the Corporation shall include any and all successors in interest to the Corporation, whether by merger, consolidation, sale of all or substantially all assets or otherwise, and this Agreement shall inure to the benefit of the successors and assigns of the Corporation and, subject to the terms herein set forth, shall be binding upon the Purchaser, its successors and permitted assigns.

(g)          Counterparts.  This Agreement may be executed in two counterparts, each of which shall be deemed an original, but which together shall constitute one and the same instrument.

 

---

 

(h)         Modification, Amendment and Waiver.  No modification, amendment or waiver of any provision of this Agreement shall be effective against the Corporation unless the same shall be in a written instrument signed by an officer of the Corporation on its behalf and such instrument is approved by its Board of Directors.  The failure at any time to enforce any of the provisions of this Agreement shall in no way be construed as a waiver of such provisions and shall not affect the right of either party thereafter to enforce each and every provision hereof in accordance with its terms.

(i)           Further Assurances.  The parties agree to execute such further instruments and to take such further action as may reasonably be necessary to carry out the intent of this Agreement.

(j)           Integration.  This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof.

(k)          Headings.  The headings of the Sections and paragraphs of this Agreement have been inserted for convenience of reference only and do not constitute a part of this Agreement.

(l)           Gender and Number.  As used in this Agreement, the masculine, feminine or neuter gender, and the singular or plural, shall be deemed to include the others whenever and wherever the content so requires.  Additionally, unless the context requires otherwise, "or" is not exclusive.

 

---

 

EXHIBIT 8

MATERIAL AGREEMENTS

NONE OTHER THAN DISCLOSED AGREEMENTS

 

---

 

 

EXHIBIT 9

WITHOLDING TAX - EXEMPTION CERTIFICATE

(SEE ATTACHED)

 

---

 

 

[*]

 

---

[*] Confidential treatment requested; certain information omitted and filed separately with the SEC.

 

---

 

 

AMENDMENT NO. 1 TO EXCLUSIVE LICENSE AGREEMENT

AMENDMENT NO. 1 TO EXCLUSIVE LICENSE AGREEMENT, dated July 24, 2008 (this “Amendment”), between S.L.A. PARMA AG (the “Licensor”), and VENTRUS BIOSCIENCES, INC., as assignee of Paramount Biosciences, LLC (the “Licensee”).

WHEREAS, the Licensor and the Licensee have entered into that certain Exclusive License Agreement, dated as of March 23, 2007 (the “License Agreement”);

WHEREAS, the parties hereto desire to amend the License Agreement as set forth herein.

NOW, THEREFORE, in consideration of the foregoing and for other consideration the sufficiency and receipt of which is hereby acknowledged by the parties, it is hereby agreed by and between the parties as follows:

1.           Capitalized Terms. Terms used herein but not otherwise defined shall have the meaning ascribed thereto in the License Agreement.

2.           Amendments.

(a)           “Maximum Anoheal Amount”, as defined in Section 12.2 of the License Agreement, shall be increased to US$4,000,000, to be used by Licensor for the Anoheal Project, and all references to Maximum Anoheal Amount in such License Agreement shall be deemed a reference to this increased amount.  Notwithstanding anything to the contrary contained in the License Agreement, the Maximum Anoheal Amount shall be paid in advance in accordance with the schedule set forth on Annex I hereto, so that on each Specified Date set forth therein Licensor shall have available to it no less than the Threshold Amount set forth on Annex I.

(b)           Notwithstanding anything contained in Sections 8.2.2 of the License Agreement to the contrary, Licensee’s obligation to make the “Anoheal Project Payment” shall terminate upon the earlier of (i) the date Licensee informed Licensor in writing of the termination of the Anoheal Project and (ii) such time as an NDA relating to a Licensed Product incorporating Anoheal API is filed by the License, its Affiliate or sublicensee.

(c)           Notwithstanding anything contained in Sections 8.2.3 of the License Agreement to the contrary, Licensee’s obligation to make the “Incostop Project Payment” shall terminate upon the earlier of (i) the date Licensee informed Licensor in writing of the termination of the Incostop Project and (ii) such time as an NDA relating to a Licensed Product incorporating InCostop API is filed by the Licensee, its Affiliate or sublicensee.

 

---

 

(d)          For the avoidance of doubt it is stated that the due dates for Anoheal Project Payments and the Incostop Project Payments as defined in Section 8.2.1 of the License Agreement are not affected by the payment schedule in Annex I but shall continue to be due at the end of each calendar month.

(e)          The Licensee shall reimburse the Licensor the costs of the sponsored research fellow in Australia. Such salary costs will be invoiced quarterly to the Licensee at a rate of £10,000 per quarter for the next eighteen (18) months. Such amounts shall be paid by Licensee in addition to the Maximum Anoheal Amount.

(f)           Notwithstanding anything contained in Section 23.4 of the License Agreement to the contrary, the cure period for purposes of a material breach or material default of the License Agreement relating in its entirety to failure to pay to the Licensor the amounts set forth in accordance with the schedule on Annex I  hereto or the Anoheal Project Payments or the Incostop Project Payments, on each date specified, shall be twenty one (21) days from the date the notice of termination is received by the non-breaching or non-defaulting party. For the avoidance of doubt, no other cure period set forth in Section 23.4 of the License Agreement shall apply with respect to a material breach or material default by the Licensee with respect to the payments set forth on Annex I hereto, the Anoheal Project Payments and the Incostop Project Payments. Notwithstanding anything contained in Section 23.4 of the License Agreement to the contrary the License Agreement shall end without further notice upon expiration of the 21 day cure period, if such material breach or material default has not otherwise been cured. Upon termination of the Projects pursuant to this clause, all rights to the Patents relating to Incostop Project and the Anoheal Project shall revert to the Licensor.

3.           Counterparts. This Amendment may be executed in any number of separate counterparts, each of which shall be an original and all of which taken together shall constitute one and the same instrument. Facsimile counterpart signatures to this Amendment shall be acceptable and binding.

4.           Applicable Law. This Amendment shall be governed by and construed in accordance with the laws of Switzerland without regard to principles of conflicts of law.

5.           Dispute Resolution. All disputes arising out of or in connection with this Amendment shall be resolved by the ordinary courts of Zurich, Switzerland, without limiting the right of recourse.

6.           No Other Amendments. Except as expressly set forth herein, the License Agreement remains in full force and effect in accordance with its terms and nothing contained herein shall be deemed to be a waiver, amendment, modification or other change of any term, condition or provision of the License Agreement.

7.           Effectiveness. This Amendment shall become effective immediately upon the date hereof.

 

2

---

 

8.           References to the License Agreement. From and after the date hereof,  all references in the License Agreement and any other documents to the License Agreement shall be deemed to be references to the License Agreement after giving effect to this Amendment.

* * * * *

 

3

---

 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 1 to Exclusive License Agreement as of the date first written above.

SLA PHARMA AG				VENTRUS BIOSCIENCES, INC.
By:	/s/ Rudolf Syz 28-7-2008			By:	/s/ Thomas Rowland
	Name: Rudolf Syz				Name:  Thomas Rowland
	Title: Director				Title: President & CEO

 

4

---

 

ANNEX I

Specified Date		Nature of Payment		Threshold Amount
November 30, 2008		Cost of Anoheal development from June 2008 to October 2008		$	300,000
November 30, 2008		First upfront installment to SLA		$	1,000,000
April 30, 2009		Second upfront installment to SLA		$	800,000
October 30, 2009		Third upfront installment to SLA		$	700,000
April 30, 2010		Final upfront installment to SLA		Balance of $4,000,000

 

 

---

 

PARAMOUNT BIOSCIENCES, LLC

787 Seventh Avenue

48th Floor

New York, NY 10019

October 27, 2008

SLA Pharma AG

Rebgasse 2

Liestal, Switzerland

Attn: David Slagel

Dear David:

Reference is hereby made to the Exclusive License Agreement, dated as of March 23, 2007, as amended on July 24, 2008 (the “License Agreement”), between SLA Pharma AG (“SLA”) and Ventrus Biosciences Inc. (“Ventrus”), as assignee of Paramount Biosciences, LLC (“Paramount”).  Paramount shall make a payment (the “Payment”) in an amount equal to USD$100,000 to SLA on behalf of Ventrus on the date hereof, in partial satisfaction of the $250,000 presently owed by Ventrus to SLA that has been guaranteed by Lindsay A. Rosenwald, M.D.  At such time as (i) no cash payments are past due under the License Agreement, and (ii) Ventrus has paid SLA an amount of cash exceeding what is then owed under the License Agreement by at least USD$100,000, SLA shall promptly remit to Paramount an amount equal to USD$100,000.

* * * * *

 

---

 

 

If the foregoing correctly sets forth your understanding of our agreement with respect to the matters addressed above, please indicate your acceptance and approval below.

	PARAMOUNT BIOSCIENCES, LLC
	By:	/s/	Lindsay A. Rosenwald
			Name:  Lindsay A. Rosenwald, MD
			Title:  Sole Member
	VENTRUS BIOSCIENCES, INC.
	By:	/s/	Thomas Rowland
			Name:  Thomas Rowland
			Title:  President & CEO

AGREED AND ACKNOWLEDGED:

SLA PHARMA AG

By:	/s/ D. Slagel
	Name:  D. Slagel
	Title:  President
	29/10/08

 

2

---

 

 

AMENDMENT NO. 2 TO EXCLUSIVE LICENSE AGREEMENT

AMENDMENT NO. 2 TO EXCLUSIVE LICENSE AGREEMENT, dated November 20, 2008 (this “Amendment”), between S.L.A. PARMA AG (the “Licensor”), and VENTRUS BIOSCIENCES, INC., (the “Licensee”) as assignee of Paramount Biosciences, LLC (“Paramount”).

WHEREAS, the Licensor and the Licensee have entered into that certain Exclusive License Agreement, dated as of March 23, 2007, as amended by Amendment No. 1 to Exclusive License Agreement dated as of July 24, 2008 (as amended to date, the “License Agreement”);

WHEREAS, the parties hereto desire to further amend the License Agreement as set forth herein.

NOW, THEREFORE, in consideration of the foregoing and for other consideration the sufficiency and receipt of which is hereby acknowledged by the parties, it is hereby agreed by and between the parties as follows:

1.           Capitalized Terms. Terms used herein but not otherwise defined shall have the meaning ascribed thereto in the License Agreement.

2.           Amendments.

(a)           Notwithstanding anything to the contrary contained in the License Agreement, the Maximum Anoheal Amount shall be paid in advance in accordance with the schedule set forth on Annex I hereto, so that on each Specified Date set forth therein Licensor shall have available to it no less than the Threshold Amount set forth on Annex I.

(b)           As of October 31, 2008 Licensee owes to Licensor the amounts set forth on Annex II.  Notwithstanding anything contained in Section 8.2 of the License Agreement to the contrary, Licensee’s obligation to make the Anoheal Project Payment and the Incostop Project Payment from the date hereof through December 31, 2008 (such period, the “Forbearance Period”) shall be suspended, and such amounts shall instead accrue and be payable in full at the end of the Forbearance Period.

(c)           Notwithstanding anything contained in Section 23.4 of the License Agreement and section 2 (f) of Amendment No. 1 to the Exclusive License Agreement to the contrary, the cure period for purposes of a material breach or material default of the License Agreement relating in its entirety to failure to pay to the Licensor any amounts due under the License Agreement, shall be twenty one (21) days from the date the notice of termination is received by the non-breaching or non-defaulting party.  For the avoidance of doubt, no other cure period set forth in Section 23.4 of the License Agreement shall apply with respect to a material breach or material default by the Licensee with respect to any payments due to the Licensor.  Notwithstanding anything contained in Section 23.4 of the License Agreement to the contrary the License Agreement shall end without further notice upon expiration of the 21 day cure period, if such material breach or material default has not otherwise been cured, subject to clause 2 (d) hereafter.  Upon termination of the Projects pursuant to this clause, all rights to the Patents relating to Incostop Project and the Anoheal Project shall revert to the Licensor.

 

---

 

(d)           In the event Licensor does not receive new funds in the amount of at least USD $1 (one) million on or before December 31, 2008 (the “Funds”), payment of all monies due under the License Agreement shall be suspended until the earlier of (i) the date Licensee receives the Funds and (ii) February 28, 2009 (“the Extended Forbearance Period”), subject to clause 2 (e) hereafter.

(e)           Notwithstanding anything to the contrary in section 2 (d) above Licensee shall make the payments set forth in Annex III in accordance with the schedule set forth therein, so that on each Specified Date set forth therein Licensor shall have available to it no less than the Threshold Amount set forth in Annex III.

(f)            Notwithstanding anything contained in Section 2 (e) above, Licensor shall be entitled to terminate the License Agreement without notice and with immediate effect, if any of the payments set forth in Annex III is not available to him on the Specified Date.

For so long as Licensee complies with the payment terms and conditions of this Amendment, then Licensee shall not be entitled to terminate this License Agreement for non-payment pursuant to Section 23.4 thereof.

3.           Counterparts. This Amendment may be executed in any number of separate counterparts, each of which shall be an original and all of which taken together shall constitute one and the same instrument. Facsimile counterpart signatures to this Amendment shall be acceptable and binding.

4.           Applicable Law. This Amendment shall be governed by and construed in accordance with the laws of Switzerland without regard to principles of conflicts of law.

5.           Dispute Resolution. All disputes arising out of or in connection with this Amendment shall be resolved by the ordinary courts of Zurich, Switzerland, without limiting the right of recourse.

6.           No Other Amendments. Except as expressly set forth herein, the License Agreement remains in full force and effect in accordance with its terms and nothing contained herein shall be deemed to be a waiver, amendment, modification or other change of any term, condition or provision of the License Agreement.

7.           Effectiveness. This Amendment shall become effective immediately upon the date hereof.

 

2

---

 

8.           References to the License Agreement. From and after the date hereof, all references in the License Agreement and any other documents to the License Agreement shall be deemed to be references to the License Agreement after giving effect to this Amendment.

* * * * *

 

3

---

 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 2 to Exclusive License Agreement as of the date first written above.

SLA PHARMA AG			VENTRUS BIOSCIENCES, INC.
By:	/s/ David Slagel		By:	/s/ Thomas Rowland
	Name:  David Slagel			Name:  Thomas Rowland
	Title: PRESIDENT			Title:  President & CEO

		PARAMOUNT BIOSCIENCES, LLC
		By:	/s/ Lindsay A. Rosenwald
			Name:  Lindsay A. Rosenwald, MD
			Title:  Sole Member
			Legal Approved
		Initial:	MRD
		Date:

If the foregoing correctly sets forth your understanding of our agreement with respect to the matters addressed above, please indicate your acceptance and approval below.

LEGAL APPROVAL			PARAMOUNT BIOSCIENCES, LLC
				By:	/s/  Lindsay A. Rosenwald, MD
Initial:	MHD			Name:    Lindsay A. Rosenwald, MD
Date:				Title:      Sole Member
				VENTRUS BIOSCIENCES, INC.
				By:	/s/ Thomas Rowland
					Name:  Thomas Rowland
					Title:    President & CEO

AGREED AND ACKNOWLEDGED:
SLA PHARMA AG
By:	/s/ D. Slagel
	Name:  D. Slagel
	Title: President

If the foregoing correctly sets forth your understanding of our agreement with respect to the matters addressed above, please indicate your acceptance and approval below.

	PARAMOUNT BIOSCIENCES, LLC
	By:	/s/ Lindsay A. Rosenwald
		Name:  Lindsay A. Rosenwald, MD
		Title:  Sole Member
	VENTRUS BIOSCIENCES, INC.
	By:	/s/ Thomas Rowland
		Name:  Thomas Rowland
		Title:  President & CEO

AGREED AND ACKNOWLEDGED:
SLA PHARMA AG
By:	/s/ D. Slagel
	Name:  D. Slagel
	Title:  President