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Exhibit
10.5
***Text
Omitted and Filed Separately
with
the Securities and Exchange Commission.
Confidential
Treatment Requested
Under
17 C.F.R. Sections 200.80(b)(4)
and
240.24b-2
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LICENSE AGREEMENT
This
License Agreement is effective as of June 5, 2017 (the
“Effective Date”), by and between THE SCRIPPS RESEARCH
INSTITUTE, a California nonprofit public benefit corporation
("TSRI"), and ChromaPharma, Inc. a Nevada corporation ("Licensee"),
each located at the respective address set forth in Section 13.17
below, with respect to the facts set forth below.
RECITALS
A. TSRI
is engaged in fundamental scientific biomedical and biochemical
research including research relating to fundamental scientific
biomedical and biochemical research including research relating to
breast cancer and NAD+/NADH redox balancing.
B.
Licensee is engaged in the discovery and development of therapeutic
drugs.
C. TSRI
has disclosed to Licensee certain technology and TSRI has the right
to grant a license to the technology, subject to certain rights of
the U.S. Government resulting from the receipt by TSRI of certain
funding from the U.S. Government.
D. TSRI
desires to grant to Licensee, and Licensee wishes to acquire from
TSRI, an exclusive license to certain patent rights of TSRI, all
subject to the terms and conditions set forth herein.
NOW,
THEREFORE, in consideration of the mutual covenants and conditions
set forth herein, TSRI and Licensee hereby agree as
follows:
1.
Definitions.
Capitalized terms shall have the meaning set forth
herein.
1.1
Affiliate. The term
"Affiliate" shall mean any entity which directly or indirectly
controls, or is controlled by Licensee. The term "control" as used
herein means (a) in the case of corporate entities, direct or
indirect ownership of at least fifty percent (50%) of the stock or
shares entitled to vote for the election of directors; or (b) in
the case of non-corporate entities, direct or indirect ownership of
at least fifty percent (50%) of the equity interests with the power
to direct the management and policies of such non-corporate
entities. The term “Licensee” as used throughout this
Agreement also includes its Affiliates.
1.2
Challenge. Licensee
or a Sublicensee will be deemed to have made a "Challenge" of the
Licensed Patent Rights if Licensee or a Sublicensee: (a) institutes
or maintains, or causes its counsel to institute or maintain on
Licensee's or such Sublicensee's behalf, any interference,
opposition, re-examination, post-grant review or similar proceeding
with respect to any Licensed Patent Right with the U.S. Patent and
Trademark Office or any foreign patent office; or (b) makes any
filing or institutes or maintains any legal proceeding, or causes
its counsel to make any filing or institute or maintain any legal
proceeding on Licensee's or such Sublicensee's behalf, with a court
or other governmental body (including, without limitation, the U.S.
Patent and Trademark Office or any foreign patent office) in which
one or more claims or allegations challenges the validity or
enforceability of any Licensed Patent Right.
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1.3
Confidential
Information. The term "Confidential Information" shall mean
any and all proprietary or confidential information of TSRI or
Licensee that such party (the “Disclosing Party”)
discloses to the other party (the “Receiving Party”)at
any time and from time to time during the term of this Agreement.
The provisions of this Agreement shall be considered the
Confidential Information of both parties. Information shall not be
considered confidential to the extent that the Receiving Party can
establish by competent proof that such information:
(a) is
publicly available through no fault of the Receiving Party, either
before or after it becomes known to the Receiving
Party;
(b) was
known to the Receiving Party prior to the date of this Agreement,
which knowledge was acquired independently and not from the
Disclosing Party (or the Disclosing Party's employees);
or
(c) is
subsequently disclosed to the Receiving Party in good faith by a
third party who is not under any obligation to maintain the
confidentiality of such information, and without breach of this
Agreement by the Receiving Party.
Specific
Confidential Information disclosed to a Receiving Party shall not
be deemed to be within any of the foregoing exceptions merely
because it is (i) embraced by more general information in the
public domain or in the Receiving Party’s possession; (ii) a
combination of features or data that can be pieced together by
combining individual features or data from multiple sources in the
public domain or in the Receiving Party’s possession to
reconstruct the Confidential Information, but none of which shows
the entire combination; and/or (iii) a selection or part of a
document or embodiment where other information in the same document
or embodiment becomes part of the public domain or in the Receiving
Party’s possession.
1.4
Derivative Product.
The term “Derivative Product” shall mean products that
are not Licensed Products, but are in the Field and share an active
pharmacophore or mechanism of action with any Licensed Product. If
a product can be characterized as a Licensed Product and a
Derivative Product, then such product shall be considered a
Licensed Product.
1.5
Field. The term
"Field" shall mean the prevention, treatment or amelioration of a
specific disease, symptom, state of health, or medical- or
health-related condition in humans and/or animals utilizing
Nicotinamide Riboside or any NAD+ precursors limited to the patent
in Exhibit B for the treat of breast cancer.
1.6
Licensed Biological
Materials. The term “Licensed Biological
Materials” shall mean the materials identified in Exhibit A
(which will be supplied by TSRI to Licensee), together with any
progeny or mutants of such materials, or unmodified derivatives of
such materials (defined as substances created by Licensee that
constitute an unmodified functional sub-unit or product expressed
by such materials) in the Field.
1.7
Licensed Patent
Rights. The term “Licensed Patent Rights” shall
mean:
(a) the
patent application(s) set forth in Exhibit B of this
Agreement;
(b) the
foreign counterpart applications of the respective
applications
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referenced in
sub-clause (a) above, but only to the extent the claims of such
foreign applications are entitled to the priority date of the
respective applications referenced in sub-clause (a)
above;
(c)
divisionals, substitutions (only those claims of such substitutions
that disclose the same subject matter that is covered by the
application for which it is substituted), and continuations of any
applications referenced in sub-clauses (a) and (b) above, provided
the claims of such applications are entitled to the priority date
of the respective applications referenced in sub-clause (a)
above;
(d) any
claim(s) of a continuation-in-part application of any application
set forth in sub-clauses (a) and (c) above that are entitled to the
priority date of the respective applications referenced in
sub-clause (a) above;
(e) the
patents issued from the applications referenced in sub-clauses (a)
– (c) above and any reissues, reexaminations, renewals and
patent term extensions of such patents; and
(f) any
claim(s) of a patent issued from a continuation-in-part application
referenced in sub-clause (d) above that are entitled to the
priority date of the respective applications referenced in
sub-clause (a) above, and any claim(s) of a reissue, reexamination,
renewal and patent term extension of a patent issued from a
continuation-in-part application referenced in sub-clause (d) above
that are entitled to the priority date of the respective
applications referenced in sub-clause (a) above.
1.8
Licensed Product.
The term "Licensed Product" shall mean any product (a) the
manufacture, use, sale, offer for sale or importation of which
would, in the absence of the license granted by this Agreement,
infringe any of the Licensed Patent Rights, (b) that is comprised
of, utilizes or incorporates any of the Licensed Biological
Materials, and/or (c) that is discovered, developed or made using a
Licensed Process or any of the Licensed Biological Materials, or
using any data or results produced or generated by using a Licensed
Process or any of the Licensed Biological Materials within the
Field.
1.9
Licensed Product
Data. The term “Licensed Product Data” shall
mean any data, information or other materials exclusively
controlled by Licensee, including without limitation pre-clinical, clinical and
other regulatory data, generated or produced by or on behalf of
Licensee directly relating to a Licensed Product and which is
generated or produced after the Effective Date.
1.10
Licensed Process.
The term “Licensed Process” shall mean any method or
process claimed in the Licensed Patent Rights.
1.11
Licensed Service.
The term “Licensed Service” shall mean the performance
of a service for a third party in the Field, which performance uses
or incorporates a Product, Licensed Process or Licensed Biological
Material.
1.12
Major Market
Country. The term "Major Market Country" shall mean any of
the following countries: the United States of America, the United
Kingdom, France, Italy, Spain, Germany, Ireland and
Japan.
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1.13
Net Sales. The term
"Net Sales" shall mean the gross amounts invoiced by Licensee and
its Sublicensees, or any of them, on all sales of Products,
Licensed Processes and Licensed Services, less the following items,
to the extent directly applicable to such sales of Products,
Licensed Processes or Licensed Services (if not previously deducted
from the amount invoiced): […***…]. Net Sales shall
include all consideration charged by Licensee or Sublicensees in
exchange for any Products, Licensed Processes or Licensed Services,
including without limitation any monetary payments or, with regard
to any other property paid in exchange for any Products, Licensed
Processes or Licensed Services, an amount in cash equal to the fair
market value of such property. For purposes of determining Net
Sales, a sale shall be deemed to have occurred when
[…***…]. Sales of Products by Licensee to a Sublicensee
or Affiliate for resale or by a Sublicensee to an Affiliate of
Licensee for resale shall be excluded, and only the subsequent sale
of such Products by such Affiliates or Sublicensees to unrelated
parties shall be deemed Net Sales hereunder.
The
deductible items listed [...***...] above shall be either (i)
included as line items on the invoice, or (ii) documented as being
specifically attributable to actual sales of Products, Licensed
Processes or Licensed Services in accordance with United States
Generally Accepted Accounting Principles
(“GAAP”) or International Financing
Reporting Standards (“IFRS”), as applicable,
consistently applied throughout the organization of the selling
party, and provided that such amounts are included in the quarterly
Royalty Reports that Licensee sends to TSRI pursuant to Section
5.3. If Licensee or other selling party receives refunds or
reimbursements of any amounts deducted as set forth herein, then
such refunded or reimbursed amounts shall be considered Net Sales
in the applicable reporting period in which such refunded or
reimbursed amounts are received.
1.14
Product. The term
“Product” shall mean a Licensed Product and/or
Derivative Product, as applicable.
1.15
Royalty Report. The
term “Royalty Report” shall have the meaning ascribed
to such term as provided in Section 5.3.
1.16
Research Funding
Agreement. The term “Research Funding Agreement”
shall mean the Research Funding Agreement between the parties dated
June 1, 2017 for sponsored research in the laboratory of Brunhilde
Felding.
1.17
Sublicensee. The
term “Sublicensee” shall mean any third party to whom
Licensee grants a sublicense or similar rights with respect to the
rights conferred upon Licensee under this Agreement, as
contemplated by Section 2.3. In addition, “Sublicensee”
shall include any and all further third party Sublicensees that may
be permitted under Section 2.3.
1.18
Sublicense
Revenues. The term “Sublicense Revenue” shall
mean all revenues and other consideration paid to Licensee or to an
Affiliate in consideration of (a) the
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grant
of rights that includes a sublicense to the Licensed Patent Rights
and/or Licensed Biological Materials, (b) the grant of distribution
or marketing rights with respect to Products and/or Licensed
Biological Materials, and/or (c) the sale or other transfer of that
portion of Licensee’s or an Affiliate’s business or
assets that relates to the rights granted under this Agreement.
Without limiting the generality of the foregoing, Sublicense
Revenues shall include without limitation all upfront fees, license
fees, milestone payments, technology access fees, premiums above
the fair market value on sales of debt or equity securities of
Licensee or of an Affiliate, annual maintenance fees, and any other
payments with respect to such sublicense, distribution or marketing
rights or sale or other transfer. Sublicense Revenues include
amounts received from a Sublicensee under the terms of the
agreement in which the sublicense is granted and under the terms of
other agreements entered into between Licensee and Sublicensee as
part of the same transaction as the agreement that includes the
grant of the sublicense. However, Sublicense Revenues shall
exclude: (i) royalties on a Sublicensee’s sales of Products,
Licensed Services or Licensed Processes; and (ii) payments for debt
or equity securities of Licensee or of an Affiliate that are at or
below the fair market value of such securities as of the date of
receipt of such payments as mutually determined by the parties. Any
non-cash Sublicense Revenues received by Licensee or by an
Affiliate shall be valued at its fair market value as of the date
of receipt as mutually determined by the parties.
1.19
Valid Claim. The
term "Valid Claim" shall mean a claim of an issued and unexpired
patent within the Licensed Patent Rights that has not been held
invalid or unenforceable by a court or other appropriate
governmental body of competent jurisdiction in a ruling that is
unappealed or unappealable within the time allowed for appeal. The
term “Valid Claim” shall also include the claims of a
pending patent application within the Licensed Patent Rights which
have not been pending for a period of more than seven (7) years
from the date of first examination on the merits of that patent
application.
2.
Grant
of License.
2.1
Grant of Exclusive License
Under Licensed Patent Rights. TSRI hereby grants and
Licensee accepts, subject to the terms and conditions of this
Agreement, an exclusive (except as specified in Sections 2.5 and
2.6), worldwide, royalty-bearing license, with limited rights to
sublicense pursuant to Section 2.3, under the Licensed Patent
Rights to make. have made, use, have used, sell, have sold, offer
to sell and import Products, Licensed Processes and Licensed
Services in the Field.
2.2
Grant of License for Licensed Biological
Materials. TSRI hereby grants
and Licensee accepts, subject to the terms and conditions of this
Agreement a non-exclusive license to the Licensed Biological
Materials to make and have made, to use and have used, to sell and
have sold, to offer to sell and to import any Licensed Biological
Materials in the Field and to create any progeny, mutant, or
derivative work thereof. Except for the license and sub-license
rights granted pursuant to this Agreement, TSRI shall not grant a
license to the Licensed Biological Materials to any party except to
other nonprofit or academic institutions, pursuant to Section 2.6,
(collectively, the “Research Institutions”) solely for
research and educational use, provided
that any such license
to the Licensed Biological Materials granted to the Research
Institutions shall prohibit the commercialization of such Licensed
Biological Materials by such Research Institutions and shall not in
any way limit Licensee’s commercialization rights under this
Agreement.
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2.3
Sublicensing.
Licensee shall have the right to grant
and authorize sublicenses to any party with respect to the rights
conferred upon Licensee under this Agreement only with TSRI’s
prior written consent, which will not be unreasonably withheld.
Sublicensees shall not have the right to further sublicense without
TSRI’s prior written consent, which will not be unreasonably
withheld. Any sublicense granted under this Section 2.3 shall be
subject in all respects to the applicable provisions contained in
this Agreement (including without limitation the provisions
regarding governmental interest, reservation of rights, development
efforts, reporting, audit rights, indemnity, insurance, Challenges,
warranty disclaimer, limitation of liability, confidentiality, and
rights upon expiration or termination). In the event of a conflict between this Agreement
and the terms of any sublicense, the terms of this Agreement shall
control. Licensee shall forward to TSRI a copy of any and all fully
executed sublicense agreements within
[…***…] days of
execution. Licensee shall at all times be and remain
responsible for the compliance by Sublicensees with the terms and
conditions of this Agreement, including without limitation the
payment of all amounts that may become due hereunder as a result of
any Sublicensees’ activities.
2.4
No Other License.
This Agreement confers no license or rights by implication,
estoppel or otherwise under any patent applications or patents or
intellectual property of TSRI other than the Licensed Patent Rights
regardless of whether such patent applications, patents or
intellectual property are dominant or subordinate to the Licensed
Patent Rights.
2.5
Governmental
Interest. Licensee and TSRI acknowledge that TSRI has
received, and expects to continue to receive, funding from the
United States Government in support of TSRI’s research
activities. Licensee and TSRI acknowledge and agree that their
respective rights and obligations under this Agreement shall be
subject to the rights of the United States Government, existing and
as amended, which may arise or result from TSRI’s receipt of
research support from the United States Government, including
without limitation 37 C.F.R. Part 401, the National Institutes of
Health (“NIH”) Grants Policy Statement and the NIH
Guidelines for Obtaining and Disseminating Biomedical Research
Resources.
2.6
Reservation of
Rights. Notwithstanding the exclusive license granted under
Section 2.1, TSRI reserves the right to use for any internal
research and educational purposes any Licensed Patent Rights and/or
Licensed Biological Materials licensed hereunder, without TSRI
being obligated to pay Licensee any royalties or other compensation
or to account to Licensee in any way. In addition, TSRI reserves
the right to grant non-exclusive licenses to use the Licensed
Patent Rights and/or Licensed Biological Materials for internal
research and educational purposes to other nonprofit or academic
institutions, without the other nonprofit or academic institution
being obligated to pay Licensee any royalties or other compensation
or to account to Licensee in any way. With regard the Licensed
Biological Materials inside the Field, TSRI reserves the right to
grant non-exclusive licenses for internal research and educational
purposes to other nonprofit or academic institutions, without the
other nonprofit or academic institution being obligated to pay
Licensee any royalties or other compensation or to account to
Licensee in any way, […***…].
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3.
Royalties and Other
Payments.
3.1
License
Issue Fee. Licensee shall pay
to TSRI a noncreditable, nonrefundable license issue fee in the
amount of […***…]
within fifteen (15) days of the Effective Date. Failure of Licensee
to make this payment shall render this Agreement null and void
(ab
initio).
3.2
Annual Fee.
Licensee shall pay to TSRI a nonrefundable minimum annual fee in
the initial amount of fifty thousand U.S. Dollars ($50,000). The
first payment is due on June 1, 2018 and on June 1 of each
subsequent calendar year until June 1, 2020, at which time the
amount of the minimum annual fee shall become one hundred thousand
U.S. Dollars ($100,000) and shall remain that amount which will be
due on June 1 of each subsequent calendar year during the remaining
term of this Agreement. The minimum annual fee shall be credited
against running royalties due for that calendar year and
Licensee’s Royalty Reports shall reflect such a credit. The
minimum annual fee shall not be credited against any milestone
payments, Sublicense Payments, royalties due for any preceding or
subsequent calendar year or against any other amounts due by
Licensee under this Agreement.
3.3
Running Royalties.
In the Field, Licensee shall pay to TSRI running royalties on a
Licensed Product and country-by country basis, on a Licensed
Process and country-by country basis, and on a Licensed Service and
country-by-country basis, in the amount of (a) […***…]
percent ([…***…]%)] of Net Sales of Licensed Products,
Licensed Processes and Licensed Services in all countries in which
the manufacture, use, sale, offer for sale or import of such
Licensed Product, Licensed Process or Licensed Service would, in
the absence of the license under the Licensed Patent Rights granted
by this Agreement, infringe one or more Valid Claims in that
country, or when the Licensed Product, Licensed Process or Licensed
Service would not infringe a Valid Claim in the country of sale,
but would infringe at least one Valid Claim in any Major Market
Country, and (b) Licensee shall pay to TSRI running royalties on a
Derivative Product and country-by country basis of Net Sales of
Derivative products at […***…]% of the Licensed Product
royalty rate set forth in this Section 3.3 (a).
3.4
Royalty Payments.
Licensee shall pay to TSRI all royalties required by this Section 3
within […***…] days after the end of each calendar
quarter, based upon Net Sales during the immediately preceding
calendar quarter. Licensee shall make all such royalty payments
itself to TSRI, and/or cause its Affiliates or Sublicensees to pay
to TSRI all royalties resulting from Net Sales by its Affiliates or
Sublicensees, within the time period specified in the preceding
sentence.
3.5
Royalty Credit. If
Licensee is required, upon the advice of patent counsel, to obtain
a license under patent rights of one or more third parties that
would, in the absence of such license, be infringed by
Licensee’s practice of the inventions claimed by the Licensed
Patent Rights in the manufacture, use or sale of a Product, such
that the total royalties paid by Licensee to such third parties and
to TSRI for that Product exceeds […***…] percent
([…***…]%) of Net Sales of such Product in a particular
royalty reporting period, then License shall be entitled to deduct
from the royalties due to TSRI under Section 3.3 with respect to
sales of that Product up to […***…] percent
([…***…]%) of the royalties Licensee actually paid to
such third parties in excess of […***…] percent
([…***…]%) of Net Sales of such Product in that
reporting period. The above offset right is subject to
the
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requirement
that (i) the royalties paid to TSRI hereunder with respect to such
Product shall not be reduced below […***…] percent
([…***…]%) of the royalties for that Product that would
otherwise be due hereunder without such credit, and (ii) all such
third parties who license patent rights to Licensee for that
Product similarly agree to a royalty stacking credit in their
license agreements with Licensee. For clarity, only one of
Licensee, its Affiliates or Sublicensees may exercise such right to
deduct with respect to a given third-party royalty obligation.
Notwithstanding the above, Licensee, its Affiliates or its
Sublicensees shall have no right to deduct or offset any royalties
or other amounts with respect to a) third party composition of
matter IP, b) generic or other competitive products and/or c) any
third party technology that is involved in any cross license or
similar arrangements (whether in the same or related transactions)
where Licensee, its Affiliates or its Sublicensees grant or provide
to such third party or agents licenses, options or other rights to
existing or future technology, intellectual property, research or
development activities or other information or materials. Licensee
will give TSRI prior written notice of any third party license that
would satisfy the above requirements for a royalty credit
sufficiently in advance of deducting such credit from royalties due
to TSRI hereunder in order to allow TSRI and Licensee to mutually
determine whether the requirements of this Section have been
satisfied.
3.6 No Multiple Royalties. No
multiple royalties shall be due because any Licensed Product,
Licensed Service or Licensed Process is covered by more than one of
the Licensed Patent Rights or can be categorized as a Licensed
Product and a Derivative Product. In such case, Licensee shall pay
only one royalty at the applicable rate pursuant to Section 3.4
above. If both Sections 3.3 (a) and 3.3 (b) are applicable to a
given Product, then Licensee shall pay the rate specified in
Section 3.3 (a).
3.7
Arms-Length
Transactions. On sales of Products, Licensed Services or
Licensed Processes which are made in other than an
arm’s-length transaction, the value of the Net Sales
attributed under this Section 3 to such a transaction shall be that
which would have been received in an arm’s-length
transaction, based on sales of like quality and quantity products,
services or processes on or about the time of such
transaction.
3.8
Payment Increase in the
Event of a Challenge.
3.8.1
Increase.
Notwithstanding anything to the contrary in this Agreement, in the
event Licensee or a Sublicensee directly or indirectly institutes
or makes any Challenges, the amount of the minimum annual fee and
the milestone payments and the percentage rates for royalties and
Sublicense Payments required under Sections 3 and 4 of this
Agreement shall be doubled during the pendency of such Challenges
from the date the challenging party first institutes or makes such
Challenges and during the pendency of such Challenges, and shall
continue to apply after the conclusion of such Challenges in the
event that at least one (1) Valid Claim that covers a Licensed
Product, Licensed Service or Licensed Process is held to be valid
and enforceable.
3.8.2
No Right to Recoup.
In the event Licensee or a Sublicensee directly or indirectly
institutes or makes any Challenges, Licensee shall have no right to
recoup, recover, set-off or otherwise get reimbursement of any
royalties, annual fees, Sublicense Payments, equity issuances to
TSRI, milestone payments, patent costs or other monies paid
hereunder to TSRI prior to or during the period of such Challenges.
Licensee hereby voluntarily and irrevocably waives any right to
seek return of such royalties, annual fees, Sublicense Payments,
equity issuances,
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milestone payments,
patent costs or other monies in the event Licensee or a Sublicensee
directly or indirectly institutes or makes any
Challenges.
3.8.3
Pre-Challenge
Requirements. Licensee will provide written notice to TSRI
at least one hundred eighty (180) days prior to Licensee or a
Sublicensee instituting or making any Challenges, and Licensee
agrees that the challenging party will not institute such Challenge
for at least one hundred eighty (180) days after the date of such
notice. Licensee will include with such written notice a list of
all prior art and a description of the other facts and arguments
that support its contention that any of the Licensed Patent Rights
are invalid or unenforceable. During such one hundred eighty (180)
day period, the parties will discuss the same and attempt in good
faith to mutually resolve such issues.
3.8.4
Reasonable
Provisions. The parties agree that neither of them is
entering into this Agreement with the anticipation that Challenges
will be instituted or made by Licensee or any of its Sublicensees
against TSRI, and consequently the percentage rates for royalties
and Sublicense Payments and the other financial terms and
conditions herein reflect that understanding. Licensee and TSRI
further agree that if the parties did expect that such Challenges
would be made against TSRI, the percentage rates for royalties and
Sublicense Payments and the other financial terms and conditions
herein would be significantly higher. Accordingly, the parties
agree that the provisions for increasing the percentage rates for
royalties and Sublicense Payments and the other amounts specified
in Section 3.8.1 and the other provisions of this Section 3.8 are
reasonable and reflect a mutual adjustment of certain financial
provisions of this Agreement to accommodate those situations in
which a Challenge is made against TSRI in lieu of increasing the
percentage rates for royalties and Sublicense Payments and the
other financial terms and conditions of this Agreement as of the
Effective Date.
3.9
Duration of Royalty
Obligations. The royalty obligations of Licensee as to each
Product, Licensed Service or Licensed Process shall continue on a
country-by-country basis until (a) the later of (i) the expiration
of the last to expire Valid Claim that covers such Licensed
Product, Licensed Service or Licensed Process in that country, or
when a Licensed Product, Licensed Service or Licensed Process is
not covered by a Valid Claim in the country of sale but is covered
by at least one Valid Claim in a Major Market Country, upon the
expiration of the last to expire Valid Claim that covers such
Licensed Product, Licensed Service or Licensed Process in a Major
Market Country, and (ii) the fifteenth (15th) anniversary of the
first commercial sale of such Product, Licensed Service or Licensed
Process in such country, or (b) for a Product, Licensed Service or
Licensed Process in any country in which the manufacture, use or
sale of such Licensed Product, Licensed Service or Licensed Process
is not covered by a Valid Claim but utilizes, is comprised of or
incorporates Licensed Biological Materials, is a Derivative
Product, or was discovered, developed or made using any Licensed
Process or Licensed Biological Material, fifteen (15) years after
the date of the first commercial sale of such Product, Licensed
Service or Licensed Process in such country.
4.
Additional
Consideration.
4.1
Sublicense
Payments. All Sublicense Revenues shall be reported and
Sublicense Payments (defined below) paid to TSRI by Licensee within
[…***…] days of Licensee’s receipt of such
Sublicense Revenues. Licensee’s reports to TSRI regarding
Sublicense Revenues shall contain an explanation and calculation of
the amount of Sublicense Payments due
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to TSRI
pursuant to the schedule below. Licensee’s obligation to pay
Sublicense Payments to TSRI shall continue for as long as royalties
are due to TSRI pursuant to Section 3.9. Licensee shall pay to TSRI
a non-creditable, non-refundable percentage of Sublicense Revenues
according to the following schedule (“Sublicense
Payments”):
|
Date of Agreement with Third Party/Sublicensee
|
Percent of Sublicense Revenue Payable to TSRI*
|
|
Before IND approval of Phase 1 clinical trials of a Product covered
by such sublicense
|
[…***…]%
|
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After IND approval of Phase 1 clinical trials, but prior to first
dosing in IND approved study, of a Product covered by such
sublicense
|
[…***…]%
|
|
After first dosing in IND approved study of a Product covered by
such sublicense
|
[…***…]%
|
*In the
event that Sublicense is with respect to a Derivative Product,
Licensee shall pay to TSRI a reduced percentage of Sublicense
Revenue equal to […***…] percent ([…***…]%)
of the rates set forth in the table above. For example, if a
Sublicense is granted with respect to a Derivative Product prior to
IND approval of Phase 1 Clinical Trial for such Derivative Product,
Licensee shall pay to TSRI Sublicense Revenues equal to
[…***…]%.
4.2
Product Development
Milestones. Licensee shall pay to TSRI the following
non-creditable, non-refundable amounts for the achievement of the
following product development milestone events within
[…***…] days of the first occurrence of each milestone
for each Product to meet such milestone as follows:
|
Milestone
|
Payment
|
|
[…***…]
|
U.S.
$[…***…]
|
|
[…***…]
|
U.S.
$[…***…]
|
|
[…***…]
|
U.S.
$[…***…]
|
|
[…***…]
|
U.S.
$[…***…]
|
|
[…***…]
|
U.S.
$[…***…]
|
|
[…***…]
|
U.S.
$[…***…]
|
-10-
*In the
event that the product development milestone achieved in the Field
is with respect to a Derivative Product, Licensee shall pay to TSRI
a reduced milestone payment equal to […***…] percent
([…***…]%) of the amounts set forth in the table above.
For example, upon Initiation of the Phase 1 Trial for such
Derivative Product, Licensee shall pay to TSRI a milestone payment
equal to […***…] dollars
($[…***…]).
For purposes of this Section 4.2, the following
definitions shall apply:
(a) The
term “Initiation” means, with respect to a clinical
trial, the first dosing of the first patient in such
trial.
(b) The
term “Phase 1 Trial” means a human clinical trial that
would satisfy the requirements for a Phase 1 study as defined in 21
C.F.R. §312.21(a) (or its successor regulation), or its
foreign equivalent.
(c) The
term “Phase 2 Trial” means a human clinical trial that
would satisfy the requirements for a Phase 2 study as defined in 21
C.F.R. §312.21(b) (or its successor regulation), or its
foreign equivalent.
(d) The
term “Phase 3 Trial” means a human clinical trial that
would satisfy the requirements for a Phase 3 study as defined in 21
C.F.R. §312.21(c) (or its successor regulation), or its
foreign equivalent.
5.
Development and
Commercialization Activities.
5.1
Development Plan and
Benchmarks. Attached hereto as Exhibit C is Licensee’s
development plan under which Licensee intends to bring the subject
matter of the Licensed Patent Rights to the point of commercial use
(“Commercial Development Plan”). Pursuant to the
Commercial Development Plan, Licensee shall achieve the Benchmarks
specified in Exhibit D within the time periods set forth in Exhibit
D (“Benchmarks”). In addition, Licensee shall use
commercially reasonable efforts, itself or through its
Sublicensees, to develop and obtain regulatory approvals to market
and sell Products, Licensed Services and Licensed Processes in the
Field as promptly as is reasonably and commercially feasible, and,
subject to obtaining necessary regulatory approvals, to produce and
sell reasonable quantities of Products, Licensed Services and
Licensed Processes sufficient to meet market demands.
5.2
Progress Reports.
Licensee shall keep TSRI generally informed as to Licensee’s
progress with respect to its development of Products, Licensed
Services and Licensed Processes, including without limitation its
regulatory filings and approvals, marketing, production, sale and
its efforts to sublicense the Licensed Patent Rights or Licensed
Biological Materials. Licensee shall also provide to TSRI written
annual reports on its progress in the development and
commercialization of Products, Licensed Services and Licensed
Processes in the Field by June 30 of each calendar year. These
progress reports shall include without limitation: progress on
research and development; status of applications for regulatory
approvals; progress towards achieving the
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Benchmarks;
manufacturing; sublicensing; marketing; importing; sales efforts
during the preceding calendar year as well as plans for the present
calendar year; and a summary of the results of animal experiments
and IND-enabling studies, and the Licensed Product Data from the
preceding calendar year and analyses thereof that will provide
meaningful understanding of the current status of Licensee’s
development of Products, Licensed Services and Licensed Processes.
If reported progress in these annual reports differs from that
projected in the Commercial Development Plan and Benchmarks,
Licensee shall explain the reasons for such differences in its
annual reports. Licensee agrees to provide any additional
information reasonably required by TSRI to evaluate
Licensee’s performance under this Agreement. Licensee shall
also report to TSRI the dates that Licensee or its Sublicensees
achieve the events described on Exhibit E attached hereto within
[…***…] days of such occurrences.
5.3 Commercial Development
Obligation. In order to maintain the license granted
hereunder in force, Licensee shall […***…] develop
Licensed Patent Rights which are licensed hereunder into
commercially viable Licensed Products, as promptly as is reasonably
and commercially feasible, and thereafter to produce and sell
reasonable quantities of Licensed Products. The parties hereto
acknowledge and agree that achievement of mutually agreeable
milestones shall be evidence of compliance by Licensee with its
commercial development obligations hereunder. Notwithstanding the
foregoing, if Licensee believes that it cannot, within the exercise
of prudent and reasonable business judgment, perform any mutually
agreed upon milestones within the time period required therefor,
Licensee may request, no more than one time per milestone, an
extension of time for the performance date to a date that Licensee
believes to be reasonable and prudent and TSRI shall agree to any
requested extension which is not more than one (l) year in length
from the originally required date and will not unreasonably
withhold consent to requests for longer extensions. In the event
TSRI has a reasonable basis to believe that Licensee is not using
reasonable efforts and due diligence as required hereunder, upon
notice by TSRI to Licensee which specifies the basis for such
belief, TSRI and Licensee shall negotiate in good faith to attempt
to mutually resolve the issue. In the event TSRI and Licensee
cannot agree upon any matter related to Licensee's commercial
development obligations, the parties agree to utilize an arbitrator
mutually agreed to by the parties in order to resolve the matter.
If the arbitrator determines that Licensee has not complied with
its obligations hereunder, and such default is not cured within
sixty (60) days after the arbitrator's decision, TSRI may terminate
Licensee's rights under this Agreement.
5.4
Royalty Reports.
Licensee shall submit to TSRI, no later than […***…]
days after the end of each calendar quarter, a royalty report (the
"Royalty Report") setting forth for such quarter at least the
following information on a country-by-country and Licensed Product,
Derivative Product, Licensed Service and Licensed Process
basis:
(a) the
number of units of Licensed Products and Derivative Products sold
by Licensee and its Sublicensees;
(b) the
gross amounts due or invoiced for such Licensed Products and
Derivative Products sold by Licensee and its
Sublicensees;
-12-
(c) the
gross amounts due or invoiced for all Licensed Processes and
Derivative Products used or sold by Licensee and its
Sublicensees;
(d) the
gross amounts due or invoiced for all Licensed Services performed
by Licensee and its Sublicensees;
(e) a
detailed listing of any royalty credits permitted under Section 3.5
and deductions applicable to determine Net Sales of Products,
Licensed Services and Licensed Processes pursuant to Section 1.13,
and any refunds or reimbursed amounts previously deducted which are
deemed Net Sales pursuant to Section 1.13; and
(f) the
amount of royalties due under Section 3, or if no royalties are due
to TSRI for any reporting period, the statement that no royalties
are due and a detailed explanation why they are not due for that
quarterly period.
Each
Royalty Report shall be certified as correct by an officer of
Licensee.
5.5
Payments. Licensee
shall pay to TSRI with each Royalty Report the amount of royalties
due with respect to such quarter. If multiple technologies are
covered by the licenses granted hereunder and Products, Licensed
Services or Licensed Processes are based on different technologies,
Licensee shall specify which Licensed Patent Rights and Licensed
Biological Materials are utilized for each Product, Licensed
Service or Licensed Process included in the Royalty Report. All
payments due under this Agreement shall be deemed received when
funds are credited to TSRI’s bank account and shall be
payable by check or wire transfer in United States Dollars to an
account designated by TSRI.
5.6
Foreign Sales. The
remittance of royalties payable on sales outside the United States
shall be payable to TSRI in United States Dollar equivalents at the
official rate of exchange of the currency of the country from which
the royalties are payable, as quoted in The Wall Street Journal for
the last business day of the calendar quarter in which the
royalties are payable. If the transfer of or the conversion into
the United States Dollar equivalents of any such remittance in any
such instance is not lawful or possible, the payment of such part
of the royalties as is necessary shall be made by the deposit
thereof, in the currency of the country where the sale was made on
which the royalty was based, to the credit and account of TSRI or
its nominee in any commercial bank or trust company designated by
TSRI and located in that country, prompt written notice of which
shall be given by Licensee to TSRI.
6.
Record
Keeping. Licensee shall keep, and shall require its
Affiliates and its Sublicensees to keep, accurate records (together
with supporting documentation) of all Products, Licensed Services
and Licensed Processes made, used and sold under this Agreement, as
appropriate to determine the amount of royalties (including the
calculations of royalty credits), product development milestone
payments and other monies due to TSRI hereunder, as well as records
regarding Sublicense Revenues, Sublicense Payments and
Licensee’s compliance with this Agreement. Such records shall
be retained for at least five (5) years following the end of the
reporting period to which such records relate. Such records shall
be available, upon prior written notice to Licensee, during normal
business hours for examination and copying by TSRI and/or its
designated certified public accountant for the purpose of verifying
the accuracy of Licensee’s reports and payments hereunder and
its compliance with this Agreement. In conducting
-13-
examinations
pursuant to this Section, TSRI and/or its accountant shall have
access to, and such accountant may disclose to TSRI, all records
which TSRI or its accountant reasonably believes to be relevant to
the calculation of royalties and other payments under Section 3,
other consideration under Section 4, other financial obligations
under this Agreement and to Licensee’s compliance with this
Agreement. These examinations shall be at TSRI’s expense,
except that if an examination shows an underreporting or
underpayment of […***…] percent ([…***…]%)
or more for any […***…] month period, then Licensee
shall pay the cost of such examination (including without
limitation TSRI’s attorney’s fees, accountant’s
fees and other costs), as well as any additional payments that
would have been payable to TSRI had Licensee reported correctly,
plus interest on such amounts at the rate of […***…]
percent ([…***…]%) per month. All payments due
hereunder shall be made within thirty (30) days of Licensee’s
receipt of a copy of the audit report. TSRI may exercise its audit
rights under this Section 6 no more frequently than once in any
calendar year.
7. Patent
Matters.
7.1
Patent Prosecution and
Maintenance. From and after the date of this Agreement, the
provisions of this Section 7 shall control the prosecution of any
patent application and maintenance of any patent included within
Licensed Patent Rights. TSRI shall (a) direct and control the
preparation, filing and prosecution of the United States and
foreign patent applications within Licensed Patent Rights
(including without limitation any reissues, reexaminations, appeals
to appropriate patent offices and/or courts, post-issuance
proceedings, interferences and foreign oppositions); and (b)
maintain the patents issuing therefrom. TSRI shall have the right,
in its sole discretion, to use TSRI’s Office of Patent
Counsel (“OPC”) in lieu of or in addition to outside
patent counsel for the patent prosecution and maintenance described
herein. The fees and expenses associated with such work done by
TSRI’s OPC and its outside patent counsel shall be paid by
Licensee as set forth below.
7.2
Information to
Licensee. TSRI shall keep Licensee timely informed with
regard to the patent application and maintenance processes. TSRI
shall deliver to Licensee copies of all patent applications,
amendments, related correspondence and other related patent
documents. Licensee shall have full rights of consultation with
TSRI’s OPC and with TSRI’s outside patent counsel on
all matters relating to the prosecution and maintenance of the
Licensed Patent Rights.
7.3
Patent Costs.
Licensee acknowledges and agrees that the licenses granted
hereunder are in partial consideration for Licensee’s
assumption of patent fees and expenses as described herein.
Licensee shall pay to TSRI all fees and expenses for the work
referenced in Sections 7.1 and 7.2. In addition, Licensee agrees to
reimburse and pay TSRI for all patent fees and expenses previously
incurred by TSRI’s OPC and its outside patent counsel with
respect to the Licensed Patent Rights before the Effective Date.
Licensee shall pay to TSRI all such past and future patent fees and
expenses associated with the work on the Licensed Patent Rights
performed by TSRI’s OPC and/or its outside patent counsel
within thirty (30) days after Licensee receives an invoice
itemizing such expenses. Failure of Licensee to pay patent fees and
expenses as set forth in this Section 7.3 shall immediately relieve
TSRI from its obligation to incur any further patent fees and
expenses. For clarity, if Licensee does not pay any patent fees and
expenses due to TSRI (for work performed by TSRI’s OPC or by
outside patent counsel) within thirty (30) days after
Licensee’s receipt of an itemized invoice therefor, TSRI
shall have the right, in its sole discretion, to cease all patent
prosecution and maintenance and allow Licensed Patent Rights to go
abandoned.
***Confidential Treatment
Requested
-14-
Such
action by TSRI shall not constitute a breach of this Agreement.
Licensee may elect with a minimum of […***…]
days’ prior written notice to TSRI, to discontinue payment
for the filing, prosecution and/or maintenance of any patent
application and/or patent within Licensed Patent Rights. Licensee
shall remain liable for all patent prosecution and maintenance fees
and costs incurred prior to the date of such notice of election and
during such […***…]-day notice period. Any such patent
application or patent so elected shall immediately be excluded from
the definition of Licensed Patent Rights and from the scope of the
licenses granted under this Agreement, and all rights relating
thereto shall revert exclusively to TSRI.
7.4 Ownership. TSRI exclusively
owns all right, title and interest in and to the Licensed Patent
Rights set forth in Exhibit B Part 1. The Licensed Patent Rights
developed under the Research Funding Agreement are jointly owned by
TSRI and Licensee as set forth in Exhibit B Part 2 and the Licensed
Biological Materials are also jointly owned and set forth in
Exhibit A.
7.5
TSRI Right to Pursue
Patent. If at any time during the term of this Agreement,
Licensee's rights with respect to any of the Licensed Patent Rights
are terminated, TSRI has the right, but not the obligation, to take
whatever action TSRI deems appropriate to obtain or maintain the
corresponding patent protection. If TSRI pursues such patent
protection under this Section 7.5, Licensee agrees to cooperate
fully, including by providing, at no charge to TSRI, all
appropriate technical data and executing all necessary legal
documents.
7.6
Infringement
Actions.
7.6.1
Prosecution of
Infringements. Licensee agrees to promptly notify TSRI in
the event that Licensee becomes aware of any infringement or
threatened infringement by a third party of any of the Licensed
Patent Rights. In order to maintain the licenses granted hereunder
in force, Licensee shall prosecute any and all infringements of any
Licensed Patent Rights by third parties, unless otherwise agreed in
writing by TSRI and Licensee. Licensee may enter into settlements,
stipulated judgments or other arrangements respecting such
infringement, at its own expense, but only with TSRI’s prior
written consent if such settlements, stipulated judgments or other
arrangements would affect TSRI’s business or its rights in
the Licensed Patent Rights. Licensee shall hold TSRI harmless from
all liabilities and expenses with respect to such infringements.
Failure on the part of Licensee to prosecute any such infringement
shall be grounds for termination of the licenses granted to
Licensee hereunder, with respect to the country in which such
infringement occurs, at TSRI’s option. If Licensee fails to
prosecute any such infringement, Licensee shall promptly notify
TSRI in writing. In such events, TSRI will have the right, but not
the obligation, to prosecute such infringement itself.
7.6.2
Allocation of
Recovery. Any damages, settlements or other recovery from an
infringement action undertaken by Licensee pursuant to Section
7.6.1 shall first be used to reimburse the parties for the fees and
expenses incurred in such action, and shall thereafter be allocated
between and paid to the parties as follows: […***…]
percent ([…***…]%) to TSRI, and […***…]
percent ([…***…]%) to Licensee. If Licensee fails to
prosecute any such action or fails to prosecute such action to
completion, and TSRI instead prosecutes such action, then any
damages or other recoveries net of the parties’ fees and
expenses incurred in such infringement action shall be allocated
entirely to TSRI.
7.6.3
Defense of
Infringements. Licensee shall, at its expense, have
the
***Confidential Treatment
Requested
-15-
first
right, but not the obligation, to defend any suits against Licensee
or Sublicensees alleging infringement of any third party
intellectual property right due to Licensee’s or its
Sublicensee’s practice of the Licensed Patent Rights or its
development or commercialization of Licensed Products, Licensed
Services or Licensed Processes. Licensee shall promptly notify TSRI
in writing of such claims, and TSRI and Licensee shall confer with
each other and cooperate during the defense of any such action.
TSRI shall, at its expense, have the right to retain separate
independent counsel to assist in defending any such actions. In no
event shall TSRI have any liability whatsoever for any damages,
litigation costs or other amounts due to any third party (except
for costs of TSRI’s own counsel as provided above). If the
third party intellectual property right is held not to be infringed
or is held unenforceable or invalid, any recovery of damages with
respect to such suit shall first be applied to reimburse all
litigation fees and expenses of TSRI, next to reimburse all
litigation fees and expenses of Licensee, and thereafter Licensee
shall be entitled to keep the remaining balance from any such
recovery. For clarity, the parties agree that this Section 7.6.3
shall in no way limit Licensee's obligations under Section 8.1 to
indemnify, defend and hold harmless Indemnitees (as defined in
Section 8.1 below) with respect to third party claims alleging
infringement of such third party's intellectual property
rights.
8.
Indemnity and
Insurance.
8.1
Indemnity. Licensee
hereby agrees to indemnify, defend (by counsel reasonably
acceptable to TSRI) and hold harmless TSRI and any parent,
subsidiary or other affiliated entity of TSRI and their respective
trustees, directors, officers, employees, scientists, agents,
students, successors, assigns and other representatives
(collectively, the “Indemnitees”) from and against all
damages, liabilities, losses and other expenses, including without
limitation reasonable attorney’s fees, expert witness fees
and costs incurred by the Indemnitees, with respect to any third
party claim, suit or action asserted against any of the
Indemnitees, whether or not a lawsuit or other proceeding is filed
(collectively “Claims”), that arise out of or relate to
(a) Licensee’s or any of its Sublicensees’ practice of
any invention claimed by the Licensed Patent Rights or use of
Licensed Biological Materials, (b) alleged defects or other
problems with any of the Products, Licensed Services or Licenses
Processes manufactured, sold, distributed or rendered by or on
behalf of Licensee or any Sublicensee, including without limitation
any personal injuries, death or property damages related thereto,
(c) the research, development, manufacture, use, marketing,
advertising, distribution, sale or importation of any Product,
Licensed Service or Licensed Process by or on behalf of Licensee or
any of its Sublicensees, (d) the negligent or willful acts or
omissions of Licensee or any of its Sublicensees, (e) any
allegations that the Products, Licensed Services or Licensed
Processes developed, manufactured, sold, distributed or rendered by
or on behalf of Licensee or any Sublicensee and/or any trademarks,
service marks, logos, symbols, slogans or other materials used in
connection with or to market Products, Licensed Services or
Licensed Processes violate or infringe upon the trademarks, service
marks, trade dress, trade names, copyrights, patents, works of
authorship, inventorship rights, trade secrets, database rights,
rights under unfair competition laws, rights of publicity, privacy
or defamation, or any other intellectual or industrial property
right of any third party, (f) Licensee’s or any
Sublicensee’s failure to comply with any applicable laws,
rules or regulations, and/or (g) the labeling, packaging or patent
marking of any Product or containers thereof by or on behalf of
Licensee or any Sublicensee. Licensee shall not enter into any
settlement, stipulated judgment or other arrangement with respect
to such Claims that (i) imposes any obligation on Indemnitees, (ii)
does not unconditionally release Indemnitees from all liability, or
(iii) would have an adverse effect on TSRI’s reputation or
business, without TSRI’s prior written consent.
Notwithstanding the above,
-16-
Indemnitees, at
their expense, shall have the right to retain separate independent
counsel to assist in defending any such Claims. In the event
Licensee fails to promptly indemnify and defend such Claims and/or
pay Indemnitees’ expenses as provided above, Indemnitees
shall have the right, but not the obligation, to defend themselves,
and in that case, Licensee shall reimburse Indemnitees for all of
their reasonable attorney’s fees, costs and damages incurred
in settling or defending such Claims within thirty (30) days of
each of Indemnitees’ written requests. This indemnity shall
be a direct payment obligation and not merely a reimbursement
obligation of Licensee to Indemnitees.
8.2
Insurance.
8.2.1
TSRI as Additional
Insured. Licensee shall name and cause TSRI and Indemnitees
to be named as “additional insureds” on any commercial
general liability and product liability insurance policies
maintained by Licensee, its Affiliates and Sublicensees applicable
to the Products, Licensed Services, Licensed Processes and Licensed
Biological Materials.
8.2.2
Coverages.
Beginning at the initiation of the first clinical trial involving
any Product, Licensed Process, Licensed Service or Licensed
Biological Material and continuing throughout the time any Product,
Licensed Process or Licensed Service is being commercially
distributed or sold by Licensee or a Sublicensee, Licensee shall,
at its sole expense, procure and maintain commercial general
liability insurance with reputable insurers in amounts not less
than $10,000,000 per occurrence and $10,000,000 annual aggregate.
Prior to the initiation of the first clinical trial involving any
Product, Licensed Process, Licensed Service or Licensed Biological
Material, Licensee shall, at its sole expense, procure and maintain
commercial general liability insurance with reputable insurers in
amounts not less than $5,000,000 per occurrence and $5,000,000
annual aggregate. Such commercial general liability insurance shall
provide coverage, to the extent available, for: (i) product
liability; (ii) completed operations; (iii) clinical trials, as
applicable; (iv) broad form property damage; (v) advertising
injury; (vi) premises operation; (vii) personal injury; and (viii)
contractual liability coverage for Licensee’s indemnification
and other obligations under this Agreement. If Licensee desires to
self insure all or part of the limits described above, such
self-insurance program must be approved in advance by TSRI in its
sole discretion. The insurance coverage amounts specified herein or
the maintenance of such insurance policies shall not in any way
limit Licensee’s indemnity or other liability under this
Agreement.
8.2.3
Waiver of
Subrogation. Licensee, on behalf of itself and its insurance
carriers, waives any and all claims and rights of recovery against
TSRI and the Indemnitees, including without limitation all rights
of subrogation, with respect to either party’s performance
under this Agreement or for any loss of or damage to Licensee or
its property or the property of others under its control.
Licensee’s commercial general liability insurance policy
shall also include a waiver of subrogation consistent with this
Section in favor of TSRI and the Indemnitees. Licensee shall be
responsible for obtaining such waiver of subrogation from its
insurance carriers. Licensee’s insurance policies shall be
primary and not contributory to any insurance carried by its
Sublicensees or by TSRI. At the time when Licensee sends its annual
progress report to TSRI under Section 5.2 and upon TSRI’s
additional request, Licensee shall deliver to TSRI copies of
insurance certificates and endorsements that comply with the
requirements of this Section 8.2.
-17-
8.2.4
Cancellation/Changes in
Coverages. Licensee shall, to the extent possible, provide
TSRI with written notice at least […***…] days prior to
the cancellation, non-renewal or material change in any insurance
required by this Section 8.2. If Licensee does not obtain
replacement insurance providing comparable coverage within such
[…***…] day period (or prior to the cancellation,
non-renewal or material change in the existing policy), TSRI shall
have the right to terminate this Agreement if Licensee fails to
cure within […***…] days of TSRI’s written notice
of intent to terminate.
8.2.5 Continuation of Coverage.
Licensee shall maintain such commercial general liability and
product liability insurance beyond the expiration or termination of
this Agreement during (a) the period that any Product, Licensed
Process or Licensed Service is being commercially distributed or
sold by or on behalf of Licensee or a Sublicensee; and (b) a
reasonable period after the period referred to in sub-clause (a)
above, which in no event shall be less than fifteen (15)
years.
9.
Disclaimer and
Limitation of Liability.
9.1
Disclaimer. TSRI
MAKES NO WARRANTIES OR REPRESENTATIONS CONCERNING LICENSED PATENT
RIGHTS, LICENSED BIOLOGICAL MATERIALS OR ANY OTHER MATTER
WHATSOEVER, INCLUDING WITHOUT LIMITATION ANY EXPRESS, IMPLIED OR
STATUTORY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS, TITLE, ACCURACY OR
ARISING OUT OF COURSE OF CONDUCT OR TRADE CUSTOM OR USAGE, AND
DISCLAIMS ALL SUCH EXPRESS, IMPLIED OR STATUTORY WARRANTIES. TSRI
MAKES NO WARRANTY OR REPRESENTATION AS TO THE VALIDITY, SCOPE OR
ENFORCEABILITY OF ANY OF THE LICENSED PATENT RIGHTS OR LICENSED
BIOLOGICAL MATERIALS, OR THAT ANY PRODUCT, LICENSED PROCESS,
LICENSED SERVICE, LICENSED PATENT RIGHTS OR LICENSED BIOLOGICAL
MATERIALS WILL NOT INFRINGE ANY THIRD PARTY RIGHTS, OR THAT NO
THIRD PARTY IS IN ANY WAY INFRINGING UPON OR MAY INFRINGE UPON ANY
LICENSED PATENT RIGHTS OR LICENSED BIOLOGICAL MATERIALS COVERED BY
THIS AGREEMENT. FURTHER, TSRI HAS MADE NO INVESTIGATION AND MAKES
NO REPRESENTATION OR WARRANTY THAT THE LICENSED PATENT RIGHTS OR
LICENSED BIOLOGICAL MATERIALS ARE SUITABLE FOR LICENSEE’S
PURPOSES.
9.2
Limitation of
Liability. IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY
INDIRECT, SPECIAL, INCIDENTAL, EXEMPLARY OR CONSEQUENTIAL DAMAGES
(INCLUDING WITHOUT LIMITATION DAMAGES FOR LOST PROFITS OR EXPECTED
SAVINGS) ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ITS
SUBJECT MATTER, EXCEPT WITH RESPECT TO LICENSEE’S INDEMNITY
OBLIGATIONS UNDER SECTION 8.1. TSRI’S AGGREGATE LIABILITY, IF
ANY, FOR ALL DAMAGES OR OTHER RELIEF OF ANY KIND RELATING TO THIS
AGREEMENT OR ITS SUBJECT MATTER SHALL NOT EXCEED THE AMOUNT PAID BY
LICENSEE TO TSRI UNDER THIS AGREEMENT. THE FOREGOING EXCLUSIONS AND
LIMITATIONS SHALL APPLY TO ALL CLAIMS AND ACTIONS OF ANY KIND AND
ON ANY THEORY OF LIABILITY, WHETHER BASED ON CONTRACT, TORT
(INCLUDING WITHOUT LIMITATION NEGLIGENCE OR STRICT LIABILITY),
OR
***Confidential Treatment
Requested
-18-
ANY
OTHER GROUNDS, AND REGARDLESS OF WHETHER A PARTY HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES, AND NOTWITHSTANDING ANY FAILURE
OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY. THE PARTIES FURTHER
AGREE THAT EACH WARRANTY DISCLAIMER, EXCLUSION OF DAMAGES OR OTHER
LIMITATION OF LIABILITY HEREIN IS INTENDED TO BE SEVERABLE AND
INDEPENDENT OF THE OTHER PROVISIONS BECAUSE THEY EACH REPRESENT
SEPARATE ELEMENTS OF RISK ALLOCATION BETWEEN THE
PARTIES.
10.
Confidentiality and
Publicity.
10.1
Treatment of Confidential
Information. The parties agree that during the term of this
Agreement, and for a period of five (5) years after this Agreement
terminates, a party receiving Confidential Information of the other
party will (a) maintain in confidence such Confidential Information
to the same extent such party maintains its own proprietary
information, but with no less than a reasonable degree of care; (b)
not disclose such Confidential Information to any third party
without the other party’s prior written consent; and (c) not
use such Confidential Information for any purpose except those
permitted by this Agreement. Notwithstanding the foregoing,
if a party is required by law,
regulation or court order to disclose Confidential Information of
the other party, the party required to make such disclosure shall
(i) promptly send a copy of the order or notice to the other party
not less than ten (10) days before the proposed disclosure (or such
shorter period of time as may be reasonably practical under the
circumstances); (ii) reasonably cooperate with the other party if the other party
wishes to object or condition such disclosure through a protective
order or otherwise; (iii) limit the extent of such disclosure to
the minimum required to comply with the order or notice; and (iv)
use reasonable efforts to seek confidential treatment (i.e., filing
“under seal”) for that disclosure. In addition, a party
may disclose Confidential Information of the other party to its
Affiliates and employees, to Sublicensees and potential
Sublicensees, to investors or potential investors of a party in
connection with due diligence or similar investigations or in
confidential financing documents, to an organization to whom TSRI
intends to assign or transfer or does assign or transfer this
Agreement or the payment obligations due hereunder to TSRI, or to
TSRI’s Assignee, in each case, that any such agrees in
writing to be bound by terms of confidentiality and non-use at
least as stringent as those set forth in this Section 10.1, but
with no further right to disclose or otherwise distribute the other
party’s Confidential Information.
10.2
Publications.
Licensee agrees that TSRI shall have the right to publish in
accordance with its general policies, and that this Agreement shall
not restrict, in any fashion, TSRI’s right to publish.
Notwithstanding the foregoing, TSRI agrees to provide Licensee a
copy of any proposed publication that uses material provided to
TSRI under the Material Transfer Agreement between TSRI and
ChromaDex corporation dated June 13, 2013 (“Material Transfer
Agreement”), pursuant to the terms set forth in Section 4.1
of the Material Transfer Agreement.
10.3
Publicity. Except
as otherwise required by law, no party shall originate or
distribute any publication, news release or other public
announcement, written or oral, whether in the public press,
stockholders' reports or otherwise, relating to this Agreement or
to any sublicense hereunder, or to the performance hereunder or
under any such sublicense agreements, without the prior written
approval of the other party, which approval shall not be
unreasonably withheld. Scientific publications published in
accordance with Section 10.2 of this Agreement shall not be
construed as publicity governed by this Section 10.3.
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11.
Term
and Termination.
11.1
Term. Unless
terminated sooner in accordance with the terms set forth herein,
this Agreement shall expire upon such time that no further
royalties are due to TSRI pursuant to Section 3.9.
11.2
Termination Upon Mutual
Agreement. This Agreement may be terminated by mutual
written consent of both parties.
11.3
Termination by
TSRI. TSRI has the right to immediately terminate this
Agreement as follows (unless a further cure period is provided
below):
(a) If
Licensee does not make a payment due hereunder and fails to cure
such non-payment (including the payment of interest in accordance
with Section 13.2) within thirty (30) days after the date of
TSRI’s written notice of such non-payment;
(b) If
Licensee defaults upon its indemnification or insurance obligations
under Section 8;
(c) As
provided in Section 5.3;
(d)
Upon TSRI’s written notice to Licensee in the event Licensee
becomes insolvent, has a petition in bankruptcy filed for or
against it, has a receiver appointed over any of Licensee’s
assets, makes an assignment for the benefit of creditors, or has
any other proceedings filed against Licensee under any bankruptcy
or insolvency laws;
(e) If
Licensee is convicted of a felony relating to the development,
manufacture, use, marketing, distribution or sale of Products,
Licensed Services, Licensed Processes or Licensed Biological
Materials;
(f) In the event Licensee or a Sublicensee
directly or indirectly institutes or makes any
Challenges;
(g)
In the event Licensee does not cure any defaults in its payments as
set forth in the Research Funding Agreement; or
(h)
Except as provided in subparagphs (a) – (h) above, if
Licensee defaults in the performance of any other obligations under
this Agreement and the default has not been remedied within thirty
(30) days after the date of TSRI’s written notice of such
default.
11.4
Rights Upon
Expiration. Upon the expiration of this Agreement, neither
party shall have any further rights or obligations, other than the
obligation of Licensee to make any and all reports and payments due
under Sections 3, 4, 7 and 11.8 with respect to events that
occurred prior to such expiration in accordance with Sections 3.4,
4, 5.4, 5.5, 5.6 and 7.3 (all
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of
which Sections referenced in this sentence shall survive such
expiration for such purposes). Notwithstanding the above, Sections
1, 2.4, 2.5, 2.6, 6, 7.4, 8, 9, 10, 11.5, 12.2 and 13 shall also
survive the expiration of this Agreement.
11.5
Rights Upon
Termination. Notwithstanding any other provision of this
Agreement, upon any termination of this Agreement prior to the
regularly scheduled expiration date of this Agreement, the licenses
granted hereunder shall terminate and revert to TSRI, and all
sublicenses granted by Licensee shall also automatically terminate.
Except as otherwise provided in Section 11.7 of this Agreement with
respect to work-in-progress, upon such termination, Licensee and
its Sublicensees shall have no further right to develop,
manufacture, market, distribute or sell any Product, Licensed
Service, Licensed Process, or to otherwise practice or use any
Licensed Patent Rights or Licensed Biological Materials. Upon any
such termination, Licensee shall promptly return all materials,
samples, documents, information and other items which embody or
disclose any Licensed Patent Rights or Licensed Biological
Materials; provided, however, that Licensee shall not be obligated
to provide TSRI with Licensee’s proprietary information which
Licensee can show that it independently developed, other than the
Licensed Product Data or that which is jointly owned in accordance
with the Research Funding Agreement. Upon any termination of this
Agreement, TSRI shall have the right, and Licensee hereby grants to
TSRI upon such termination, a non-exclusive, worldwide, fully
paid-up license, with the right to sublicense, to use the Licensed
Product Data in order to research, have researched, develop, have
developed, make, have made, use, have used, sell, have sold, offer
to sell, import and have imported Products, Licensed Services,
Licensed Processes and/or Licensed Biological Materials in the
Field, and the right to reference any Licensed Product Data
contained in any of Licensee’s regulatory filings with the
FDA (as defined in Section 4.3) or with any equivalent foreign
agency or governmental authority with respect to TSRI’s or
its sublicensees’ development or commercialization
activities. Any such termination shall not relieve either party
from any obligations accrued to the date of such termination,
including without limitation the obligation of Licensee to make any
and all reports and payments due under Sections 3, 4, 7 and 11.8
with respect to events that occurred prior to such termination or
as provided in Section 11.7, in accordance with Sections 3.6, 4,
5.4, 5.5, 5.6 and 7.3 (all of which Sections referenced in this
sentence shall survive such termination for such purposes). In
addition, Sections 1, 2.4, 2.5, 2.6, 3.2, 6, 7.4, 8, 9, 10, 11.6,
11.7, 12.2 and 13 shall also survive the termination of this
Agreement.
11.6
Work-in-Progress.
Upon any early termination of the licenses granted hereunder,
Licensee shall be entitled to finish any work-in-progress and to
sell any completed inventory of Products which remain on hand as of
the termination date, so long as Licensee sells such inventory in
the normal course of business and at regular selling prices and
pays to TSRI the royalties applicable to such subsequent sales in
accordance with the provisions of this Agreement, provided that no
such sales shall be permitted following the date that is six (6)
months after the termination date.
11.7
Final Royalty
Report. Upon termination or expiration of this Agreement,
Licensee shall promptly submit a final report to TSRI, and any
payments due to TSRI under this Agreement that accrued prior to
such termination or expiration shall be paid by Licensee to TSRI at
the time of delivery of the final report.
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12.
Assignment;
Successors.
12.1
Assignment. Any and
all assignments of this Agreement or any rights granted hereunder
by Licensee without TSRI’s prior written consent are
void.
12.2
Binding Upon Successors
and Assigns. Subject to the limitations on assignment in
Section 12.1, this Agreement shall be binding upon and inure to the
benefit of any successors in interest and assigns of TSRI and
Licensee. Any successor or assignee of Licensee's interest shall
expressly assume in writing the performance of all the terms and
conditions of this Agreement to be performed by Licensee and such
written assumption shall be delivered to TSRI as a condition to
TSRI’s agreement to consent to any such
assignment.
13.
General
Provisions.
13.1
Independent
Contractors. The relationship between TSRI and Licensee is
that of independent contractors. TSRI and Licensee are not joint
venturers, partners, principal and agent, master and servant,
employer and employee, and have no other relationship other than
independent contracting parties. TSRI and Licensee shall have no
power to bind or obligate each other in any manner, other than as
is expressly set forth in this Agreement.
13.2
Late Payments. Late
payments of any and all amounts due hereunder shall bear interest
from the due date until the date paid at a rate of one percent (1%)
per month, or Two Hundred Fifty Dollars ($250), whichever is
greater.
13.3
Governmental Approvals and
Compliance. Licensee shall, at its expense, be responsible
for obtaining all necessary governmental approvals for the
development, production, distribution, performance, sale and use of
any Product, Licensed Service or Licensed Process, and shall comply
with all applicable laws, rules and regulations in conducting its
activities under this Agreement. Licensee shall, at its expense,
also be responsible for any warning labels, packaging and
instructions produced or distributed with respect to the use of
Products, Licensed Services or Licensed Processes and for the
quality control for any Products, Licensed Services or Licensed
Processes.
13.4
Patent Marking. To
the extent required by applicable law, Licensee and its
Sublicensees shall properly mark all Products or their containers
in accordance with the applicable patent marking laws. Upon
TSRI’s request, Licensee shall provide to TSRI copies of its
patent marking of all Products. To the extent Licensee or a
Sublicensee marks any Licensed Products by referencing the Licensed
Patent Rights thereon, Licensee represents and warrants that such
Licensed Products are covered by a claim of the applicable
referenced Licensed Patent Rights.
13.5
No Use of Name. The
use of the name "The Scripps Research Institute", "Scripps",
“TSRI” or any variation thereof in connection with the
marketing, advertising, distribution, sale or performance of
Products, Licensed Services or Licensed Processes is expressly
prohibited.
13.6
U.S. Manufacture.
To the extent commercially practicable, Licensee agrees that it and
its Sublicensees will abide by the Preference for United States
Industry
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as set
forth in 37 C.F.R. Section 401.14 (I), which requires that any
Product or Licensed Process sold in the United States shall be
manufactured substantially in the United States.
13.7
Foreign
Registration. Licensee agrees, at its expense, to register
this Agreement with any foreign governmental agency which requires
such registration.
13.8
Use of Biological
Materials. Licensee agrees that its and its
Sublicensees’ use of any Licensed Biological Materials shall
comply with all applicable laws, rules, regulations and guidelines.
Licensee agrees that the Licensed Biological Materials will not be
used for research involving human subjects or clinical trials in
the United States without complying with 21 C.F.R. Part 50 and 45
C.F.R. Part 46. Licensee agrees that the Licensed Biological
Materials will not be used for research involving human subjects or
clinical trials outside of the United States without complying with
the applicable foreign laws, rules and regulations.
13.9
Dispute Resolution.
Any dispute or claim between the parties arising out of or relating
to this Agreement, including without limitation the breach thereof,
shall be resolved according to the following dispute resolution
procedures:
(a)
Such dispute shall be first addressed by the representatives of
TSRI and Licensee who have primary responsibility for managing this
Agreement.
(b) If
the dispute is not resolved by such representatives within fifteen
(15) days after the date either party gives written notice that
such dispute exists, then the dispute shall be referred to and
addressed by the senior management of each party.
(c) If
such dispute is not resolved by the parties’ senior
management within thirty (30) days after the date the dispute is
referred to them, then the dispute shall be submitted to mediation.
The mediator shall be a retired judge or other neutral third party
mutually selected by TSRI and Licensee who has at least ten (10)
years experience in mediating or arbitrating cases in the
bio-pharmaceutical industry and regarding the same or substantially
similar subject matter as the dispute between Licensee and TSRI. If
the parties are unable to agree on such mediator within twenty (20)
days after they exchange initial lists of potential mediators, a
mediator with the same qualifications will be selected by the JAMS
office in San Diego located at 401 B Street, San Diego, CA 92101
(after consultation with the parties).
(d) The
location of the mediation shall be in the County of San Diego,
California. TSRI and Licensee hereby irrevocably submit to the
exclusive jurisdiction and venue of the mediator mutually selected
by the parties or to the neutral mediator selected by JAMS of San
Diego for purposes of the mediation, and to the exclusive
jurisdiction and venue of the federal and state courts located in
San Diego County, California for any action or proceeding regarding
this Agreement in the event mediation is unsuccessful as provided
in sub-clause (e) below, or as provided in sub-clause (f) below,
and waive any right to contest or otherwise object to such
exclusive jurisdiction or venue, including without limitation any
claim that such exclusive venue is not a convenient
forum.
(e) If
the dispute is not resolved through mediation, either party
may
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refer
the dispute to a court of competent jurisdiction in San Diego
County, California.
(f)
Notwithstanding anything to the contrary in this Agreement, prior
to or while a mediation proceeding is pending, either party has the
right to seek and obtain injunctive and other equitable relief from
a court of competent jurisdiction to enforce that party’s
rights hereunder.
13.10
Entire Agreement;
Modification. This Agreement and all of the attached
Exhibits (which are incorporated herein) set forth the entire
agreement between the parties as to the subject matter hereof, and
supersede all prior or contemporaneous agreements or
understandings, whether oral or written, regarding this subject
matter. This Agreement cannot be amended except by a written
instrument signed by both parties.
13.11
California Law.
This Agreement shall be construed and enforced according to the
laws of the State of California without regard to its conflicts or
choice of law rules.
13.12
Headings. The
headings for each Section in this Agreement have been inserted for
convenience of reference only and are not intended to limit or
expand on the meaning of the language contained in the particular
Section.
13.13
Severability. If
any provision of this Agreement is judicially determined to be
invalid, void or unenforceable, the remaining provisions shall
remain in full force and effect, and the stricken provision shall
be revised in a manner that best reflects the original intent of
the parties.
13.14
No Waiver. The
failure of a party to enforce any of its rights hereunder or at law
or in equity shall not be deemed a waiver or a continuing waiver of
any of its rights or remedies against the other party, unless such
waiver is in writing and signed by the waiving party.
13.15
Name. Whenever
there has been an assignment by Licensee as permitted by this
Agreement, the term "Licensee" as used in this Agreement shall also
include and refer to, if appropriate, such assignee.
13.16
Attorneys'
Fees.. In the
event of a dispute between the parties or any default hereunder,
the party prevailing in the resolution of such dispute or default
shall be entitled to recover its reasonable attorneys' fees and
other costs incurred in connection with resolving such dispute or
default, in addition to any other relief to which it is entitled.
Notwithstanding anything to the contrary herein, the parties agree
that this Section 13.16 shall not apply and attorney’s fees
and costs shall not be awarded to either party with respect to any
Challenge or any action where Licensee or a Sublicensee alleges
that it is not required to comply with or perform some or all of
the provisions of this Agreement based upon a good faith claim that
any of the Licensed Patent Rights are invalid or unenforceable.
TSRI and Licensee each represent that it has been represented by
its own counsel in the negotiation and execution of this Agreement.
Each party further represents that it has relied solely on the
advice and representation of its respective counsel in agreeing to
this Section 14.16 and all of the other provisions of this
Agreement.
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13.17
Notices. Any
notices required or permitted by this Agreement shall be in writing
and shall be delivered as follows, with notice deemed given as
indicated: (a) by personal delivery, when received; (b) by
overnight courier guaranteeing next-day delivery, upon the next
business day immediately following delivery to such overnight
courier; or (c) by registered or certified mail, return receipt
requested and postage prepaid, upon verification of receipt.
Notices shall be sent to the respective addresses set forth below,
unless subsequently changed by written notice to the other
party:
For
TSRI: The
Scripps Research Institute
10550
North Torrey Pines Road, TPC-9
La
Jolla, California 92037
Attention: Vice
President, Business Development
with a
copy
to:
The Scripps Research Institute
10550
North Torrey Pines Road, TPC-8
La
Jolla, California 92037
Attention: Chief
Business Counsel
For
Licensee:
ChromaPharma, Inc.
10005
Muirlands Blvd, Suite G
Irvine,
California 92618
Attention: Chief
Financial Officer
13.18
Counterparts. This
Agreement may be executed in several counterparts that together
shall constitute originals and one and the same
instrument.
13.19
Cumulative
Remedies. The rights and remedies stated in this Agreement
shall be cumulative and in addition to any other rights and
remedies the parties may have at law or in equity.
IN
WITNESS WHEREOF, the parties have executed this Agreement by their
duly authorized representatives as of the Effective
Date.
|
TSRI:
|
LICENSEE:
|
|
|
|
|
THE
SCRIPPS RESEARCH INSTITUTE
|
ChromaPharma,
Inc.
|
|
|
|
|
By:
/s/ Matt
Tremblay
|
By:
/s/ Tom
Varvaro
|
|
|
Tom
Varvaro
|
|
|
|
|
Title:
Vice President, Business Development
|
Title:
CFO 6/9/2017
|
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-26-
EXHIBIT A
LICENSED BIOLOGICAL MATERIALS
None.
-27-
EXHIBIT B
LICENSED PATENT RIGHTS
[…***…]
***Confidential Treatment
Requested
-28-
EXHIBIT C
COMMERCIAL DEVELOPMENT PLAN
None.
-29-
EXHIBIT D
BENCHMARKS
[…***…]
-30-
EXHIBIT E
REPORTING EVENTS
Licensee shall
notify TSRI in writing of each of the following events with respect
to each Product, Licensed Service and Licensed Process in a Major
Market Country within […***…] days of such
occurrence:
1.
[…***…];
2.
[…***…];
3.
[…***…];
and
4.
[…***…].
***Confidential Treatment
Requested
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