UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒
Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the Fiscal Year Ended December 31, 2017
☐
Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from
to
Commission File Number: 000-55866
MONOPAR THERAPEUTICS INC.
(Exact name of registrant as specified in its charter)
DELAWARE
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32-0463781
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. employer
identification number)
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1000 Skokie Blvd., Suite 350, Wilmette, IL
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60091
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(Address of principal executive offices)
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(zip code)
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(847) 388-0349
(Registrant’s telephone number, including area
code)
Securities registered pursuant to Section 12(b) of the
Act:
Title of each class
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Name of each exchange on which registered
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N/A
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N/A
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Securities registered pursuant to section 12(g) of the
Act:
Common Stock, $0.001 par value
Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act.
Yes
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No
☒
Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the Act.
Yes
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No
☒
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes
☐
No
☒
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every
Interactive Data File required to be submitted and posted pursuant
to Rule 405 of Regulation S-T (§ 232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).
Yes
☒
No
☐
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K (§ 229.405 of this chapter) is
not contained herein, and will not be contained, to the best of
registrant’s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.
Yes
☒
No
☐
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer,
or a smaller reporting company. See the definitions of “large
accelerated filer,” “accelerated filer” and
“smaller reporting company” in Rule 12b-2 of the
Exchange Act.
Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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(Do not check if a smaller reporting
company)
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Smaller reporting company
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Emerging growth company
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If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange
Act.
☐
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the
Act).
Yes
☐
No
☒
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Section 12, 13 or
15(d) of the Securities Exchange Act of 1934 (the “Exchange
Act”) subsequent to the distribution of securities under a
plan confirmed by a court.
Yes
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No
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Not Applicable.
The number of shares outstanding with respect to each of the
classes of our common stock, as of March
26
, 2018, is set forth below:
Class
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Number of shares outstanding
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Class A common stock, par value $0.001 per share
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9,291,420.614
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Documents incorporated by reference:
MONOPAR THERAPEUTICS INC.
TABLE OF CONTENTS
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Page
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Business
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3
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Risk
Factors
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22
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Properties
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33
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Legal
Proceedings
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33
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Market
for Registrant’s Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities
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33
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Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
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35
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Financial
Statements and Supplementary Data
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49
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Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosures
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50
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Controls
and Procedures
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50
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Directors,
Executive Officers and Corporate Governance
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51
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Executive
Compensation
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57
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Security Ownership
of Certain Beneficial Owners and Management and Related Stockholder
Matters
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61
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Certain
Relationships and Related Transactions and Director
Independence
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63
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Principal
Accountant Fees and Services
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65
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Exhibits
and Financial Statement Schedules
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66
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Signatures
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Forward-Looking Statements
This
Annual Report on Form 10-K contains “forward-looking
statements” within the meaning of Section 27A of the
Securities Act of 1933, as amended (the “Act”) and
Section 21E of the 34 Act. All statements other than statements of
historical facts included in this Annual Report on Form 10-K are
forward-looking statements. The words “hopes,”
“believes,” “anticipates,”
“plans,” “seeks,” “estimates,”
“projects,” “expects,”
“intends,” “may,” “could,”
“should,” “would,” “will,”
“continue,” and similar expressions are intended to
identify forward-looking statements. Forward-looking statements
contained in this Annual Report on Form 10-K include without
limitation statements about the market for cancer products in
general and statements about our:
●
projections and
related assumptions;
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business and
corporate strategy;
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plans, objectives,
expectations, and intentions;
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clinical and
preclinical pipeline and the anticipated development of our
technologies, products, and operations;
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anticipated revenue
and growth in revenue from various product offerings;
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future operating
results;
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intellectual
property portfolio;
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projected liquidity
and capital expenditures;
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development and
expansion of strategic relationships, collaborations, and
alliances; and
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market opportunity,
including without limitation the potential market acceptance of our
technologies and products and the size of the market for cancer
products.
Although
we believe that the expectations reflected in such forward-looking
statements are appropriate, we can give no assurance that such
expectations will be realized. Cautionary statements are disclosed
in this Annual Report on Form 10-K, including without limitation
statements in the section entitled “RISK FACTORS,”
addressing forward-looking statements. All subsequent written and
oral forward-looking statements attributable to us or persons
acting on our behalf are expressly qualified in their entirety by
the cautionary statements. We undertake no obligation to update any
statements made in this Annual Report on Form 10-K or elsewhere,
including without limitation any forward-looking statements, except
as required by law.
You
should read the following discussion in conjunction with our
financial statements as of December 31, 2017 and the notes to such
financial statements included elsewhere in this Annual Report on
Form 10-K.
Overview
We
are a clinical-stage biotechnology company focused on developing
innovative drugs and drug combinations to improve clinical outcomes
for cancer patients. We are building a drug development pipeline
through the licensing or acquisition of oncology therapeutics at
the late preclinical through advanced clinical development stage,
leveraging already existing scientific and clinical data as much as
possible to de-risk clinical development.
Our
lead drug product candidate is Validive® (clonidine mucobuccal
tablet; clonidine MBT), a Phase 3-ready molecule for the prevention
and treatment of severe oral mucositis (“SOM”) in
patients undergoing radiotherapy for oropharyngeal cancer
(“OPC”). In September 2017, we exercised our exclusive
option with Onxeo S.A. to license worldwide rights to
Validive.
Increased expression of pro-inflammatory cytokines
by macrophages is believed to be the mechanism of
radiotherapy-induced severe oral mucositis. Oropharyngeal cancer
arises in the immune tissue at the back of the throat, which is
characterized by a high localization of macrophages. As a
mucoadhesive tablet that works locally through agonizing a receptor
on macrophages that suppresses cytokine expression at the sites of
radiation, we believe Validive
®
has significant promise in addressing
this large unmet medical need. Currently, there are no U.S. Food
and Drug Administration (“FDA”)-approved preventive or
therapeutic options for patients that develop radiation-induced
SOM.
A
Phase 1 and Phase 2 trial with Validive have been completed, with
encouraging results. We anticipate a pre-Phase 3 meeting with the
FDA in the second quarter of 2018, and are aiming to initiate our
Phase 3 development program in the second half of 2018. Assuming
the FDA concurs with our clinical plan, an interim analysis of the
Phase 3 clinical data is currently planned for the fourth quarter
of 2019, with final data anticipated to be released in the first
half of 2021. In anticipation of initiating the international Phase
3 development program for Validive, we created a wholly-owned
French subsidiary, Monopar Therapeutics, SARL in January 2018, and
a wholly-owned Australian subsidiary, Monopar Therapeutics
Australia Pty Ltd. in March 2018.
In
August 2017, we acquired the clinical stage drug product candidate
MNPR-201 (GPX-150) from TacticGem, LLC. MNPR-201 is a novel
doxorubicin analog engineered to eliminate the cardiotoxic side
effects typically generated by anthracycline-based cancer drugs.
MNPR-201 has completed a small Phase 2 clinical trial in soft
tissue sarcoma patients. We are aiming to initiate one or more
Phase 2 trials for MNPR-201 in the first half of 2019.
As
part of the transaction to acquire MNPR-201, TacticGem, LLC became
our majority shareholder. Surrounding this transaction, we raised
approximately $9.5 million (net of transaction costs) and filed a
Form 10 with the SEC which became effective on January 8,
2018.
We
also own several discovery and preclinical stage drug product
candidates, the furthest along being MNPR-101 (huATN-658). MNPR-101
is a novel first-in-class humanized monoclonal antibody to the
urokinase plasminogen activator receptor (“uPAR”) for
the treatment of advanced cancers. It has nearly completed
IND-enabling work and we anticipate a pre-IND meeting with the FDA
in the third quarter of 2018.
In
order to fund our planned operations, including executing our
clinical development plans and advancing our drug product
candidates, we will need to obtain additional significant capital
through the sale of equity securities or other financial
arrangements; however, there can be no assurance that we will be
able to raise needed capital under acceptable terms, if at all. The
sale of additional equity will dilute our existing
stockholders.
Corporate Information
We were
formed as a Delaware limited liability company in December 2014,
with the name Monopar Therapeutics, LLC. In December 2015, we
converted into a Delaware C corporation. Our principal executive
offices are located at 1000 Skokie Blvd, Suite 350, Wilmette, IL
60091. Our telephone number is (847) 388-0349, and our email
address is
info@monopartx.com
.
Our corporate website is located at www.monopartx.com. Any
information contained in, or that can be accessed through our
website is not incorporated by reference in this Annual Report on
Form 10-K.
Our Strategy
Our
goal is to leverage the experience and competencies of our
management team to acquire, in-license and develop promising drug
product candidates and to commercialize cancer therapeutics that
address unmet medical needs in the oncology market. The key
elements of our strategy include:
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Initiate
our Phase 3 development program for Validive;
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Obtain
FDA approval of Validive for reducing the risk of onset of SOM in
patients undergoing radiotherapy for oropharyngeal
cancer;
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Commercialize
Validive in the U.S. and EU;
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Maintain,
expand and protect our intellectual property portfolio around
Validive;
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Initiate
clinical trial(s) for MNPR-201 in indications where we can leverage
existing data of doxorubicin’s efficacy (breast cancer,
sarcoma, rare pediatric cancers);
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Request
pre-IND meeting for MNPR-101; and
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Expand
our product portfolio through acquiring or in-licensing additional
product candidates, especially ones where we can leverage already
existing scientific and clinical data to help de-risk further
clinical development.
The Oncology Therapeutics Market
Cancer
is a collection of diseases characterized by uncontrolled growth
and spread of abnormal cells. In January 2018, the American Cancer
Society projected that there will be an estimated 1.7 million new
cancer cases diagnosed and 609,640 cancer deaths in the U.S. in
2018. Current treatments for cancer include surgery, radiation
therapy, chemotherapy, hormone therapy, targeted therapy and
immunotherapy. The IQVIA Institute for Human Data Science reported
in 2017 that total global spending on oncology medicines, including
therapeutic treatments and supportive care, reached $113 billion in
2016.
Many
currently marketed cancer drugs do not distinguish between rapidly
growing healthy cells and cancer cells. This leads to serious side
effects and a very narrow therapeutic index. Often, treatment is
discontinued because of adverse effects or cumulative toxicities,
rendering chronic treatment impossible. Since tumors are generally
not completely eradicated by chemotherapy, cessation of treatment
often leads to a regrowth of the malignancy. Furthermore, many
tumors mutate rapidly and develop resistance, thereby further
rendering existing treatments ineffective. While newer
immunotherapies have shown promising results, only a portion of
patients will respond to such treatments. There is an urgent need
for additional drugs to improve cancer treatment.
Advances
in the understanding of how tumor cells differ from normal tissue
have made possible the development of a new class of targeted
cancer therapies that interrupt processes important to tumor
survival and progression. These include anti-angiogenic drugs,
anti-metastatic drugs, and cell-signaling inhibitors.
All
of these approaches may be associated with various side effects
experienced by cancer patients that result from the treatments
having an adverse impact on normal functioning cells and organ
systems. Supportive care products are frequently prescribed or
administered to cancer patients to prevent or treat these side
effects thereby allowing the patients to continue to receive
potentially life prolonging cancer therapies and to minimize long
term consequences from these treatments.
Our
pipeline and strategy are aligned with the trends in cancer care.
Validive is intended to reduce the incidence of SOM and keep OPC
patients on treatment longer. MNPR-201 is a novel analog of
doxorubicin designed to eliminate formation of dose limiting
cardiotoxic metabolites generated by doxorubicin while retaining
the anti-cancer activity. MNPR-101 is designed to bind a specific
cell surface receptor found cancer cells (uPAR), to thereby
interrupt several pathways required for tumor growth and
progression.
Our Drug Product Candidates
MONOPAR
PRODUCT PIPELINE
Validive
®
(clonidine mucobuccal tablet;
clonidine MBT)
Validive (clonidine MBT) is a mucobuccal tablet
(“MBT”) of clonidine based on the
Lauriad
®
mucoadhesive technology. The Lauriad
technology was developed for oral transmucosal drug delivery and
significantly increases the mucous and salivary concentrations of
the active ingredient it contains, with decreased systemic
absorption. The tablet is placed under the patient’s upper
lip and remains there for several hours a day, releasing the active
ingredient into the saliva.
Mechanism of Action
Validive is designed to deliver high local
concentrations of the active pharmaceutical ingredient clonidine,
an agonist of alpha-2 adrenergic receptors
(“alpha
-
2AR”),
to the oropharynx, the site of irradiation in the treatment of OPC.
In the oropharynx,
alpha-
2AR are
expressed on macrophages, immune cells that produce cytokines, the
molecules that are responsible for the development of SOM (Maria et
al., 2017). A recent clinical study demonstrated that radiation
treatment substantially increased salivary cytokine levels and that
these were positively associated with the formation of SOM in
patients with head and neck cancer (Bossi et al., 2016). OPC
patients with human papilloma virus positive (“HPV+”)
OPC demonstrate an increased accumulation of macrophages in the
tumor microenvironment compared to patients with OPC without human
papilloma virus (“HPV–”), thus further priming
HPV+ OPC patients for the development of SOM (Oguejiofor et al.,
2017). The
alpha-
2AR regulates
the expression of cytokines by macrophages, and clonidine reduces
this cytokine production (Romero-Sandoval et al., 2005; Spengler et
al., 1990). Macrophages are the primary immune cells that express
alpha-
2AR, making clonidine’s mechanism of
cytokine suppression macrophage selective and distinct from the
mechanism of other anti-inflammatory drugs (Handy et al., 1998;
Perälä et al., 1992; Laukova et al., 2010). Further,
Validive delivers clonidine transmucosally, to the sites of
radiation treatment in OPC. This results in high salivary
concentrations of clonidine and minimizes systemic absorption,
allowing for maximal dosing of drug to the at-risk oral mucosa and
the OPC microenvironment (Vasseur et al., 2017). Onxeo’s
preclinical studies and Phase 2 clinical trial have provided data
that support Validive’s mechanism of action and therapeutic
potential for reducing the development of SOM in patients with OPC,
improving oral mucositis-related symptoms, and decreasing
radiotherapy-related adverse events, while exhibiting a favorable
safety profile and high compliance rate with
patients.
Severe Oral Mucositis (“SOM”)
SOM
is induced by radiation treatment and is the most frequent major
radiation-induced side effect observed in patients with head and
neck cancer (“HNC”). SOM induces intense oral pain and
dysphagia and limits a patient’s ability to eat and drink,
which can lead to severe weight loss and a requirement for enteral
or parenteral nutritional support. Patients that develop SOM are
often hospitalized, and symptoms can force patients to stop cancer
treatment for an undefined period of time or terminate early, thus
reducing cancer treatment efficacy (Elting et al., 2008;
Vera-Llonch et al., 2006). Thus, SOM impacts both quality of life
and clinical outcomes in HNC patients. Currently, there are no
FDA-approved preventive or therapeutic options for patients that
develop radiation-induced SOM. Only symptomatic treatments such as
opioids and mouthwashes are currently considered as part of the
standard of care for this indication.
The
global incidence of HNC was approximately 690,000 cases in 2012
(Globocan 2012; Gupta, 2016). The incidence of HNC in the U.S. was
approximately 63,000 cases in 2017 (cancer.net) and is projected to
increase to more than 93,000 new cases by 2030 (Gupta et al.,
2016). A similar increase is also predicted in the European Union
(“EU”) Five (France, Germany, Italy, Spain and the
United Kingdom).
These
projections include all HNC patients, regardless of the anatomic
location of their disease. However, the most rapidly growing
sub-population of HNC are patients with OPC (Chaturvedi et al.,
2011; Ramqvist et al., 2010). The oropharynx is comprised largely
of immune tissue and includes the soft palate, the base (rear one
third) of the tongue, and the tonsils. In the U.S., the incidence
of OPC is approaching 70% of all HNC, the majority of which
(approximately 70%) is HPV+ (Chaturvedi et al., 2011; Jordan et
al., 2012; Gooi et al., 2016). The incidence of OPC is also
increasing in the rest of the world (>30% of HNC) (Taberna et
al., 2017), with >50% of all OPC being HPV+ (Gupta et al., 2016;
Fakhry et al., 2015).
Recent
data (Vatca et al., 2014) have demonstrated that HPV+ OPC patients
have a 6.9-fold increased risk of developing SOM during radiation
treatment, and that onset of SOM occurs sooner than in HPV–
OPC patients. These observations suggest that HPV+ OPC patients may
be more likely to benefit from Validive (clonidine MBT) treatment
than other HNC patients. The incidence of HPV+ OPC has outpaced the
incidence of HPV– HNC by 4-5-fold over the past decade
(Chaturvedi et al., 2011; Castellsagué et al., 2017). We
project that this trend will continue for at least the next 20-25
years (another generation) in the U.S. based on the predicted
increase in high-risk oral HPV infections due to the lack of
adequate use of HPV vaccinations in children (Castellsagué et
al., 2017). Thus, the HPV+ OPC population could be a driver of
market growth for Validive (clonidine MBT), and also represents a
potentially molecularly defined population for the clinical
development of this drug (Taberna et al., 2017; Castellsagué
et al., 2017).
Clinical Data
In
November 2012, Onxeo submitted an Investigational New Drug
application ("IND") for Validive with the FDA for the prevention
and treatment of oral mucositis induced by radiotherapy and/or
chemotherapy in cancer patients. On March 12, 2018, we received a
notification from the FDA confirming the IND transfer from Onxeo to
us. We believe that Onxeo’s Phase 2 data support the
development of Validive for SOM in OPC patients, with an enhanced
response anticipated in HPV+ patients. Patients with HPV+ OPC have
a 6.9-fold higher risk of developing SOM (Vatca et al., 2014)
possibly due to the increased accumulation of immune cells in the
tumor due to the presence of the HPV infection (Lyford-Pike et al.,
2013; Vatca et al., 2014; Oguejiofor et al., 2017). These immune
cells may release oral mucosa damaging cytokines in response to
radiation and may therefore be more responsive to Validive, which
suppresses the production of these cytokines.
In
October 2015, the results from an international Phase 2 clinical
trial of Validive were announced by Onxeo, demonstrating
encouraging signs of clinical activity and safety compared to
placebo. The trial enrolled 183 patients and was conducted in more
than thirty centers in Europe and the U.S. This global,
multi-center, double-blind, randomized, placebo-controlled,
three-arm study (NCT01385748) compared the efficacy and safety of
Validive (50 microgram (µg) and 100 µg) to placebo in
patients with HNC receiving chemoradiation therapy. Validive and
placebo were applied to the gum of the mouth once daily beginning 1
to 3 days prior to chemoradiotherapy and continuing until the end
of chemoradiation treatment.
The
safety profile of Validive was similar to placebo. Patients treated
with Validive experienced less nausea and dysphagia compared to
placebo.
The
mean overall patient compliance was approximately 90% across all
treatment groups. Overall compliance according to patient diaries
was similar in all treatment groups and consistent with the
compliance according to the investigator’s
evaluation.
The
analysis of OPC patients in this study showed:
●
The incidence
of severe oral mucositis (primary endpoint) was reduced by 26.3%
(40% relative to placebo) in OPC patients treated with Validive
(100 µg) (p=0.09† which is a meaningful trend but not
statistically significant). 65.2% of OPC patients on placebo
experienced severe oral mucositis compared to only 38.9% of OPC
patients on Validive 100 µg.
●
Validive
(100 µg) reduced the risk of onset of SOM by 52% compared to
placebo
●
Secondary
endpoints of severe drinking, eating, and speaking limitations due
to mouth and throat soreness (“MTS”) score were reduced
in the Validive (100µg) treated cohort.
●
Decreases
in other indicators of clinical benefit, including decreased
duration of severe oral mucositis (by 15 days versus placebo),
weight loss, decreased opiate use and increased cumulative dose of
radiation received, strongly favored the Validive (100 µg)
treated cohort.
●
A
dose response was observed with the Validive (100 µg) dose,
demonstrating a trend toward superiority over the Validive (50
µg) dose as well as placebo.
†
p
-value or probability value, is a statistical
measurement of the likelihood a drug does not actually work based
on the clinical data compared to a control such as a placebo (with
no active pharmaceutical ingredient). In general, the FDA requires
a p-value of less than 5% or p < 0.05, which is considered
statistically significant, for marketing approval. A p-value of
p<0.05 for a clinical trial comparing a drug and placebo means
that there is less than a 5% chance the drug is actually
inactive.
Our
review of Onxeo’s Phase 2 data indicated that the effect of
Validive was much greater in OPC compared to non-OPC patients. We
believe the data along with the mechanism of action of Validive
provide a rationale for developing Validive for the treatment of
radiation induced SOM in OPC patients as a first indication. The
most rapidly growing sub-population of HNC in the U.S. and Europe
are patients with HPV+ disease, which are primarily HNC patients
with OPC. The oropharynx is the part of the throat at the back of
the mouth, which includes the soft palate, the base (rear one
third) of the tongue, and the tonsils. HPV+ OPC is a molecularly
defined population of HNC characterized by the expression of a
protein biomarker, p16 INK4a, and the presence of HPV DNA in the
tumor. Evaluation of HPV status is part of the routine clinical
assessment of patients with OPC prior to initiating treatment. The
incidence of HPV+ OPC has outpaced the incidence of HPV– HNC
in the U.S. and Europe by 4 to 5-fold over the past decade
(Chaturvedi et al., 2011; Castellsagué et al.,
2017).
Validive Development Strategy
Based
on the existing Phase 2 data in patients with OPC treated with
Validive, we are planning an adaptive design Phase 3 development
program that will evaluate Validive compared to placebo in OPC
patients stratified for HPV status. This design will allow us to
prospectively confirm the observation made from the Phase 2 trial,
that Validive will be effective in preventing radiation-induced SOM
in patients with OPC. The Phase 3 program will also evaluate if
Validive performs better in the HPV+ OPC cohort. We are currently
working with the U.S. and EU regulatory agencies to design a
development plan to move Validive toward registration in both a
time- and cost- efficient manner. An optimal timeline of
development milestones related to Validive include: FDA meeting to
discuss Phase 3 in the second quarter of 2018, with Phase 3 trial
being initiated in the third quarter of 2018, first patient dosed
in the fourth quarter of 2018, interim analysis of Phase 3 trial in
the fourth quarter of 2019, initiate stage 2 of the Phase 3 trial
in the first half of 2020, data readout for the Phase 3 trial in
the first half of 2021, and NDA submission in the second half of
2021. However, there are many risk factors which could delay or
otherwise affect Validive’s development. See Item 1A –
“Risk Factors.”
MNPR-201 (GPX-150; 5-imino-13-deoxydoxorubicin)
MNPR-201 (GPX-150; 5-imino-13-deoxydoxorubicin) is
a proprietary doxorubicin analog that is selective for
topoisomerase-II-
alpha
.
Doxorubicin is used to treat adult and pediatric solid and blood
(hematologic) cancers including breast, gastric, ovarian and
bladder cancer, soft tissue sarcomas, leukemias and lymphomas. A
number of clinical studies have demonstrated the anti-cancer
benefit of higher doses of doxorubicin administered for longer
periods of time. The optimal clinical efficacy of doxorubicin,
however, has been limited historically by the risk of patients
developing irreversible, potentially life-threatening
cardiotoxicity. MNPR-201 has been engineered specifically to retain
the anticancer activity of doxorubicin while minimizing the toxic
effects on the heart. We believe the results of these studies,
along with the potential to combine a less or non-cardiotoxic
analog of doxorubicin with other anticancer agents, emphasizes that
there is a large market opportunity for MNPR-201 in a broad
spectrum of cancer types.
The
antitumor effects of MNPR-201 are mediated through the
stabilization of the topoisomerase II complex after a DNA strand
break and DNA intercalation leading to apoptosis (cell death)
through a mechanism similar to doxorubicin and other anthracycline
drugs. Inhibiting the topoisomerase II-alpha isoform is desired for
the anti-cancer effect, while inhibiting the topoisomerase II-beta
isoform has been demonstrated to mediate, at least in part, the
cardiotoxicity associated with all anthracycline drugs currently
used in the clinic. MNPR-201 is substantially more selective than
doxorubicin for inhibiting topoisomerase II-alpha versus
topoisomerase II-beta. This selectivity may at least partly explain
the minimal cardiotoxicity that MNPR-201 has demonstrated in
clinical studies to date.
Clinical Data
In February 2007, Gem Pharmaceuticals, LLC (a
partner of TacticGem LLC) submitted an IND for MNPR-201 (GPX-150)
for the treatment of cancer. The IND remains open and was
transferred to us in February 2018. Several clinical studies of
MNPR-201 (GPX-150) have been completed. A Phase I dose escalation
study conducted at the University of Iowa enrolled 24 patients at 5
different dose levels of MNPR-201 (GPX-150) ranging from 14-265
mg/m
2
.
No evidence of irreversible cardiotoxicity was observed in any of
these patients, including 4 patients that had received prior
anthracycline (doxorubicin or related molecules) treatment. In the
four highest dose levels (>84 mg/m
2
),
9/17 patients showed a stabilization of disease including 3 out of
4 patients with leiomyosarcoma, which is a type of cancer that
originates in connective tissue and smooth muscle most commonly in
the uterus, stomach and small intestine.
Based on the demonstration of stable disease in
patients with leiomyosarcoma in the Phase I trial, a multi-center
open label single arm Phase 2 trial was run in
doxorubicin-naïve patients with non-resectable or metastatic
soft tissue sarcoma (“STS”). Doxorubicin has
historically been the standard of care for the treatment of
leiomyosarcoma and other STS. This Phase 2 clinical trial enrolled
22 patients and was completed in early 2017. MNPR-201 was
administered intravenously at 265 mg/m
2
every 3 weeks for up to 16 doses and
there was clear indication of anticancer activity and no evidence
of irreversible cardiotoxicity. One patient went on compassionate
use and received 20 cycles of MNPR-201, many more than the 6 to 8
cycles patients on doxorubicin are typically limited to. The
progression free survival at 6 months was 38%, versus
doxorubicin’s 6-month progression free survival of 25%, 33%,
and 23% in three separate studies in this patient population
(Lorigan et al., 2007; Judson et al., 2014; Chawla et al.,
2015).
MNPR-201 Development Strategy
We will need to raise additional funds to support
the next stage of clinical development of MNPR-201, which is
planned to include Phase 2 trials that will evaluate MNPR-201 in
cancer indications where doxorubicin has shown efficacy but its use
is restricted due to cardiotoxicity. The objective of these trials
would be to demonstrate signals of efficacy where MNPR-201 dosing
does not have to be restricted due to cardiotoxicity. For example,
several clinical studies completed in the 1990s demonstrated that
concurrent doxorubicin (60 mg/m
2
,
8 cycles) and paclitaxel gave a 94% overall response rate in
patients with metastatic breast cancer but led to 18% of these
patients developing congestive heart failure (Gianni et al., 1995).
Reduction of doxorubicin to 4-6 cycles of treatment decreased
occurrence of congestive heart failure, but also reduced response
rate to 45-55% (Sparano et al., 1999; Valero et al., 2001). A
potential Phase 2 screening trial in patients with metastatic
breast cancer would evaluate concurrent MNPR-201 plus paclitaxel to
see if a higher response rate than 45-55% could be observed in the
absence of irreversible cardiotoxicity. Concomitant administration
of paclitaxel and MNPR-201 in the absence of cardiotoxicity would
also provide rationale for this same combination in other clinical
settings. Similar studies are also under consideration for the
combination of MNPR-201 + trastuzumab in metastatic HER2+ breast
cancer patients. Additional studies will evaluate cross-over to
MNPR-201 in patients benefiting from doxorubicin that have reached
their lifetime limit of doxorubicin exposure in STS and other
cancer indications including several pediatric cancer indications.
The results of these Phase 2 studies would be used to inform an
initial registration strategy for MNPR-201, as well as to support
collaborative clinical development efforts with cooperative groups
and cancer-focused foundations. Ideally, we would like to initiate
the Phase 2 clinical trial(s) in the first half of 2019. However,
there are many risk factors which could delay or otherwise affect
MNPR-201’s development. See Item 1A – “Risk
Factors.”
MNPR-101 (formerly huATN-658)
No
IND is required for MNPR-101 at this time because it is not yet in
human clinical trials.
uPA/uPAR Antibodies
A significant body of
in vitro
and
in vivo
data have established the urokinase plasminogen
activator ("uPA") system as being central to the processes of
angiogenesis and metastasis, and therefore as a potentially
promising target for cancer drug development. The uPA system is
involved in the tissue remodeling and tumor signaling that leads to
the progression of cancer. Recent evidence suggests that, in
addition to uPA, its cell surface receptor, uPAR, may also be a
suitable target for cancer therapeutics and diagnostics because
it:
●
is
selectively expressed on metastatic tumor, tumor-associated immune
and angiogenic endothelial cells, but not on most normal cells
(several Phase 1 imaging studies in human advanced cancer patients
show that uPAR can only be detected in the tumor and not in normal
tissues);
●
is
central to several extracellular and intracellular oncogenic
pathways required for metastasis (inhibiting the uPA system in turn
inhibits many other downstream targets that are currently being
targeted by other companies);
●
is
expressed on immune cells that allow the tumor to evade recognition
by the immune system; and
●
has
the potential to interfere at several different signaling pathways
that converge at uPAR.
Thus,
uPAR-targeted therapies may have broad-spectrum activity against
many different cancer types.
We
have developed a set of monoclonal antibodies that target uPA and
uPAR. Our lead antibody, MNPR-101, demonstrated significant
anti-tumor activity in numerous preclinical models of tumor growth
and is being advanced for clinical evaluation. Based on the
selective expression of uPAR in tumor, MNPR-101 is expected to be
well-tolerated and amenable to a variety of combination treatment
approaches.
Efficacy and Safety
MNPR-101
is designed to interrupt several pathways required for tumor growth
and progression. The compound’s mechanism of action is
designed to block several particular cellular activities that are
only turned “on” in a tumor rather than to destroy the
tumor cell directly. For this reason, we believe that MNPR-101 may
have fewer side effects than current cytotoxic agents which kill
cells indiscriminately. In addition, by inhibiting multiple
pathways required for tumor growth and progression, we believe
MNPR-101 may lead to more effective tumor control than therapies
that target only a single such pathway. We believe that most
tumors, regardless of the tissue from which they originate, rely on
the pathways that we are targeting; therefore, therapies directed
at such pathways have the potential to be used against many
different types of cancers.
Drug Resistance
MNPR-101
may also avoid some of the drug resistance problems caused by
genetic instability that plague many conventional chemotherapies.
Cancerous cells mutate and reproduce rapidly, meaning that there is
great genetic heterogeneity among cells in a tumor. A given
chemotherapy may be effective against the vast majority of these
cells, but if even a small number have mutations that confer
resistance, these cells will likely survive the treatment. The
tumor will grow back composed almost entirely of these mutated
cells, making the cancer resistant to further treatments with that
particular chemotherapy. By targeting multiple tumor progression
pathways, using drugs in combination regimens, and targeting more
genetically stable endothelial and immune cells in addition to
tumor cells, we believe that MNPR-101 has the potential to avoid
these drug resistance problems.
Combination Use
Published
preclinical data have shown the ability of MNPR-101 to enhance the
anti-tumor activity of chemotherapies such as paclitaxel and
gemcitabine (Bauer et al., 2005; Kenny et al., 2011). The
expression and targeting of uPAR in general also suggests that
MNPR-101 may combine with other targeted agents that affect
signaling leading to tumor growth including the ability of tumors
to evade immune response. In particular, uPAR is selectively
expressed on cells of the myeloid lineage such as myeloid derived
suppressor cells, neutrophils and macrophages, all of which drive
tumor progression and may mediate resistance to immune checkpoint
inhibitors.
Reports
of successful cancer therapy increasingly involve the use of drug
combinations that target multiple metabolic pathways
simultaneously. To that end, oncologists are increasingly exploring
the combined use of approved drugs when treating their patients.
MNPR-101 is not expected to replace existing therapies, but rather
to complement them. MNPR-101 is intended to be combined with
existing therapies used to reduce tumor mass in order to make the
overall treatment more effective in the acute setting. MNPR-101
could make chemotherapy more effective by making tumors more
susceptible to chemotherapy by interrupting the tumors’
protective mechanisms. MNPR-101 could also potentially be used as a
standard follow-up therapy after chemotherapy to prevent tumor
regrowth and metastasis or in combination with immunotherapy
including immune checkpoint inhibitors. Many cancers are not fatal
unless tumors metastasize beyond their primary site and interfere
with normal function in critical organs of the body. Current
thinking suggests that by containing or preventing tumor growth, it
may be possible to transform cancer into a manageable, non-fatal
condition treated with chronic drug therapy. Given these potential
uses, new treatments that target multiple pathways and are designed
to be used in drug combinations, like MNPR-101, have the potential
to significantly improve treatment outcomes, rather than merely
competing with each other in the market.
MNPR-101 Development Strategy
We
currently plan to request a pre-IND meeting with the FDA to discuss
MNPR-101 in the third quarter of 2018. However, there are many risk
factors which could delay or otherwise affect MNPR-101’s
development. See Item 1A – “Risk
Factors.”
Material Agreements
Since
our inception, we have entered into three material agreements, one
with Onxeo S.A., one with Cancer Research UK, and one with XOMA
Ltd. None of the agreements requires any issuance of equity or any
annual maintenance fee. See the summary of each material agreement
below.
In
June 2016, we executed an option agreement with Onxeo S.A., a
French public company, which gave us the option to license Validive
(clonidine mucobuccal tablet), a mucoadhesive tablet of clonidine
based on the Lauriad mucoadhesive technology to potentially treat
severe oral mucositis in patients undergoing treatment for head and
neck cancers. The pre-negotiated license terms included as part of
the option agreement included clinical, regulatory, developmental
and sales milestones that could reach up to $108 million if we
achieve all milestones, and escalating royalties on net sales from
5 - 10%. On September 8, 2017, pursuant to the Onxeo license option
agreement, we exercised the option to license Validive for $1
million. The exercise of the option assigns all of Onxeo’s
rights to the Validive intellectual property to us, which allows us
to commence the planning of our Phase 3 clinical trial in severe
oral mucositis. Under the agreement, we are required to pay
royalties to Onxeo on a product-by-product and country-by-country
basis until the later of (1) the date when a given product is no
longer within the scope of a patent claim in the country of sale or
manufacture, (2) the expiry of any extended exclusivity period in
the relevant country (such as orphan drug exclusivity, pediatric
exclusivity, new chemical entity exclusivity, or other exclusivity
granted beyond the expiry of the relevant patent), or (3) a
specific time period after the first commercial sale of the product
in such country. In most countries, including the U.S., the patent
term is generally 20 years from the earliest claimed filing date of
a non-provisional patent application in the applicable country, not
taking into consideration any potential patent term adjustment that
may be filed in the future or any regulatory extensions that may be
obtained. The royalty termination provision pursuant to (3)
described above is shorter than 20 years and is the least likely
cause of termination of royalty payments.
The
Onxeo license agreement does not have a pre-determined term, but
expires on a product-by-product and country-by-country basis; that
is, the agreement expires with respect to a given product in a
given country whenever our royalty payment obligations with respect
to such product have expired. The agreement may also be terminated
early for cause if either we or Onxeo materially breach the
agreement, or if either we or Onxeo become insolvent. We may also
choose to terminate the agreement, either in its entirety or as to
a certain product and a certain country, by providing Onxeo with
advance notice.
On May 15, 2015, we entered into a Clinical Trial
and Option Agreement (“CTOA”) with Cancer Research UK.
Being a new entity at the time of the agreement negotiations, one
of the requirements under the CTOA, which has already been
fulfilled, was for us to deposit $800,000 into an escrow to cover
indemnities in the event of third party claims resulting from
actions or inactions of ours, patent infringement claims, or
potential costs on termination of the CTOA by Cancer Research UK
for cause.
Pursuant to this
agreement Cancer Research UK conducted preclinical work, improved
the manufacturing, and planned to conduct a Phase 1a/1b clinical
trial in cancer patients. Under this agreement, Cancer Research UK
was to cover all costs through Phase 1a/1b clinical studies,
including manufacturing. As part of a portfolio reprioritization
review, on March 21, 2018, Cancer Research UK notified us
it was terminating the agreement and would work to transfer to us
the data generated under the agreement. We are currently
reviewing potential alternative collaboration opportunities for
MNPR-101 and continue to maintain the program’s intellectual
property portfolio.
To humanize our MNPR-101 antibody, we have taken a
non-exclusive license to XOMA Ltd.’s humanization technology
and know-how. Under the terms of the license, we are to pay only
upon developmental and sales milestone achievements which could
reach up to $14.925 million if we achieve all milestones.
The agreement does not require the
payment of sales royalties.
There can be no assurance that we will reach any
milestones. The first milestone payment is payable upon first
dosing of a human patient in a Phase 2 clinical
trial.
Oncology Market Competition
The
pharmaceutical industry in general, and the oncology therapeutics
sector in particular, are characterized by intense competition. We
face competition from pharmaceutical and biotechnology companies,
many of which are larger and better financed than us. We also face
competition in our efforts to develop and commercialize new
oncology therapeutics from academic and government laboratories.
The therapeutics that we are developing, if successfully
commercialized, will have to compete with existing therapeutics
already on the market and novel therapeutics currently in
development, as well as new therapeutics that may be discovered and
developed in the future. Our product candidates will also have to
compete with alternate treatment modalities, such as radiation,
which is also subject to continual innovation and improvement.
Additional information can be found in the section entitled
“Risk Factors – Risks Related to Our Business
Operations and Industry.”
Intellectual Property Portfolio and Exclusivity
An
important part of our strategy is obtaining patent protection to
help preserve the proprietary nature of our drug product
candidates, and to prevent others from developing competitive
agents that are similar. Our patent portfolio includes issued
patents and pending patent applications in the U.S. and in foreign
countries. Our general practice is to seek patent protection in
major markets worldwide.
We
license all intellectual property related to Validive from Onxeo
S.A., a French public company. See “Material
Agreements”. Validive is covered by 32 issued patents and
allowed patent applications and corresponding patents and
applications in 32 jurisdictions, including the U.S., EU, Japan,
and other Asian countries, and has orphan drug designation in the
EU as well as Fast Track designation from the FDA. These patents
are methods of use patents that cover the use of Validive to
prevent and/or treat inflammation and inflammatory pain of the
mucosa including cancer therapy-induced mucositis, and have been
assigned to us pursuant to our license agreement with Onxeo. These
patents expire in 2029.
MNPR-201
(GPX-150) is covered by both composition of matter as well as
manufacturing process patents. We have a patent for chemical
synthesis technology that efficiently converts cardiotoxic
"13-keto" anthracyclines such as doxorubicin, daunorubicin,
epirubicin, and idarubicin into novel, patentable, and most likely
less-cardiotoxic "5-imino-13-deoxy" analogs. A novel chemical
composition of an intermediate for this synthesis is also patented.
In addition, we have a patent covering the combination of MNPR-201
with paclitaxel for the treatment of cancer, plus covering the
method of use of these two drugs for this purpose. Our MNPR-201
patent portfolio, which is still in the process of completing
transfer of ownership subsequent to the purchase from TacticGem
LLC, contains seven issued and allowed U.S. patents and allowed
patent applications and one U.S. pending patent application. We
have certain corresponding patents and applications in twenty-nine
foreign jurisdictions, including the U.S., EU, Japan, and other
Asian countries. The composition of matter patents will expire in
2018, the process patents for the synthesis of MNPR-201
intermediates will expires in 2024 and the patents covering the
combination use of MNPR-201 and its analogs with taxanes will
expire in 2026. We may pursue patent term extensions where
appropriate. We do not believe that expiration of the MNPR-201
composition of matter patents will significantly affect our ability
to develop or maintain our proprietary position around MNPR-201,
given that we have obtained patent protection around the
intermediates and process used to manufacture MNPR-201, will have
Hatch-Waxman exclusivity (applicable to new chemical entities) for
5 years that will prevent generic competition, and have obtained
U.S. orphan drug status in soft tissue sarcoma with additional
orphan cancer indications to follow. We also have a pending
International Nonproprietary Name (“INN”) request with
the World Health Organization for a non-proprietary (generic) name
for MNPR-201.
Our
patent portfolio for our MNPR-101 antibody (huATN-658), as well as
its epitope, consists of two issued U.S. composition of matter and
their methods of use patents, and allowed patent applications and
corresponding (granted and pending) patents and patent applications
in twenty-two foreign jurisdictions, including the European Union,
Japan, and other Asian countries. These patents are owned by us.
The patents covering the composition of matter of MNPR-101 will
expire in 2025 and the patents covering the MNPR-101 epitope will
expire in 2027. Being a novel biologic, it is eligible for 12 years
of exclusivity in the U.S. under the Biologics Price Competition
and Innovation Act (“BPCI Act”), and in numerous other
countries it will benefit from varying durations of similar
exclusivity, as well.
Patent
life determination depends on the date of filing of the application
and other factors as promulgated under the patent laws. In most
countries, including the U.S., the patent term is generally 20
years from the earliest claimed filing date (the priority date) of
a non-provisional patent application in the applicable country, not
taking into consideration any potential patent term adjustment that
may be filed in the future or any regulatory extensions that may be
obtained. Some of our patents are currently near expiration and we
may pursue patent term extensions for these where appropriate. See
“Risk Factors – Risks Related to Our Intellectual
Property.”
Manufacturing
We
do not currently own or operate manufacturing facilities for the
production or testing of Validive, MNPR-201, MNPR-101 or any other
product candidates, nor do we have plans to develop our own
manufacturing operations in the foreseeable future. We presently
depend on third party contract manufacturers for all our required
raw materials, Active Pharmaceutical Ingredients
(“API”), and finished drug products for our preclinical
and clinical studies. We have not yet executed manufacturing
agreements for our API and supplies of Validive, MNPR-201, or
MNPR-101. See “Risk Factors – Risks Related to Our
Reliance on Third Parties.”
Research and Development Costs
Research
and development (“R&D”) costs including in-process
R&D are expensed as incurred. Major components of R&D
expenses include R&D salaries and benefits, materials and
supplies and fees paid to consultants and to the entities that
conduct certain development activities on our behalf. R&D
expense, including upfront fees and milestones paid to
collaborators, are expensed as goods are received or services
rendered. Costs to acquire technologies, including license fees, to
be used in R&D that have not reached technological feasibility
and have no alternative future use are expensed as in-process
R&D as incurred, except in the case of a business combination
when such costs are capitalized as part of the purchase price
allocation. During the fiscal years ended December 31, 2017 and
2016, in aggregate we spent approximately $15.7 million (which
includes $14.5 million of in-process R&D) on research and
development costs (not including approximately $1.5 million spent
by Gem in development of MNPR-201). See “Risk Factors –
Risks Related to Clinical Development and Regulatory
Approval.”
Government Regulation and Product Approval
Government
authorities in the U.S., at the federal, state and local level, and
other countries extensively regulate, among other things, the
research, development, testing, manufacture, quality control,
approval, labeling, packaging, storage, record-keeping, promotion,
advertising, distribution, post-approval monitoring and reporting,
marketing and export and import of products such as those we are
developing. The pharmaceutical drug product candidates that we
develop must be approved by the FDA before they may be legally
marketed in the U.S. See “Risk Factors – Risks Related
to Clinical Development and Regulatory
Approval.”
U.S. Pharmaceutical Product Development Process
In
the U.S., the FDA regulates pharmaceutical products under the
Federal Food, Drug and Cosmetic Act (“FDCA”) and
implementing regulations. Pharmaceutical products are also subject
to other federal, state and local statutes and regulations. The
process of obtaining regulatory approvals and the subsequent
compliance with appropriate federal, state, local and foreign
statutes and regulations require the expenditure of substantial
time and financial resources. Failure to comply with the applicable
U.S. requirements at any time during the product development
process, approval process or after approval, may subject an
applicant to administrative or judicial enforcement. FDA
enforcement could result in refusal to approve pending
applications, withdrawal of an approval, a clinical hold, warning
letters, product recalls, product seizures, total or partial
suspension of production or distribution injunctions, fines,
refusals of government contracts, restitution, disgorgement or
civil or criminal penalties. Any agency or judicial enforcement
action could have a material adverse effect on us. The process
required by the FDA before a non-biological pharmaceutical product
may be marketed in the U.S. generally involves the
following:
●
Completion
of preclinical laboratory tests, animal studies and formulation
studies according to Good Laboratory Practices (“GLP”),
or other applicable regulations;
●
Submission
to the FDA of an Investigational New Drug application
(“IND”), which must become effective before human
clinical studies may begin;
●
Performance
of adequate and well-controlled human clinical studies according to
the FDA’s current Good Clinical Practices
(“GCP”), to establish the safety and efficacy of the
proposed pharmaceutical product for its intended use;
●
Submission
to the FDA of a New Drug Application (“NDA”), for a new
pharmaceutical product;
●
Satisfactory
completion of an FDA inspection of the manufacturing facility or
facilities where the pharmaceutical product is produced to assess
compliance with the FDA’s current Good Manufacturing Practice
standards (“cGMP:”), to assure that the facilities,
methods and controls are adequate to preserve the pharmaceutical
product’s identity, strength, quality and
purity;
●
Potential
FDA audit of the preclinical and clinical study sites that
generated the data in support of the NDA; and
●
FDA
review and approval of the NDA.
The
lengthy process of seeking required approvals and the continuing
need for compliance with applicable statutes and regulations
require the expenditure of substantial resources and approvals are
inherently uncertain.
Before
testing any compounds with potential therapeutic value in humans,
the pharmaceutical product candidate enters the preclinical testing
stage. Preclinical tests include laboratory evaluations of product
chemistry, toxicity and formulation, as well as animal studies to
assess the potential safety and activity of the pharmaceutical
product candidate. These early proof-of-principle studies are done
using sound scientific procedures and thorough documentation. The
conduct of the single and repeat dose toxicology and toxicokinetic
studies in animals must comply with federal regulations and
requirements including GLP. The sponsor must submit the results of
the preclinical tests, together with manufacturing information,
analytical data, any available clinical data or literature and a
proposed clinical protocol, to the FDA as part of the IND. The IND
automatically becomes effective 30 days after receipt by the FDA,
unless the FDA has concerns and notifies the sponsor. In such a
case, the IND sponsor and the FDA must resolve any outstanding
concerns before the clinical study can begin. If resolution cannot
be reached within the 30-day review period, either the FDA places
the IND on clinical hold or the sponsor withdraws the application.
The FDA may also impose clinical holds on a pharmaceutical product
candidate at any time before or during clinical studies due to
safety concerns or non-compliance. Accordingly, it is not certain
that submission of an IND will result in the FDA allowing clinical
studies to begin, or that, once begun, issues will not arise that
suspend or terminate such clinical studies.
During
the development of a new drug, sponsors are given opportunities to
meet with the FDA at certain points. These points may be prior to
submission of an IND, at the end of Phase 2, and before an NDA is
submitted. Meetings at other times may be requested. These meetings
can provide an opportunity for the sponsor to share information
about the data gathered to date, for the sponsor to ask specific
questions to the FDA, for the FDA to provide advice, and for the
sponsor and FDA to reach agreement on the next phase of
development. Sponsors typically use the end of Phase 2 meeting to
discuss their Phase 2 clinical results and present their plans for
the pivotal Phase 3 clinical (registration) trial(s) that they
believe will support approval of the new drug. A sponsor may be
able to request a Special Protocol Assessment (“SPA”),
the purpose of which is to reach agreement with the FDA on the
design of the Phase 3 clinical trial protocol design and analyses
that will form the primary basis of an efficacy claim.
According
to FDA guidance for industry on the SPA process, a sponsor which
meets the prerequisites may make a specific request for a SPA and
provide information regarding the design and size of the proposed
clinical trial. The FDA’s goal is to evaluate the protocol
within 45 days of the request to assess whether the proposed trial
is adequate, and that evaluation may result in discussions and a
request for additional information. A SPA request must be made
before the proposed trial begins, and all open issues must be
resolved before the trial begins. If a written agreement is
reached, it will be documented and made part of the IND record. The
agreement will be binding on the FDA and may not be changed by the
sponsor or the FDA after the trial begins except with the written
agreement of the sponsor and the FDA or if the FDA determines that
a substantial scientific issue essential to determining the safety
or efficacy of the drug was identified after the testing
began.
Clinical
studies involve the administration of the pharmaceutical product
candidate to healthy volunteers or patients under the supervision
of qualified investigators, generally physicians not employed by or
under the clinical study sponsor’s control. Clinical studies
are conducted under protocols detailing, among other things, the
objectives of the clinical study, dosing procedures, subject
selection and exclusion criteria, how the results will be analyzed
and presented and the parameters to be used to monitor subject
safety. Each protocol must be submitted to the FDA as part of the
IND. Clinical studies must be conducted in accordance with Good
Clinical Practice (“GCP”) guidelines. Further, each
clinical study must be reviewed and approved by an independent
institutional review board (“IRB”), at, or servicing,
each institution at which the clinical study will be conducted. An
IRB is charged with protecting the welfare and rights of study
participants and is tasked with considering such items as whether
the risks to individuals participating in the clinical studies are
minimized and are reasonable in relation to anticipated benefits.
The IRB also approves the informed consent form that must be
provided to each clinical study subject or his or her legal
representative and must monitor the clinical study until
completed.
Human
clinical studies are typically conducted in three sequential phases
that may overlap or be combined:
●
Phase
I. The pharmaceutical product is initially introduced into healthy
human subjects and tested for safety, dosage tolerance, absorption,
metabolism, distribution and excretion.
●
Phase
2. The pharmaceutical product is evaluated in a limited patient
population to identify possible adverse effects and safety risks,
to preliminarily evaluate the efficacy of the product for specific
targeted diseases, to determine dosage tolerance, optimal dosage
and dosing schedule and to identify patient populations with
specific characteristics where the pharmaceutical product may be
more effective.
●
Phase
3. Clinical studies are undertaken to further evaluate dosage,
clinical efficacy and safety in an expanded patient population at
geographically dispersed clinical study sites. These clinical
studies are intended to establish the overall risk/benefit ratio of
the product and provide an adequate basis for product labeling. The
studies must be well-controlled and usually include a control arm
for comparison. One or two Phase 3 studies are required by the FDA
for an NDA approval, depending on the disease severity and other
available treatment options.
●
Post-approval
studies, or phase IV clinical studies, may be conducted after
initial marketing approval. These studies are used to gain
additional experience from the treatment of patients in the
intended therapeutic indication.
●
Progress
reports detailing the results of the clinical studies must be
submitted at least annually to the FDA and written IND safety
reports must be submitted to the FDA and the investigators for
serious and unexpected adverse events or any finding from tests in
laboratory animals that suggests a significant risk for human
subjects. Phase I, Phase 2 and Phase 3 clinical studies may not be
completed successfully within any specified period, if at all. The
FDA or the sponsor or its data safety monitoring board may suspend
a clinical study at any time on various grounds, including a
finding that the research subjects or patients are being exposed to
an unacceptable health risk. Similarly, an IRB can suspend or
terminate approval of a clinical study at its institution if the
clinical study is not being conducted in accordance with the
IRB’s requirements or if the pharmaceutical product has been
associated with unexpected serious harm to patients.
Concurrent
with clinical studies, companies usually complete additional animal
studies and must also develop additional information about the
chemistry and physical characteristics of the pharmaceutical
product as well as finalize a process for manufacturing the product
in commercial quantities in accordance with cGMP requirements. The
manufacturing process must be capable of consistently producing
quality batches of the pharmaceutical product candidate and, among
other things, must develop methods for testing the identity,
strength, quality and purity of the final pharmaceutical product.
Additionally, appropriate packaging must be selected and tested and
stability studies must be conducted to demonstrate that the
pharmaceutical product candidate does not undergo unacceptable
deterioration over its shelf life.
U.S. Review and Approval Processes
The
results of product development, preclinical studies and clinical
studies, along with descriptions of the manufacturing process,
analytical tests conducted on the chemistry of the pharmaceutical
product, proposed labeling and other relevant information are
submitted to the FDA as part of an NDA requesting approval to
market the product. The submission of an NDA is subject to the
payment of substantial user fees; a waiver of such fees may be
obtained under certain limited circumstances.
In
addition, under the Pediatric Research Equity Act
(“PREA”), an NDA or supplement to an NDA must contain
data to assess the safety and effectiveness of the pharmaceutical
product for the claimed indications in all relevant pediatric
subpopulations and to support dosing and administration for each
pediatric subpopulation for which the product is safe and
effective. The FDA may grant deferrals for submission of data or
full or partial waivers. Unless otherwise required by regulation,
PREA does not apply to any pharmaceutical product for an indication
for which orphan designation has been granted.
The
FDA reviews all NDAs submitted before it accepts them for filing
and may request additional information rather than accepting an NDA
for filing. Once the submission is accepted for filing, the FDA
begins an in-depth review of the NDA. Under the goals and policies
agreed to by the FDA under the Prescription Drug User Fee Act
(“PDUFA”), the FDA has 10 months in which to complete
its initial review of a standard NDA and respond to the applicant,
and six months for a priority NDA. The FDA does not always meet its
PDUFA goal dates for standard and priority NDAs. The review process
and the PDUFA goal date may be extended by three months if the FDA
requests or if the NDA sponsor otherwise provides additional
information or clarification regarding information already provided
in the submission within the last three months before the PDUFA
goal date.
After
the NDA submission is accepted for filing, the FDA reviews the NDA
application to determine, among other things, whether the proposed
product is safe and effective for its intended use, and whether the
product is being manufactured in accordance with cGMP to assure and
preserve the product’s identity, strength, quality and
purity. The FDA may refer applications for novel pharmaceutical
products or pharmaceutical products which present difficult
questions of safety or efficacy to an advisory committee, typically
a panel that includes clinicians and other experts, for review,
evaluation and a recommendation as to whether the application
should be approved and under what conditions. The FDA is not bound
by the recommendations of an advisory committee, but it considers
such recommendations carefully when making decisions. During the
pharmaceutical product approval process, the FDA also will
determine whether a risk evaluation and mitigation strategy
(“REMS”), is necessary to assure the safe use of the
pharmaceutical product. If the FDA concludes that a REMS is needed,
the sponsor of the NDA must submit a proposed REMS; the FDA will
not approve the NDA without a REMS, if required.
Before
approving an NDA, the FDA will inspect the facilities at which the
product is manufactured. The FDA will not approve the product
unless it determines that the manufacturing processes and
facilities are in compliance with cGMP requirements and adequate to
assure consistent production of the product within required
specifications. Additionally, before approving an NDA, the FDA will
typically inspect one or more clinical sites as well as the site
where the pharmaceutical product is manufactured to assure
compliance with GCP and cGMP. If the FDA determines the
application, manufacturing process or manufacturing facilities are
not acceptable, it will outline the deficiencies in the submission
and often will request additional testing or information. In
addition, the FDA will require the review and approval of product
labeling.
The
NDA review and approval process is lengthy and difficult and the
FDA may refuse to approve an NDA if the applicable regulatory
criteria are not satisfied or may require additional clinical data
or other data and information. Even if such data and information
are submitted, the FDA may ultimately decide that the NDA does not
satisfy the criteria for approval. Data obtained from clinical
studies are not always conclusive and the FDA may interpret data
differently than the sponsor interprets the same data. The FDA will
issue a complete response letter if the agency decides not to
approve the NDA. The complete response letter usually describes all
of the specific deficiencies in the NDA identified by the FDA. The
deficiencies identified may be minor, for example, requiring
labeling changes, or major, for example, requiring additional
clinical studies. Additionally, the complete response letter may
include recommended actions that the applicant might take to place
the application in a condition for approval. If a complete response
letter is issued, the applicant may either resubmit the NDA,
addressing all of the deficiencies identified in the letter, or
withdraw the application.
If
a product receives regulatory approval, the approval may be
significantly limited to specific diseases and dosages or the
indications for use may otherwise be limited, which could restrict
the commercial value of the product. Further, the FDA may require
that certain contraindications, warnings or precautions be included
in the product labeling. In addition, the FDA may require Phase IV
testing which involves clinical studies designed to further assess
pharmaceutical product safety and effectiveness and may require
testing and surveillance programs to monitor the safety of approved
products that have been commercialized.
Expedited Development and Review Programs
The
FDA has a Fast Track program that is intended to expedite or
facilitate the process for reviewing new pharmaceutical products
that meet certain criteria. Specifically, new pharmaceutical
products are eligible for Fast Track designation if they are
intended to treat a serious or life-threatening condition and
demonstrate the potential to address unmet medical needs for the
condition. The Fast Track designation must be requested by the
sponsor. Fast Track designation applies to the combination of the
product and the specific indication for which it is being studied.
With a Fast Track designated product, the FDA may consider for
review sections of the NDA on a rolling basis before the complete
application is submitted, if the sponsor provides a schedule for
the submission of the sections of the NDA, if the FDA agrees to
accept sections of the NDA and determines that the schedule is
acceptable and if the sponsor pays any required user fees upon
submission of the first section of the NDA.
Any
product submitted to the FDA for marketing approval, including a
Fast Track program, may also be eligible for other types of FDA
programs intended to expedite development and review, such as
priority review and accelerated approval. Any product is eligible
for priority review if it has the potential to provide safe and
effective therapy where no satisfactory alternative therapy exists
or a significant improvement in the treatment, diagnosis or
prevention of a disease compared to marketed products. The FDA will
attempt to direct additional resources to the evaluation of an
application for a new pharmaceutical product designated for
priority review in an effort to facilitate the review.
Additionally, a product may be eligible for accelerated approval.
Pharmaceutical products studied for their safety and effectiveness
in treating serious or life-threatening illnesses and that provide
meaningful therapeutic benefit over existing treatments may receive
accelerated approval, which means that the products may be approved
on the basis of adequate and well-controlled clinical studies
establishing that the product has an effect on a surrogate endpoint
that is reasonably likely to predict a clinical benefit, or on the
basis of an effect on a clinical endpoint other than survival or
irreversible morbidity. As a condition of approval, the FDA may
require that a sponsor of a pharmaceutical product receiving
accelerated approval perform adequate and well-controlled
post-marketing clinical studies. In addition, the FDA currently
requires as a condition for accelerated approval pre-approval of
promotional materials, which could adversely impact the timing of
the commercial launch of the product. Fast Track designation,
priority review and accelerated approval do not change the
standards for approval but may expedite the development or approval
process.
Breakthrough Therapy Designation
The
FDA is also required to expedite the development and review of the
application for approval of drugs that are intended to treat a
serious or life-threatening disease or condition where preliminary
clinical evidence indicates that the drug may demonstrate
substantial improvement over existing therapies on one or more
clinically significant endpoints. Under the breakthrough
therapy program, the sponsor of a new drug candidate may request
that the FDA designate the drug candidate for a specific indication
as a breakthrough therapy concurrent with, or after, the filing of
the IND for the drug candidate. The FDA must determine if the
drug candidate qualifies for breakthrough therapy designation
within 60 days of receipt of the sponsor’s request.
Validive and MNPR-101 may both be eligible for breakthrough therapy
designation.
European Union Drug Review and Approval
In
the European Economic Area (“EEA”) (which is comprised
of the 28 Member States of the European Union plus Norway, Iceland
and Liechtenstein), medicinal products can only be commercialized
after obtaining a Marketing Authorization (“MA”). There
are two types of MA:
The
Community MA, which is issued by the European Commission through
the Centralized Procedure, based on the opinion of the CHMP, or
Committee for Medicinal Products for Human Use, of the European
Medicines Agency (“EMA”), is valid throughout the
entire territory of the EEA. The Centralized Procedure is mandatory
for certain types of products, such as biotechnology medicinal
products, orphan medicinal products, and medicinal products
containing a new active substance indicated for the treatment of
AIDS, cancer, neurodegenerative disorders, diabetes and auto-immune
and viral diseases. The Centralized Procedure is optional for
products containing a new active substance not yet authorized in
the EEA, or for products that constitute a significant therapeutic,
scientific or technical innovation or which are in the interest of
public health in the EU.
National
MAs, which are issued by the competent authorities of the Member
States of the EEA and only cover their respective territory, are
available for products not falling within the mandatory scope of
the Centralized Procedure. Where a product has already been
authorized for marketing in a Member State of the EEA, this
National MA can be recognized in other Member States through the
Mutual Recognition Procedure. If the product has not received a
National MA in any Member State at the time of application, it can
be approved simultaneously in various Member States through the
Decentralized Procedure. Under the above described procedures,
before granting the MA, the EMA or the competent authorities of the
Member States of the EEA make an assessment of the risk-benefit
balance of the product on the basis of scientific criteria
concerning its quality, safety and efficacy.
PRIME Designation
The
EMA launched its PRIME regulatory initiative to enhance support for
the development of therapies that target an unmet medical need. The
initiative focuses on drugs that may offer a major therapeutic
advantage over existing treatments, or benefit patients with no
treatment options. These therapies are considered priority
medicines within the EU. Through PRIME, the EMA offers early,
proactive and enhanced support to drug developers to optimize the
generation of robust data on a therapy’s benefits and risks
and enable accelerated assessment of drug applications. MNPR-101
may be eligible for PRIME designation.
Post-Approval Requirements
Any
pharmaceutical products for which a sponsor receives FDA approvals
are subject to continuing regulation by the FDA, including, among
other things, record-keeping requirements, reporting of adverse
experiences with the product, providing the FDA with updated safety
and efficacy information, product sampling and distribution
requirements, complying with certain electronic records and
signature requirements and complying with FDA and FTC promotion and
advertising requirements, which include, among others, standards
for direct-to-consumer advertising, prohibitions on promoting
pharmaceutical products for uses or in patient populations that are
not described in the pharmaceutical product’s approved
labeling (known as “off-label use”), industry-sponsored
scientific and educational activities and promotional activities
involving the internet. Failure to comply with FDA requirements can
have negative consequences, including adverse publicity,
enforcement letters from the FDA, actions by the U.S. Department of
Justice and/or U.S. Department of Health and Human Services Office
of Inspector General, mandated corrective advertising or
communications with doctors, and civil or criminal penalties.
Although physicians may prescribe legally available pharmaceutical
products for off-label uses, manufacturers may not directly or
indirectly market or promote such off-label uses.
Manufacturers
of FDA approved products are required to comply with applicable FDA
manufacturing requirements contained in the FDA’s cGMP
regulations. cGMP regulations require, among other things, quality
control and quality assurance, as well as the corresponding
maintenance of records and documentation. Pharmaceutical product
manufacturers and other entities involved in the manufacture and
distribution of approved pharmaceutical products are required to
register their establishments with the FDA and certain state
agencies, and are subject to periodic unannounced inspections by
the FDA and certain state agencies for compliance with cGMP and
other laws. Accordingly, manufacturers must continue to expend
time, money and effort in the area of production and quality
control to maintain cGMP compliance. Discovery of problems with a
product after approval may result in restrictions on a product,
manufacturer or holder of an approved NDA, including withdrawal of
the product from the market. In addition, changes to the
manufacturing process generally require prior FDA approval before
being implemented and other types of changes to the approved
product, such as adding new indications and additional labeling
claims, are also subject to further FDA review and approval. The
FDA also may require post-marketing testing, known as Phase IV
testing, risk minimization action plans and surveillance to monitor
the effects of an approved product or place conditions on an
approval that could restrict the distribution or use of the
product.
U.S. Foreign Corrupt Practices Act
The
U.S. Foreign Corrupt Practices Act (“FCPA”), prohibits
certain individuals and entities from promising, paying, offering
to pay, or authorizing the payment of anything of value to any
foreign government official, directly or indirectly, to obtain or
retain business or an improper advantage. The U.S. Department of
Justice and the SEC have increased their enforcement efforts with
respect to the FCPA. Violations of the FCPA may result in large
civil and criminal penalties and could result in an adverse effect
on a company’s reputation, operations, and financial
condition. A company may also face collateral consequences such as
debarment and the loss of export privileges.
Federal and State Pharmaceutical Legislation
In
addition to FDA restrictions on marketing of pharmaceutical
products, several other types of state and federal laws have been
applied to restrict certain business practices in the
biopharmaceutical industry.
Anti-Kickback Statute of 1972
The
federal Anti-Kickback Statute prohibits, among other things,
knowingly and willfully offering, paying, soliciting, or receiving
remuneration to induce or in return for purchasing, leasing,
ordering, or arranging for the purchase, lease, or order of any
healthcare item or service reimbursable under Medicare, Medicaid,
or other federally financed healthcare programs. The term
“remuneration” has been broadly interpreted to include
anything of value, including for example, gifts, discounts, the
furnishing of supplies or equipment, credit arrangements, payments
of cash, waivers of payment, ownership interests and providing
anything at less than its fair market value. The Anti-Kickback
Statute has been interpreted to apply to arrangements between
pharmaceutical manufacturers on one hand and prescribers,
purchasers, and formulary managers on the other. Although there are
a number of statutory exemptions and regulatory safe harbors
protecting certain common activities from prosecution, the
exemptions and safe harbors are drawn narrowly, and a
company’s practices may not in all cases meet all of the
criteria for statutory exemptions or safe harbor protection.
Practices that involve remuneration that may be alleged to be
intended to induce prescribing, purchases, or recommendations may
be subject to scrutiny if they do not qualify for an exemption or
safe harbor. Several courts have interpreted the statute’s
intent requirement to mean that if any one purpose of an
arrangement involving remuneration is to induce referrals of
federal healthcare covered business, the statute has been violated.
The reach of the Anti-Kickback Statute was also broadened by the
PPACA, which, among other things, amends the intent requirement of
the federal Anti-Kickback Statute. Pursuant to the statutory
amendment, a person or entity no longer needs to have actual
knowledge of this statute or specific intent to violate it in order
to have committed a violation. In addition, the PPACA provides that
the government may assert that a claim including items or services
resulting from a violation of the federal Anti-Kickback Statute
constitutes a false or fraudulent claim for purposes of the civil
False Claims Act (discussed below) or the civil monetary penalties
statute, which imposes penalties against any person who is
determined to have presented or caused to be presented a claim to a
federal health program that the person knows or should know is for
an item or service that was not provided as claimed or is false or
fraudulent.
False Claims Act of 1986
The
federal False Claims Act prohibits any person from knowingly
presenting, or causing to be presented, a false claim for payment
to the federal government. Recently, several pharmaceutical and
other healthcare companies have been prosecuted under these laws
for allegedly providing free product to customers with the
expectation that the customers would bill federal programs for the
product. Other companies have been prosecuted for causing false
claims to be submitted because of the companies’ marketing of
the product for unapproved, and thus non-reimbursable, uses. Many
states also have statutes or regulations similar to the federal
Anti-Kickback Statute and False Claims Act, which state laws apply
to items and services reimbursed under Medicaid and other state
programs, or, in several states, apply regardless of the
payer.
Health Insurance Portability and Accountability Act of 1996
(“HIPPA”)
The
federal Health Insurance Portability and Accountability Act of 1996
(“HIPAA”), created new federal criminal statutes that
prohibit knowingly and willfully executing a scheme to defraud any
healthcare benefit program, including private third-party payers
and knowingly and willfully falsifying, concealing or covering up a
material fact or making any materially false, fictitious or
fraudulent statement in connection with the delivery of or payment
for healthcare benefits, items or services. Because of the breadth
of these laws and the narrowness of the federal Anti-Kickback
Statute’s safe harbors, it is possible that some of a
company’s business activities could be subject to challenge
under one or more of such laws. Such a challenge could have a
material adverse effect on a company’s business, financial
condition and results of operations. See “Risk Factors -
Risks Related to Commercialization of Our Product
Candidates.”
Health Information Technology for Economic and Clinical Health Act
of 2009 (“HITECH”)
HIPAA,
as amended by the Health Information Technology and Clinical Health
Act (“HITECH”), and its implementing regulations,
imposes certain requirements relating to the privacy, security and
transmission of individually identifiable health information. Among
other things, HITECH makes HIPAA’s privacy and security
standards directly applicable to “business
associates”—independent contractors or agents of
covered entities that receive or obtain protected health
information in connection with providing a service on behalf of a
covered entity. HITECH also increased the civil and criminal
penalties that may be imposed against covered entities, business
associates and possibly other persons, and gave state attorneys
general new authority to file civil actions for damages or
injunctions in federal courts to enforce the federal HIPAA laws and
seek attorney’s fees and costs associated with pursuing
federal civil actions. In addition, state laws govern the privacy
and security of health information in certain circumstances, many
of which differ from each other in significant ways and may not
have the same effect, thus complicating compliance efforts. See
“Risk Factors - Risks Related to Commercialization of Our
Product Candidates.”
The Medicare Prescription Drug, Improvement and Modernization Act
of 2003 (“MMA”)
In
the U.S. and foreign jurisdictions, there have been a number of
legislative and regulatory changes to the healthcare system, in
particular, there have been and continue to be a number of
initiatives at the U.S. federal and state levels that seek to
reduce healthcare costs. The Medicare Prescription Drug,
Improvement, and Modernization Act of 2003 (“MMA”),
imposed new requirements for the distribution and pricing of
prescription drugs for Medicare beneficiaries. Under Part D,
Medicare beneficiaries may enroll in prescription drug plans
offered by private entities, which will provide coverage of
outpatient prescription drugs. Part D plans include both
stand-alone prescription drug benefit plans and prescription drug
coverage as a supplement to Medicare Advantage plans. Unlike
Medicare Part A and B, Part D coverage is not standardized. Part D
prescription drug plan sponsors are not required to pay for all
covered Part D drugs, and each drug plan can develop its own drug
formulary that identifies which drugs it will cover and at what
tier or level. However, Part D prescription drug formularies must
include drugs within each therapeutic category and class of covered
Part D drugs, though not necessarily all the drugs in each category
or class. Any formulary used by a Part D prescription drug plan
must be developed and reviewed by a pharmacy and therapeutic
committee. Moreover, while the MMA applies only to drug benefits
for Medicare beneficiaries, private payers often follow Medicare
coverage policy and payment limitations in setting their own
payment rates. Any reduction in payment that results from Medicare
Part D may result in a similar reduction in payments from
non-governmental payers.
The American Recovery and Reinvestment Act of 2009
The
American Recovery and Reinvestment Act of 2009 provides funding for
the federal government to compare the effectiveness of different
treatments for the same illness. A plan for the research will be
developed by the Department of Health and Human Services, the
Agency for Healthcare Research and Quality and the National
Institutes for Health, and periodic reports on the status of the
research and related expenditures will be made to Congress.
Although the results of the comparative effectiveness studies are
not intended to mandate coverage policies for public or private
payers, it is not clear what effect, if any, the research will have
on the sales of any product, if any such product or the condition
that it is intended to treat is the subject of a
study.
Physician Payments Sunshine Act of 2010
The
federal Physician Payments Sunshine Act requires certain
manufacturers of drugs, devices, biologics and medical supplies for
which payment is available under Medicare, Medicaid or the
Children’s Health Insurance Program, with specific
exceptions, to report annually to the Centers for Medicare &
Medicaid Services (“CMS”) information related to
payments or other transfers of value made to physicians and
teaching hospitals, and applicable manufacturers and applicable
group purchasing organizations to report annually to CMS ownership
and investment interests held by the physicians and their immediate
family members.
Patent Protection and Affordable Care Act of 2010
In
March 2010, the PPACA was enacted, which includes measures to
significantly change the way healthcare is financed by both
governmental and private insurers. Among the provisions of the
PPACA of importance to the pharmaceutical and biotechnology
industry are the following:
●
an
annual, nondeductible fee on any entity that manufactures or
imports certain branded prescription drugs and biologic agents,
apportioned among these entities according to their market share in
certain government healthcare programs, that began in
2011;
●
an
increase in the rebates a manufacturer must pay under the Medicaid
Drug Rebate Program to 23.1% and 13% of the average manufacturer
price for branded and generic drugs, respectively;
●
a
new Medicare Part D coverage gap discount program, in which
manufacturers must agree to offer 50% point-of-sale discounts to
negotiated prices of applicable brand drugs to eligible
beneficiaries during their coverage gap period, as a condition for
the manufacturer’s outpatient drugs to be covered under
Medicare Part D;
●
extension
of manufacturers’ Medicaid rebate liability to covered drugs
dispensed to individuals who are enrolled in Medicaid managed care
organizations;
●
expansion
of eligibility criteria for Medicaid programs by, among other
things, allowing states to offer Medicaid coverage to additional
individuals and by adding new mandatory eligibility categories for
certain individuals with income at or below 133% of the Federal
Poverty Level beginning in 2014, thereby potentially increasing
manufacturers’ Medicaid rebate liability;
●
expansion
of the entities eligible for discounts under the Public Health
Service pharmaceutical pricing program
●
new
requirements under the federal Open Payments program, created under
Section 6002 of the PPACA and its implementing regulations, that
manufacturers of drugs, devices, biologics and medical supplies for
which payment is available under Medicare, Medicaid or the
Children’s Health Insurance Program (with certain exceptions)
report annually to the U.S. Department of Health and Human Services
(“HHS”), information related to “payments or
other transfers of value” made or distributed to physicians
(defined to include doctors, dentists, optometrists, podiatrists
and chiropractors) and teaching hospitals, and that applicable
manufacturers and applicable group purchasing organizations report
annually to HHS ownership and investment interests held by
physicians (as defined above) and their immediate family members,
with data collection required beginning August 1, 2013 and
reporting to the Centers for Medicare & Medicaid Services
(“CMS”), required by March 31, 2014 and by the 90th day
of each subsequent calendar year;
●
a
requirement to annually report drug samples that manufacturers and
distributors provide to physicians, effective April 1,
2012;
●
expansion
of health care fraud and abuse laws, including the False Claims Act
and the Anti-Kickback Statute, new government investigative powers,
and enhanced penalties for noncompliance;
●
a
licensure framework for follow-on biologic products;
●
a
new Patient-Centered Outcomes Research Institute to oversee,
identify priorities in, and conduct comparative clinical
effectiveness research, along with funding for such
research;
●
creation
of the Independent Payment Advisory Board which, beginning in 2014,
will have authority to recommend certain changes to the Medicare
program that could result in reduced payments for prescription
drugs and those recommendations could have the effect of law even
if Congress does not act on the recommendations; and
●
establishment
of a Center for Medicare Innovation at CMS to test innovative
payment and service delivery models to lower Medicare and Medicaid
spending, potentially including prescription drug spending that
began on January 1, 2011.
Budget Control Act of 2011
In
August 2011, the President signed into law the Budget Control Act
of 2011, which, among other things, created the Joint Select
Committee on Deficit Reduction, or joint committee, to recommend
proposals in spending reductions to Congress. The joint committee
did not achieve its targeted deficit reduction of at least $1.2
trillion and for the years 2013 through 2021, triggering automatic
reductions to several government programs. These reductions include
aggregate reductions to Medicare payments to providers of up to 2%
per fiscal year, starting in 2013.
American Taxpayer Relief Act of 2012
In
January 2013, the President signed into law the American Taxpayer
Relief Act of 2012, which, among other things, reduced Medicare
payments to several providers and increased the statute of
limitations period for the government to recover overpayments to
providers from three to five years. These new laws may result in
additional reductions in Medicare and other healthcare
funding.
Proposals in Congress to repeal or replace parts of the
PPACA
There
have been a number of proposals in the U.S. Congress to repeal or
replace parts of the PPACA. Some of the proposals include the
repeal of the tax on prescription medications, repeal of the
medical device excise tax for sales, and repeal of the elimination
of a deduction for expenses allocable to Medicare Part D subsidy.
It is uncertain whether any repeal or replace legislation will be
passed and signed into law or what effect any such legislation may
have on our commercialization strategy. See “Risk Factors -
Future Legislation, Executive or Private Sector Action May Increase
the Difficulty and Cost for us to Commercialize our Products and
Affect the Prices Obtained for Such Products.”
Patent Term Restoration and Marketing Exclusivity
Depending
upon the timing, duration and specifics of the FDA approval of the
use of our pharmaceutical product candidates, some of our products
to be licensed under U.S. patents may be eligible for limited
patent term extension under the Drug Price Competition and Patent
Term Restoration Act of 1984, commonly referred to as the
Hatch-Waxman Amendments. The Hatch-Waxman Amendments permits a
patent restoration term of up to five years as compensation for
patent term lost during product development and the FDA regulatory
review process. However, patent term restoration cannot extend the
remaining term of a patent beyond a total of 14 years from the
product’s approval date. The patent term restoration period
is generally one-half the time between the effective date of an IND
and the submission date of an NDA plus the time between the
submission date of an NDA and the approval of that application.
Only one patent applicable to an approved pharmaceutical product is
eligible for the extension and the application for the extension
must be submitted prior to the expiration of the patent. The U.S.
Patent and Trademark Office (“USPTO”), in consultation
with the FDA, reviews and approves the application for any patent
term extension or restoration.
Market
exclusivity provisions under the U.S. Food, Drug, and Cosmetic Act
can also delay the submission or the approval of certain
applications of other companies seeking to reference another
company’s NDA.
The Biologics Price Competition and Innovation Act (“BPCI
Act”)
The
Biologics Price Competition and Innovation Act, (“BPCI
Act”), authorizes the FDA to license a biological product
that is biosimilar to an FDA-licensed biologic through an
abbreviated pathway. The BPCI Act establishes criteria for
determining that a product is biosimilar to an already-licensed
biologic, or reference product, and establishes a process by which
an abbreviated BLA for a biosimilar product is submitted, reviewed
and approved. The BPCI Act provides periods of exclusivity that
protect a reference product from biosimilars competition. Under the
BPCI Act, the FDA may not accept a biosimilar application for
review until four years after the date of first licensure of the
reference product, and the biosimilar may not be licensed until at
least 12 years after the reference product’s approval.
Additionally, the BPCI Act establishes procedures by which the
biosimilar applicant provides information about its application and
product to the reference product sponsor, and by which information
about potentially relevant patents may be shared and litigation
over patents may proceed in advance of approval. The BPCI Act also
provides a period of exclusivity for the first biosimilar
determined by the FDA to be interchangeable with the reference
product.
We
anticipate that the contours of the BPCI Act will continue to be
defined as the statute is implemented over a period of years. This
likely will be accomplished by a variety of means, including
decisions related to the statute by the relevant federal courts,
FDA issuance of guidance documents, and FDA decisions in the course
of considering specific applications. The FDA has to date issued
various guidance documents and other materials indicating the
agency’s thinking regarding a number of issues implicated by
the BPCI Act. Additionally, the FDA’s approval of several
biosimilar applications in recent years has helped define the
agency’s approach to certain issues.
Pharmaceutical Coverage, Pricing and Reimbursement
Significant
uncertainty exists as to the coverage and reimbursement status of
any pharmaceutical product candidates for which we obtain
regulatory approval. In the U.S. and markets in other countries,
sales of any products for which we receive regulatory approval for
commercial sale will depend in part upon the availability of
reimbursement from third-party payers. Third-party payers include
government payers such as Medicare and Medicaid, managed care
providers, private health insurers and other organizations. The
process for determining whether a payer will provide coverage for a
pharmaceutical product may be separate from the process for setting
the price or reimbursement rate that the payer will pay for the
pharmaceutical product. Third-party payers may limit coverage to
specific pharmaceutical products on an approved list, or formulary,
which might not include all of the FDA-approved pharmaceutical
products for a particular indication. Third-party payers are
increasingly challenging the price and examining the medical
necessity and cost-effectiveness of medical products and services,
in addition to their safety and efficacy. We may need to conduct
expensive pharmaco-economic studies in order to demonstrate the
medical necessity and cost-effectiveness of its products, in
addition to the costs required to obtain the FDA approvals. A
payer’s decision to provide coverage for a pharmaceutical
product does not imply that an adequate reimbursement rate will be
approved.
In
2003, the federal government enacted legislation providing a
partial prescription drug benefit for Medicare recipients, which
became effective at the beginning of 2006. However, to obtain
payments under this program, a company would be required to sell
products to Medicare recipients through prescription drug plans
operating pursuant to this legislation. As part of their
participation in the Medicare prescription drug program, these
plans negotiate discounted prices for prescription drugs. Federal,
state and local governments in the U.S. continue to consider
legislation to limit the growth of health care costs, including the
cost of prescription drugs. Future legislation and regulations
could limit payments for pharmaceuticals such as the drug product
candidates that we are developing.
Different
pricing and reimbursement schemes exist in other countries. In the
European Community, governments influence the price of
pharmaceutical products through their pricing and reimbursement
rules and control of national health care systems that fund a large
part of the cost of those products to consumers. Some jurisdictions
operate positive and negative list systems under which products may
only be marketed once a reimbursement price has been agreed upon.
To obtain reimbursement or pricing approval, some of these
countries may require the completion of clinical studies that
compare the cost-effectiveness of a particular pharmaceutical
product candidate to currently available therapies. Other member
states allow companies to fix their own prices for medicines, but
monitor and control company profits. The downward pressure on
health care costs in general, particularly prescription drugs, has
become very intense. As a result, increasingly high barriers are
being erected to the entry of new products. In addition, in some
countries, cross-border imports from low-priced markets exert a
commercial pressure on pricing within a country.
International Regulation
In
addition to regulations in the U.S., there are a variety of foreign
regulations governing clinical studies and commercial sales and
distribution of our future product candidates. Whether or not FDA
approval is obtained for a product, approval of a product must be
obtained by the comparable regulatory authorities of foreign
countries before clinical studies or marketing of the product can
commence in those countries. The approval process varies from
country to country, and the time may be longer or shorter than that
required for FDA approval. The requirements governing the conduct
of clinical studies, product licensing, pricing and reimbursement
vary greatly from country to country. In addition, certain
regulatory authorities in select countries may require us to repeat
previously conducted preclinical and/or clinical studies under
specific criteria for approval in their respective country which
may delay and/or greatly increase the cost of approval in certain
markets targeted for approval by us.
Under
E.U. regulatory systems, marketing applications for pharmaceutical
products must be submitted under a centralized procedure to the
EMA. The centralized procedure provides for the grant of a single
marketing authorization that is valid for all E.U. member states.
The EMA also has designations for Orphan Drugs, which, if
applicable, can provide for faster review, lower fees and more
access to advice during drug development. While the marketing
authorization in the European Union is centralized, the system for
clinical studies (application, review and requirements) is handled
by each individual country. Approval to run a clinical study in one
country does not guarantee approval in any other country. The
pharmaceutical industry in Canada is regulated by Health Canada. A
New Drug Submission (“NDS”) is the equivalent of a U.S.
NDA and must be filed to obtain approval to market a pharmaceutical
product in Canada. Marketing regulations and reimbursement are
subject to national and provincial laws. In Japan, applications for
approval to manufacture and market new drugs must be approved by
the Ministry of Health, Labor and Welfare. Nonclinical and clinical
studies must meet the requirements of Japanese laws. Results from
clinical studies conducted outside of Japan must be supplemented
with at least a bridging clinical study conducted in Japanese
patients.
In
addition to regulations in Europe, Canada, Japan and the U.S.,
there are a variety of foreign regulations governing clinical
studies, commercial distribution and reimbursement of future
product candidates which we may be subject to as we pursue
regulatory approval and commercialization of Validive, MNPR-201,
MNPR-101, or any future product candidates
internationally.
Compliance with Environmental Laws
Since we do not
have our own laboratory facilities, we do not estimate any annual
costs of compliance with environmental laws.
Employees
Our
operations are currently overseen by five individuals, of which
three have a PhD, two have an MD, one has an MBA, one has an MSc in
health economics and policy, and one has an inactive CPA. They have
worked at industry leading companies such as BioMarin
Pharmaceutical Inc., Raptor Pharmaceuticals, Abbott Laboratories,
and Onyx Pharmaceuticals. As of March 1, 2018, we have five
employees; four of them are full-time employees. For information
regarding our executive officers, see the section entitled
“Executive Officers and Board Members.”
Available Information
Our
Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q,
Current Reports on Form 8-K and amendments to those reports filed
or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act
may be accessed through the SEC’s website at
www.sec.gov
and on our website
at
www.monopartx.com
free of
charge. Such filings are placed on our website as soon as
reasonably practicable after they are filed with the SEC. Our Code
of Business Conduct and Ethics and our Audit Committee Charter are
also posted on the Investor Highlight page on our
website.
RISK FACTORS
An
investment in our common stock involves a high degree of risk. A
prospective investor should carefully consider the following
information about these risks, together with other information
appearing elsewhere in this Annual Report on Form 10-K, before
deciding to invest in our common stock. The occurrence of any of
the following risks could have a material adverse effect on our
business, financial condition, results of operations and future
prospects and prospective investors could lose all or part of their
investment. The risk factors discussed below and elsewhere in this
Annual Report on Form 10-K are not exhaustive; other significant
risks may exist that are not identified in this Annual Report on
Form 10-K, but that might still materially and adversely affect our
business, prospects, financial condition, and results of operations
were any of such risks to occur.
Risks Related to Our Financial Condition and Capital
Requirements
We have a limited operating history, expect to incur significant
operating losses, and have a high risk of never being
profitable.
We
commenced operations in December 2014 and have a limited operating
history of almost three years. Therefore, there is limited
historical financial or operational information upon which to
evaluate our performance. Our prospects must be considered in light
of the uncertainties, risks, expenses, and difficulties frequently
encountered by companies in their early stages of operations. Most
companies in our industry at our stage of development never become
profitable, and are acquired or go out of business without
successfully developing any product that generates revenue from
commercial sales.
From
inception in December 2014 through December 31, 2017, we have
incurred losses of approximately $18.4 million. We expect to
continue to incur substantial operating losses over the next
several years for the clinical development of our current and
future licensed or purchased drug product candidates.
The
amount of future losses and when, if ever, we will become
profitable are uncertain. We do not have any products that have
generated any revenues from commercial sales, and do not expect to
generate revenues from the commercial sale of products in the near
future, if ever. Our ability to generate revenue and achieve
profitability will depend on, among other things, successful
completion of the development of our product candidates; obtaining
necessary regulatory approvals from the FDA and international
regulatory agencies; establishing manufacturing, sales, and
marketing arrangements with third parties; obtaining adequate
reimbursement by third party payers; and raising sufficient funds
to finance our activities. If we are unsuccessful at some or all of
these undertakings, our business, financial condition, and results
of operations are expected to be materially and adversely
affected.
As
a new public reporting company, we are subject to SEC reporting and
other requirements, which will lead to increased operating costs in
order to meet these requirements.
If we continue to incur operating losses and fail to obtain the
capital necessary to fund our operations, we will be unable to
advance our development programs, complete our clinical trials, or
bring products to market, or may be forced to cease operations
entirely. In addition, any capital obtained by us may be obtained
on terms that are unfavorable to us, our investors, or
both.
Developing
a new drug and conducting clinical trials for one or more disease
indications involves substantial costs. We have projected cash
requirements for the near term based on a variety of assumptions,
but some or all of such assumptions are likely to be incorrect
and/or incomplete, possibly materially in an adverse direction. Our
actual cash needs may deviate materially from those projections,
changes in market conditions or other factors may increase our cash
requirements, or we may not be successful even in raising the
amount of cash we currently project will be required for the near
term. See discussion of our material development agreements in
“Material Agreements”. We will need to raise additional
capital in the future; the amount of additional capital needed will
vary as a result of a number of factors, including without
limitation the following:
●
receiving
less funding than we require;
●
higher
than expected costs to manufacture our active pharmaceutical
ingredient and our drug product candidates;
●
higher
than expected costs for preclinical testing;
●
an
increase in the number, size, duration, or complexity of our
clinical trials;
●
slower
than expected progress in developing Validive, MNPR-201, MNPR-101,
or other drug product candidates, including without limitation,
additional costs caused by program delays;
●
higher
than expected costs associated with attempting to obtain regulatory
approvals, including without limitation additional costs caused by
additional regulatory requirements or larger clinical trial
requirements;
●
higher
than expected personnel or other costs, such as adding personnel or
pursuing the licensing/acquisition of additional assets;
and
●
higher
than expected costs to protect our intellectual property portfolio
or otherwise pursue our intellectual property
strategy.
If
we attempt to raise additional financing, there can be no assurance
that we will be able to secure such additional financing in
sufficient quantities or at all. We may be unable to raise
additional capital for reasons including without limitation our
financial performance, investor confidence in us and the
biopharmaceutical industry, credit availability from banks and
other financial institutions, the status of current projects, and
our prospects for obtaining any necessary regulatory approvals.
Potential investors’ capital investments may be shifted to
other opportunities with perceived greater returns and/or lower
risk thereby reducing capital available to us, if at
all.
In
addition, any additional financing might not be available and even
if available, may not be available on terms favorable to us or our
then-existing investors. We may seek to raise funds through public
or private equity offerings, debt financings, corporate
collaboration or licensing arrangements, mergers, acquisitions,
sales of intellectual property, or other financing vehicles or
arrangements. To the extent that we raise additional capital by
issuing equity securities or other securities, our then-existing
investors may experience significant dilution. If we raise funds
through debt financings or bank loans, we may become subject to
restrictive covenants, our assets may be pledged as collateral for
the debt, and the interests of our then-existing investors would be
subordinated to the debt holders or banks. In addition, our use of
and ability to exploit assets pledged as collateral for debt or
loans may be restricted or forfeited. To the extent that we raise
additional funds through collaboration or licensing arrangements,
we may be required to relinquish significant rights (including
without limitation intellectual property rights) to our
technologies or product candidates, or grant licenses on terms that
are not favorable to us. If we are not able to raise needed funding
under acceptable terms or at all, then we will have to reduce
expenses, including the possible options of curtailing operations,
abandoning opportunities, selling off assets, reducing costs, or
ceasing operations entirely.
Risks Related to Clinical Development and Regulatory
Approval
We do not have and may never have any approved products on the
market. Our business is highly dependent upon receiving approvals
from various U.S. and international governmental agencies and will
be severely harmed if we are not granted approval to manufacture
and sell our drug product candidates.
In
order for us to commercialize any treatment for a cancer indication
or for any other clinical indication, we must obtain regulatory
approvals of such treatment for that indication. Satisfying
regulatory requirements is an expensive process that typically
takes many years and involves compliance with requirements covering
research and development, testing, manufacturing, quality control,
labeling, and promotion of drugs for human use. To obtain necessary
regulatory approvals, we must, among other requirements, complete
clinical trials demonstrating that our products are safe and
effective for a particular indication. There can be no assurance
that our products are safe and effective, that our clinical trials
will demonstrate the necessary safety and effectiveness of our drug
product candidates, or that we will succeed in obtaining regulatory
approval for any treatment we develop even if such safety and
effectiveness are demonstrated.
Any
delays or difficulties we encounter in our clinical trials may
delay or preclude regulatory approval from the FDA or from
international regulatory organizations. Any delay or preclusion of
regulatory approval would be expected to delay or preclude the
commercialization of our products. Examples of delays or
difficulties that we may encounter in our clinical trials include
without limitation the following:
●
Clinical
trials may not yield sufficiently conclusive results for regulatory
agencies to approve the use of our products.
●
Our
products may fail to be more effective than current therapies, or
to be effective at all.
●
We
may discover that our products have adverse side effects, which
could cause our products to be delayed or precluded from receiving
regulatory approval or otherwise expose us to significant
commercial and legal risks.
●
It
may take longer than expected to determine whether or not a
treatment is effective.
●
Patients
involved in our clinical trials may suffer severe adverse side
effects even up to death, whether as a result of treatment with our
products, the withholding of such treatment, or other reasons
(whether within or outside of our control).
●
We
may fail to enroll a sufficient number of patients in our clinical
trials.
●
Patients
enrolled in our clinical trials may not have the characteristics
necessary to obtain regulatory approval for a particular
indication.
●
We
may be unable to produce sufficient quantities of product to
complete the clinical trials.
●
Even
if we are successful in our clinical trials, any required
governmental approvals may still not be obtained or, if obtained,
may not be maintained.
●
If
approval for commercialization is granted, it is possible the
authorized use will be more limited than is necessary for
commercial success, or that approval may be conditioned on
completion of further clinical trials or other activities, which
will cause a substantial increase in costs and which we might not
succeed in performing or completing.
●
If
granted, approval may be withdrawn or limited if problems with our
products emerge or are suggested by the data arising from their use
or if there is a change in law or regulation.
Any
success we may achieve at a given stage of our clinical trials does
not guarantee that we will achieve success at any subsequent stage,
including without limitation final FDA approval.
We
may encounter delays or rejections in the regulatory approval
process because of additional government regulation resulting from
future legislation or administrative action, or from changes in the
policies of the FDA or other regulatory bodies during the period of
product development, clinical trials, or regulatory review. Failure
to comply with applicable regulatory requirements may result in
criminal prosecution, civil penalties, recall or seizure of
products, total or partial suspension of production, or an
injunction preventing certain activity, as well as other regulatory
action against our product candidates or us. As a company, we have
no experience in successfully obtaining regulatory approval for a
drug and thus may be poorly equipped to gauge, and may prove unable
to manage risks relating to obtaining such approval.
Outside
the U.S., our ability to market a product is contingent upon
receiving clearances from appropriate non-U.S. regulatory
authorities. Non-U.S. regulatory approval typically includes all of
the risks associated with FDA clearance discussed above as well as
the additional uncertainties and potential prejudices faced by U.S.
companies conducting business abroad. In certain cases, pricing
restrictions and practices can make achieving even limited
profitability very difficult.
If we or our licensees, development collaborators, or suppliers are
unable to manufacture our products in sufficient quantities or at
defined quality specifications, or are unable to obtain regulatory
approvals for the manufacturing facility, we may be unable to
develop and/or meet demand for our products and lose time to market
and potential revenues.
Completion
of our clinical trials and commercialization of our product
candidates require access to, or development of, facilities to
manufacture a sufficient supply of our product candidates. We
currently contract with outside sources to manufacture MNPR-101. In
order to be able to manufacture sufficient quantities of MNPR-101
to be able to proceed with human clinical trials, Cancer Research
UK developed a new cell line under our CTOA. We received
notification of termination of CRUK’s work on MNPR-101 under
the CTOA on March 21, 2018. There can be no assurance that this new
cell line will be successful or that sufficient quantities of
MNPR-101 will be able to be manufactured. Since Cancer Research UK
has decided to terminate its involvement with MNPR-101, we will
need to make other arrangements for the clinical testing,
development and manufacture of our drug product candidate. There
can be no assurance that such alternative arrangements can be made
or on terms favorable to us. We in the future may become unable,
for various reasons, to rely on our sources for the manufacture of
our product candidates, either for clinical trials or, at some
future date, for commercial distribution. We may not be successful
in identifying additional or replacement third-party manufacturers,
or in negotiating acceptable terms with any we do identify. We may
face competition for access to these manufacturers’
facilities and may be subject to manufacturing delays if the
manufacturers give other clients higher priority than they give to
us. Even if we are able to identify an additional or replacement
third-party manufacturer, the delays and costs associated with
establishing and maintaining a relationship with such manufacturer
may have a material adverse effect on us.
Before
we can begin to commercially manufacture Validive, MNPR-201,
MNPR-101, or any other product candidate, we must obtain regulatory
approval of the manufacturing facility and process. Manufacturing
of drugs for clinical and commercial purposes must comply with the
FDA's current Good Manufacturing Practices requirements, commonly
known as “cGMP”, and applicable non-U.S. regulatory
requirements. The cGMP requirements govern quality control and
documentation policies and procedures. Complying with cGMP and
non-U.S. regulatory requirements will require that we expend time,
money, and effort in production, recordkeeping, and quality control
to ensure that the product meets applicable specifications and
other requirements. We, or our contracted manufacturing facility,
must also pass a pre-approval inspection prior to FDA approval.
Failure to pass a pre-approval inspection may significantly delay
or prevent FDA approval of our products. If we fail to comply with
these requirements, we would be subject to possible regulatory
action and may be limited in the jurisdictions in which we are
permitted to sell our products and will lose time to market and
potential revenues.
It is uncertain whether insurance will be adequate to address
product liability claims, or that insurance against such claims
will be affordable or available on acceptable terms in the
future.
Clinical
research involves the testing of new drugs on human volunteers
pursuant to a clinical trial protocol. Such testing involves a risk
of liability for personal injury to or death of patients due to,
among other causes, adverse side effects, improper administration
of the new drug, or improper volunteer behavior. Claims may arise
from patients, clinical trial volunteers, consumers, physicians,
hospitals, companies, institutions, researchers, or others using,
selling, or buying our products, as well as from governmental
bodies. In addition, product liability and related risks are likely
to increase over time, in particular upon the commercialization or
marketing of any products by us or parties with which we enter into
development, marketing, or distribution collaborations. Although we
are contracting for general liability insurance in connection with
our ongoing business, there can be no assurance that the amount and
scope of such insurance coverage will be appropriate and sufficient
in the event any claims arise, that we will be able to secure
additional coverage should we attempt to do so, or that our
insurers would not contest or refuse any attempt by us to collect
on such insurance policies. Furthermore, there can be no assurance
that suitable insurance will continue to be available on terms
acceptable to us or at all, or that, if obtained, the insurance
coverage will be appropriate and sufficient to cover any potential
claims or liabilities.
Risks Related to Our Reliance on Third Parties
Corporate, non-profit, and academic collaborators may take actions
(including lack of effective actions) to delay, prevent, or
undermine the success of our products.
Our
operating and financial strategy for the development, clinical
testing, manufacture, and commercialization of drug product
candidates is heavily dependent on us entering into collaborations
with corporations, non-profit organizations, academic institutions,
licensors, licensees, and other parties. There can be no assurance
that we will be successful in establishing such collaborations.
Some of our existing collaborations are, and future collaborations
may be terminable at the sole discretion of the collaborator. For
example, our collaboration with Cancer Research UK on MNPR-101, we
recently received notification of termination by CRUK of its
involvement with MNPR-101 and we will need to seek alternate
arrangements. Replacement collaborations might not be available on
attractive terms, or at all. The activities of any collaborator
will not be within our control and may not be in our power to
influence. There can be no assurance that any collaborator will
perform its obligations to our satisfaction or at all; that we will
derive any revenue, profits, or benefit from such collaborations;
or that any collaborator will not compete with us. If any
collaboration is not pursued, we may require substantially greater
capital to undertake development and commercialization of our
proposed products, and may not be able to develop and commercialize
such products effectively, if at all. In addition, a lack of
development and commercialization collaborations may lead to
significant delays in introducing proposed products into certain
markets and/or reduced sales of proposed products in such markets.
Furthermore, current or future collaborators may act deliberately
or inadvertently in ways detrimental to our interests.
The termination of third-party licenses could adversely affect our
rights to important compounds.
We
rely on certain rights to MNPR-101 that we have secured through a
non-exclusive license agreement with XOMA. XOMA, as licensor, has
the ability to terminate the license if we breach our obligations
under the license agreement and do not remedy any such breach in
time after receiving written notice of such breach from XOMA. A
termination of the license agreement might force us to cease
developing and/or selling MNPR-101, if it gets to market. We have
exercised our option to license Validive; as such, Onxeo has the
ability to terminate the license if we breach our obligations under
the option and license agreement. A termination of the option and
license agreement might force us to cease developing and/or selling
Validive.
Data provided by collaborators and other parties upon which we rely
have not been independently verified and could turn out to be
false, misleading, or incomplete.
We
rely on third-party vendors, scientists, and collaborators to
provide us with significant data and other information related to
our projects, clinical trials, and business. We do not
independently verify or audit all of such data (including possibly
material portions thereof). As a result, such data may be
inaccurate, misleading, or incomplete.
In certain cases, we rely on a single supplier for a particular
manufacturing material, and any interruption in or termination of
service by such supplier could delay or disrupt the
commercialization of our products.
We
rely on third-party suppliers for the materials used to manufacture
our compounds. Some of these materials may only be available from
one supplier. Any interruption in or termination of service by such
single source suppliers could result in a delay or disruption in
manufacturing until we locate an alternative source of supply.
There can be no assurance that we would be successful in locating
such alternative source of supply or in negotiating acceptable
terms with such prospective supplier.
Risks Related to Commercialization of Our Product
Candidates
Our product development efforts are at an early stage. We have not
yet undertaken any marketing efforts, and there can be no
assurances that future anticipated market testing and analyses will
validate our marketing strategy and therefore we may need to modify
the products, or will not be successful in either developing or
marketing those products.
We
have not completed the development or clinical trials of any
product candidates and, accordingly, have not yet begun to market
or generate revenue from the commercialization of any products.
Commercializing these product candidates will require substantial
additional research and development as well as costly clinical
trials. There can be no assurance that we will successfully
complete development of our product candidates or successfully
market them. We may encounter problems and delays relating to
research and development, regulatory approval, intellectual
property rights of product candidates, or other factors. There can
be no assurance that our development programs will be successful,
that our products, if successfully developed, will prove to be safe
and effective in or after clinical trials, that the necessary
regulatory approvals for any product candidates will be obtained,
or, even if obtained, will be as broad as sought or will be
maintained for any period thereafter, that patents will issue on
our patent applications, that any intellectual property protections
we secure will be adequate, or that our collaboration arrangements
will not diminish the value of our intellectual property through
licensing or other arrangements. Furthermore, there can be no
assurance that any product we might market will be received
favorably by customers (whether physicians, patients, or both),
adequately reimbursed by third party payers, or that competitive
products will not perform better and/or be marketed more
successfully. Additionally, there can be no assurances that any
future market testing and analyses will validate our marketing
strategies. We may need to seek to modify the product labels
through additional studies in order to be able to market them
successfully.
If we are unable to establish relationships with licensees or
collaborators to carry out sales, marketing, and distribution
functions or to create effective marketing, sales, and distribution
capabilities, we will be unable to market our products
successfully.
Our
business strategy may include out-licensing product candidates to
or collaborating with larger firms with experience in marketing and
selling pharmaceutical products. There can be no assurance that we
will successfully be able to establish marketing, sales, or
distribution relationships with any third party, that such
relationships, if established, will be successful, or that we will
be successful in gaining market acceptance for any products we
might develop. To the extent that we enter into any marketing,
sales, or distribution arrangements with third parties, our product
revenues per unit sold are expected to be lower than if we
marketed, sold, and distributed our products directly, and any
revenues we receive will depend upon the efforts of such third
parties.
If
we are unable to establish such third-party marketing and sales
relationships, or choose not to do so, we would have to establish
in-house marketing and sales capabilities. We have no experience in
marketing or selling oncology pharmaceutical products, and
currently have no marketing, sales, or distribution infrastructure
and no experience developing or managing such infrastructure for an
oncology product. To market any products directly, we would have to
establish a marketing, sales, and distribution force that had
technical expertise and could support a distribution capability.
Competition in the biopharmaceutical industry for technically
proficient marketing, sales, and distribution personnel is intense
and attracting and retaining such personnel may significantly
increase our costs. There can be no assurance that we will be able
to establish internal marketing, sales, or distribution
capabilities or that these capabilities will be sufficient to meet
our needs.
Commercial success of our product candidates will depend on the
acceptance of these products by physicians and
patients.
Any
product candidate that we may develop may not gain market
acceptance among physicians and patients. Market acceptance of and
demand for any product that we may develop will depend on many
factors, including without limitation:
●
prevalence
and severity of adverse side effects;
●
potential
advantages over alternative treatments;
●
convenience
and ease of administration;
●
sufficient
third-party coverage or reimbursement;
●
strength
of marketing and distribution support; and
●
our
ability to provide acceptable evidence of safety and
efficacy.
If
any product candidate developed by us receives regulatory approval
but does not achieve an adequate level of market acceptance by
physicians and patients, we may generate little or no product
revenue and may not become profitable.
Our products may not be accepted for reimbursement or properly
reimbursed by third-party payers.
The
successful commercialization of any products we might develop will
depend substantially on whether the costs of our products and
related treatments are reimbursed at acceptable levels by
government authorities, private healthcare insurers, and other
third-party payers, such as health maintenance organizations.
Reimbursement rates may vary, depending upon the third-party payer,
the type of insurance plan, and other similar or dissimilar
factors. If our products are not subject to adequate reimbursement,
physicians may not prescribe for our products in sufficient amounts
to make our products profitable.
Comparative
effectiveness research demonstrating benefits in a
competitor’s product could adversely affect the sales of our
drug product candidates. If third-party payers do not consider our
products to be cost-effective compared to other available
therapies, they may not cover our products as a benefit under their
plans or, if they do, the level of payment may not be sufficient to
allow us to sell our products on a profitable basis.
Adequate
third-party reimbursement may not be available to enable us to
maintain price levels sufficient to realize an appropriate return
on our investment in product development. In addition, in the U.S.
there is a growing emphasis on comparative effectiveness research,
both by private payers and by government agencies. To the extent
other drugs or therapies are found to be more effective than our
products, payers may elect to cover such therapies in lieu of our
products and/or reimburse our products at a lower
rate.
In
addition, emphasis on managed care in the U.S. has increased and we
expect this will continue to increase the pressure on
pharmaceutical pricing. Coverage policies and third-party
reimbursement rates may change at any time. Even if favorable
coverage and reimbursement status is attained for one or more
products for which we receive regulatory approval, less favorable
coverage policies and reimbursement rates may be implemented in the
future.
Any
development along these lines could materially and adversely affect
our prospects. We are unable to predict what legislative or
regulatory changes relating to the healthcare industry, including
without limitation any changes affecting governmental and/or
private or third party coverage and reimbursement, may be enacted
in the future, or what effect such legislative or regulatory
changes would have on our business.
If we obtain FDA approval for any of our product candidates, we
will be subject to various federal and state fraud and abuse laws;
these laws may impact, among other things, our proposed sales,
marketing and education programs. Fraud and abuse laws are expected
to increase in breadth and in detail, which will likely increase
our operating costs and the complexity of our programs to insure
compliance with such enhanced laws.
If
we obtain FDA approval for any of our product candidates and begin
commercializing those products in the U.S., our operations may be
directly, or indirectly through our customers, distributors, or
other business partners, subject to various federal and state fraud
and abuse laws, including, without limitation, anti-kickback
statutes and false claims statutes which may increase our operating
costs. These laws may impact, among other things, our proposed
sales, marketing and education programs. In addition, we may be
subject to data privacy and security regulation by both the federal
government and the states in which we conduct
business.
If our operations are found to be in violation of any of the
federal and state laws or any other governmental regulations that
apply to us, we may be subject to criminal actions and significant
civil monetary penalties, which would adversely affect our ability
to operate our business and our results of operations.
If
our operations are found to be in violation of any of the federal
and state laws described above or any other governmental
regulations that apply to us, we may be subject to penalties,
including criminal and significant civil monetary penalties,
damages, fines, imprisonment, exclusion from participation in
government healthcare programs, and the curtailment or
restructuring of our operations, any of which could adversely
affect our ability to operate our business and our results of
operations. To the extent that any of our product candidates are
ultimately sold in a foreign country, we may be subject to similar
foreign laws and regulations, which may include, for instance,
applicable post-marketing requirements, including safety
surveillance, anti-fraud and abuse laws, and implementation of
corporate compliance programs and reporting of payments or
transfers of value to healthcare professionals.
Negotiated prices for our products covered by a Part D prescription
drug plan will likely be lower than the prices we might otherwise
obtain.
Government
payment for some of the costs of prescription drugs may increase
demand for our products for which we receive marketing approval,
however, any negotiated prices for our products covered by a Part D
prescription drug plan will likely be lower than the prices we
might otherwise obtain.
Risks Related to Our Intellectual Property
If we and our third-party licensors do not obtain and preserve
protection for our respective intellectual property rights, our
competitors may be able to take advantage of our (and our
licensors’) development efforts to develop competing
drugs.
Our
commercial success will depend in part on obtaining patent
protection for any products and other technologies we might
develop, and successfully defending any patents we obtain against
third-party challenges. We license all intellectual property
related to Validive from Onxeo S.A., a French public company. See
“Material Agreements”. The assignment and transfer of
the MNPR-201 (GPX-150) patent portfolio from TacticGem, LLC to us
has been completed. We filed and have been granted in the U.S. and
various countries around the world patents for antibodies that
target uPAR. We have also been granted in the U.S. and various
countries around the world patents to a specific sequence of amino
acids on uPAR, to which our MNPR-101 antibody binds. We are
currently prosecuting this patent in other countries around the
world to further protect MNPR-101. The patent process is subject to
numerous risks and uncertainties, and there can be no assurance
that we will be successful in obtaining and defending patents. See
“Intellectual Property Portfolio”. These risks and
uncertainties include without limitation the
following:
●
Patents that may be issued or licensed may be challenged,
invalidated, or circumvented; or may not provide any competitive
advantage for other reasons.
●
Our competitors, many of which have substantially greater
resources than us and have made significant investments in
competing technologies, may seek, or may already have obtained,
patents that will limit, interfere with, or eliminate our ability
to make, use, and sell our potential products either in the U.S. or
in international markets.
●
As a matter of public policy regarding worldwide health
concerns, there may be significant pressure on the U.S. government
and other international governmental bodies to limit the scope of
domestic and international patent protection for cancer treatments
that prove successful.
●
Countries other than the U.S. may have less restrictive
patent laws than those upheld by the U.S. courts; therefore,
non-U.S. competitors could exploit these laws to create, develop,
and market competing products.
In
addition, the USPTO and patent offices in other jurisdictions have
often required that patent applications concerning pharmaceutical
and/or biotechnology-related inventions be limited or narrowed
substantially to cover only the specific innovations exemplified in
the patent application, thereby limiting their scope of protection
against competitive challenges. Thus, even if we or our licensors
are able to obtain patents, the patents may be substantially
narrower than anticipated.
If
we permit our patents to lapse or expire, we will not be protected
and will have less of a competitive advantage. The value of our
products may be greatly reduced if this occurs. Our patents expire
at different times and are subject to the laws of multiple
countries. Some of our patents are currently near expiration and we
may pursue patent term extensions for these where appropriate. See
“Intellectual Property Portfolio”.
In
addition to patents, we also rely on trade secrets and proprietary
know-how. While we take measures to protect this information by
entering into confidentiality and invention agreements with our
consultants and collaborators, we cannot provide any assurances
that these agreements will be fully enforceable and will not be
breached, that we will be able to protect ourselves from the
harmful effects of disclosure if they are not fully enforceable or
are breached, that any remedy for a breach will adequately
compensate us, that these agreements will achieve their intended
aims, or that our trade secrets will not otherwise become known or
be independently discovered by competitors. If any of these events
for which we cannot provide assurances occurs, or we otherwise lose
protection for our trade secrets or proprietary know-how, the value
of this information may be greatly reduced.
Intellectual property disputes could require us to spend time and
money to address such disputes and could limit our intellectual
property rights.
The
biopharmaceutical industry has been characterized by extensive
litigation regarding patents and other intellectual property
rights, and companies have employed intellectual property
litigation to gain a competitive advantage. We may become subject
to infringement claims or litigation arising out of patents and
pending applications of our competitors, or additional interference
proceedings declared by the USPTO to determine the priority of
inventions. The defense and prosecution of intellectual property
suits, USPTO proceedings, and related legal and administrative
proceedings are costly and time-consuming to pursue, and their
outcome is uncertain. Litigation may be necessary to enforce our
issued patents, to protect our trade secrets and know-how, or to
determine the enforceability, scope, and validity of the
proprietary rights of others. An adverse determination in
litigation or interference proceedings to which we may become a
party could subject us to significant liabilities, require us to
obtain licenses from third parties, or restrict or prevent us from
selling our products in certain markets. Even if a given patent or
intellectual property dispute were settled through licensing or
similar arrangements, our costs associated with such arrangements
may be substantial and could include the payment by us of large
fixed payments and ongoing royalties. Furthermore, the necessary
licenses may not be available on satisfactory terms or at all. In
addition, even where we have meritorious claims or defenses, the
costs of litigation may prevent us from pursuing these claims or
defenses and/or may require extensive financial and personnel
resources to pursue these claims or defenses.
Risks Related to Our Business Operations and Industry
We have a limited operating history as we are a new
entity.
As
of March 1, 2018, we have engaged exclusively in acquiring
pharmaceutical drug product candidates, licensing rights to drug
product candidates and entering into collaboration agreements, and
have not completed any clinical trials, received any governmental
approvals, brought any product to market, manufactured or produced
products in commercial quantities or sold any pharmaceutical
products. We have limited experience in negotiating, establishing,
and maintaining strategic relationships, conducting clinical
trials, and managing the regulatory approval process, all of which
will be necessary if we are to be successful. Our lack of
experience in these critical areas makes it difficult for a
prospective investor to evaluate our abilities, and increases the
risk that we will fail to successfully execute our
strategies.
Furthermore,
if our business grows rapidly, our operational, managerial, legal,
and financial resources will be strained. Our development will
require continued improvement and expansion of our management team
and our operational, managerial, legal, and financial systems and
controls.
In
the normal course of business, we have evaluated and expect to
evaluate potential acquisitions and/or licenses of patents,
compounds, and technologies that our management believes could
complement or expand our business. We have limited history of
conducting acquisitions, and negotiating and acquiring licenses. In
the event that we identify an acquisition or license candidate we
find attractive, there is no assurance that we will be successful
in negotiating an agreement to acquire or license, or in financing
or profitably exploiting, such patents, compounds, or technologies.
Furthermore, such an acquisition or license could divert management
time and resources away from other activities that would further
our business development.
If we lose key management leadership, and/or scientific personnel,
and if we cannot recruit qualified employees, managers, directors,
officers, or other significant personnel, we may experience delays
and increases in compensation costs, and our business materially
disrupted.
Our
future success is highly dependent on the continued service of
principal members of our management, leadership, and scientific
personnel, who are able to terminate their employment with us at
any time, and may be able to compete with us. The loss of any of
our key management, leadership, or scientific personnel including
in particular, Chandler D. Robinson, our President and CEO, and
Andrew P. Mazar, our Executive Vice President of Research and
Development, and Chief Scientific Officer, could materially disrupt
our business and materially delay or prevent the successful
commercialization of our product candidates. We have employment
agreements with Dr. Robinson and Dr. Mazar which have no term but
are for at-will employment, meaning the executives have the ability
to terminate their employment at any time.
Our
future success will also depend on our continuing ability to
identify, hire, and retain highly skilled personnel for all areas
of the organization. Competition in the biopharmaceutical industry
for scientifically and technically qualified personnel is intense,
and we may be unsuccessful in identifying, hiring, and retaining
qualified personnel. Our continued ability to identify, hire, and
retain highly skilled personnel may cause our compensation costs to
increase materially.
We are an emerging growth company and we cannot be certain if the
reduced disclosure requirements applicable to emerging growth
companies will make our common stock less attractive to
investors.
We
are an emerging growth company. Under the Jumpstart Our Business
Startups Act of 2012 (the “JOBS Act”), emerging growth
companies can delay adopting new or revised accounting standards
until such time as those standards apply to private companies.
Therefore, we may not be subject to the same new or revised
accounting standards as other public companies that are not
“emerging growth companies.”
For
as long as we continue to be an emerging growth company, we also
intend to take advantage of certain other exemptions from various
reporting requirements that are applicable to other public
companies including, but not limited to, reduced disclosure
obligations regarding executive compensation in our periodic
reports and proxy statements, exemptions from the requirements of
holding a nonbinding advisory stockholder vote on executive
compensation and any golden parachute payments not previously
approved, exemption from the requirement of auditor attestation in
the assessment of our internal control over financial reporting and
exemption from any requirement that may be adopted by the Public
Company Accounting Oversight Board regarding mandatory audit firm
rotation or a supplement to the auditor’s report providing
additional information about the audit and the financial statements
(auditor discussion and analysis). If we do take advantage of these
exemptions, the information that we provide stockholders will be
different than what is available with respect to other public
companies. We cannot predict if investors will find our Common
Stock less attractive because we will rely on these exemptions. If
investors find our Common Stock less attractive as a result of our
status as an emerging growth company, there may be less liquidity
for our Common Stock and our stock price may be more
volatile.
We
will remain an emerging growth company until the earliest of (i)
the end of the fiscal year in which the market value of our common
stock that is held by non-affiliates exceeds $700 million as of the
end of the second fiscal quarter, (ii) the end of the fiscal year
in which we have total annual gross revenues of $1 billion or more
during such fiscal year, (iii) the date on which we issue more than
$1 billion in non-convertible debt in a three-year period or (iv)
the end of the fiscal year following the fifth anniversary of the
date of the first sale of our Common Stock pursuant to an effective
registration statement filed under the Act.
Competition and technological change may make our product
candidates obsolete or non-competitive.
The
biopharmaceutical industry is subject to rapid technological
change. We have many potential competitors, including major drug
and chemical companies, specialized biopharmaceutical firms, and
universities and other research institutions. These companies,
firms, and other institutions may develop products that are more
effective than our product candidates or that would make our
product candidates obsolete or non-competitive. Many of these
companies, firms, and other institutions have greater financial
resources than us and may be better able to withstand and respond
to adverse market conditions within the biopharmaceutical industry,
including without limitation the lengthy regulatory approval
process for product candidates.
If product liability lawsuits are brought against us, we may incur
substantial costs to defend them and address any damages awarded,
and demand for our products could be reduced as a result of such
lawsuits.
The
testing and marketing of medical products is subject to an inherent
risk of product liability claims. Since we currently are not
sponsoring a clinical trial, we do not have product liability
insurance coverage, but plan to obtain appropriate coverage when we
enroll patients in a Validive or other clinical trial. Regardless
of their merit or eventual outcome, product liability claims may
result in:
●
decreased
demand for our products;
●
injury
to our reputation and significant, adverse media
attention;
●
withdrawal
of clinical trial volunteers; and
●
potentially
significant litigation costs, including without limitation any
damages awarded to the plaintiffs if we lose or settle
claims.
We use hazardous materials, including radioactive materials, in our
business, and any claims relating to improper handling, storage, or
disposal of these materials could materially harm our
business.
Our
business involves the use of a broad range of hazardous chemicals
and materials, including radioactive materials. Environmental laws
impose stringent civil and criminal penalties for improper
handling, disposal, and storage of these materials. In addition, in
the event of an improper or unauthorized release of, or exposure of
individuals to, hazardous materials, we could be subject to civil
damages due to personal injury or property damage caused by the
release or exposure. A failure to comply with environmental laws
could result in fines and the revocation of environmental permits,
which could prevent us from conducting our business.
We have limited the liability of and indemnified our directors and
officers.
Although
our directors and officers are accountable to us and must exercise
good faith, good business judgement, and integrity in handling our
affairs, our Second Amended and Restated Certificate of
Incorporation (the “Certificate of Incorporation”),
provides that our directors will be indemnified to the fullest
extent permitted under Delaware law. As a result, our stockholders
may have fewer rights against our directors than they would have
absent such provisions in our Certificate of Incorporation, and a
stockholder’s ability to seek and recover damages for a
breach of fiduciary duties may be reduced or restricted. Delaware
law allows indemnification if our Board Member (a) has acted in
good faith, in a manner the Board Member reasonably believes to be
in or not opposed to our best interests, and (b) with respect to
any criminal action or proceeding, if the Board Member had no
reasonable cause to believe the conduct was unlawful.
Pursuant
to the Certificate of Incorporation, each director and (to the
extent approved by our Board) each of our officers who is made a
party to a legal proceeding because he or she is or was a Board
Member or officer, is indemnified by us from and against any and
all liability, except that we may not indemnify a Board Member or
officer: (a) for any liability incurred in a proceeding in which
such person is adjudged liable to Monopar or is subjected to
injunctive relief in favor of Monopar; (b) for acts or omissions
that involve intentional misconduct or a knowing violation of law,
fraud or gross negligence; (c) for unlawful distributions; (d) for
any transaction for which such Board Member or officer received a
personal benefit or as otherwise prohibited by or as may be
disallowed under Delaware law; or (e) with respect to any dispute
or proceeding between us and such Board Member or officer unless
such indemnification has been approved by a disinterested majority
of Board Members or by a majority in interest of disinterested
stockholders. We are required to pay or reimburse attorney’s
fees and expenses of a Board Member seeking indemnification as they
are incurred, provided the director executes an agreement to repay
the amount to be paid or reimbursed if there is a final
determination by a court of competent jurisdiction that such person
is not entitled to indemnification.
Future legislation or executive or private sector actions may
increase the difficulty and cost for us to commercialize our
products and affect the prices obtained for such
products.
There
have been several attempts made to repeal the Patient Protection
and Affordable Care Act (the “PPACA”), and modification
and partial or complete repeal of the Affordable Care Act in the
future is possible. On December 22, 2017, the Tax Cuts and Jobs Act
became law – one of its provisions repealed what is known as
the individual mandate under PPACA which could have the effect of
negating such law. Healthcare reform measures that may be adopted
in the future may result in more rigorous coverage criteria and
lower reimbursement, and in additional downward pressure on the
price that may be charged for any of our product candidates, if
approved.
The
increasing cost of healthcare as a percentage of GDP and the
increasing deferred liabilities behind most governmental health
care programs (such as Medicare and Medicaid) continue to be an
economic challenge which affects the overall economic health of the
U.S. High cost products and therapies that are early in their life
cycle, are attractive targets for parties that believe that the
cost of healthcare must be better controlled and reduced.
Pharmaceutical prices and healthcare reform has been debated and
acted upon by legislators for many years. Future legislation or
executive or private sector actions related to healthcare reform
could materially and adversely affect our business by reducing our
ability to generate revenue at prices sufficient to reward for the
risks and costs of development, to raise capital, and to market our
products.
Additionally, Executive Orders and policy
statements issued by President Trump have increased the uncertainty
regarding the timing for the FDA’s interpretation and
implementation of requirements under the Federal Food, Drug and
Cosmetic Act (“FDCA”). Some of these executive actions
may also negatively affect the FDA’s exercise of regulatory
oversight and ability to timely review industry submissions and
applications in connection with the drug development and approval
process. Notably, on April 12, 2017, the Director for the Office of
Management and Budget (“OMB”) implemented a long-term
plan to reduce the size of the federal workforce. Although the FDA
is funded in the near-term, in the future, an under-staffed FDA
could result in increasing delays in the FDA’s responsiveness
or in its ability to review applications, issue regulations or
guidance, or implement or enforce regulatory requirements in a
timely fashion or at all. A January 30, 2017 Executive Order also
included a budget neutrality provision that requires the total
incremental cost of all new regulations in the 2017 fiscal year,
including repealed regulations, to be no greater than zero, except
in limited circumstances. It is difficult to predict how these
requirements will be interpreted and implemented, and the extent to
which they will impact the FDA’s ability to continue engaging
in its regulatory authorities under the FDCA. If executive or
legislative actions impose restrictions on the FDA’s ability
to engage in oversight and implementation activities in the normal
course, our business may be negatively impacted. On August 18,
2017, the FDA Reauthorization Act of 2017 was signed which, among
other things, established user fees for human drug applications
which are to be directed toward expediting the drug development
process. On December 12, 2017, an amendment to the FDCA was passed
to authorize additional emergency uses for medical products during
a military emergency.
Both of
these actions restore increased funding for the FDA. The user fees
for human drug applications can result in funding which is variable
depending on the work load created by applications that is
supported by the user fees.
There is no assurance that
federal or state health care reform will not adversely affect our
future business and financial results, and we cannot predict how
future federal or state legislative, judicial or administrative
changes relating to healthcare reform and third party payers will
affect the pharmaceutical industry in general and our business in
particular.
Future tax reform measures may negatively impact our financial
position.
Our
business may be negatively impacted by tax reform measures. If tax
reform measures are passed, there can be no assurance that we will
continue to receive favorable tax treatment related to our patents.
For example, on December 22, 2017, the Tax Cuts and Jobs Act of
2017 was signed into law that significantly revises the Internal
Revenue Code of 1986, as amended. The newly enacted federal income
tax law, among other things, contains significant changes to
corporate taxation, including reduction of the corporate tax rate
from a top marginal rate of 35% to a flat rate of 21%, limitation
of the tax deduction for interest expense to 30% of adjusted
earnings (except for certain small businesses), limitation of the
deduction for net operating losses to 80% of current year taxable
income and elimination of net operating loss carrybacks, treatment
of proceeds from the sale of “self-created” patents as
ordinary income, and modifying or repealing many business
deductions and credits (including reducing the business tax credit
for certain clinical testing expenses incurred in the testing of
orphan drugs from 50% to 25%). Notwithstanding the reduction in the
corporate income tax rate, the overall impact of the new federal
tax law is uncertain and our business and financial condition could
be adversely affected. In addition, it is uncertain if and to what
extent various states will conform to the newly enacted federal tax
law. The impact of this tax reform on holders of our common stock
is also uncertain. We urge our stockholders to consult with their
legal and tax advisors with respect to this legislation and the
potential tax consequences of investing in or holding our common
stock. It is difficult to predict what future tax reform measures,
if any, could be implemented and the extent to which they will
impact our accounting practices and our business.
Our anticipated operating expenses over the next year are based
upon our management’s estimates of possible future events.
Actual amounts could differ materially from those estimated by our
management.
Development
of pharmaceuticals and cancer drugs is extremely risky and
unpredictable. We have estimated operating expenses and capital
expenditures over the next year based on certain assumptions. Any
change in the assumptions could and will cause the actual results
to vary substantially from the anticipated expenditures, and could
result in material differences in actual versus forecasted expenses
or expenditures. Furthermore, all of the factors are subject to the
effect of unforeseeable future events. The estimates of capital
expenditures and operating expenses represent forward-looking
statements within the meaning of the federal securities laws.
Prospective investors are cautioned that any such forward-looking
statements are not guarantees of future performance and involve
risks and uncertainties. Actual events or results may differ
materially from those discussed in the forward-looking statements
as a result of various factors, including the risk factors set
forth under "Risk Factors" in this Form 10-K. In view of the
foregoing, investors should not rely on these estimates in making a
decision to invest in us.
Risks Associated with Our Capital Stock
We may never provide liquidity to our investors.
No
public market exists with respect to any of our securities. There
is no assurance that any public offering, merger, combination,
sale, or other liquidity event relating to us will ever take place,
or that any public offering, merger, combination, sale, or other
event that might take place would provide liquidity for our
investors or that we will be able to provide liquidity to our
investors in any fashion. In the event that we are unable to affect
a public offering, merger, combination, sale, or other liquidity
event, our investors would likely be unable to sell their interests
in us.
Existing and new investors will experience dilution as a result of
future sales or issuances of our common stock and future option
exercises under our stock option plan.
Our
Board Members, employees, and certain of our consultants have been
and will be issued equity and/or granted options that vest with the
passage of time. Up to a total of 1,600,000 shares of our Common
Stock may be issued as stock options or restricted stock under the
Amended and Restated Monopar Therapeutics Inc. 2016 Stock Incentive
Plan, and stock options for the purchase of up to 690,596 shares of
our common stock have already been granted. See Item 11 -
“Stock Option Plan.” The issuance of such equity and/or
the exercise of such options will dilute both our existing and our
new investors. As of March 1, 2018, no stock options have been
exercised.
Our
existing and our new investors will likely also experience
substantial dilution resulting from the issuance by us of equity
securities in connection with certain transactions, including
without limitation, future offering of shares, intellectual
property licensing, acquisition, or commercialization
arrangements.
Holders of the shares of our Common Stock will have no control of
our operations or of decisions on major transactions.
Our
business and affairs are managed by or under the direction of our
Board. Our Stockholders are entitled to vote only on actions that
require a Stockholder vote under federal or state law. Stockholder
approval requires the consent and approval of holders of a majority
or more of our outstanding stock. Shares of stock do not have
cumulative voting rights and therefore, holders of a majority of
the shares of our outstanding stock will be able to elect all Board
Members. TacticGem, LLC owns 7,166,667 shares of common stock
(77.1%). The limited liability company agreement of TacticGem, LLC
provides that the manager will vote its shares of Monopar to elect
to the Board of Directors those persons nominated by TacticPharma
LLC plus one person nominated by Gem Pharmaceuticals, LLC.
Additionally, other than in the elections of directors the limited
liability company agreement requires TacticGem to pass through
votes to its members in proportion to their membership percentages
in TacticGem. As a result, Tactic Pharma, our initial investor,
holds an approximately 46% beneficial interest in us and together
with Gem’s beneficial ownership of approximately 33%, the two
entities control a majority of our stock and will be able to elect
all Board Members and control our affairs. Some of our Board
Members and executive officers own and control Tactic Pharma.
Although no single person has a controlling interest in Tactic
Pharma, acting together, they are able to control Tactic Pharma and
a large voting block of Monopar and elect over a majority of our
Board of Directors. See Item 12 - “Security Ownership of
Certain Beneficial Owners and Management.”
Our ability to list on Nasdaq in the future will require raising
significant additional capital and likely require a public stock
transaction; failure to qualify to trade on Nasdaq will make it
more difficult to raise capital.
We
will need to raise significant funds in the next 24 months to
execute our clinical development plans and we believe that if our
stock is trading on Nasdaq’s Capital Market it will enable
better access to capital. Nasdaq has listing requirements for
inclusion of securities for trading on the Nasdaq Capital Market,
including stockholders equity of $4 million (market value standard)
or $5 million (equity standard), market value of publicly held
shares of $15 million, an operating history of 2 years under the
equity standard or a market value of listed securities of $50
million under the market value standard, 1 million publicly held
shares, 300 shareholders, three market makers and a $4 bid price or
a closing price of $3 (equity standard) or $2 (market value
standard). If we are unable to list on Nasdaq, it could make it
harder for us to raise capital in both the immediate time frame and
in the long-term. If we are unable to raise capital when needed in
the future, we may have to cease or reduce operations.
We
lease approximately 1,202 square feet of space in the Village of
Wilmette, Illinois for our corporate offices, under a lease which
runs through the end of 2019. We lease approximately 160 square
feet for our Seattle, Washington office. We believe that we will
require additional office space within the next 12 months as we
begin to hire additional personnel.
We are
not party to any material legal proceedings.
I
t
em 5. Market for
Registrant’s Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities
Market Information
There
is no established public trading market in our common stock. Our
securities are not listed for trading on any national securities
exchange nor are bid or asked quotations reported in any
over-the-counter quotation service.
Rule 144 Eligibility
As of
March 1, 2018, 1,335,079.3 shares of our common stock are eligible
for sale under Rule 144.
We
cannot estimate the number of shares of our common stock that our
existing stockholders will elect to sell under Rule
144.
Holders
As of
March 1, 2018, there were 9,291,420.614 shares of our common stock
outstanding held by 43 holders. In addition, there were nine
holders of stock options to purchase up to 690,596 shares of our
common stock.
Dividends
We have
never paid cash dividends on any of our capital stock and we
currently intend to retain our future earnings, if any, to fund the
development and growth of our business. We do not intend to pay
cash dividends to holders of our common stock in the foreseeable
future.
Securities Authorized for Issuance Under Equity Compensation
Plans
The
following table provides information as of December 31, 2017, with
respect to shares of our common stock that may be issued under
existing equity compensation plans. There are no equity
compensation plans that have not been approved by our security
holders.
|
Number of
Securities to be Issued Upon Exercise of Outstanding Options,
Warrants and Rights
|
Weighted
Average Exercise Price of Outstanding Options, Warrants and
Rights
|
Number of
Securities Remaining Available For Future Issuance under Equity
Compensation Plans
|
Equity compensation
plans approved by security holders (1)
|
658,592
|
$
0.94
|
941,408
|
(1) The
Monopar Therapeutics Inc. 2016 Stock Incentive Plan.
Registration Rights
We are
subject to an agreement with TacticGem (pursuant to the Gem
Transaction as discussed later in this document), which obligates
us to file Form S-3 or other appropriate form of registration
statement covering the resale of any of our Common Stock by
TacticGem, Gem, or Tactic, upon direction by TacticGem at any time
after we have been subject to the reporting requirements of the
1934 Act for at least twelve months (the “Initial Holding
Period’). We are required to use our best efforts to have
such registration statement declared effective as soon as practical
after it is filed. In the event that such registration statement
for resale is not approved by the SEC, and TacticGem submits a
written request, we are required to prepare and file a registration
statement on Form S-1 registering such Common Stock for resale and
to use our best efforts to have such registration statement
declared effective as soon as practical thereafter. After
registration, pursuant to these rights, these shares will become
freely tradable without restriction under the Securities Act other
than pursuant to restrictions on affiliates under Rule
144.
Recent Sales of Unregistered Securities.
Set
forth below is information regarding shares of common stock issued
and options granted by us in the year ended December 31, 2017, that
were not registered under the Securities Act. Also included is the
consideration, if any, received by us, for such shares and options
and information relating to the Securities Act, or rule of the SEC,
under which exemption from registration was claimed. No
underwriters were involved in the foregoing issuances of
securities. Below this description of recent sales of unregistered
securities is a description of the exemptions from registration
which were applicable to each sale or grant.
(a) On
February 20, 2017, we granted stock options for 1,200 shares of our
Common Stock to each of Dr. Christopher M. Starr, Dr. Chandler D.
Robinson, and Dr. Andrew P. Mazar in exchange for services.
Pursuant to the “Conversion” in March 2017, these stock
options were each adjusted to be for 84,000 shares. On the same
date, we granted a stock option for 336 shares of our Common Stock
to Kim R. Tsuchimoto in exchange for services, which was adjusted
to be for 23,520 shares pursuant to the Conversion. The exercise
price of each of these options was $0.001 per share and the options
expire on February 19, 2027.
(b)
During March 2017 through June 2017, 340,840.33 shares of Common
Stock were sold to accredited investors at a price of $6.00 per
share.
(c)
During August 2017 through September 2017, 448,834 shares of Common
Stock were sold to accredited investors at a price of $6.00 per
share.
(d) On
September 1, 2017, we granted options for 21,024 shares of Common
Stock to Arthur Klausner, and on September 18, 2017, we granted
options for 21,024 shares of Common Stock to each of Michael J.
Brown and Raymond W. Anderson, in exchange for services as
Directors. The exercise price of the options was $6.00 per share
and the options expire on August 31, 2027 and September 17, 2027,
respectively.
(e) On
August 25, 2017, 3,055,394.12 shares of our Common Stock were
issued to TacticGem in exchange for the Gem Contributed Assets
(including assets and $5 million in cash) as part of the Gem
Transaction.
(f) On
November 1, 2017, we granted options for 40,000 shares of Common
Stock to Kirsten Anderson in exchange for services. The exercise
price of the options was $6.00 per share and the options expire on
October 31, 2027.
(g) On January 1, 2018, we granted options for 32,004 shares of
Common Stock to Patrice Rioux in exchange for services. The
exercise price of the option was $6.00 per share and the options
expire on December 31, 2027.
The
offers, sales and issuances of the securities described in
paragraphs (a), (d), (f), and (g) were deemed to be exempt from
registration under the Securities Act in reliance on both Section
4(a)(2) of the Act and Rule 701 in that the transactions were under
compensatory benefit plans and contracts relating to compensation
as provided under Rule 701. The recipients of such securities
were our employees, officers, bona
fide consultants and advisors and received the securities under our
Plan. Appropriate legends were affixed to the securities issued in
these transactions. Each of the recipients of securities in these
transactions had adequate access, through employment, business or
other relationships, to information about us and had knowledge and
experience to make the decision to accept the stock
options.
The offers, sales and issuances of the securities
described in paragraph (b), (c), and (e) were deemed to be exempt
from registration under the Securities Act in reliance on Rule
506(b) of Regulation D in that the issuance of securities to the
accredited investors did not involve a public offering. The
recipients of securities in each of these transactions acquired the
securities for investment only and not with a view to or for sale
in connection with any distribution thereof. Each of the recipients
of securities in these transactions was an accredited investor
under Rule 501 of Regulation D.
Form D was filed related to
the offer described in paragraph (b) on March 28, 2017; and Form D
was filed related to the offer described in paragraph (c) on August
23, 2017.
I
tem 7.
Management's Discussion and
Analysis of Financial Condition and Results of
Operations.
You
should read the following discussion and analysis of our financial
condition and results of operations together with our financial
statements and related notes appearing at the end of this Annual
Report on Form 10-K. Some of the information contained in this
discussion and analysis or set forth elsewhere in this Annual
Report on Form 10-K, including information with respect to our
plans and strategy for our business and related financing, includes
forward-looking statements that involve risks and uncertainties.
You should read the "Risk Factors" section of this Annual Report on
Form 10-K, Item 1A, for a discussion of important factors that
could cause actual results to differ materially from the results
described in or implied by the forward-looking statements contained
in the following discussion and analysis.
Overview
Our
mission is to develop innovative drugs and drug combinations to
improve clinical outcomes for cancer patients. We are building a
drug development pipeline through the licensing or acquisition of
oncology therapeutics at the late preclinical through advanced
clinical development stage.
Validive
is being developed for the treatment of radiation-induced SOM. SOM
is a frequent major adverse side effect for patients with head and
neck cancer who are treated by radiation treatment. SOM causes
intense oral pain and limits a patient’s ability to eat and
drink, which causes additional treatment complications. Many
affected patients require hospitalization and the SOM symptoms can
force patients to stop cancer treatments early, which reduces the
success of treatments. Validive is designed to deliver the active
ingredient, clonidine, to the at-risk oropharyngeal mucosa.
Clonidine reduces the production of cytokines, the molecules that
cause ulcerations and pain in patients that develop SOM.
Preclinical studies and a Phase 2 clinical trial have demonstrated
that Validive has the potential for reducing the frequency of
developing SOM in addition to improving its symptoms, as compared
to a placebo. On September 8, 2017, we exercised our exclusive
option to license in order to advance the development of Validive
with the near-term goal of commencing a Phase 3 development
program. If successful, this Phase 3 program may allow us to apply
for marketing approval. See “Material Agreements” and
“Strategy.”
In August 2017, we acquired MNPR-201 (GPX-150;
5-imino-13-deoxydoxorubicin), a proprietary analog of doxorubicin
that is selective for
topoisomerase-II-alpha
from TacticGem. MNPR-201 has been
engineered specifically to retain the anticancer activity of
doxorubicin while minimizing toxic effects on the
heart.
MNPR-101 is a drug product candidate designed to
reduce tumor growth by targeting a specific receptor, uPAR, which
is present in a range of tumor types, including pancreatic and
ovarian tumors. uPAR is part of the normal cell repair process in
non-cancerous cells; however, in cancerous cells the tumor hijacks
uPAR to help the tumor grow and spread. Preclinical models have
shown that MNPR-101 is effective at reducing tumor growth, both
used alone and in combination with existing therapies.
In May
2015, we entered into a Clinical Trial and Option Agreement with
Cancer Research UK with respect to our drug product candidate
MNPR-101 (formerly huATN-658). Pursuant to this agreement Cancer
Research UK conducted preclinical work, improved the manufacturing,
and planned to conduct a Phase 1a/1b clinical trial in cancer
patients. As part of a portfolio reprioritization review,
on March 21, 2018 Cancer Research UK notified us it was
closing its project related to MNPR-101 and would work to make
arrangements to formally terminate the agreement. We are
currently reviewing potential alternative collaboration
opportunities for MNPR-101 and continue to maintain the
program’s intellectual property
portfolio.
Over
the next three years, we plan to execute a Phase 3 clinical trial
for Validive, continue clinical development of MNPR-201, pursue
collaboration opportunities for MNPR-101 for initial clinical
development, raise additional capital to fund our drug development
programs, acquire or in-license additional drug product candidates
and promote public and biotech investor awareness of
us.
Developing
a new drug and conducting clinical trials for one or more disease
indications involves substantial costs and resources. Our operating
and financial strategy for the development, clinical testing,
manufacture and commercialization of drug product candidates is
heavily dependent on our entering into collaborations with
corporations, non-profits, scientific institutions, licensors,
licensees and other parties, which enables us to utilize their
financial and other resources to assist in drug development.
Additionally, we will need to raise significant funds in the next
12–24 months to execute our clinical development of Validive
and potential approval and commercialization plans. We believe that
we will have better access to capital as a public reporting company
and if a trading market develops for our stock. This would increase
corporate visibility, provide increased liquidity for our
stockholders, and create a market value for our pipeline of
oncology drug product candidates. Therefore, we became a public
reporting company under the Securities Exchange Act of 1934 (the
“34 Act”) through the filing of a Form 10 registration
statement with the SEC. We are working with investment bankers and
market makers, with the intention of listing on Nasdaq as soon as
we are able to meet the shareholder number, capitalization and
other requirements for such a listing, which will likely require a
public offering of our stock or other public stock transaction. See
“Risk Factors – Our ability to list on Nasdaq in the
future will require raising significant additional capital and
likely require a public stock transaction; failure to qualify to
trade on Nasdaq will make it more difficult to raise
capital.” There can be no assurance that we will be
successful in including our stock for trading on Nasdaq or that a
market will develop for our stock. See Item 1A - “Risk
Factors – Risks Related to Our Financial Condition and
Capital Requirements”, and “Risks Related to Our
Business Operations and Industry.”
Revenues
We
are an emerging growth company, have no approved drugs and have not
generated any revenues.
Conversion of Preferred Stock to Common Stock
In
March 2017, holders of a majority in interest of our Series A
Preferred Stock and holders of a majority in interest of our Series
Z Preferred Stock voted to adopt the Second Amended and Restated
Certificate of Incorporation of the Company (the “Certificate
of Incorporation”). When the Certificate of Incorporation
took effect, each share of Series A Preferred Stock was
automatically converted into 84 shares of common stock of the
Company (a 1.2 for 1 conversion to Common Stock concurrent with a
70 for 1 stock split) and each share of Series Z Preferred Stock
was automatically converted into 70 shares of common stock of the
Company (a 1 for 1 conversion to common stock concurrent with a 70
for 1 stock split) and Series A Preferred Stock and Series Z
Preferred Stock were eliminated (the “Conversion”).
100,000 shares of Series Z Preferred Stock were converted into
7,000,000 shares of common stock and 15,894 shares of Series A
Preferred Stock were converted into 1,335,079.284 shares of common
stock. All references in this “Management’s Discussion
and Analysis of Financial Conditions and Results of
Operations” to common stock authorized, issued and
outstanding and common stock options take into account the stock
split that occurred as part of the Conversion.
Critical Accounting Policies and Use of Estimates
While
our significant accounting policies are described in more detail in
Note 2 of our financial statements included elsewhere in this
Annual Report on Form 10-K, we believe the following accounting
policies to be critical to the judgments and estimates used in the
preparation of our financial statements.
Use of Estimates
The
preparation of financial statements in conformity with GAAP
requires our management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, disclosure
of contingent assets and liabilities, and reported amounts of
revenues and expenses in the financial statements and accompanying
notes. Actual results could differ from those
estimates.
Going Concern Assessment
We
adopted Accounting Standards Updates (“ASU”) 2014-15,
Disclosure of Uncertainties about an Entity’s Ability to
Continue as a Going Concern, which the Financial Accounting
Standards Board (“FASB”) issued to provide guidance on
determining when and how reporting companies must disclose
going-concern uncertainties in their financial statements. The ASU
requires management to perform interim and annual assessments of an
entity’s ability to continue as a going concern within one
year of the date of issuance of the entity’s financial
statements (or within one year after the date on which the
financial statements are available to be issued, when applicable).
Further, a company must provide certain disclosures if there is
“substantial doubt about the entity’s ability to
continue as a going concern.” In February 2018, we analyzed
our minimum cash requirements through March 2019 and have
determined that, based upon our current available cash, we have no
substantial doubt about our ability to continue as a going concern.
See Item 1A - “Risk Factors” – our anticipated
operating expenses over the next year are based upon our
management’s estimates of possible future events. Actual
operating expenses could differ materially from those projected by
our management.
Revenue
We
are an emerging growth company, have no approved drugs and have not
generated any revenues. See “Overview –
Revenues”. To date, we have engaged in acquiring
pharmaceutical drug product candidates, licensing rights to drug
product candidates, entering into collaboration agreements for
testing and clinical development of our drug product candidates and
providing the infrastructure to support the clinical development of
drug product candidates. We do not anticipate revenues from
operations until we complete testing and development of one of our
drug product candidates and obtain marketing approval or we sell or
out-license one of our drug product candidates to another party.
See “Liquidity and Capital Resources”.
Research and Development Expenses
Research
and development (“R&D”) costs are expensed as
incurred. Major components of research and development expenses
include salaries and benefits of R&D staff, fees paid to
consultants and to the entities that conduct certain development
activities on our behalf and materials and supplies.
We
accrue and expense the costs for clinical trial activities
performed by third parties based upon estimates of the percentage
of work completed over the life of the individual study in
accordance with agreements established with contract research
organizations and clinical trial sites. We determine the estimates
through discussions with internal clinical personnel and external
service providers as to progress or stage of completion of trials
or services and the agreed upon fee to be paid for such services.
Costs of setting up clinical trial sites for participation in the
trials are expensed immediately as research and development
expenses. Clinical trial site costs related to patient enrollment
are accrued as patients are entered into the trial. During the
previous two fiscal years, we had no clinical trials in
progress.
The
successful development of our product pipeline is highly uncertain.
We cannot reasonably estimate the nature, timing or costs of the
efforts that will be necessary to complete the remainder of the
development of any of our drug product candidates or the period, if
any, in which material net cash inflows from our drug product
candidates may commence. This is due to the numerous risks and
uncertainties associated with developing drug product candidates,
including:
●
receiving
less funding than we require;
●
slower
than expected progress in developing Validive, MNPR-201, MNPR-101
or other drug product candidates;
●
higher
than expected costs to produce our current and future drug product
candidates;
●
higher
than expected costs for preclinical testing of our future and
current acquired and/or in-licensed programs;
●
future
clinical trial costs, including an increase in the number, size,
duration, or complexity of future clinical trials;
●
future
clinical trial results;
●
higher
than expected costs associated with attempting to obtain regulatory
approvals, including without limitation additional costs caused by
delays;
●
higher
than expected personnel or other costs, such as adding personnel or
pursuing the acquisition or licensing of additional
assets;
●
higher
than expected costs to protect our intellectual property portfolio
or otherwise pursue our intellectual property
strategy;
●
the
potential benefits of our product candidates over other therapies;
and
●
our
ability to market, commercialize and achieve market acceptance for
any of our product candidates that we are developing or may develop
in the future.
There
are other risks described in Item 1A - “Risk Factors”.
A change in the outcome of any of these variables with respect to
the development of a drug product candidate could mean a
significant change in the costs and timing associated with the
development of that drug product candidate. We expect that research
and development expenses will increase in future periods as a
result of increased personnel, increased consulting, future
preclinical and clinical trial costs, including clinical drug
product manufacturing and related costs.
In-process Research and Development
In-process
research and development (“IPR&D”) expense
represents the costs to acquire technologies to be used in research
and development that have not reached technological feasibility,
have no alternative future uses, and are thus expensed as incurred.
IPR&D expense also includes upfront license fees and milestones
paid to collaborators, with no alternative use, which are expensed
as goods are received or services rendered.
General and Administrative Expenses
General
and administrative expenses consist primarily of compensation and
expenses for our executive personnel, stock-based compensation
expense related to stock options issued to our executive team,
legal and audit expenses, general and administrative consulting,
board fees and expenses, patent legal and application fees, and
facilities and related expenses. Future general and administrative
expenses may also include: compensation and expenses related to the
employment of finance, human resources and business development
personnel, depreciation and amortization of general and
administrative fixed assets, investor relations and annual meeting
expense, and stock-based compensation expense related to general
and administrative personnel. We expect that our general and
administrative expenses will increase in future periods as a result
of increased personnel, expanded infrastructure, increased
consulting, legal, accounting and investor relations expenses
associated with being a public company and costs incurred to seek
and establish collaborations with respect to any of our drug
product candidates.
Collaborative Arrangements
We
and our collaborative partners are active participants in a
collaborative arrangement and all parties are exposed to
significant risks and rewards depending on the development and
commercial success of the activities. Contractual payments to the
other parties in the collaboration agreement and costs incurred by
us when we are deemed to be the principal participant for a given
transaction are recognized on a gross basis in research and
development expenses. Royalties and license payments are recorded
as earned.
In May 2015, we entered into a Clinical Trial and Option Agreement
with Cancer Research UK with respect to our drug product candidate
MNPR-101 (formerly huATN-658). Pursuant to this agreement Cancer
Research UK conducted preclinical work, improved the manufacturing,
and planned to conduct a Phase 1a/1b clinical trial in cancer
patients. Under this agreement, Cancer Research UK was to cover all
costs through Phase 1a/1b clinical studies, including
manufacturing. As part of a portfolio reprioritization review,
on March 21, 2018 Cancer Research UK notified us it was
closing its project related to MNPR-101 and would work to make
arrangements to formally terminate the agreement. We are
currently reviewing potential alternative collaboration
opportunities for MNPR-101 and continue to maintain the
program’s intellectual property portfolio.
In addition, we have a non-exclusive license with
XOMA Ltd. for its humanization technology and know-how utilized in
the development of MNPR-101. Under the terms of the license, we are
required to pay developmental and sales milestones which could
reach up to $14.925 million if we achieve all milestones.
The agreement does not require the
payment of sales
royalties.
There can be no assurance that we will reach any
milestones.
From
inception in December 2014 through March 1, 2018, no milestones
were met and no royalties were earned, therefore, we did not pay or
accrue/expense any milestone or royalty payments under the CTOA and
XOMA Ltd. license agreement.
License Option Agreement
In
June 2016, we executed an agreement with Onxeo S.A., a French
public company, which gave us the option to license Validive
(clonidine mucobuccal tablet), a mucoadhesive tablet of clonidine
based on the Lauriad mucoadhesive technology to potentially treat
severe oral mucositis in patients undergoing treatment for head and
neck cancers. The pre-negotiated license terms included as part of
the option agreement included clinical, regulatory, developmental
and sales milestones that could reach up to $108 million if we
achieve all milestones, and escalating royalties on net sales from
5 - 10%. On September 8, 2017, we exercised the option to license
Validive in order to commence the clinical development of the drug
product candidate in exchange for a one-time option fee payment of
$1 million.
Under
the agreement, we are required to pay royalties to Onxeo on a
product-by-product and country-by-country basis until the later of
(1) the date when a given product is no longer within the scope of
a patent claim in the country of sale or manufacture, (2) the
expiry of any extended exclusivity period in the relevant country
(such as orphan drug exclusivity, pediatric exclusivity, new
chemical entity exclusivity, or other exclusivity granted beyond
the expiry of the relevant patent), or (3) a specific time period
after the first commercial sale of the product in such country. In
most countries, including the U.S., the patent term is generally 20
years from the earliest claimed filing date of a non-provisional
patent application in the applicable country, not taking into
consideration any potential patent term adjustment that may be
filed in the future or any regulatory extensions that may be
obtained. The royalty termination provision pursuant to (3)
described above is shorter than 20 years and is the least likely
cause of termination of royalty payments.
The
Onxeo license agreement does not have a pre-determined term, but
expires on a product-by-product and country-by-country basis; that
is, the agreement expires with respect to a given product in a
given country whenever our royalty payment obligations with respect
to such product have expired. The agreement may also be terminated
early for cause if either we or Onxeo materially breach the
agreement, or if either we or Onxeo become insolvent. We may also
choose to terminate the agreement, either in its entirety or as to
a certain product and a certain country, by providing Onxeo with
advance notice.
From
the execution of the agreement through March 1, 2018, no milestones
were met and no royalties were earned, therefore, we did not pay or
accrue/expense any milestone or royalty payments under the Onxeo
option agreement.
Income Taxes
We
use an asset and liability approach for accounting for deferred
income taxes, which requires recognition of deferred income tax
assets and liabilities for the expected future tax consequences of
events that have been recognized in our financial statements, but
have not been reflected in our taxable income. Estimates and
judgments occur in the calculation of certain tax liabilities and
in the determination of the recoverability of certain deferred
income tax assets, which arise from temporary differences and carry
forwards. Deferred income tax assets and liabilities are measured
using the currently enacted tax rates that apply to taxable income
in effect for the years in which those tax assets and liabilities
are expected to be realized or settled.
We
regularly assess the likelihood that our deferred income tax assets
will be realized from recoverable income taxes or recovered from
future taxable income. To the extent that we believe any amounts
are more likely not to be realized, we record a valuation allowance
to reduce the deferred income tax assets. In the event we determine
that all or part of the net deferred tax assets are not realizable
in the future, an adjustment to the valuation allowance would be
charged to earnings in the period such determination is made.
Similarly, if we subsequently realize deferred income tax assets
that were previously determined to be unrealizable, the respective
valuation allowance would be reversed, resulting in an adjustment
to earnings in the period such determination is made.
Internal
Revenue Code Section 382 provides that, after an ownership change,
the amount of a loss corporation’s net operating loss
(“NOL”) for any post-change year that may be offset by
pre-change losses shall not exceed the section 382 limitation for
that year. Because we will continue to raise equity in the coming
years, section 382 may limit our usage of NOLs in the
future.
Based
on the available evidence, we believe that the Company was not
likely to be able to utilize our minimal deferred tax assets in the
future and, as a result, we recorded a full valuation allowance for
the years ended December 31, 2017 and 2016. We intend to maintain
the valuation allowance until sufficient evidence exists to support
their reversal. We regularly review our tax positions and for a tax
benefit to be recognized, the related tax position must be more
likely than not to be sustained upon examination. Any amount
recognized is generally the largest benefit that is more likely
than not to be realized upon settlement. Our policy is to recognize
interest and penalties related to income tax matters as an income
tax expense. For the years ended December 31, 2017 and 2016, the
Company did not have any interest or penalties associated with
unrecognized tax benefits.
We
are subject to U.S. federal, Illinois and California income taxes.
Tax regulations within each jurisdiction are subject to the
interpretation of the related tax laws and regulations and require
significant judgment to apply. We are subject to U.S. federal,
state and local tax examinations by tax authorities for the years
ended December 31, 2017 and 2016. We plan on filing our tax returns
for the year ending December 31, 2017 prior to the respective
filing deadlines in all applicable jurisdictions.
On
December 22, 2017, the Tax Cuts and Jobs Act of 2017 was enacted by
the U.S. President. The Tax Reform Bill is effective as of January
1, 2018. In accordance with ASC guidance, deferred tax
assets/liabilities in our financial statements are to be reflected
at the tax rate in which the deferred tax assets/liabilities are
anticipated to be realized. As a result, we changed the tax rate
for tax provision purposes at December 31, 2017 from 34% to
21%.
Stock-Based Compensation
We
account for stock-based compensation arrangements with employees,
nonemployee directors and consultants using a fair value method,
which requires the recognition of compensation expense for costs
related to all stock-based payments, including stock options. The
fair value method requires us to estimate the fair value of
stock-based payment awards on the date of grant using an option
pricing model.
Stock-based
compensation costs for options granted to our employees and
nonemployee directors are based on the fair value of the underlying
option calculated using the Black-Scholes option-pricing model on
the date of grant for stock options and recognized as expense on a
straight-line basis over the requisite service period, which is the
vesting period. Determining the appropriate fair value model and
related assumptions requires judgment, including estimating stock
price volatility, forfeiture rates and expected term. The expected
volatility rates are estimated based on the actual volatility of
comparable public companies over the expected term. We selected
these companies based on comparable characteristics, including
market capitalization, risk profiles, stage of development and with
historical share price information sufficient to meet the expected
life of the stock-based awards. The expected term for options
granted during the years ended December 31, 2017 and 2016 is
estimated using the simplified method. Forfeitures are estimated at
the time of grant and revised, if necessary, in subsequent periods
if actual forfeitures differ from those estimates. We have not paid
dividends and do not anticipate paying a cash dividend in the
future vesting period and, accordingly, use an expected dividend
yield of zero. The risk-free interest rate is based on the rate of
U.S. Treasury securities with maturities consistent with the
estimated expected term of the awards. The measurement of
consultant share-based compensation is subject to periodic
adjustments as the underlying equity instruments vest and is
recognized as an expense over the period over which services are
rendered.
Stock Option Plan
In
April 2016, our Board and the preferred stockholders representing a
majority in interest of our outstanding stock approved the Amended
and Restated Monopar Therapeutics Inc. 2016 Stock Incentive Plan
(the “Plan”), allowing us to grant up to an aggregate
700,000 shares (as adjusted subsequent to the Conversion) of stock
awards, stock options, stock appreciation rights and other
stock-based awards to our employees, non-employee directors and
consultants. In October 2017, our Board increased the stock option
pool up to 1,600,000 shares. Through December 31, 2017, our Board
granted to Board Members, our Chief Financial Officer, our Acting
Chief Medical Officer, and our Senior Vice President of Clinical
Development stock options to purchase up to an aggregate 555,520
shares of our common stock at an exercise price of $0.001 par value
and stock options to purchase up to an aggregate 103,072 shares of
our common stock at an exercise price of $6.00 based upon third
party valuations of our common stock and based on the price per
share at which common stock was sold in our most recent private
offering.
Under
the Plan, the per share exercise price for the shares to be issued
upon exercise of an option is determined by our Plan administrator,
except that the per share exercise price cannot be less than 100%
of the fair market value per share on the grant date. In connection
with our stock options issued in April 2016, December 2016, and
February 2017, fair market value was established by our Plan
Administrator using recently obtained third party valuation
reports. In connection with our stock options issued in September
2017, November 2017, and January 2018, fair market value was
established by our Plan Administrator based on the price per share
at which common stock was sold in our most recent private offering.
Options generally expire after ten years.
The
fair market value of the 273,000 options granted in April 2016, the
7,000 options granted in December 2016 and the 275,520 options
granted in February 2017 was nominal at the time of grant because
of both the low number of options granted prior to Conversion in
March 2017 and the low exercise price (equal to par value $0.001).
For employees that were previously consultants at the time of
grant, the fair market value during the year ended December 31,
2017 totaled $32,401 of which $26,498 was recorded as research and
development expenses and $5,903 was recorded as general and
administrative expenses. In September 2017, we granted three Board
members options to purchase up to 21,024 shares of our common stock
each. The options for these board members have a six-month vesting
cliff and vest between 24 and 48 months, depending on the Board
member's prior months of service. The fair market value of the
aggregate 63,072 options granted to Board members totaled $20,962
during the year ended December 31, 2017 and was recorded as general
and administrative expenses. In November 2017, we granted options
to purchase up to 40,000 shares of our common stock to an employee.
The options for the employee have a six-month vesting cliff and
vest over 48 months. The fair market value of the 40,000 options
granted to an employee during the year ended December 31, 2017
totaled $5,502 and was recorded as general and administrative
expenses.
We
recognize as an expense the fair value of options granted to
persons who are neither employees nor directors. The fair value of
expensed options was based on the Black-Scholes option-pricing
model assuming the following factors: 6.1 to 5.3 year expected
term, 57% volatility, 2.2% to 1.2% risk free interest rate and zero
dividends. Stock-based compensation expense for non-employees for
the year ended December 31, 2017 and 2016 was $251,842 and $0,
respectively, of which $199,769 and $0, respectively, was recorded
as research and development expenses and $52,073 and $0,
respectively, as general and administrative expenses.
Stock
option activity under the Plan from January 1, 2017 through
December 31, 2017 is as follows:
|
|
|
|
|
|
Weighted-Average Exercise Price
|
Balances,
January 1, 2017
|
420,000
|
280,000
|
$
0.001
|
Increase in option
pool
(1)
|
900,000
|
-
|
-
|
Granted
(2)
|
(378,592
)
|
378,592
|
1.63
|
Forfeited
|
-
|
-
|
-
|
Exercised
|
-
|
-
|
-
|
Balances,
December 31, 2017
|
941,408
|
658,592
|
0.94
|
(1)
The option pool was
increased to 1,600,000 effective October 26, 2017.
(2)
336,544 options
vest 6/48
ths
at the six-month
anniversary of grant date and 1/48
th
per month thereafter, 21,024 options
vest 6/24ths on the six-month anniversary of grant date and 1/24th
per month thereafter, and 21,024 options vest 6/42nds on the
six-month anniversary of grant date and 1/42nd per month
thereafter.
A
summary of options outstanding as of December 31, 2017 is shown
below:
|
Number of Shares Subject to Options Outstanding
|
Weighted Average Remaining Contractual Term
|
Number of Shares Subject to Options Fully Vested and
Exercisable
|
Weighted Average Remaining Contractual Term
|
$
0.001
|
555,520
|
8.7
years
|
337,400
|
|
$
6.00
|
103,072
|
9.6
years
|
-
|
N/A
|
|
658,592
|
|
337,400
|
|
No
income tax benefits have been recognized in the statements of
operations for stock-based compensation arrangements.
We
recognize as an expense the fair value of options granted to
persons who are neither our employees nor directors. The fair value
of expensed options is based on the Black-Scholes
option-pricing.
Results of Operations
Comparison of the Years Ended December 31, 2017 and December 31,
2016
The
following table summarizes the results of our operations for the
years ended December 31, 2017 and 2016:
|
|
|
(in
thousands)
|
|
|
|
Revenue
|
$
-
|
$
-
|
$
-
|
|
|
|
|
Research and
development expenses
|
935
|
280
|
655
|
In-process research
and development expenses
|
14,502
|
-
|
14,502
|
General and
administrative expenses
|
1,166
|
913
|
253
|
|
|
|
|
Total operating
expenses
|
16,603
|
1,193
|
15,410
|
|
|
|
|
Operating
loss
|
(16,603
)
|
(1,193
)
|
(15,410
)
|
Interest and other
income
|
48
|
7
|
41
|
Net
loss
|
$
(16,555
)
|
$
(1,186
)
|
$
(15,369
)
|
R&D Expenses
R&D
expenses for the year ended December 31, 2017 were approximately
$0.94 million, compared to approximately $0.28 million for the year
ended December 31, 2016, an increase of approximately $0.66
million. This increase was primarily attributed to:
|
Year ended December 31, 2017 versus year ended December 31,
2016
|
Research and Development Expense (in thousands)
|
|
Increased
consulting in clinical development for Validive
|
$
254
|
Stock-based
compensation (non-cash) for consultants
|
200
|
Salaries
and benefits for R&D staff hired in Q4 2017
|
152
|
Stock-based
compensation (non-cash) for employees in Q4 2017
|
26
|
Other,
net
|
23
|
Net
increase in R&D expenses
|
$
655
|
In-process Research and Development ("IPR&D")
Expenses
IPR&D expenses
for the year ended December 31, 2017 of $14.5 million represents
the $1 million license fee for Validive and $13.5 million
representing the value of MNPR-201, including transaction costs,
acquired from TacticGem LLC in August 2017. IPR&D represents
the costs of acquiring or licensing technologies that have not
reached technological feasibility and have no alternative future
use.
General and Administrative (“G&A”)
Expenses
G&A
expenses for the year ended December 31, 2017 were approximately
$1.18 million, compared to approximately $0.91 million for the year
ended December 31, 2016, an increase of approximately $0.27
million. This increase was primarily attributed to:
|
Year ended December 31, 2017 versus year ended December 31,
2016
|
General and Administration Exp. (in thousands)
|
|
|
|
Intellectual
property legal costs for MNPR-201 (GPX-150) and international
filings for MNPR-101
|
$
197
|
Increase in
CEO’s salary plus new hires in Q4 2017
|
95
|
Fees and expenses
for new Board members
|
76
|
Stock-based
compensation (non-cash) for consultant
|
52
|
Audit services
related to quarterly reviews
|
46
|
Stock-based
compensation (non-cash) for new Board members
|
21
|
Website
revisions
|
17
|
Consulting in 2016
for potential transaction not repeated in 2017
|
(36
)
|
Legal expenses in
2016 were recorded as G&A expenses, in 2017 were recorded as
IPR&D expense and deferred offering costs (a current
asset)
|
(215
)
|
|
|
Net
increase in G&A expenses
|
$
253
|
Interest Income
Interest income for
the year ended December 31, 2017 increased by approximately $0.04
million versus the year ended December 31, 2016 due to higher bank
balances resulting from funds raised in 2017. Interest income was
related to interest earned on our cash equivalent investments in
two business savings accounts and on our escrow
account.
Liquidity and Capital Resources
Sources of Liquidity
We have
incurred losses and cumulative negative cash flows from operations
since our inception in December 2014 and, as of December 31, 2017
we had an accumulated deficit of approximately $18.4 million. We
anticipate that we will continue to incur losses for the
foreseeable future. We expect that our research and development and
general and administrative expenses will increase, and, as a
result, we anticipate that we will need to raise additional capital
to fund our operations, which we may seek to obtain through a
combination of equity offerings, debt financings, strategic
collaborations and grant funding. From our inception, through March
1, 2018, we have financed our operations primarily through private
placements of our preferred stock and common stock, the $4.8
million received (net of transaction costs) received in the Gem
Transaction (as defined below), and our Cancer Research UK
collaboration. As of March 1, 2018, we have received net proceeds
of approximately $4.70 million (net of issuance costs) from the
sale of our preferred stock which have been converted into common
stock and we sold 789,674.33 shares of our common stock for net
proceeds of approximately $4.71 million. We anticipate that the
funds raised to-date will fund our minimal operations through March
2019.
We
invest our cash equivalents in a money market account.
Contribution to Capital
In
August 2017, our largest stockholder, Tactic Pharma, LLC,
surrendered 2,888,727.12 shares of common stock back to us as a
contribution to the capital of the Company. This resulted in
reducing Tactic Pharma’s ownership in us from 79.5% to
69.9%.
The Gem Transaction
On
August 25, 2017, Tactic Pharma and Gem Pharmaceuticals formed a
limited liability company, TacticGem, LLC, with Tactic Pharma
contributing 4,111,272.88 shares of our common stock and Gem
contributing assets and $5 million in cash before transaction
costs. TacticGem then contributed the Gem assets and cash to us in
exchange for 3,055,394.12 shares of our common stock. This has
resulted in TacticGem owning 77.1% of our outstanding common stock
as of March 1, 2018. The contribution by TacticGem, made in
conjunction with contributions from outside investors in a private
offering, was intended to qualify for tax-free
treatment.
It is
anticipated that this transaction will increase the Company’s
annual cash burn by at least $750,000 and will be significantly
higher if the Company chooses to conduct clinical trials with the
Gem drug candidate programs.
The Gem
Transaction was recorded on our financial statements for the year
ended December 31, 2017 as follows:
Cash
to be recorded on our Balance Sheet
|
$
5,000,000
|
Assembled
Workforce to be recorded as In-process Research and Development
Expense on our Statement of Operations
|
9,886
|
MNPR-201
(GPX-150) recorded as In-process Research and Development Expense
on our Statement of Operations
|
13,491,736
|
Total
Gem Transaction
|
$
18,501,622
|
Cash Flows
The
following table provides information regarding our cash flows for
the years ended December 31, 2017 and 2016.
(in thousands)
|
|
|
|
|
Increase
(decrease) year ended December 31, 2017 over December 31,
2016
|
|
|
|
|
Cash used in
operating activities
|
$
(2,627
)
|
$
(1,195
)
|
$
(1,432
)
|
Cash provided by
financing activities
|
9,536
|
1,263
|
8,273
|
Net change in cash,
cash equivalents and restricted cash
|
$
6,909
|
$
68
|
$
6,841
|
During
the years ended December 31, 2017 and 2016, we had net cash inflows
of $6.91 million and $0.07 million, respectively.
Cash Flow Used in Operating Activities
The
increase to cash used in operating activities during the year ended
December 31, 2017 compared to the year ended December 31, 2016 of
approximately $1.43 million was primarily due to the $1.0 million
license fee for Validive paid in 2017 plus the increase in clinical
development consulting for planning our Phase 3 clinical trial for
Validive. Cash used in operating activities of approximately $2.63
million for the year ended December 31, 2017 was primarily a result
of our approximately $16.55 million net loss offset by non-cash
in-process research and development of $13.50 million, non-cash
stock-based compensation of $0.31 million and changes in operating
assets and liabilities of approximately $0.12 million. Cash used in
operating activities of approximately $1.19 million for the year
ended December 31, 2016 was primarily a result of our approximately
$1.19 million net loss.
Cash Flow Used in Investing Activities
There
was no cash provided by or used in investing activities for the
years ended December 31, 2017 and 2016.
Cash Flow Provided by Financing Activities
The
increase of cash provided by financing activities during the year
ended December 31, 2017 compared to the year ended December 31,
2016 of approximately $8.27 million was due to the sale of common
stock during the year ended December 31, 2017 at $6.00 per share
for aggregate net proceeds of $4.70 million plus $4.83 million of
net proceeds from the Gem Transaction compared to $1.26 million
raised during the year ended December 31, 2016 from the sale of
Series A Preferred Stock.
Future Funding Requirements
We have
not generated any revenue from product sales. We do not know when,
or if, we will generate any revenue from product sales. We do not
expect to generate any revenue from product sales unless and until
we obtain regulatory approval of and commercialize any of our
current or future drug product candidates or we out-license or sell
a drug product candidate to another party. At the same time, we
expect our expenses to increase in connection with our ongoing
development activities, particularly as we continue the research,
development, future preclinical and clinical trials of, and seek
regulatory approval for, our current and future drug product
candidates. If we are able to list on Nasdaq or another national
stock exchange, we expect to incur additional costs associated with
operating as a listed public company. In addition, if we obtain
regulatory approval of any of our current and future drug product
candidates, we will need substantial additional funding in
connection with our future continuing operations.
As a
company, we have not completed development of any therapeutic
products. We expect to continue to incur significant expenses and
increasing operating losses for the foreseeable future. We
anticipate that our expenses will increase substantially as
we:
●
advance the
clinical development and execute the regulatory strategy of
Validive;
●
continue the
clinical development of MNPR-201;
●
continue the
preclinical and clinical development of MNPR-101;
●
acquire and/or
license additional pipeline drug product candidates and pursue the
future preclinical and/or clinical development of such drug product
candidates;
●
seek regulatory
approvals for any of our current and future drug product candidates
that successfully complete registration trials;
●
establish a sales,
marketing and distribution infrastructure and increase or develop
our manufacturing capabilities to commercialize any products for
which we may obtain regulatory approval; and
●
add operational,
financial and management information systems and personnel,
including personnel to support our drug product candidate
development and planned commercialization efforts.
We
anticipate that the funds raised to-date will fund our minimal
operations through at least the next 12 months. We have based this
estimate on assumptions that may prove to be wrong, and we could
use our available capital resources sooner than we currently
expect. Because of the numerous risks and uncertainties associated
with the development and commercialization of our drug product
candidates, and the extent to which we enter into collaborations
with third parties to participate in the development and
commercialization of our drug product candidates, we are unable to
estimate the amounts of increased capital outlays and operating
expenditures associated with our current and anticipated drug
product candidate development programs. Our future capital
requirements will depend on many factors, including:
●
the progress of
regulatory interactions and clinical development of
Validive;
●
the progress of
clinical development of MNPR-201;
●
the progress of
preclinical and clinical development of MNPR-101;
●
the number and
characteristics of other drug product candidates that we may
pursue;
●
the scope,
progress, timing, cost and results of research, preclinical
development and clinical trials;
●
the costs, timing
and outcome of seeking and obtaining FDA and international
regulatory approvals;
●
the costs
associated with manufacturing and establishing sales, marketing and
distribution capabilities;
●
our ability to
maintain, expand and defend the scope of our intellectual property
portfolio, including the amount and timing of any payments we may
be required to make in connection with the licensing, filing,
defense and enforcement of any patents or other intellectual
property rights;
●
our need and
ability to hire additional management, scientific and medical
personnel;
●
the effect of
competing products that may limit market penetration of our drug
product candidates;
●
our need to
implement additional internal systems and infrastructure;
and
●
the economic and
other terms, timing and success of our existing collaboration and
licensing arrangements and any collaboration, licensing or other
arrangements into which we may enter in the future, including the
timing of receipt of or payment to or from others of any milestone
or royalty payments under these arrangements
See
Item 1A - “Risk Factors”. In the first quarter of 2018,
expenditures are expected to increase in employee compensation as a
result of hiring various employees and consultants to support the
planning of our Phase 3 clinical trial of Validive, in preparation
for public market listing via the Form 10 process, and in adjusting
employee compensation to align with comparable public companies.
There can be no assurance that any such events will occur. We
intend to continue evaluating drug product candidates for the
purpose of growing our pipeline. Identifying and securing high
quality compounds usually takes time; however, our spending could
be significantly accelerated in 2018 if additional product
candidates are acquired and enter clinical development. In this
event, we may be required to expand our management team, and pay
much higher insurance rates, contract manufacturing costs, contract
research organization fees or other clinical development costs that
are not currently anticipated. We, under this scenario, would plan
to pursue raising additional capital in the next 12 months. The
anticipated operating cost increases from 2018 through 2019 are
expected to be primarily driven by the funding of our planned
Validive Phase 3 clinical program. Office space rent in 2018 and
2019 will also likely increase as a result of requiring additional
space as we hire additional employees.
Until
we can generate a sufficient amount of product revenue to finance
our cash requirements, we expect to finance our future cash needs
primarily through a combination of equity offerings, debt
financings, strategic collaborations and grant funding. To the
extent that we raise additional capital through the sale of equity
or convertible debt securities, the ownership interest of our
stockholders will be diluted, and the terms of these securities may
include liquidation or other preferences that adversely affect our
stockholders’ rights. See Item 1A - “Risk Factors
– Existing and new investors will experience dilution as a
result of our option plan and potential future stock sales.”
Debt financing, if available, may involve agreements that include
covenants limiting or restricting our ability to take specific
actions, such as incurring additional debt, making capital
expenditures or declaring dividends. If we raise additional funds
through marketing and distribution arrangements or other
collaborations, strategic alliances or licensing arrangements with
other parties, we may have to relinquish valuable rights to our
technologies, future revenue streams, research programs or product
candidates or grant licenses on terms that may not be favorable to
us. If we are unable to raise additional funds through equity or
debt financings when needed, we may be required to delay, limit,
reduce or terminate our pipeline product development or
commercialization efforts or grant rights to others to develop and
market product candidates that we would otherwise prefer to develop
and market ourselves.
Contractual Obligations and Commitments
Development and Collaboration Agreements
Onxeo SA
In June
2016, we executed an agreement with Onxeo S.A., a French public
company, which gave us the exclusive option to license (on a
world-wide exclusive basis) Validive (clonidine mucobuccal tablet;
clonidine MBT a mucoadhesive tablet of clonidine based on the
Lauriad mucoadhesive technology) to pursue treating severe oral
mucositis in patients undergoing chemoradiation treatment for head
and neck cancers. The agreement includes clinical, regulatory,
developmental and sales milestones that could reach up to $108
million if we achieve all milestones, and escalating royalties on
net sales from 5 - 10%. In September 2017, we exercised the option
to license Validive from Onxeo for $1 million, but as of March 1,
2018, we have not been required to pay Onxeo any other funds under
the agreement.
Under
the agreement, we are required to pay royalties to Onxeo on a
product-by-product and country-by-country basis until the later of
(1) the date when a given product is no longer within the scope of
a patent claim in the country of sale or manufacture, (2) the
expiry of any extended exclusivity period in the relevant country
(such as orphan drug exclusivity, pediatric exclusivity, new
chemical entity exclusivity, or other exclusivity granted beyond
the expiry of the relevant patent), or (3) a specific time period
after the first commercial sale of the product in such country. In
most countries, including the U.S., the patent term is generally 20
years from the earliest claimed filing date of a non-provisional
patent application in the applicable country, not taking into
consideration any potential patent term adjustment that may be
filed in the future or any regulatory extensions that may be
obtained. The royalty termination provision pursuant to (3)
described above is shorter than 20 years and is the least likely
cause of termination of royalty payments.
The
Onxeo license agreement does not have a pre-determined term, but
expires on a product-by-product and country-by-country basis; that
is, the agreement expires with respect to a given product in a
given country whenever our royalty payment obligations with respect
to such product have expired. The agreement may also be terminated
early for cause if either we or Onxeo materially breach the
agreement, or if either we or Onxeo become insolvent. We may also
choose to terminate the agreement, either in its entirety or as to
a certain product and a certain country, by providing Onxeo with
advance notice.
Given
the strength of the Phase 2 data, we paid the $1 million fee to
Onxeo and exercised the license option in order to advance the
clinical development of Validive. We fully anticipate the need to
raise significant funds to support the completion of clinical
development of Validive.
Cancer Research UK
In July
2015, we entered into a Clinical Trial and Option Agreement
(“CTOA”) with Cancer Research UK and Cancer Research
Technology Limited, a wholly-owned subsidiary of Cancer Research
UK. As part of the CTOA, we were obligated to deposit $0.8 million
in escrow to cover certain potential future claims, intellectual
property infringement costs or termination costs incurred by Cancer
Research UK.
Pursuant to this
agreement Cancer Research UK conducted preclinical work, improved
the manufacturing, and planned to conduct a Phase 1a/1b clinical
trial in cancer patients. Under this agreement, Cancer Research UK
was to cover all costs through Phase 1a/1b clinical studies,
including manufacturing. As part of a portfolio reprioritization
review, on March 21, 2018 Cancer Research UK notified us
it was closing its project related to MNPR-101 and would work to
make arrangements to formally terminate the agreement. We are
currently reviewing potential alternative collaboration
opportunities for MNPR-101 and continue to maintain the
program’s intellectual property
portfolio.
XOMA Ltd.
The
intellectual property rights contributed by Tactic Pharma, LLC to
us included the non-exclusive license agreement with XOMA Ltd. for
the humanization technology used in the development of MNPR-101.
Pursuant to such license agreement, we are obligated to pay XOMA
Ltd. clinical, regulatory and sales milestones which could reach up
to $14.925 million if we achieve all milestones for MNPR-101 The
agreement does not require the payment of sales royalties. There
can be no assurance that we will achieve any milestones. As of
March 1, 2018, we had not reached any milestones and had not been
required to pay XOMA Ltd. any funds under this license
agreement.
Service Providers
In the
normal course of business, we contract with service providers to
assist in the performance of research and development, financial
strategy, audit, tax and legal support. We can elect to discontinue
the work under these agreements at any time. We could also enter
into collaborative research, contract research, manufacturing and
supplier agreements in the future, which may require upfront
payments and/or long-term commitments of cash.
Office Lease
In May
2016, we executed a six-month office lease in Northbrook, Illinois
for $1,340 per month, which was extended to December 31, 2017.
Effective January 1, 2018, we leased office space in the Village of
Wilmette for $2,379 per month for 24 months. This office space
houses our current headquarters. On November 1, 2017, we executed a
month-to-month office lease in Seattle, Washington for $1,249 per
month for the first three months, but which tiers up to $2,495 on
the last month.
Legal Contingencies
We are
currently not, and to date have never been, a party to any material
legal proceedings.
Indemnification
In the
normal course of business, we enter into contracts and agreements
that contain a variety of representations and warranties and
provide for general indemnification. Our exposure under these
agreements is unknown because it involves claims that may be made
against us in the future, but that have not yet been made. To date,
we have not paid any claims or been required to defend any action
related to our indemnification obligations. However, we may record
charges in the future as a result of these indemnification
obligations.
In
accordance with our Second Amended and Restated Certificate of
Incorporation and Amended and Restated Bylaws we have
indemnification obligations to our officers and Board Members for
certain events or occurrences, subject to certain limits, while
they are serving at our request in such capacity. There have been
no claims to date. See Item 1A - “Risk Factors -
We have limited the liability of and indemnified
our directors and officers
.”
Off-Balance Sheet Arrangements
To
date, we have not had any off-balance sheet arrangements, as
defined under SEC rules.
Recent Accounting Pronouncements
In
August 2014, FASB issued ASU 2014-15, Disclosure of Uncertainties
about an Entity’s Ability to Continue as a Going Concern,
which provides guidance on determining when and how reporting
companies must disclose going-concern uncertainties in their
financial statements. The ASU requires management to perform
interim and annual assessments of an entity’s ability to
continue as a going concern within one year of the date of issuance
of the entity’s financial statements (or within one year
after the date on which the financial statements are available to
be issued, when applicable). Further, a company must provide
certain disclosures if there is “substantial doubt about the
entity’s ability to continue as a going concern.” This
ASU is effective for annual periods ending after December 15, 2016
and interim periods within annual periods beginning after December
15, 2016. Early adoption is permitted. We have adopted this new
accounting standard in our financial statements and footnote
disclosures.
In
November 2015, the FASB issued ASU 2015-17, Balance Sheet
Classification of Deferred Taxes. This is part of FASB’s
simplification initiative. The amendments in this ASU require that
deferred tax liabilities and assets be classified as noncurrent in
a classified statement of financial position. This ASU is effective
for us in the first quarter of 2017. Early adoption is permitted.
We have adopted this ASU and determined that it does not have a
material effect on our financial condition and results of
operations for the year ended December 31, 2017.
In
January 2016, the FASB issued ASU 2016-01, Recognition and
Measurement of Financial Assets and Financial Liabilities. The
purpose is to enhance the reporting model for financial instruments
to provide users of financial statements with more decision-useful
information. This ASU is effective for us in the first quarter of
2018. Early adoption is not permitted except for limited
provisions. We do not expect the adoption of this amendment to have
a material effect on our financial condition and results of
operations.
In
February 2016, the FASB issued ASU 2016-02, Leases, which for
operating leases, requires a lessee to recognize a right-of-use
asset and a lease liability, initially measured at the present
value of the lease payments, in its balance sheet. The standard
also requires a lessee to recognize a single lease cost, calculated
so that the cost of the lease is allocated over the lease term, on
a generally straight-line basis. ASU 2016-02 will be effective for
us in the first quarter of 2019, and early adoption is permitted.
We are currently assessing the impact that adopting this new
accounting standard will have on our financial statements and
footnote disclosures.
In
March 2016, the FASB issued ASU 2016-09, Improvements to Employee
Share-Based Payment Accounting, which simplifies several aspects of
the accounting for employee share-based payment transactions for
both public and nonpublic companies, including the accounting for
income taxes, forfeitures, and statutory tax withholding
requirements, as well as classification in the statement of cash
flows. The ASU will be effective for us in the first quarter of
2017, and early adoption is permitted. We have adopted this ASU and
determined that it does not have a material effect on our financial
condition and results of operations for the year ended December 31,
2017.
In
November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows
(Topic 230): Restricted Cash. The amendments apply to all entities
that have restricted cash or restricted cash equivalents and are
required to present a statement of cash flows. The amendments
address diversity in practice that exists in the classification and
presentation of changes in restricted cash on the statement of cash
flows. The amendments require that a statement of cash flows
explain the change during the period in the total of cash, cash
equivalents, and amounts generally described as restricted cash or
restricted cash equivalents. As a result, amounts generally
described as restricted cash and restricted cash equivalents should
be included with cash and cash equivalents when reconciling the
beginning-of-period and end-of-period total amounts shown on the
statement of cash flows. The amendments do not provide a definition
of restricted cash or restricted cash equivalents. The amendments
are effective for public business entities for fiscal years
beginning after December 15, 2017, and interim periods within those
fiscal years. For all other entities, the amendments are effective
for fiscal years beginning after December 15, 2018, and interim
periods within fiscal years beginning after December 15, 2019.
Early adoption is permitted. We have early adopted the amendments
and have applied them using a retrospective transition method to
each period presented. Therefore, we have included restricted cash
in cash equivalents and restricted cash on our statements of cash
flows for the years ended December 31, 2017 and 2016.
In
January 2017, the FASB issued ASU No. 2017-01, Business
Combinations (Topic 805): Clarifying the Definition of a Business
(“ASU No. 2017-01”). The amendments in ASU No. 2017-01
clarify the definition of a business with the objective of adding
guidance to assist entities with evaluating whether transactions
should be accounted for as acquisitions (or disposals) of assets or
businesses. The definition of a business affects many areas of
accounting including acquisitions, disposals, goodwill and
consolidation. For public companies, the amendments are effective
for annual periods beginning after December 15, 2017, including
interim periods within those periods. For all other companies and
organizations, the amendments are effective for annual periods
beginning after December 15, 2018, and interim periods within
annual periods beginning after December 15, 2019. We are currently
assessing the impact that adopting this new accounting standard
will have on our financial statements and footnote
disclosures.
In May
2017, the FASB issued ASU No. 2017-09, Compensation-Stock
Compensation (Topic 718): Scope of Modification Accounting. The
amendment amends the scope of modification accounting for
share-based payment arrangements, provides guidance on the types of
changes to the terms or conditions of share-based payment awards to
which an entity would be required to apply modification accounting
under ASC 718. This ASU is effective for all entities for annual
periods, and interim periods within those annual periods, beginning
after December 15, 2017. Early adoption is permitted, including
adoption in any interim period for: (a) public business entities
for reporting periods for which financial statements have not yet
been issued, and (b) all other entities for reporting periods for
which financial statements have not yet been made available for
issuance. We are currently assessing the impact that adopting this
new accounting standard will have on our financial statements and
footnote disclosures.
In July
2017, the FASB issued ASU No. 2017-11, Earnings Per Share (Topic
260) Distinguishing Liabilities from Equity (Topic 480) Derivatives
and Hedging (Topic 815) (Part I) Accounting for Certain Financial
Instruments with Down Round Features, (Part II) Replacement of the
Indefinite Deferral for Mandatorily Redeemable Financial
Instruments of Certain Nonpublic Entities and Certain Mandatorily
Redeemable Noncontrolling Interests with a Scope Exception. This
ASU simplifies the accounting for certain financial instruments
with down round features, a provision in an equity-linked financial
instrument (or embedded feature) that provides a downward
adjustment of the current exercise price based on the price of
future equity offerings. Down round features are common in
warrants, preferred shares, and convertible debt instruments issued
by private companies and development-stage public companies. This
new ASU requires companies to disregard the down round feature when
assessing whether the instrument is indexed to its own stock, for
purposes of determining liability or equity classification. The
provisions of this new ASU related to down rounds are effective for
public business entities for fiscal years, and interim periods
within those fiscal years, beginning after December 15, 2018. For
all other entities, the amendments are effective for fiscal years
beginning after December 15, 2019, and interim periods within
fiscal years beginning after December 15, 2020. Early adoption is
permitted for all entities. We are currently assessing the impact
that adopting this new accounting standard will have on our
financial statements and footnote disclosures.
I
tem 8. Financial Statements and
Supplementary Data
The
information required to be filed in this item appears on pages F-1
to F-24 of this Annual Report on Form 10-K.
Documents filed as
part of this Annual Report on Form 10-K:
|
|
Page
|
Report of
Independent Registered Public Accounting Firm
|
|
F-2
|
|
|
|
Balance Sheets
as of December 31, 2017 and 2016
|
|
F-3
|
|
|
|
Statements of
Operations for the Years Ended December 31, 2017 and
2016
|
|
F-4
|
|
|
|
Statements of
Stockholders’ Equity for the Years Ended December 31, 2017
and 2016
|
|
F-5
|
|
|
|
Statements of
Cash Flows for the Years Ended December 31, 2017 and
2016
|
|
F-6
|
|
|
|
Notes to
Financial Statements
|
|
F-7
to F-24
|
PART II – FINANCIAL INFORMATION
I
tem 9: Changes in and Disagreements
with Accountants on Accounting and Financial
Disclosure
None.
I
tem 9a: Controls and
Procedures
Our
Chief Executive Officer and Chief Financial Officer have provided
certifications filed as Exhibits 31.1 and 32.1, and 31.2,
respectively. Such certifications should be read in conjunction
with the information contained in this Item 9A for a more complete
understanding of the matters covered by those
certifications.
(a) Management’s Annual Report on Internal Control over
Financial Reporting
Our
management is responsible for establishing and maintaining adequate
internal control over financial reporting, as defined in Rule
13a15(f) of the Securities Exchange Act of 1934 (the
“Exchange Act”). Our internal control over financial
reporting is a process designed to provide reasonable assurance
regarding the reliability of the financial reporting and the
preparation of financial statements for external purposes in
accordance with U.S. generally accepted accounting principles. This
process includes those policies and procedures (i) that pertain to
the maintenance of records that, in reasonable detail, accurately
and fairly reflect the transactions and dispositions of our assets.
(ii) that receipts and expenditures are being made only in
accordance with authorizations of our management and directors.
(iii) that provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use, or disposition
of our assets that could have a material effect on our financial
statements. and (iv) that provide reasonable assurance that
transactions are recorded as necessary to permit preparation of
financial statements in accordance with GAAP. Because of its
inherent limitations, internal control over financial reporting may
not prevent or detect misstatements. Also, projections of any
evaluation of the internal control over financial reporting to
future periods are subject to risk that the internal control may
become inadequate because of changes in conditions, or that the
degree of compliance with policies or procedures may
deteriorate.
This annual report does not include a report of management's
assessment regarding internal controls over financial reporting or
an attestation report of the Company's registered public accounting
firm due to a transition period established by SEC rules for newly
public companies.
(b) Disclosure Controls and Procedures
We
carried out an evaluation, under the supervision and with the
participation of our management, including our Chief Executive
Officer and Chief Financial Officer, of the effectiveness of our
disclosure controls and procedures as of December 31, 2017,
pursuant to Rules 13a15(e) and 15d15(e) under the Exchange Act.
Based on that evaluation, our Chief Executive Officer and Chief
Financial Officer have concluded that our disclosure controls and
procedures, as of such date, were effective.
(c) Changes in Internal Control over Financial
Reporting
We have
concluded that the financial statements and other financial
information included in this Annual Report on Form 10-K fairly
present in all material respects our financial condition, results
of operations and cash flows as of, and for, the periods
presented.
There
have been no changes in our internal control over financial
reporting during the fourth quarter and the year ended December 31,
2017 that have materially affected, or are reasonably likely to
materially affect, our internal control over financial
reporting.
I
tem 10. Directors and Executive
Officers and Corporate Governance.
The
Members of our Board of Directors, each of whom serves until the
next annual meeting of stockholders, and the executive officers of
the Company, each of whom serves at the discretion of the Board of
Directors are as follows:
Name
|
|
Age
|
|
Positions
|
|
Director
Since
|
Christopher M.
Starr, Ph.D.
|
|
65
|
|
Executive
Chairman, Director, Member of the Audit Committee, the Compensation
Committee, and the Corporate Governance & Nominating
Committee
|
|
December
2014
|
|
|
|
|
|
|
|
Chandler D.
Robinson, MD MBA MSc
|
|
34
|
|
Chief Executive
Officer, Director
|
|
December
2014
|
|
|
|
|
|
|
|
Andrew P. Mazar,
Ph.D.
|
|
56
|
|
Executive Vice
President of Research and Development, Chief Scientific Officer,
Director
|
|
December
2014
|
|
|
|
|
|
|
|
Kim
R. Tsuchimoto
|
|
55
|
|
Chief Financial
Officer
|
|
-
|
|
|
|
|
|
|
|
Patrice Rioux,
MD Ph.D.
|
|
66
|
|
Acting Chief
Medical Officer
|
|
-
|
|
|
|
|
|
|
|
Michael J.
Brown, MSc
|
|
60
|
|
Director, Member
of the Audit Committee, the Compensation Committee, and the
Corporate Governance & Nominating Committee
|
|
December
2014
|
|
|
|
|
|
|
|
Raymond
“Bill” Anderson, MBA
|
|
76
|
|
Director, Chair
of the Audit Committee, Member of the Compensation Committee and
the Corporate Governance & Nominating Committee
|
|
April
2017
|
|
|
|
|
|
|
|
Arthur Klausner,
MBA
|
|
57
|
|
Director, Member
of the Audit Committee, the Compensation Committee, and the
Corporate Governance & Nominating Committee
|
|
August
2017
|
|
|
|
|
|
|
|
Kirsten
Anderson
|
|
50
|
|
Senior Vice
President, Clinical Development
|
|
-
|
Backgrounds of our
executive officers and board members are discussed
below.
Executive Officers and Board Members
Christopher M. Starr, PhD - Executive Chairman
Dr.
Starr is a co-founder and has been our Executive Chairman and a
Board Member of ours and our predecessor Monopar Therapeutics, LLC
since its inception in December 2014. Dr. Starr’s primary
responsibility as our Executive Chairman is to work with our Chief
Executive Officer and the rest of our Board to set our strategic
direction and provide guidance to, and oversight of our Chief
Executive Officer. Our Chairman also sets the agenda for Board
meetings and presides over them. Dr. Starr was the co-Founder and
served as the initial chief executive officer (“CEO”)
at Raptor Pharmaceuticals (“Raptor”), a public company
(Nasdaq: RPTP), since its inception in 2006 through December 2014
and continued to serve Raptor as a member of its board of directors
until Raptor was sold to Horizon Pharma plc in October 2016. The
principal business of Raptor is the development and
commercialization of treatments for rare diseases. Dr.
Starr’s primary responsibilities as CEO included the day to
day leadership and performance of Raptor which had one approved
drug marketed in the U.S. and Europe. Dr. Starr co-founded BioMarin
in 1997, a public company (Nasdaq: BMRN) where he last served as
Senior Vice President and Chief Scientific Officer overseeing the
approval of three drugs until starting Raptor in 2006. As Senior
Vice President at BioMarin, Dr. Starr was responsible for managing
a Scientific Operations team of 181 research, process development,
manufacturing and quality personnel through the successful
development of commercial manufacturing processes for its biologic
enzyme replacement therapy and small molecule products, and
supervised the cGMP design, construction and licensing of
BioMarin’s proprietary biological manufacturing facility.
From 1991 to 1997, Dr. Starr supervised research and commercial
programs at BioMarin’s predecessor company, Glyko, Inc.,
where he served as Vice President of Research and Development.
Prior to his tenure at Glyko, Inc., Dr. Starr was a National
Research Council Associate at the National Institutes of Health.
Dr. Starr earned a B.S. from Syracuse University and a Ph.D. in
Biochemistry and Molecular Biology from the State University of New
York Health Science Center, in Syracuse, New York.
Chandler D. Robinson, MD MBA MSc - Chief Executive
Officer
Dr.
Robinson is a co-founder and has been our CEO and a Board Member of
ours and our predecessor Monopar Therapeutics, LLC since its
inception in December 2014. Dr. Robinson’s primary
responsibilities as CEO are for our day to day leadership and
performance. Since 2010, Dr. Robinson has been, and continues to
be, a manager of Tactic Pharma LLC (“Tactic”), which he
co-founded and led as CEO until it became a holding company in
April 2014. Tactic acquired and developed preclinical and clinical
stage compounds. In 2010, Tactic acquired a drug on which Dr.
Robinson conducted research at Northwestern University. Tactic
licensed the drug to a company in Europe and manufactured it for
sale on a Named Patient basis throughout Europe. In April 2014,
Tactic sold its remaining rights to the compound to three large
European investment firms and this compound is currently in a Phase
3 clinical trial for Wilson disease. Among his previous
experiences, Dr. Robinson in 2008 worked at Onyx Pharmaceuticals in
their Nexavar marketing division, from 2008 to 2009 as a co-manager
of a healthcare clinic in San Jose CA, from 2004 to present as
Founder and President of an undergraduate research focused
non-profit now in its 14th year, and from 2006 to 2007 as part of a
quantitative internal hedge-fund style team at Bear Stearns
investment bank. He was previously on the board of Wilson
Therapeutics (Nasdaq: WTX) and is currently on the board of
Northwestern University’s Chemistry of Life Processes
Institute. Dr. Robinson graduated summa cum laude from Northwestern
University, earned a master's degree in International Health Policy
and Health Economics from the London School of Economics on a
Fulbright Scholarship, an MBA from Cambridge University on a Gates
Scholarship through Bill Gates’ Trust, and an MD from
Stanford University.
Andrew P. Mazar, PhD – Executive Vice President of Research
and Development, and Chief Scientific Officer
Dr.
Mazar is a co-founder and has been our Chief Scientific Officer and
a Board Member of ours and our predecessor Monopar Therapeutics,
LLC, since inception in December 2014. Dr. Mazar became our
Executive Vice President of Research and Development effective as
of November 1, 2017. Dr. Mazar’s primary responsibilities for
us are the day to day leadership and performance of our research
and development activities. Dr. Mazar has spent 28 years working on
drug discovery and development at the interface of academia and
industry and has founded or co-founded 8 start-up companies to
commercialize new drug discoveries, including Tactic Pharma LLC
(“Tactic”), which acquired and developed preclinical
and clinical stage compounds. He is also internationally recognized
for his basic research work on the role of the urokinase
plasminogen activator (uPA) system in tumor progression as well as
mechanisms of cancer invasion and metastasis. Prior to joining
Tactic in 2010 and the Chemistry of Life Processes Institute at
Northwestern University in 2009, Dr. Mazar was the Chief Scientific
Officer at Attenuon, LLC in San Diego from 2000 to 2009 and led
discovery and development efforts resulting in three drugs entering
oncology clinical trials. Dr. Mazar has now overseen 18
IND-enabling efforts, many of these focused on drugs discovered in
academia.
Dr.
Mazar is the previous Chair of the NCI Nanotechnology Alliance
Animal Model working group (2011-2015) and has been a member of the
NHLBI Scientific Review Board (SRB) for the SMARTT program since
2011. Dr. Mazar served as Associate Editor for Recent Patent
Reviews on Anti - Cancer Drug Discovery (2010-2013) and is
currently a member of the editorial board of Clinical Cancer
Research. He most recently served as a charter member of the NIH
Developmental Therapeutics Study Section (2012-2016), and has also
served on study sections for the NCI, NIDDK, NHLBI, NIH Special
Emphasis Panels, VA Oncology Merit Review, AHA and the Phillip
Morris External Research Program. He is also the co-author of 110
peer reviewed publications and 18 reviews and book chapters, most
recently contributing chapters on Cancer Invasion and Metastasis to
the Oxford Textbook of Clinical Oncology and The Oxford Textbook of
Cancer Biology. Dr. Mazar has founded or advised several start-up
companies over the past 5 years including Tactic Pharma LLC,
Valence Therapeutics, Wilson Therapeutics, Panther Biotechnology,
Lung Therapeutics Inc., Actuate Therapeutics, AvidTox and
Tempus.
Kim R. Tsuchimoto –Chief Financial Officer
Ms.
Tsuchimoto was our Acting Chief Financial Officer since June 2015,
and became employed as our Chief Financial Officer effective
November 1, 2017. Ms. Tsuchimoto spent over nine years at Raptor,
as its Chief Financial Officer from Raptor’s inception in May
2006 until September 2012, as Raptor’s Vice President of
International Finance, Tax & Treasury from September 2012 to
February 2015, and lastly served as Raptor’s Vice President,
Financial Planning & Analysis and Internal Controls from
February to May 2015. Prior to Raptor, Ms. Tsuchimoto spent eight
years at BioMarin and its predecessor, Glyko, Inc., where she held
the positions of Vice President-Treasurer, Vice
President-Controller and Controller. Ms. Tsuchimoto received a B.S.
in Business Administration from San Francisco State University. She
holds an inactive California Certified Public Accountant
license.
Patrice Rioux, MD Ph.D. – Acting Chief Medical
Officer
Dr.
Rioux has been our Acting Chief Medical Officer since December
2016. Dr. Rioux’s primary responsibilities include clinical
development and regulatory (FDA & EMA) planning, coordination
of clinical operations and statistical strategy, support of
investor relationship. Dr. Rioux has been deeply involved in
development of drugs for rare diseases for the last 20 years. His
background includes development of drugs and biologic products for
various indications across neurodegenerative diseases, immunology,
pain management, oncology and metabolic diseases. Dr. Rioux has
been performing development, medical/regulatory, and clinical
consulting services through his consulting company, pRx Consulting,
LLC from June 2004 to the present. From 2009 to October 2014, Dr.
Rioux was the Chief Medical Officer at Raptor where he was
responsible for securing regulatory approval of PROCYSBI, a
delayed-release cysteamine for the treatment of a lysosomal storage
disease, nephropathic cystinosis, in both the U.S. and Europe. From
2005 to 2008 he served as the Chief Medical Officer at Edison
Pharmaceuticals, and as from 2000 to 2003, he served as Vice
President Clinical at Repligen, where he gained significant orphan
disease experience in mitochondrial diseases as well as in autism,
and auto-immune diseases. After several years as a clinical
researcher at INSERM (France), he started his career in the
pharmaceutical industry at Biogen in October 1995, working on
multiple sclerosis, before joining Variagenics, Inc. in 1998, one
of the first pharmacogenomic companies. Dr. Rioux received his
Medical Education at Faculté de Médecine
Pitié-Salpetriere, his Ph.D. in Mathematical Statistics at
Faculté des Sciences, and his Degree of Pharmacology
(pharmacokinetics and clinical pharmacology) at Faculté de
Médecine Pitié-Salpetriere.
Kirsten Anderson - Senior Vice President, Clinical
Development
Ms.
Anderson has more than 25 years of experience in the biotech and
pharmaceutical industry, with expertise in oncology drug
development, most recently as an independent clinical development
consultant for us from February 2017 through October 2017. She
became our Senior Vice President of Clinical Development effective
November 1, 2017. From 2008 to 2016, she was at OncoGenex
Pharmaceuticals, where she served as Vice President of Clinical
Operations (March 2015 to November 2016). Since 2008, she has also
held the following positions with OncoGenex: Director, Clinical
Research (2008 to December 2010) and Senior Director, Clinical
Research (January 2012 to February 2015). Prior to joining
OncoGenex, Ms Anderson held clinical trial management positions at
Sonus Pharmaceuticals, Xcyte Therapies, and Immunex, including the
oversight of global clinical operations, drug safety and data
management. She has a laboratory research background and began her
career at the University of Pennsylvania. Ms. Anderson earned a
degree in Biology from the University of Vermont and is completing
her Masters in Biotech Enterprise (expected 2018) from Johns
Hopkins University.
Michael J. Brown, MSc – Board Member
Mr.
Brown has been a Board Member of ours and our predecessor, Monopar
Therapeutics, LLC since its inception in December 2014. Mr. Brown
is also the Administrator of the Monopar 2016 Stock Incentive Plan.
Mr. Brown is the Co-Founder, and since 1994 has served as Chairman,
and since 1996 as CEO, of Euronet Worldwide Inc.
(“Euronet”), a public company (Nasdaq: EEFT) which
offers payment and transaction processing and distribution
solutions to financial institutions, retailers, service providers
and individual consumer. Mr. Brown has been President of Euronet
since December 2014 and also served as President of Euronet from
December 2006 to June 2007. Mr. Brown has been a member of the
Euronet board of directors since December 1996 and also served on
the boards of Euronet’s predecessor companies. He has a
Master of Science in molecular and cellular biology.
Raymond W. Anderson, MBA MS – Board Member
Mr.
Anderson has been a Board Member of Monopar since April 2017. He
has been chair of the audit committee since October 2017. Mr.
Anderson has more than 35 years of biopharmaceutical/medical
technology sector experience, primarily focused in financial
management. Mr. Anderson worked at Dow Pharmaceutical Sciences,
Inc. from July 2003 until June 2010. He most recently served as
Dow’s Managing Director from January 2009 to June 2010, and
previously served as Dow’s Chief Financial Officer and Vice
President, Finance and Administration. Prior to joining Dow in
2003, Mr. Anderson was Chief Financial Officer for Transurgical,
Inc., a private medical technology company. Prior to that, Mr.
Anderson served as Chief Operating Officer and Chief Financial
Officer at BioMarin Pharmaceutical Inc. from June 1998 to January
2002. Prior to June 1998, Mr. Anderson held similar executive-level
positions with other biopharmaceutical companies, including Syntex
Laboratories, Chiron Corporation, Glycomed Incorporated and Fusion
Medical Technologies. Mr. Anderson served as a board member and
chair of the audit committee at Raptor Pharmaceutical Inc. from its
founding in 2006 to its acquisition in 2016. Mr. Anderson also
served as an officer in the U.S. Army Corps of Engineers, as a
strategic planner and operational profit and loss manager at
General Electric and as a finance manager at Memorex. Mr. Anderson
holds an M.B.A. from Harvard University, an M.S. in Administration
from George Washington University and a B.S. in Engineering from
the U.S. Military Academy.
Arthur Klausner, MBA – Board Member
Mr.
Klausner has been a consultant to the biopharmaceutical industry
since 2009. He served as Chief Executive Officer of Gem
Pharmaceuticals, LLC (“Gem”) from September 2012 until
Gem’s drug development assets were acquired by us in 2017.
Gem’s lead, Phase 2 drug product candidate was GPX-150
(renamed MNPR-201) (5-imino-13-deoxydoxorubicin), a proprietary
analog of doxorubicin engineered specifically to retain the
anticancer activity of doxorubicin while minimizing toxic effects
on the heart. In addition to his role at Gem, Mr. Klausner served
as CEO of Jade Therapeutics Inc. (“Jade”) from
September 2012 until December 2015. Jade’s focus was on the
development of proprietary, cross-linked hyaluronic acid
formulations for ophthalmic applications until its March 2016
acquisition by EyeGate Pharmaceuticals, Inc. (Nasdaq: EYEG).
Previously, Mr. Klausner spent a total of 18 years at the life
science venture capital firms Domain Associates and Pappas
Ventures, where he was involved in the investment in and subsequent
nurturing of a variety of biotechnology, specialty pharmaceutical,
and medical device companies. During that time, he was a member of
the board of directors at Santarus (acquired by Salix
Pharmaceuticals), X-Ceptor Therapeutics (acquired by Exelixis),
Orexigen Therapeutics, Inc. (Nasdaq: OREX), and Syndax
Pharmaceuticals (Nasdaq: SNDX), and a board observer at Peninsula
Pharmaceuticals (acquired by Johnson & Johnson) and Cerexa
(acquired by Forest Laboratories). Mr. Klausner currently serves on
the board of directors of Cennerv Pharma (S) Pte. Ltd. (Singapore),
and on advisory boards for Neurotez, Inc., and the New York
University Innovation Venture Fund. He received his M.B.A. from the
Stanford University Graduate School of Business and his
undergraduate degree in Biology from Princeton
University.
Agreement Regarding Election of Directors
The
limited liability company agreement of TacticGem provides that the
Manager of TacticGem is required to vote TacticGem’s shares
of our common stock to elect Tactic Pharma’s nominees to our
Board plus one person designated by Gem. The Gem board nomination
right terminates at such time as we achieve a listing on a national
stock exchange (e.g. Nasdaq, the NYSE or similar national stock
exchange). Gem’s initial designee for election to our Board
was Arthur Klausner.
Board Composition and Election of Directors
Independence of the Board of Directors
We
believe it is important to have independent directors on our Board
who can make decisions without being influenced by personal
interests. Additionally, because one of our goals is to qualify for
listing with NADSDAQ we are following the Nasdaq Stock Market
(“Nasdaq”) listing standards, which requires that a
majority of the members of our Board of Directors must qualify as
“independent,” as affirmatively determined by our
Board. Our Board consults with our counsel to ensure that our
Board’s determinations are consistent with relevant
securities and other laws and regulations regarding the definition
of “independent,” including those set forth in
pertinent listing standards of Nasdaq, as in effect from time to
time.
Consistent
with these considerations, after review of all relevant identified
transactions or relationships between each director, or any of his
family members, and us, our senior management and our independent
registered public accounting firm, our Board has affirmatively
determined that the following directors are independent directors
within the meaning of the applicable Nasdaq listing standards: Dr.
Starr, Mr. Brown, Mr. Anderson and Mr. Klausner. In making this
determination, our Board found that none of the directors had a
material or other disqualifying relationship with us. Dr. Robinson,
our President and Chief Executive Officer, is not an independent
director by virtue of his employment relationship with us, and
similarly Dr. Mazar by virtue of his employment relationship with
us is not an independent director.
There
are no family relationships among any of our directors or executive
officers.
Board Leadership Structure
We
have structured our Board in a way that we believe effectively
serves our objectives of corporate governance and management
oversight. We separate the roles of Chief Executive Officer and
Chairman of the Board in recognition of the differences between the
two roles. We believe that the Chief Executive Officer should be
responsible for Monopar’s day to day leadership and
performance, while our Executive Chairman of the Board should work
with our Chief Executive Officer and the rest of our Board to set
our strategic direction and provide guidance to, and oversight of
our Chief Executive Officer. Our Executive Chairman also sets the
agenda for Board meetings and presides over them.
Audit Committee
Our
Board has formed an audit committee. Mr. Anderson has been
appointed as chair of the audit committee. Mr. Anderson is a
financial expert as defined by Nasdaq and is an independent board
member as contemplated by Rule 10A-3 under the Exchange Act. In
addition, Dr. Starr, Mr. Klausner and Mr. Brown have been appointed
as independent members of the audit committee.
The functions of our Audit Committee include,
among other
duties and responsibilities
:
●
to
assist the Board of Directors in its oversight responsibilities for
the integrity of the Company’s financial
statements;
●
to
assure the quality of the accounting and financial reporting
processes of the Company;
●
to
assure the effectiveness of the Company’s internal controls
over financial reporting;
●
to
assist with the Company’s compliance with legal and
regulatory requirements;
●
to
review and discuss with management and the independent registered
public accounting firm the Company’s annual and quarterly SEC
reports including the audit of the annual financial statements and
the reviews of the quarterly financial statements and related
disclosures;
●
to
be directly responsible for the appointment, compensation,
retention, and oversight of the work of the independent registered
public accounting firm and any other independent registered public
accounting firm performing other audit, review, or attest services
for the Company;
●
to
review and discuss with the Company’s management the risk
assessment and risk management policies of the
Company;
●
to
oversee systems and procedures for the receipt, retention and
resolution of complaints received by the Company regarding
accounting, internal financial controls or auditing matters and for
the confidential and anonymous submission by Company employees of
concerns regarding potential fraud or questionable financial,
accounting, internal financial controls or auditing
matters;
●
to
periodically review and update the Company’s Code of Business
Conduct and Ethics and review programs established to monitor
compliance with and to improve employees’ knowledge of the
Code;
●
to
review and approve or disapprove any transaction required to be
disclosed according to SEC regulations between the Company and any
related party and to oversee the Company’s policies and
procedures for judgments as to related party transactions;
and
●
to
prepare the Audit Committee’s report required by SEC rules,
when such requirement becomes applicable to the
Company.
Code of Conduct and Business Ethics
We have
adopted a Code of Conduct and Business Ethics that is applicable to
our principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing
similar functions. It also applies to all of our employees and our
non-employee directors. Our Code of Conduct and Business Ethics is
available on our website, will be provided to any person without
charge upon request, and is filed as an exhibit to this Annual
Report on Form 10-K.
Corporate Governance and Nominating Committee
The
Board has formed a Corporate Governance and Nominating Committee
and has appointed Dr. Starr, Mr. Brown, Mr. Anderson and Mr.
Klausner as members of the committee.
It
is anticipated that the functions of our corporate governance and
nominating committee will include, among other things:
●
identifying
individuals qualified to become board members;
●
recommending
to our board the persons to be nominated for election as directors
and to each of the board's committees;
●
reviewing
and making recommendations to the board with respect to management
succession planning;
●
developing
and recommending to the board corporate governance guidelines;
and
●
overseeing
an annual evaluation of the board.
Compensation Committee
Our
Board has also formed a Compensation Committee consisting of Mr.
Brown Dr. Starr, Mr. Anderson and Mr. Klausner as independent
members. It is anticipated that the compensation committee will
engage independent third-party compensation experts as
needed.
The
functions of our Compensation Committee is anticipated to include,
among other things:
●
annually reviewing
and approving corporate goals and objectives relevant to our chief
executive officer's compensation;
●
determining our
chief executive officer's compensation;
●
reviewing and
approving, or making recommendations to our board with respect to,
the compensation of our other executive officers;
●
overseeing an
evaluation of our senior executives;
●
overseeing and
administering our equity incentive plans;
●
reviewing and
making recommendations to our board with respect to director
compensation; and
●
preparing the
annual compensation committee report to the extent required by SEC
rules,
when such requirement becomes
applicable to us
.
I
tem 11. Executive
Compensation.
Summary Compensation Table
The
following table sets forth for the fiscal year
s
ended December 31,
2017 and
2016, the
compensation of the Company’s Chief Executive Officer and
the Company's
t
wo
highest compensated
executive
officer
s
whose
compensation exceeded $100,000
during our last fiscal
year
.
Name and
|
Fiscal
|
|
|
|
|
|
Positions
|
Year
|
|
|
|
|
|
Chandler D. Robinson, M.D.,
|
2017
|
318,750
|
-
|
23
(1)
|
70,000
(2)
|
388,773
|
Chief Executive Officer and Director
|
2016
|
300,000
|
|
41
(1)
|
75,000
(2)
|
375,041
|
|
|
|
|
|
|
|
Andrew P. Mazar, Ph.D.,
|
2017
|
87,500
|
-
|
220,466
(1)
|
238,750
(3)
|
546,716
|
Chief Scientific Officer and Director
|
2016
|
-
|
-
|
41
(1)
|
197,500
(3)
|
197,541
|
|
|
|
|
|
|
|
Kirsten Anderson,
|
2017
|
43,333
|
25,000
|
5,502
|
78,550
|
152,385
|
Senior Vice President, Clinical Development(4)
|
2016
|
-
|
-
|
-
|
-
|
-
|
(1) In
2016, each of Dr. Robinson and Dr. Mazar was granted options to
purchase up to 84,000 shares of our common stock as discussed below
in the section
Outstanding Equity
Awards at Fiscal Year End
. Based upon the Black-Scholes
valuation model for stock option compensation expense, the value of
Dr. Robinson’s stock options was $
41
and the value of Dr.
Mazar’s stock options was $
41
for the year ended December
31, 2016. The options vested 50% on the grant date (April 4, 2016),
25% on the six-month anniversary of the grant date (October 4,
2016) and 25% on the one year anniversary of the grant date (April
3, 2017).
In 2017, each of Dr. Robinson and Dr. Mazar was granted options to
purchase up to 84,000 shares of our common stock as discussed below
in the section
Outstanding Equity
Awards at Fiscal Year End
. Based upon the Black-Scholes
valuation model for stock option compensation expense, the value of
Dr. Robinson’s stock options outstanding as of December 31,
2017 was $23 and the value of Dr. Mazar’s stock options
outstanding as of December 31, 2017 was $220,466 for the year ended
December 31, 2017. The options granted in 2017 vested 6/48ths on
the six month anniversary of grant date (August 20, 2017) and
1/48th per month thereafter.
(2)
Consisting of an employer funded 401(k) in the amount of
$54,000 and
$53,000
for 2017 and 2016,
respectively
, plus
$16,000 and
$22,000 in lieu of
benefits
for 2017 and 2016,
respectively
.
(3)
Until November 1, 2017, Dr. Mazar was a consultant acting as chief
scientific officer for
$225,000 and
$197,500 in
consulting fees
in 2017 and
2016, respectively
, with no additional compensation for
board member services. As of November 1, 2017, Dr. Mazar became
employed as our Executive Vice President of Research and
Development, and Chief Scientific Officer
at an annual base salary of $350,000
and an amount in lieu of benefits of $55,000
.
A pro rata amount of in lieu of
benefits of $13,750 is included in All Other
Compensation.
(4) Until November 1, 2017, Ms. Anderson was a consultant during
2017 providing clinical development strategy for $78,550 in
consulting fees. As of November 1, 2017, Ms. Anderson became
employed as our Senior Vice President, Clinical Development at an
annual base salary of $260,000 and a sign-on bonus of $25,000. On
November 1, 2017, Ms. Anderson was granted options to purchase up
to 40,000 shares of our common stock as discussed below in the
section
Outstanding Equity
Awards at Fiscal Year End
. Based upon the Black-Scholes
valuation model for stock option compensation expense, the value of
Ms. Anderson’s stock options outstanding as of December 31,
2017 was $5,502. The options vest 6/48ths on the six month
anniversary of grant date (May 1, 2018) and 1/48th per month
thereafter.
Employment Agreements
In
December 2016, we entered into an employment agreement with Dr.
Robinson for his role as our chief executive officer. Although we
have been paying Dr. Robinson as our employee since January 1,
2016, we did not enter into a formal employment agreement until
December 2016. Dr. Robinson’s employment agreement is for an
indefinite term (for at-will employment). The agreement was amended
and restated on November 1, 2017.
Under
his employment agreement, Dr. Robinson currently receives a
$375,000 per year base salary, which may be adjusted from time to
time in accordance with normal business practice and in our sole
discretion. In addition, Dr. Robinson will be eligible for an
annual performance bonus, of up to 50% of his base salary, based on
achieving goals as determined by our Board and our Compensation
Committee. Until we obtain retirement and healthcare benefits for
our eligible employees and Dr. Robinson elects to opt in to such
benefits, Dr. Robinson is entitled to an additional salary of at
least $4,583.33 per month (or such greater amount as determined by
our Board) in lieu of such benefits.
On
November 1, 2017, we entered into an employment agreement with Dr.
Mazar for his role as our Executive Vice President of Research and
Development and Chief Scientific Officer. Dr. Mazar’s
employment agreement is for an indefinite term (for at-will
employment). Under his employment agreement, Dr. Mazar receives a
$350,000 per year base salary, which may be adjusted from time to
time in accordance with normal business practice and in our sole
discretion. In addition, Dr. Mazar will be eligible for an annual
performance bonus, of up to 40% of his base salary, based on
achieving goals as determined by our Board and our Compensation
Committee. Until we obtain retirement and healthcare benefits for
our eligible employees and Dr. Mazar elects to opt in to such
benefits, Dr. Mazar is entitled to an additional salary of at least
$4,583.33 per month (or such greater amount as determined by our
Board) in lieu of such benefits.
On
November 1, 2017, we entered into an employment agreement with Ms.
Tsuchimoto for her role as our Chief Financial Officer. Ms.
Tsuchimoto’s employment agreement is for an indefinite term
(for at-will employment). The agreement was amended on March 1,
2018. Under her employment agreement, Ms. Tsuchimoto receives a
$137,500 per year base salary to reflect 50% time, which may be
adjusted from time to time in accordance with normal business
practice and in our sole discretion. Ms. Tsuchimoto is entitled to
an additional salary of up to $1,800 per month in lieu of medical,
dental and vision benefits until such time the Company has such
benefit plans in place. In addition, Ms. Tsuchimoto will be
eligible for an annual performance bonus determined by our Board
and our Compensation Committee.
On
November 1, 2017, we entered into an employment agreement with Ms.
Anderson for her role as our Senior Vice President of Clinical
Development. Ms. Anderson’s employment agreement is for an
indefinite term (for at-will employment). Under her employment
agreement, Ms. Anderson receives a $260,000 per year base salary,
which may be adjusted from time to time in accordance with normal
business practice and in our sole discretion.
Ms. Anderson's employment agreement
included a $25,000 sign-on bonus.
In addition, beginning in
2018, Ms. Anderson will be eligible for an annual performance bonus
determined by our Board and our Compensation
Committee.
Outstanding Equity Awards at Fiscal Year End
The
following table sets forth outstanding stock option awards held by
named executive officers as of December 31, 201
7
. There were no outstanding
stock awards as of December 31, 201
7
.
|
|
Number of securities underlying unexercised options (#)
exercisable
|
|
Number of securities underlying unexercised options (#)
unexercisable
|
|
Option exercise price ($)
|
|
|
Chandler D.
Robinson, M.D.
|
|
17,500
(1)
84,000
(2)
|
|
66,500
(1)
-
|
|
$0.001
$0.001
|
|
02/19/2027
04/03/2026
|
|
|
|
|
|
|
|
|
|
Andrew P. Mazar,
Ph.D
|
|
17,500
(1)
84,000
(2)
|
|
66,500
(1)
-
|
|
$0.001
$0.001
|
|
02/19/2027
04/03/2026
|
|
|
|
|
|
|
|
|
|
Kirsten
Anderson
|
|
-
(3)
|
|
40,000
(3)
|
|
$6.00
|
|
10/31/2027
|
(1)
Both Dr. Robinson and Dr. Mazar were granted stock option awards on
February 20, 2017 which vested 6/48ths on the six month anniversary
of grant date (August 20, 2017) and 1/48th per month
thereafter.
(2)
Both Dr. Robinson
and Dr. Mazar were granted stock option awards on April 4, 2016
which vested 50% on the grant date (April 4, 2016), 25% on the
six-month anniversary of the grant date (October 4, 2016) and 25%
on the one year anniversary of the grant date (April 3,
2017).
(3)
Ms. Anderson was granted a stock option award on November 1, 2017
which vests 6/48ths on the six month anniversary of grant date (May
1, 2018) and 1/48th per month thereafter.
Potential Payments upon Termination or Change in
Control
Each of
Dr. Mazar’s and Dr. Robinson’s employment agreements
provides that upon execution and effectiveness of a release of
claims, Dr. Mazar and Dr. Robinson will be entitled to severance
payments if we terminate their employment without cause, as defined
in the employment agreement, or if Dr. Mazar or Dr. Robinson
terminates his employment with us for good reason, as defined in
the employment agreement. If employment terminates under these
circumstances, in each case absent a change in control, as defined
in the employment agreements, we will be obligated for a period of
twelve months, (1) to pay base salary, (2) to provide that any
equity awards will continue vesting, (3) to pay the monthly
premiums for COBRA coverage equal to the amount paid for similarly
situated employees and (4) to the extent allowed by applicable law
and the applicable plan documents, continue to provide all of our
employee benefit plans and arrangements that the employee was
receiving at the time of termination. In addition, equity awards
held by the terminated employee, that vest solely on the passage of
time, will be accelerated by 12 months. If employment terminates
under these circumstances, within 12 months following a change in
control, in addition to the severance described above, we will be
obligated to accelerate in full the vesting of all of the
employee’s outstanding equity awards.
In the case of a change in control,
instead of the 12 months of base salary described above, we will be
obligated to provide an amount equal to one-and-a-half times the
sum of the base salary and target bonus for the fiscal year in
which termination occurred. If either of Dr. Mazar’s or Dr.
Robinson’s employment is terminated because of death or
permanent disability, we will be obligated to provide the severance
described above, but for a period of three months instead of twelve
months.
Ms. Anderson’s employment agreement provides that upon
execution and effectiveness of a release of claims, Ms. Anderson
will be entitled to severance payments if we terminate her
employment without cause, as defined in the employment agreement,
or if Ms. Anderson terminates her employment with us for good
reason, as defined in the employment agreement. If employment
terminates under these circumstances, absent a change in control,
as defined in the employment agreement, we will be obligated for a
period of three months to pay base salary, and for a period of six
months (1) to provide that any vested and unexercised equity awards
continue to be exercisable and (2) to pay the monthly premiums for
COBRA coverage. If employment terminates within six months
following a change in control, we will be obligated to pay six
months base salary and monthly premiums for COBRA coverage for six
months and accelerate in full the vesting of all of the
employee’s outstanding equity awards which would be
exercisable for two years from termination. If Ms. Anderson's
employment is terminated because of death or permanent disability,
we will be obligated to provide base salary for two months and
monthly premiums for COBRA coverage for two months.
Stock Option Plan
In
April 2016, our Board and stockholders holding more than a majority
of our outstanding convertible preferred stock approved the Monopar
Therapeutics Inc. 2016 Stock Incentive Plan (as subsequently
amended, the “Plan”), allowing us to grant up to an
aggregate 700,000 shares of stock awards, stock options, stock
appreciation rights and other stock-based awards to employees,
non-employee directors and consultants. Concurrently, our Board
granted to non-employee board members and our acting chief
financial officer stock options to purchase up to an aggregate
273,000 shares of our common stock at an exercise price of $0.001
per share (the par value) based upon a third party valuation of our
common stock. Such stock options vest 50% on grant date, 25% on the
six month anniversary of the grant date and 25% on the one year
anniversary of the grant date. In December 2016, our Board granted
to our acting chief medical officer options to purchase up to 7,000
shares of our common stock. Such options vest monthly over six
months from the grant date. In February 2017, our Board granted to
board members and our acting chief financial officer stock options
to purchase up to an aggregate 275,520 shares of our common stock
at an exercise price of $0.001 per share (the par value) based upon
a third party valuation of our common stock. Such options vest
6/48ths upon the six month anniversary of the grant date and 1/48th
per month thereafter. In September 2017 and November 2017, stock
options to purchase up to an aggregate 103,072 shares of our common
stock were granted at an exercise price of $6.00, based on the
price per share at which common stock was sold in our most recent
private offering. 61,024 of such options vest 6/48ths upon the six
month anniversary of the grant date and 1/48th per month
thereafter, 21,024 of such options vest 6/42nd upon the six month
anniversary of the grant date and 1/42nd per month thereafter and
21,024 of such options vest 6/24ths upon the six month anniversary
of the grant date and 1/24th per month thereafter. On January 1,
2018, our Board granted to our acting chief medical officer options
to purchase up to 32,004 shares of our common stock at an exercise
price of $6 per share based upon the price per share at which
common stock was sold in our most recent private offering, and such
options vest 12,000 on the date of grant and 1,667 options on the
1
st
of
each month thereafter. All outstanding stock options have a ten
year term. 690,596 stock options were outstanding as of March 1,
2018.
Under
the Plan, the per share exercise price for the shares to be issued
upon exercise of an option is to be determined by the Plan
administrator, except that the per share exercise price may be no
less than 100% of the fair market value per share on the grant
date. Fair market value is established by our Board, using third
party valuation reports and recent financings. Stock options
generally expire after ten years.
The
Plan provides that the Plan administrator will be our Board, a
committee designated by our Board, or an individual designee. On
February 28, 2018, our independent Directors approved the
appointment of a committee (the “Plan Administrator
Committee”) consisting of three independent, non-employee
Directors (Dr. Starr, Mr. Brown, and Mr. Anderson) to serve as the
Administrator of our 2016 Stock Incentive Plan. The Plan
Administrator Committee will require a quorum of at least two of
the three Directors on all decisions. The Administrator has
exclusive authority, consistent with laws and the terms of the
Plan, to designate recipients of options to be granted thereunder
and to determine the number and type of options and the number of
shares subject thereto. Prior to February 28, 2018, Mr. Brown was
the Board-representative Administrator of our 2016 Stock Incentive
Plan. In March 2017, at the time of the Conversion, which resulted
in a 70 for 1 split of our common stock, the Administrator effected
the 70 for 1 stock split for the Plan which increased the stock
option pool from 10,000 to 700,000 and changed the stock options
granted in 2016 and in February 2017 by a 70 for 1 factor. No other
features were changed on the outstanding stock options
granted.
The
Plan was subsequently amended and restated in October 2017, which
was approved by stockholders holding more than a majority of our
outstanding common stock, as the Amended and Restated Monopar
Therapeutics Inc. 2016 Stock Incentive Plan, in order to increase
the maximum aggregate grants under the Plan from 700,000 to
1,600,000 shares of stock awards, stock options, stock appreciation
rights and other stock-based awards.
Director Compensation for Fiscal Year Ended December 31,
201
7
The
following table sets forth the compensation of our non-employee
Board of Directors during the year ended December 31,
201
7
.
Name
|
Fees earned or paid in cash ($)
|
|
All Other
Compensation
($)
|
|
Christopher M.
Starr, Ph.D.
|
100,897
|
23
(1)
|
-
|
100,920
|
Michael J.
Brown
|
20,000
|
9,652
(2)
|
-
|
29,652
|
Raymond "Bill"
Anderson
|
37,500
|
5,672
(3)
|
-
|
43,172
|
Arthur
Klausner
|
14,022
|
5,615
(4)
|
-
|
19,637
|
(1)
Based upon the Black-Scholes valuation model for stock option
compensation expense, the value of Dr. Starr’s stock
option
s outstanding as of
December 31, 2017
was $
23
for the year ended December
31, 201
7
. Dr. Starr
was
granted a stock option award on
February 20, 2017 which vested 6/48ths on the six month anniversary
of grant date (August 20, 2017) and 1/48th per month thereafter. In
2016, Dr. Starr was granted a stock option award on April 4, 2016
which vested 50% on the grant date (April 4, 2016), 25% on the
six-month anniversary of the grant date (October 4, 2016) and 25%
on the one year anniversary of the grant date (April 3,
2017).
(2) Based upon the Black-Scholes valuation model for stock option
compensation expense, the value of Mr. Brown’s stock options
outstanding as of December 31, 2017 was $9,652 for the year ended
December 31, 2017. Mr. Brown was granted a stock option award on
September 18, 2017 which vests 6/24ths on the six month anniversary
of grant date (March 18, 2018) and 1/24th per month
thereafter.
(3) Based upon the Black-Scholes valuation model for stock option
compensation expense, the value of Mr. Anderson’s stock
options outstanding as of December 31, 2017 was $5,672 for the year
ended December 31, 2017. Mr. Anderson was granted a stock option
award on September 18, 2017 which vests 6/42nds on the six month
anniversary of grant date (March 18, 2018) and 1/42nd per month
thereafter.
(4) Based upon the Black-Scholes valuation model for stock option
compensation expense, the value of Mr. Klausner’s stock
options outstanding as of December 31, 2017 was $5,615 for the year
ended December 31, 2017. Mr. Klausner was granted a stock option
award on September 1, 2017 which vests 6/48ths on the six month
anniversary of grant date (March 1, 2018) and 1/48th per month
thereafter.
Options Exercised and Stock Vested
None of
our executive officers or non-employee directors exercised any
options during the years ended December 31, 201
7
and 201
6
.
I
tem 12. Security Ownership of
Certain Beneficial Owners and Management and Related Stockholder
Matters.
Securities Authorized for Issuance Under Equity Compensation
Plans
The
following table provides information as of December 31, 2017, with
respect to shares of our common stock that may be issued under
existing equity compensation plans. There are no equity
compensation plans that have not been approved by our security
holders.
Plan
Category
|
Number of
Securities to be Issued Upon Exercise of Outstanding Options,
Warrants and Rights
|
Weighted
Average Exercise Price of Outstanding Options, Warrants and
Rights
|
Number of
Securities Remaining Available For Future Issuance under Equity
Compensation Plans
|
Equity compensation
plans approved by security holders (1)
|
658,592
|
$
0.94
|
941,408
|
(1) The
Monopar Therapeutics Inc. 2016 Stock Incentive Plan.
The
following table and the related notes present information on the
beneficial ownership of shares of our common stock, our only
outstanding class of stock, as of March 1, 2018 (subsequent to the
Conversion) by:
●
each of our named
executive officers;
●
all of our current
directors and executive officers as a group; and
●
each person known
by us to beneficially own more than five percent of our common
stock
Beneficial
ownership is determined in accordance with the rules of the SEC and
includes voting or investment power with respect to the securities.
Shares of our common stock that may be acquired by an individual or
group within 60 days of March 1, 2018, pursuant to the exercise of
options or warrants, are deemed to be outstanding for the purpose
of computing the percentage ownership of such individual or group,
but are not deemed to be outstanding for the purpose of computing
the percentage ownership of any other person shown in the
table.
Except
as indicated in footnotes to this table, we believe that the
stockholders named in this table have sole voting and investment
power with respect to all shares of common stock shown to be
beneficially owned by them, based on information provided to us by
such stockholders.
Name and
Address of Beneficial Owner
*
Unless otherwise noted, addresses are:
1000 Skokie Blvd., Suite 350, Wilmette, IL
60091
|
Shares of
Common Stock Beneficially Owned (A)
|
Percent of
Class Held (A)
|
TacticGem,
LLC
|
7,166,667(B)
|
77.1%
|
Tactic Pharma
LLC
|
4,277,939.88(B)
|
46.0%
|
Gem
Pharmaceutical LLC
941
Lake Forest Cir.
Birmingham, AL
35244
|
3,055,394.12(B)
|
32.9%
|
Chandler D.
Robinson, Chief Executive Officer and Director
|
122,502.8
|
1.3%
|
Christopher M.
Starr, Executive Chairman
|
157,900
|
1.7%
|
Andrew P. Mazar,
Executive Vice President of Research and Development, Chief
Scientific Officer and Director
|
122,502.8
|
1.3%
|
Michael J.
Brown, Director
|
216,132
|
2.3%
|
Raymond
“Bill” Anderson, Director
|
4,504
|
*
|
Arthur Klausner,
Director
|
8,066
|
*
|
Kim
R. Tsuchimoto, Chief Financial Officer
|
27,860
|
*
|
Patrice P.
Rioux, Acting Chief Medical Officer
|
24,001
|
*
|
Named executive
officers and directors as a group
(C)
|
7,850,135.6
|
81.1%
|
(A)
Beneficial
ownership is based upon 9,291,420.614 shares of our Common Stock
outstanding; and includes common stock options that vest within 60
days after March 1, 2018 as follows – Chandler D. Robinson,
Christopher M. Starr and Andrew P. Mazar options to purchase up to
108,500 shares of common stock, Kim R. Tsuchimoto options to
purchase up to 27,860 shares of common stock and Patrice P. Rioux
options to purchase up to 24,001 shares. These vested option shares
are deemed to be outstanding and beneficially owned by the person
holding the applicable options for the purpose of computing the
percentage ownership of that person, but they are not treated as
outstanding for the purpose of computing the percentage ownership
of any other person.
(B)
Tactic Pharma LLC
(“Tactic Pharma”) shares voting and investment power
over 4,111,272.88 shares of our common stock owned by TacticGem,
and Gem Pharmaceutical LLC (“Gem”) shares voting and
investment power over 3,055,394.12 shares of our common stock owned
by TacticGem, because pursuant to the TacticGem limited liability
company agreement all votes of our common stock (other than votes
for the election of directors) are passed through to Tactic Pharma
and Gem in proportion to their percentage interests in TacticGem,
and after an initial holding period, which ends after we have been
subject to the reporting requirements of the Exchange Act and have
filed all required reports for a period of at least 12 months,
either member of TacticGem can cause up to its proportionate shares
of our common stock to be distributed to it. Tactic Pharma holds
166,667 shares of stock in its own name. Mr. Brown, Dr. Mazar and
Dr. Robinson are managers of Tactic Pharma; because of this, they
control voting and dispositive power over 4,111,272.88 shares of
our common stock owned by TacticGem, and over our Common Stock
owned by Tactic Pharma. Gem is controlled by Pharma Investments,
LLC, which is in turn controlled by Diane M.
Hendricks.
(C)
Shares held by
TacticGem are only included in the total beneficial ownership of
our named executive officers and directors because the limited
liability agreement of TacticGem provides that the Manager of
TacticGem will vote our common stock held by TacticGem to elect
Tactic Pharma’s nominees plus one person designated by Gem
(until we achieve listing on a national stock exchange) to our
Board, and acting together the directors are able to control Tactic
Pharma, LLC, and how it selects its nominees for our Board of
Directors.
* Less
than 1%
I
tem 13. Certain Relationships and
Related Transactions, and Director Independence.
Since
January 2015, we (including as Monopar Therapeutics, LLC) have
engaged in the following transactions with our directors, executive
officers, holders of more than 5% of our voting securities, and
affiliates or immediate family members of our directors, executive
officers and holders of more than 5% of our voting securities, and
our co-founders. We believe that all of these transactions were on
terms as favorable as could have been obtained from unrelated third
parties.
During
the years ended December 31, 2017 and 2016, we paid or accrued
legal fees to Baker & Hostetler, LLP, a large national law firm
in which our Chief Executive Officer’s family member is a law
partner, approximately $300,140 and $54,000, respectively. The
family member billed a
de
minimis
amount of time on our legal engagement with Baker
& Hostetler, LLP.
Contributions by Tactic Pharma, LLC
We were
initially formed as a Delaware limited liability company in
December 2014, with the name Monopar Therapeutics, LLC, at which
time Tactic Pharma contributed technology and related assets to us,
in exchange for 1,000,000 shares of Series Z Preferred Units, which
were exchanged for 100,000 shares of Series Z Preferred Stock at
the time of our conversion to a corporation. The issued Series Z
Preferred Stock was recorded at par value $0.001 per share on our
balance sheet reflecting the historical capitalized cost basis, due
to the fact that MNPR-101’s development costs were previously
expensed (not capitalized) by Tactic Pharma. In March 2017, the
100,000 shares of Series Z Preferred Stock were converted into
7,000,000 shares of our common stock, $.0001 par value in
connection with the Conversion. See “
Conversion of Preferred Stock to Common
Stock
”.
In
August 2017, Tactic Pharma surrendered 2,888,727.12 shares of our
common stock back to us as a contribution to the capital of the
Company. This reduced its ownership percentage of our common stock
from 79.5% to 69.9%.
We
reimbursed Tactic Pharma, a
de
minimis
amount in monthly storage fees during the years
ended December 31, 2017 and 2016. In March 2017, Tactic Pharma
wired $1 million to us in advance of the sale of our common stock
at $6 per share under a private placement memorandum. In April, we
issued to Tactic Pharma 166,667 shares in exchange for the $1
million at $6 per share once we began selling stock to unaffiliated
parties under the private placement memorandum. In August 2017,
Tactic Pharma surrendered 2,888,727.12 shares of our common stock
back to us as a contribution to the capital of the Company. This
resulted in reducing Tactic Pharma’s ownership in us from
79.5% to 69.9%. Following the surrender of the common stock, Tactic
Pharma contributed 4,111,272.88 shares of its holdings in our
common stock to TacticGem pursuant to the Gem Transaction discussed
in detail in Note 6 of our audited financial statements below. As
of December 31, 2017, Tactic Pharma beneficially owned 46% of our
common stock, and TacticGem owned 77% of our common
stock.
Gem Transaction
On June
27, 2017, we signed a term sheet with Gem Pharmaceuticals, LLC
(“Gem”) pursuant to which Gem was to transfer assets
related to certain of its drug product candidate programs to us in
exchange for 32% of our outstanding common stock on a fully-diluted
basis. The Gem transaction was structured through a limited
liability company, TacticGem, which Gem formed with Tactic Pharma,
LLC (“Tactic Pharma”), our largest shareholder at that
time. Gem contributed certain of Gem’s drug product
candidates’ intellectual property and agreements associated
primarily with Gem’s GPX-150 (renamed MNPR-201) drug product
candidate program, along with $5,000,000 in cash (the “Gem
Contributed Assets”) to TacticGem for a 42.633% interest, and
Tactic Pharma contributed 4,111,272.88 shares of our common stock
to TacticGem for a 57.367% interest. Then, TacticGem contributed
the Gem Contributed Assets to us in exchange for 3,055,394.12 newly
issued shares of our common stock (31.4% on a fully-diluted basis)
(the two contributions collectively, the “Gem
Transaction”). The contribution by TacticGem, made in
conjunction with contributions from outside investors in a private
offering, was intended to qualify for tax-free treatment. The Gem
Transaction closed on August 25, 2017. Following the Gem
Transaction, TacticGem owns 7,166,667 shares of our stock. Pursuant
to the TacticGem limited liability company agreement, all votes of
our common stock by TacticGem (aside from the election of our Board
of Directors) is required to be passed through to Tactic Pharma and
Gem based on their percentage interest (currently pursuant to this
voting agreement, Tactic has voting and investment power over
4,111,272.88 shares of our common stock and Gem has voting and
investment power over 3,055,394.12 shares of our common stock).
Neither Gem nor TacticGem was a related person prior to the Gem
Transaction. The TacticGem limited liability company agreement
provides that its manager will vote all shares of our common stock
held by it to elect Tactic Pharma’s nominees to our Board of
Directors plus one person nominated by Gem, initially Arthur
Klausner.
Pursuant to the
Conversion and the Gem Transaction and sales of our common stock in
September 2017, Tactic Pharma now holds voting and investment power
over 4,277,939.88 shares of our Common Stock, which is 46.0% of our
outstanding common stock. In the ordinary course of business, we
have reimbursed and continue to reimburse Tactic Pharma for
expenses Tactic Pharma has paid on our behalf, which historically
included legal patent fees and storage rental fees. Certain of our
Board Members and executive officers own and control Tactic Pharma.
Although no single person has a controlling interest in Tactic
Pharma, acting together they are able to control Tactic Pharma and
a large voting block of our common stock.
Stock Purchases by Directors and Executive Officers
The
following table sets forth the number of shares of our common stock
owned by our co-founders; each co-founder purchased such shares at
$3.57 per share (taking into account the Conversion) in
2016.
Name
|
Related Person
Status
|
# Shares of
Common Stock
|
Transaction
Value (and Related Person’s Interest)
($)
|
Christopher M.
Starr, Ph.D.
|
Executive
Chairman
|
29,400
|
105,000
|
Chandler D.
Robinson, M.D.
|
Director, Chief
Executive Officer
|
14,002.3
|
50,010
|
Andrew P. Mazar,
Ph.D.
|
Director, Chief
Scientific Officer
|
14,002.3
|
50,010
|
Also,
in 2016, Michael Brown (Director), purchased 210,000 shares of our
common stock (taking into account the Conversion), at $3.57 per
share, for a total transaction value of $750,000.
In
2017, Board members purchased shares of our common stock at $6 per
share, as follows: Dr. Starr purchased 20,000 shares for a
transaction value of $120,000; Mr. Anderson purchased 1,000 shares
for a transaction value of $6,000; and Mr. Klausner purchased 5,000
shares for a transaction value of $30,000.
Promoters and Certain Control Persons
We have
not had any promoters since our formation in December
2014.
Parent Companies
Prior
to the Gem Transaction, Tactic Pharma was our parent company,
having a controlling interest in us. After the Gem Transaction,
TacticGem became our parent company, currently having a 77.1%
controlling interest in us. See “
Contributions by Tactic Pharma,
LLC
” and “
Gem
Transaction
”.
Director Independence
We have
decided to follow the Nasdaq Stock Market, or Nasdaq, listing
standards, which require that a majority of the members of our
Board of Directors, or our Board, must qualify as
“independent,” as affirmatively determined by our
Board. Our Board consults with our counsel to ensure that our
Board’s determinations are consistent with relevant
securities and other laws and regulations regarding the definition
of “independent,” including those set forth in
pertinent listing standards of Nasdaq, as in effect from time to
time.
Consistent with
these considerations, after review of all relevant identified
transactions or relationships between each director, or any of his
family members, and us, our senior management and our independent
registered public accounting firm, our Board has affirmatively
determined that the following four directors are independent
directors within the meaning of the applicable Nasdaq listing
standards: Dr. Starr, Mr. Brown, Mr. Anderson and Mr. Klausner. In
making this determination, our Board found that none of the
directors had a material or other disqualifying relationship with
us. Dr. Robinson, our President and Chief Executive Officer is not
an independent director by virtue of his employment relationship
with us, and similarly, Dr. Mazar by virtue of his employment
relationship with us is not an independent director.
There
are no family relationships among any of our directors or executive
officers.
Relationships Considered in Determining Director
Independence
In
addition to the stock transactions described above, in considering
director independence, we considered the following
transactions:
During
the years ended December 31, 2017 and 2016, we were advised by four
members of our Board of Directors, who were Managers of our
predecessor LLC prior to our conversion to a C Corporation. The
four former Managers are also our current common stockholders
(owning approximately an aggregate 3% of our common stock
outstanding as of December 31, 2017). Three of the former Managers
are also Managing Members of Tactic Pharma, LLC, which was, prior
to the Gem Transaction, our largest and controlling stockholder
(owning a 46% beneficial interest in us at December 31, 2017 and in
partnership with Gem through TacticGem owning 77.1%). We paid the
Managing Members of Tactic Pharma, LLC the following during the
years ended December 31, 2017 and 2016: Chandler D. Robinson, our
Co-Founder, Chief Executive Officer, common stockholder, Managing
Member of Tactic Pharma, LLC and former Manager of our predecessor
LLC, $346,545 and $322,000, respectively; and Andrew P. Mazar, our
Co-Founder, Chief Scientific Officer, common stockholder, Managing
Member of Tactic Pharma, LLC and former Manager of our predecessor
LLC, $300,731 and $197,500, respectively. We also paid Christopher
M. Starr, our Co-Founder, Executive Chairman of the Board of
Directors, common stockholder and former Manager of our predecessor
LLC, $100,897 and $96,339 during the years ended December 31, 2017
and 2016, respectively.
In the
normal course of business, our Chief Executive Officer, Board
Members and consultants incur expenses on behalf of us and are
reimbursed within 30 days of submission of relevant expense
reports.
I
tem 14. Principal Accounting Fees
and Services
The
following is a summary of the fees billed and services provided by
our independent registered public accounting firm, BPM LLP during
the years ended December 31, 2017 and 2016,
respectively.
Description of
Services Provided by BPM LLP
|
For the year
ended December 31, 2017
|
For the year
ended December 31, 2016
|
Audit
Fees
|
$
83,815
|
$
32,036
|
Audit-Related Fees
: These services
relate to assurance and services reasonably related to the
performance of the audit or review of financial statements not
included above.
|
28,325
|
0
|
Tax Compliance Fees
: These services
relate to the preparation of federal, state and foreign tax returns
and other filings.
|
3,150
|
4,910
|
Tax Consulting and Advisory Services
:
These services primarily relate to the area of tax strategy and
minimizing Federal, state, local and foreign taxes.
|
1,250
|
|
All
Other Fees
|
0
|
35,680
|
I
tem 15. Exhibits, Financial
Statement Schedule
(a)
INDEX TO FINANCIAL STATEMENTS
|
|
Page
|
Report of
Independent Registered Public Accounting Firm
|
|
F-2
|
|
|
|
Balance Sheets
as of December 31, 2017 and 2016
|
|
F-3
|
|
|
|
Statements of
Operations for the Years Ended December 31, 2017 and
2016
|
|
F-4
|
|
|
|
Statements of
Stockholders’ Equity for the Years Ended December 31, 2017
and 2016
|
|
F-5
|
|
|
|
Statements of
Cash Flows for the Years Ended December 31, 2017 and
2016
|
|
F-6
|
|
|
|
Notes to
Financial Statements
|
|
F-7
to F-24
|
(b) Exhibits
The
following exhibits are filed as part of this Annual Report on Form
10-K.
Exhibit
|
|
Document
|
|
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|
|
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|
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101.INS
|
|
XBRL
Instance Document
|
101.SCH
|
|
XBRL
Taxonomy Extension Schema
|
101.CAL
|
|
XBRL
Taxonomy Extension Calculation Linkbase
|
101.DEF
|
|
XBRL
Taxonomy Extension Definition Linkbase
|
101.LAB
|
|
XBRL
Taxonomy Extension Label Linkbase
|
101.PRE
|
|
XBRL
Taxonomy Extension Presentation Linkbase
|
Confidential
Information has been omitted and filed separately with the
Securities and Exchange Commission on exhibits marked with (*).
Confidential treatment has been approved with respect to the
omitted information, pursuant to an Order dated January 8,
2018.
SIGNATURES
Pursuant to the
requirements of Section 13 or 15(d) of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly
authorized.
|
C
ompany
MONOPAR
THERAPEUTICS INC.
|
|
|
|
|
|
Dated: March 26,
2018
|
By:
|
/s/
Kim
Tsuchimoto
|
|
|
|
Kim
Tsuchimoto
|
|
|
|
Chief Financial
Officer (Principal Financial Officer)
|
|
KNOW
ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Chandler Robinson and Kim
Tsuchimoto, his attorneyinfact, with the power of
substitution, for him in any and all capacities, to sign any
amendments to this Annual Report on Form 10K and to file the
same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said
attorneysinfact, or his substitute or substitutes, may
do or cause to be done by virtue hereof.
Pursuant to the
requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates
indicated:
Signatures
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/
Chandler Robinson
|
|
|
|
March
26,
2018
|
Chandler
Robinson
|
|
Chief
Executive Officer and Director (Principal Executive
Officer)
|
|
|
|
|
|
|
|
/s/ Kim
Tsuchimoto
|
|
|
|
March
26,
2018
|
Kim
Tsuchimoto
|
|
Chief
Financial Officer (Principal Financial Officer and Principal
Accounting Officer)
|
|
|
|
|
|
|
|
/s/
Andrew Mazar
|
|
|
|
March
26,
2018
|
Andrew
Mazar
|
|
Chief
Scientific Officer and Director
|
|
|
|
|
|
|
|
/s/
Christopher Starr
|
|
|
|
March
26,
2018
|
Christopher
Starr
|
|
Executive
Chairman of the Board and Director
|
|
|
|
|
|
|
|
/s/
Raymond W. Anderson
|
|
|
|
March
26,
2018
|
Raymond
W. Anderson
|
|
Director
|
|
|
|
|
|
|
|
/s/
Michael Brown
|
|
|
|
March
26,
2018
|
Michael
Brown
|
|
Director
|
|
|
|
|
|
|
|
/s/
Arthur Klausner
|
|
|
|
March
26,
2018
|
Arthur
Klausner
|
|
Director
|
|
|
INDEX TO FINANCIAL STATEMENTS
|
|
Page
|
Report of
Independent Registered Public Accounting Firm
|
|
F-2
|
|
|
|
Balance Sheets
as of December 31, 2017 and 2016
|
|
F-3
|
|
|
|
Statements of
Operations for the Years Ended December 31, 2017 and
2016
|
|
F-4
|
|
|
|
Statements of
Stockholders’ Equity for the Years Ended December 31, 2017
and 2016
|
|
F-5
|
|
|
|
Statements of
Cash Flows for the Years Ended December 31, 2017 and
2016
|
|
F-6
|
|
|
|
Notes to
Financial Statements
|
|
F-7
to
F-24
|
REPORT OF INDEPENDENT
REGIST
ERED PUBLIC ACCOUNTING
FIRM
To the
Stockholders and Board of Directors of
Monopar
Therapeutics Inc.
Opinion on the Financial Statements
We have
audited the accompanying balance sheets of Monopar Therapeutics
Inc. (the "Company") as of December 31, 2017 and 2016, the related
statements of operations, stockholders’ equity and cash
flows, for each of the two years in the period ended December 31,
2017, and the related notes (collectively referred to as the
"financial statements"). In our opinion, the financial statements
present fairly, in all material respects, the financial position of
the Company as of December 31, 2017 and 2016, and the results of
its operations and its cash flows for each of the two years in the
period ended December 31, 2017, in conformity with accounting
principles generally accepted in the United States of
America.
Basis for Opinion
These
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on the
Company's financial statements based on our audits. We are a public
accounting firm registered with the Public Company Accounting
Oversight Board (United States) ("PCAOB") and are required to be
independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of
the Securities and Exchange Commission and the PCAOB.
We
conducted our audits in accordance with the standards of the PCAOB.
Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements
are free of material misstatement, whether due to error or fraud.
The Company is not required to have, nor were we engaged to
perform, an audit of its internal control over financial reporting.
As part of our audits, we are required to obtain an understanding
of internal control over financial reporting but not for the
purpose of expressing an opinion on the effectiveness of the
Company's internal control over financial reporting. Accordingly,
we express no such opinion.
Our
audits included performing procedures to assess the risks of
material misstatement of the financial statements, whether due to
error or fraud, and performing procedures that respond to those
risks. Such procedures included examining, on a test basis,
evidence regarding the amounts and disclosures in the financial
statements. Our audits also included evaluating the accounting
principles used and significant estimates made by management, as
well as evaluating the overall presentation of the financial
statements. We believe that our audits provide a reasonable basis
for our opinion.
/s/ BPM
LLP
We have
served as the Company's auditor since 2015.
San
Francisco, California
March
26, 2018
Monopar Therapeutics Inc.
Balance Sheet
|
|
|
|
|
Assets
|
|
|
Current
assets:
|
|
|
Cash
and cash equivalents
|
$
8,981,894
|
$
2,072,611
|
Prepaid
expenses and other current assets
|
149,342
|
22,562
|
Total
current assets
|
9,131,236
|
2,095,173
|
|
|
|
Restricted
cash
|
800,031
|
800,393
|
|
|
|
Total
assets
|
$
9,931,267
|
$
2,895,566
|
Liabilities and Equity
|
|
|
Current
liabilities:
|
|
|
Accounts
payable and accrued expenses
|
$
311,867
|
$
64,510
|
Total
current liabilities
|
311,867
|
64,510
|
Long
term liabilities
|
—
|
—
|
|
|
|
Total
liabilities
|
311,867
|
64,510
|
Commitments
and contingencies (Note 9)
|
|
|
|
|
|
Stockholders’
equity:
|
|
|
Preferred
stock, par value of $0.001 per share, zero shares authorized at
December 31, 2017, and 200,000 shares authorized at December 31,
2016; 115,894 shares issued and outstanding, aggregate liquidation
preference of $34,768,140 at December 31, 2016
|
—
|
116
|
Common
stock, par value of $0.001 per share, 40,000,000 authorized,
9,291,421 shares issued and outstanding at December 31, 2017; zero
shares issued and outstanding at December 31, 2016
|
9,291
|
—
|
Additional
paid-in capital
|
28,037,889
|
4,703,848
|
Accumulated
deficit
|
(18,427,780
)
|
(1,872,908
)
|
Total
stockholders’ equity
|
9,619,400
|
2,831,056
|
Total
liabilities and stockholders’ equity
|
$
9,931,267
|
$
2,895,566
|
The
accompanying notes are an integral
part of
these financial statements.
Monopar Therapeutics Inc.
Statements of Operations
|
|
|
|
|
Revenues
|
$
—
|
$
—
|
|
—
|
—
|
Operating
expenses:
|
|
|
Research
and development
|
935,319
|
280,355
|
In-process
research and development
|
14,501,622
|
—
|
General
and administrative
|
1,166,186
|
912,474
|
Total
operating expenses
|
16,603,127
|
1,192,829
|
Loss
from operations
|
(16,603,127
)
|
(1,192,829
)
|
Other
income:
|
|
|
Interest
and other income
|
48,255
|
7,232
|
Net
loss
|
$
(16,554,872
)
|
$
(1,185,597
)
|
Net
loss per share:
|
|
|
Basic
and diluted
|
$
(1.89
)
|
N/A
|
Weighted
average shares outstanding:
|
|
|
Basic
and diluted
|
8,782,037
|
N/A
|
Monopar Therapeutics Inc.
Statement of Stockholders’ Equity
|
Series A and Z Preferred Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at
January 1, 2016
|
111,644
|
112
|
0
|
—
|
3,441,352
|
(687,311
)
|
2,754,153
|
Issuance of
Series A Preferred Stock at $300 per share for cash, net of $12,500
issuance costs
|
4,250
|
4
|
—
|
—
|
1,262,496
|
|
1,262,500
|
Net
loss
|
—
|
—
|
—
|
—
|
—
|
(1,185,597
)
|
(1,185,597
)
|
Balance at
December 31, 2016
|
115,894
|
116
|
0
|
—
|
4,703,848
|
(1,872,908
)
|
2,831,056
|
Conversion
of preferred stock to common stock
|
(115,894
)
|
(116
)
|
8,335,080
|
8,335
|
(8,219
)
|
—
|
—
|
Issuance of
common stock at $6 per share for cash, net of $32,400 issuance
costs
|
—
|
—
|
789,674
|
790
|
4,704,856
|
—
|
4,705,646
|
Tactic
Pharma shares surrendered
|
—
|
—
|
(2,888,727
)
|
(2,889
)
|
2,889
|
—
|
—
|
Shares
issued in Gem transaction, net of issuance costs of
$169,257
|
—
|
—
|
3,055,394
|
3,055
|
18,329,310
|
—
|
18,332,365
|
Non-cash
stock compensation
|
—
|
—
|
—
|
—
|
305,205
|
—
|
305,205
|
Net
loss
|
—
|
—
|
—
|
—
|
—
|
(16,554,872
)
|
(16,554,872
)
|
Balance at
December 31, 2017
|
—
|
$
—
|
9,291,421
|
$
9,291
|
$
28,037,889
|
$
(18,427,780
)
|
$
9,619,400
|
The
accompanying notes are an integral
part of
these financial statements.
Monopar Therapeutics Inc.
Statement of Cash Flows
|
|
|
|
|
Cash flows from operating activities:
|
|
|
Net
loss
|
$
(16,554,872
)
|
$
(1,185,597
)
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
|
|
Stock
compensation expense (non-cash)
|
305,205
|
—
|
In
process research and development (non-cash)
|
13,501,622
|
—
|
Changes in operating assets and liabilities, net
|
|
|
Prepaid
expenses and other current assets
|
(126,780
)
|
298
|
Accounts
payable and accrued expenses
|
247,357
|
(9,333
)
|
Net
cash used in operating activities
|
(2,627,468
)
|
(1,194,632
)
|
Cash flows from financing activities:
|
|
|
Proceeds
from sale of Series A Preferred Stock, net of $12,500 of issuance
costs
|
—
|
1,262,500
|
Cash
received from Gem, net of $169,257 of transaction
costs
|
4,830,743
|
—
|
Proceeds
from the sale of common stock, net of $32,400 of issuance
costs
|
4,705,646
|
—
|
Net
cash provided by financing activities
|
9,536,389
|
1,262,500
|
Net
increase in cash, cash equivalents and restricted cash
|
6,908,921
|
67,868
|
Cash, cash equivalents and restricted cash at beginning of
period
|
2,873,004
|
2,805,136
|
Cash, cash equivalents and restricted cash at end of
period
|
$
9,781,925
|
$
2,873,004
|
Supplemental disclosure of non-cash items for cash flow
information:
|
|
|
Value
of shares issued in Gem transaction
|
18,332,365
|
-
|
The
accompanying notes are an integral
part of
these financial statements.
MONOPAR THERAPEUTICS INC.
NOTES TO
FINANCIAL STATEMENTS
December 31, 2017
Note
1 - Nature of Business and Liquidity
Nature of Business
Monopar
Therapeutics Inc. (the ”Company”) is an emerging
biopharmaceutical company focused on developing innovative drug
candidates to improve clinical outcomes in cancer patients. Monopar
currently has three compounds in development: Validive®
(clonidine mucobuccal tablet; clonidine MBT), a Phase 3-ready,
first-in-class mucoadhesive local anti-inflammatory tablet for the
prevention and treatment of radiation induced severe oral mucositis
(“SOM”) in oropharyngeal cancer
patients; MNPR-201 (GPX-150;
5-imino-13-deoxydoxorubicin), a proprietary topoisomerase-II-alpha
targeted
analog of
doxorubicin engineered specifically to retain the anticancer
activity while minimizing toxic effects on the heart; and MNPR-101
(formerly huATN-658), a near-to-the-clinic humanized monoclonal
antibody, which targets the urokinase plasminogen activator
receptor (“uPAR”), for the treatment of advanced solid
cancers.
The
Company was originally formed in the State of Delaware on December
5, 2014 as a limited liability company (“LLC”) and on
December 16, 2015 converted to a C Corporation in a tax-free
exchange. In March 2017, the Company’s Series A Preferred
Stock and Series Z Preferred Stock converted into common stock at a
conversion rate of 1.2 for 1 and 1 for 1, respectively, along with
a concurrent common stock split of 70 for 1 which eliminated all
shares of Series A Preferred Stock and Series Z Preferred Stock.
All references to common stock authorized, issued and outstanding
and common stock options take into account the 70 for 1 stock
split.
Liquidity
The
Company has incurred an accumulated loss of approximately $18.4
million as of December 31, 2017. To date, the Company has primarily
funded its operations with the net proceeds from private placements
of convertible preferred stock and common stock and from the cash
provided in the Gem transaction discussed in detail in Note 6
below. Management believes that currently available resources will
provide sufficient funds to enable the Company to meet its minimum
obligations through March 2019. The Company’s ability to fund
its future operations, including the clinical development of
Validive, is dependent primarily upon its ability to execute on its
business strategy and obtain additional funding or execute
collaboration research transactions. There can be no certainty that
future financing or collaborative research transactions will
occur.
Note 2 - Significant Accounting Policies
Basis of Presentation
These
financial statements include the books of Monopar Therapeutics
Inc., its French branch and its wholly-owned French subsidiary,
Monopar Therapeutics, SARL and have been prepared in accordance
with accounting principles generally accepted in the United States
(“GAAP”) and include all disclosures required by GAAP
for financial reporting. The principal accounting policies applied
in the preparation of these financial statements are set out below
and have been consistently applied in all periods presented. The
Company has been primarily involved in performing research
activities, developing product technologies, and raising capital to
support and expand these activities.
Comprehensive Loss
Comprehensive loss
represents net loss plus any gains or losses not reported in the
statements of operations, such as foreign currency translations
gains and losses that are typically reflected on a company’s
statements of stockholders’ equity. There were no differences
between net loss for the years ended December 31, 2017 and 2016,
and comprehensive loss for those periods.
MONOPAR THERAPEUTICS INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
Use of Estimates
The
preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities, disclosure of
contingent assets and liabilities, and reported amounts of revenues
and expenses in the financial statements and accompanying notes.
Actual results could differ from those estimates.
Going Concern Assessment
The
Company adopted Accounting Standards Updates (“ASU”)
2014-15,
Disclosure of
Uncertainties about an Entity’s Ability to Continue as a
Going Concern,
which the Financial Accounting Standards
Board (“FASB”) issued to provide guidance on
determining when and how reporting companies must disclose
going-concern uncertainties in their financial statements. The ASU
requires management to perform interim and annual assessments of an
entity’s ability to continue as a going concern within one
year of the date of issuance of the entity’s financial
statements (or within one year after the date on which the
financial statements are available to be issued, when applicable).
Further, a company must provide certain disclosures if there is
“substantial doubt about the entity’s ability to
continue as a going concern.” In February 2018, the Company
analyzed its minimum cash requirements through March 2019 and has
determined that, based upon the Company’s current available
cash, the Company has no substantial doubt about its ability to
continue as a going concern.
Cash Equivalents
The
Company considers all highly liquid investments purchased with an
original maturity of 90 days or less to be cash equivalents. Cash
equivalents as of December 31, 2017 and December 31, 2016 consist
entirely of money market accounts.
Restricted Cash
On July
9, 2015, the Company entered into a Clinical Trial and Option
Agreement (“CTOA”) with Cancer Research UK. Pursuant to
the CTOA, the Company deposited $0.8 million into an escrow account
to cover certain future indemnities, claims or potential
termination costs incurred by Cancer Research UK. Restricted cash
was $0.8 million as of December 31, 2017 and December 31,
2016.
Prepaid Expenses
Prepayments are
expenditures for goods or services before the goods are used or the
services are received and are charged to operations as the benefits
are realized. Prepaid expenses include insurance premiums and
software costs that are expensed monthly over the life of the
contract and prepaid legal patent fees that will be expensed as
incurred.
Concentration of Credit Risk
Financial
instruments that potentially subject the Company to concentration
of credit risk consist of cash and cash equivalents and restricted
cash. The Company maintains cash and cash equivalents at one
financial institution and restricted cash at another financial
institution. As of December 31, 2017, and December 31, 2016, cash
and cash equivalents and restricted cash balances at these two
financial institutions were in excess of the $250,000 Federal
Deposit Insurance Corporation (“FDIC”) insurable
limit.
Fair Value of Financial Instruments
For
financial instruments consisting of cash and cash equivalents,
prepaid expenses, deferred offering costs, accounts payable and
accrued expenses, the carrying amounts are reasonable estimates of
fair value due to their relatively short maturities.
MONOPAR THERAPEUTICS INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
The Company adopted Accounting Standard
Codification
(“ASC”) 820,
Fair Value Measurements and
Disclosures,
as amended,
addressing the measurement of the fair value of financial assets
and financial liabilities. Under this standard, fair value is
defined as the price that would be received to sell an asset or
paid to transfer a liability
(i.e., the “exit price”) in an orderly
transaction between market participants at the measurement
date.
In
determining fair values of all reported assets and liabilities that
represent financial instruments, the Company uses the carrying
market values of such amounts.
The
standard establishes a hierarchy for inputs used in measuring fair
value that maximizes the use of observable inputs and minimizes the
use of unobservable inputs by requiring that the most observable
inputs be used when available.
Observable inputs reflect
assumptions market participants would use in pricing an asset or
liability based on market data obtained from independent sources.
Unobservable inputs
reflect a
reporting entity’s pricing an asset or liability
developed based on the best information available
in the circumstances
. The fair value hierarchy consists of
the following three levels:
Level 1
- instrument valuations are
obtained from real-time quotes for transactions in active exchange
markets involving identical assets.
Level 2
- instrument valuations are
obtained from readily-available pricing sources for comparable
instruments.
Level 3
- instrument valuations are
obtained without observable market values and require a high-level
of judgment to determine the fair value.
Determining which
category an asset or liability falls within the hierarchy requires
significant judgment. The Company evaluates its hierarchy
disclosures each reporting period. There were no transfers between
Level 1, 2 or 3 of the fair value hierarchy during the years ended
December 31, 2017 and 2016. The following table presents the assets
and liabilities recorded that are reported at fair value on our
balance sheets on a recurring basis.
Assets and Liabilities Measured at Fair Value on a Recurring
Basis
|
|
|
|
Assets
|
|
|
|
Cash
equivalents
(1)
|
$
8,872,982
|
$
-
|
$
8,872,982
|
Restricted
cash
(2)
|
31
|
800,000
|
800,031
|
Total
|
$
8,873,013
|
$
800,000
|
$
9,673,013
|
(1)
Cash equivalents
represent the fair value of the Company’s investments in two
money market accounts at December 31, 2017.
(2)
Restricted cash
represents the fair value of the Company’s investments in an
$800,000 certificate of deposit and $31 in a money market account
at December 31, 2017.
|
|
|
|
Assets
|
|
|
|
Cash
equivalents
(1)
|
$
2,009,018
|
$
-
|
$
2,009,018
|
Restricted
cash
(2)
|
393
|
800,000
|
800,393
|
Total
|
$
2,009,411
|
$
800,000
|
$
2,809,411
|
(1)
Cash equivalents
represent the fair value of the Company’s investments in a
money market account at December 31, 2016.
(2)
Restricted cash
represents the fair value of the Company’s investments in an
$800,000 certificate of deposit and $393 in a money market account
at December 31, 2016.
Net Loss per Share
Net
loss per share for the year ended December 31, 2017 is calculated
by dividing net loss by the weighted-average shares of common stock
outstanding during the period. Diluted net loss per share for the
year ended December 31, 2017 is calculated by dividing net loss by
the weighted-average shares of common stock outstanding and
potential
MONOPAR THERAPEUTICS INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
shares
of common stock during the period. As of December 31, 2017,
potentially dilutive securities included 658,592 options to
purchase common stock.
During
the year ended December 31, 2016 there were no shares of common
stock outstanding.
Research and Development Expenses
Research and
development (“R&D”) costs are expensed as incurred.
Major components of research and development expenses include
salaries and benefits paid to the Company’s R&D staff,
fees paid to consultants and to the entities that conduct certain
development activities on the Company’s behalf and materials
and supplies.
The
Company accrues and expenses the costs for clinical trial
activities performed by third parties based upon estimates of the
percentage of work completed over the life of the individual study
in accordance with agreements established with contract research
organizations and clinical trial sites. The Company determines the
estimates through discussions with internal clinical personnel and
external service providers as to progress or stage of completion of
trials or services and the agreed upon fee to be paid for such
services. Costs of setting up clinical trial sites for
participation in the trials are expensed immediately as research
and development expenses. Clinical trial site costs related to
patient enrollment are accrued as patients are entered into the
trial. During the year ended December 31, 2017 and 2016, the
Company had no clinical trials in progress.
In-process Research and Development
In-process research
and development expense represents the costs to acquire
technologies to be used in research and development that have not
reached technological feasibility, have no alternative future uses
and thus are expensed as incurred. IPR&D expense also includes
upfront license fees and milestones paid to collaborators, with no
alternative use, which are expensed as goods are received or
services rendered.
Collaborative Arrangements
The
Company and its collaborative partner are active participants in a
collaborative arrangement and all parties are exposed to
significant risks and rewards depending on the technical and
commercial success of the activities. Contractual payments to the
other party in the collaboration agreement and costs incurred by
the Company when the Company is deemed to be the principal
participant for a given transaction are recognized on a gross basis
in research and development expenses. Royalties and license
payments are recorded as earned.
During
the years ended December 31, 2017 and 2016, no milestones were met
and no royalties were earned, therefore, the Company did not pay or
accrue/expense any milestone or royalty payments.
Licensing Agreements
The
Company has various agreements to license technology utilized in
the development of its programs. The licenses contain success
milestone obligations and royalties on future sales. During the
year ended December 31, 2017 and 2016, no milestones were met and
no royalties were earned, therefore, the Company did not pay or
accrue/expense any milestone or royalty payments under any of its
license agreements.
Patent Costs
The
Company expenses costs relating to issued patents and patent
applications, including costs relating to legal, renewal and
application fees, as a component of general and administrative
expenses in its statements of operations.
MONOPAR THERAPEUTICS INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
Income Taxes
From
December 2014 to December 16, 2015, the Company was an LLC taxed as
a partnership under the Internal Revenue Code, during which period
the members separately accounted for their pro-rata share of
income, deductions, losses, and credits of the Company. On December
16, 2015, the Company converted from an LLC to a C Corporation.
Beginning on December 16, 2015, the Company uses an asset and
liability approach for accounting for deferred income taxes, which
requires recognition of deferred income tax assets and liabilities
for the expected future tax consequences of events that have been
recognized in its financial statements, but have not been reflected
in its taxable income. Estimates and judgments occur in the
calculation of certain tax liabilities and in the determination of
the recoverability of certain deferred income tax assets, which
arise from temporary differences and carry forwards. Deferred
income tax assets and liabilities are measured using the currently
enacted tax rates that apply to taxable income in effect for the
years in which those tax assets and liabilities are expected to be
realized or settled.
The
Company regularly assesses the likelihood that its deferred income
tax assets will be realized from recoverable income taxes or
recovered from future taxable income. To the extent that the
Company believes any amounts are more likely not to be realized,
the Company records a valuation allowance to reduce the deferred
income tax assets. In the event the Company determines that all or
part of the net deferred tax assets are not realizable in the
future, an adjustment to the valuation allowance would be charged
to earnings in the period such determination is made. Similarly, if
the Company subsequently realizes deferred income tax assets that
were previously determined to be unrealizable, the respective
valuation allowance would be reversed, resulting in an adjustment
to earnings in the period such determination is made.
Internal Revenue
Code Section 382 provides that, after an ownership change, the
amount of a loss corporation’s net operating loss
(“NOL”) for any post-change year that may be offset by
pre-change losses shall not exceed the section 382 limitation for
that year. Because the Company will continue to raise equity in the
coming years, section 382 may limit the Company’s usage of
NOLs in the future.
Based
on the available evidence, the Company believed it was not likely
to utilize its minimal deferred tax assets in the future and as a
result, the Company recorded a full valuation allowance as of
December 31, 2017 and 2016. The Company intends to maintain the
valuation allowance until sufficient evidence exists to support
their reversal. The Company regularly reviews its tax positions and
for a tax benefit to be recognized, the related tax position must
be more likely than not to be sustained upon examination. Any
amount recognized is generally the largest benefit that is more
likely than not to be realized upon settlement. The Company’s
policy is to recognize interest and penalties related to income tax
matters as an income tax expense. For the years ended December 31,
2017 and 2016, the Company did not have any interest or penalties
associated with unrecognized tax benefits.
The
Company is subject to U.S. Federal, Illinois and California income
taxes. Tax regulations within each jurisdiction are subject to the
interpretation of the related tax laws and regulations and require
significant judgment to apply. The Company was incorporated on
December 16, 2015 and is subject to U.S. Federal, state and local
tax examinations by tax authorities for the years ended December
31, 2017 and 2016 and for the short tax period December 16, 2015 to
December 31, 2015. The Company does not anticipate significant
changes to its current uncertain tax positions through December 31,
2017. The Company plans on filing its tax returns for the year
ending December 31, 2017 prior to the filing deadlines in all
jurisdictions.
MONOPAR THERAPEUTICS INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
Stock-Based Compensation
The
Company accounts for stock-based compensation arrangements with
employees, nonemployee directors and consultants using a fair value
method, which requires the recognition of compensation expense for
costs related to all stock-based payments, including stock options.
The fair value method requires the Company to estimate the fair
value of stock-based payment awards on the date of grant using an
option pricing model.
Stock-based
compensation costs for options granted to employees and nonemployee
directors are based on the fair value of the underlying option
calculated using the Black-Scholes option-pricing model on the date
of grant for stock options and recognized as expense on a
straight-line basis over the requisite service period, which is the
vesting period. Determining the appropriate fair value model and
related assumptions requires judgment, including estimating stock
price volatility, forfeiture rates and expected term. The expected
volatility rates are estimated based on the actual volatility of
comparable public companies over the expected term. The Company
selected these companies based on comparable characteristics,
including enterprise value, risk profiles, stage of development and
with historical share price information sufficient to meet the
expected life of the stock-based awards. The expected term for
options granted to date is estimated using the simplified method.
Forfeitures are estimated at the time of grant and revised, if
necessary, in subsequent periods if actual forfeitures differ from
those estimates. The Company has not paid dividends and does not
anticipate paying a cash dividend in the future vesting period and,
accordingly, uses an expected dividend yield of zero. The risk-free
interest rate is based on the rate of U.S. Treasury securities with
maturities consistent with the estimated expected term of the
awards. The measurement of consultant share-based compensation is
subject to periodic adjustments as the underlying equity
instruments vest and is recognized as an expense over the period
over which services are rendered.
Recent Accounting Pronouncements
In
August 2014, FASB issued ASU 2014-15,
Disclosure of Uncertainties about an
Entity’s Ability to Continue as a Going Concern,
which
provides guidance on determining when and how reporting companies
must disclose going-concern uncertainties in their financial
statements. The ASU requires management to perform interim and
annual assessments of an entity’s ability to continue as a
going concern within one year of the date of issuance of the
entity’s financial statements (or within one year after the
date on which the financial statements are available to be issued,
when applicable). Further, a company must provide certain
disclosures if there is “substantial doubt about the
entity’s ability to continue as a going concern.” This
ASU became effective for annual periods ending after December 15,
2016 and interim periods within annual periods beginning after
December 15, 2016. The Company has adopted this new accounting
standard in its financial statements and footnote
disclosures.
In
November 2015, the FASB issued ASU 2015-17,
Balance Sheet Classification of Deferred
Taxes
. This is part of FASB’s simplification
initiative. The amendments in this ASU require that deferred tax
liabilities and assets be classified as noncurrent in a classified
statement of financial position. This ASU became effective for the
Company in the first quarter of 2017. The Company has adopted this
ASU and determined that it does not have a material effect on its
financial condition and results of operations for the year ended
December 31, 2017.
In
January 2016, the FASB issued ASU 2016-01,
Recognition and Measurement of Financial
Assets and Financial Liabilities
. The purpose is to enhance
the reporting model for financial instruments to provide users of
financial statements with more decision-useful information. This
ASU is effective for the Company in the first quarter of 2018.
Early adoption is not permitted except for limited provisions. The
Company does not expect the adoption of this amendment to have a
material effect on its financial condition and results of
operations.
MONOPAR THERAPEUTICS INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
In
February 2016, the FASB issued ASU 2016-02,
Leases
, which for operating leases,
requires a lessee to recognize a right-of-use asset and a lease
liability, initially measured at the present value of the lease
payments, in its balance sheet. The standard also requires a lessee
to recognize a single lease cost, calculated so that the cost of
the lease is allocated over the lease term, generally on a
straight-line basis. ASU 2016-02 will be effective for the Company
in the first quarter of 2019, and early adoption is permitted. The
Company is currently assessing the impact that adopting this new
accounting standard will have on its financial statements and
footnote disclosures.
In
March 2016, the FASB issued ASU 2016-09,
Improvements to Employee Share-Based Payment
Accounting
, which simplifies several aspects of the
accounting for employee share-based payment transactions for both
public and nonpublic companies, including the accounting for income
taxes, forfeitures, and statutory tax withholding requirements, as
well as classification in the statement of cash flows. The ASU
became effective for the Company in the first quarter of 2017. The
Company has adopted this ASU and determined that it does not have a
material effect on its financial condition and results of
operations for the year ended December 31, 2017.
In
November 2016, the FASB issued ASU 2016-18,
Statement of Cash Flows (Topic 230):Restricted
Cash
. The amendments apply to all entities that have
restricted cash or restricted cash equivalents and are required to
present a statement of cash flows. The amendments address diversity
in practice that exists in the classification and presentation of
changes in restricted cash on the statement of cash flows. The
amendments require that a statement of cash flows explain the
change during the period in the total of cash, cash equivalents,
and amounts generally described as restricted cash or restricted
cash equivalents. As a result, amounts generally described as
restricted cash and restricted cash equivalents should be included
with cash and cash equivalents when reconciling the
beginning-of-period and end-of-period total amounts shown on the
statement of cash flows. The amendments do not provide a definition
of restricted cash or restricted cash equivalents. The amendments
are effective for public business entities for fiscal years
beginning after December 15, 2017, and interim periods within those
fiscal years. For all other entities, the amendments are effective
for fiscal years beginning after December 15, 2018, and interim
periods within fiscal years beginning after December 15, 2019.
Early adoption is permitted. The Company has early adopted the
amendments and has applied them using a retrospective transition
method to each period presented. Therefore, the Company has
included restricted cash in cash equivalents and restricted cash on
its statements of cash flows for the years ended December 31, 2017
and 2016.
In
January 2017, the FASB issued ASU No. 2017-01,
Business Combinations (Topic 805): Clarifying
the Definition of a Business
(“ASU No.
2017-01”). The amendments in ASU No. 2017-01 clarify the
definition of a business with the objective of adding guidance to
assist entities with evaluating whether transactions should be
accounted for as acquisitions (or disposals) of assets or
businesses. The definition of a business affects many areas of
accounting including acquisitions, disposals, goodwill and
consolidation. For public companies, the amendments are effective
for annual periods beginning after December 15, 2017, including
interim periods within those periods. For all other companies and
organizations, the amendments are effective for annual periods
beginning after December 15, 2018, and interim periods within
annual periods beginning after December 15, 2019. The Company is
currently assessing the impact that adopting this new accounting
standard will have on its financial statements and footnote
disclosures.
In May
2017, the FASB issued ASU No. 2017-09,
Compensation-Stock Compensation (Topic 718):
Scope of Modification Accounting
. The amendment amends the
scope of modification accounting for share-based payment
arrangements, provides guidance on the types of changes to the
terms or conditions of share-based payment awards to which an
entity would be required to apply modification accounting under ASC
718. This ASU is effective for all entities for annual periods, and
interim periods within those annual periods, beginning after
December 15, 2017. Early adoption is permitted, including adoption
in any interim period for: (a) public business entities for
reporting periods for which financial statements have not yet been
issued, and (b) all other entities for reporting periods for which
financial statements have not yet been made available for issuance.
The Company is currently assessing the impact that adopting this
new accounting standard will have on its financial statements and
footnote disclosures.
MONOPAR THERAPEUTICS INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
In July
2017, the FASB issued ASU No. 2017-11,
Earnings Per Share (Topic 260) Distinguishing
Liabilities from Equity (Topic 480) Derivatives and Hedging (Topic
815) (Part I) Accounting for Certain Financial Instruments with
Down Round Features, (Part II) Replacement of the Indefinite
Deferral for Mandatorily Redeemable Financial Instruments of
Certain Nonpublic Entities and Certain Mandatorily Redeemable
Noncontrolling Interests with a Scope Exception
. This ASU
simplifies the accounting for certain financial instruments with
down round features, a provision in an equity-linked financial
instrument (or embedded feature) that provides a downward
adjustment of the current exercise price based on the price of
future equity offerings. Down round features are common in
warrants, convertible preferred shares, and convertible debt
instruments issued by private companies and development-stage
public companies. This new ASU requires companies to disregard the
down round feature when assessing whether the instrument is indexed
to its own stock, for purposes of determining liability or equity
classification. The provisions of this new ASU related to down
rounds are effective for public business entities for fiscal years,
and interim periods within those fiscal years, beginning after
December 15, 2018. For all other entities, the amendments are
effective for fiscal years beginning after December 15, 2019, and
interim periods within fiscal years beginning after December 15,
2020. Early adoption is permitted for all entities. The Company is
currently assessing the impact that adopting this new accounting
standard will have on its financial statements and footnote
disclosures.
Note 3 - Capital Stock
On
December 16, 2015, the Company converted from an LLC to a C
Corporation at which time the Company effected a 1 for 10 reverse
stock split. All references to preferred stock authorized, issued
and outstanding and common stock authorized take into account the 1
for 10 reverse stock split. In March 2017, the Company’s
Series A Preferred Stock and Series Z Preferred Stock converted to
common stock at a conversion rate of 1.2 for 1 and 1 for 1,
respectively, along with a simultaneous common stock split of 70
for 1 and the elimination all shares of Series A Preferred Stock
and Series Z Preferred Stock (collectively, the
“Conversion”). 100,000 shares of Series Z Preferred
Stock were converted into 7,000,000 shares of common stock and
15,894 shares of Series A Preferred Stock were converted into
1,335,079 shares of common stock. All references to common stock
authorized, issued and outstanding and common stock options take
into account the 70 for 1 stock split.
Holders
of the common stock are entitled to receive such dividends as may
be declared by the Board of Directors out of funds legally
available therefor. Upon dissolution and liquidation of the
Company, holders of the common stock are entitled to a ratable
share of the net assets of the Company remaining after payments to
creditors of the Company. The holders of shares of common stock are
entitled to one vote per share for the election of directors and on
all other matters submitted to a vote of stockholders.
The
Company’s amended and restated certificate of incorporation
authorizes the Company to issue 40,000,000 shares of common stock
with a par value of $0.001 per share.
Contribution to Capital
In
August 2017, the Company’s largest stockholder, Tactic
Pharma, LLC (“Tactic Pharma”), surrendered 2,888,727.12
shares of common stock back to the Company as a contribution to the
capital of the Company. This resulted in reducing Tactic
Pharma’s ownership in Monopar from 79.5% to
69.9%.
Sales of Common Stock
Pursuant to an
active private placement memorandum, during the period from July 1,
2017 through September 30, 2017, Monopar sold 448,834 shares of
common stock at $6 per share for proceeds of approximately $2.7
million. This financing closed on September 30, 2017.
MONOPAR THERAPEUTICS INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
Issuance of Common Stock in the Gem Transaction
Pursuant to the Gem
Transaction, discussed in detail in Note 6 below, the Company
issued 3,055,394.12 shares of its common stock in exchange for cash
and intellectual property related to GPX-150 (renamed
MNPR-201).
As of
December 31, 2017, the Company had 9,291,420.614 shares of common
stock issued and outstanding. The Company no longer has any shares
of preferred stock authorized or outstanding.
In
April 2016, the Company adopted the 2016 Stock Incentive Plan and
the Company’s Board of Directors reserved 700,000 shares of
common stock for issuances under the plan (as adjusted subsequent
to the Conversion). In October 2017, the Company’s Board of
Directors increased the stock option pool to 1,600,000 shares of
common stock.
Note 4 - Stock Option Plan
In
April 2016, the Company’s Board of Directors and the
convertible preferred stockholders representing a majority of the
Company’s outstanding stock approved, the Monopar
Therapeutics Inc. 2016 Stock Incentive Plan (the
“Plan”) allowing the Company to grant up to an
aggregate 700,000 shares of stock awards, stock options, stock
appreciation rights and other stock-based awards to employees,
directors and consultants. Concurrently, the Board of Directors
granted to certain Board members and the Company’s acting
chief financial officer stock options to purchase up to an
aggregate 273,000 shares of the Company’s common stock at an
exercise price of $0.001 par value based upon a third-party
valuation of the Company’s common stock.
In
December 2016, the Board of Directors granted stock options to
purchase up to 7,000 shares of the Company’s common stock at
an exercise price of $0.001 par value to the Company’s acting
chief medical officer.
In
February 2017, the Board of Directors granted to certain Board
members and the Company’s acting chief financial officer
stock options to purchase up to an aggregate 275,520 shares of the
Company’s common stock at an exercise price of $0.001 par
value based upon a third-party valuation of the Company’s
common stock. In September 2017, the Board of Directors represented
by the designated Plan Administrator, granted options to purchase
up to 21,024 shares of common stock to each of the three new Board
members at an exercise price of $6 per share based on the price per
share at which common stock was sold in the Company’s most
recent private offering.
Under
the Plan, the per share exercise price for the shares to be issued
upon exercise of an option shall be determined by the Plan
administrator, except that the per share exercise price shall be no
less than 100% of the fair market value per share on the grant
date. Fair market value is established by the Company’s Board
of Directors, using third party valuation reports and recent
financings. Options generally expire after ten years.
MONOPAR THERAPEUTICS INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
Stock
option activity under the Plan was as follows:
|
|
|
|
|
|
Weighted-Average Exercise Price
|
Balances at January 1, 2016
|
—
|
—
|
$
—
|
Initial
option pool
|
700,000
|
|
|
Granted
(1)
|
(280,000
)
|
280,000
|
0.001
|
Forfeited
|
—
|
—
|
—
|
Exercised
|
—
|
—
|
—
|
Balances at December 31, 2016
|
420,000
|
280,000
|
0.001
|
Option
pool increase (2)
|
900,000
|
—
|
—
|
Granted
(3)
|
(378,592
)
|
378,592
|
1.63
|
Forfeited
|
—
|
—
|
—
|
Exercised
|
—
|
—
|
—
|
Balances at December 31, 2017
|
941,408
|
658,592
|
0.94
|
(1)
273,000 options
vested 50% upon grant date, 25% upon the 6-month anniversary of
grant date and 25% upon the 1-year anniversary of grant date; 7,000
options vested monthly over 6 months.
(2)
In October 2017,
the Company’s Board of Directors increased the option pool to
1,600,000 shares.
(3)
336,544 options
vest 6/48ths at the six-month anniversary of grant date and 1/48th
per month thereafter 21,024 options vest 6/24ths on the six-month
anniversary of grant date and 1/24th per month thereafter; and
21,024 options vest 6/42nds on the six-month anniversary of grant
date and 1/42nd per month thereafter.
A
summary of options outstanding as of December 31, 2017 is shown
below:
|
Numberof Shares Outstanding
|
Weighted Average Remaining Contractual Term
|
Number of Shares Fully Vested and Exercisable
|
Weighted Average Remaining Contractual Term
|
$
0.001
|
555,520
|
8.7
years
|
337,400
|
|
$
6.00
|
103,072
|
9.6
years
|
—
|
N/A
|
|
658,592
|
|
337,400
|
|
During
the years ended December 31, 2017 and 2016, the Company recognized
$26,864 and $0 of employee and non-employee director stock-based
compensation expense as general and administrative expenses,
respectively, and $26,499 and $0 as research and development
expenses, respectively. The compensation expense is allocated on a
departmental basis, based on the classification of the option
holder. No income tax benefits have been recognized in the
statements of operations for stock-based compensation
arrangements.
MONOPAR THERAPEUTICS INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
The
Company recognizes as an expense the fair value of options granted
to persons who are neither employees nor directors. The fair value
of expensed options was based on the Black-Scholes option-pricing
model assuming the following factors: 6.1 to 5.3 years expected
term, 57% volatility, 2.2% to 1.2% risk free interest rate and zero
dividends.
The expected
term for options granted to date is estimated using the simplified
method. Stock-based compensation expense for non-employees for the
years ended December 31, 2017 and 2016 was $251,842 and $0,
respectively, of which $199,769 and $0, respectively was recorded
as research and development expenses and $52,073 and $0,
respectively, as general and administrative expenses. For the years
ended December 31, 2017 and 2016: the weighted average grant date
fair value was $0.88 and $0.00 per share, respectively; and the
fair value of shares vested were approximately $0.3 million and
nominal, respectively. At December 31, 2017, the aggregate
intrinsic value was approximately $3.3 million of which
approximately $2.0 million was vested and approximately $1.3
million is expected to vest and the weighted average exercise price
in aggregate was $0.94 which includes $0.001 for fully vested stock
options and $1.93 for stock options expected to vest. At December
31, 2017 unamortized unvested balance of stock base compensation
was $925,126, to be amortized over 3.3 years.
Note 5 - Development and Collaboration Agreements
Onxeo SA
The
pre-negotiated Onxeo license agreement for Validive included as
part of the option agreement includes clinical, regulatory,
developmental and sales milestones that could reach up to $108
million if the Company achieves all milestones, and escalating
royalties on net sales from 5 - 10%. On September 8, 2017, the
Company exercised the option, and therefore was required to pay
Onxeo the $1 million fee under the option and license
agreement.
Under
the agreement, the Company is required to pay royalties to Onxeo on
a product-by-product and country-by-country basis until the later
of (1) the date when a given product is no longer within the scope
of a patent claim in the country of sale or manufacture, (2) the
expiry of any extended exclusivity period in the relevant country
(such as orphan drug exclusivity, pediatric exclusivity, new
chemical entity exclusivity, or other exclusivity granted beyond
the expiry of the relevant patent), or (3) a specific time period
after the first commercial sale of the product in such country. In
most countries, including the U.S., the patent term is generally 20
years from the earliest claimed filing date of a non-provisional
patent application in the applicable country, not taking into
consideration any potential patent term adjustment that may be
filed in the future or any regulatory extensions that may be
obtained. The royalty termination provision pursuant to (3)
described above is shorter than 20 years and is the least likely
cause of termination of royalty payments.
The
Onxeo license agreement does not have a pre-determined term, but
expires on a product-by-product and country-by-country basis; that
is, the agreement expires with respect to a given product in a
given country whenever the Company’s royalty payment
obligations with respect to such product have expired. The
agreement may also be terminated early for cause if either the
Company or Onxeo materially breach the agreement, or if either the
Company or Onxeo become insolvent. The Company may also choose to
terminate the agreement, either in its entirety or as to a certain
product and a certain country, by providing Onxeo with advance
notice.
The
Company plans to internally develop Validive with the near-term
goal of commencing a Phase 3 clinical trial, which, if successful,
may allow the Company to apply for marketing approval within the
next few years. The Company will need to raise significant funds to
support the further development of Validive.
Cancer
Research UK
In May 2015, the Company entered into a CTOA with
Cancer Research UK and Cancer Research Technology Limited, a
wholly-owned subsidiary of Cancer Research UK. As part of the CTOA,
the Company was obligated to submit $0.8 million in escrow to cover
certain potential future claims, intellectual property infringement
costs or termination costs incurred by Cancer Research UK.
Pursuant to
this agreement Cancer Research UK conducted preclinical work,
improved the manufacturing, and planned to conduct a Phase 1a/1b
clinical trial in cancer patients. As part of a portfolio
reprioritization review, on March 21, 2018 Cancer
Research UK notified the Company that it was terminating the CTOA
and would work to transfer to the Company the data generated under
the CTOA. The Company is currently reviewing potential
alternative collaboration opportunities for MNPR-101 and continues
to maintain the program’s intellectual property
portfolio.
MONOPAR THERAPEUTICS INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
XOMA Ltd.
The
intellectual property rights contributed by Tactic Pharma to the
Company included the non-exclusive license agreement with XOMA Ltd.
for the humanization technology used in the development of
MNPR-101. Pursuant to such license agreement, the Company is
obligated to pay XOMA Ltd. clinical, regulatory and sales
milestones for MNPR-101 that could reach up to $14.925 million if
the Company achieves all milestones. The agreement does not require
the payment of sales royalties. There can be no assurance that the
Company will reach any milestones. As of December 31, 2017, the
Company has not reached any milestones and has not been required to
pay XOMA Ltd. any funds under this license agreement.
Note 6 - The Gem Transaction
On
August 25, 2017, the Company executed definitive agreements with
Gem Pharmaceuticals, LLC (“Gem”), pursuant to which Gem
formed a limited liability company, TacticGem LLC
(“TacticGem”) with Tactic Pharma, the Company’s
largest shareholder at that time. Gem contributed certain of
Gem’s drug candidates’ intellectual property and
agreements associated primarily with Gem’s GPX-150 (renamed
MNPR-201) drug candidate program, along with $5,000,000 in cash
(the “Gem Contributed Assets”) to TacticGem for a
42.633% interest, and Tactic Pharma contributed 4,111,272.88 shares
of common stock of Monopar to TacticGem for a 57.367% interest.
Then, TacticGem contributed the Gem Contributed Assets to the
Company in exchange for 3,055,394.12 newly issued shares of common
stock of the Company (31.4% on a fully-diluted basis) (the two
contributions collectively, the “Gem Transaction”). The
Gem Transaction closed on August 25, 2017. Following the Gem
Transaction, TacticGem owns 7,166,667 (77.1%) shares of
Monopar’s common stock as of December 31, 2017.
The
transaction was recorded as an asset acquisition on August 25, 2017
as follows:
Cash
recorded on the Company’s Balance Sheet
|
$
5,000,000
|
Assembled
Workforce recorded as In-process Research and Development Expense
on
the
Company’s Statement of Operations
|
9,886
|
MNPR-201
(GPX-150) recorded as In-process Research and Development Expense
on
the
Company’s Statement of Operations
|
13,491,736
|
Total
Gem Transaction
|
$
18,501,622
|
Within
90 days of the effective date of the transaction, the Company was
required to use its best efforts to file a Form 10 to register its
common stock under the Securities Exchange Act of 1934. The Company
filed its Form 10 on November 9, 2017. Additionally, Arthur
Klausner, current CEO of Gem, has been added to the Company’s
Board of Directors and will remain on the Board of Directors at
least until the Company achieves a listing on a major stock
exchange (such as Nasdaq or NYSE). Richard Olson and Gerald Walsh,
CSO and President of Gem, respectively, have been retained with
one-year consulting agreements to aid in an efficient transfer of
Gem’s GPX-150 (renamed MNPR-201) and associated
programs.
It is
anticipated that this transaction will increase the Company’s
annual cash burn by at least $750,000, and will be significantly
higher if the Company chooses to conduct clinical trials with the
Gem drug candidate programs.
MONOPAR THERAPEUTICS INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
Note 7 - Related Party Transactions
During
the years ended December 31, 2017 and 2016, the Company was advised
by four members of its Board of Directors, who were Managers of the
LLC prior to the Company’s conversion to a C Corporation. The
four former Managers are also current common stockholders (owning
approximately an aggregate 3% of the common stock outstanding as of
December 31, 2017). Three of the former Managers are also Managing
Members of Tactic Pharma the Company’s largest and
controlling stockholder (beneficially owning 46% of the Company at
December 31, 2017 and in partnership with Gem through TacticGem
owning 77%). Monopar paid Managing Members of Tactic Pharma the
following during the years ended December 31, 2017 and 2016:
Chandler D. Robinson, the Company’s Co-Founder, Chief
Executive Officer, common stockholder, Managing Member of Tactic
Pharma and former Manager of the predecessor LLC $346,545 and
$322,000, respectively; and Andrew P. Mazar, the Company’s
Co-Founder, Chief Scientific Officer, common stockholder, Managing
Member of Tactic Pharma and former Manager of the predecessor LLC,
$300,731 and $197,500, respectively. The Company also paid
Christopher M. Starr, the Company’s Co-Founder, Executive
Chairman of the Board of Directors, common stockholder and former
Manager of the predecessor LLC $100,897 and $96,339 during the
years ended December 31, 2017 and 2016, respectively.
In the
normal course of business, the Company’s Chief Executive
Officer, Board Members and consultants incur expenses on behalf of
the Company and are reimbursed within 30 days of submission of
relevant expense reports.
The
Company reimbursed Tactic Pharma, a
de minimis
amount in monthly storage
fees during the years ended December 31, 2017 and 2016. In March
2017, Tactic Pharma wired $1 million to the Company in advance of
the sale of the Company’s common stock at $6 per share under
a private placement memorandum. In April, the Company issued to
Tactic Pharma 166,667 shares in exchange for the $1 million at $6
per share once the Company began selling stock to unaffiliated
parties under the private placement memorandum. In August 2017,
Tactic Pharma surrendered 2,888,727 shares of common stock back to
the Company as a contribution to the capital of the Company. This
resulted in reducing Tactic Pharma’s ownership in Monopar
from 79.5% to 69.9%. Following the surrender of the common stock,
Tactic Pharma contributed 4,111,272.88 shares of its holdings in
Monopar’s common stock to TacticGem pursuant to the Gem
Transaction discussed in detail in Note 6 above. As of December 31,
2017, Tactic Pharma beneficially owned 46% of Monopar’s
common stock, and TacticGem owned 77% of Monopar’s common
stock.
During
the years ended December 31, 2017 and 2016, the Company paid or
accrued legal fees to a large national law firm, in which a family
member of the Company’s Chief Executive Officer is a law
partner, approximately $300,140 and $54,000, respectively. The
family member personally billed a
de minimis
amount of time on the
Company’s legal engagement with the law firm in these
periods.
Note 8 – Income Taxes
ASC 740
requires that the tax benefit of net operating losses, temporary
differences, and credit carryforwards be recorded as an asset to
the extent that management assesses that realization is "more
likely than not." Realization of the future tax benefits is
dependent on the Company's ability to generate sufficient taxable
income within the carryforward period. The Company has reviewed the
positive and negative evidence relating to the realizability of the
deferred tax assets and has concluded that the deferred tax assets
are not more likely than not to be realized with the exception of
$4,358 of U.S. Federal R&D tax credits. These tax credits will
be utilized to reduce payroll taxes in 2018. Accordingly, the
valuation allowance has not been released related to these assets
with the exception of $4,000 in U.S. Federal R&D tax credits.
The valuation allowance increased by approximately $470,000 and
$460,000 during the years ended December 31, 2017 and 2016,
respectively.
MONOPAR THERAPEUTICS INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
The
provision for income taxes for December 31, 2017 and 2016 consists
of the following:
|
|
|
|
|
Current:
|
|
|
Federal
|
$
-
|
$
-
|
State
|
800
|
800
|
Total
current
|
800
|
800
|
Deferred:
|
|
|
Federal
|
980,176
|
463,520
|
State
|
25,169
|
71,734
|
Total
deferred
|
1,005,345
|
535,254
|
Full valuation
allowance
|
(1,000,987
)
|
(535,254
)
|
Total
provision
(1)
|
$
(3,558
)
|
$
800
|
(1)
Total provision
consists of U.S. Federal R&D credits, net of California minimum
tax.
The
difference between the effective tax rate and the U.S. federal tax
rate is as follows:
|
|
Federal income
tax
|
34.00
%
|
State income taxes,
less federal benefit
|
0.07
%
|
Tax
credits
|
0.09
%
|
Permanent
differences
|
-27.38
%
|
Tax basis
intangibles
|
-4.90
%
|
Change in valuation
allowance
|
-1.88
%
|
Other (Release of
VA)
|
0.03
%
|
Effective tax rate
benefit (expense)
|
0.03
%
|
MONOPAR THERAPEUTICS INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
Deferred tax assets
and liabilities consist of the following:
|
|
|
|
|
Deferred
tax assets:
|
|
|
Net
operating loss carryforwards
|
$
186,019
|
$
111,245
|
Tax
credit carryforwards
|
30,143
|
4,470
|
Stock
compensation
|
58,536
|
—
|
Intangible
asset basis differences
|
730,647
|
419,539
|
Gross
deferred tax assets
|
1,005,345
|
535,254
|
Valuation
allowance
|
(1,000,987
)
|
(535,254
)
|
Total
deferred tax assets, net of valuation allowance
|
4,358
|
0
|
Deferred
tax liabilities:
|
|
|
Net
deferred tax liability
|
—
|
—
|
Net
deferred taxes
|
$
4,358
|
$
0
|
As of
December 31, 2017, Company had federal net operating loss
carryforwards of approximately $820,000 which will begin to expire
in 2035 for federal tax purposes. At December 31, 2017, the Company
had state net operating loss carryforwards of approximately
$260,000 which will begin to expire in 2027. The net operating loss
related deferred tax assets do not include excess tax benefits from
employee stock option exercises.
As of
December 31, 2017, Company had R&D credit carryforwards of
approximately $19,000 and $14,000 available to reduce future
taxable income, if any, for both federal and state income tax
purposes, respectively. In addition, Company had $4,358 available
to reduce future payroll taxes, if any, for Federal tax purposes.
The federal R&D credit carryforwards expire beginning 2035 and
Illinois R&D credit carryforwards expire beginning
2020.
The Tax
Reform Act of 1986 limits the use of net operating carryforwards in
certain situations where changes occur in the stock ownership of a
company. In the event the Company has had a change in ownership,
utilization of the carryforwards could be limited. The Company has
not performed such a study.
On
January 1, 2015, the Company adopted the provisions of FASB
Accounting Standards Codification (ASC 740-10), "
Accounting for Uncertainty in Income
Taxes
." ASC 740-10 prescribes a comprehensive model for the
recognition, measurement, presentation and disclosure in financial
statements of any uncertain tax positions that have been taken or
expected to be taken on a tax return. The cumulative effect of
adopting ASC 740-10 resulted in no adjustment to retained earnings
as of December 31, 2017. It is Company's policy to include
penalties and interest expense related to income taxes as a
component of other expense and interest expense, respectively, as
necessary.
No
liability related to uncertain tax positions is recorded on the
financial statements related to uncertain tax positions. There are
no unrecognized tax benefits as of December 31, 2017. The Company
does not expect that uncertain tax benefits will materially change
in the next 12 months.
MONOPAR THERAPEUTICS INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
Company
files U.S. federal, California and Illinois State tax returns.
Company is subject to California State minimum franchise taxes. All
tax returns will remain open for examination by the federal and
state taxing authorities for three and four years, respectively,
from the date of utilization of any net operating loss
carryforwards or R&D credits.
On
December 22, 2017, the Tax
Cuts and
Jobs Act of 2017
was enacted by the U.S. President. The Tax
Cuts and Jobs Act of 2017
is
effective as of January 1, 2018. In accordance with ASC guidance,
deferred tax assets/liabilities in the Company’s financial
statements are to be reflected at the tax rate in which the
deferred tax assets/liabilities are anticipated to be realized. As
a result, the Company changed the tax rate for tax provision
purposes at December 31, 2017 from 34% to 21%. This resulted in a
reduction of the value of the Company’s deferred tax asset
balances in the amount of approximately $176,000.
Note
9 – Commitments and Contingencies
Development
and Collaboration Agreements
The
intellectual property rights contributed by Tactic Pharma, LLC to
the Company included the non-exclusive license agreement with XOMA
Ltd. for the humanization technology used in the development of
MNPR-101. Pursuant to such license agreement, the Company is
obligated to pay XOMA Ltd. clinical, regulatory and sales
milestones for MNPR-101 and zero royalties. As of December 31,
2017, the Company has not reached any milestones and has not been
required to pay XOMA Ltd. any funds under this license
agreement.
Leases
The
Company leases office space at 500 Mercer St., Seattle, WA. The
lease commenced on November 1, 2017 and is extendable on a
month-to-month basis. Commencing January 1, 2018, the Company
entered into a lease for its executive headquarters at 1000 Skokie
Blvd., Suite 350, Wilmette, IL. The lease term is January 1, 2018
through December 31, 2019. The future lease commitments as
presented below include amounts for these two leases.
2018
|
$
30,234
|
2019
|
30,234
|
2020
|
-
|
Total
future lease payments
|
$
60,468
|
Legal
Contingencies
The
Company is subject to claims and assessments from time to time in
the ordinary course of business. The Company’s management
does not believe that any such matters, individually or in the
aggregate, will have a material adverse effect on the
Company’s business, financial condition, results of
operations or cash flows.
MONOPAR THERAPEUTICS INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2017
Indemnification
In the
normal course of business, the Company enters into contracts and
agreements that contain a variety of representations and warranties
and provide for general indemnification. The Company’s
exposure under these agreements is unknown because it involves
claims that may be made against the Company in the future, but that
have not yet been made. To date, the Company has not paid any
claims or been required to defend any action related to its
indemnification obligations. However, the Company may record
charges in the future as a result of these indemnification
obligations.
In
accordance with its amended and restated certificate of
incorporation and bylaws, the Company has indemnification
obligations to its officers and directors for certain events or
occurrences, subject to certain limits, while they are serving at
the Company’s request in such capacity. There have been no
claims to date.
Note 10 - Subsequent Events
Cancer
Research UK Termination of CTOA
On
March 21, 2018 Cancer Research UK notified the Company that it was
terminating the CTOA and would work to transfer to the Company the
data and know-how generated under the CTOA. The Company is
currently reviewing potential alternative collaboration
opportunities for MNPR-101 and continues to maintain the
program’s intellectual property portfolio.
The
Company has evaluated all events occurring from December 31, 2017
through March 26,
2018, the date which these financial statements were available to
be issued, and did not identify any additional material disclosable
subsequent events.
Schedule
II: Valuation and Qualifying Accounts
Valuation
Allowance for Deferred Tax Assets
|
|
|
|
|
Balance at
beginning of year
|
$
535,254
|
$
75,251
|
Additions to
charged to expenses/other accounts
|
465,733
|
460,003
|
Balance
at end of year
|
$
1,000,987
|
$
535,254
|
SECOND
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF MONOPAR
THERAPEUTICS INC.
This
Second Amended and Restated Certificate of Incorporation (the
“
Certificate
”)
amends and restates the Certificate of Incorporation of Monopar
Therapeutics Inc., originally filed with the Delaware Secretary of
State on December 16, 2015, which was amended and restated on March
15, 2016, under the provisions of and subject to the requirements
of the General Corporation Law of the State of Delaware (the
"
DGCL
"). This Certificate
has been duly adopted in accordance with Section 245 of the DGCL,
and by written consent of a majority of stockholders under Section
228 of the DGCL.
FIRST:
The name of the corporation is Monopar Therapeutics Inc. (the
"
Corporation
").
SECOND:
The address of the registered office of the Corporation in the
State of Delaware is Corporation Trust Center, 1209 Orange Street,
Wilmington, DE 19801, in New Castle County. The name of the
registered agent of the Corporation at such address is The
Corporation Trust Company.
THIRD:
The nature of the business or purposes to be conducted or promoted
by the Corporation is to engage in any lawful act or activity for
which corporations may be organized under the DGCL.
FOURTH:
The total number of shares of stock which the Corporation is
authorized to issue is 40,000,000; all of which shall be common
stock having $0.001 par value per share (“
Common Stock
”). The Common Stock,
and any other stock issued by the board of directors of the
Corporation (the “
Board
”) (together, the
“
Stock
”) of the
Corporation shall be governed by the Bylaws of the Corporation and
this Certificate. Upon the effectiveness of this Certificate, (a)
each share of Series A Preferred Stock, $0.001 par value per share
of the Corporation authorized and outstanding immediately prior to
the effectiveness of this Certificate shall be automatically
converted into 84 shares of Common Stock, $0.001 par value per
share, and (b) each share of Series Z Preferred Stock, $0.001 par
value per share, of the Corporation authorized and outstanding
immediately prior to the effectiveness of this Certificate shall be
automatically converted into 70 shares of Common Stock, $0.001 par
value per share.
Section
1.
General
. The
terms of each of the shares of Stock of the Corporation shall be
equal to and identical in all respects with every other share of
Stock, irrespective of class.
Section
2.
Additional
Stockholders
. Additional persons may be admitted to the
Corporation as Stockholders, and shares (of any existing or new
classes) may be created for issuance to such persons, on such terms
and conditions as the Board may determine.
Section
3.
Conversion
. The
certificates representing shares of Series A Preferred Stock or
Series Z Preferred Stock, as applicable, shall continue to
represent the holders’ ownership in the Corporation until
returned to the Corporation for replacement, at which time the
Corporation shall issue and deliver to such holder of Series A
Preferred Stock or Series Z Preferred Stock, or
to his
or its nominees, a certificate or certificates for the number of
shares of Common Stock to which the holder is
entitled.
FIFTH:
To the extent permitted by law, the Corporation may purchase or
otherwise acquire shares of stock of any class issued by it for
such consideration and upon such terms and conditions as may be
authorized by the Board from time to time.
SIXTH:
In furtherance of and not in limitation of powers conferred by
statute, this Article is inserted for the management of the
business and for the conduct of the affairs of the
Corporation.
1.
General Powers
. The business
and affairs of the Corporation shall be managed by or under the
direction of the Board pursuant to the provisions of this
Certificate of Incorporation and the Bylaws of the Corporation, as
amended, restated and/or modified from time to time.
2.
Election of Directors
. Election
of directors need not be by written ballot. Voting rights with
respect to election or removal of members of the Board are set
forth in the Bylaws of the Corporation.
3.
Authority to Amend Bylaws
. In
furtherance and not in limitation of the rights, powers, privileges
and discretionary authority granted or conferred by the General
Corporation Law of the State of Delaware or other statutes or laws
of the State of Delaware, but subject to the express provisions of
this Certificate, the Board is expressly authorized to adopt, make,
alter, amend or repeal the Bylaws of the Corporation, without any
action on the part of the stockholders (except to the extent
specifically set forth in such Bylaws), but the Stockholders may
adopt or make additional Bylaws and may alter, amend or repeal any
Bylaw whether adopted by the Stockholders or
otherwise.
The
Corporation may in its Bylaws confer powers upon its Board in
addition to the foregoing and in addition to the powers and
authorities expressly conferred upon the Board by applicable
law.
SEVENTH: To the
fullest extent permitted by Delaware law, no director of the
Corporation shall be personally liable to the Corporation or its
stockholders (the “
Stockholders
”) for monetary
damages for any breach of fiduciary duty as a director,
notwithstanding any provision of law (other than any provision of
the DGCL) imposing such liability. No amendment to or repeal of
this provision shall apply to or have any effect on the liability
or alleged liability of any director of the Corporation for or with
respect to any acts or omissions of such director occurring prior
to such amendment or repeal.
EIGHTH:
The Corporation shall, to the fullest extent permitted by the DGCL,
as amended from time to time, indemnify each person who was or is a
party or is threatened to be made a party to any threatened,
pending, or completed action, suit, or proceeding, whether civil,
criminal, administrative, or investigative, by reason of the fact
that he or she is or was, or has agreed to become, a director or
officer of the Corporation, or is or was serving, or has agreed to
serve, at the request of the Corporation, as a director, officer,
manager, partner, employee, or trustee of, or in a similar capacity
with, another corporation, limited liability company, partnership,
joint venture, trust, or other enterprise (including any employee
benefit plan) (all such persons being
referred to
hereafter as an “
Indemnitee
”), or by reason of any
action alleged to have been taken or omitted in such capacity,
against all expenses (including attorneys’ fees), judgments,
fines, and amounts paid in settlement actually and reasonably
incurred by or on behalf of an Indemnitee in connection with such
action, suit, or proceeding and any appeal therefrom.
As a
condition precedent to an Indemnitee’s right to be
indemnified, the Indemnitee must notify the Corporation in writing
as soon as practicable of any action, suit, proceeding, or
investigation involving such Indemnitee for which indemnity will or
could be sought. With respect to any action, suit, proceeding, or
investigation of which the Corporation is so notified, the
Corporation will be entitled to participate therein at its own
expense and/or to assume the defense thereof at its own expense,
with legal counsel reasonably acceptable to the
Indemnitee.
In the
event that the Corporation does not assume the defense of any
action, suit, proceeding, or investigation of which the Corporation
receives notice under this Article, the Corporation shall pay in
advance of the final disposition of such matter any expenses
(including attorneys’ fees) incurred by an Indemnitee in
defending a civil or criminal action, suit, proceeding, or
investigation or any appeal therefrom; provided, however, that the
payment of such expenses incurred by an Indemnitee in advance of
the final disposition of such matter shall be made only upon
receipt of an undertaking by or on behalf of the Indemnitee to
repay all amounts so advanced in the event that it shall ultimately
be determined that the Indemnitee is not entitled to be indemnified
by the Corporation as authorized in this Article, which undertaking
shall be accepted without reference to the financial ability of the
Indemnitee to make such repayment; and further provided that no
such advancement of expenses shall be made under this Article if it
is reasonably determined that (i) the Indemnitee did not act in
good faith and in a manner he or she reasonably believed to be in,
or not opposed to, the best interests of the Corporation, or (ii)
with respect to any criminal action or proceeding, the Indemnitee
had reasonable cause to believe his or her conduct was
unlawful.
The
Corporation shall not indemnify an Indemnitee pursuant to this
Article in connection with a proceeding (or part thereof) initiated
by such Indemnitee unless the initiation thereof was approved by
the Board of the Corporation. In addition, the Corporation shall
not indemnify an Indemnitee to the extent such Indemnitee is
reimbursed from the proceeds of insurance, and in the event the
Corporation makes any indemnification payments to an Indemnitee and
such Indemnitee is subsequently reimbursed from the proceeds of
insurance, such Indemnitee shall promptly refund such
indemnification payments to the Corporation to the extent of such
insurance reimbursement.
The
Corporation may not indemnify an Indemnitee (i) for any liability
incurred in a proceeding in which such person is adjudged liable to
the Corporation or is subjected to injunctive relief in favor of
the Corporation (ii) for acts or omissions that involve intentional
misconduct or a knowing violation of law, fraud or gross
negligence, (iii) for unlawful distributions (iv) for any
transaction for which such Indemnitee received a personal benefit
in violation or breach of any provision of this Certificate or the
Bylaws of the Corporation, or as otherwise prohibited by or as may
be disallowed under Delaware law or (v) with respect to any dispute
or proceeding between the Corporation and such Indemnitee unless
such
indemnification has
been approved by a disinterested majority of the Board or by a
majority in interest of disinterested Stockholders who are entitled
to vote.
All
determinations hereunder as to the entitlement of an Indemnitee to
indemnification or advancement of expenses shall be made in each
instance (a) by a majority vote of the directors of the Corporation
consisting of persons who are not at that time parties to the
action, suit, or proceeding in question (“disinterested
directors”), whether or not a quorum, (b) by a committee of
disinterested directors designated by majority vote of
disinterested directors, whether or not a quorum, (c) if there are
no disinterested directors, or if the disinterested directors so
direct, by independent legal counsel (who may, to the extent
permitted by law, be regular legal counsel to the Corporation) in a
written opinion, or (d) by the Stockholders of the
Corporation.
The
rights provided in this Article (i) shall not be deemed exclusive
of any other rights to which an Indemnitee may be entitled under
any law, agreement, or vote of Stockholders or disinterested
directors or otherwise, and (ii) shall inure to the benefit of the
heirs, executors and administrators of the Indemnitees. The
Corporation may, to the extent authorized from time to time by its
Board, grant indemnification rights to other employees or agents of
the Corporation or other persons serving the Corporation and such
rights may be equivalent to, or greater or less than, those set
forth in this Article.
The
Corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or
agent of the Corporation, or is or was serving at the request of
the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss incurred by such
person in any such capacity or arising out of his status as such,
whether or not the Corporation would have the power to indemnify
him against such liability under the DGCL.
No
amendment, termination, or repeal of this Article or of the
relevant provisions of the DGCL or any other applicable laws shall
affect or diminish in any way the rights of any Indemnitee to
indemnification under the provisions hereof with respect to any
action, suit, proceeding, or investigation arising out of or
relating to any actions, transactions, or facts occurring prior to
the final adoption of such amendment, termination or
repeal.
NINTH:
Meetings of Stockholders may be held within or without the State of
Delaware, as the By-laws of the Corporation may provide. The books
of the Corporation may be kept outside the State of Delaware at
such place as may be designated from time to time by the Board or
in the By-laws of the Corporation.
TENTH:
The Corporation shall have the right from time to time, to amend
this Certificate or any provision thereof in any manner now or
hereafter provided by law. Except as expressly set forth herein,
all rights and powers of any kind conferred upon a director or
stockholder of the Corporation by this Certificate or any amendment
thereof are conferred subject to such right.
[SIGNATURE PAGE
FOLLOWS]
In witness whereof, the Corporation has caused
this Second Amended and Restated Certificate of
Incorporation
to
be signed this 17th
day
of March, 2017.
By:
/s/ Chandler D.
Robinson
Chandler
D. Robinson. President
AMENDED
AND RESTATED
BY-LAWS
OF MONOPAR THERAPEUTICS INC.
ARTICLE
I OFFICES
Section 1.01
Registered
Office.
The address, principal office, and principal place
of business of Monopar Therapeutics Inc. (hereinafter called the
"
Corporation
") in the State
of Delaware shall be at 5 Revere Dr., Suite 200, Northbrook,
Illinois 60062. The address of the Corporation’s registered
office in Delaware shall be Corporation Trust Center, 1209 Orange
Street, Wilmington, DE 19801.
Section 1.02
Other
Offices.
The Corporation may also have offices at such other
places, both within and outside the State of Delaware, as the
acting board of directors of the Corporation (the "
Board of Directors
") from time to time
shall determine or the business of the Corporation may
require.
Section 1.03
Books
and Records.
Any records maintained by the Corporation in
the regular course of its business, including its stock ledger,
books of account and minute books, may be maintained on any
information storage device or method;
provided that
the records so kept can
be converted into clearly legible paper form within a reasonable
time. The Corporation shall so convert any records so kept upon the
request of any person entitled to inspect such records pursuant to
applicable law.
ARTICLE
II
MEETINGS
OF THE STOCKHOLDERS
Section 2.01
Place
of Meetings.
All meetings of the stockholders shall be held
at such place, if any, either within or without the State of
Delaware, as shall be designated from time to time by resolution of
the Board of Directors and stated in the notice of meeting. If
authorized by the Board of Directors in its sole discretion, and
subject to such guidelines and procedures as the Board of Directors
may adopt, stockholders and proxyholders not physically present at
a meeting of stockholders may, by means of remote communication
participate in a meeting of stockholders; and be deemed present in
person and vote at a meeting of stockholders, whether such meeting
is to be held at a designated place or solely by means of remote
communication, provided that (i) the Corporation shall implement
reasonable measures to verify that each person deemed present and
permitted to vote at the meeting by means of remote communication
is a stockholder or proxyholder, (ii) the Corporation shall
implement reasonable measures to provide such stockholders and
proxyholders a reasonable opportunity to participate in the meeting
and to vote on matters submitted to the stockholders, including an
opportunity to read or hear the proceedings of the meeting
substantially concurrently with such proceedings, and (iii) if any
stockholder or proxyholder votes or takes other action at the
meeting by means of remote communication, a record of such vote or
other action shall be maintained by the Corporation.
Section 2.02
Annual
Meeting.
Unless directors are elected by written consent in
lieu of an annual meeting as permitted by Section 2.11, the annual
meeting of the stockholders for the election of directors and for
the transaction of such other business as may properly come before
the meeting shall be held at such date, time and place, if any, as
shall be determined by the Board of Directors and stated in the
notice of the meeting.
Section 2.03
Special
Meetings.
Special meetings of stockholders for any purpose
or purposes shall be called pursuant to a resolution approved by
the Board of Directors and may not be called by any other person or
persons. The only business which may be conducted at a special
meeting shall be the matter or matters set forth in the notice of
such meeting.
Section 2.04
Adjournments.
Any meeting of the stockholders, annual or special, may be
adjourned from time to time to reconvene at the same or some other
place, if any, and notice need not be given of any such adjourned
meeting if the time, place, if any, thereof and the means of remote
communication, if any, are announced at the meeting at which the
adjournment is taken. At the adjourned meeting, the Corporation may
transact any business which might have been transacted at the
original meeting. If the adjournment is for more than 30 days, a
notice of the adjourned meeting shall be given to each stockholder
of record entitled to vote at the meeting. If after the adjournment
a new record date is fixed for stockholders entitled to vote at the
adjourned meeting, the Board of Directors shall fix a new record
date for notice of the adjourned meeting and shall give notice of
the adjourned meeting to each stockholder of record entitled to
vote at the adjourned meeting as of the record date fixed for
notice of the adjourned meeting.
Section 2.05
Notice
of Meetings.
Notice of the place, if any, date, hour, the
record date for determining the stockholders entitled to vote at
the meeting (if such date is different from the record date for
stockholders entitled to notice of the meeting) and means of remote
communication, if any, of every meeting of stockholders shall be
given by the Corporation not less than ten days nor more than 60
days before the meeting (unless a different time is specified by
law) to every stockholder entitled to vote at the meeting as of the
record date for determining the stockholders entitled to notice of
the meeting. Notices of special meetings shall also specify the
purpose or purposes for which the meeting has been called. Except
as otherwise provided herein or permitted by applicable law, notice
to stockholders shall be in writing and delivered personally or
mailed to the stockholders at their address appearing on the books
of the Corporation. Without limiting the manner by which notice
otherwise may be given effectively to stockholders, notice of
meetings may be given to stockholders by means of electronic
transmission in accordance with applicable law. Notice of any
meeting need not be given to any stockholder who shall, either
before or after the meeting, submit a waiver of notice or who shall
attend such meeting, except when the stockholder attends for the
express purpose of objecting, at the beginning of the meeting, to
the transaction of any business because the meeting is not lawfully
called or convened. Any stockholder so waiving notice of the
meeting shall be bound by the proceedings of the meeting in all
respects as if due notice thereof had been given.
Section 2.06
List
of Stockholders.
The officer of the Corporation who has
charge of the stock ledger shall prepare a complete list of the
stockholders entitled to vote at any meeting
of
stockholders (provided, however, if the record date for determining
the stockholders entitled to vote is less than ten days before the
date of the meeting, the list shall reflect the stockholders
entitled to vote as of the tenth day before the meeting date),
arranged in alphabetical order, and showing the address of each
stockholder and the number of shares of each class of capital stock
of the Corporation registered in the name of each stockholder at
least ten days before any meeting of the stockholders. Such list
shall be open to the examination of any stockholder, for any
purpose germane to the meeting, on a reasonably accessible
electronic network if the information required to gain access to
such list was provided with the notice of the meeting or during
ordinary business hours, at the principal place of business of the
Corporation for a period of at least ten days before the meeting.
If the meeting is to be held at a place, the list shall also be
produced and kept at the time and place of the meeting the whole
time thereof and may be inspected by any stockholder who is
present. If the meeting is held solely by means of remote
communication, the list shall also be open for inspection by any
stockholder during the whole time of the meeting as provided by
applicable law. Except as provided by applicable law, the stock
ledger of the Corporation shall be the only evidence as to who are
the stockholders entitled to examine the stock ledger and the list
of stockholders or to vote in person or by proxy at any meeting of
stockholders.
Section 2.07
Quorum.
Unless otherwise required by law, the Corporation's Certificate of
Incorporation (the "
Certificate of
Incorporation
") or these by-laws, at each meeting of the
stockholders, a majority in voting power of the shares of the
Corporation entitled to vote at the meeting, present in person or
represented by proxy, shall constitute a quorum. If, however, such
quorum shall not be present or represented at any meeting of the
stockholders, the stockholders entitled to vote thereat, present in
person or represented by proxy, shall have power, by the
affirmative vote of a majority in voting power thereof, to adjourn
the meeting from time to time, in the manner provided in Section
2.04, until a quorum shall be present or represented. A quorum,
once established, shall not be broken by the subsequent withdrawal
of enough votes to leave less than a quorum. At any such adjourned
meeting at which there is a quorum, any business may be transacted
that might have been transacted at the meeting originally
called.
Section 2.08
Conduct
of Meetings.
The Board of Directors may adopt by resolution
such rules and regulations for the conduct of the meeting of the
stockholders as it shall deem appropriate. At every meeting of the
stockholders, the President, or in his or her absence or inability
to act, the Vice President, or, in his or her absence or inability
to act, the person whom the President shall appoint, shall act as
chairman of, and preside at, the meeting. The secretary or, in his
or her absence or inability to act, the person whom the chairman of
the meeting shall appoint secretary of the meeting, shall act as
secretary of the meeting and keep the minutes thereof. Except to
the extent inconsistent with such rules and regulations as adopted
by the Board of Directors, the chairman of any meeting of the
stockholders shall have the right and authority to prescribe such
rules, regulations and procedures and to do all such acts as, in
the judgment of such chairman, are appropriate for the proper
conduct of the meeting. Such rules, regulations or procedures,
whether adopted by the Board of Directors or prescribed by the
chairman of the meeting, may include, without limitation, the
following: (a) the establishment of an agenda or order of business
for the meeting; (b) the determination of when the polls shall open
and close for any given matter to be voted on at the meeting; (c)
rules and procedures for maintaining order at the meeting and the
safety of those present; (d) limitations on attendance at or
participation in
the
meeting to stockholders of record of the corporation, their duly
authorized and constituted proxies or such other persons as the
chairman of the meeting shall determine; (e) restrictions on entry
to the meeting after the time fixed for the commencement thereof;
and (f) limitations on the time allotted to questions or comments
by participants.
Section 2.09
Voting;
Proxies.
Unless otherwise required by law or the Certificate
of Incorporation the election of directors shall be decided by a
plurality of the votes cast at a meeting of the stockholders by the
holders of stock entitled to vote in the election. Unless otherwise
required by law, the Certificate of Incorporation or these by-laws,
any matter, other than the election of directors, brought before
any meeting of stockholders shall be decided by the affirmative
vote of the majority of shares present in person or represented by
proxy at the meeting and entitled to vote on the matter. Each
stockholder entitled to vote at a meeting of stockholders or to
express consent to corporate action in writing without a meeting
may authorize another person or persons to act for such stockholder
by proxy, but no such proxy shall be voted or acted upon after
three years from its date, unless the proxy provides for a longer
period. A proxy shall be irrevocable if it states that it is
irrevocable and if, and only as long as, it is coupled with an
interest sufficient in law to support an irrevocable power. A
stockholder may revoke any proxy which is not irrevocable by
attending the meeting and voting in person or by delivering to the
secretary of the Corporation a revocation of the proxy or a new
proxy bearing a later date. Voting at meetings of stockholders need
not be by written ballot.
Section 2.10
Inspectors
at Meetings of Stockholders.
The Board of Directors, in
advance of any meeting of stockholders, may, and shall if required
by law, appoint one or more inspectors, who may be employees of the
Corporation, to act at the meeting or any adjournment thereof and
make a written report thereof. The Board of Directors may designate
one or more persons as alternate inspectors to replace any
inspector who fails to act. If no inspector or alternate is able to
act at a meeting, the person presiding at the meeting shall appoint
one or more inspectors to act at the meeting. Each inspector,
before entering upon the discharge of his or her duties, shall take
and sign an oath faithfully to execute the duties of inspector with
strict impartiality and according to the best of his or her
ability. The inspectors shall (a) ascertain the number of shares
outstanding and the voting power of each, (b) determine the shares
represented at the meeting, the existence of a quorum and the
validity of proxies and ballots, (c) count all votes and ballots,
(d) determine and retain for a reasonable period a record of the
disposition of any challenges made to any determination by the
inspectors and (e) certify their determination of the number of
shares represented at the meeting and their count of all votes and
ballots. The inspectors may appoint or retain other persons or
entities to assist the inspectors in the performance of their
duties. Unless otherwise provided by the Board of Directors, the
date and time of the opening and the closing of the polls for each
matter upon which the stockholders will vote at a meeting shall be
announced at the meeting. No ballot, proxies, votes or any
revocation thereof or change thereto, shall be accepted by the
inspectors after the closing of the polls unless the Court of
Chancery of the State of Delaware upon application by a stockholder
shall determine otherwise. In determining the validity and counting
of proxies and ballots cast at any meeting of stockholders, the
inspectors may consider such information as is permitted by
applicable law. No person who is a candidate for office at an
election may serve as an inspector at such election.
Section 2.11
Written
Consent of Stockholders Without a Meeting.
Any action to be
taken at any annual or special meeting of stockholders may be taken
without a meeting, without prior notice and without a vote, if a
consent or consents in writing, setting forth the action to be so
taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted and shall be
delivered (by hand or by certified or registered mail, return
receipt requested) to the Corporation by delivery to its registered
office in the State of Delaware, its principal place of business or
an officer or agent of the Corporation having custody of the book
in which proceedings of meetings of stockholders are recorded.
Every written consent shall bear the date of signature of each
stockholder who signs the consent, and no written consent shall be
effective to take the corporate action referred to therein unless,
within 60 days of the earliest dated consent delivered in the
manner required by this Section, written consents signed by a
sufficient number of holders to take action are delivered to the
Corporation as aforesaid. Prompt notice of the taking of the
corporate action without a meeting by less than unanimous written
consent shall, to the extent required by applicable law, be given
to those stockholders who have not consented in writing, and who,
if the action had been taken at a meeting, would have been entitled
to notice of the meeting if the record date for notice of such
meeting had been the date that written consents signed by a
sufficient number of holders to take the action were delivered to
the Corporation. Stockholders may act by written consent to elect
directors; provided, however, that, if such consent is less than
unanimous, such action by written consent may be in lieu of holding
an annual meeting only if all of the directorships to which
directors could be elected at an annual meeting held at the
effective time of such action are vacant and are filled by such
action.
Section
2.12
Fixing
the Record Date.
(a)
In order that the
Corporation may determine the stockholders entitled to notice of or
to vote at any meeting of stockholders or any adjournment thereof,
the Board of Directors may fix a record date, which record date
shall not precede the date upon which the resolution fixing the
record date is adopted by the Board of Directors, and which record
date shall not be more than 60 nor less than ten days before the
date of such meeting. If the Board of Directors so fixes a date,
such date shall also be the record date for determining the
stockholders entitled to vote at such meeting unless the Board of
Directors determines, at the time it fixes such record date, that a
later date on or before the date of the meeting shall be the date
for making such determination. If no record date is fixed by the
Board of Directors, the record date for determining stockholders
entitled to notice of or to vote at a meeting of stockholders shall
be at the close of business on the day next preceding the day on
which notice is given, or, if notice is waived, at the close of
business on the day next preceding the day on which the meeting is
held. A determination of stockholders of record entitled to notice
of or to vote at a meeting of stockholders shall apply to any
adjournment of the meeting;
provided, however,
that the Board of
Directors may fix a new record date for the determination of
stockholders entitled to vote at the adjourned meeting and in such
case shall also fix as the record date for stockholders entitled to
notice of such adjourned meeting the same or an earlier date as
that fixed for the determination of stockholders entitled to vote
therewith at the adjourned meeting.
(b)
In order that the
Corporation may determine the stockholders entitled to consent to
corporate action in writing without a meeting, the Board of
Directors may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date
is adopted by the Board of Directors, and which record date shall
not be more than ten days after the date upon which the resolution
fixing the record date is adopted by the Board of Directors. If no
record date has been fixed by the Board of Directors, the record
date for determining stockholders entitled to consent to corporate
action in writing without a meeting: (i) when no prior action by
the Board of Directors is required by law, the record date for such
purpose shall be the first date on which a signed written consent
setting forth the action taken or proposed to be taken is delivered
to the Corporation by delivery (by hand, or by certified or
registered mail, return receipt requested) to its registered office
in the State of Delaware, its principal place of business, or an
officer or agent of the Corporation having custody of the book in
which proceedings of meetings of stockholders are recorded and (ii)
if prior action by the Board of Directors is required by law, the
record date for such purpose shall be at the close of business on
the day on which the Board of Directors adopts the resolution
taking such prior action.
(c)
In order that the
Corporation may determine the stockholders entitled to receive
payment of any dividend or other distribution or allotment of any
rights or the stockholders entitled to exercise any rights in
respect of any change, conversion or exchange of stock, or for the
purpose of any other lawful action, the Board of Directors may fix
a record date, which record date shall not precede the date upon
which the resolution fixing the record date is adopted, and which
record date shall be not more than 60 days prior to such action. If
no record date is fixed, the record date for determining
stockholders for any such purpose shall be at the close of business
on the day on which the Board of Directors adopts the resolution
relating thereto.
ARTICLE
III BOARD OF DIRECTORS
Section 3.01
General
Powers.
The business and affairs of the Corporation shall be
managed by or under the direction of the Board of Directors. The
Board of Directors may adopt such rules and procedures, not
inconsistent with the Certificate of Incorporation, these by-laws
or applicable law, as it may deem proper for the conduct of its
meetings and the management of the Corporation.
Section 3.02
Number;
Term of Office.
The number of directors of the Corporation
shall not be less than three nor more than seven. The number of
directors shall, at the date of adoption of these Bylaws, initially
be fixed at four, and hereafter, such number of directors may be
fixed or changed at any annual meeting of the stockholders or at
any special meeting of the stockholder called for that purpose by
the affirmative vote of the holders of a majority or more of the
voting power of the Corporation. Each director shall hold office
for a period of one year and until a successor is duly elected and
qualified or until the director's earlier death, resignation,
disqualification or removal.
Section 3.03
Newly
Created Directorships and Vacancies.
Any newly created
directorships resulting from an increase in the authorized number
of directors and any vacancies occurring in the Board of Directors,
may be filled by the affirmative votes of a majority of the
remaining members of the Board of Directors, although less than a
quorum, or by a sole remaining director. A director so elected
shall be elected to hold office until the earlier of the expiration
of the term of office of the director whom he or she has replaced,
a successor is duly elected and qualified or the earlier of such
director's death, resignation or removal.
Section 3.04
Resignation.
Any director may resign at any time by notice given in writing or
by electronic transmission to the Corporation. Such resignation
shall take effect at the date of receipt of such notice by the
Corporation or at such later time as is therein
specified.
Section 3.05
Removal.
Except as prohibited by applicable law or the Certificate of
Incorporation, the stockholders entitled to vote in an election of
directors may remove any director from office at any time, with or
without cause, by the affirmative vote of a majority in voting
power thereof.
Section 3.06
Fees
and Expenses.
Directors shall receive such fees, which may
include equity compensation, and expenses as the Board of Directors
shall from time to time prescribe.
Section 3.07
Regular
Meetings.
Regular meetings of the Board of Directors may be
held without notice at such times and at such places as may be
determined from time to time by the Board of Directors or its
chairman.
Section 3.08
Special
Meetings.
Special meetings of the Board of Directors may be
held at such times and at such places as may be determined by the
chairman or the President on at least 24 hours' notice to each
director given by one of the means specified in
Section 3.11
hereof other than by mail
or on at least three days' notice if given by mail. Special
meetings shall be called by the chairman or the President in like
manner and on like notice on the written request of any two or more
directors.
Section 3.09
Telephone
Meetings.
Board of Directors or Board of Directors committee
meetings may be held by means of telephone conference or other
communications equipment by means of which all persons
participating in the meeting can hear each other and be heard.
Participation by a director in a meeting pursuant to this Section
shall constitute presence in person at such meeting.
Section 3.10
Adjourned
Meetings.
A majority of the directors present at any meeting
of the Board of Directors, including an adjourned meeting, whether
or not a quorum is present, may adjourn and reconvene such meeting
to another time and place. At least 24 hours' notice of any
adjourned meeting of the Board of Directors shall be given to each
director whether or not present at the time of the adjournment, if
such notice shall be given by one of the means specified in
Section 3.11
hereof other
than by mail, or at least three days' notice if by mail. Any
business may be transacted at an adjourned meeting that might have
been transacted at the meeting as originally called.
Section 3.11
Notices.
Subject to Section 3.08, Section 3.10 and Section 3.12 hereof,
whenever notice is required to be given to any director by
applicable law, the Certificate of Incorporation or these by-laws,
such notice shall be deemed given effectively if given in person or
by telephone, mail addressed to such director at such director's
address as it appears on the records of the Corporation, facsimile,
e-mail or by other means of electronic transmission.
Section 3.12
Waiver
of Notice.
Whenever notice to directors is required by
applicable law, the Certificate of Incorporation or these by-laws,
a waiver thereof, in writing signed by, or by electronic
transmission by, the director entitled to the notice, whether
before or after such notice is required, shall be deemed equivalent
to notice. Attendance by a director at a meeting shall constitute a
waiver of notice of such meeting except when the director attends a
meeting for the express purpose of objecting, at the beginning of
the meeting, to the transaction of any business on the ground that
the meeting was not lawfully called or convened. Neither the
business to be transacted at, nor the purpose of, any regular or
special Board of Directors or committee meeting need be specified
in any waiver of notice.
Section 3.13
Organization.
At each meeting of the Board of Directors, the chairman or, in his
or her absence, another director selected by the Board of Directors
shall preside. The secretary shall act as secretary at each meeting
of the Board of Directors. If the secretary is absent from any
meeting of the Board of Directors, an assistant secretary shall
perform the duties of secretary at such meeting; and in the absence
from any such meeting of the secretary and all assistant
secretaries, the person presiding at the meeting may appoint any
person to act as secretary of the meeting.
Section 3.14
Quorum
of Directors.
The presence of a majority of the Board of
Directors shall be necessary and sufficient to constitute a quorum
for the transaction of business at any meeting of the Board of
Directors.
Section 3.15
Action
by Majority Vote.
Except as otherwise expressly required by
these by-laws, the Certificate of Incorporation or by applicable
law, the vote of a majority of the directors shall be the act of
the Board of Directors.
Section 3.16
Action
Without Meeting.
Unless otherwise restricted by the
Certificate of Incorporation or these by-laws, any action required
or permitted to be taken at any meeting of the Board of Directors
or of any committee thereof may be taken without a meeting if all
directors or members of such committee, as the case may be, consent
thereto in writing or by electronic transmission, and the writings
or electronic transmissions are filed with the minutes of
proceedings of the Board of Directors or committee in accordance
with applicable law.
Section 3.17
Committees
of the Board of Directors.
The Board of Directors may
designate one or more committees, each committee to consist of one
or more of the directors of the Corporation. The Board of Directors
may designate one or more directors as alternate members of any
committee, who may replace any absent or disqualified member at any
meeting of the committee. If a member of a committee shall be
absent from any meeting, or disqualified from voting thereat, the
remaining member or members present at the meeting and not
disqualified from voting, whether or not such member or members
constitute a quorum, may
unanimously appoint
another member of the Board of Directors to act at the meeting in
the place of any such absent or disqualified member. Any such
committee, to the extent permitted by applicable law, shall have
and may exercise all the powers and authority of the Board of
Directors in the management of the business and affairs of the
Corporation and may authorize the seal of the Corporation to be
affixed to all papers that may require it to the extent so
authorized by the Board of Directors. Unless the Board of Directors
provides otherwise, at all meetings of such committee, a majority
of the then authorized members of the committee shall constitute a
quorum for the transaction of business, and the vote of a majority
of the members of the committee present at any meeting at which
there is a quorum shall be the act of the committee. Each committee
shall keep regular minutes of its meetings. Unless the Board of
Directors provides otherwise, each committee designated by the
Board of Directors may make, alter and repeal rules and procedures
for the conduct of its business. In the absence of such rules and
procedures each committee shall conduct its business in the same
manner as the Board of Directors conducts its business pursuant to
this Article III.
ARTICLE
IV OFFICERS
Section 4.01
Positions
and Election.
The officers of the Corporation shall be
elected annually by the Board of Directors and shall include a
president, a treasurer and a secretary. The Board of Directors, in
its discretion, may also elect a chairman (who must be a director),
one or more vice chairmen (who must be directors) and one or more
vice presidents, assistant treasurers, assistant secretaries and
other officers. Any two or more offices may be held by the same
person.
Section 4.02
Term.
Each officer of the Corporation shall hold office until such
officer's successor is elected and qualified or until such
officer's earlier death, resignation or removal. Any officer
elected or appointed by the Board of Directors may be removed by
the Board of Directors at any time with or without cause by the
majority vote of the members of the Board of Directors then in
office. The removal of an officer shall be without prejudice to his
or her contract rights, if any. The election or appointment of an
officer shall not of itself create contract rights. Any officer of
the Corporation may resign at any time by giving written notice of
his or her resignation to the president or the secretary. Any such
resignation shall take effect at the time specified therein or, if
the time when it shall become effective shall not be specified
therein, immediately upon its receipt. Unless otherwise specified
therein, the acceptance of such resignation shall not be necessary
to make it effective. Should any vacancy occur among the officers,
the position shall be filled for the unexpired portion of the term
by appointment made by the Board of Directors.
Section 4.03
The
President.
The president shall have general supervision over
the business of the Corporation and other duties incident to the
office of president, and any other duties as may be from time to
time assigned to the president by the Board of Directors and
subject to the control of the Board of Directors in each
case.
Section 4.04
Vice
Presidents.
Each vice president shall have such powers and
perform such duties as may be assigned to him or her from time to
time by the chairman of the Board of Directors or the
president.
Section 4.05
The
Secretary.
The secretary shall attend all sessions of the
Board of Directors and all meetings of the stockholders and record
all votes and the minutes of all proceedings in a book to be kept
for that purpose, and shall perform like duties for committees when
required. He or she shall give, or cause to be given, notice of all
meetings of the stockholders and meetings of the Board of
Directors, and shall perform such other duties as may be prescribed
by the Board of Directors or the president. The secretary shall
keep in safe custody the seal of the Corporation and have authority
to affix the seal to all documents requiring it and attest to the
same.
Section 4.06
The
Treasurer.
The treasurer shall have the custody of the
corporate funds and securities, except as otherwise provided by the
Board of Directors, and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation
and shall deposit all moneys and other valuable effects in the name
and to the credit of the Corporation in such depositories as may be
designated by the Board of Directors. The treasurer shall disburse
the funds of the Corporation as may be ordered by the Board of
Directors, taking proper vouchers for such disbursements, and shall
render to the president and the directors, at the regular meetings
of the Board of Directors, or whenever they may require it, an
account of all his or her transactions as treasurer and of the
financial condition of the Corporation.
Section 4.07
Duties
of Officers May Be Delegated.
In case any officer is absent,
or for any other reason that the Board of Directors may deem
sufficient, the president or the Board of Directors may delegate
for the time being the powers or duties of such officer to any
other officer or to any director.
ARTICLE
V
STOCK
CERTIFICATES AND THEIR TRANSFER
Section 5.01
Certificates
Representing Shares.
The shares of stock of the Corporation
shall be represented by certificates; provided that the Board of
Directors may provide by resolution or resolutions that some or all
of any class or series shall be uncertificated shares that may be
evidenced by a book-entry system maintained by the registrar of
such stock. If shares are represented by certificates, such
certificates shall be in the form, other than bearer form, approved
by the Board of Directors. The certificates representing shares of
stock of each class shall be signed by, or in the name of, the
Corporation by the chairman, any vice chairman, the president or
any vice president, and by the secretary, any assistant secretary,
the treasurer or any assistant treasurer. Any or all such
signatures may be facsimiles. Although any officer, transfer agent
or registrar whose manual or facsimile signature is affixed to such
a certificate ceases to be such officer, transfer agent or
registrar before such certificate has been issued, it may
nevertheless be issued by the Corporation with the same effect as
if such officer, transfer agent or registrar were still such at the
date of its issue.
Section 5.02
Lost,
Stolen or Destroyed Certificates.
The Board of Directors may
direct a new certificate or uncertificated shares to be issued in
place of any certificate theretofore issued by the Corporation
alleged to have been lost, stolen or destroyed upon the making of
an affidavit of that fact by the owner of the allegedly lost,
stolen or destroyed certificate. When
authorizing such issue of a new
certificate or uncertificated shares, the Board of Directors
may
,
in
its
discretion and as a condition precedent
to the issuance thereof, require the owner of the lost, stolen or
destroyed certificate
,
or the owner's legal representative to
give the Corporation a bond sufficient to indemnify it against any
claim that may
be
made against the Corporation with respect
to the certificate alleged to have been lost, stolen or destroyed
or the issuance of such new certificate or uncertificated
shares
.
ARTICLE VI
GENERAL
PROVISIONS
Section 6.01
Seal.
The board of
directors may adopt and use a corporate seal. The seal of the
Corporation shall be
in
such form as shall
be
approved by the Board of Directors. The
seal may
be
used by causing it or a
facsimile thereof to
be
impressed or affixed or reproduced or
otherwise, as may be prescribed by law or custom or by the Board of
Directors. Failure to
affix
the corporate seal,
if
any
,
shall not affect the validity of any
instrument.
Section 6.02 Fiscal
Year.
The fiscal year
of the Corporation shall be the calendar
year.
Section 6.03 Checks,
Notes, Drafts, Etc.
All checks, notes, drafts or other orders
for the payment of money of the Corporation shall
be
signed, endorsed or accepted in the name
of the Corporation by such officer, officers, person or persons as
from time to time may be designated by the Board of Directors or by
an officer or officers authorized by the Board of Directors to make
such designation.
Section 6.04
Dividends.
Subject to
applicable law and the Certificate of Incorporation, dividends upon
the shares of capital stock of the Corporation may be declared by
the Board of Directors at any regular or special meeting of the
Board of Directors or by consent in writing. Dividends may be paid
in cash, in property or in shares of the Corporation's capital
stock
,
unless otherwise provided by
applicable law or the Certificate of
Incorporation.
Section 6.05 Conflict
with Applicable Law or Certificate of Incorporation.
These by-laws are adopted
subject
to
any applicable law and the
Certificate of Incorporation
.
Whenever these by-laws may conflict with
any applicable law or the Certificate of Incorporation, such
conflict shall
be
resolved in favor of such law or the
Certificate of Incorporation
.
ARTICLE VII
AMENDMENTS
These by-laws may
be
amended, altered, changed, adopted and
repealed or new by-laws adopted at any meeting of the Board of
Directors
.
Eff. March
17 2017
/s/ Chandler D.
Robinson
[***] =
Confidential
Information has been omitted and filed separately with the
Securities and Exchange Commission.
Confidential treatment has been approved with respect to the
omitted information, pursuant to an Order dated January 8,
2018.
CANCER
RESEARCH UK
and
CANCER RESEARCH
TECHNOLOGY LIMITED
and
MONOPAR
THERAPEUTICS LLC
CLINICAL TRIAL
AND OPTION AGREEMENT
(CTOA)
TABLE OF CONTENTS
1
|
DEFINITIONS AND
INTERPRETATION
|
4
|
2
|
CONDITIONS
PRECEDENT
|
12
|
3
|
CONDUCT OF THE
CLINICAL TRIAL AND SPONSORSHIP
|
12
|
4
|
COMPANY’S
OBLIGATIONS
|
14
|
5
|
CONFIDENTIALITY/PUBLICATION
|
16
|
6
|
INTELLECTUAL
PROPERTY RIGHTS
|
19
|
7
|
OPTION
|
20
|
8
|
WARRANTIES AND
LIMITS OF LIABILITY
|
21
|
9
|
INDEMNITIES
|
22
|
10
|
ASSIGNMENT
|
24
|
11
|
TERM
AND TERMINATION
|
24
|
12
|
CONSEQUENCES OF
TERMINATION
|
25
|
13
|
DISPUTE
RESOLUTION
|
26
|
14
|
NOTICES
|
27
|
15
|
WAIVER
|
28
|
16
|
FORCE
MAJEURE
|
28
|
17.
|
INSOLVENCY
|
28
|
18
|
SEVERABILITY
|
28
|
19
|
ENTIRE
AGREEMENT
|
29
|
20
|
AMENDMENT
|
29
|
21
|
PUBLIC
ANNOUNCEMENTS
|
29
|
22
|
PAYMENTS
|
30
|
23
|
DATA
PROTECTION
|
30
|
24
|
THIRD
PARTY RIGHTS
|
30
|
25.
|
EXECUTION
|
30
|
Schedule
1
|
Company
Patent Rights
|
Schedule
2
|
Report
Synopsis Headings
|
Schedule
3
|
Licence
from CRT to Company
|
Schedule
4
|
No
Fault Compensation Scheme
|
Schedule
5
|
Assignment
and Licence from Company to CRT
|
Schedule
6
|
Protocol
|
Schedule
7
|
Company
Materials
|
Schedule
8
|
Back-Up
Antibodies
|
Schedule
9
|
XOMA
Licence
|
Schedule
10
|
Progress
Reports
|
Schedule
11
|
Clinical
Protocol Summary
|
Schedule
12
|
Escrow
Agreement
|
Schedule
13
|
Technical
Agreement
|
THIS AGREEMENT
is made the 15th day of May 2015
BETWEEN
:
CANCER RESEARCH UK
a
company limited by guarantee
registered under number 4325234 and a
charity registered under number
1089464 of Angel Building, 407 St. John Street, London, EC1V 4AD,
England (the
“Charity”
);
CANCER RESEARCH TECHNOLOGY LIMITED
a company registered in
England and Wales with number 1626049 and registered office at
Angel Building, 407 St. John Street, London, EC1V 4AD, England
(
“CRT”
);
and
MONOPAR THERAPEUTICS LLC, a limited liability company
registered in/incorporated in/ established under the laws of The
State of Delaware, U.S.A., with registered office/principal place
of business at 598 Rockefeller Road, Lake Forest, Illinois, U.S.A.,
60045 (the
“Company”
).
WHEREAS:
(A)
The Company has the right to conduct research and
clinical testing on the Antibody (as defined below). At this time,
the Company does not intend to undertake any further development
of
the
Antibody
.
(B)
The Charity's
charitable objects are to protect and promote the health of the
public in particular by research into the nature, causes,
diagnosis, prevention, treatment and cure of cancer, including
development of findings of research into practical
applications.
(C)
The Charity has
expertise in the clinical evaluation of novel anti-cancer agents
and considers that the Antibody has the potential to be a valuable
drug that could be applied for the treatment of cancer.
Accordingly, the Charity is interested in undertaking the
development of the Antibody at its own cost. As the development is
to be undertaken in pursuance of the Charity's charitable objects,
the Charity will have the right to publish the results of such
development work.
(D)
On completion of
the Charity’s development work, the Company will have the
option to take a licence to the results thereof with a view to the
Company developing the drug further. If the Company does not wish
to take a licence to such results, then CRT shall have the right to
an assignment of rights owned by the Company and a licence to the
rights licensed to the Company, in both cases in and to the
Antibody, to enable CRT to find an alternative partner to develop
the Antibody further.
(E)
CRT is a wholly
owned subsidiary of the Charity and is, by arrangement with the
Charity, responsible for the management, exploitation and
commercialisation of intellectual property generated by the Charity
or using funding from the Charity and the Charity has assigned and
will assign such intellectual property to CRT for such purpose. CRT
remits all its taxable profits to the Charity.
(F)
The Company, CRT
and the Charity have therefore agreed to enter into this Agreement
to enable the Charity to undertake the development of the
Antibody subject to the following
terms and conditions:
[***] =
Confidential Information has been
omitted and filed separately with the Securities and Exchange
Commission.
Confidential treatment has been approved with
respect to the omitted information, pursuant to an Order dated
January 8, 2018.
NOW IT IS HEREBY AGREED
as follows:
1.
DEFINITIONS
AND INTERPRETATION
1.1
In this Agreement
the words and phrases set out below shall, unless the context
requires otherwise, have the corresponding meaning attributed to
them below. In addition, any words and phrases in this Agreement
which are not defined below, but which are defined in the CTD,
shall have the meaning attributed to them in the CTD.
“Additional Studies”
|
means
any biomarker, manufacturing, purity, toxicology, imaging or
combination studies, or any other exploratory or pre-clinical
in vitro
or
in vivo
studies commenced after the
Commencement Date and associated with any part of the Antibody, or
carried out in support of the clinical trial conducted pursuant to
this Agreement, where such studies are performed by or on behalf of
the Charity (as the same may be amended from time to time by the
Charity).
|
“Additional Results”
|
means
all Know-How, data, information and results Controlled by the
Charity or CRT and arising from the Additional
Studies.
|
“Affiliate”
|
means
an entity that, whether now or in the future, Controls, is
Controlled by or is under common Control with a Party. For the
purpose of this definition only, “Control” means the
possession (directly or indirectly) of fifty per cent or more of
the voting stock or other equity interest of a subject entity with
the power to vote, or the power in fact to control the management
decisions of such entity through the ownership of securities or by
contract or otherwise and “Controls” and
“Controlled by” shall be construed
accordingly.
|
“Antibody”
|
means
the humanised anti-uPAR monocolonal antibody known as HuATN-658
and/or any monoclonal antibody derived directly or indirectly from
the Cell Line, including any fragment or conjugated
antibody.
|
“this Agreement”
|
means
this agreement and each of the Schedules to it as amended from time
to time in accordance with Clause 20.
|
“Back-Up Antibodies”
|
means
any and all antibodies, other than the
anti-uPAR
monocolonal antibody known as HuATN-658,
that have been or
are discovered, generated or developed by or on behalf of the
Company or any of its Affiliates in the course of the [***]
including, but not limited to, the compounds identified in Schedule
8.
|
“Case Report Forms”
|
means
a record of the data and other information gathered on each
Clinical Trial Subject pursuant to the Protocol.
|
“Cell line”
|
means
[***].
|
“Charity’s Standard
Operating
Procedures”
|
means
the documents in use by the Centre for Drug Development of the
Charity from time to time that are designated as standard operating
procedures and which describe the procedures that must be followed
to complete various tasks.
|
“Chief Investigator”
|
means
the person who will lead and co-ordinate the work of the Clinical
Trial overall where the Clinical Trial is to be carried out at more
than one site.
|
“Clinical Trial”
|
means
the Phase I clinical trial described in the Protocol to be
conducted under the Sponsorship of the Charity and any Additional
Studies.
|
“Clinical Trial Database
Lock Date”
|
means
the date when the clinical research database relating to the
Clinical Trial is locked (after the Clinical Trial Results have
been cleaned but excluding any Long Term Survival Data) in
accordance with the Charity’s Standard Operating
Procedures.
|
“Clinical Trial
Legislation”
|
means
all laws and regulations from time to time in force applicable to
the performance of the Clinical Trial, including the CTD, the Human
Rights Act 1998, the Data Protection Act 1998, the Medicines Act
1968, the Medicines for Human Use (Clinical Trials) Regulations
2004, and the Human Tissue Act 2004.
|
“Clinical Trial LPFV
Date”
|
means
the date when the final Clinical Trial Subject in the Clinical
Trial attends their first study visit. The Clinical Trial LPFV Date
may be further defined in the Protocol.
|
“Clinical Trial Results”
|
means
all Know-How, data, information, results and improvements
Controlled by the Charity or CRT and arising from the Clinical
Trial, including the contents of each Progress Report, the Final
Report, Case Report Forms and associated Data Listings and any
other updates that may be agreed by the Parties from time to
time.
|
“Clinical Trial Subject”
|
means
any person who is enrolled in the Clinical Trial either as a
recipient or planned recipient of the Investigational Medicinal
Product or as a control.
|
“Commencement Date”
|
means
the date on which the Conditions Precedent have been
satisfied.
|
“Company GMP Materials”
|
means
those Company Materials listed in Part 2 of Schedule
7.
|
“Company Intellectual
Property”
|
means
the Company Patent Rights, and all rights in the Company Know-How,
the Investigational Medicinal Product and the Company
Materials.
|
“Company Know-How”
|
means
such Know-How in the Company’s Control relating to the
Antibody and/or Investigational Medicinal Product (and any
constituents thereof), including: (i) any safety and toxicological
data; (ii) information relating to the manufacturing/production;
(iii) information relating to quality; (iv) information relating to
safe and proper handling, storage and use; (v) any other data which
is relevant to the efficient performance of the Clinical Trial
and/or would make the Investigational Medicinal Product in any way
easier to make; and (vi) any other data that would make the
Antibody more useful, more valuable or in any way improve its
prospects for development or commercialisation.
|
“Company Materials”
|
means
the Cell Line and Materials identified in Schedule 7 that are to be
provided by the Company to the Charity pursuant to this
Agreement.
|
“Company Patent Rights”
|
means
(i) those Patent Rights listed in Schedule 1; (ii) those Patent
Rights owned by or licensed to the Company which would be infringed
by the unauthorised manufacture, use or sale in, or importation
into, the relevant country of the Antibody, Back-Up Antibodies
and/or Investigational Medicinal Product; and (iii) all Patent
Rights deriving priority from (i) and (ii).
|
“Conditions Precedent”
|
have
the meaning given to them in Clause 2.1.
|
“Confidential Information”
|
means
all information designated as confidential by any Party in writing
together with all other information which relates to the business,
affairs, technology, products, developments, trade secrets,
Know-How, personnel, customers, agents, distributors and suppliers
of any Party or information which may reasonably be regarded as the
confidential information of the Disclosing Party. Subject to the
terms of any licence agreement entered into in relation to them,
the Clinical Trial Results shall be the Confidential Information of
the Charity and CRT.
|
“Control”
|
means,
with respect to Intellectual Property Rights, possession of the
ability (whether through ownership or licence, other than a licence
granted under this Agreement) to access and provide the Know-How
and Material or grant the licences or sublicences or make the
assignments as provided herein without violating the terms of any
agreement or other arrangement with any third party.
|
“Contributors”
|
means
the Chief Investigator, the Principal Investigator(s), the
Sub-Investigators, the Experts, the NHS Trust(s) involved in the
Clinical Trial, any sub-contractor of the Charity and/or any
academic or not-for-profit entity involved in the Clinical
Trial.
|
“Costs”
|
means
all actual prepaid and committed costs and expenses incurred from
time to time in connection with the Clinical Trial, including, for
the avoidance of doubt, the internal personnel costs of the Charity
and the Charity’s Biotherapeutics Development Unit (BDU) and
Formulation Unit.
|
“CTD”
|
means
the European Clinical Trials Directive (Directive 2001/20/EC) and
national legislation implementing such Directive, as the same may
be amended from time to time.
|
“Data Listings”
|
means
the computer generated data listings produced by the Charity
detailing all anonymised patient data collected under the Clinical
Trial other than the Long Term Survival Data.
|
“Declaration of Helsinki”
|
means
the 2008 version of the Helsinki Declaration of the World Medical
Association.
|
“Disclosing Party”
|
has
the meaning specified in Clause 5.1.
|
“
Escrow
Account
”
|
means
an investment account established by the Company with the Escrow
Agent under the provisions of the Escrow Agreement.
|
“
Escrow
Agent
”
|
means
Fifth Third Bank, a United States banking corporation with
registered address at Fifth Third Square, 38 Fountain Square Plaza,
Cincinnati, OH, 45263, or any other substantially comparable United
States banking corporation selected by mutual agreement of the
Parties.
|
“
Escrow
Agreement
”
|
means
a written agreement between the Parties and the Escrow Agent in
substantially the form attached as Schedule 12, and under which the
Company is obliged to cause the Escrow Agent to open the Escrow
Account, and deposit the Escrow Amount in the Escrow Account,
before the Long Stop Date.
|
“Escrow Amount”
|
means
a sum of of eight hundred thousand US dollars (US
$800,000).
|
“Ethics Committee”
|
has
the meaning given to it in the CTD.
|
“Exclusive Results”
|
means
those Clinical Trial Results and the Intellectual Property Rights
therein that directly relate to and only to the IMP. Exclusive
Results shall not include any assay methodology,
formulation-related results or biomarker results which do not
directly relate to and only to the Investigational Medicinal
Product.
|
“Exercise Notice”
|
has
the meaning specified in Clause 7.1.
|
“Expert”
|
means
any member of the Charity’s expert committees or any other
person not being an employee of the Charity whom the Charity may
engage from time to time to advise the Charity on the Clinical
Trial.
|
“Final Report”
|
means
a Report Synopsis, unless, pursuant to Clause 3.10, a Full Clinical
Study Report is prepared by the Charity instead of a Report
Synopsis.
|
“Financial Year”
|
means
the period commencing on January 1 and ending on December
31.
|
“Full Clinical
Study Report”
|
means
a full clinical study report in relation to the Clinical Trial
written by or on behalf of the Charity in accordance with the
Charity’s Standard Operating Procedures and which meets the
standards of the ICH Guidelines for Structure and Content of
Clinical Study reports as per ICH Topic E3 dated July 1996 except
that Long Term Survival Data will not be included in the
report.
|
“Full CS Report Fee”
|
has
the
meaning given to
it in Clause 3.10.
|
|
|
“Good Manufacturing
Practice”
|
means
the principles and guidelines of good manufacturing practice in
respect of medicinal products for human use and investigational
medicinal products for human use as defined in: (i) the CTD; (ii)
European Community Directive 2003/94/EC; (iii) European Community
Directive 2005/28/EC; (iv) Eudralex Volume 4: ‘EU Guidelines
to Good Manufacturing Practice, Medicinal Products for Human and
Veterinary Use, Part II Basic Requirements for Active Substances
used as Starting Materials’, ICHQ7a Good Manufacturing
Practice Guidance for Active Pharmaceutical Ingredients and
‘EU Guidelines to Good Manufacturing Practice Medicinal
Products for Human and Veterinary Use, Annex 13: Investigational
Medicinal Products’; and (v) any national legislation
implementing the aforementioned Directives and any relevant
guidance relating thereto.
|
“ICH GCP”
|
means
the latest version from time to time of the International
Conference on Harmonisation (ICH) Tripartite Guidelines, Good
Clinical Practice (CPMP/ICH/135/95) together with such other good
clinical practice requirements as are specified in the CTD and in
Commission Directive 2005/28/EC and in any other regulations
relating to medicinal products for human use and in any guidance
published by the European Commission pursuant to such Directives or
regulations.
|
“Independent Opinion”
|
means
the opinion of an independent expert in the field of valuation of
intellectual property in a similar field to the Company
Intellectual Property, appointed by agreement between the Parties
or in default of such agreement within twenty one (21) days of a
Party seeking in writing to the others to appoint such expert, by
the President for the time being of the Association of the British
Pharmaceutical Industry (ABPI) in England and Wales, referred to at
Clause 13.1.
|
“Intellectual Property
Rights”
|
means
all Patent Rights, Know-How, copyright, database rights, design
rights, moral rights, rights in trade names, logos and trade and
service marks, domain names, rights in Materials and all rights or
forms of protection of a similar nature or having equivalent or
similar effect to any of them which may subsist anywhere in the
world, whether or not any of them are registered, including any
application for registration of any of them.
|
“Investigational Medicinal
Product” or
“IMP”
|
means
the pharmaceutical formulation of the Antibody suitable for use in
the Clinical Trial.
|
“Investigational Medicinal
or
Product Dossier”
or “IMPD”
|
means
a dossier relating to the Investigational Medicinal Product which
accompanies a request for clinical trial authorisation to conduct
the Clinical Trial from a Regulatory Authority. The Investigational
Medicinal Product Dossier shall include a specification of the
IMP.
|
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential treatment has been approved with
respect to the omitted information, pursuant to an Order dated
January 8, 2018.
“Know-How”
|
means
all technical and other information which is not in the public
domain, including information comprising or relating to concepts,
discoveries, data, designs, formulae, ideas, inventions, methods,
models, designs for experiments and tests and results of
experimentation and testing, processes, specifications and
techniques, laboratory records, clinical data, reports,
manufacturing data and information contained in submissions to
Regulatory Authorities.
|
“Licence”
|
means
a licence to the Clinical Trial Results and any Intellectual
Property Rights therein in the form attached at Schedule 3. Such
licence shall be exclusive in respect of the Exclusive Results, and
non-exclusive in relation to the Non-Exclusive
Results.
|
“Long Stop Date”
|
has
the meaning given to it in Clause 2.2.
|
“Long Term Survival Data”
|
means
any ongoing survival data for Clinical Trial Subjects that the
Charity collects after the completion of the interventional
component of the Clinical Trial.
|
“Losses”
|
means
losses, damages, costs and
expenses (including reasonable legal costs and expenses), in each
case directly incurred by a Party.
|
“Materials”
|
means
any chemical or biological substances including any: organic or
inorganic element or compound; nucleotide or nucleotide sequence
including DNA and RNA sequences gene; vector or construct including
plasmids, phages, bacterial vectors, bacteriophages and viruses;
host organism including bacteria, fungi, algae, protozoa and
hybridomas;
eukaryotic or
prokaryotic cell line or expression system or any development
strain or product of that cell line or expression systems; protein
including any peptide or amino acid sequence, enzyme, antibody or
protein conferring targeting properties and any fragment of a
protein or a peptide enzyme or antibody; drug or pro-drug; assay or
reagent; any plasma or tissue; or any other genetic or biological
material or micro-organism or any transgenic
animal.
|
“Non-Exclusive Results”
|
means those Clinical Trial Results that are not Exclusive Results
(and all Intellectual Property Rights therein), including all assay
methodology, formulation-related results or biomarker
results.
|
“Option”
|
has the meaning specified in Clause 7.1.
|
“Option Fee”
|
means the sum of [***]
less the
amount of any Full CS Report Fee actually paid by the Company to
CRT under Clause 3.10 and excluding
VAT or other applicable sales
tax.
|
“Option Period”
|
has the meaning specified in Clause 7.1.
|
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential treatment has been approved with
respect to the omitted information, pursuant to an Order dated
January 8, 2018.
“Party”
|
means
any party to this Agreement and “
Parties
” means all of
them.
|
“Patent Rights”
|
means
any patent applications, patents, author certificates, inventor
certificates, utility models, and all foreign counterparts of them
and includes all divisionals, renewals, continuations,
continuations-in-part, extensions, reissues, substitutions,
confirmations, registrations, revalidations and additions of or to
them, as well as any Supplementary Protection Certificate, or any
like form of protection (including any pediatric, orphan drug or
other exclusivity granted by a Regulatory Authority beyond the
expiry of the original patent expiration date).
|
“Principal Investigator”
|
means
the person who will lead and co-ordinate the work of the Clinical
Trial at a particular Clinical Trial site.
|
“Progress Report”
|
means
a report on the status of the Clinical Trial in the format set out
in Schedule 10, or in such other format as is the Charity’s
standard practice at the relevant time in respect of a clinical
trial at the same stage, and of the same scope, as the Clinical
Trial.
|
“Protocol”
|
means
the clinical trial protocol to be prepared by the Charity and the
Chief Investigator as may be amended from time to time by the
Charity in accordance with Clause 3.6.
|
“Recipient Party”
|
has
the meaning specified in Clause 5.2.
|
“Regulatory Authority”
|
means
any local, national or supra-national agency, authority,
department, inspectorate, minister, ministry official or public or
statutory person (whether autonomous or not) or any government of
any country as shall have jurisdiction over the Clinical Trial or
any part of it or over any activity of the Parties in connection
with the Clinical Trial. Regulatory Authority includes, but is not
limited to, the United Kingdom Medicines and Healthcare products
Regulatory Agency (MHRA), the United States Food and Drug
Administration (FDA) and the European Medicines Agency
(EMEA).
|
“Report Synopsis”
|
a
summary of the results of the Clinical Trial written by or on
behalf of the Charity in accordance with the Charity’s
Standard Operating Procedures in a form substantially similar to
the format set out in Schedule 2 and the format of the clinical
study synopsis set out in Annex I of ICH Topic E3 of the ICH
Guidelines for Structure and Content of Clinical Study reports
dated July 1996. The Report Synopsis shall not include or contain
any additional documents or any appendices, exhibits or annexes nor
shall it include or contain any Data Listings, Case Report Forms or
any raw data comprised within the Clinical Trial Results or cover
any Long Term Survival Data.
|
“uPAR”
|
means
[***].
|
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential treatment has been approved with
respect to the omitted information, pursuant to an Order dated
January 8, 2018.
|
|
[***]
|
means
any and all research programmes undertaken by or on behalf of the
Company, Tactic Pharma LLC or by Attenuon, LLC, or any of their
Affiliates, and in the course of which the Antibody or the antibody
known as ATN-658 or any of the Back-Up Antibodies were discovered,
generated or developed (including but not limited to development
activities conducted after the Commencement Date).
|
“Signature Period”
|
means
the period of [***] commencing on:
|
|
(i)
in the
event that the Charity does not prepare a Full Clinical Study
Report pursuant to Clause 3.10, the Company’s receipt of the
Data Listings pursuant to Clause 7.3; or
|
|
(ii)
in the
event that the Charity prepares a Full Clinical Study Report
pursuant to Clause 3.10, the date of the Exercise
Notice.
|
“Sub-Investigator”
|
means
a clinician appointed and supervised by the Chief Investigator or
Principal Investigator to assist in the carrying out of the
Clinical Trial at the same trial site as the Principal
Investigator.
|
“Supplementary
|
|
Protection Certificate”
|
means
a right based on a patent pursuant to which the holder of the right
is entitled to exclude third parties from using, making, having
made, selling or otherwise disposing or offering to dispose of,
importing or keeping the product to which the right relates, such
as supplementary protection certificates in Europe, and any similar
right anywhere in the world.
|
“
Tactic
”
|
Tactic
Pharma LLC, an Illinois limited liability company based at
[***].
|
“Tobacco
Party
”
|
means:
(i) any entity who develops, sells or manufactures tobacco
products; and/ or (ii) any entity which makes the majority of its
profits from the importation, marketing, sale or disposal of
tobacco products. Furthermore, Tobacco Party shall include any
entity that is an Affiliate of any entity referred to in (i) or
(ii).
|
“Transfer Documents”
|
means
the following documents: (i) the asset contribution agreement
between the Company and Tactic dated 20 January 2015 (and as
amended on 20 January 2015); the assignment and assumption of
licence agreement between the Company and Tactic dated 20 January
2015; and (iii) the letter from Tactic to the Parties dated 12
March 2015 in respect of the Cell Line and related Intellectual
Property Rights.
|
“XOMA IP”
|
means
any and all Intellectual Property Rights licensed to the Company
under the XOMA Licence.
|
“XOMA Licence”
|
means
the agreement entered into between XOMA (US) LLC and Tactic on 24
September 2014 in respect of the Antibody, which was assigned to
the Company by Tactic pursuant to an agreement dated 20 January
2015. Both agreements are attached in Schedule 9.
|
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential treatment has been approved with
respect to the omitted information, pursuant to an Order dated
January 8, 2018.
“XOMA Licence
Payments”
|
means
those milestone payments set out in the XOMA Licence.
|
1.2.1
unless the context
requires otherwise, all references to a particular Clause,
paragraph or Schedule shall be references to that clause, paragraph
or schedule, of or to this Agreement;
1.2.2
the table of
contents and headings are inserted for convenience only and shall
be ignored in construing this Agreement;
1.2.3
unless the contrary
intention appears, words importing the masculine gender shall
include the feminine and vice versa and words in the singular
include the plural and vice versa;
1.2.4
unless the contrary
intention appears, words denoting persons shall include any
individual, partnership, company, corporation, joint venture,
trust, association, organisation or other entity, in each case
whether or not having separate legal personality;
1.2.5
reference to any
statute or regulation includes any modification or re-enactment of
that statute or regulation, provided that the modification or
re-enactment does not diminish the rights or extend the obligations
of any Party; and
1.2.6
references to the
words “include” or “including” shall be
construed without limitation to the generality of the preceding
words.
2.1
Notwithstanding
anything to the contrary in this Agreement, the Charity and CRT
shall have no obligations, nor have any liability, of any nature
howsoever arising under or in connection with this Agreement unless
and until the following conditions precedent have been
satisfied:
2.1.1
the valid execution
of the Escrow Agreement; and
2.1.2
the Company’s
performance of its obligations under the Escrow Agreement to open
the Escrow Account and deposit the Escrow Amount in it;
and
2.1.3
the Company’s
delivery to the Charity of written evidence to the Charity’s
reasonable satisfaction that the Company has obtained insurance
described in Clause 9.5,
(the
“
Conditions
Precedent
”).
2.2
If the Conditions
Precedent have not been satisfied by 14:00pm (BST) on the date
falling [***] after the date of signature of this Agreement (the
“
Long Stop
Date
”), the Agreement shall expire on the Long Stop
Date.
2.3
The Company shall
use its best endeavours to satisfy the Conditions Precedent before
the Long Stop Date.
3.
CONDUCT
OF THE CLINICAL TRIAL AND SPONSORSHIP
3.1
Subject to: (i) the
Company’s compliance with its obligations hereunder; and (ii)
the Ethics Committee and the Regulatory Authority granting consent
for the Clinical Trial, the Charity will use its reasonable
endeavours to carry out or procure the carrying out of the Clinical
Trial in accordance with the Protocol.
3.2
Once the Clinical
Trial has been opened to Clinical Trial Subjects, the Charity shall
use reasonable endeavours to provide to the Company at least one
Progress Report per month (or with the frequency that is the
Charity’s standard practice at the relevant time in respect
of a clinical trial at the same stage, and of the same scope, as
the Clinical Trial, but no less frequently than quarterly). The
Company may use the Progress Reports for the purpose of determining
whether or not to exercise the Option. All Progress Reports and any
supplementary information provided under them shall be the
Confidential Information of the Charity and the provisions of
Clause 5 shall apply. The Company acknowledges that information or
data provided under this Clause 3.2 may not be verified, clean or
accurate, and is provided “as is”. Without prejudice to
the generality of Clause 8.7, neither CRT nor the Charity make any
representation or warranty (express or implied) of any nature in
respect of such data or information, including as to its accuracy,
quality, usefulness or comprehensiveness.
3.3
The Charity may, at
its sole discretion: (i) sub-contract to third parties any part of
the Clinical Trial; and (ii) engage such Experts and such persons
to fulfil the roles of Chief Investigator and/or Principal
Investigator as the Charity deems appropriate. Company shall be
notified of any such third parties, Experts and persons set forth
in this clause 3.3, and the Charity may make such notification by
email.
3.4
The Charity shall,
at its own expense, be responsible for seeking approval of the
Clinical Trial and the Protocol from the Regulatory Authority and
Ethics Committee prior to commencing the Clinical Trial. For the
avoidance of doubt, the Charity shall not be held liable or
responsible for any failure and/or refusal by the Ethics Committee
or the Regulatory Authority to grant consent for the Clinical Trial
or any change required therein.
3.5
The Charity shall
use reasonable endeavours to carry out, or procure the carrying out
of, the Clinical Trial in accordance with the relevant aspects
of:
3.5.1
Clinical Trial
Legislation; and
3.5.2
ICH GCP and the
Declaration of Helsinki.
Any
breach of this Clause 3.5 shall be a material breach.
3.6
The Charity shall
be free to amend the Protocol or to change the third party
undertaking any part of the Clinical Trial as it deems appropriate,
provided that such Protocol or change to the Protocol has first
been approved by the Ethics Committee and, if required by law or
regulation, the Regulatory Authority; and further provided
that:
3.6.1
prior to submission
for Ethics Committee approval, the Charity shall provide to the
Company a copy of the first final version of the Protocol at least
fourteen (14) days before seeking Ethics Committee approval and
give due consideration to any comments received from the Company by
the Charity within such time.
3.6.2
the Charity shall
notify the Company in writing of any proposed changes to the
Protocol at least fourteen (14) days before seeking Ethics
Committee approval for such changes, and shall give due
consideration to any comments that the Company might make within
such time. In an emergency (such as patient safety needs) the said
fourteen (14) day time period may be reduced to such time period as
the Charity is actually able to give to the Company in the
circumstances and the Charity may, if in its reasonable opinion it
is required, submit such changes to the Ethics committee prior to
notifying the Company of such. The Charity will try to reach a
consensus with the Company on all issues arising out of the
Company’s review of any Protocol pursuant to this Clause
3.6.2, but the Charity shall have the final decision.
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential treatment has been approved with
respect to the omitted information, pursuant to an Order dated
January 8, 2018.
3.6.3
in the event that
the Ethics Committee and/or the Regulatory Authority does not
approve the original Protocol and/or agree to any amendment to the
Protocol, the Charity shall have the right to terminate this
Agreement forthwith upon written notice to the
Company.
3.7
The Charity shall
have sole responsibility for the conduct and control of the
Clinical Trial and shall accept the obligations of the sponsor of
the Clinical Trial in accordance with the requirements of the
Medicines for Human Use (Clinical Trials) Regulations
2004.
3.8
The Charity shall
use reasonable endeavours to procure that Clinical Trial Subjects
are recruited in accordance with the selection procedures and
criteria set out in the Protocol.
3.9
The Charity shall
promptly advise the Company, in writing, of the occurrence of the
Clinical Trial LPFV Date.
3.10
The Company may
elect to receive a Full Clinical Study Report instead of a Report
Synopsis by:
3.10.1
providing the
Charity with written notice of its election to receive a Full
Clinical Study Report, which written notice must be received by the
Charity before the expiration of thirty (30) days from the date the
Charity advised the Company of the occurrence of the Clinical Trial
LPFV Date; and
3.10.2
paying the Charity
the sum of
[***]
excluding VAT
or other applicable sales tax (the “
Full CS Report Fee
”) within twenty
one (21) days after service of such notice.
If the
Company does not serve a written notice and pay the Full CS Report
Fee as specified in this Clause 3.10, the Charity shall prepare a
Report Synopsis and shall have no obligation to prepare or provide
the Company with a Full Clinical Study Report.
3.11
The Charity shall
provide the Final Report to the Company and CRT within [***] after
the Clinical Trial Database Lock Date.
3.12
The Charity shall
only use the Investigational Medicinal Product for the purposes of
carrying out the Clinical Trial and shall not permit any third
party to use the Investigational Medicinal Product except as
required for the purpose of carrying out the Clinical Trial or as
set out in this Agreement.
4.1
The Company shall
at the Company’s sole cost, provide the Charity
with:
4.1.1
such information
and Know-How relating to the manufacture of the IMP as is relevant
to the efficient production of sufficient quantity of the IMP to
conduct the Clinical Trial, as soon as practicable following the
Commencement Date;
4.1.2
all Company
Know-How and the Company Materials as soon as practicable following
the Commencement Date;
4.1.3
any other
information in the Company’s Control pertaining to the safety
of the IMP or which in the reasonable opinion of the Company may
have a bearing on the conduct of the Clinical Trial as soon as the
same comes to the attention of the Company.
4.1.4
such scientific and
technical guidance as the Charity may reasonably request to enable
the Charity and the Contributors to conduct and manage the Clinical
Trial in a safe and proper manner; and
4.1.5
all information
(including information for inclusion in the Investigational
Medicinal Product Dossier) and co-operation reasonably requested by
the Charity at any time from the Commencement Date to enable the
Charity to compile an Investigational Medicinal Product Dossier;
provided that such requested information is in the Company’s
Control (which shall include all information transferred, and all
information which the Company is entitled to request or Control,
under the Transfer Documents). In the case of co-operation
requested under this Clause 4.1.5, the Company shall procure (at
its own cost) that any subcontractor which has performed activities
or produced documents on its behalf under this Agreement is made
available to the Charity on such notice, for such time and with
such frequency as may be reasonably requested by the Charity. The
Company shall provide information requested by the Charity within
fourteen (14) days of request (or such other period as may be
reasonable given the nature of the request).
4.2
The Company shall
provide to the Charity any and all data, documentation, information
and Know-How described in Clauses 4.1.1 to 4.1.5 on an ongoing
basis within a reasonable time after the same comes to the
attention of the Company (if already in the Company’s
Control), or into the Company’s Control, after the
Commencement Date.
4.3
The Company will
keep the Charity informed of the scope and results of any
pre-clinical or other non-clinical studies being undertaken by it
or with third parties in relation to the Antibody or Back-Up
Antibodies. If the Company is intending to transfer the Antibody or
undertake any new research in relation to the Antibody or a Back-Up
Antibody with a third party, it will consult with the Charity on
the scope of the intended research and the identity of the third
party and take into good faith consideration any comments the
Charity may have in respect to the same. This Clause should not be
interpreted to limit any restrictions on the Company’s use of
the Antibody or any Back-Up Antibody under Clause 6.1 or elsewhere
in this Agreement.
4.4
The Company shall
submit to CRT:
4.4.1
a copy of its
detailed operating
budget for
development of the Antibody
(including a quarterly cash flow
and expenditure forecast) in respect of each Financial Year as
adopted by the Company’s board (the “
Annual Budget
”), at least thirty
(30) days prior to the commencement of the Financial Year to which
the Annual Budget relates; and
4.4.2
quarterly
management accounts of the Company (to include, inter alia, a
(consolidated) profit and loss account, balance sheet and cash flow
statement and shall indicate where such management accounts differ
to any material extent from the Annual Budget for such period),
within sixty (60) days of the end of the period to which they
relate; save that the accounts relating to the final quarter in any
calendar year may be provided within ninety five (95) days, rather
than sixty (60) days, of the end of that quarter. Such quarterly
management accounts shall be prepared on a basis which is
consistent with those adopted in the preparation of all previous
management accounts of the Company.
4.5
The Company shall
generally keep CRT informed of the progress of the Company's
business and affairs and shall promptly supply CRT with written
details of any circumstances which will or might cause any actual
or prospective material adverse change in the financial position,
prospects or business of the Company.
4.6
As between the
Parties, the Company will be solely responsible for any and all
payments due under the XOMA Licence that may become due as a result
of the grant of rights to the Charity under this Agreement or the
carrying out the Clinical Trial in accordance with this
Agreement.
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential treatment has been approved with
respect to the omitted information, pursuant to an Order dated
January 8, 2018.
4.7
Following its
receipt of the Company GMP Material, the Charity will assess
whether or not it wishes to use the Company GMP Material to
manufacture IMP. At the Charity’s request, the Charity and
the Company shall negotiate in good faith the terms of a technical
agreement that sets out the responsibilities of each Party in
respect of IMP and the GMP aspects of manufacturing IMP (the
“
Technical
Agreement
”). Negotiations shall take place and be
concluded within [***] of the Charity’s request for a
Technical Agreement. If required, the Technical Agreement will be
in a form substantially similar to that set out in Schedule
13.
5.
CONFIDENTIALITY/PUBLICATION
5.1
Subject to Clause
5.5, each Party shall keep confidential and not disclose to any
third party (other than the Experts, Contributors, Ethics
Committee, Regulatory Authority and staff involved in carrying out
the Clinical Trial on a need to know basis) any Confidential
Information disclosed to it by another Party (the
“
Disclosing
Party
”) without the prior written consent of the
Disclosing Party. For the avoidance of doubt, the Charity shall be
permitted to disclose Confidential Information disclosed to it to
CRT and CRT shall be permitted to disclose Confidential Information
disclosed to it to the Charity. Any party to whom Confidential
Information is disclosed in accordance with this Clause 5.1 shall
be:
5.1.1
subject to no less
onerous obligations than those contained in this Clause 5 to keep
such information confidential; and
5.1.2
advised of its
confidential nature.
5.2
The obligations of
confidence referred to in Clause 5.1 shall not apply to any part of
the Confidential Information which can be proved by evidence in
writing:
5.2.1
was known to the
recipient Party (the “
Recipient Party
”) before its
disclosure by the Disclosing Party;
5.2.2
was available to
the public before that date or was otherwise in the public
domain;
5.2.3
becomes available
to the public or enters the public domain after that date otherwise
than as a result of an act or default of the Recipient
Party;
5.2.4
is received by the
Recipient Party from a third party not bound to the Disclosing
Party by any obligation of secrecy;
5.2.5
is independently
developed or generated by the Recipient Party in circumstances
where it has not been derived directly or indirectly from the
Disclosing Party’s Confidential Information; or
5.2.6
is required to be
disclosed by: (i) law, (ii) a Regulatory Authority; or (iii) an
order of any court, provided however, that in each such event the
Recipient Party required to disclose the Confidential Information
shall give prompt notice to the Disclosing Party of such
requirement so that such Disclosing Party may seek a protective
order or other appropriate remedy to the extent of such
disclosure.
5.3
The obligations of
the Parties under Clause 5.1 shall survive the expiry or
termination of this Agreement for whatever reason for a period of
ten (10) years from the date of such expiry or
termination.
5.4
Each of the Parties
agrees that the provisions of this Clause 5 are fair and reasonable
and that money damages are not a sufficient remedy for any breach
of this Clause 5 and therefore, in addition to all other remedies,
all Parties shall be entitled to seek injunctive or other equitable
relief as a remedy for such breach.
5.5
Notwithstanding any
confidentiality obligations assumed by the Parties hereunder, the
Parties acknowledge: i) the importance of publications to the
academic standing of the Charity and the Contributors; and ii) the
capital raising, transactional, and licensing prospects of the
Company; and iii) the reporting and disclosure obligations of the
Company to its investors and to XOMA under the XOMA Licence.
Accordingly, the Parties have agreed as follows as regards
publication of Clinical Trial Results and Progress
Reports:
5.5.1
The Charity shall
use reasonable endeavours to publish, or procure the publication by
the Contributors of, the Clinical Trial Results in a timely manner
in accordance with generally accepted academic practice, whether
during the course of or after completion of the Clinical
Trial.
5.5.2
The Company may
disclose the content of Progress Reports to XOMA only to the extent
it is required to do so under the XOMA Licence, provided that the
disclosure will exclude all information regarding clinical
responses and shall be limited to only information regarding the
clinical indication, anticipated timelines of the trial, the number
of patients dosed, and such other information of a similar nature
as may be reasonably required by the XOMA Licence.
5.5.3
The Company may
disclose:
(a)
the content of
Progress Reports to a third party in connection with capital
raising, financing, transactional, and/or licensing activities or
prospects for the benefit of the Company. Prior to making such
disclosure, the Company shall give notice to the Charity, including
details of the content of the proposed disclosure and the reason
for wishing to make such disclosure, and shall inform the Charity
of the identity of the third party in its notice unless it is
prevented from doing so due to express confidentiality restrictions
owed to, and requested by, the third party, in which case the
Company shall state the main business area within which the third
party operates. The Company may, without the Charity’s prior
approval, disclose only the clinical indication, anticipated
timelines of the trial, and the number of patients dosed, but shall
obtain the Charity’s approval before proceeding with any
other disclosure under this Clause 5.5.3(a);
(b)
the Final Report to
the Company’s consultants and professional advisors, solely
for the purpose of assisting in the evaluation of the results with
a view to exercise of the Option and provided that no patient data
shall be disclosed unless it has been cleansed; and
(c)
the content of
Progress Reports to persons holding investments in the Company,
solely for the purpose of a status update, such as periodic
disclosure of recruitment numbers to investors in the Company by
way of demonstration of progress in the Clinical
Trial.
5.5.4
It is further
provided that each disclosure of the content of Progress Reports by
the Company under this Clause 5.5 shall be subject to the following
conditions:
(a)
all recipients
shall be informed in writing beforehand of the confidential nature
of the information being disclosed and shall have agreed in writing
to obligations of confidentiality in favour of the Company no less
onerous than those contained in this Clause 5 (but without any
right of further disclosure) to keep such information confidential;
and
(b)
only the content of
the documents containing the relevant information which has been
processed into a suitable format may be disclosed but not copies of
the actual documents themselves.
5.6
The Charity will
include provisions in its contracts with the Contributor(s) that
require such Contributor(s) to notify the Charity in advance of
submission of any abstract, presentation or manuscript
incorporating Clinical Trial Results that the Contributor(s) wish
to publish or have published or to present or have
presented.
5.7
Upon receipt of
such notification from a Contributor or if the Charity wishes
itself to publish or have published or to present or have presented
an abstract, presentation or manuscript incorporating Clinical
Trial Results the Charity shall so notify the Company and CRT and
provide (in so far as it is able to do so in the case of a
Contributor’s notification) in response to the
Company’s and/or CRT’s reasonable request a copy or
summary thereof at least seven (7) days prior to submission for
publication of an abstract or presentation or at least thirty (30)
days prior to submission for publication of a manuscript (or twenty
one (21) days prior to submission for publication of a manuscript
in the case of a Contributor’s notification). Any such copy
or summary shall provide
sufficient details to enable the
Company and CRT to ascertain whether it contains Confidential
Information of the Company or CRT respectively or whether Patent
Rights or other proprietary protection should be
sought.
5.8
The Company and CRT
shall review and make any comments on such intended publication or
presentation of an abstract to the Charity within seven (7) days
and/or shall review and make any comments on such intended
publication or presentation of a manuscript within thirty (30)
days. The Company and/or CRT may request that:
5.8.1
Confidential
Information of the Company (not including Clinical Trial Results
nor information directly relating to the Investigational Medicinal
Product) or Confidential Information of CRT (not including Clinical
Trial Results) be removed from the proposed publication or
presentation; and/or
5.8.2
any such
publication or presentation be delayed if in the Company’s or
CRT’s reasonable opinion it is necessary to delay publication
or presentation in order to file a patent application or
application for other proprietary protection in respect of any
invention made in the course of the Clinical Trial. Any such delay
will be kept to the minimum period practicable and will in no event
extend beyond thirty (30) days from the date the proposed
publication or presentation was provided to the
Company.
In the
event of a request pursuant to Clauses 5.8.1 or 5.8.2, the Company
or CRT (as the case may be) shall provide the Charity with a
written explanation of the reasons why it believes information
should be removed or a delay is necessary. For the avoidance of
doubt, any Patent Rights filed pursuant to Clause 5.8.2 shall be
filed in CRT’s name unless any Company personnel are deemed
inventors on any such filing, in which case such Patent Right shall
be filed in both CRT’s and Company’s names. As used
herein, inventorship shall be determined in accordance with English
law.
5.9
The Charity and CRT
shall be entitled to publish information in relation to the
proposed Clinical Trial, including that it is or will be a trial
conducted by the Clinical Development Partnerships initiative set
up by the Charity and CRT, the pre-requisites for patient
recruitment, a brief description of the Clinical Trial, including
the name of the Company, the reference number and class of the
Investigational Medicinal Product and the location(s) at which the
trial is taking place.
5.10
In addition to the
disclosures under Clause 5.5, the Company may disclose the
commercial terms of this Agreement to any actual or potential
investors, bankers, acquirers, acquirees or merger partners, in
each case under appropriate confidentiality provisions
substantially equivalent to those of this Agreement.
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential treatment has been approved with
respect to the omitted information, pursuant to an Order dated
January 8, 2018.
5.11
Except as expressly
permitted in Clause 5, the Company shall not disclose the Clinical
Trial Results to any potential investors, licensees or
sub-licensees of the Company (or any other person) until the
Company has been granted the Licence.
6.
INTELLECTUAL
PROPERTY RIGHTS
6.1
The Company hereby
grants to the Charity with a right to sub licence to
Contributors:
6.1.1
the [***] of the
Investigational Medicinal Product;
6.1.2
the [***] relating
to the Investigational Medicinal Product;
6.1.3
an [***] under the
Company Intellectual Property; and
6.1.4
a [***] under the
XOMA IP,
on a [***] basis
for the purpose of preparing for and carrying out (and having
prepared or carried out for the Charity) the Clinical Trial. The
Company shall not be entitled to (and shall (i) procure that its
Affiliates do not, and (ii) not authorise any other third party to)
conduct any clinical trials in respect of the Antibody or any
Back-Up Antibody during the term of this Agreement.
6.2
The Company shall
use commercially reasonable endeavours to continue to prosecute and
maintain, at its own cost, all of the Company Patent Rights. If the
Company intends to substantially narrow the scope of the claims of
any Patent Rights within the Company Patent Rights it will first
consult with CRT and take into good faith consideration any
concerns or views expressed by CRT. If the Company elects not to
prosecute or maintain any part of the Company Patent Rights, the
Company shall notify CRT in writing within a reasonable period and
no less than [***] prior to the expiration of any applicable time
bars. After receipt of such notice, CRT may elect, before the
expiry of any such time bars, by written notice to the Company, to
take an assignment to any Company Patent Rights identified in such
notice at CRT’s sole discretion and for consideration not
exceeding [***]. In the event that CRT elects to take such an
assignment, the Company shall, at CRT’s expense, promptly
transfer to CRT (or any person nominated by CRT) copies of any and
all documents in the Company’s Control relating to the
filing, prosecution, maintenance, enforcement and defence of such
Company Patent Rights. The Company shall not assign, charge,
encumber or dispose of any interest in any of the Company
Intellectual Property to a Tobacco Party or in a manner that limits
or impairs the Charity’s or CRT’s rights under the
licence (or assignment, where applicable) of Company Intellectual
Property pursuant to this Agreement without the Charity’s or
CRT’s prior written consent.
6.3
As between the
Company and the Charity, [***]. The Charity hereby [***]. CRT
hereby [***].
6.4
Subject to [***],
the Company shall [***].
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential treatment has been approved with
respect to the omitted information, pursuant to an Order dated
January 8, 2018.
6.5
Solely in
connection with the Charity’s and the Contributors’
activities performed pursuant to the Clinical Trial, where carried
out in accordance with the terms of this Agreement, the Company
shall not, and shall procure that its Affiliates shall not,
anywhere in the world, institute or prosecute (or, other than as
required by law, in any way aid any third party in instituting or
prosecuting) any claim, demand, action or cause of action for
damages, costs, expenses or compensation, or for an enjoinment,
injunction, or any other equitable remedy, alleging the
infringement by the Charity and/or any Contributors of any Patent
Rights of the Company and/or any Patent Rights of the
Company’s Affiliates. For the avoidance of doubt, the
foregoing shall not apply in respect of: (i) development, at any
time, of products other than the IMP; or (ii) any activity in
relation to the IMP which constitutes a breach of the terms of this
Agreement.
6.6
Any breach of
Clause 6.5 shall be a material breach and shall accordingly entitle
the Charity to terminate this Agreement under Clause
11.2.
6.7
CRT hereby reserves
and excludes from the Option, the worldwide, perpetual and
irrevocable right in and to the Exclusive Results for the
Contributors and the Charity (including scientists funded and/or
employed by the Charity) to:
6.7.1
use the Exclusive
Results for the purpose of non-commercial scientific research
carried out by or for or under their respective direction in
accordance with their respective charitable and/or academic status,
whether alone or in collaboration with a third party or third
parties; and
6.7.2
grant licences
under, and make available, the Exclusive Results solely to the
extent necessary to exercise the rights under Clause 6.7.1, but not
otherwise.
6.8
For the avoidance
of doubt, CRT shall be entitled, at its discretion, at any time
(including during the Option Period) to grant non-exclusive
licences to the Non-Exclusive Results to any person and for any
purpose.
6.9
Neither Charity nor
CRT, or any affiliate or agent of Charity or CRT, shall institute
any type of proceeding in a court, governmental agency, or patent
office anywhere throughout the world for the purposes of
invalidating, narrowing, or reducing the term of one or more claim
in an issued patent or pending patent application. The institution
of any such proceeding during the term of this agreement and
afterwards during the term of Company’s Patent Rights shall
be a material breach and shall accordingly entitle the Company to
terminate this Agreement under Clause 11.2.
7.1
CRT grants to the
Company the option, exercisable by notice to CRT in writing (the
“
Exercise
Notice
”) at any time during the [***] period after the
Company receives the Final Report (the “
Option Period
”), to enter into the
Licence (the “
Option
”). Subject to Clause 6.7,
the Option shall be [***]
7.2
Upon exercise of
the Option, the Company shall pay the Option Fee to CRT within the
Option Period.
7.3
Save where the
Charity has provided a Full Clinical Study Report, CRT shall
procure the provision of the Data Listings to the Company following
the exercise of the Option and the receipt by CRT of the Option
Fee.
7.4
If the Company
exercises the Option, CRT and the Company shall execute the Licence
within the Signature Period.
7.5.1
the Company does
not exercise the Option within the Option Period; or
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential treatment has been approved with
respect to the omitted information, pursuant to an Order dated
January 8, 2018.
7.5.2
following the
exercise of the Option, the Company does not enter into the Licence
within the Signature Period,
then the Company
shall, within [***] of the expiry of the Option Period or Signature
Period (as applicable):
a)
assign the Company
Intellectual Property and sub-license the XOMA IP to CRT by
executing an agreement in the form attached at Schedule 5, and CRT
shall be free to license or otherwise grant rights in respect of
the Clinical Trial Results and the Intellectual Property Rights in
the Clinical Trial Results on such terms and to such third parties
as it shall see fit; and
b)
provide CRT with
such assistance as CRT may reasonably request in liaising with XOMA
for the purpose of obtaining direct contractual rights with XOMA in
respect of the XOMA IP.
8.
WARRANTIES
AND LIMITS OF LIABILITY
8.1
The Charity
warrants that:
8.1.1
it will procure the
discharge of its obligations hereunder with reasonable care and
skill; and
8.1.2
it will use its
reasonable endeavours to procure that each Contributor that carries
out part of the Clinical Trial ensures that the relevant Chief
Investigator and/or the Principal Investigator discharge their
obligations in respect of that part of the Clinical Trial in
accordance with applicable ICH GCP provisions.
8.2
The Company
warrants and represents that:
8.2.1
it is entitled to
make the Company Materials available to the Charity for the
purposes of this Agreement;
8.2.2
to the best of its
knowledge and belief the use and possession of the Company
Materials and/or the Antibody by the Charity and/or the
Contributors shall not infringe the rights (including without
limitation any Intellectual Property Rights) of any third
party;
8.2.3
the Company
Materials have been manufactured, handled and stored at all times
in compliance with relevant legislation and, in the case of
relevant Company Materials (including the Company Materials
identified in Part 2 of Schedule 7), in accordance with Good
Manufacturing Practice;
8.2.4
it is a party to
the XOMA Licence, which is in full force and effect;
8.2.5
it has, and will
maintain throughout the Term, the full right, power and authority,
and has obtained all assignments, approvals or consents necessary
to grant the rights, including under the Transfer Documents and the
XOMA Licence, as provided under this Agreement;
8.2.6
the XOMA Licence is
the only third party licence held by the Company in respect of the
manufacture, possession and use of the Antibody, IMP and the rights
granted to the Charity under this Agreement;
8.2.7
the XOMA Licence
set out in Schedule 9 is a true and correct copy of the XOMA
Licence;
8.2.8
to the best of its
knowledge and belief, there are no outstanding breaches of the XOMA
Licence by any party (or any predecessor parties) to the XOMA
Licence;
8.2.9
to the best of its
knowledge and belief there are no acts, facts, circumstances or
omissions at the Commencement Date which would give XOMA the right
to terminate the XOMA Licence, either now or at a later
date;
8.2.10
it shall maintain,
and shall not amend or terminate the XOMA Licence without
CRT’s prior written consent; and
8.2.11
it shall notify the
Charity and CRT as soon as possible if it becomes aware of any
facts, circumstances or omissions which may give XOMA the right to
terminate the XOMA Licence.
References to the
“best of its knowledge and belief” in Clause 8.2 shall
include any knowledge within the Company or its Affiliates, and,
where relevant, of any predecessor party to the XOMA Licence,
having made due and proper enquiries.
8.3
The Company
warrants and represents that all information and Know-How supplied
to the Charity and/or CRT pursuant to this Agreement (including any
safety information) shall be accurate and complete and shall be
supplied as soon as practicable following the Commencement Date to
enable the Charity to conduct and manage the Clinical Trial in a
safe and proper manner.
8.4
Nothing in this
Agreement shall exclude or limit the liability of any Party for
death or personal injury resulting from its negligence or the
negligence of its employees while acting in the course of their
employment or shall exclude or limit the liability of any Party for
fraud.
8.5
Subject to Clause
8.4, the entire aggregate liability, for any loss or damage arising
from any act or omission relating to this Agreement regardless of
the form of action, whether in contract or tort (including in each
case negligence), strict liability or otherwise:
8.5.1
of the Charity and
CRT to the Company shall be limited to
£1,000,000 (one million Pounds
Sterling)
in aggregate;
8.5.2
of the Company to
CRT and the Charity shall be limited to US $7,500,000 (7.5 million
US dollars) in aggregate. The Escrow Amount is not, and shall not
be deemed to operate in any manner as, a cap or limit on the
Company’s liability to the other Parties.
8.6
To the fullest
extent permissible by law, no Party shall under any circumstances
be liable to any other for any loss of revenue, business,
contracts, anticipated savings, profits, data or information, or
any indirect or consequential loss howsoever arising whether from
negligence, breach of contract or otherwise.
8.7
Save to the extent
otherwise provided in this Agreement, each Party specifically
excludes to the extent permitted by law all warranties,
representations, and conditions regarding the performance of its
obligations under this Agreement including those implied by law,
whether as to suitability, quality or fitness for any purpose or
otherwise.
9.1
Subject to Clause
8.5, the Charity shall indemnify and hold the Company its officers,
and employees (the “
Company
Indemnitees
”) harmless from and against
all Losses arising
from any claims and proceedings made or brought (whether
successfully or otherwise) on behalf of Clinical Trial Subjects for
personal injury (including death), arising out of the conduct of
the Clinical Trial, save where such claims, proceedings and/or
Losses arise as a consequence of (i) any wrongful act or omission
and/or negligence of any of the Company Indemnitees; (ii) a breach
of this Agreement by the Company; or (iii) a misrepresentation by
the Company.
9.2
Notwithstanding the
provisions of Clause 9.1 above and any other restrictions on
liability contained in this Agreement, but subject to Clause 8.5
above, the Company shall indemnify and hold the Charity, CRT, the
Contributors, the Experts and their respective officers, employees
and agents (the “
Charity
Indemnitees
”) harmless from and against
all Losses arising
from any claims and proceedings made or brought (whether successful
or otherwise)
:
9.2.1
on behalf of
Clinical Trial Subjects for personal injury (including death),
arising out of: (i) any failure or delay on the part of the Company
to provide relevant or accurate Company KnowHow and other
information relating to the storage, use and safety of any of the
Company Materials. and/or (ii) any wrongful act or omission and/or
negligence of the Company (or any third party engaged by the
Company) in the supply and/or manufacture of any of the Company
Materials
; and
9.2.2
alleging
infringement of a third party’s Patent Rights or other
Intellectual Property Rights resulting from use of Company
Intellectual Property or Company Materials in the course of or in
consequence of the performance of the Clinical Trial or by
importation, storage, supply or use of any of the Company Materials
and/or Antibody as permitted by this Agreement. provided always
that
;
9.2.3
it is a condition
of the indemnity that the Charity and CRT hand over or procure the
hand over (as the case may be) of control of the matter to the
Company, and give or procure (as the case may be) such information
and assistance as the Company may reasonably request in connection
with the matter, and allow or procure, (as the case may be) that
the Company has exclusive conduct of the matter and any ensuing
legal proceedings.
9.3
The indemnities set
out in Clauses 9.1 and 9.2 shall survive the expiration or
termination of this Agreement for whatever reason. Each
Party’s agreement to indemnify, defend, and hold the other
Party and its respective indemnitees harmless is conditioned upon
the indemnified Party: (a) providing written notice to the
indemnifying Party of any claim or proceeding arising out of the
indemnified activities within thirty (30) days after the
indemnified Party has knowledge of such claim or proceeding; (b)
permitting the indemnifying Party to assume full responsibility and
authority to investigate, prepare for, and defend against any such
claim or proceeding; and (c) assisting the indemnifying Party, at
the indemnifying Party's reasonable expense, in the investigation
of, preparation for and defence of any such claim or proceeding. If
the indemnifying Party assumes the defence of a third party claim,
the indemnifying Party will not be subject to any liability for any
settlement of such claim made by the indemnified Party without the
indemnifying Party’s consent (which consent may not be
unreasonably withheld, delayed or conditioned).
9.4
The Charity shall
ensure that all Clinical Trial Subjects receive the benefit of a
no-fault compensation scheme substantially in the form attached at
Schedule 4 hereto. Subject to the indemnity in Clause 9.2, the
Charity shall bear all costs associated with the provision of such
compensation scheme including in relation to all claims received
pursuant to such scheme.
9.5
The Company shall
carry insurance coverage on an "occurrence" or "claims made" basis
for potential liabilities which the Company may have under this
Agreement, and ensure that the Charity and CRT are each named
additional insureds on each such policy and may claim directly
under them. The Company shall maintain such insurance in full force
throughout the term of the Agreement (and in the case of insurance
coverage on a "claims made" basis, for a further two years after
the term of the Agreement) and shall upon request of the Charity
provide such evidence of compliance as the Charity deems
sufficient. The initial insurance policy of the Company which
satisfied the condition under Clause 2.1.3 is agreed to provide the
minimum coverage required for the policy to be carried by the
Company under this Clause 9.5. The Company’s obligations, and
the Charity’s and CRT’s rights, under this Clause 9.5
shall apply in addition to, and not instead of, the obligations of
the Company, and rights of the Charity and CRT, under the Escrow
Agreement. Neither the existence of the Escrow Agreement nor any of
its contents shall limit the obligations imposed or rights granted
under this Clause 9.5.
10.1
No Party shall
assign its rights under this Agreement or any part thereof.
provided that the Company may assign its rights and obligations to
a third party in connection with any merger or consolidation of the
Company with another business entity, or in connection with the
sale of all or a substantial part of its business and related
assets that includes its business in relation to the Licensed
Product (including, among other things, all XOMA IP and
Intellectual Property licensed under this Agreement), other than a
merger or consolidation with or a sale of assets to a Tobacco Party
and provided that the Company obtains a direct covenant from the
acquiring party to CRT and the Charity undertaking to be bound by
the terms of this Agreement. Save as set out in this Agreement, no
Party shall sub-contract the performance of all or any of its
obligations under this Agreement without the prior written consent
of the other Parties.
11.1
Unless terminated
earlier pursuant to the provisions hereunder, and except as
otherwise provided hereunder
,
this Agreement shall remain in full
force and effect from the Commencement Date until the earlier of
the date that:
11.1.1
the Agreement
expires pursuant to Clause 2.2 due to a failure to satisfy the
Conditions Precedent before the Long Stop Date;
11.1.2
the Company enters
into the Licence pursuant to Clause 7.4; or
11.1.3
the Company assigns
the Company Intellectual Property and sub-licenses the XOMA IP to
CRT pursuant to Clause 7.5.
11.2
Any of the Parties
hereto may at any time terminate this Agreement, but shall not be
obliged to do so, upon written notice to the other Party (being the
Charity and CRT where the terminating Party is the Company, or the
Company where the terminating Party is the Charity or CRT) under
the following circumstances:
11.2.1
in the event that
the other Party commits a material breach of this Agreement and
does not fully remedy, if capable of remedy, the same within sixty
(60) days of its receipt of written notice of the breach from any
other Party; or
11.2.2
in the event, in
respect of a Party: that respective Party proposes a voluntary
arrangement for that respective Party or a voluntary arrangement is
approved for that respective Party; or an administration order is
made as to such Party; or a receiver or administrative receiver is
appointed of any of such Party’s assets; or undertakings or a
winding-up resolution or petition is passed as to such Party
(otherwise than for the purpose of solvent reconstruction or
amalgamation); or if any circumstances arise which entitle a court
or a creditor to appoint a receiver, administrative receiver or
administrator or make a winding-up order or similar; or equivalent
action is taken against or by such Party by reason of its
insolvency. A Party shall notify the other Parties immediately upon
becoming aware that any of the events identified in this Clause
11.2.2 has or is likely to take place in relation to
it.
11.3
The Charity shall
have the right to terminate this Agreement forthwith, upon written
notice to the Company:
11.3.1
if the Charity has
an insufficient quantity of IMP of the standard required to perform
the activities envisaged under this Agreement (whether due to a
breach by the Company of Clause 8.2 or otherwise);
11.3.2
in accordance with
Clause 3.6; or
11.3.3
if the Charity
considers in its sole discretion that it would be unethical or
otherwise undesirable for any reason to proceed or continue with
the Clinical Trial.
11.4
The Charity shall
have the right to terminate this Agreement forthwith, upon written
notice to the Company if, by way of merger, acquisition or
otherwise, the Company becomes a Tobacco Party.
11.5
The Parties may by
mutual written agreement terminate this Agreement for any reason,
including, if in their opinion the objectives of the Clinical Trial
cannot be achieved.
12.
CONSEQUENCES
OF TERMINATION
12.1
In the event of
termination of this Agreement by the Company:
12.1.1
without prejudice
to Clause 12.1.4, the Company shall have no obligation to enter
into the Option or any other licence with CRT or the Charity, or to
licence or assign its Intellectual Property Rights to
CRT;
12.1.2
subject to Clause
12.1.4 and 12.6, the Charity shall, within ninety (90) days after
written request of the Company, return to the Company or destroy
(by a method specified by the Company) and at the Company’s
cost and expense any remaining quantities of the Company Materials
and/or Confidential Information of the Company in the
Charity’s possession or control;
12.1.3
where the Charity
has commenced the Clinical Trial, the Charity shall within thirty
(30) days of finalisation of the last Case Report Form submit to
the Company copies of all completed Case Report Forms and Data
Listings for the Clinical Trial. The Charity shall be entitled to
retain the original Case Report Forms for its own records;
and
12.1.4
where the Charity
has commenced the Clinical Trial, the Charity shall nonetheless be
entitled to make (or have made) the Investigational Medicinal
Product and continue to provide it to: (i) any particular Clinical
Trial Subject who has commenced treatment; and/or (ii) any Clinical
Trial Subject where the Regulatory Authority and/or Ethics
Committee request or require that such provision
occurs.
12.2
In the event of any
termination of this Agreement pursuant to Clause 11.2 or 11.4 by
CRT or the Charity:
12.2.1
the Option shall
lapse forthwith;
12.2.2
the Company shall
within thirty (30) days of the date of such termination reimburse
the Charity all Costs;
12.2.3
the Parties shall
within thirty (30) days of the date of such termination execute the
agreement set out in Schedule 5; and
12.2.4
the Charity shall
be entitled to (as applicable) commence and complete the Clinical
Trial and the Company shall provide the Charity with the necessary
assistance to allow the Charity to do so. For the avoidance of
doubt, the licence granted by the Company under Clause 6.1 shall
continue to the extent necessary to allow the Charity to commence
and complete the Clinical Trial, provided that upon completion or
termination of the Clinical Trial the Charity shall, within thirty
(30) days written notice by the Company return to the Company or
destroy (by a method specified by the Company) and at the
Company’s cost and expense any remaining quantities of the
Company Materials and/or Confidential Information of the Company in
the Charity’s possession or control.
12.3
In the event of
termination of this Agreement pursuant to Clause 11.3 by the
Charity or pursuant to Clause 11.5:
12.3.1
subject to Clause
12.3.2 and 12.6, the Charity shall, within thirty (30) days written
request by the Company, return to the Company or destroy (by a
method specified by the Company) and at the Company’s cost
and expense any remaining quantities of the Company Materials
and/or Confidential Information of the Company in the
Charity’s possession or control;
12.3.2
where the Charity
has commenced the Clinical Trial, the Company shall nonetheless
continue to permit the Charity to continue to provide such
Investigational Medicinal Product to: (i) any particular Clinical
Trial Subject who has commenced treatment; and/or (ii) any Clinical
Trial Subject where the Regulatory Authority and/or Ethics
Committee request or require that such provision occurs;
and
12.3.3
where the Charity
and CRT consider it appropriate to do so in light of the reason for
termination, for a period of thirty (30) days from the date of
termination (or such longer period as CRT may notify) CRT shall
offer the Company the option, exercisable by written notice to CRT,
to enter into the Licence in respect of those Clinical Trial
Results in existence at the date of termination and subject to
agreement between CRT and the Company on amended financial and
other terms for the Licence to reflect that the Clinical Trial was
not completed. If the Parties are not able to agree amended
financial terms within thirty (30) days of the date CRT receives
the Company’s exercise notice, the Parties at their joint
cost and expense shall obtain an Independent Opinion on a fair and
reasonable reduction to the financial terms which will be binding
on both Parties.
12.4
Termination of this
Agreement for whatever reason shall not affect the accrued rights
of the Parties arising out of this Agreement as at the date of its
termination.
12.5
The provisions of
the following Clauses shall survive the expiration or termination
of this Agreement: 5 (Confidentiality/Publication), 6.3 (Assignment
of Clinical Trial Results to CRT), 6.5 (Covenant not to sue), 6.9
(invalidation of Company’s IP rights), 8.4 to 8.6 inclusive
(Limits or exclusion of liability), 8.7 (Exclusion of other
warranties), 9 (Indemnities), 10 (Assignment), 12 (Consequences of
termination), 13 to 23 inclusive (Dispute Resolution to Third Party
Rights inclusive).
12.6
The Charity shall
retain copies of the Company’s Confidential Information and
the Clinical Trial Results in accordance with ICH GCP and as
otherwise required under the Charity’s obligations as Sponsor
of the Clinical Trial.
13.1
Insofar as this
Agreement provides that a matter shall be resolved by Independent
Opinion, the opinion of the appointed independent expert (who shall
act as an expert and not as an arbitrator) shall be final and
binding on the Parties. In the event of a Party seeking an
Independent Opinion under this Agreement, each Party shall make
written submissions to the expert and to the other Parties within
fourteen (14) days of the appointment. Each Party shall have seven
(7) days to respond to the others’ submissions. The expert
shall be requested to deliver his Independent Opinion within a
further thirty (30) days. The costs of any Independent Opinion
shall be borne in such proportions as the expert may determine in
his Independent Opinion to be fair and reasonable in all the
circumstances or, if no such determination is made in the
Independent Opinion, by the Parties in equal
proportions.
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential treatment has been approved with
respect to the omitted information, pursuant to an Order dated
January 8, 2018.
13.2
It shall be a
condition precedent to the commencement of any action in court or
other tribunal (save an action for an interim injunction or an
Independent Opinion sought under Clause 13.1) in respect of any
dispute relating to this Agreement that the Parties have sought to
resolve the dispute by one Party notifying the others in writing
for resolution to the Chief Executive Officer of CRT, the Director
of Drug Development of the Charity and the CEO of the Company (or
their express delegates) (the “
Representatives
”) who shall meet
(whether in person or via teleconference) within twenty one (21)
days of such notice to seek resolution in good faith. If the
Representatives are unable to resolve the dispute at such meeting,
any Party may pursue any remedy available to such Party at law or
in equity, subject to the terms and conditions of this Agreement
and the other agreements expressly contemplated
hereunder.
13.3
This Agreement
shall be governed by and construed in accordance with English Law
and, subject to the provisions of Clause 13.1 and 13.2, each Party
agrees to submit to the exclusive jurisdiction of the English
Courts (except in respect of disputes under Clause 5 where
jurisdiction is non-exclusive).
14.1
Any notice or other
document to be given under this Agreement shall be in writing and
shall be deemed to have been given:
14.1.1
upon delivery if
given in person; or
14.1.2
upon confirmation
of receipt if sent by facsimile or email; or
14.1.3
(if posted to
an inland destination) three (3) business days after deposit into
First Class post; or
14.1.4
(If posted to an
overseas destination) five (5) days after deposit into airmail
post; or
14.1.5
upon delivery by
air delivery service;
to a
Party at the address set out below (or, if provided below or so
notified, such facsimile or electronic communication) for such
Party or such other address as the Party may from time to time
designate by written notice to the other Parties.
Address of the Company
Monopar
Therapeutics LLC
598
Rockefeller Road
Lake
Forest, IL USA 60045
Contact: Chief
Executive Officer
Email:
[***]
Address of the Charity
Cancer
Research UK
Angel
Building
407 St.
John Street
London
EC1V 4AD
England
Contact: Director
of Drug Development
Fax:
+44 (0) 20 7121 6700
With a
copy to:
Cancer
Research UK
Angel
Building
407 St.
John Street
London
EC1V 4AD
England
Contact: Caroline
Foxton
Fax:
+44 (0) 20 7121 6700
Address of CRT
Cancer
Research Technology Limited
Angel
Building
407 St.
John Street
London
EC1V
4AD
United
Kingdom
Contact: Chief
Executive Officer
Fax:
+44 (0) 20 3014 8633
15.1
No failure or delay
on the part of any Party hereto to exercise any right or remedy
under this Agreement shall be construed as or operate as a waiver
thereof nor shall any single or partial exercise of any right or
remedy under this Agreement preclude the exercise of any other
right or remedy or preclude the further exercise of such right or
remedy as the case may be.
16.1
No Party shall be
liable to any other Party or shall be in default of its obligations
hereunder if such default is the result of any cause beyond the
reasonable control of the Party affected including war,
hostilities, revolution, civil commotion, strike, epidemic,
accident, fire, wind, flood or because of any act of God . The
Party affected by such circumstances shall promptly notify the
other Parties in writing when such circumstances cause a delay or
failure in performance (a “
Delay
”) and where they cease to do
so. In the event of a Delay lasting for twenty six (26) weeks or
more either of the non-affected Parties shall have the right to
terminate this Agreement immediately by notice in writing to the
affected Party.
17.1
All rights and
licenses granted under or pursuant to this Agreement by the Company
to CRT and the Charity are for all purposes of Section 365(n) of
Title 11 of the U.S. Bankruptcy Code (“
Title 11
”), licenses of rights to
“intellectual property” as defined in Section 101 of
Title 11.
17.2
The Company agrees
that CRT and the Charity shall retain and may fully exercise all of
its rights and elections under the U.S. Bankruptcy Code. If a case
under Title 11 is commenced by or against the Company, CRT and the
Charity shall have all rights of licensees set out in Section
365(n) of Title 11.
17.3
Without limiting
CRT’s and the Charity’s rights under Section 365(n) of
Title 11, if a case under Title 11 is commenced by or against the
Company, and this Agreement is rejected by the Company in any
bankruptcy proceeding by or against the Company under the U.S.
Bankruptcy Code, (i) the Company shall provide CRT and the Charity
with a complete duplicate of (and complete access to, as
appropriate) any IP and embodiments of IP not already in their
possession; and (ii) the Company shall not interfere with
CRT’s and the Charity’s rights to IP and embodiments of
IP, and shall facilitate and assist with CRT and the Charity
obtaining IP and embodiments of IP (including from a third
party).
17.4
The term
“embodiments” of IP includes all tangible, intangible,
electronic or other embodiments of rights and licenses, including
antibodies, compounds and products embodying IP and related rights
and technology. All rights of CRT and the Charity under this Clause
and under Section 365(n) of Title 11 are in addition to, not in
substitution of, any other rights and remedies that they may have
under this Agreement, Title 11 and any other applicable
law.
18.1
If and to the
extent that any court or tribunal of competent jurisdiction holds
any of the terms, provisions or conditions or parts thereof of this
Agreement, or the application hereof to any circumstances, to be
invalid or to be unenforceable in a final non-appealable order, the
remainder of this Agreement and the application of such term,
provision or condition or part thereof to circumstances other than
those as to which it is held invalid or unenforceable shall not be
affected thereby, and each of the other terms, provisions and
conditions of this Agreement shall be valid and enforceable to the
fullest extent permissible by law.
19.1
This Agreement
embodies and sets forth the entire agreement and understanding of
the Parties and supersedes all prior oral or written agreements,
understandings or arrangements relating to the subject matter of
this Agreement. No Party shall be entitled to rely on any
agreement, understanding or arrangement which is not expressly set
forth in this Agreement unless otherwise agreed between the Parties
and recorded in writing. In the event of any inconsistency between
this Agreement and the Protocol, the terms of this Agreement shall
govern.
20.1
This Agreement
shall not be amended, modified, varied or supplemented except in
writing signed by duly authorised representatives of the
Parties.
20.2
The Charity shall
at all times be free to amend, modify, vary or supplement any of
its own Standard Operating Procedures.
21.1
The text of any
press release, shareholders’ report or other communication to
be published
or
disclosed in any way by or on behalf of the Company by or in the
media concerning the Charity, the Contributors or the Experts, the
subject matter of this Agreement or concerning this Agreement
itself, other than as required by law or by any regulatory or
government authority, shall be submitted to the Charity and CRT at
least seven (7) days in advance of publication or disclosure for
approval, such approval not to be unreasonably withheld; provided
that insofar as a disclosure repeats or restates a prior public
disclosure permitted by this Agreement, such disclosure need not be
submitted to the Charity or CRT for approval.
22.1
All payments due to
CRT and the Charity under this Agreement shall be made in cleared
funds in pounds sterling to the bank accounts nominated by CRT and
the Charity respectively from time to time. All costs of
transmission shall be borne by the Company.
22.2
All payments under
this Agreement are expressed to be exclusive of value added tax
howsoever arising, which the Company shall pay in addition to those
payments.
22.3
Save as expressly
set out in Clause 7.2, all amounts due under this Agreement shall
be paid in full without any deduction or withholding other than as
required by law and the Company shall not be entitled to assert any
credit, set-off or counterclaim against CRT or the Charity in order
to justify withholding payment of any such amount in whole or in
part.
22.4
Where a Party does
not receive payment of any sums due to it by the due date, interest
shall accrue both before and after any judgement on the sum due and
owing to such Party at the rate equivalent to an annual rate of two
percent (2%) over the then current base rate of Natwest Bank,
calculated on a daily basis, until the full amount is paid, without
prejudice to such Party’s right to receive payment on the due
date.
23.1
The Parties’
attention is drawn to the Data Protection Act 1998, Directive
95/46/EC of the European Parliament and any national or European
legislation and/or regulations implementing them or made in
pursuance of them (all referred to together as the
“
Data Protection
Requirements
”).
23.2
Each Party warrants
that it will observe all its obligations under the Data Protection
Requirements which arise in connection with the performance of this
Agreement and in particular that it will process and use any
personal data fairly and lawfully.
24.1
Save for the third
parties identified in Clauses 5.5 (Contributors’ right to
publish), 6.5 (Covenant not to sue), 9.1 and 9.2 (Indemnities) and
9.3 (No fault compensation scheme), who shall have the benefit of
those respective Clauses, this Agreement shall not create any
rights that shall be enforceable by anyone other than the Parties
to this Agreement. The rights created in Clauses 5.5, 6.5, 9.1, 9.2
and 9.3 may be altered or extinguished by the Parties without
consent of any third party beneficiary of such rights.
25.1
This Agreement may
be executed in any one or more number of counterpart agreements,
and as scanned email attachments, and all signatures and
counterparts so exchanged shall be considered as original and shall
be deemed to form part of and together constitute this
Agreement.
IN WITNESS
whereof this Agreement has been executed by duly
authorised officers of the Parties on the day first above
written.
Signed
by:
|
/s/ PJ
L’Hullier
|
|
Name:
|
PJ
L’Hullier
|
|
Title:
|
Director,
Business Management
|
|
|
|
|
|
For and
on behalf of
|
|
|
CANCER RESEARCH TECHNOLOGY LIMITED
|
|
|
|
|
Signed
by:
|
/s/ Dr.
Nigel Blackburn
|
|
Name:
|
Dr.
Nigel Blackburn
|
|
Title:
|
Director
of Drug Development CRUK Centre for Drug Development
|
|
|
|
|
|
For and
on behalf of
|
|
|
CANCER RESEARCH UK
|
|
|
|
|
Signed
by:
|
/s/
Chandler Robinson
|
|
Name:
|
Chandler
Robinson
|
|
Title:
|
CEO and
Manager
|
|
|
|
|
|
For and
on behalf of
|
|
|
MONOPAR THERAPEUTICS LLC
|
|
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential treatment has been approved with
respect to the omitted information, pursuant to an Order dated
January 8, 2018.
Schedule 1
Company Patent Rights
(details
of company patent rights to be inserted here)
B&
N Ref Country
Status Comments Applicaiton
# Filing Date Patent
# Grant Date
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
Schedule
2
Report
Synopsis
Name of
Sponsor/Company:
|
Individual Study
Table
Referring to
Part
of the
Dossier
Volume:
Page:
|
Name of
Finished Product:
|
Name of
Active Ingredient:
|
Title
of Study:
|
Investigators:
|
Study
Centre(s):
|
Publication
(reference):
|
Studied
period (years):
(date
of first enrolment)
(date
of last completed)
|
Phase
of development:
|
Objectives:
|
Methodology:
|
Number
of Patients (planned and analysed):
|
Diagnosis
and main criteria for inclusion:
|
Test
product, dose and mode of administration, batch
number:
|
Duration
of treatment:
|
Reference
therapy, dose and mode of administration, batch
number:
|
Name of
Sponsor/Company:
|
Individual Study
Table
Referring to
Part
of the
Dossier
Volume:
Page:
|
Name of
Finished Product:
|
Name of
Active Ingredient:
|
Criteria
for evaluation:
Efficacy:
[Drafting Note: The sub-heading of “Efficacy” can be
adapted to “Pharmacokinetics”,
“Pharmacodynamics”, “Immunogenicity”,
“Pharmacogenomics” etc, as dictated by the study
objectives. If there is more than one major area of evaluation,
further top-level headings can be added here.]
Safety:
[Drafting Note: The sub-heading of “Safety” must always
be included.]
|
Statistical
methods:
|
SUMMARY
– CONCLUSIONS
EFFICACY RESULTS:
[Drafting Note: The sub-heading of “Efficacy Results”
can be adapted to “Pharmacokinetics”,
“Pharmacodynamics”, “Immunogenicity”,
“Pharmacogenomics Results” etc, as dictated by the
study endpoints. If there is more than one major area of
evaluation, further top-level headings can be added
here.
Efficacy (and/or other similar) result CONCLUSIONS ONLY should be
summarised. The summaries can be superficial if the study was
uncontrolled, seriously flawed or aborted such that this data
cannot be analysed.]
SAFETY RESULTS:
[Drafting Note: The subheading of “Safety Results” must
always be included. Safety result CONCLUSIONS ONLY must always be
presented.]
CONCLUSION:
Date of
the report:
|
Schedule
3
Licence from CRT to Company
THIS AGREEMENT is made the________ day of
____________________20[
●●
]
BETWEEN:
(1)
CANCER RESEARCH TECHNOLOGY LIMITED
, a
company registered in England and Wales under number 1626049 with
registered office at Angel Building, 407 St. John Street, London,
EC1V 4AD, England] (
“CRT”
); and
(2)
[MONOPAR THERAPEUTICS LLC,
a limited
liability company registered in/incorporated in/ established under
the laws of The State of Delaware, U.S.A., with registered
office/principal place of business at 598 Rockefeller Road, Lake
Forest, Illinois, U.S.A., 60045] (the
“Company”
).]
RECITALS
(A)
CRT is a wholly
owned subsidiary of Cancer Research UK (the “
Charity
”) and is, by arrangement
with the Charity, responsible for the management, exploitation and
commercialisation of intellectual property generated by the Charity
or using funding from the Charity.
(B)
Pursuant to a
Clinical Trial and Option Agreement between CRT, the Charity and
the Company dated [●●●] attached at Appendix 2
(the “
CTOA
”) the
Charity has conducted the Clinical Trial (as defined below) and
assigned the results of such Clinical Trial and all intellectual
property therein to CRT.
(C)
CRT has agreed to
grant the Company a licence under the Licensed Intellectual
Property (as defined below) upon the terms and conditions set out
in this Agreement.
OPERATIVE PROVISIONS
1.1
In this Agreement
except where the context requires otherwise, the following words
and expressions shall have the following meanings:
“
Accountancy
Opinion”
|
means
the opinion of an independent United Kingdom chartered accountant
appointed by agreement between the Parties or in default of such
agreement within twenty one (21) days of either Party seeking in
writing to the other to appoint such accountant, at the request of
either Party, by the President for the time being of the Institute
of Chartered Accountants in England and Wales, referred to in
Clauses 1, 6.3 and 24.1.
|
“Affiliate”
|
has the
same meaning as that ascribed to that phrase in the
CTOA.
|
“Affordable Price”
|
means
in relation to a Licensed Product: (i) a determination by the UK
Pricing Authority that such Licensed Product should be used within
the NHS; and/or (ii) approval by the UK Pricing Authority of the
price proposed by the Company or its Sub-Licensee in relation to
sales of that Licensed Product in the United Kingdom (or one or
more constituent countries thereof).
|
“Agreement”
|
means
this agreement and each of the Appendices as amended from time to
time in accordance with Clause 21.
|
“Clinical Trial”
|
has the
same meaning as that ascribed to that phrase in the
CTOA.
|
“Clinical Trial Results”
|
has the
same meaning as that ascribed to that phrase in the
CTOA.
|
“Company Intellectual Property”
|
has the
same meaning as that ascribed to that phrase in the
CTOA.
|
“Company Patent Rights”
|
has the
same meaning as that ascribed to that phrase in the
CTOA.
|
“Competing Programme”
|
means a
research and development programme under which human subjects in a
clinical trial have or are to be administered a treatment or
compound directed towards the same target molecule as the
Antibody.
|
“Confidential Information”
|
means
the Clinical Trial Results and all information relating to the
customers, suppliers, business partners, clients, finances,
business plans and products (in each case actual or prospective) of
a Party which is not in the public domain and which is acquired by
the other Party pursuant to this Agreement.
|
“
Contributors
”
|
has the
same meaning as that ascribed to that phrase in the
CTOA.
|
“
Control
”
|
means:
a)
with respect to
corporate ownership, the possession (directly or indirectly) of
fifty per cent or more of the voting stock or other equity interest
of a subject entity with the power to vote, or the power in fact to
control the management decisions of such entity through the
ownership of securities or by contract or otherwise;
and
b)
with respect to
Intellectual Property Rights, possession of the ability (whether
through ownership or licence, other than a licence granted under
this Agreement) to provide the information or grant the licences or
sublicences or make the assignments as provided herein without
violating the terms of any agreement or other arrangement with any
third party,
and
“
Controls
” and
“
Controlled by
”
shall be construed accordingly.
|
“Currency”
|
means
pounds sterling or such other currency as CRT may reasonably
specify from time to time.
|
“Data Exclusivity Period”
|
means
any period of clinical trial data or other regulatory exclusivity,
together with any such periods under national implementations in
the European Union of Article 10.1 of Directive 2001/EC/83 and all
equivalents elsewhere in the Territory.
|
“Data Listings”
|
has the
same meaning as that ascribed to that phrase in the
CTOA.
|
“Development Plan”
|
means
the development plan at Appendix 1 (as the same shall be updated in
accordance with Clause 3.1) which describes: (i) the steps to be
taken to develop Licensed Products within the Territory; and (ii)
the relevant timescales within which such steps will be
taken.
|
“Effective
Date”
|
means
the date this Agreement is made.
|
“Exclusive Results”
|
has the
same meaning as that ascribed to that phrase in the
CTOA.
|
“Expert Opinion”
|
means
the opinion of an independent expert appointed by agreement between
the Parties or in default of such agreement within twenty one (21)
days of either Party seeking in writing to the other to appoint
such expert, by the President for the time being of the Association
of the British Pharmaceutical Industry referred to in Clauses 12.3
and 24.1.
|
“Field”
|
means
the treatment, prophylaxis, diagnosis, prevention and/or cure of
human disease and conditions.
|
“Final Report”
|
has the
same meaning as that ascribed to that phrase in the
CTOA.
|
“First Commercial Sale”
|
means,
with respect to a Licensed Product, the first transfer or
disposition for value of such Licensed Product by or on behalf of
the Company or a Sub-Licensee or an Affiliate of either of them,
after all relevant Regulatory Authorisations for the transfer or
disposition of such Licensed Product have been obtained in respect
of the relevant region or country.
|
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential treatment has been approved with
respect to the omitted information, pursuant to an Order dated
January 8, 2018.
“Indication”
|
means a
disease classification block as defined within the
‘International Statistical Classification of Diseases and
Related Health Problems’ as published from time to time by
the World Health Organization (e.g. “C50 Malignant neoplasm
of Breast”, “C92 Myeloid leukaemia”, “B20
Human immunodeficiency virus [HIV] disease resulting in infectious
and parasitic diseases”, “M34 Systemic
sclerosis”).
|
“Investigational Medicinal Product”
or
“IMP”
|
has the
same meaning as that ascribed to that phrase in the
CTOA.
|
“Intellectual Property Rights”
|
has the
same meaning as that ascribed to that phrase in the
CTOA.
|
“Licensed Intellectual Property”
|
means
the Clinical Trial Results and all Intellectual Property Rights
therein.
|
“Licensed Product”
|
means
any product:
a)
whose application
for Regulatory Authorisation from a Regulatory Authority in any
jurisdiction included the Clinical Trial Results and/or the Final
Report and/or the Data Listings or any part of any of them,
and/or
b)
that contains the
Antibody or a Back-Up Antibody (or any part of either), in each
case whether or not as the sole active ingredient,
and/or
c)
the unauthorised
manufacture, sale or use of which would infringe a valid claim of
the Company Patent Rights.
|
“Major Markets”
|
means
[***]
|
“Milestone Event”
|
has the
meaning specified in Clause 4.1.2.
|
“Milestone Payments”
|
has the
meaning specified in Clause 4.1.2.
|
“
NDA”
|
means,
in relation to any Licensed Product, a biologics license
application, new drug application, supplementary new drug
application, abbreviated new drug application or any of their
equivalents filed with the United States Food and Drugs
Administration (FDA) or any successor to it, a marketing
authorisation application or its equivalent filed with the European
Medicines Agency (EMEA) or any successor to it, or a marketing
authorisation application or a product licence application or
equivalent filed with the relevant Regulatory Authority in any one
or more countries or regions within the Territory.
|
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential treatment has been approved with
respect to the omitted information, pursuant to an Order dated
January 8, 2018.
“Net Sales Value”
|
means,
in relation to
Licensed Product the gross amount invoiced
by the Company or SubLicensee or Affiliate of the Company or a
SubLicensee
[***]
to the extent that any of those items are included as separate
items in the amount so invoiced, and
[***].
|
“New Company IP”
|
means
any Intellectual Property Rights developed by or on behalf of the
Company on or after the Effective Date that directly relate to the
IMP and its use.
|
“Non-Exclusive Results”
|
has the
same meaning as that ascribed to that phrase in the
CTOA.
|
“Oncology Indication”
|
means
an Indication in the range C00 – D48 (e.g. “C50
Malignant neoplasm of Breast”, “C92 Myeloid
leukaemia”).
|
“Party”
|
means
either party to this Agreement and “
Parties
” means both of
them.
|
“Patent Rights”
|
has the
same meaning as ascribed to that phrase in the CTOA.
|
“Phase II Clinical Trial Commencement”
|
means
the first dosing of a human subject in a clinical trial of a
Licensed Product (or in the adaptation of an existing clinical
trial) in any country that would satisfy the requirements of 21 CFR
§312.21(b) and is intended to establish dose response and/or
preliminary data on the efficacy of Licensed Product and/or route
of administration of the Licensed Product.
|
“Phase III Clinical Trial Commencement”
|
means
the first dosing of a human subject in a clinical trial of a
Licensed Product (or the adaptation of an existing clinical trial)
to be a larger scale (than Phase I or Phase II), usually
multi-centred trial in any country that would satisfy the
requirements of 21 CFR §312.21(c) and is intended to establish
the efficacy and safety of the Licensed Product or any other human
clinical trial of the Licensed Product intended as a pivotal trial
for regulatory approval purposes whether or not such trial is a
traditional Phase III trial.
|
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential treatment has been approved with
respect to the omitted information, pursuant to an Order dated
January 8, 2018.
“pound”
and
“£”
|
means
British pound sterling or if England changes its currency during
the Term, then a sum equivalent in the new currency based on the
spot exchange rate at the date of adoption of the new
currency.
|
“Price Approval”
|
means,
in those countries in the Territory where Regulatory Authorities
may approve or determine pricing and/or pricing reimbursement for
pharmaceutical products, such approval or
determination.
|
“Quarter”
|
means
any of the three-monthly periods commencing on the first day of any
of the months of January, April, July, and October in any year and
“Quarterly”
has
a corresponding meaning.
|
“Regulatory Authorisations”
|
means
all marketing authorisations, approvals, clearances and
authorisations that may be required by a Regulatory Authority in
any country or region within the Territory prior to Phase II
Clinical Trial Commencement and/or Phase III Clinical Trial
Commencement and/or commercial sale of the Licensed Product,
including any necessary variations thereto, but excluding always
any Price Approvals.
|
“Regulatory Authority”
|
means
any local or national agency, court, authority, department,
inspectorate, minister, ministry official or public or statutory
person (whether autonomous or not) of, or of any government of, any
country having jurisdiction over this Agreement or either of the
Parties or over the development or marketing of medicinal products
including, the European Medicines Agency and the European Court of
Justice.
|
“Signature Fee”
|
means
the sum of [***].
|
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential treatment has been approved with
respect to the omitted information, pursuant to an Order dated
January 8, 2018.
“Sub-Licence Revenue”
|
means
any monies or non-monetary consideration (including securities)
receivable from time to time by the Company or any of its
Affiliates in respect of: (i) any sub-licence granted by the
Company or any of its Affiliates under this Agreement; (ii) any
licence granted by the Company or any of its Affiliates (whether
under the Company Intellectual Property or otherwise) to sell
Licensed Products anywhere in the Territory; and/or (iii) the grant
of the right to acquire such a sub-licence or licence, including,
in each case, option fees, licence issue fees or other up-front
payments, annual licence fees, milestone or other lump sum payments
which are attributable to the grant of the rights in question,
excluding royalties and Net Sales Value as referred to in Clause
4.4 (in the case of non-monetary Sub-Licence Revenue such as
company stocks and shares, such non-monetary consideration shall
not form Sub-Licence Revenue until Company or relevant Affiliate
has received cash proceeds from the disposal or other realisation
of such consideration. [***]
|
“Sub-Licensee”
|
means
any person who is granted: (i) a sub-licence in accordance with
Clause 2.3 in respect of the rights granted under this Agreement
(and any further tiers of sub-licence thereunder); and/or (ii) a
licence by the Company (whether under the Company Intellectual
Property or otherwise) to sell Licensed Products anywhere in the
Territory, but shall not mean distributors, wholesalers, and sales
agents (sales to whom will be sales for the purpose of Net Sales
Value).
|
“Term”
|
means
the term of this Agreement as determined under Clause
12.1.
|
“Territory”
|
means
worldwide.
|
“Tobacco Party”
|
means:
(i) any entity who develops, sells or manufactures tobacco
products; and/ or (ii) any entity which makes the majority of its
profits from the importation, marketing, sale or disposal of
tobacco products. Furthermore, Tobacco Party shall include any
entity that is an Affiliate of any entity referred to in (i) or
(ii).
|
“UK Pricing Authority”
|
means
any supra-national, national or regional government department,
authority, agency or entity (including a non-departmental public
body or similar entity) with responsibility for evaluating the cost
effectiveness of medicinal products in the United Kingdom (or one
or more constituent countries thereof) or otherwise determining
whether the NHS (or constituent parts thereof) should purchase
medicinal products.
|
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential treatment has been approved with
respect to the omitted information, pursuant to an Order dated
January 8, 2018.
“XOMA”
|
has the
meaning ascribed to that phrase in the CTOA.
|
“XOMA Licence”
|
has the
same meaning ascribed to that phrase in the CTOA.
|
“Year”
|
means a
calendar year.
|
1.2.1
unless the context
requires otherwise, all references to a particular Clause,
paragraph or Appendix shall be references to that clause, paragraph
or appendix, in or to this Agreement;
1.2.2
the headings are
inserted for convenience only and shall be ignored in construing
this Agreement;
1.2.3
unless the contrary
intention appears, words importing the masculine gender shall
include the feminine and vice versa and words in the singular
include the plural and vice versa;
1.2.4
unless the contrary
intention appears, words denoting persons shall include any
individual, partnership, company, corporation, joint venture,
trust, association, organisation or other entity, in each case
whether or not having separate legal personality; and
1.2.5
references to the
words ‘include’ or ‘including’ shall be
construed without limitation to the generality of the preceding
words.
2.1
Subject to the
provisions of this Agreement and the surviving provisions of the
CTOA, CRT hereby grants to the Company:
in each
case to research, develop, make, have made, import, use and sell
Licensed Products for any and all uses in the Territory and to
apply for Regulatory Authorisation for such Licensed Products in
any jurisdiction.
2.2
CRT hereby reserves
and excepts from the [***] under Clause 2.1.1 the worldwide,
perpetual and irrevocable right for the Contributors and the
Charity (including use by scientists funded and/or employed by the
Charity) to:
2.2.1
use the Licensed
Intellectual Property for the purpose of non-commercial scientific
research carried out by or for or under their respective direction
in accordance with their respective charitable and/or academic
status, whether alone or in collaboration with a third party or
third parties and whether sponsored or funded, in whole or in part,
by any third party including any commercial entity;
and
2.2.2
make publications
in relation to the Licensed Intellectual Property and any results
of research using the same in accordance with generally accepted
academic practice.
2.3
The Company shall
be entitled to grant sub-licences in respect of the rights granted
under this Agreement, provided that:
2.3.1
any sub-licence
granted by the Company shall be expressed to terminate
automatically on the termination of this Agreement for any
reason;
2.3.2
any sub-licence
granted by the Company beyond the first tier of sub-licensing shall
expressly prohibit further sub-licensing without CRT’s prior
written consent, which consent may not be unreasonably conditioned,
delayed, or withheld.
2.3.3
the Company shall
ensure that there are included in the terms of any sub-licence like
obligations and undertakings on the part of the Sub-Licensee as are
contained in this Agreement (except this Clause 2.3, but including
Clause 9 (indemnity) and Clause 14 (confidentiality)) and shall
further ensure that all Sub-Licensees duly comply with the
same;
2.3.4
no sub-licence
shall be granted to a Tobacco Party;
2.3.5
the sub-licence
shall be entered into on an arms-length basis reflecting the market
value of the rights granted; and
2.3.6
the Company shall
provide CRT with a copy of such sub-licence within thirty (30) days
of entering into it.
2.4
Any breach of
Clause 2.3 shall be deemed to be a material breach.
2.5
The grant of any
sub-licence shall be without prejudice to the Company’s
obligations under this Agreement. Any act or omission of any such
Sub-Licensee which, if it were the act or omission of the Company
would be a breach of any of the provisions of this Agreement, will
be deemed to be a breach of this Agreement by the Company who will
be liable to CRT accordingly.
2.6
CRT will provide
the Company with any Long Term Survival Data as and when the
Charity has completed collection of the same.
2.7
The Company may not
publish or publicly disclose any Clinical Trial Results in the one
(1) year period beginning on the Effective Date without the prior
written consent of CRT, which will be given at CRT’s sole
discretion. All publications by the Company of the Clinical Trial
Results and results of research using the same will be made in
accordance with generally accepted academic practice, including in
respect of the role played by the Contributors. The foregoing
provisions of this Clause 2.7 shall not apply to disclosure of
Clinical Trial Results, or any portion thereof, by the Company to
the extent required for (a) satisfying mandatory reporting and
disclosure obligations under United States and other securities
laws. or (b) to existing licensors or sublicensors of the Company
in order to comply with reporting obligations in existence as at
the date of this agreement under the XOMA Licence, provided that in
the case of (b) the disclosure shall be limited to only information
as may be reasonably required by the XOMA Licence and subject to
XOMA being bound by confidentiality obligations that are no less
restrictive than those that the Company is bound by under this
Agreement in respect of confidential information disclosed to
it.
2.8
The Charity shall,
within thirty (30) days written request by the Company, return to
the Company or destroy (by a method specified by the Company) and
at the Company’s cost and expense any remaining quantities of
the Company Materials in the Charity’s possession or
control.
3.1
The Company shall
provide an updated Development Plan to CRT on at least a
six-monthly basis before the first approval of an NDA in respect of
a Licensed Product, and on an annual basis thereafter.
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential treatment has been approved with
respect to the omitted information, pursuant to an Order dated
January 8, 2018.
3.2
The Company shall
procure the achievement of Phase II Clinical Trial Commencement
within [***] of the Effective Date.
3.3
The Company shall
use its commercially reasonable efforts at all times during the
Term to:
3.3.1
comply with the
most up-to-date version of the Development Plan;
3.3.2
develop and pursue
Regulatory Authorisation for a Licensed Product for use in [***] in
each of the [***];
3.3.3
introduce a
Licensed Product for use in [***] into each of the [***] as soon as
reasonably and commercially practical following receipt of the
corresponding Regulatory Authorisations and subsequently use
commercially reasonable efforts to market the Licensed Product and
pursue maximum market penetration throughout the Major Markets for
such Licensed Product;
3.3.4
launch each
Licensed Product in the United Kingdom as soon as practicable and
in any event no later than [***] after the date the first
Regulatory Authorisation is granted by the European Medicines
Agency; and
3.3.5
make Licensed
Products that are launched in the United Kingdom available at an
Affordable Price if required by a Regulatory Authority in order to
obtain a Price Approval for such Licensed Products in the United
Kingdom.
3.4
Subject to Clause
3.5.2, the Company shall provide CRT with reports as to the
progress of the development of each Licensed Product, the progress
of any applications for Regulatory Authorisation and Price
Approval, and the progress of and plans for the marketing and sale
of the Licensed Product and its compliance with the Development
Plan, in such form and detail as CRT may reasonably require. The
Company shall provide such reports on at least a six-monthly basis
before first approval of an NDA in respect of a Licensed Product,
and on an annual basis thereafter.
3.5
If, prior to the
First Commercial Sale in the United Kingdom and two (2) other Major
Markets, the Company undergoes a change of Control, or acquires or
begins (whether independently or with a third party) a Competing
Programme:
3.5.1
it shall notify CRT
in writing within thirty (30) days after the change of Control
occurring, or its commencement or acquisition of the Competing
Programme; and
3.5.2
for the [***]
period following the change of Control, or commencement or
acquisition of the Competing Programme, it shall provide CRT with a
report described in Clause 3.4 at least once every three (3)
months.
3.6
The Company shall
give CRT prompt notice upon the occurrence of any Milestone
Event.
3.7
The Company shall
submit to CRT:
3.7.1
a copy of its
detailed operating budget (including a semi-annual cash flow and
expenditure forecast) for the Licensed Product in respect of each
Financial Year as adopted by the Company’s board (the
“
Annual
Budget
”), at least thirty (30) days prior to the
commencement of the Financial Year to which the Annual Budget
relates;
3.7.2
semi-annual
management accounts of the Company (to include, inter alia, a
(consolidated) profit and loss account, balance sheet and cash flow
statement and shall indicate where such management accounts differ
to any material extent from the Annual Budget for such period),
within sixty (60) days of the end of the period to which they
relate; save that the accounts relating to the final quarter in any
calendar year may be provided within ninety five (95) days, rather
than sixty (60) days, of the end of that quarter. Such semi-annual
management accounts shall be prepared on a basis which is
consistent with those adopted in the preparation of all previous
management accounts of the Company.
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential treatment has been approved with
respect to the omitted information, pursuant to an Order dated
January 8, 2018.
3.8
The Company shall
generally keep CRT informed of the progress of the Company's
business and affairs and shall supply CRT with written details of
any circumstances which will or might cause any actual or
prospective material adverse change in the financial position,
prospects or business of the Company.
3.9
Any breach of
Clause 3 shall be deemed to be a material breach of this
Agreement.
4.1
The Company shall
pay the Signature Fee to CRT within thirty (30) days of the
Effective Date.
4.2
Subject to clause
4.5, the Company shall pay the following payments
(“
Milestone
Payments
”) to CRT each time the following events
(“
Milestone
Events
”) occur in relation to any Licensed
Product:
Upon
the occurrence of each Milestone Event, any Milestone Event listed
before it in this Clause 4 which has not occurred shall be deemed
to have occurred. For the avoidance of doubt, a Milestone Event may
be triggered by the actions of the Company, a Sub-Licensee or any
third party acting on behalf of the Company or any
Sub-Licensee.
4.3
Subject to Clause
4.5, the Company shall pay to CRT:
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential treatment has been approved with
respect to the omitted information, pursuant to an Order dated
January 8, 2018.
For the
avoidance of doubt, Sub-Licence Revenue expressly excludes royalty
payments due under Clause 4.4 or Net Sales Value.
4.4
The Company shall
pay royalties to CRT on a Licensed Product by Licensed Product, and
country by country basis until the later of:
4.5
In the event that
any Milestone Event is triggered by any Sub-Licensee, the Company
shall pay to CRT the greater of: (i) [***]; and (ii)
[***].
5.1
All payments due to
CRT under this Agreement shall be made in the Currency in cleared
funds to the following bank account:
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
or such
other account as CRT may notify to the Company from time to
time.
5.2
The Company shall
pay to CRT:
5.2.1
the Signature Fee
on the date specified in Clause 4.1;
5.2.2
each of the
Milestone Payments within thirty (30) days of the relevant
Milestone Event occurring; and
5.2.3
each payment that
is due under Clause 4.3 or 4.4, within thirty (30) days of the
Company or any relevant Affiliate receiving the corresponding
Sub-Licence Revenue or percentage of Net Sales Value. All sums due
to CRT under Clause 4.3 or 4.4 shall belong to CRT upon the
Company’s or its Affiliate’s receipt of the revenue to
which such payment corresponds (and is a percentage of) and such
sums shall be held on trust for CRT until paid to CRT in accordance
with this Clause 5.2.3. The Company shall take all steps necessary
to ensure, and to procure that any relevant Affiliate ensures, that
sums held on trust are separate and identifiable from other monies
of the Company or Affiliate, including holding such sums in a
separate account to monies that belong to the Company and/or
Affiliate. At CRT’s reasonable request, the Company shall
provide written evidence of the arrangements required under this
Clause 5.2.3.
5.3
Where Licensed
Products are sold or Sub-Licence Revenue or royalties are received
by the Company (or a Sub-Licensee) in a currency other than the
Currency, the rate of exchange to be used for converting such other
currency into the Currency shall be the relevant mid-spot rate for
the currency quoted by the Financial Times on the last day of the
Quarter to which they relate.
5.4
All costs of
transmission and currency conversion shall be borne by the
Company.
5.5
All payments to CRT
under this Agreement are expressed to be exclusive of value added
tax howsoever arising, and the Company shall pay to CRT in addition
to those payments or, if earlier, on receipt of a tax invoice or
invoices from CRT, all value added tax for which CRT is liable to
account in relation to any supply made or deemed to be made for
value added tax purposes pursuant to this Agreement.
5.6
All sums payable
under this Agreement shall be paid without deduction or deferment
in respect of any claims whatsoever and of any taxes except any tax
which the Company is required by law to deduct or withhold. If the
Company is required by law to make any such tax deduction or
withholding, the Company shall pay to CRT such amount as shall,
after deduction, amount to the sum referred to in this Agreement
give reasonable assistance to CRT to claim exemption from or (if
that is not possible) a credit for the deduction or withholding
under any applicable double taxation or similar agreement from time
to time in force, and shall promptly give CRT proper evidence as to
the deduction or withholding and payment over of the tax deducted
or withheld.
5.7
Where CRT does not
receive payment of any sums due to it by the due date, interest
shall accrue both before and after any judgment on the sum due and
owing to CRT at the rate equivalent to an annual rate of two
percent (2%) over the then current base rate of the Bank of
England, calculated on a daily basis, until the full amount is paid
to CRT, without prejudice to CRT’s right to receive payment
on the due date.
5.8
Within thirty (30)
days after the end of each Quarter, the Company shall send to CRT a
written statement detailing in respect of that Quarter (including a
nil report if appropriate):
5.8.1
any Milestone
Payments which became due to CRT;
5.8.2
for each
sub-licence, details of each item of Sub-Licence Revenue received
by the Company during that Quarter and the Sub-Licence Revenue
payable to CRT thereon;
5.8.3
the quantity of
each type of Licensed Product sold or otherwise disposed of by the
Company or any Sub-Licensees in each country in the
Territory;
5.8.4
the Net Sales Value
in respect of each such type of Licensed Product in each country of
the Territory;
5.8.5
the aggregate Net
Sales Value in respect of that Quarter for Licensed
Product;
5.8.6
the type and value
of deductions made in the calculation of Net Sales Value by type of
Licensed Product and country;
5.8.7
any currency
conversions, showing the rates used;
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential treatment has been approved with
respect to the omitted information, pursuant to an Order dated
January 8, 2018.
5.8.8
any further
information necessary for the calculation of Sub-Licence Revenue
and Net Sales Value of Licensed Products and/or the royalties due
to CRT; and
5.8.9
the amount of the
royalties due to CRT in respect of that Quarter.
6.1.1
keep and
notwithstanding termination of this Agreement, maintain and shall
procure that each Sub-Licensee keeps and maintains, for at least
six (6) years, true and accurate accounts and records (including
any underlying documents supporting such accounts and records) in
sufficient detail to enable the amount of all sums payable under
this Agreement to be determined; and
6.1.2
during the Term and
thereafter until the said period of six (6) years relevant to the
accounts and records has expired, at the reasonable request of CRT
and (subject to Clause 6.2) at the expense of CRT from time to
time, permit or procure permission for a qualified accountant
nominated by CRT to inspect and audit those accounts and records
and, to the extent that they relate to the calculation of those
sums, to take copies of them. Subject to receiving not less than
thirty (30) days written notice, the Company shall at the request
of CRT assemble in one location that is respectively convenient to
the Company and Sub-Licensee(s) all such relevant accounts and
records of the Company and all Sub-Licensee(s).
6.2
If, following any
inspection pursuant to Clause 6.1.2, CRT’s nominated
accountant certifies to CRT that the payments in respect of any
Quarter or Year fall short of the sums which were properly payable
in respect of that Quarter or Year under this Agreement, CRT shall
send a copy of the certificate to the Company and the Company shall
(subject to Clause 6.3) within thirty (30) days of the date of
receipt of the certificate pay the shortfall to CRT [***], the
Company shall also reimburse to CRT the reasonable costs and
expenses of CRT in making the inspection.
6.3
If within fifteen
(15) days of the date of receipt by the Company any certificate
produced pursuant to Clause 6.2 the Company notifies CRT in writing
that it disputes the certificate, the dispute shall be referred for
resolution by Accountancy Opinion in accordance with Clause
24.1.
7.
INTELLECTUAL
PROPERTY PROTECTION, PROCEEDINGS AND COSTS
7.1
The Company shall
throughout the Term continue to use commercially reasonable efforts
to prosecute and maintain the Company Patent Rights.
Notwithstanding the foregoing, if the Company elects not to
prosecute or maintain any part of the Company Patent Rights in any
of the Major Markets, the Company shall notify CRT in writing at
least ninety (90) days prior to the expiration of any applicable
time bars. After receipt of such notice, CRT may elect, before the
expiry of any such time bars, by written notice to the Company, to
take an assignment of the relevant Company Patent Rights such that
CRT may continue to prosecute and/or maintain the Company Patent
Rights at CRT’s sole discretion and expense.
8.1
Each Party warrants
that it has the legal capacity to enter into this
Agreement.
8.2
Each Party
acknowledges that, in entering into this Agreement, it does not do
so in reliance on any warranty or other provision except as
expressly provided in this Agreement, and any conditions,
warranties or other terms implied by statute or common law are
excluded to the fullest extent permitted by law.
8.3
Without limiting
the scope of Clause 8.2, CRT does not give any warranty,
representation or undertaking:
8.3.1
as to the efficacy
or usefulness or accuracy of the Clinical Trial Results;
or
8.3.2
that the exercise
of rights granted under this Agreement will not infringe the
intellectual property or other rights of any other
person.
9.1
The Company shall
indemnify and hold harmless CRT, the Contributors and the Charity
and their respective officers, employees and agents (each, an
“
Indemnified
Party
”) from and against
any and all third
party claims, demands, losses, damages and expenses (including,
without limitation, legal fees)
arising from or in
connection with the exercise of the rights granted in Clause 2 by
the Company or a Sub-Licensee or the actions of any Affiliate of
any of them in relation to the Licensed Product. This Clause 9 is
without prejudice to and shall not limit the rights of the Company,
and is without prejudice to and shall not limit the liabilities of
the Charity, under Clause 9.1 of the CTOA.
9.2
Promptly after
receipt by CRT of any written claim or alleged claim or notice of
the commencement of any action, administrative or legal proceeding,
or investigation to which the indemnity provided for in this Clause
9 may apply, CRT shall give written notice to the Company of such
fact and specifying that the Company shall have the option to
assume the defence thereof by election in writing within seven (7)
days of receipt of such notice. If the Company fails to make such
election, the Indemnified Party may assume such defence and the
Company will be liable for the legal and other expenses
consequently incurred in connection with such defence. If CRT fails
to notify Company within thirty (30) days of receipt of any written
claim or alleged claim or notice of the relevant commencement, then
the Company shall not be liable for the legal and other expenses
consequently incurred in connection with such defence. The Parties
will co-operate in good faith in the conduct of any defence,
provide such reasonable assistance as may be required to enable any
claim properly to be defended and the Party with conduct of the
action shall provide promptly to the other Party copies of all
correspondence and documents and notice in writing of the substance
of all oral communications relating to such action.
9.3
Should the Company
assume conduct of the defence:
9.3.1
the Indemnified
Party may retain separate legal advisers, at its sole cost and
expense save that if the Company denies the applicability of the
indemnity or reserves its position in relation to the same, the
indemnity in this Clause 9 shall extend to the Indemnified
Party’s costs and expenses so incurred unless it is
subsequently resolved between the Parties or determined by a court
of competent jurisdiction (after exhaustion or expiration of all
rights of appeal) that the indemnity under this Clause 9 was not
available to the Indemnified Party in the terms claimed by the
Indemnified Party;
9.3.2
the Company will
not, except with the written consent of the Indemnified Party
consent to the entry of any judgment or enter into any settlement
provided always, that if the Indemnified Party unreasonably refuses
to consent to such entry of judgment or settlement and the matter
proceeds to trial at which a greater amount is ordered by the Court
then the amount which the Indemnified Party shall be entitled to
recover from the Company pursuant to this Clause 9 shall be limited
to the amount for which the action would otherwise have been
settled or compromised and the Indemnified Party shall assume all
costs of defending the claim or proceeding from the date of the
Indemnified Party’s refusal;
9.3.3
CRT shall not admit
liability in respect of, or compromise or settle any such action
without the prior written consent of the Company, such consent not
to be unreasonably withheld, conditioned or delayed;
and
9.3.4
the Company shall
not be responsible for or bound by any settlement made by CRT in
breach of Clause 9.3.3.
10.1
The Company shall
maintain, at its own cost, comprehensive product liability
insurance and general commercial liability insurance, and shall
ensure that each insurance policy maintained under this Clause 10.1
is held in the joint names of the Parties as co-insureds. Within
thirty (30) days of the Effective Date and of the beginning of each
policy period, the Company shall provide CRT with a certificate
evidencing the coverage required hereby, and the amount thereof.
Such insurance shall be with a reputable insurance company and
shall be maintained for not less than six (6) years following the
expiration/termination of this Agreement for any reason or if such
coverage is of the ‘claims made’ type, for ten (10)
years following the expiration or termination of this Agreement for
any reason.
11.
LIMITATION
OF LIABILITY
11.1
Neither Party nor
the Charity, nor their respective officers, employees and agents
shall have liability whether under statute or in tort (including
negligence), contract or otherwise to the other Party in respect of
any consequential, indirect or pure economic loss nor in any event
for loss of goodwill, opportunity, profit or contract.
11.2
Nothing in this
Agreement shall be construed as excluding or limiting the liability
of either Party or the Charity or any of their respective officers,
employees and agents to the other Party for death or personal
injury of any person resulting from the negligence of such
persons.
12.1
This Agreement will
become effective on the Effective Date and, subject to the
provisions of this Clause 12, will remain effective in each country
of the Territory until expiry of the obligation of the Company to
pay royalties under Clause 4.4 in relation to that country pursuant
to this Agreement.
12.2
Without prejudice
to any other rights of the Parties this Agreement may be terminated
by notice in writing:
12.2.1
by either Party
forthwith if the other Party shall be in material breach of any of
its obligations under this Agreement and in the case of a
remediable breach fails to remedy the breach within ninety (90)
days of written notice containing full particulars of the breach
and requiring it to be remedied;
12.2.2
by CRT if a
voluntary arrangement is proposed or approved or an administration
order is made, or a receiver or administrative receiver is
appointed of any of the Company’s assets or undertakings or a
winding-up resolution or petition is passed (otherwise than for the
purpose of solvent reconstruction or amalgamation) or if any
circumstances arise which entitle the Court or a creditor to
appoint a receiver, administrative receiver or administrator or
make a winding-up order or similar or equivalent action is taken
against or by the Company by reason of its insolvency;
12.2.3
by CRT forthwith in
the event that, by way of merger, acquisition or otherwise, the
Company becomes a Tobacco Party; or
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential treatment has been approved with
respect to the omitted information, pursuant to an Order dated
January 8, 2018.
12.2.4
by CRT upon ninety
(90) days written notice to the Company if the
Company:
(a)
discontinues the
development (including prosecuting application for Regulatory
Authorisation) of all Licensed Products; or
(b)
discontinues the
development (including prosecuting application for Regulatory
Authorisation) of a Licensed Product in relation to one or more
Oncology Indications (in which case termination shall not apply to
the whole Agreement but shall be limited to such Licensed Product
and such Oncology Indications); or
(c)
discontinues the
development (including prosecuting application for Regulatory
Authorisation) of all Licensed Products in Oncology Indications (in
which case termination shall not apply to the whole Agreement but
shall be limited to Oncology Indications); or
(d)
fails to use its
commercially reasonable efforts to obtain Regulatory Authorisation
in all of the Major Markets within fifteen (15) years, taking into
account the unique aspects of the development and regulatory path
for the Licensed Product, indication and market (in which case
termination shall not apply to the whole Agreement but shall be
limited to that Major Market); or
(e)
having obtained
Regulatory Authorisation for a Licensed Product in a Major Market,
ceases to actively market and sell such Licensed Product in such
Major Market (in which case termination shall not apply to the
whole Agreement but shall be limited to that Licensed Product in
that Major Market); or
(f)
ceases to carry on
business in the Field; or
(g)
without reasonable
cause fails to commence sales of any Licensed Product in a Major
Market within two (2) years of obtaining Regulatory Authorization
to market such Licensed Product in such market (in which case
termination shall not apply to the whole Agreement but shall be
limited to that Licensed Product in that Major
Market).
12.3
The Company shall
notify CRT in writing immediately upon any of the events described
in Clause 12.2 occurring. However, CRT’s right to terminate
under Clause 12.2 shall not be conditional upon the Company’s
such notice.
12.4
In the event of
disagreement between the Parties as to whether entitlement to
terminate has arisen under Clause 12.2.1 or 12.2.4, the Parties at
their joint cost and expense shall obtain an Expert Opinion which
shall be final as to whether it has arisen.
13.
EFFECTS
OF TERMINATION
13.1
Subject to Clause
13.2, upon the termination of this Agreement for any
reason:
13.1.1
other than
termination by CRT pursuant to Clause 12.2.1, 12.2.2, or 12.2.3
subject to all the terms of this Agreement (including without
limitation payment of royalties), the Company shall be entitled for
a period not exceeding [***] following such termination
to:
(a)
manufacture any of
the Licensed Products to the extent necessary to satisfy orders
accepted before termination; and
(b)
sell, use or
otherwise dispose of any unsold stocks of the Licensed
Products.
13.1.2
subject to Clause
13.1.1, the Company shall, and shall procure that all Sub-Licensees
shall, cease to exploit the Licensed Intellectual Property in any
way, either directly or indirectly;
13.1.3
subject to Clause
13.1.1, the Company shall, at the request and option of CRT, return
or destroy CRT’s Confidential Information;
13.1.4
notwithstanding any
provision of this Agreement allowing the Company credit, payment of
royalties and all other sums to CRT shall become due and payable to
CRT immediately upon notice of termination of this
Agreement;
13.1.5
the Company shall,
within thirty (30) days of notice of termination of this Agreement
provide CRT with a final written statement detailing, in respect of
the time elapsed since the last statement under Clause 5.8, the
matters set out in Clause 5.8;
13.1.6
other than
termination by the Company pursuant to Clause 12.2.1, the
Company:
(a)
hereby grants to
CRT an exclusive, perpetual, worldwide, sub-licensable licence
under the Company Intellectual Property, Company Patent Rights and
New Company IP to research, develop, make, have made, market, use
and sell Licensed Products, on revenue share and, if appropriate,
royalty terms to be agreed; provided that such licence shall only
become effective upon termination, and not before. If, having
regard to the nature and status of the rights licensed, the
products to which they relate, the likely market for such products,
the nature and standing of potential sub-licensees and actual or
potential competing products, the Parties cannot agree such revenue
share and, if appropriate, royalty terms within three (3) months of
the date of termination then either Party may refer the matter,
subject to Clause 24.2, for determination by an Accountancy
Opinion;
(b)
in the case of XOMA
IP, hereby grants to CRT a sub-licence to the full extent of the
Company‘s rights under the XOMA Licence; provided that such
licence shall only become effective upon termination, and not
before;
(c)
at CRT’s
request, shall promptly transfer to CRT (or any person nominated by
CRT) any and all documents and information in the Company’s
Control relating to the Patent Rights exclusively licensed to CRT
under clause 13.1.6 above and CRT may assume responsibility for the
prosecution, maintenance and enforcement of the same;
and
(d)
at CRT’s
request, shall transfer to CRT (or its nominee) any Regulatory
Authorisations, Price Approvals and other permits and applications
relating to Licensed Products.
13.2
This Clause 13.2
shall not apply in the case of termination of this Agreement under
Clause 12.1. In the event that this Agreement is terminated solely
in respect of particular Licensed Product and/or Indication and/or
Major Market, the provisions of Clause 13.1 shall apply, but solely
in respect of the relevant Licensed Product, Indication and/or
Major Market.
13.3.1
All rights and
licenses granted under or pursuant to Clause 13.1.6 by the Company
to CRT are for all purposes of Section 365(n) of Title 11 of the
U.S. Bankruptcy Code (“
Title
11
”), licenses of rights to “intellectual
property” as defined in Section 101 of Title 11.
13.3.2
the Company agrees
that CRT shall retain and may fully exercise all of its rights and
elections under the U.S. Bankruptcy Code. If a case under Title 11
is commenced by or against the Company, CRT shall have all rights
of licensees set out in Section 365(n) of Title 11;
13.3.3
without limiting
CRT’s rights under Section 365(n) of Title 11, if a case
under Title 11 is commenced by or against the Company, and this
Agreement is rejected by the Company in any bankruptcy proceeding
by or against the Company under the U.S. Bankruptcy Code, (i) the
Company shall provide CRT with a complete duplicate of (and
complete access to, as appropriate) any IP and embodiments of IP
not already in their possession; and (ii) the Company shall not
interfere with CRT’s rights to IP and embodiments of IP, and
shall facilitate and assist with CRT obtaining IP and embodiments
of IP (including from a third party); and
13.3.4
the term
“embodiments” of IP includes all tangible, intangible,
electronic or other embodiments of rights and licenses, including
antibodies, compounds and products embodying IP and related rights
and technology. All rights of CRT under this Clause and under
Section 365(n) of Title 11 are in addition to, not in substitution
of, any other rights and remedies that they may have under this
Agreement, Title 11 and any other applicable law.
13.2
The termination of
this Agreement howsoever arising will be without prejudice to the
rights and duties of either Party accrued prior to termination. The
following Clauses will continue to be enforceable notwithstanding
termination: Clauses 1 (Definitions), 6 (Accounts), 7.2 (XOMA
Licence), 9 (Indemnity), 10 (Insurance), 11 (Limitation of
Liability), 12 (Termination), 13 (Effects of Termination), 14
(Confidentiality), 19 (Severability), 24 (Dispute Resolution) and
25 (Law and Jurisdiction).
14.1
Each Party
undertakes with the other that it shall keep and it shall procure
that its respective directors and employees keep secret and
confidential all Confidential Information belonging to or
Controlled by the other Party and shall not disclose the same or
any part of the same to any person whatsoever other
than:
14.1.1
in the case of the
Company: (i) to Sub-Licensees subject to compliance with Clause
2.3.3, (ii) to potential development partners, sublicensees, and
investors bound by terms of confidentiality at least as strict as
those herein, and (iii) as necessary in communications with
Regulatory Authorities in the Territory relating to the Licensed
Products;
14.1.2
in the case of CRT
to the Charity; and
14.1.3
in the case of each
Party, to its directors or employees directly or indirectly
concerned in the exercise of the rights granted under this
Agreement.
14.2
The provisions of
Clause 14.1 shall not apply to Confidential Information which CRT
or the Company (as the case may be):
14.2.1
can prove to have
been in its possession (other than under an obligation of
confidence to the other or to a third party) at the date of receipt
or which enters the public domain otherwise than through a breach
of any obligation of confidentiality owed to the Party
communicating such information to the other;
14.2.2
can prove it has
independently developed; or
14.2.3
is required to
disclose by law or by the order of a competent court, solely to the
extent of such disclosure.
14.3
The provisions of
this Clause 14 shall remain in force for a period of five (5) years
from the expiry or termination of this Agreement
15.1
The Company shall
not without CRT’s consent assign its rights under this
Agreement except in conjunction with a merger or consolidation of
the Company with another business entity or the sale of all or
substantially all or a substantial part of its business and related
assets that includes its business in relation to the Licensed
Products other than a merger or consolidation with, or a sale of
assets to, a Tobacco Party and provided that Company obtains a
direct covenant from the acquiring party to CRT undertaking to be
bound by the terms of this Agreement.
16.1
Any notice or other
document to be given under this Agreement shall be in writing and
shall be deemed to have been given:
16.1.1
upon delivery if
given in person; or
16.1.2
upon confirmation
of receipt if sent by facsimile (or other similar means of
electronic communication, such as email); or
16.1.3
(if posted to an
inland destination) three (3) business days after deposit into
First Class post; or
16.1.4
(If posted to an
overseas destination) five (5) days after deposit into airmail
post; or
16.1.5
upon delivery by
air delivery service,
to a
Party at the address set out below (or, if provided below or so
notified, such facsimile or electronic communication) for such
Party or such other address as the Party may from time to time
designate by written notice to the other Party.
[As may be updated at the Effective
Date.]
Address of the Company
Monopar
Therapeutics LLC
598
Rockefeller Road
Lake
Forest, IL USA 60045
Contact:
Chief Executive Officer
Address of CRT
Angel
Building
407 St.
John Street
London
EC1V 4AD
United
Kingdom
Contact: Chief
Executive Officer
Fax:
+44 (0) 20 3014 8633
17.1
No failure or delay
on the part of either Party hereto to exercise any right or remedy
under this Agreement shall be construed as or operate as a waiver
thereof nor shall any single or partial exercise of any right or
remedy under this Agreement preclude the exercise of any other
right or remedy or preclude the further exercise of such right or
remedy as the case may be.
18.1
Except in relation
to obligations pursuant to Clauses 4 and/or 5, neither Party shall
be liable to the other Party or shall be in default of its
obligations hereunder if such default is the result of war,
hostilities, revolution, civil commotion, strike, epidemic,
accident, fire, wind, flood or because of any act of God or other
cause beyond the reasonable control of the Party affected. The
Party affected by such circumstances shall promptly notify the
other Party in writing when such circumstances cause a delay or
failure in performance (a “Delay”) and where they cease
to do so. In the event of a Delay lasting for twenty six (26) weeks
or more the non-affected Party shall have the right to terminate
this Agreement immediately by notice in writing to the affected
Party.
19.1
If and to the
extent that any court or tribunal of competent jurisdiction holds
any of the terms, provisions or conditions or parts thereof of this
Agreement, or the application hereof to any circumstances, to be
invalid or to be unenforceable in a final non-appealable order, the
remainder of this Agreement and the application of such term,
provision or condition or part thereof to circumstances other than
those as to which it is held invalid or unenforceable shall not be
affected thereby, and each of the other terms, provisions and
conditions of this Agreement shall be valid and enforceable to the
fullest extent permissible by law.
20.1
This Agreement and
the surviving clauses of the CTOA, embodies and sets forth the
entire agreement and understanding of the Parties and supersedes
all prior oral or written agreements, understandings or
arrangements relating to the subject matter of this Agreement.
Without prejudice to any liability for fraudulent misrepresentation
or fraudulent misstatement neither Party shall be entitled to rely
on any agreement, understanding or arrangement which is not
expressly set forth in this Agreement unless otherwise agreed
between the Parties and recorded in writing.
21.1
This Agreement
shall not be amended, modified, varied or supplemented except in
writing signed by duly authorised representatives of the
Parties.
22.1
The text of any
press release, shareholders’ report or other communication to
be published or disclosed to the public in any way by or in the
media concerning CRT or the Charity, the subject matter of this
Agreement or concerning this Agreement itself, other than as
required by law or by any Regulatory Authority or the rules of any
securities exchange, shall be submitted to CRT at least seven (7)
days in advance of publication for approval, such approval not to
be unreasonably withheld, conditioned, or delayed, provided that
insofar as a disclosure repeats or restates a prior public
disclosure permitted by this Agreement, such disclosure need not be
submitted to the Charity or CRT for approval.
23.1
The Parties hereby
undertake to do all such other acts and things, and execute and
provide all such documents at the requesting Party’s cost as
may be necessary or desirable to give effect to the purposes of
this Agreement.
24.1
Insofar as this
Agreement provides that a matter shall be resolved by Accountancy
Opinion or Expert Opinion the opinion of such expert (who shall act
as an expert and not as an arbitrator) shall be final and binding
on the Parties. In the event of a Party seeking an Accountancy
Opinion or Expert Opinion under this Agreement, each Party shall
make written submissions to the expert so appointed and to the
other Party within fourteen (14) days of the appointment. Each
Party shall have seven (7) days to respond to the other’s
submissions. The expert shall be requested to deliver his
Accountancy Opinion or Expert Opinion within a further thirty (30)
days. The costs of any Accountancy Opinion or Expert Opinion shall
be borne in such proportions as the expert may determine in his
opinion to be fair and reasonable in all the circumstances or, if
no such determination is made in the opinion, by the Parties in
equal proportions.
24.2
It shall be a
condition precedent to the commencement of any action in court or
other tribunal (save an action for an interim injunction or an
Expert Opinion sought under Clause 12.1) in respect of any dispute
relating to this Agreement that the Parties have sought to resolve
the dispute by either Party notifying the other Party in writing
for resolution to the Chief Executive Officer (in the case of CRT)
and the Chief Executive Officer (in the case of the Company) (or
their express delegates) (the “Senior Executives”) who
shall meet (whether in person or via teleconference) within twenty
one (21) days of such notice to seek resolution in good faith. If
the Senior Executives are unable to resolve the dispute at such
meeting, either Party may pursue any remedy available to such Party
at law or in equity, subject to the terms and conditions of this
Agreement and the other agreements expressly contemplated
hereunder.
25.1
This Agreement
shall be governed by and construed in accordance with English Law
and, subject to the provisions of Clauses 24.1 and 24.2, each Party
agrees to submit to the exclusive jurisdiction of the English
Courts (except in respect of disputes under Clause 14 where
jurisdiction is non-exclusive).
26.1
This Agreement may
be executed in any one or more number of counterpart agreements,
and as scanned email attachments, and all signatures and
counterparts so exchanged shall be considered as original and shall
be deemed to form part of and together constitute this
Agreement.
27.
CONTRACTS
(RIGHTS OF THIRD PARTIES) ACT 1999
27.1
Save that the
Charity, the Contributors and their and CRT’s respective
officers, employees and agents in respect of Clauses 9 and 11 may
enforce those respective terms, no term of this Agreement is
enforceable under the Contracts (Rights of Third Parties) Act 1999
by a person who is not a Party to this Agreement. Notwithstanding
the provisions of this Clause, the Parties shall be entitled to
amend, suspend, cancel or terminate this Agreement or any part of
it in accordance with Clause 21, without the consent of any third
party including those referred to in this Clause.
The
Parties hereby execute this Agreement by their duly authorised
representatives:
Signed
by:
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_____________________________________
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Name:
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_____________________________________
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|
|
Title:
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_____________________________________
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|
|
|
For
and on behalf of
|
|
CANCER RESEARCH TECHNOLOGY LIMITED
|
|
|
|
|
|
|
|
|
|
|
|
|
Signed
by:
|
_____________________________________
|
|
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Name:
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_____________________________________
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Title:
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_____________________________________
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For
and on behalf of
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MONOPAR THERAPEUTICS LLC
|
Appendix 1
Development Plan
Appendix 2
Executed CTOA
Schedule 4
No Fault Compensation Scheme
Preamble
The
Association of the British Pharmaceutical Industry favours a simple
and expeditious procedure in relation to the provision of
compensation for injury caused by participation in clinical trials.
The Association therefore recommends that a member company
sponsoring a clinical trial should provide without legal commitment
a written assurance to the investigator — and through him to
the relevant research ethics committee — that the following
Guidelines will be adhered to in the event of injury caused to a
patient attributable to participation in the trial in
question.
1.1
Notwithstanding the
absence of legal commitment, the company should pay compensation to
patient-volunteers suffering bodily injury (including death) in
accordance with these Guidelines.
1.2
Compensation should
be paid when, on the balance of probabilities, the injury was
attributable to the administration of a medicinal product under
trial or any clinical intervention or procedure provided for by the
protocol that would not have occurred but for the inclusion of the
patient in the trial.
1.3
Compensation should
be paid to a child injured in utero through the participation of
the subject’s mother in a clinical trial as if the child were
a patient-volunteer with the full benefit of these
Guidelines.
1.4
Compensation should
only be paid for the more serious injury of an enduring and
disabling character (including exacerbation of an existing
condition) and not for temporary pain or discomfort or less serious
or curable complaints.
1.5
Where there is an
adverse reaction to a medicinal product under trial and injury is
caused by a procedure adopted to deal with that adverse reaction,
compensation should be paid for such injury as if it were caused
directly by the medicinal product under trial.
1.6
Neither the fact
that the adverse reaction causing the injury was foreseeable or
predictable, nor the fact that the patient has freely consented
(whether in writing or otherwise) to participate in the trial
should exclude a patient from consideration for compensation under
these Guidelines, although compensation may be abated or excluded
in the light of the factors described in paragraph 4.2
below.
1.7
For the avoidance
of doubt, compensation should be paid regardless of whether the
patient is able to prove that the company has been negligent in
relation to research or development of the medicinal product under
trial or that the product is defective and therefore, as the
producer, the company is subject to strict liability in respect of
injuries caused by it.
2
Type
of Clinical Research Covered
2.1
These Guidelines
apply to injury caused to patients involved in Phase II and Phase
III trials, that is to say, patients under treatment and
surveillance (usually in hospital) and suffering from the ailment
which the medicinal product under trial is intended to treat but
for which a product licence does not exist or does not authorise
supply for administration under the conditions of the
trial.
2.2
These Guidelines do
not apply to injuries arising from studies in non-patient
volunteers (Phase I), whether or not they are in hospital, for
which separate Guidelines for compensation already
exist.
2.3
These Guidelines do
not apply to injury arising from clinical trials on marketed
products (Phase IV) where a product licence exists authorising
supply for administration under the conditions of the trial, except
to the extent that the injury is caused to a patient as a direct
result of procedures undertaken in accordance with the protocol
(but not any product administered) to which the patient would not
have been exposed had treatment been other than in the course of
the trial.
2.4
These Guidelines do
not apply to clinical trials which have not been initiated or
directly sponsored by the company providing the product for
research. Where trials of products are initiated independently by
doctors under the appropriate Medicines Act 1968 exemptions,
responsibility for the health and welfare of patients rests with
the doctor alone (see also paragraph 5.2 below).
3.1
No compensation
should be paid for the failure of a medicinal product to have its
intended effect or to provide any other benefit to the
patient.
3.2
No compensation
should be paid for injury caused by other licensed medicinal
products administered to the patient for the purpose of comparison
with the product under trial.
3.3
No compensation
should be paid to patients receiving placebo in consideration of
its failure to provide therapeutic benefit.
3.4
No compensation
should be paid (or it should be abated as the case may be) to the
extent that the injury has arisen:
3.4.1
through
a significant departure from the agreed protocol;
3.4.2
through the
wrongful act or default of a third party, including a
doctor’s failure to deal adequately with an adverse
reaction;
3.4.3
through
contributory negligence by the patient.
4
Assessment
of Compensation
4.1
The amount of
compensation paid should be appropriate to the nature, severity and
persistence of the injury and should in general terms be consistent
with the quantum of damages commonly awarded for similar injuries
by an English Court in cases where legal liability is
admitted.
4.2
Compensation may be
abated, or in certain circumstances excluded, in the light of the
following factors (on which will depend the level of risk the
patient can reasonably be expected to accept):
4.2.1
the seriousness of
the disease being treated, the degree of probability that adverse
reactions will occur and any warnings given;
4.2.2
the risks and
benefits of established treatments relative to those known or
suspected of the trial medicine.
This
reflects the fact that flexibility is required given the particular
patient’s circumstances. As an extreme example, there may be
a patient suffering from a serious or life-threatening disease who
is warned of a certain defined risk of adverse reaction.
Participation in the trial is then based on an expectation that the
benefit/risk ratio associated with participation may be better than
that associated with alternative treatment. It is, therefore,
reasonable that the patient accepts the high risk and should not
expect compensation for the occurrence of the adverse reaction of
which he or she was told.
4.3
In any case where
the company concedes that a payment should be made to a patient but
there exists a difference of opinion between company and patient as
to the appropriate level of compensation, it is recommended that
the company agrees to seek at its own cost (and make available to
the patient) the opinion of a mutually acceptable independent
expert, and that his opinion should be given substantial weight by
the company in reaching its decision on the appropriate payment to
be made.
5.1
Claims pursuant to
the Guidelines should be made by the patient to the company,
preferably via the investigator, setting Out details of the nature
and background of the claim and, subject to the patient providing
on request an authority for the company to review any medical
records relevant to the claim, the company should consider the
claim expeditiously.
5.2
The undertaking
given by a company extends to injury arising (at whatever time)
from all administrations, clinical interventions or procedures
occurring during the course of the trial but not to treatment
extended beyond the end of the trial at the instigation of the
investigator. The use of unlicensed products beyond the trial
period is wholly the responsibility of the treating doctor and in
this regard attention is drawn to the advice provided to doctors in
MAL 3Q2 concerning the desirability of doctors notifying their
protection society of their use of unlicensed
products.
5.3
The fact that a
company has agreed to abide by these Guidelines in respect of a
trial does not affect the right of a patient to pursue a legal
remedy in respect of injury alleged to have been suffered as a
result of participation. Nevertheless, patients will normally be
asked to accept that any payment made under the Guidelines will be
in full settlement of their claims.
5.4
A company
sponsoring a trial should encourage the investigator to make clear
to participating patients that the trial is being conducted subject
to the ABPI Guidelines relating to compensation for injury arising
in the course of clinical trials and have available copies of the
Guidelines should they be requested.
References
1
Guidelines
for
Medical Experiments in
Non-patient Human Volunteers, ABPI March 1988, as amended May
1990.
2
MAL 30— A
Guide to the Provisions affecting Doctors and Dentists, DHSS,
(Revised June 1985)
The Association of the British Pharmaceutical Industry
12
Whitehall London SW1
Schedule 5
Assignment and Licence from Company to CRT
THIS AGREEMENT is made the________ day of
_______________________20[
●●
]
BETWEEN:
(1)
CANCER RESEARCH TECHNOLOGY LIMITED
, a
company registered in England and Wales with number 1626049 with
registered office at Angel Building, 407 St. John Street, London,
EC1V 4AD, England (“
CRT
”); and
(2)
[MONOPAR THERAPEUTICS LLC,
a limited
liability company registered in/incorporated in/ established under
the laws of The State of Delaware, U.S.A., with registered
office/principal place of business at 598 Rockefeller Road, Lake
Forest, Illinois, U.S.A., 60045] (the
“Company”
).
WHEREAS
(A)
CRT, the Company
and the Charity (as defined below) are parties to a Clinical Trial
and Option Agreement dated [●●●] (the
“
CTOA
”) relating
to the Investigational Medicinal Product (as defined in the
CTOA).
(B)
Pursuant to clause
7.5 of the CTOA, the Company has agreed to assign the Company
Intellectual Property and sub-license the XOMA IP in return for a
royalty and a share of any revenue generated by CRT from the
commercial exploitation of such intellectual property rights upon
the terms and conditions set out below.
NOW IT IS HEREBY AGREED
as follows:
1.1
In this Agreement
except where the context requires otherwise, the following words
and expressions shall have the following meanings:
“Affiliate”
|
has the
same meaning as that ascribed to that phrase in the
CTOA.
|
“
Accountancy
Opinion”
|
means
the opinion of an independent United Kingdom chartered accountant
appointed by agreement between the Parties or in default of such
agreement within twenty one (21) days of either Party seeking in
writing to the other to appoint such accountant, at the request of
either Party, by the President for the time being of the Institute
of Chartered Accountants in England and Wales, referred to in
Clauses 6.3 and 12.1.
|
“Charity”
|
means
Cancer Research UK, a charity registered under number 1089464 of
Angel Building, 407 St. John Street, London EC1V 4AD,
England.
|
“Clinical Trial”
|
has the
meaning given in the CTOA.
|
“Company Intellectual Property”
|
means
the Company Patent Rights and all rights in the Company Materials,
the Investigational Medicinal Product and the Company
Know-How.
|
“Company Know-How”
|
means:
(a) any Know How that was disclosed by the Company to the Charity
pursuant to the CTOA; (b) any Know How described in Annex 2; and
(c) such other Know How in the Company’s Control relating to
the Investigational Medicinal Product (and any constituents
thereof) or any Back-Up Antibody including but not limited to: (i)
any safety and toxicological data; (ii) information relating to
manufacturing/production; (iii) information relating to quality;
(iv) information relating to safe and proper handling, storage and
use; and (v) any information which would in any way improve the
prospects for its commercialisation.
|
“Company Materials”
|
means
Materials Controlled by the Company which include and relate to the
Investigational Medicinal Product, the Antibody and the Back-Up
Antibodies, more particularly described in Annex 3.
|
“Company Patent Rights”
|
means
(i) those Patent Rights listed in Annex 1A; (ii) those Patent
Rights Controlled by the Company which would be infringed by the
unauthorised manufacture, use or sale in, or importation into, the
relevant country of the Investigational Medicinal Product, Antibody
or Back-Up Antibodies; and (iii) all Patent Rights deriving
priority from (i) and (ii).
|
“Control”
|
has the
meaning given in the CTOA.
|
“Data Exclusivity Period”
|
means
any period of clinical trial data or other regulatory exclusivity,
together with any such periods under national implementations in
the European Union of Article 10.1 of Directive 2001/EC/83 and all
equivalents elsewhere in the Territory.
|
“Direct Costs”
|
means
XOMA Licence Payments paid by CRT pursuant to Clause
7.2.
|
“Effective Date”
|
means
the date of this Agreement.
|
“First Commercial Sale”
|
means,
with respect to a Licensed Product, the first transfer or
disposition for value of such Licensed Product by or on behalf of
CRT or a Sub-Licensee or an Affiliate of either of them, after all
relevant Regulatory Authorisations for the transfer or disposition
of such Licensed Product have been obtained in respect of the
relevant region or country.
|
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential treatment has been approved with
respect to the omitted information, pursuant to an Order dated
January 8, 2018.
“Gross Revenue”
|
means
any and all monies or non-monetary consideration (including
securities) received by CRT from time to time in respect of the
commercial exploitation of the Investigational Medicinal Product,
Antibody, Back-Up Antibodies, or any Licensed Product; [***]. For
the avoidance of doubt, any developmental and/or sales milestone
revenue shall constitute Gross Revenue, and not
Royalties.
|
“Investigational Medicinal Product” or
“IMP”
|
has the
meaning given in the CTOA.
|
“Intellectual Property Rights”
|
means
all Patent Rights, Know-How, copyright, database rights, design
rights, moral rights, rights in trade names, logos and trade and
service marks, domain names, rights in Materials and all rights or
forms of protection of a similar nature or having equivalent or
similar effect to any of them which may subsist anywhere in the
world, whether or not any of them are registered including any
application for registration of any of them.
|
“Know-How”
|
has the
meaning given in the CTOA.
|
“Licence”
|
has the
meaning given in the CTOA.
|
“Licensed Product”
|
means
any product:
a)
whose application
for a Regulatory Authorisation from a Regulatory Authority in any
jurisdiction included the Clinical Trial Results and/or the Final
Report and/or the Data Listings or any part of any of them,
and/or
b)
that contains the
Antibody or a Back-Up Antibody (or any part of either), in each
case whether or not as the sole active ingredient,
and/or
c)
the unauthorised
manufacture, sale or use of which would infringe a valid claim of
the Company Patent Rights,
where
“
Clinical Trial
Results
”, “
Final
Report
” and “
Data Listings
” have the meaning
given to them in the CTOA and “
Regulatory Authorisation
” has the
meaning given to it in the Licence.
|
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential treatment has been approved with
respect to the omitted information, pursuant to an Order dated
January 8, 2018.
“Materials”
|
has the
meaning given in the CTOA.
|
“
NDA”
|
means,
in relation to any Licensed Product, a biologics license
application, new drug application, supplementary new drug
application, abbreviated new drug application or any of their
equivalents filed with the United States Food and Drugs
Administration (FDA) or any successor to it, a marketing
authorisation application or its equivalent filed with the European
Medicines Agency (EMEA) or any successor to it, or a marketing
authorisation application or a product licence application or
equivalent filed with the relevant Regulatory Authority in any one
or more countries or regions within the Territory.
|
“Net Revenue”
|
means
Gross Revenue less Direct Costs.
|
“Net Sales Value”
|
means,
in relation to Licensed Product, the gross amount invoiced by CRT
or Sub-Licensee or Affiliate of CRT or a Sub-Licensee [***] to the
extent that any of those items are included as separate items in
the amount so invoiced, and [***]
|
“Party”
|
means
either party to this Agreement and “
Parties
” means both of
them.
|
“Patent Rights”
|
has the
meaning given in the CTOA.
|
“Royalties”
|
means
any monies that CRT receives from a Sub-Licensee which are a
percentage of Net Sales Value only, and are paid to CRT on a
Licensed-Product by Licensed-Product and country-by-country
basis.
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“Sub-Licensee”
|
means
any person who is granted a sub-licence in respect of the Company
Intellectual Property under this Agreement; and/or any person who
is granted a sub-licence (whether under the Company Intellectual
Property or otherwise) to sell Licensed Products anywhere in the
Territory, but shall not mean distributors, wholesalers, and sales
agents (sale to whom will be sales for the purpose of Net Sales
Value).
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[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential treatment has been approved with
respect to the omitted information, pursuant to an Order dated
January 8, 2018.
“Territory”
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means
worldwide.
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“XOMA IP”
|
has the
meaning given in the CTOA.
|
“XOMA Licence”
|
has the
meaning given in the CTOA.
|
“XOMA Licence Payments”
|
has the
meaning given in the CTOA.
|
1.2
The headings in
this Agreement are for convenience only and shall not affect its
interpretation. Unless the contrary intention appears, words
denoting persons shall include any individual, partnership,
company, corporation, joint venture, trust, association,
organisation or other entity, in each case whether or not having
separate legal personality. References to the words
“include” or “including” shall be construed
without limitation to the generality of the preceding
words.
2.
ASSIGNMENT
AND LICENCE FROM COMPANY TO CRT
2.1
Pursuant to clause
7.5 of the CTOA, and in consideration of the provisions of Clause
4, the Company hereby assigns to CRT with full title
guarantee:
2.1.1
[***] the Company
Patent Rights (and the inventions disclosed in such Company Patent
Rights) and the [***];
2.1.2
[***] the Company
Intellectual Property and [***];
2.1.3
[***] the Company
Intellectual Property [***];
2.1.4
[***] the Company
Patent Rights; and
2.2
Effective only upon
a written request from CRT and to the extent it is entitled to do
so under the XOMA Licence, the Company hereby grants to CRT [***]
to research, develop, make, have made, import, use and sell the
Investigational Medicinal Product and products incorporating the
Antibody or any Back-Up Antibody. The licence granted under this
Clause 2.2 shall become effective upon written notice from CRT to
the Company (such notice to be given within thirty (30) days of the
Effective Date).
2.3
The Company shall
disclose to CRT any Company Know-How that was not already disclosed
to CRT pursuant to the CTOA within three (3) months of the
Effective Date and agrees that the Company Know-How may be used by
CRT and anyone to whom CRT discloses the Company Know-How, and that
the Company shall not disclose the Company Know-How to any third
party or use the Company Know-How in any internal research
programme.
2.4
The Company either
has or shall transfer, or procure the transfer of, the Company
Materials and any and all rights therein to CRT (or any third party
nominated by CRT) within three (3) months of the Effective Date and
agrees that the Company Materials may be used by CRT and any third
party authorised by CRT and that the Company shall not transfer any
Company Materials to any third party or use the Company Materials
in any internal research programme.
2.5
At CRT’s
request, the Company shall negotiate with CRT in good faith on
reasonable commercial terms a [***] the Company and not already
licensed or assigned under this Agreement which may be necessary
and/or useful for the development and/or commercial exploitation of
the Company Intellectual Property.
3.
ASSISTANCE
AND FURTHER ASSURANCE
3.1
The Company shall
promptly provide to CRT or its nominated patent agent all documents
relating to the filing, prosecution and maintenance of the Company
Patent Rights.
3.2
The Company shall
execute, sign and do all instruments, applications, documents, acts
and things that may reasonably be required by CRT to enable CRT to
enjoy the full benefit of the property and rights hereby assigned
or licensed and (if requested to do so by CRT) to apply for any
patents or other forms of protection in respect of the
Investigational Medicinal Product throughout the world and fully
and effectively to assign the same to CRT or as CRT shall
direct.
3.3
The Company shall
assist CRT and any third party that CRT may nominate in
understanding and using the Company Know-How and the Company
Materials and assist CRT and any such third party in relation to
any further development of the Investigational Medicinal Product
and any regulatory application in relation thereto (including
without limitation and to the extent that the Company may lawfully
do so by the provision of information that may be requested from
time to time in relation to the origin, development, and
distribution by the Company to any third parties of the Licensed
Product).
3.4
The Company shall
maintain the XOMA Licence, and not terminate it without the prior
written agreement of CRT.
3.5
To the extent it
has the rights under the XOMA Licence to Control Patent Rights
which are XOMA IP, the Company shall transfer to CRT control of the
filing, prosecution, maintenance, enforcement and defence of any
such Patent Rights to CRT.
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential treatment has been approved with
respect to the omitted information, pursuant to an Order dated
January 8, 2018.
4.1
Subject to Clause
4.5, CRT and the Company shall share Net Revenue in the following
proportions:
CRT
[***];
Company
[***].
4.2
In the event that
any Gross Revenue is received by CRT as part of the consideration
for the grant of rights which include rights other than those in
respect of Company Intellectual Property, CRT shall apportion the
consideration as between on the one hand, the rights granted in
respect of the Company Intellectual Property and, on the other, any
other rights granted, in such manner as is fair and
reasonable.
4.3
If CRT receives any
non-monetary consideration in respect of the commercial
exploitation of the Company Intellectual Property (such as company
stocks and shares), such non-monetary consideration shall not form
Gross Revenue until CRT has received cash proceeds from the
disposal or other realisation of such consideration. CRT shall not
determine the timing of and price for any realisation of the
Company’s share of non-monetary consideration without first
having notified and consulted the Company, but shall otherwise seek
to realise such non-monetary consideration at the earliest
opportunity that is consistent with securing a reasonable return.
For the avoidance of doubt, any dividend or similar monetary
consideration received in respect of such non-monetary
consideration shall form Gross Revenue.
4.4
Subject to Clause
4.5, CRT and the Company shall share any Royalties received by CRT
in each calendar quarter of the Royalty Term in the following
proportions:
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential treatment has been approved with
respect to the omitted information, pursuant to an Order dated
January 8, 2018.
CRT
[***];
Company
[***],
provided that under
no circumstance other than that set out in Clause 4.5 shall CRT pay
the Company under this Clause 4.4 [***] in each such calendar
quarter. CRT shall include in any and all sub-licenses granted
under this Agreement obligations on its sub-licensee(s) to make
timely payments (on not less than a quarterly basis) of sufficient
royalties to CRT to ensure that CRT can meet its obligations under
this Clause 4.4.
In this
Clause 4.4, “
Royalty
Term
” means a period, on a Licensed
Product-by-Licensed Product, country-by-country basis, beginning on
the Effective Date and ending upon the later to occur
of:
4.4.1
the expiry of any
Data Exclusivity Period in respect of the data submitted for the
NDA for such Licensed Product in such country;
4.4.2
the expiry of ten
(10) years from the First Commercial Sale; and
4.4.3
the date when
unauthorised manufacture, sale or use of the Licensed Product would
no longer infringe a valid claim of the Company Patent Rights in
the country of sale or manufacture.
4.5
Without restricting
or limiting any of the Charity’s or CRT’s rights under
the CTOA, CRT may deduct as a first charge and set off from sums
due to the Company under this Clause 4 any and all sums of any
nature that are due and payable, but not yet paid, by the Company
to CRT or the Charity under or in connection with the CTOA
(including, without limitation, any sums due pursuant to Clause 9.2
or 12.2 of the CTOA).
5.1
All payments due to
the Company under this Agreement shall be made in United States
Dollars in cleared funds to such bank account as Company may notify
to CRT from time to time.
5.2
CRT shall pay to
Company:
5.2.1
payments due under
Clause 4.1, Clause 4.2, and Clause 4.3 within thirty (30) days of
CRT receiving the revenue; and
5.2.2
the payments due
pursuant to Clause 4.4 Quarterly within thirty (30) days of the end
of each Quarter in which the corresponding Royalties are received
by CRT.
5.3
Where Licensed
Products are sold or Sub-Licence Revenue or Royalties are received
by CRT (or a Sub-Licensee) in a currency other than United States
Dollars, the rate of exchange to be used for converting such other
currency into United States Dollars shall be the relevant mid-spot
rate for the currency quoted by the Financial Times on the last day
of the Quarter to which they relate.
5.4
All costs of
transmission and currency conversion shall be borne by
CRT.
5.5
All payments to the
Company under this Agreement are expressed to be exclusive of value
added tax howsoever arising, and CRT shall pay to the Company in
addition to those payments or, if earlier, on receipt of a tax
invoice or invoices from the Company, all value added tax for which
the Company is liable to account in relation to any supply made or
deemed to be made for value added tax purposes pursuant to this
Agreement.
5.6
All sums payable
under this Agreement shall be paid without deduction or deferment
in respect of any claims whatsoever and of any taxes except any tax
which CRT is required by law to deduct or withhold. If CRT is
required by law to make any such tax deduction or withholding, CRT
shall pay to the Company such amount as shall, after deduction,
amount to the sum referred to in this Agreement give reasonable
assistance to the Company to claim exemption from or (if that is
not possible) a credit for the deduction or withholding under any
applicable double taxation or similar agreement from time to time
in force, and shall promptly give the Company proper evidence as to
the deduction or withholding and payment over of the tax deducted
or withheld.
5.7
Where the Company
does not receive payment of any sums due to it by the due date,
interest shall accrue both before and after any judgment on the sum
due and owing to the Company at the rate equivalent to an annual
rate of two percent (2%) over the then current base rate of the
Bank of England, calculated on a monthly basis, until the full
amount is paid to the Company, without prejudice to the
Company’s right to receive payment on the due
date.
5.8
Within thirty (30)
days after the end of each Quarter, CRT shall send to the Company a
written statement detailing in respect of that Quarter (including a
nil report if appropriate):
5.8.1
any payments which
became due to Company;
5.8.2
for each
sub-licence, details of each item of Sub-Licence Revenue received
by CRT during that Quarter and the Sub-Licence Revenue payable to
Company thereon;
5.8.3
the quantity of
each type of Licensed Product sold or otherwise disposed of by CRT
or any Sub-Licensees in each country in the Territory;
5.8.4
the Net Sales Value
in respect of each such type of Licensed Product in each country of
the Territory;
5.8.5
the aggregate Net
Sales Value in respect of that Quarter for Licensed
Product;
5.8.6
the type and value
of deductions made in the calculation of Net Sales Value by type of
Licensed Product and country;
5.8.7
any currency
conversions, showing the rates used;
5.8.8
any further
information necessary for the calculation of Sub-Licence Revenue
and Net Sales Value of Licensed Products and/or the Royalties due
to Company; and
5.8.9
the amount of the
Royalties due to Company in respect of that Quarter.
6.1.1
keep and
notwithstanding termination of this Agreement, maintain and shall
procure that each Sub-Licensee keeps and maintains, for at least
three (3) years, true and accurate accounts and records (including
any underlying documents supporting such accounts and records) in
sufficient detail to enable the amount of all sums payable under
this Agreement to be determined; and
6.1.2
during the Term and
thereafter until the said period of three (3) years relevant to the
accounts and records has expired, at the reasonable request of
Company and (subject to Clause 6.2) at the expense of the Company
from time to time, permit or procure permission for a qualified
accountant nominated by the Company to inspect and audit those
accounts and records and, to the extent that they relate to the
calculation of those sums, to take copies of them. Subject to
receiving not less than thirty (30) days written notice, CRT shall
at the request of the Company assemble in one location that is
respectively convenient to CRT and Sub-Licensee(s) all such
relevant accounts and records of CRT and all
Sub-Licensee(s).
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential treatment has been approved with
respect to the omitted information, pursuant to an Order dated
January 8, 2018.
6.2
If, following any
inspection pursuant to Clause 6.1.2, the Company’s nominated
accountant certifies to the Company that the payments in respect of
any Quarter or Year fall short of the sums which were properly
payable in respect of that Quarter or Year under this Agreement,
the Company shall send a copy of the certificate to CRT and CRT
shall (subject to Clause 6.3) within thirty (30) days of the date
of receipt of the certificate pay the shortfall to the Company and,
[***] of the sum properly payable, CRT shall also reimburse to the
Company the reasonable costs and expenses of the Company in making
the inspection.
6.3
If within fifteen
(15) days of the date of receipt by CRT any certificate produced
pursuant to Clause 6.2 CRT notifies the Company in writing that it
disputes the certificate, the dispute shall be referred for
resolution by Accountancy Opinion in accordance with Clause
12.1.
7.1
As of the Effective
Date and subject to any notices served pursuant to Clause 8.2.11 of
the CTOA, the Company hereby restates and gives the warranties and
representations set out in Clause 8.2 of the CTOA (save that
references in such provisions to: (i) the “Agreement”
shall mean this Agreement not the CTOA; (ii) to rights granted to
the Charity shall mean rights granted to CRT; and (iii) to the
“Commencement Date” shall mean the Effective Date). In
addition, the Company shall give as much notice as practicable to
CRT if the XOMA Licence is liable to be, or is summarily
terminated, and at CRT’s request use its commercially
reasonable endeavours to facilitate a continuance and an assignment
of the XOMA Licence to CRT.
7.2
CRT will be
responsible for paying directly to XOMA (US) LLC any XOMA Licence
Payments incurred after the Effective Date, in each case in
accordance with the terms of the XOMA Licence insofar as such XOMA
Licence Payments are triggered by, and only by, CRT or any of its
Sub-Licensee(s) or Affiliates. Each XOMA Licence Payment paid by
CRT shall be a Direct Cost. The Company will remain solely
responsible for all XOMA Licence Payments incurred prior to the
Effective Date.
8.
MANAGEMENT
AND EXPLOITATION
8.1
The filing,
prosecution, maintenance, enforcement and defence of any Company
Intellectual Property and further development and commercial
exploitation thereof shall be at the sole discretion of
CRT.
9.1
Subject to the
other provisions of this Clause 9, each Party undertakes that both
during and after termination of this Agreement, it will keep
confidential and not disclose to any person other than to its
officers, employees or professional advisors whose province it is
to know, any confidential proprietary information of the other
Party disclosed to or obtained by it in connection with this
Agreement. For these purposes, Company Know-How shall be deemed to
be the confidential information of CRT but only to the extent such
Company Know-How pertains solely or directly to the Licensed
Product and the Field. Additionally, subject to the provisions of
Clause 9.2, any information of the Charity (and any charitable body
succeeding to it) disclosed to or obtained by the Company in
connection with this Agreement shall be deemed to be the
confidential information of the Charity.
9.2
With the exception
of Company Know-How which the Company shall keep confidential in
accordance with Clause 9.1, Clause 9.1 shall not apply
to:
9.2.1
information which
is or was already known to the receiving Party at the time of
disclosure under this Agreement, as shown by the receiving
Party’s written records, without any obligation to keep it
confidential;
9.2.2
information which
at the time of being disclosed or obtained by the receiving Party
under this Agreement or at any time thereafter, is published or
otherwise generally available to the public other than due to
default by the receiving Party of its obligations hereunder;
or
9.2.3
information which
is required to be disclosed by a competent Court or regulatory
authority or otherwise by applicable law or statute or any rule or
regulation of any Regulatory Authority or other government or
administrative agency or authority, to the extent of such
disclosure, provided that the receiving Party shall give notice of
such disclosure as soon as reasonably practicable.
9.3
Clause 9.1 above
shall not apply to the use or disclosure of any information by any
Party for the purpose of exercising or enforcing its rights under
this Agreement.
9.4
Each Party will
ensure that all personnel and third parties to whom confidential
information of another Party is disclosed are informed of the
provisions of this Clause 9.
9.5
So long as this
Agreement remains in effect, as between CRT and the Company only,
clause 5 of the CTOA shall cease to operate and this Clause 9 shall
replace and supersede the obligations and rights of CRT and the
Company only under such clause 5 of the CTOA.
10.1
The Company
represents and warrants to CRT that to the best of its knowledge
and belief:
10.1.1
it is not aware of
any inventors of the Company Patent Rights other than the inventors
named therein;
10.1.2
it is the legal and
beneficial owner of the Company Intellectual Property free of any
third party rights or encumbrances;
10.1.3
it has not and will
not enter into any Agreement which prevents it fulfilling its
obligations under this Agreement;
10.1.4
it has not done
anything whereby the whole or any part of the rights assigned or
licensed under the Agreement might be invalidated or registration
of them refused;
10.1.5
the manufacture,
use and possession of the Investigational Medicinal Product by CRT
or any person authorised by CRT shall not infringe the rights
(including without limitation any Intellectual Property Rights) of
any third party; and
10.1.6
it has not done or
omitted to do anything with respect to the Investigational
Medicinal Product which may materially prejudice the further
development of the Investigational Medicinal Product or adversely
affect any application which may be made to any regulatory
authority concerned with the approval of medicinal products and
their sale.
10.2
Nothing in this
Agreement shall be treated as imposing on CRT any liability to the
Company in relation to the further development and commercial
exploitation of the Investigational Medicinal Product or the
Company Intellectual Property.
11.1
This Agreement
shall come into force on the Effective Date and shall extend for so
long as CRT has the potential to receive Gross Revenue and/or
Royalties.
12.1
Insofar as this
Agreement provides that a matter shall be resolved by Accountancy
Opinion or Expert Opinion the opinion of such expert (who shall act
as an expert and not as an arbitrator) shall be final and binding
on the Parties. In the event of a Party seeking an Accountancy
Opinion or Expert Opinion under this Agreement, each Party shall
make written submissions to the expert so appointed and to the
other Party within fourteen (14) days of the appointment. Each
Party shall have seven (7) days to respond to the other’s
submissions. The expert shall be requested to deliver his
Accountancy Opinion or Expert Opinion within a further thirty (30)
days. The costs of any Accountancy Opinion or Expert Opinion shall
be borne in such proportions as the expert may determine in his
opinion to be fair and reasonable in all the circumstances or, if
no such determination is made in the opinion, by the Parties in
equal proportions.
12.2
It shall be a
condition precedent to the commencement of any action in court or
other tribunal (save an action for an interim injunction or an
Expert Opinion sought under Clause 12.1) in respect of any dispute
relating to this Agreement that the Parties have sought to resolve
the dispute by either Party notifying the other Party in writing
for resolution to the Chief Executive Officer (in the case of CRT)
and the Chief Executive Officer (in the case of the Company) (or
their express delegates) (the “Senior Executives”) who
shall meet (whether in person or via teleconference) within twenty
one (21) days of such notice to seek resolution in good faith. If
the Senior Executives are unable to resolve the dispute at such
meeting, either Party may pursue any remedy available to such Party
at law or in equity, subject to the terms and conditions of this
Agreement and the other agreements expressly contemplated
hereunder.
13.1
The surviving terms
and conditions of the CTOA shall, in accordance with its terms,
continue in full force and effect.
13.2
This Agreement
shall be governed by and construed in accordance with English law
and each Party agrees to submit to the exclusive jurisdiction of
the English courts (except in respect of disputes under Clause 9
where jurisdiction is non-exclusive).
13.3
This Agreement may
be executed in any one or more number of counterpart agreements, as
scanned email attachments, and all signatures and counterparts so
exchanged shall be considered as original and shall be deemed to
form part of and together constitute this Agreement.
IN WITNESS
whereof this document is executed by the parties
on the date stated at the beginning of this Agreement through their
authorised signatories
Signed
by:
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_____________________________________
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Name:
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_____________________________________
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Title:
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_____________________________________
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For
and on behalf of
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CANCER RESEARCH TECHNOLOGY LIMITED
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Signed
by:
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_____________________________________
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Name:
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_____________________________________
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Title:
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_____________________________________
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For
and on behalf of
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MONOPAR THERAPEUTICS LLC
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ANNEX 1A
COMPANY PATENT RIGHTS
[Drafting note – Annex 1A to include those patents identified
in schedule 1 of the CTOA and any applications made during the term
of the CTOA relating to the Investigational Medicinal Product and
its use (e.g. formulation, manufacturing, etc.)]
PATENT/
APPLICATION NUMBER
|
TITLE
|
TERRITORY
|
FILING
DATE
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ANNEX 1B
COMPANY COMBINATION PATENT RIGHTS
PATENT/
APPLICATION NUMBER
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TITLE
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TERRITORY
|
FILING
DATE
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ANNEX 2
COMPANY KNOW-HOW
ANNEX 3
COMPANY MATERIALS
Schedule 6
Protocol
(copy
of protocol to be inserted here)
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential treatment has been approved with
respect to the omitted information, pursuant to an Order dated
January 8, 2018.
Schedule
7
Company Materials
(insert
list of materials to be provided by the Company to the
Charity)
[***];
purified huATN-658 reference material.
Schedule 7 - Part 2
Company GMP Materials
(insert
list of GMP materials to be provided by the Company to the
Charity)
[***].
Schedule 8
Back-Up Antibodies
The
[***] known as [***], each of which is owned by the Company but, as
at the Commencement Date, are held by XOMA at its
premises.
Schedule 9
XOMA Licence
(copy
of XOMA Licence to be inserted here)
Schedule 10
Progress Reports
Schedule 11
Clinical Protocol Summary
(To be added to this Agreement within 3 months of
signing)
Schedule 12
Escrow Agreement
ESCROW AGREEMENT
THIS AGREEMENT
is made the ________ day of ________ 2015
(the “
Effective
Date
”)
AMONG:
CANCER RESEARCH UK
a company limited by guarantee registered
under number 4325234 and a charity registered under number 1089464
of Angel Building, 407 St. John Street, London, EC1V 4AD, England
(the “
Charity
”);
CANCER RESEARCH TECHNOLOGY LIMITED
a company registered in
England and Wales with number 1626049 and registered office at
Angel Building, 407 St. John Street, London, EC1V 4AD, England
(“
CRT
”);
MONOPAR THERAPEUTICS LLC
, a limited liability company
registered in/incorporated in/ established under the laws of The
State of Delaware, U.S.A., with registered office/principal place
of business at 598 Rockefeller Road, Lake Forest, Illinois, U.S.A.,
60045 (the “
Company
”); and
[NAME]
, as the escrow agent (the “
Escrow Agent
”).
WHEREAS:
(A)
The Charity, CRT and the Company have entered into that
certain
CLINICAL TRIAL AND OPTION
AGREEMENT
(the “
CTOA
”), a true copy of which (as
executed) is attached hereto as
Exhibit A
, incorporated herein by
reference and made a part of this Agreement;
(B)
The Charity, CRT and the Company further intend that the
Company shall hold in escrow, throughout the Escrow Period, Eight
Hundred Thousand Dollars ($800,000.00 USD) as collateral for the
liabilities of the Company under the CTOA (“
Escrow
Consideration
”);
NOW IT IS HEREBY AGREED
as follows:
1.
Escrow.
1.1
Escrow Fund
. The
Escrow Agent shall immediately establish and open an account to
receive, invest, hold and disburse the funds that constitute (i)
the Escrow Consideration (the “
Escrow Fund
”) and (ii) the Escrow
Earnings (defined below). That account is referred to as the
“
Escrow
Account
”.
1.2
Appointment
. CRT,
the Charity, and the Company hereto hereby appoint, and the Escrow
Agent hereby accepts such appointment as, and agrees to act
throughout the Escrow Period as, the escrow agent to hold,
safeguard and disburse the Escrow Fund and the Escrow Earnings
(defined below) pursuant to the terms and conditions
hereof.
1.3
Deposit
. Within
fourteen (14) days of the Effective Date, the Company shall deposit
the Escrow Consideration in the Escrow Account and provide written
evidence of the same to CRT and the Charity.
1.4
Investment of the Escrow
Consideration
.
(a) The
Escrow Agent agrees to invest and reinvest funds in the Escrow
Account, but only upon written instruction signed by an authorized
agent of the Company, and only in one or more of the following
investments (the “
Permitted
Investments
”) from time to time: (i) bank accounts;
(ii) bank money-market accounts; (iii) short-term certificates of
deposit; or (iv) short-term securities issued or guaranteed by the
United States government.
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential treatment has been approved with
respect to the omitted information, pursuant to an Order dated
January 8, 2018.
(b) The
Company, the Charity, and CRT recognize and agree that the Escrow
Agent will not provide supervision, recommendations or advice
relating to either the investment of moneys held in the Escrow
Account or the purchase, sale, retention or other disposition of
any Permitted Investment. Interest and other earnings on Permitted
Investments shall be added to the Escrow Account and disbursed in
accordance with Sections 4 and 5 hereof. Without prejudice to
Section 2, any loss or expense incurred as a result of an
investment will be borne by the Escrow Account. In the event that
the Escrow Agent does not receive directions to invest funds held
in the Escrow Account, the Escrow Agent shall invest such funds in
bank money-market accounts.
(c) The
Escrow Agent is hereby authorized to execute purchases and sales of
Permitted Investments through the facilities of its own trading or
capital markets operations or those of any affiliated entity. The
Escrow Agent shall send statements to the Company hereto on a
monthly basis reflecting activity in the Escrow Account for the
preceding month. Although the Company recognizes that it may obtain
a broker confirmation or written statement containing comparable
information at no additional cost, the Company hereby agrees that
confirmations of Permitted Investments are not required to be
issued by the Escrow Agent for each month in which a monthly
statement is rendered. No statement need be rendered for the Escrow
Account if no activity occurred for such month. The Company shall
send statements to CRT hereto on a quarterly basis stating the
balance of funds in the Escrow Account for the preceding
quarter.
(d) The
Escrow Agent shall sell or redeem any Permitted Investments as
necessary to make any payments or distributions required under this
Agreement. The Escrow Agent shall have no responsibility or
liability for any loss which may result from any investment made
pursuant to, and in accordance with, this Agreement, or for any
loss resulting from the authorized sale of such
investment.
(e)
Proceeds of the sale of investments will be delivered on the
business day on which the appropriate instructions are received by
the Escrow Agent if received prior to the deadline for same day
sale of such permitted investments. If such instructions are
received after the applicable deadline, proceeds will be delivered
on the next succeeding business day.
(f)
Investments will be made promptly following the availability of
such funds to the Escrow Agent taking into consideration the
regulations and requirements (including investment cut-off times)
of the Federal Reserve wire system, any investment provider and the
Escrow Agent.
(g) The
Company, the Charity, and CRT shall furnish the Escrow Agent with a
completed Form W-8 or Form W-9, as applicable.
1.5
Purpose of the Escrow
Fund
. The Escrow Fund shall be held by the Escrow Agent to
provide a source of collateral for the liabilities of the Company
under the CTOA.
1.6
Escrow Period
. The
“
Escrow Period
”
shall mean the period commencing on the Effective Date and ending
on the earlier of:
(i) the
date that [***];
(ii) by
mutual written agreement between the Company, CRT, and the Charity
to terminate this Agreement for any reason; or
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential treatment has been approved with
respect to the omitted information, pursuant to an Order dated
January 8, 2018.
(iii)
five (5) years from the Effective Date of the CTOA;
(the
“
Claim Expiration
Date
”); provided that if there are any Claims that are
not Resolved at the end of such period, the Escrow Period shall
extend automatically beyond the Claim Expiration Date and continue
until such time as all Claims have been Resolved.
The
Company, CRT, and the Charity shall jointly deliver to Escrow Agent
written notice upon the end of the Escrow Period, unless it has
been five (5) years since the Effective Date of the CTOA, in which
case no notice is required.
“
Resolved
” shall mean, in respect
of a Claim, that the Claim has been (i) agreed in writing between
the Company, the Charity and CRT as to both liability and quantum;
(ii) finally determined (as to both liability and quantum) pursuant
to Section 5 or, if applicable, by a court of competent
jurisdiction from which there is no right of appeal, or from whose
judgment the relevant Party is debarred (by passage of time or
otherwise) from making an appeal, including in situations where the
Claim relates to a third party claim brought against the Charity,
CRT or a Charity Indemnitee; or (iii) unconditionally withdrawn by
the Charity and CRT in writing; and, in each case, all sums due to
the Charity or CRT under this Agreement in respect of such Claim
have been paid.
1.7
Instructions
. All
instructions required under this Agreement will be delivered to
Escrow Agent in writing, in either original or facsimile form,
executed by an authorized person of each of the Company, CRT, and
the Charity. Escrow Agent reserves the right to telephone an
authorized person to confirm the details of such instructions or
documents.
1.8
Taxes and Income
Distributions
.
(a)
Ownership of Funds in
Escrow
. For U.S. federal income tax purposes, the parties
hereto agree that the Company shall be treated as owning the funds
in the Escrow Fund.
(b)
Treatment of Escrow Fund
Earnings
. The Company shall include in its taxable income
all interest, dividends and other income earned on the amounts in
the Escrow Fund (the “
Escrow
Earnings
”), and the Escrow Agent shall make
distributions to the Company (“
Income Distributions
”), at the end
of each calendar quarter and upon the final distribution out of the
Escrow Fund, [***]; provided that in no circumstance shall Income
Distributions result in the Escrow Fund falling below eight hundred
thousand US dollars ($800,000 USD).
2.
Maintenance of Escrow
Fund
.
2.1
Minimum
. The
Company shall ensure at all times during the Escrow Period that the
Escrow Fund is at least equal to the difference between (i) the
amount of
eight hundred
thousand US dollars ($800,000 USD), and (ii) [***]
in
connection with Claims made under Section 5.1 (the
“
Escrow
Balance
”). The Company shall also ensure at all times
during the Escrow Period that the Escrow Balance is available for
payment to the Charity or CRT in connection with Claims allowed
under Section 5.
2.2
Additional
Deposits
. If, for any reason, at any time during the Escrow
Period the Escrow Fund is less than the Escrow Balance, the Company
shall immediately make any additional deposits in the Escrow
Account, and take any other steps, needed to ensure that it meets
its obligations under Section 2.1.
3.
Fees
. The Escrow
Agent shall be entitled to receive a fee for its services under
this agreement. The fee shall be ____________________. Fees are
payable by the Company and shall not be paid out of or deducted
from the Escrow Fund.
4.
Disbursement
.
Promptly after the Escrow Period, the Escrow Agent shall deliver to
the Company all funds remaining in the Escrow Fund.
5.
Claims Upon the Escrow
Fund
;
Objections to
Claims
;
Resolution
of Conflicts
.
5.1
Claims Upon Escrow
Fund
. By written notice to the Escrow Agent and the Company,
CRT and the Charity shall have the right to make a Claim upon the
Escrow Fund at any time during the Escrow Period before 5:00 p.m.
Eastern Standard Time on the Claim Expiration Date upon any failure
by the Company to fully discharge any of its obligations under, or
fully meet its liabilities arising under or in connection with, the
CTOA (each, a “
Claim
”), including
if:
(a) the
Company fails to fully discharge its obligations under Clause 9.2
of the CTOA. Subject to Clause 13 of the CTOA, CRT or the Charity,
but not both, shall have the right to receive from the Escrow Agent
an amount out of the Escrow Fund equal to the amount the Company
has failed to cover to fully discharge its obligations under Clause
9.2 of the CTOA. Such right shall include the right of the Charity
or CRT to make Claims on behalf of Charity Indemnitees, and receive
from the Escrow Agent an amount out of the Escrow Fund equal to the
amount payable by the Company to Charity Indemnitees, under the
CTOA; and
(b) the
Company fails to pay amounts owed to the Charity under Clause
12.2.2 of the CTOA upon termination of the CTOA by CRT or the
Charity pursuant to Clause 11.2 or 11.4. Subject to Clause 13 of
the CTOA, CRT or the Charity, but not both, shall have the right to
receive from the Escrow Agent an amount out of the Escrow Fund
equal to the amount the Company owes the Charity.
The
Charity’s and CRT’s rights under this Section 5.1 are
subject to Section 5.4.
5.2
Objections to
Claims
.
(a) At
the time of delivery of a written notice of a Claim to the Escrow
Agent and the Company by CRT or the Charity, and for a period of
twenty (20) days after such delivery is made to the Company, the
Escrow Agent shall make no delivery to CRT, the Charity, or the
Charity Indemnitees of any amount from the Escrow Fund pursuant to
Section 5.1 hereof unless the Escrow Agent shall have received
written authorization from the Company to make such delivery. After
the expiration of such twenty (20) day period, the Escrow Agent
shall pay and deliver funds (in US dollars) claimed by the Charity
or CRT from the Escrow Fund to an account designated by the Charity
or CRT; provided, however, that no such payment or delivery may be
made if the Company shall object in a written statement to the
Claim made in the written notice, and such statement shall have
been delivered to the Escrow Agent, the Charity and CRT prior to
the expiration of such twenty (20) day period.
(b) The
Company shall furnish CRT and the Charity with detailed written
reason(s) for its objection at the same time as it delivers its
objection to any Claim.
(c) The
Company shall not unreasonably object to any Claim made to the
Escrow Agent by CRT or the Charity, including by making any
objection that has no reasonable prospect of being upheld if
referred to arbitration.
5.3
Resolution of
Conflicts
;
Arbitration
.
(a) In
case the Company shall object in writing to any Claim or Claims
made in any written notice by CRT or the Charity, the Company, CRT,
and the Charity shall attempt in good faith to agree upon the
rights of the respective parties with respect to each of such
Claims. If the Company, CRT, and the Charity should so agree, a
memorandum setting forth such agreement shall be prepared and
signed by the parties and shall be furnished to the Escrow Agent.
The Escrow Agent shall be entitled to rely on any such memorandum
and distribute funds or withhold payments from the Escrow Fund in
accordance with the terms thereof.
(b) If
no such agreement can be reached within twenty (20) business days
after delivery of the Company’s written objection to CRT or
the Charity’s Claim in the written notice notwithstanding
good faith negotiation, any of the Company, CRT or the Charity may
demand arbitration of the matter. The Company, CRT, or the Charity
shall, within twenty (20) days of the demand, mutually select one
independent arbitrator with at least five (5) years relevant
experience; provided, however, that if the Company, CRT, and the
Charity cannot agree upon one arbitrator during such twenty (20)
day period, the Company, on the one hand, and CRT and the Charity,
on the other, shall, within five (5) days following such twenty
(20) day period, each select one arbitrator and the two arbitrators
so selected shall select a third arbitrator, each of which
arbitrators shall be independent and have at least five (5) years
relevant experience. The arbitrator(s) shall set a limited time
period and establish procedures designed to reduce the cost and
time for discovery to the extent possible while allowing the
parties an opportunity, adequate in the sole judgment of the
arbitrators, to discover relevant information from the opposing
parties about the subject matter of the dispute. The arbitrator(s)
shall rule upon motions to compel or limit discovery and shall have
the authority to impose sanctions, including attorneys’ fees
and costs, should the arbitrator(s) determine that discovery was
sought without substantial justification or that discovery was
refused or objected to without substantial justification. The
decision of the arbitrator (or, in the case of three arbitrators, a
majority of the three arbitrators) as to the validity and amount of
any Claim in such written notice shall be binding and conclusive
upon the parties to this Agreement, and notwithstanding anything in
Section 5.2 hereof, the Escrow Agent shall act in accordance with
such decision and make or withhold payments out of the Escrow Fund
in accordance therewith. Such decision shall be written and shall
be supported by written findings of fact and conclusions which
shall set forth the award, judgment, decree or order awarded by the
arbitrator(s). The arbitrator(s) shall also have the authority to
award additional sums to the Charity and CRT, and reimbursement of
attorneys’ fees and costs, should the arbitrator(s) determine
that the objection had no reasonable prospect of being
upheld.
(c)
Judgement upon any award rendered by the arbitrators may be entered
in any court having jurisdiction. Any such arbitration shall be
held in London, England, under the International Arbitration Rules
of the International Centre for Dispute Resolution then in
effect.
(d)
Each party shall bear its own fees and costs in connection with the
arbitration. The fees, costs and expenses of the arbitrator(s), if
any, shall be apportioned between the Company, on the one hand, and
CRT and the Charity, on the other, based upon the inverse
proportion of the amount of disputed items resolved in favor of
such party (i.e., so that the prevailing party bears a lesser
amount of such fees and expenses).
5.4
Limit
. The maximum
aggregate amount that the Charity and CRT may claim, and that is
payable to them, from the Escrow Account to satisfy any and all
Claims made under this Agreement shall be
eight hundred
thousand US dollars ($800,000 USD)
. The rights granted under
this Agreement are in addition to, and not instead of, any rights
of the Charity and CRT under or in connection with the CTOA,
whether under contract, statute or tort. Nothing in this Agreement
shall, or is intended to, limit such rights, including where sums
paid under this Agreement do not fully discharge the
Company’s liabilities.
6.
Limitation on Escrow
Agent’s Liability
. The Escrow Agent’s
responsibilities and liabilities shall be limited as
follows:
6.1 The
Escrow Agent shall not be responsible for or be required to enforce
any of the terms or conditions of the CTOA or any other agreement
between the parties thereto. The Escrow Agent shall not be
responsible or liable in any manner whatsoever for the performance
by the Company, CRT, or the Charity of their respective obligations
under the CTOA or this Agreement, nor shall the Escrow Agent be
responsible or liable in any manner whatsoever for the failure of
any party to the CTOA to honor any of the provisions of the
CTOA.
6.2 The
duties and obligations of the Escrow Agent shall be limited to and
determined solely by the express provisions of this Agreement and
the CTOA, and no implied duties or obligations shall be read into
this Agreement against the Escrow Agent. The Escrow Agent shall
neither be responsible for, nor chargeable with, knowledge of the
terms and conditions of any other agreement, instrument or document
other than this Escrow Agreement or the CTOA, whether or not a copy
and/or original of such agreement is held by Escrow Agent; and, the
Escrow Agent shall have no duty to know or inquire as to the
performance or nonperformance of any provision of any such
agreement, instrument or document. This Escrow Agreement sets forth
all matters pertinent to the escrow contemplated hereunder, and no
additional obligations of the Escrow Agent shall be inferred from
the terms of this Escrow Agreement or any other agreement,
instrument or document. All references in this Escrow Agreement to
any other agreement (other than the CTOA) are for the convenience
of the parties other than the Escrow Agent, and the Escrow Agent
has no duties or obligations with respect thereto.
6.3 The
Escrow Agent shall be entitled to rely upon and shall be protected
in acting in reliance upon any instruction, notice, information,
certificate, instrument or other document which is submitted to it
in connection with its duties under, and in accordance with, this
Agreement and which the Escrow Agent in good faith believes to have
been signed or presented by the proper party or parties. The Escrow
Agent shall have no liability with respect to the form, execution,
validity or authenticity thereof.
6.4 The
Escrow Agent shall be entitled to consult, at its own cost, with
independent counsel of its own selection and the opinion of such
counsel shall be full and complete authorization and protection to
the Escrow Agent in respect of any action taken or omitted by the
Escrow Agent hereunder in good faith and in accordance with the
opinion of such counsel, unless caused by or arising from its own
fraud, gross negligence or willful misconduct.
6.5 The
Escrow Agent shall have no responsibility or liability for any
diminution in value of any assets held under this agreement which
may result from any investments or reinvestments made in accordance
with any provision which may be contained in this
agreement.
6.6 The
Escrow Agent shall not be liable for any action taken or omitted
under this Agreement while acting in good faith, unless caused by
or arising from its own fraud, negligence or
misconduct.
6.7 The
Escrow Agent shall have the right to perform any of its duties
hereunder through custodians or nominees, and shall be liable for
all acts and omissions of such custodians or nominees as if they
were acts or omissions of the Escrow Agent.
6.8 Any
banking association or corporation into which the Escrow Agent may
be merged, converted or with which the Escrow Agent may be
consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Escrow Agent shall be a
party, or any banking association or corporation to which all or
substantially all of the corporate trust business of the Escrow
Agent shall be transferred, shall succeed to all of the Escrow
Agent’s rights, obligations and immunities hereunder without
the execution or filing of any paper or any further act on the part
of any of the parties hereto, anything herein to the contrary
notwithstanding.
6.9 The
Escrow Agent shall have the right at any time to resign for any
reason and be discharged of its duties as Escrow Agent hereunder by
giving written notice of its resignation to the parties hereto at
least thirty (30) calendar days prior to the date specified for
such resignation to take effect. In addition, the Company, the
Charity and CRT may remove the Escrow Agent as escrow agent at any
time with or without cause, by an instrument given to the Escrow
Agent, which instrument shall be signed by each of the Company, the
Charity and CRT and shall designate the effective date of such
removal. In the event of any such resignation or removal, a
successor escrow agent which, unless the Company, CRT, and the
Charity otherwise agree in writing, shall be a bank or trust
company organized under the laws of the United States of America or
of the State of Illinois shall be appointed by Company with the
approval of CRT and the Charity, which approval shall not be
unreasonably delayed, conditioned, or withheld. Any such successor
escrow agent shall deliver to Company, CRT and the Charity a
written instrument accepting such appointment, and thereupon it
shall succeed to all the rights and duties of the Escrow Agent
hereunder and shall be entitled to receive the Escrow Fund. All
responsibilities of the Escrow Agent hereunder shall cease and
terminate on the effective date of its resignation or removal and
its sole responsibility thereafter shall be to hold the Escrow Fund
for a period of thirty (30) calendar days following the effective
date of resignation or removal, at which time:
(1) if
a successor Escrow Agent shall have been appointed and written
notice thereof shall have been given to the resigning or removed
Escrow Agent by parties hereto and the successor Escrow Agent, then
the resigning Escrow Agent shall deliver the remaining Escrow Fund
to the successor Escrow Agent; or
(2) if
a successor Escrow Agent shall not have been appointed, for any
reason whatsoever, the resigning or removed Escrow Agent shall
deliver the Escrow Fund to a court of competent jurisdiction in the
County of New York, New York and give written notice of the same to
Company, CRT, and the Charity.
6.10 In
the event that the Escrow Agent shall be uncertain as to its duties
or rights hereunder or shall receive instructions with respect to
the Escrow Fund, which, in its sole discretion, are in conflict
either with other instructions received by it or with any provision
of this Agreement, the Escrow Agent shall have the absolute right
to suspend all further performance under this Agreement (except for
the safekeeping and investment of the Escrow Fund) until such
uncertainty or conflicting instructions have been resolved by
alternative dispute resolution, to the Escrow Agent’s sole
satisfaction, pursuant to Section 7 hereof or by final judgment of
a court of competent jurisdiction, joint written instructions
executed by all parties hereto, or otherwise. In the event that any
controversy arises between one or more of the parties hereto or any
other party with respect to this Agreement and/or the Escrow Fund,
the Escrow Agent shall not be required to determine the proper
resolution of such controversy or the proper disposition of the
Escrow Fund. In such event, and without the consent or
approval of any other party, (i) the Escrow Agent shall have the
absolute right, in its sole discretion, to deposit; and (ii) the
Company shall have the absolute right, in its sole discretion, to
require the Escrow Agent to deposit, the cash remaining in the
Escrow Fund with the clerk of a court of competent jurisdiction
specified in Section 6 hereof, file a suit in interpleader in that
court and obtain an order from that court requiring all parties
involved to resolve their respective claims to the Escrow Fund
pursuant to Section 6. Upon the deposit by the Escrow Agent of the
Escrow Fund with the clerk of that court in accordance with this
provision, the Escrow Agent shall be relieved of all further
obligations, and the Company shall have no obligation to restore
the Escrow Balance under Section 2.
6.11
The Company shall indemnify and hold the Escrow Agent harmless from
and against all liabilities, causes of action, claims, demands,
judgments, damages, reasonable costs and expenses that may arise
out of or in connection with the Escrow Agent’s good faith
acceptance of and performance of its duties and obligations under
this Agreement, except to the extent related to acts or omissions
of the Escrow Agent in bad faith constituting fraud, gross
negligence or willful misconduct or otherwise in breach of this
Agreement. The provisions of this Section 6.11 shall survive the
resignation or removal of the Escrow Agent and the termination of
this Agreement.
7.
Dispute
Resolution/Governing Law
.
7.1
This Agreement shall be governed by and construed in accordance
with the laws of the State of New York without giving effect to the
principles of conflicts of laws (other than Section 5-1401 of the
New York General Obligations Law).
7.2
Subject to Section 5.3(c), the parties hereto intend that all
disputes between the parties arising out of or related to this
Agreement shall be settled by the parties amicably through
good-faith discussions upon the written request of any
party.
7.3 In
the event that any such dispute cannot be resolved thereby within a
period of twenty (20) days after such notice has been given, such
dispute shall be resolved by binding arbitration, which shall take
place in the County of New York, New York, administered by and in
accordance with the then-existing International Arbitration Rules
of the International Centre for Dispute Resolution.
7.4 An
award rendered in connection with an arbitration pursuant to this
Section 7 shall be final and binding upon the parties, and the
parties agree and consent that the arbitral award shall be
conclusive proof of the validity of the determinations of the
arbitrations set forth in the award, and judgment upon any award
rendered by the arbitrators may be entered by any state or federal
court having jurisdiction thereof.
7.5
This Section 7 is subject to the terms of Section 10
hereof.
8.
Notices
. All
notices and other communications given or made pursuant hereto
shall be in writing and shall be deemed to have been duly given or
made as of the date delivered, mailed or transmitted, and shall be
effective upon receipt, if delivered personally, mailed by
registered or certified mail (postage prepaid, return receipt
requested) or sent by fax (with immediate confirmation) or
internationally recognized overnight courier service, as
follows:
If to
the Company, to:
Monopar
Therapeutics LLC
598
Rockefeller Road
Lake
Forest, IL USA 60045
Contact:
Chief Executive Officer
If to
the Charity or CRT, to:
Angel
Building
407 St.
John Street
London
EC1V 4AD
United
Kingdom
Contact:
Chief Executive Officer and Director of Centre for Drug
Development
Fax:
+44 (0) 20 3014 8633
If to
the Escrow Agent, to:
[]
[]
[]
Attn:
Fax:
9.
Interpretation and
Construction of Agreement
.
9.1
Unless the context shall otherwise require, any pronoun herein
shall include the corresponding masculine, feminine, and neuter
forms, and words using the singular or plural number shall also
include the plural or singular number, respectively. The words
“include,” “includes” and
“including” herein shall be deemed to be followed by
the phrase “without limitation” and the word
“or” shall include the meaning “either or
both.” All references herein to sections, exhibits, and
schedules shall be deemed to be references to sections of, and
exhibits and schedules to, this Agreement unless the context shall
otherwise require. The headings of the sections herein are inserted
for convenience of reference only and are not intended to be a part
of or to affect the meaning or interpretation of this Agreement.
Unless the context shall otherwise require, any reference herein to
any agreement, other instrument, statute or regulation is to such
agreement, instrument, statute or regulation as amended and
supplemented from time to time (and, in the case of a statute or
regulation, to any successor provision).
9.2 The
Company, CRT, and the Charity acknowledge that each has
participated in the drafting of this Agreement and that any rule of
construction to the effect that ambiguities are to be resolved
against the drafting party shall not be applied in the construction
or interpretation of this Agreement.
9.3 Any
reference herein to a “day” or a number of
“days” (without the explicit qualification of
“business”) shall be interpreted as a reference to a
calendar day or number of calendar days. If any action or notice is
to be taken or given on or by a particular calendar day, and such
calendar day is not a business day, then such action or notice
shall be deferred until, or may be taken or given on, the next
business day.
10.
Specific
Performance
. Each party agrees that irreparable harm, for
which there may be no adequate remedy at law and for which the
ascertainment of damages would be difficult, would occur in the
event any of the provisions of this Agreement were not performed in
accordance with its specific terms or were otherwise breached. Each
party accordingly agrees that the other parties shall be entitled
to specifically enforce this Agreement and to obtain an injunction
or injunctions to prevent breaches of the provisions of this
Agreement and to enforce specifically the terms and provisions
hereof or thereof, in each instance without being required to post
bond or other security and in addition to, and without having to
prove the adequacy of, other remedies at law.
11.
Counterpart Signatures,
Electronic Communication Delivery
. This Agreement may be
executed in one or more counterparts and delivered by electronic
communication, all of which shall be considered one and the same
agreement, and shall become effective when one or more counterparts
have been signed by each of the parties and delivered to the other
parties, it being understood that all parties need not sign the
same counterpart.
12.
Entire Agreement
.
This Agreement and the documents, instruments and other agreements
specifically referred to herein or delivered pursuant hereto (a)
constitute the entire agreement among the parties with respect to
the subject matter hereof and (b) supersede all prior agreements
and understandings, both written and oral, among the parties with
respect to the subject matter hereof.
13.
Amendment; Waiver;
Requirement of Writing
. This Agreement may be amended,
modified, superseded, rescinded, or canceled only by a written
instrument executed by the Company, CRT, the Charity, and the
Escrow Agent. Any term or condition of this Agreement may be waived
at any time by the party hereto entitled to the benefit thereof,
and any such term or condition may be modified at any time by an
agreement in writing executed by each of the parties hereto
entitled to the benefit thereof. No delay or failure on the part of
any party in exercising any rights hereunder, and no partial or
single exercise thereof, will constitute a waiver of such rights or
of any other rights hereunder.
14.
Expenses
. Each of
the parties hereto shall bear, without right of reimbursement from
any other party, all the costs incurred by it incident to the
preparation, execution, and delivery of this Agreement or the
performance of its obligations hereunder, whether or not the
transactions contemplated by this Agreement shall be
consummated.
15.
No Third-Party
Beneficiaries
. Nothing in this Agreement will be construed
as giving any person, other than the parties, their successors and
permitted assigns, any right, remedy, or claim under or in respect
of this Agreement or any provision hereof; it being acknowledged
that (i) this Section 15 is without prejudice to the rights of the
Charity Indemnitees under the CTOA; (ii) the Charity and CRT may
make Claims under this Agreement on behalf of the Charity
Indemnitees in respect of Claims made by the Charity Indemnitees
under the CTOA; and (iii) the Escrow Agent may make payments to the
Charity and/or CRT on behalf of such Charity Indemnitees in respect
of such Claims, but only after the Escrow Agent has received
written confirmation from such Charity Indemnitees of the authority
of the Charity and/or CRT to receive such payments on behalf of
such Charity Indemnitees..
16.
Disclaimer of
Agency
. Except for any provisions herein expressly
authorizing one party to act for another, this Agreement shall not
constitute any party as a legal representative or agent of any
other party, nor shall a party have the right or authority to
assume, create, or incur any liability of any kind, expressed or
implied, against or in the name or on behalf of any other party or
any of such other party’s affiliates.
17.
Relationship of the
Parties
. Nothing contained in this Agreement is intended to,
or shall be deemed to, create a partnership or joint venture
relationship among the parties hereto or any of their affiliates
for any purpose, including tax purposes.
18.
Assignment
. This
Agreement and the rights and obligations of each party hereunder or
thereunder shall be binding upon, and inure to the benefit of, the
parties hereto and their respective successors and permitted
assigns. None of the Company, CRT or the Charity shall assign this
Agreement without the prior written consent of each other, which
consent may not be unreasonably conditioned, delayed, or withheld.
Assignment by Escrow Agent shall be governed by Section 6
hereof.
19.
Severability
. In
the event that any provision of this Agreement, or the application
thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of
this Agreement will continue in full force and effect, and the
application of such provision to other persons or circumstances
will be interpreted so as reasonably to effect the intent of the
parties hereto. The parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible,
the economic, business and other purposes of such void or
unenforceable provision.
20.
Several Liability
.
The obligations and liabilities of each party under this Agreement
are several, not joint.
[Signatures on following page]
IN WITNESS
whereof this Agreement has been executed by duly
authorised officers of the parties on the day first above
written.
Signed
by:
_____________________________________
Name:
_____________________________________
Title:
_____________________________________
For and
on behalf of
CANCER
RESEARCH TECHNOLOGY LIMITED
Signed
by:
_____________________________________
Name:
_____________________________________
Title:
_____________________________________
For and
on behalf of
CANCER
RESEARCH UK
Signed
by:
_____________________________________
Name:
_____________________________________
Title:
_____________________________________
For and
on behalf of
MONOPAR
THERAPEUTICS LLC
Signed
by:
_____________________________________
Name:
_____________________________________
Title:
_____________________________________
For and
on behalf of
[
ESCROW
AGENT
]
Signature Page to Escrow Agreement
Exhibit A
Clinical
Trial and Option Agreement
Schedule 13
Technical Agreement (Standard Form)
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TECHNICAL AGREEMENT
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between
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Cancer Research UK
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and
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MONOPAR THERAPEUTICS LLC
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The
Cancer Research UK Centre for Drug Development is the Sponsor of
clinical trials where the investigational medicinal product (IMP,
including the master cell bank and bulk drug substance where
applicable) is manufactured, and/or analysed, and/or labelled,
and/or stored, and/or shipped by Cancer Research UK The Sponsor has
obligations with respect to all aspects of the management of the
IMP in the clinical trial.This document is a technical agreement
that meets the requirements of European Good Manufacturing Practice
(GMP) legislation 2003/94/EC. This document should also be
interpreted with respect to the European Clinical Trials
legislation 2001/20/EC and Eudralex Volume 4, Annex 13, paragraph
36 and 37 regarding reference and retention samples.
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The
technical agreement takes the form of a detailed check list of all
the activities associated with manufacturing, packaging, storage
and distribution of the huATN-658 master cell bank
It defines the individual
responsibilities of
Monopar
Therapeutics
and of
Cancer
Research UK
and in particular defines who is responsible for
the GMP aspects of the activities listed. Responsibility for each
activity is assigned to either party in the appropriate tick box.
If any element of the check list does not apply, it should be
clearly crossed through not left blank. More detail may be added as
necessary to clarify particular points to ensure that only one
party is responsible for each point.
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Technical Agreement Signatures
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Contract Giver
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Company
Name
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Cancer Research UK Biotherapeutics Development Unit
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Address
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Clare Hall
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Potters Bar
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Hertfordshire
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EN6 3LD
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Position
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Qualified Person
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Name
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Dr Robert Scott
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Authorised
signatory
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Date
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Company
Name
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Cancer Research UK Centre of Drug Development (Contract
Giver)
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Address
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Angel Building
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407 St John Street
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London EC1V 4AD
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Position
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Drug Supply Manager
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Name
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Dr Nigel Westwood
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Authorised
signatory
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Date
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CONTRACT ACCEPTOR
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Company
Name
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MONOPAR THERAPEUTICS LLC
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Address
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598 Rockefeller Road
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Lake Forest, Illinois
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U.S.A., 60045
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Position
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Name
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Authorised
signatory
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Date
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Authorised
signatory
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Date
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Purpose
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This
Technical Agreement assigns the responsibilities of Monopar
Therapeutics and Cancer Research UK with respect to the huATN-658
master cell bankNote: Monopar Therapeutics has outsourced the
manufacture and storage of the master cell bank. Therefore, some
aspects of these activities may be delegated by Monopar
Therapeutics to third parties. However, Monopar Therapeutics
remains responsible for oversight of those functions as outlined in
the Technical Agreement.
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[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential treatment has been approved with
respect to the omitted information, pursuant to an Order dated
January 8, 2018.
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Definitions and Acronyms
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BDU
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Biotherapeutics
Development Unit
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CA
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Contract
Acceptor
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CG
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Contract
Giver
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GMP
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Good
Manufacturing Practice
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EU
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European
Union
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EU
GMP
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European
Union current Good Manufacturing Practice as defined in directive
2003/94/EC
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IMP
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Investigational
Medicinal Product = drug product (unless otherwise stated IMP means
manufactured to EU cGMP or its equivalent)
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MCB
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[***]
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QP
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Qualified
Person
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Retention
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A
sample of a packaged unit from a batch of finished
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sample
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product
for each packaging run/trial period. It is stored for
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identification
purposes
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Reference
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A
sample of a batch in its primary packaging or finished
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sample
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product
container which is stored for the purpose of being
analysed
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should
the need arise
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Strikethrough text where responsibility is not applicable to either
party
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1.00
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RESPONSIBILITIESMaster Cell Bank (MCB)
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Monopar (CA)
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Cancer Research UK (CG)
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1.01
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Supply
to the CG copies of audit reports plus associated
corrective/preventative actions and close out documentation for the
CA's GMP contract manufacturer used to manufacture and store the
MCB
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X
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1.02
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Supply
to the CG a statement from QA confirming what GMP standard the MCB
was produced in compliance with including reference to EU GMP if
appropriate
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X
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1.03
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Supply
to the CG a Certificates of Analysis for the MCB approved, signed
and dated by QA
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X
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1.04
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CA
confirms that ≥200 of sealed vials have been stored at
-140°C (LN) that form the QA approved MCB CG provides
documentation to confirm that the vials have been stored in an area
dedicated to GMP appropriately documented and secure and completely
separate from any non tested cell banks
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X
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1.05
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Supply
copies of completed QA reviewed batch manufacturing records used in
the manufacture of the MCB
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X
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1.06
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Supply
copies to the CG of all deviations recorded during the manufacture
and storage of the MCB and any associated corrective/preventative
actions taken and documentation closing out the
deviation
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X
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1.07
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Supply
copies to CG of storage records for the MCB demonstrating that the
MCB has been stored correctly at all times since it was
frozen
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X
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[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential treatment has been approved with
respect to the omitted information, pursuant to an Order dated
January 8, 2018.
1.08
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Supply
copies to the CG of all out of specifications reported either
during the manufacture, testing or storage of the MCB and related
corrective/preventative and/or close out documentation
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X
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1.09
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Supply
to the CG a material Safety Data Sheet (if applicable) to the CG
including biological safety classification of the
[***]
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X
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1.10
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Shipment
of packaged, MCB to sponsor's licenced facility as notified by the
CG with temperature monitoring of the MCB using a suitably
qualified shipper
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X
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1.11
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Supply
to the CG data to confirm that the MCB is both mycoplasma free and
sterile when tested using validated pharmacopoieal
methods
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X
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1.12
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Supply
to the CG data on the stability and recovery of the MCB. Trended
stability data generated from the MCB shall be supplied to the CG
if available
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X
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1.13
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Confirm
receipt of the MCB on delivery to the CG and notify the CA
immediately of any breakages, packaging issues, temperature alarms
or documentation discrepancies
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X
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1.14
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CG
confirms that ≥100 of sealed vials received will be stored at
-140°C (LN) which form the QA approved CA supplied MCB CG will
store the vials in an area dedicated to GMP, which is appropriately
documented and secure and completely separate from any non tested
cell banks
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X
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1.15
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CA will
notify the CG of any Competent Authority inspection findings
directly related to the MCB when stored at the CA's
contractor
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X
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Distribution List
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Cancer Research UK Formulation Unit
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Name/Title/Duties
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Dr
Robert Scott - QA/QC Manager Cancer Research UK Biotherapeutics
Development Unit, Responsible for quality assurance at the BDU and
quality control of biologicals QP certification and release of
IMP
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Dr
Heike Lentfer - Head of BDU. Responsible for delivering the
development and manufacture of biological IMPs
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Dr
Nigel Westwood - Drug Supply ManagerAccountable for ensuring API
and IMP are available for the clinical trials Sponsored by Cancer
Research UK
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Monopar Therapeutics
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Name/Title/Duties
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Please
add names here
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[***] =
Confidential Information has been
omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
AMENDED AND RESTATED LICENSE AGREEMENT
THIS
AMENDED AND RESTATED LICENSE AGREEMENT (this “
Agreement
”), effective as
of September 24, 2014 (the “
Effective Date
”), is
entered into between Tactic Pharma, LLC, a limited liability
company (“
TACTIC
”), having offices
at 1062 Princeton Avenue, Highland Park, IL 60035 and XOMA (US)
LLC, a Delaware limited liability company (“
XOMA
”), having offices at
2910 Seventh Street, Berkeley, California 94710. Each of XOMA and
TACTIC are sometimes referred to herein separately as a
“
Party
”
and together as “
Parties
.”
WHEREAS
TACTIC was formed upon the dissolution of Attenuon, LLC, San Diego,
California, 92121 (“ATTENUON”), such that TACTIC can be
considered a successor of ATTENUON;
WHEREAS
TACTIC is the successor and rightful owner of certain IP rights
developed by ATTENUON, including, but not limited to,
ATN-658;
WHEREAS
ATTENUON and XOMA had entered into a certain HUMAN
ENGINEERING™ LICENSE AGREEMENT, effective September 29, 2006,
(the “Prior Agreement”) in which, among other things,
Attenuon, LLC obtained a license to certain HUMAN ENGINEERING
PATENT RIGHTS as described in the Prior Agreement for the purposes
of developing and commercializing human engineered
ATN-658;
WHEREAS
for the good and valuable consideration set forth in this
agreement, the Parties agree that all rights, claims, and
obligations under the Prior Agreement between Attenuon, LLC, its
successors, and XOMA are now null and void unless expressly
restated herein. Accordingly, the Parties agree that there are no
outstanding payments, liabilities, or other obligations owed by
TACTIC to XOMA under the Prior Agreement.
For
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties agree as
follows:
ARTICLE
1
DEFINITIONS
For
purposes of this Agreement, the terms defined in this Article 1
shall have the respective meanings set forth below:
1.1
“
Affiliate
” shall mean,
with respect to any Person, any other Person which, presently or in
the future, directly or indirectly controls, is controlled by, or
is under common control with, such Person.
1.2
“
Antibody
” shall mean any
immunoglobulin molecule (such as IgG), whether in monospecific or
any other form, and shall include, without limitation, any
immunoglobulin fragment (such as Fv, Fab, F(ab') or
F(ab')
2
),
any fusion protein of an immunoglobulin or immunoglobulin fragment
and any single chain antibody (such as scFv), as well as any
derivative of any of the foregoing.
[***] =
Confidential Information has been
omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
1.3
“
TACTIC Antibody
” shall
mean the non-human Antibody directed to the TACTIC Target, referred
to by TACTIC as “ATN-658”
1.4
“
TACTIC
Patent Rights
” shall have the meaning set forth in
Section 1.6.
1.5
“
TACTIC Program
Inventions
” shall have the meaning set forth in
Section 1.6.
1.6
“
TACTIC
Program Inventions and Patent Rights
” shall mean any
and all (a) Program Inventions, whether or not patentable, that (i)
comprise or embody (A) [***], (B) [***], (C) [***], (D) [***], (E)
[***] and (F) any uses of any and all of the foregoing, or (ii) do
not meet the definition of [***] by virtue of the preceding clause
(i) or the definition of [***] by virtue of clause (i) thereof and
were [***] (collectively, the “
TACTIC Program
Inventions
”); and (b) Patent Rights arising out of the
conduct of activities under the Prior Agreement that claim or cover
such TACTIC Program Inventions (the “
TACTIC Patent Rights
”).
Notwithstanding the foregoing, TACTIC Program Inventions and Patent
Rights do not include any [***] and Patent Rights;
provided
that the foregoing shall not
apply to [***] (I) [***] (II) [***] (III) [***] (IV) [***] (V)
[***] and (VI) any uses of any and all of the foregoing, each of
which shall be included in the [***] and [***].
1.7
“
TACTIC Target
” shall mean
the target antigen known as urokinase-type plasminogen activator
receptor (uPAR).
1.8
“
Combination Product
”
shall have the meaning set forth in Section 1.22.
1.9
“
Composition of Matter
”
shall mean any composition of matter or article of
manufacture.
1.10
“
Confidential
Information
” shall mean any proprietary or
confidential information or material disclosed by a Party to the
other Party pursuant to the Prior Agreement or this Agreement which
is (a) disclosed in tangible form and is designated thereon as
“Confidential” at the time it is delivered to the
receiving Party, or (b) disclosed orally and identified as
confidential or proprietary when disclosed and such disclosure of
confidential information is confirmed in writing within thirty (30)
days by the disclosing Party. Notwithstanding the foregoing,
Confidential Information shall not include information which the
receiving Party can establish by written documentation (i) to have
been publicly known prior to disclosure of such information by the
disclosing Party to the receiving Party, (ii) to have become
publicly known, without fault on the part of the receiving Party,
subsequent to disclosure of such information by the disclosing
Party to the receiving Party, (iii) to have been received by the
receiving Party at any time from a source, other than the
disclosing Party, rightfully having possession of and the right to
disclose such information, other than under an obligation
of
[***] =
Confidential Information has been
omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
confidentiality,
(iv) to have been otherwise rightfully known by the receiving Party
prior to disclosure of such information by the disclosing Party to
the receiving Party, other than under an obligation of
confidentiality, or (v) to have been independently developed by
employees or agents of the receiving Party without access to or use
of such information disclosed by the disclosing Party to the
receiving Party without violating any obligation of confidentiality
or non-use.
1.11
“
Control
,”
“
Controls
” and
“
Controlled
” shall mean,
with respect to a particular item of information or Intellectual
Property Right, that the applicable Party or any of its Affiliates
owns (whether solely or jointly with the other Party or any Third
Party), or has a license to, such item or right and has the ability
to grant to the other Party access to, and a license or sublicense
(as applicable) under, such item or right as provided for herein
without violating the terms of any agreement with any Third
Party.
1.12
“
CPR
”
shall have the meaning set forth in Section 9.2.
1.13
“
Dispute
”
shall have the meaning set forth in Section 9.1.
1.14
“
Human
Engineer™
,” “
Human Engineered™
”
and “
Human
Engineering™
” shall mean, for purposes of this
Agreement, with respect to a particular Antibody, resulting from,
or otherwise practicing, the methods of the Human
Engineering™ Patent Rights or any other proprietary protein
engineering methods used by XOMA for modifying non-human Antibodies
with the intended purpose of making them suitable for medical
purposes in humans.
1.15
“
Human
Engineered™ TACTIC Antibodies
” shall mean the
Human Engineered™ versions of the TACTIC Antibodies provided
by XOMA under the Prior Agreement.
1.16
“
Human
Engineering™ Patent Rights
” shall mean the
Patent Rights listed on
Schedule 1.16
hereto and all
patents issuing on any of the applications so listed, including
extensions, reissues and re-examinations.
1.17
“
Indemnitee
”
shall have the meaning set forth in Section 8.2.
1.18
“
Indemnitor
”
shall have the meaning set forth in Section 8.2.
1.19
“
Intellectual
Property Rights
” shall mean Patent Rights, copyrights,
trademarks, service marks, know-how, trade secrets, and
applications and registrations for the foregoing, in any country,
supranational organization or territory of the world.
1.20
"
Joint
Program Inventions
" shall mean
any and all Program Inventions, whether or not patentable, that are
invented jointly by employees, agents, consultants or contractors
of both [***], but [***].
1.21
"
Major
Market Country
" shall mean any of the United States of
America, Japan or any of the top five (5) countries (measured by
pharmaceutical sales for the most recently com pleted
calendar year for which such information is available at the time
of determination) of the European Union.
[***] =
Confidential Information has been
omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
1.22
“Milestone
Payment
” shall have the meaning set forth in Section
3.1.
1.23
“
Net
Sales
” shall mean the gross amount invoiced by TACTIC,
its Affiliates, assignees or sublicensees for sales of Products to
Third Parties,
less
the following items, as allocable to such Products:
(a)
trade discounts,
rebates or allowances actually allowed and taken directly with
respect to such sales;
(b)
credits or
allowances additionally granted upon returns, rejections, recalls
or retroactive price reductions;
(c)
freight, shipping
and insurance charges;
(d)
[***]
;
(e)
taxes, duties or
other governmental tariffs (other than income taxes);
and
(f)
government mandated
rebates.
In the
event that a Product is sold as part of a Combination Product (as
defined below) in any country, the Net Sales of the Product as part
of a Combination Product in that country for the purposes of
determining royalty payments shall be determined by multiplying the
Net Sales of the Combination Product in that country by the
fraction (A/A+B) where A is the average sale price in the relevant
quarterly period of the Product in that country when sold
separately in finished form and B is the average sale price in the
relevant quarterly period of the Other Element (as defined below)
in that country sold separately in finished form. In the event that
the average sale price of the Product in that country can be
determined but the average sale price of the Other Element in that
country cannot be determined, Net Sales of the Product in that
country for the purposes of determining royalty payments shall be
calculated by multiplying the Net Sales of the Combination Product
in that country by the fraction (C/D) where C is the selling
Party's average sales price in the relevant quarterly period of the
Product and D is the average selling price in the relevant
quarterly period of the Combination Product in that country. If the
average sale price of the Other Element in that quarterly period
can be determined but the average price of the Product in that
country cannot be determined, Net Sales of the Combination Product
in that country for the purposes of determining royalty payments
shall be calculated by multiplying the Net Sales of the Combination
Product in that country by the following formula: one
(1)
minus E/D where E is the average
selling price in the relevant quarterly period of the Other Element
in that country and D is the average selling price of the
Combination Product in that country in the relevant quarterly
period. If the average sale price of both the Product and the Other
Element cannot be deter mined, the Net Sales of the Product
shall be reasonably agreed upon by the Parties. As used herein, the
term "
Combination
Product
" shall mean a product which contains or comprises a
Product as an active component and at least one other active
compound (an "
Other
Element"
).
Provision
of Products free of charge for clinical trials, for promotional or
sampling purposes or as donations (for example to non-profit
institutions or government agencies for a non-commercial purpose)
at levels not in excess of industry norms, shall not be considered
in determining Net Sales.
[***] =
Confidential Information has been
omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
1.24
“
Patent
Prosecution
” shall mean, with respect to particular
Patent Rights, (a) preparing, filing and prosecuting patent
applications (including, but not limited to, provisional,
non-provisional, reissue, reexamination, continuing, continuation,
continuation-in-part, divisional, and substitute applications and
any foreign counterparts thereof) of such Patent Rights; (b)
maintaining such Patent Rights; and (c) managing or conducting any
interference or opposition or similar proceedings relating to the
foregoing.
1.25
“Patent
Rights
” shall mean any of the following, whether
existing now or in the future anywhere in the world:
(a) patents and patent applications; (b) continuations,
continuations-in-part, divisionals and substitute applications with
respect to any such patent application; (c) any patents issued
based on or claiming priority to any such patent applications;
(d) any reissue, reexamination, renewal or extension
(including any supplemental patent certificate) of any such
patents; and (e) any confirmation patent or registration patent or
patent of addition based on any such patents.
1.26
“
Person
”
shall mean an individual, corporation, partnership, limited
liability company, trust, business trust, association, joint stock
company, joint venture, pool, syndicate, sole proprietorship,
unincorporated organization, governmental authority or any other
form of entity or organization not specifically listed
herein.
1.27
“
Product
”
shall mean
any Composition of Matter
that comprises or contains
the Human Engineered™
Tactic Antibodies
or any derivatives,
conjugates and/or fragments thereof.
1.28
"
Program
Invention
" shall mean any invention (whether or not
patentable), discovery, Composition of Matter, improvement,
enhancement, technology, data or information made or conceived in
connection with the conduct of activities pursuant to the Prior
Agreement.
1.29
“
PTO
”
shall have the meaning set forth in Section 5.4(c).
1.30
“
Term
”
shall have the meaning set forth in Section 7.1.
1.31
“
Third
Party
” shall mean any Person other than XOMA or TACTIC
or their Affiliates.
1.32
“
Title
XI
” shall have the meaning set forth in Section
11.2.
1.33
“
Valid
Claim
” shall mean (a) a claim of an issued and
unexpired patent which has not been held permanently revoked,
unenforceable or invalid by a decision of a court or other
governmental agency of competent jurisdiction, unappealable or
unappealed within the time allowed for appeal and that is not
admitted to be invalid or unenforceable through reissue, disclaimer
or otherwise, or (b) a claim (including amendments) of a pending
patent application that has neither (i) been abandoned or finally
rejected without the possibility of appeal or refiling nor (ii)
been pending for more than [***],
provided
that any claim excluded from
this definition in reliance on this clause (b)(ii) that
subsequently issues shall constitute a Valid Claim so long as it
meets the requirements of clause (a) above.
[***] =
Confidential Information has been
omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
1.34
"
XOMA
Deliverables
" shall mean the XOMA materials and information
delivered to ATTENUON under the Prior Agreement.
1.35
“
XOMA
Patent Rights
” shall have the meaning set forth in
Section 1.37.
1.36
“
XOMA
Program Inventions
” shall have the meaning set forth
in Section 1.37.
1.37
“
XOMA
Program Inventions and Patent Rights
” shall mean any
and all (a) Program Inventions, whether or not patentable, that (i)
comprise or embody (A) [***] (B) methods that are generally
applicable to the [***] or (ii) do not [***] and were invented
solely by employees, agents, consultants or contractors of [***]
(collectively, the “
XOMA Program
Inventions
”); and (b) all Patent Rights arising out of
the conduct of activities under the Prior Agreement that claim or
cover such XOMA Program Inventions (the “
XOMA Patent
Rights
”).
ARTICLE
2
INTELLECTUAL PROPERTY RIGHTS
2.1
License Grants to TACTIC
. XOMA
hereby grants to TACTIC:
(a)
a worldwide,
non-exclusive license, with the right to sublicense in its sole
discretion, under any and all Intellectual Property Rights
Controlled by XOMA at any time during the Term covering, claiming
or relating to Program Inventions, and/or XOMA’s Human
Engineering™ technology
utilized in XOMA's performance of work under the
Prior Agreement
including, without limitation, the Human
Engineering
™
Patent
Rights), to make, have made, use, offer for sale, sell and import
Human Engineered™ TACTIC Antibodies and any
Product.
2.2
Ownership of Intellectual
Property
.
2.2.1
Inventorship
for Program Inventions shall be determined in accordance with U.S.
patent laws.
2.2.2
TACTIC
reserves and shall retain all right, title and interest in and to
the TACTIC Antibody and all Intellectual Property Rights
therein.
2.2.3
Subject
to the rights and licenses granted under this Agreement, ownership
of all Program Inventions, irrespective of inventorship, shall be
as follows: (a) TACTIC shall own TACTIC Program Inventions and
Patent Rights; (b) XOMA shall own all XOMA Program Inventions and
Patent Rights; and (c)
TACTIC and
XOMA shall jointly own, in equal undivided shares, any Joint
Program Inventions.
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
2.2.4
XOMA
hereby assigns, and agrees to assign, to TACTIC all of XOMA’s
right, title and interest in and to any and all TACTIC Program
Inventions and Patent Rights, including, without limitation, the
right to sue for past, present and future infringement. XOMA
agrees, without further consideration, to execute all documents,
certificates and other instruments, and to do all acts reasonably
necessary to vest and confirm in TACTIC, its successors and
assigns, the legal title to all such Program Inventions and Patent
Rights;
provided
that, if
such requests require more than
de
minimis
out-of-pocket expenditures by XOMA, TACTIC will
reimburse XOMA for such expenditures, to the extent previously
approved by TACTIC in writing (which approval shall not be
unreasonably withheld or delayed).
2.2.5
TACTIC
hereby assigns, and agrees to assign, to XOMA all of TACTIC’s
right, title and interest in and to any and all XOMA Program
Inventions and Patent Rights, including, without limitation, the
right to sue for past, present and future infringement. TACTIC
agrees, without further consideration, to execute all documents,
certificates and other instruments, and to do all acts reasonably
necessary to vest and confirm in XOMA, its successors and assigns,
the legal title to all such Program Inventions and Patent Rights;
provided
that, if such
requests require more than
de
minimis
out-of-pocket expenditures by TACTIC, XOMA will
reimburse TACTIC for such expenditures, to the extent previously
approved by XOMA in writing (which approval shall not be
unreasonably withheld or delayed).
2.3
No Implied Rights
. Only the
rights and licenses granted pursuant to the express terms of this
Agreement shall be of any legal force. Without limiting the
foregoing and subject to the license granted by XOMA in Section
2.1, neither the grants provided in Section 2.1 nor the assignment
from XOMA to TACTIC provided in Section 2.2.4 provide TACTIC with
any right to practice the methods of the Human Engineering™
technology (including, without limitation, the Human
Engineering
™
Patent Rights)
or, subject to the grants made in Section 2.1, to receive from XOMA
or use information received from XOMA related to its Human
Engineering™ technology, and in no event shall XOMA be
required to disclose such methods or information.
2.4
Sublicenses
. Any sublicense
permitted hereunder shall be set forth in a written agreement
containing provisions relating to ownership of intellectual
property that are substantially consistent with, and with respect
to audits and confidentiality that are substantially consistent
with, and at least as stringent as, those contained herein and
shall be subject and subordinate to the terms and conditions of
this Agreement.
ARTICLE
3
FINANCIAL TERMS
3.1
Milestone Payments
. In full
consideration of the rights and licenses granted to TACTIC herein,
TACTIC shall pay to XOMA the applicable payments below (each, a
“
Milestone
Payment
”)
Event
|
Payment
|
1.
[***]
|
[***]
|
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
2.
[***]
|
[***]
|
3.
[***]
|
[***]
|
4.
[***]
|
[***]
|
5.
[***]
|
[***]
|
6.
[***]
|
[***]
|
Each
Milestone Payment shall be due [***] days from the achievement of
the corresponding milestone event. Each Milestone Payment [***],
and [***] (a) [***] or (b) [***].
3.2
Third Party Payments
. TACTIC
will be responsible for all financial obligations due Third
Parties.
3.3
Payments; Currency
. All
payments due under this Article 3 shall be paid in United States
dollars in immediately available funds to an account designated by
XOMA.
3.4
Payment Reports and
Timing
.
3.4.1
TACTIC
shall make a written report to XOMA within thirty (30) days of the
achievement of each of the milestones set forth in Section 3.1
with respect to Product
3.5
Payment Records and
Audits
.
3.5.1
TACTIC
shall, and shall contractually require all Third Parties selling
Products on its behalf to, keep complete and accurate books of
account for, and records of Net Sales of, Product in sufficient
detail to enable the milestone payments payable under this
Agreement to be determined
3.5.2
Upon
the written request of XOMA, TACTIC shall permit an independent
auditor appointed by XOMA and reasonably acceptable to TACTIC to
have access during normal business hours to such of the records of
TACTIC and its Affiliates as may be reasonably necessary to verify
the accuracy of the Net Sales under this Agreement. The auditor
shall only disclose to XOMA whether the Net Sales reported are
correct or incorrect and the amount of any discrepancy. No other
information shall be provided to XOMA without the prior consent of
TACTIC unless disclosure is required by law, regulation or judicial
order. If XOMA determines that disclosure is required by law,
regulation or judicial order, it shall give TACTIC reasonable prior
notice thereof in order for TACTIC to seek a protective order
against or limiting such disclosure. TACTIC is entitled to require
the auditor to execute a reasonable confidentiality agreement prior
to commencing any such audit. Any agreement between TACTIC and/or
any of its Affiliates, on the one hand, and one or more Third
Parties, on the other hand, pursuant to which such Third Party may
market and/or sell Product shall contain provisions for access and
inspection of records substantially similar to the
foregoing.
[***] =
Confidential Information has been
omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
3.5.3
Audits
conducted under this Section 3.5 shall be at the expense of XOMA
unless an unpaid amount for the full
period covered by the audit is identified, in which case all
reasonable out-of-pocket costs incurred by the auditor to perform
the audit will be paid promptly by TACTIC. Any unpaid amounts
discovered by such inspections or otherwise will be paid promptly
by TACTIC, with interest on such amounts from the date(s) such
amount(s) were due, at a rate equal to the lesser of the prime rate
reported by the Bank of America plus [***] per annum, or the
highest interest rate permitted under applicable New York
law.
ARTICLE
4
CONFIDENTIALITY
4.1
Confidential Information
.
Except as expressly provided herein, the Parties agree that, for
the Term and for [***] thereafter, each of them shall keep
completely confidential and shall not publish or otherwise disclose
and shall not use for any purpose except for the purposes
contemplated by this Agreement any Confidential Information
furnished to it by the other Party. Each Party also agrees to cause
its Affiliates with access to any Confidential Information to
comply with all terms of this Agreement relating to such
Confidential Information and the treatment thereof, and each Party
shall remain primarily liable for any breach of any such provision
by any of its Affiliates.
4.2
Permitted Use and Disclosures
.
The receiving Party may use or disclose Confidential Information to
the extent such use or disclosure is reasonably necessary in
complying with any applicable law, regulation or court order or in
conducting clinical trials or in connection with seeking, enforcing
or defending Patent Rights covering Program Inventions;
provided
that if the
receiving Party is required to make any such disclosure of
Confidential Information, other than pursuant to a confidentiality
agreement, it will give reasonable advance notice to the disclosing
Party of such disclosure and will use its reasonable efforts to
secure confidential treatment of such Confidential Information
prior to its disclosure (whether through protective orders or
otherwise). Notwithstanding the foregoing, TACTIC may use and
disclose the Confidential Information of XOMA as reasonably
necessary in connection with the exercise of TACTIC’s rights
under Section 2.1(a) and otherwise with respect to the development
or exploitation of TACTIC Program Inventions and Patent Rights,
including, without limitation, to actual or prospective business
partners, investors, contractors, and sublicensees of TACTIC, in
each case, pursuant to a confidentiality agreement with terms
substantially consistent with, and at least as stringent as, those
set forth in this Agreement.
4.3
Confidential
Terms
. Except as expressly
provided herein, each Party agrees not to disclose any terms of
this Agreement to any Third Party without the consent of the other
Party;
provided
that disclosures may be made as
required by securities or other applicable laws, or as reasonably
necessary to actual or prospective business partners, investors and
Tactic's sublicensees under this Agreement pursuant to a
confidentiality agreement with terms at least as stringent as those
in this Agreement, or to a Party's accountants, attorneys and other
professional advisors owing a contractual or other duty of
confidentiality to such Party. Upon the reasonable written request
of the disclosing Party, the receiving Party shall promptly return
or destroy, and certify the same in writing, all Confidential
Information of the other Party;
provided
that the receiving Party may retain one (1) copy
of any such Confidential Information in its files for purposes of
maintaining appropriate records of its activities in connection
with this Agreement.
4.4
Use of Name
. Neither Party
shall use the name or trademarks of the other Party, except to the
extent that a Party is permitted to use the Confidential
Information of the other Party or required to do so pursuant to
this Article 4, without the prior written consent of such other
Party, such consent not to be unreasonably withheld or
delayed.
4.5
Previous Agreements
. The
parties acknowledge and understand that the Prior Agreement is now
void and superseded by this Agreement.
ARTICLE
5
PATENT RIGHTS
5.1
Prosecution and Maintenance of TACTIC
and XOMA Patent Rights
. TACTIC shall have sole and exclusive
responsibility for Patent Prosecution of all TACTIC Patent Rights.
XOMA shall have sole and exclusive responsibility for Patent
Prosecution of XOMA Patent Rights. In each such case, the
non-prosecuting Party will provide the prosecuting Party with such
assistance and execute such documents as are reasonably necessary
to permit or continue such Patent Prosecution by the prosecuting
Party. The prosecuting Party shall bear all Patent Prosecution
expenses, including attorneys’ fees, incurred by such Party,
or by the other Party at the request of the prosecuting Party, in
the performance of Patent Prosecution.
5.2
Enforcement of TACTIC and XOMA Patent
Rights
.
5.2.1
Notifications
.
Each Party shall provide to the other Party copies of (a) any
written notices it receives from any Third Party regarding any
patent nullity action, declaratory judgment action, alleged
invalidity, unenforceability, infringement or non-infringement with
respect to or alleged misappropriation of intellectual property
with respect to Program Inventions, or the TACTIC Patent Rights,
and (b) any written allegations it receives from a Third Party that
the manufacture, use, sale, offer for sale or import of Product
infringes the Intellectual Property Rights of such Third Party, in
each case promptly following receipt thereof.
5.2.2
Infringement
Proceedings Against Third Parties
. TACTIC shall have the
sole and exclusive right, but not the obligation, to institute and
direct legal proceedings against any Third Party believed to be
infringing the TACTIC Patent Rights. XOMA shall have the sole and
exclusive right, but not the obligation, to institute and direct
legal proceedings against any Third Party believed to be infringing
any XOMA Patent Rights. Each Party will bear all of its own costs,
including attorneys’ fees, relating to such legal
proceedings;
provided
that
the Party directing such legal proceedings shall bear the other
Party’s out-of-pocket expenses, including attorneys’
fees, incurred in complying with requests for cooperation made by
the directing Party. Without limiting the foregoing, any recovery
in connection with such suit or proceeding will be retained solely
by the Party directing such suit or proceeding.
5.3
Infringement Proceedings by Third
Parties
. In the event that a Party receives written notice
that it or any of its Affiliates have been individually named as a
defendant in a legal proceeding by a Third Party alleging
infringement or misappropriation of a Third Party Intellectual
Property Right as a result of the manufacture, use, sale, offer for
sale or import of a Product or the XOMA Materials, such Party shall
promptly notify the other Party in writing. Such written notice
shall include a copy of any summons or complaint (or the equivalent
thereof) received regarding the foregoing.
5.4
Cooperation
. Each Party hereby
agrees:
(a)
to cooperate in the
Patent Prosecution of any inventions within the Program Inventions
;
(b)
to take all
reasonable additional actions and execute such agreements,
instruments and documents as may be reasonably required to perfect
the other Party’s ownership interest in the XOMA Materials
and the Program Inventions in accordance with the intent of this
Agreement;
(c)
to provide comments
and suggestions, as reasonably requested by the other Party, with
respect to copies of drafts of material filings with or other
submissions to the U.S. Patent and Trademark Office or any foreign
counterpart (the “
PTO
”) relating to Patent
Prosecution, or the court or other tribunal relating to any
infringement claims against Third Parties under the TACTIC Patent
Rights or the defense of infringement or misappropriation claims by
Third Parties relating to Product;
(d)
to cooperate, as
reasonably necessary, with the other Party in gaining patent term
extensions, supplemental protection certificates or their
equivalents wherever applicable to TACTIC Patent
Rights;
5.5
No Other Technology Rights
.
Except as otherwise provided in this Agreement, under no
circumstances shall a Party, as a result of this Agreement, obtain
any ownership interest or other right in any invention, discovery,
Composition of Matter or other technology, or in any other
Intellectual Property Right, of the other Party (including without
limitation those owned, controlled or developed by the other Party
at any time pursuant to this Agreement).
ARTICLE
6
REPRESENTATIONS AND WARRANTIES
6.1
Each Party hereby
represents and warrants to the other Party as follows:
6.1.1
Existence
.
Such Party is duly organized, validly existing and in good standing
under the laws of the jurisdiction in which it is
organized.
6.1.2
Authorization
and Enforcement of Obligations
. Such Party (a) has the
requisite power and authority and the legal right to enter into
this Agreement and to perform its obligations hereunder, and (b)
has taken all necessary action on its part to authorize the
execution and delivery of this Agreement and the performance of its
obligations hereunder. This Agreement has been duly executed and
delivered on behalf of such Party, and constitutes a legal, valid,
binding obligation, enforceable against such Party in accordance
with its terms.
6.1.3
Consents
.
All necessary consents, approvals and authorizations of all
governmental authorities and other Persons required to be obtained
by such Party in connection with this Agreement have been
obtained.
6.1.4
No
Conflict
. The execution and delivery of this Agreement and
the performance of such Party’s obligations hereunder (a) do
not conflict with or violate any requirement of applicable laws or
regulations and (b) do not conflict with, or constitute a default
under, any contractual obligation of such Party.
6.1.5 Additional Representations of
TACTIC.
TACTIC further represents and warrants that (a)
TACTIC was formed upon the
dissolution of ATTENUON, such that TACTIC can be considered a
lawful successor of ATTENUON
; (b)
TACTIC is the successor and rightful owner of
certain IP rights developed by ATTENUON, including, but not limited
to, ATN-658; (c)
TACTIC will have in place by the start of a
Phase I clinical trial general liability and product liability
insurance with respect to the research, development and
commercialization of the TACTIC Target, the TACTIC Antibody and
Human Engineered™ TACTIC Antibodies in such amounts as are
reasonable and customary in the biopharmaceutical industry and
covenants that it shall maintain appropriate general liability and
product liability insurance with respect thereto in such amounts
for so long as such research, development and commercialization
continues and thereafter for so long as is reasonable and customary
in the biopharmaceutical industry, and (d) TACTIC and its
Affiliates will have in place by the start of a Phase I clinical
trial appropriate policies and procedures intended to assure that
Confidential Information of XOMA, or other material non-public
information of XOMA, delivered or otherwise made available to
TACTIC will not be used by TACTIC or its officers, directors,
employees or agents in connection with any activity that would
constitute a criminal or civil violation of United States
securities laws and/or the regulations of the U.S. Securities and
Exchange Commission and, for so long as any provision of this
Agreement remains in effect, TACTIC covenants that it shall
maintain and enforce such policies and procedures and shall not
disclose any such Confidential Information of XOMA, or other
material non-public information of XOMA, to TACTIC's Affiliates who
do not then maintain and enforce such policies.
6.2
DISCLAIMER
OF WARRANTIES
. EXCEPT AS OTHERWISE SET FORTH IN SECTION 6.1
OF THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATIONS OR
WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE ANTIBODIES AND
OTHER INFORMATION DELIVERED OR TO BE DELIVERED PURSUANT TO THE
PRIOR AGREEMENT OR THE PROGRAM INVENTIONS, INCLUDING WITHOUT
LIMITATION ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE OR NON-INFRINGEMENT OF THE PATENT RIGHTS OR
OTHER INTELLECTUAL PROPERTY RIGHTS OF ANY OTHER
PERSON.
[***] =
Confidential Information has been
omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
ARTICLE
7
TERM
AND TERMINATION
7.1
Term
. Subject to
Sections 7.5 and 7.6 hereof, the term of this Agreement will
commence on the Effective Date and shall remain in full force and
effect until the expiration of all obligations of TACTIC under
Article 3, unless earlier terminated pursuant to 7.2 or 7.3 (the
period from the Effective Date through such expiration or earlier
termination being referred to herein as the “
Term
”). Upon such
expiration, TACTIC shall be deemed to have a fully paid-up license
to the rights set forth in Section 2.1.
7.2
Termination for Material
Breach
. This Agreement may be terminated by the
non-breaching Party if the other Party is in breach of its material
obligations under this Agreement and after receiving notice
describing such breach in reasonable detail and requesting its cure
has not cured such breach within [***] days (in the case of a
payment breach with respect to any amount not being disputed in
good faith) or [***] days (in the case of a non-payment breach).
Notwithstanding the foregoing sentence of this Section 7.2: (a) if
such breach is cured or shown to be non-existent within the
aforesaid [***] days or [***] day period, the notice shall be
deemed automatically withdrawn and of no effect and the notifying
Party shall provide written notice to the breaching Party of the
withdrawal; and (b) without limiting the effects of the following
sentence of this Section 7.2, in the event of a good faith dispute
with respect to the existence of a material breach, the [***] day
or [***] day cure period shall be tolled until such time as the
dispute is resolved pursuant to Article 10. The Parties acknowledge
that any failure by XOMA to provide a Human Engineered
TM
TACTIC Antibody that meets the Success Criteria or that meets any
other technical objectives shall not in and of itself be deemed a
material breach of this Agreement.
7.3
Termination For Convenience
.
This Agreement may be terminated without cause at any time upon
sixty (60) days prior written notice by TACTIC to XOMA, at
TACTIC’s discretion.
7.4
Contested Validity.
If TACTIC, a TACTIC successor, a TACTIC sublicensee of the rights
granted hereunder, or a person or entity Controlled by any of the
preceding entities, intends to challenge the validity or
enforceability of any of the XOMA Patent Rights, whether through a
declaratory judgment action, opposition, post-grant proceeding or
otherwise, then such entity shall: (a) [***] and (b)
[***].
7.5
Effect of
Termination
.
7.5.1
Termination
of this Agreement shall not release either Party hereto from any
liability (including, without limitation, any payment obligation)
which, at the time of such termination, has already accrued to the
other Party or which is attributable to a period prior to such
termination nor preclude either Party from pursuing any rights and
remedies it may have hereunder or at law or in equity with respect
to any breach of this Agreement.
[***] =
Confidential Information has been
omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
7.5.2
Upon
any termination of this Agreement, TACTIC and XOMA shall (a)
promptly return to the other Party all Confidential Information
received from the other Party (except that each Party may retain
one copy for its files solely for the purpose of determining its
rights and obligations hereunder) or (b) destroy all such
Confidential Information with the other Party’s
consent.
Notwithstanding the survival of Article 2 as set
forth in Section 7.6 below, (a) the rights and licenses of TACTIC
under Section 2.1 shall terminate and be of no further force or
effect, and (b) TACTIC (on behalf of itself, its Affiliates, and
its successors and assigns) shall not (i) practice or exercise any
invention claimed in, or license, authorize or otherwise allow any
Third Party to practice or exercise such invention claimed in, any
XOMA Patent Rights or (ii) except as reasonably necessary to comply
with applicable law, regulation or court order as provided in
Section 4.2
, use or disclose, or authorize or otherwise
allow the use or disclosure of, the XOMA Deliverables, upon (A)
termination of this Agreement by TACTIC pursuant to Section 7.3;
(B) termination of this Agreement by XOMA pursuant to Section 7.2
based on TACTIC 's failure to pay any amount due under Article 3
hereof and not being disputed in good faith; or (C) TACTIC 's
failure to pay a sum that had been disputed in good faith by the
Parties (together with all accrued interest due thereon under this
Agreement) within [***] days after a final determination by an
arbitrator pursuant to Section 9.3 that such amount is due under
this Agreement..
7.5.3
Nothing
herein shall in any way limit or restrict XOMA’s ability to
seek and obtain money damages, injunctive relief or any other
remedy, whether at law or in equity, that may be available from or
awarded by a court of competent jurisdiction based on, arising out
of or relating to any breach of this Agreement by
TACTIC.
7.5.4
Notwithstanding
anything to the contrary herein, XOMA shall not, at any time during
the Term or thereafter, use, or authorize or otherwise allow the
use of any Human Engineered™ TACTIC Antibody.
7.6
Survival
. Sections 3.5, 7.5 and
7.6, and Articles 1, 2 (including, subject to Section 7.5.2, all
rights and licenses therein), 4, 5, 6, 8, 9, 10 and 11 of this
Agreement shall survive any termination hereof.
ARTICLE
8
INDEMNITY
8.1
Indemnity
.
8.1.1
By
XOMA
. XOMA shall indemnify and hold TACTIC harmless, and
hereby forever releases and discharges TACTIC, from and against all
losses, liabilities, damages and expenses (including reasonable
attorneys’ fees and costs) resulting from all claims,
demands
,
actions and other
proceedings by any Third Party to the extent arising from (a) the
breach of any
representation, warranty or covenant
of XOMA under this or the Prior Agreement, (b) a
claim that the processes or
technologies used by XOMA in the performance of its activities
under the Prior Agreement (other than any such claim with respect
to the CMV promoter), including, without limitation, Human
Engineering™ activities, infringe the Intellectual Property
Rights of such Third Party (other than Intellectual Property Rights
to the TACTIC Target, any Antibody to the TACTIC Target (including
any Product), or (c) the
gross negligence or willful
misconduct of XOMA, its Affiliates or sublicensees
in the performance of its obligations, and its
permitted activities
, under this or
the Prior Agreement; in each case except to the
extent arising from the gross negligence or willful misconduct of
ATTENUON or TACTIC
8.1.2
By
TACTIC
. TACTIC shall indemnify and hold XOMA harmless, and
hereby forever releases and discharges XOMA, from and against all
losses, liabilities, damages and expenses (including reasonable
attorneys’ fees and costs) resulting from all claims,
demands, actions and other proceedings by any Third Party to the
extent arising from (a) the breach of any representation, warranty
or covenant of ATTENUON or TACTIC under this or the Prior
Agreement, (b)
excluding losses,
liabilities, damages and expenses covered by XOMA pursuant to
Section 8.1.1(b),
the making, having made, using, offering
for sale, selling or importing of any Antibody to the TACTIC Target
(including without limitation any Human Engineered
™
TACTIC
Antibody or Product) by ATTENUON, TACTIC, its Affiliates or
licensees or by XOMA pursuant to the terms of this Agreement, (c)
the use of the TACTIC Target
or the
ATTENUON Deliverables by XOMA pursuant to the terms of the Prior
Agreement
or (d) the gross negligence or willful misconduct
of ATTENUON, TACTIC, their Affiliates or licensees in the
performance of its obligations, and its permitted activities, under
this or the Prior Agreement; in each case except to the extent
arising from (i)
a claim that the
processes used by XOMA in the performance of Human
Engineering™ infringe the Intellectual Property Rights of
such Third Party (other than Intellectual Property Rights to the
TACTIC Target, any Antibody to the TACTIC Target,
or (ii)
the gross negligence or willful misconduct of XOMA.
8.2
Procedure
. A Party (the
“
Indemnitee
”) that intends
to claim indemnification under this Article 8 shall promptly notify
the other Party (the “
Indemnitor
”) of any
claim, demand, action or other proceeding for which the Indemnitee
intends to claim such indemnification. The Indemnitor shall have
the right to participate in, and to the extent the Indemnitor so
desires, to assume the defense thereof with counsel selected by the
Indemnitor;
provided,
however,
that the Indemnitee shall have the right to retain
its own counsel, with the fees and expenses to be paid by the
Indemnitor, if representation of the Indemnitee by the counsel
retained by the Indemnitor would be inappropriate due to actual or
potential differing interests between the Indemnitee and any other
Party represented by such counsel in such proceeding. The indemnity
obligations under this Article 8 shall not apply to amounts paid in
settlement of any claim, demand, action or other proceeding if such
settlement is effected without the prior express written consent of
the Indemnitor, which consent shall not be unreasonably withheld or
delayed. The failure to deliver notice to the Indemnitor within a
reasonable time after notice of any such claim or demand, or the
commencement of any such action or other proceeding, if prejudicial
to its ability to defend such claim, demand, action or other
proceeding, shall relieve such Indemnitor of any liability to the
Indemnitee under this Article 8 with respect thereto, but the
omission so to deliver notice to the Indemnitor shall not relieve
it of any liability that it may have to the Indemnitee otherwise
than under this Article 8. The Indemnitor may not settle or
otherwise consent to an adverse judgment in any such claim, demand,
action or other proceeding that diminishes the rights or interests
of the Indemnitee without the prior express written consent of the
Indemnitee, which consent shall not be unreasonably withheld or
delayed. The Indemnitee, its employees and agents shall reasonably
cooperate with the Indemnitor and its legal representatives in the
investigation and defense of any claim, demand, action or other
proceeding covered by this Article 8.
[***] =
Confidential Information has been
omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
ARTICLE
9
DISPUTE RESOLUTION
9.1
Attempts to Amicably Resolve
Disputes
. If any dispute, controversy or claim is initiated
by either Party arising out of, resulting from or relating in any
way to this Agreement, the performance by either Party of its
obligations under this Agreement or the subject matter of this
Agreement (a “
Dispute
”), then the
Parties shall attempt to resolve such Dispute as follows. The Party
initiating the Dispute shall give written notice to the other
Party
specifying in
reasonably specific detail the basis for such Dispute. Following
receipt of such notice, the Parties shall refer the Dispute to
their respective chief executive officers (or their designees) for
resolution. The Parties’ respective chief executive officers
(or their designees) shall meet (in person, by videoconference or
by telephone as mutually agreed upon by the Parties) to attempt to
reach a mutually acceptable resolution of the Dispute.
9.2
Mediation
. Subject to Section
9.4, if a Dispute is not resolved in the manner set forth in
Section 9.1
within [***]
days after receipt of notice under Section 9.1, the Parties agree
to try in good faith to resolve such dispute in an expeditious
manner by mediation administered by the CPR Institute for Dispute
Resolution or its successor organization (“
CPR
”) in accordance with
its mediation procedure. The mediation proceeding shall be
conducted at the location of the Party not originally requesting
the resolution of the Dispute. The Parties agree that they shall
share equally the cost of the mediation filing and hearing fees and
the cost of the mediator. Each Party must bear its own
attorney’s fees and associated costs and expenses. For the
avoidance of doubt, nothing in connection with such mediation shall
be binding on either Party, except for the provisions regarding
sharing of costs set forth in this Section 9.2.
9.3
Arbitration
.
9.3.1
Subject
to Section 9.4, any Dispute that is not resolved in the manner set
forth in Section 9.2
within [***] days after referral to
mediation under Section 9.2 shall be finally resolved by binding
arbitration, as set forth in this Section 9.3.
9.3.2
Whenever
a Party shall decide to institute arbitration proceedings, it shall
give written notice to that effect to the other Party. Any such
arbitration shall be conducted under the Commercial Arbitration
Rules of the American Arbitration Association by a panel of one (1)
arbitrator appointed in accordance with such rules to be appointed
within [***] days of such notice. Such arbitrator shall have no
less than [***] of experience directly in the field of
biotechnology licensing, and shall be available to serve under the
geographic and time constraints set forth herein and in Section
9.3.3. Any such arbitration shall be held in New York, New
York.
[***] =
Confidential Information has been
omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
9.3.3
The
arbitrator shall be jointly instructed by the Parties in writing to
set a schedule that will enable them to complete all proceedings
and render their award within [***] days from the date of
appointment of the arbitrator in accordance with Section 9.3.2. For
good cause shown, the arbitrator may extend this schedule for up
to, but in no event more than, [***] additional days. The failure
of the arbitrator to render a final award within the foregoing time
frame shall not give rise to a jurisdictional defect, but this fact
shall not be disclosed to the arbitrators until after the
expiration of such [***] day period. The arbitrator shall have the
authority to grant specific performance in such equitable manner as
they determine. The prevailing Party in any such arbitration (as
determined by the arbitrator) shall be entitled to recover its
reasonable attorneys’ fees and expenses incurred in
connection with such arbitration. Judgment upon the award so
rendered may be entered in any court having jurisdiction as
provided in Section 9.5 or application may be made to such court
for judicial acceptance of any award and an order of enforcement,
as the case may be.
9.3.4
In
no event shall a demand for arbitration be made after the date when
institution of a legal or equitable proceeding based upon such
claim, dispute or other matter in question would be barred by the
applicable statute of limitations.
9.3.5
Notwithstanding
the foregoing, either Party shall have the right, without waiving
any right or remedy available to such Party under this Agreement or
otherwise, to seek and obtain from any court of competent
jurisdiction any interim or provisional relief that is necessary or
desirable to protect the rights or property of such Party, pending,
the selection of the arbitrators hereunder or pending the
arbitrators’ determination of any dispute, controversy or
claim hereunder.
9.4
Disputes Regarding Patents
.
Notwithstanding any provision hereof to the contrary, any Dispute
relating to the determination of ownership, validity,
enforceability or infringement by the other Party of a
Party’s patents shall, if not resolved in the manner set
forth in Section 9.1
within [***] days after receipt of
notice under Section 9.1, be submitted exclusively to the federal
courts located in New York, New York , and the Parties hereby
consent to the jurisdiction and venue of such court.
9.5
Venue;
Jurisdiction
.
9.5.1
Any
action or proceeding brought by either Party seeking to enforce any
provision of, or based on any right arising out of, this Agreement
must be brought against either Party in the courts of the State of
New York. Each Party (i) hereby irrevocably submits to the
jurisdiction of the state courts of the State of New York and to
the jurisdiction of any United States District Court in the State
of New York , for the purpose of any suit, action, or other
proceeding arising out of or based upon this Agreement or the
subject matter hereof brought by any Party or its successors or
assigns, (ii) hereby waives, and agrees not to assert, by way of
motion, as a defense, or otherwise, in any such suit, action, or
proceeding, any claim that it is not subject personally to the
jurisdiction of the above-named courts, that its property is exempt
or immune from attachment or execution, that the suit, action or
proceeding is brought in an inconvenient forum, that the venue of
the suit, action, or proceeding is improper or that this Agreement
or the subject matter hereof may not be enforced in or by such
court, and (iii) hereby waives and agrees not to seek any review by
any court of any other jurisdiction that may be called upon to
grant an enforcement of the judgment of any such Illinois state or
federal court.
9.5.2
Process
in any action or proceeding seeking to enforce any provision of, or
based on any right arising out of, this Agreement may be served on
any Party anywhere in the world. Each Party consents to service of
process by registered mail at the address to which notices are to
be given pursuant to Section 11.4. Nothing herein shall affect the
right of a Party to serve process in any other manner permitted by
applicable law. Each Party further agrees that final judgment
against it in any such action or proceeding arising out of or
relating to this Agreement shall be conclusive and may be enforced
in any other jurisdiction within or outside the United States of
America by suit on the judgment, a certified or exemplified copy of
which shall be conclusive evidence of the fact and of the amount of
its liability.
9.5.3
Each
Party agrees that it shall not, and that it shall instruct those in
its control not to, take any action to frustrate or prevent the
enforcement of any writ, decree, final judgment, award (arbitral or
otherwise) or order entered against it with respect to this
Agreement, and shall agree to be bound thereby as if issued or
executed by a competent judicial tribunal having personal
jurisdiction situated in its country of residence or
domicile.
ARTICLE
10
SUCCESSORS AND ASSIGNS
10.1
Limited
Right to Assign
. Neither TACTIC nor XOMA may transfer or
assign this Agreement or any of its rights hereunder without the
written consent of the other
;
provided,
however,
that (a) XOMA may,
without such consent, assign this Agreement and its rights and
obligations hereunder to a Third Party only in connection with the
transfer or sale of all or substantially all of its business
relating to Human Engineering™, or in the event of a merger,
consolidation or other transaction resulting in a change in control
of XOMA, and (b) TACTIC may, without such consent, assign this
Agreement and its rights and obligations hereunder to a Third Party
only in connection with the transfer or sale of a Human
Engineered™ version of a TACTIC Antibody or all or
substantially all of its assets relating to its anti-uPAR
monoclonal antibodies or in the event of a merger, consolidation or
other transaction resulting in a change in control of TACTIC. Any
attempted transfer or assignment in violation of this Section 10.1
shall be void. Nothing herein shall prohibit any transfer or
assignment by either TACTIC or XOMA to or among any of their
respective Affiliates.
10.2
Permitted
Successors and Assigns
. This Agreement shall be binding upon
and inure to the benefit of the Parties and their successors and
assigns as permitted in Section 10.1.
ARTICLE
11
MISCELLANEOUS
11.1
Governing
Law
. This Agreement and any dispute arising from the
performance or breach hereof shall be governed by and construed and
enforced in accordance with the laws of the State of New York,
without reference to conflicts of laws principles.
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
11.2
Bankruptcy
.
All rights and licenses granted under or pursuant to this Agreement
by one Party to the other are, for all purposes of Section 365(n)
of Title XI of the United States Code (“
Title XI
”), licenses of
rights to “intellectual property” as defined in Title
XI. During the Term each Party shall create and maintain current
copies to the extent practicable of all such intellectual property.
If a bankruptcy proceeding is commenced by or against one Party
under Title XI, the other Party shall be entitled to a copy of any
and all such intellectual property and all embodiments of such
intellectual property, and the same, if not in the possession of
such other Party, shall be promptly delivered to it (a) upon such
Party’s written request following the commencement of such
bankruptcy proceeding, unless the Party subject to such bankruptcy
proceeding, or its trustee or receiver, elects within [***] days to
continue to perform all of its obligations under this Agreement, or
(b) if not delivered as provided under clause (a) above, upon such
other Party’s request following the rejection of this
Agreement by or on behalf of the Party subject to such bankruptcy
proceeding. If a Party has taken possession of all applicable
embodiments of the intellectual property of the other Party
pursuant to this Section 11.2 and the trustee in bankruptcy of the
other Party does not reject this Agreement, the Party in possession
of such intellectual property shall return such embodiments upon
request. If a Party seeks or involuntarily is placed under Title XI
and the trustee rejects this Agreement as contemplated under 11
U.S.C. 365(n)(1), the other Party hereby elects, pursuant to
Section 365(n) of Title XI, to retain all rights granted to it
under this Agreement to the extent permitted by law.
11.3
Waiver
.
No waiver of any rights shall be effective unless consented to in
writing by the Party to be charged and the waiver of any breach or
default shall not constitute a waiver of any other right hereunder
or any subsequent breach or default.
11.4
Notices
.
All invoices, notices, requests and other communications hereunder
shall be in writing and shall be delivered or sent in each case to
the respective address specified below, or such other address as
may be specified in writing to the other Party hereto, and shall be
effective on receipt.
If to
TACTIC:
Tactic Pharma,
LLC
[***]
Attention: Andrew Mazar,
CSO.
With a copy
to:
Baker &
Hostetler, LLP 2929 Arch Street
Cira
Centre – 12
th
Floor
Philadelphia, PA
19004
Attention: Tactic
Pharma Legal Counsel, Dr. Jeffrey H. Rosedale
If to
XOMA:
XOMA (US)
LLC
2910 Seventh
Street
Berkeley, California
94710
Attention: Legal
Department
with a copy
to:
XOMA (US)
LLC
2910 Seventh
Street
Berkeley, California
94710
Attention: Legal
Department
11.5
Independent
Contractors
. The Parties are independent contractors under
this Agreement. Nothing contained in this Agreement is intended nor
is to be construed so as to constitute TACTIC or XOMA as partners
or joint venturers with respect to this Agreement. Except as
expressly provided for by this Agreement, no Party shall have any
express or implied right or authority to assume or create any
obligations on behalf of or in the name of any other Party or to
bind any other Party to any other contract, agreement or
undertaking with any Third Party.
11.6
Force
Majeure
. A Party shall neither be held liable or responsible
to the other Party, nor be deemed to have defaulted under or
breached this Agreement, for failure or delay in fulfilling or
performing any obligation under this Agreement (other than an
obligation for the payment of money) to the extent, and for so long
as, such failure or delay is caused by or results from causes
beyond the reasonable control of such Party, including but not
limited to fire, floods, embargoes, war, acts of war (whether war
be declared or not), insurrections, riots, civil commotions,
strikes, lockouts or other labor disturbances, acts of God or acts,
omissions or delays in acting by any governmental authority or
other Party.
11.7
Other
Activities
. Except as otherwise expressly provided in this
Agreement, nothing in this Agreement shall preclude either Party
from conducting other programs (either for its own benefit or with
or for the benefit of any other Person) to conduct research, or to
develop or commercialize products or services, for use in any
field.
11.8
Headings
.
The captions to the several sections hereof are not a part of this
Agreement, but are included merely for convenience of reference
only and shall not affect its meaning or
interpretation.
11.9
Entire
Agreement; Amendment
.
11.9.1
This
Agreement constitutes the entire and exclusive agreement between
the Parties with respect to the subject matter hereof and
supersedes and cancels all previous discussions, agreements,
representations, commitments and writing in respect
thereof.
11.9.2
No
amendment or addition to this Agreement shall be effective unless
reduced to writing and executed by the authorized representatives
of the Parties.
11.10
Illegality;
Unenforceability
. In the event that any provision of this
Agreement shall be determined to be illegal or unenforceable, that
provision will be limited or eliminated to the minimum extent
necessary so that this Agreement shall otherwise remain in full
force and effect and enforceable.
11.11
Counterparts
.
This Agreement may be executed in counterparts, each of which shall
be deemed to be an original and together shall be deemed to be one
and the same agreement.
[SIGNATURE PAGE
FOLLOWS ]
IN
WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first set forth above.
TACTIC PHARMA,
LLC
By: /s/ Andrew
Mazar
Andrew
Mazar
Chief Scientific Officer
|
XOMA
(US) LLC
By: /s/ James
Neal
James R. Neal
VP, Business Development & Program
Leadership
|
[***] =
Confidential Information has been
omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
Schedule
1.16
Human Engineering™ Patent Rights
Inventors
:
Studnicka,
Little, Fishwild, Kohn
Based
on [***].
COUNTRY
|
SERIAL NO.
|
PATENT NO.
|
EXPIRES
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
VALIDIVE®
OPTION AND LICENSE AGREEMENT
BY AND
BETWEEN
MONOPAR
THERAPEUTICS INC.
AND
TABLE OF CONTENTS
1.
|
|
2
|
2,
|
MONOPAR VALIDIVE OPTION; MONOPAR DEVELOPMENT AND
COMMERCIALIZATION
|
11
|
3
|
LICENSES; TECHNOLOGY TRANSFER; EXCLUSIVITY
|
16
|
4
|
FINANCIAL TERMS
|
18
|
5
|
INTELLECTUAL PROPERTY
|
22
|
6
|
WARRANTIES AND LIMITATION OF LIABILITY
|
25
|
7
|
INDEMNITY AND INSURANCE
|
27
|
8
|
CONFIDENTIALITY
|
29
|
9
|
TERM AND TERMINATION
|
31
|
10
|
DISPUTE RESOLUTION
|
37
|
11
|
MISCELLANEOUS
|
38
|
SCHEDULE
1
|
Licensed
Patents
|
SCHEDULE
2
|
Licensed
Know-How
|
SCHEDULE
3
|
Licensed
Trademarks
|
SCHEDULE
4
|
Validive
Materials
|
SCHEDULE
5
|
Confirmatory
Patent License
|
OPTION AND LICENSE AGREEMENT
THIS OPTION AND LICENSE AGREEMENT
(together with any
Schedules attached hereto, this
“Agreement”
) is made and
entered into as of June 17, 2016 (the
“Effective Date”
), by and
between Monopar Therapeutics Inc., a Delaware corporation located
at 598 Rockefeller Rd, Lake Forest, Illinois 60201, United States
of America (“
Monopar
”), and Onxeo S.A., a
French
société anonyme
à Conseil d’administration
located at 49,
boulevard du Général Martial Valin, 75015 Paris, France
(“
Onxeo
”).
Monopar and Onxeo are sometimes referred to herein individually as
a “Party” and collectively as the
“Parties.”
RECITALS
WHEREAS:
(A)
Onxeo owns Patents, Trademark registrations and
other proprietary rights relating to Validive
®
(as
defined below). At this time, Onxeo does not intend to undertake
any further development of Validive
®
.
(B)
Monopar
has expertise in research, development, and commercialization of
pharmaceutical products.
(C)
Onxeo desires to grant, and Monopar desires to
obtain, an exclusive option to take a license to research, develop,
and commercialize Validive
®
on an
exclusive basis for any and all uses in the Field in the Territory
(each, as defined below), all on the terms and conditions set forth
herein.
(D)
Upon exercise by Monopar of the option for the
license for Validive
®
, Onxeo
desires to grant Monopar, and Monopar desires to obtain, an
exclusive license in the Field in the Territory to use, sell, offer
for sale, import, and make or have made Licensed Products (as
defined below) in the Field in the Territory on the terms and
conditions set forth herein.
AGREEMENT
NOW IT IS HEREBY AGREED
as follows:
1.
DEFINITIONS AND
INTERPRETATION
1.1
In this Agreement
the words and phrases set out below shall, unless the context
requires otherwise, have the corresponding meaning attributed to
them below.
“Active Party”
has the
meaning
set forth in
Section
5.3.5
.
“Affiliate”
means with
respect to a given entity, any person, corporation, partnership or
other entity, that Controls, is Controlled by, or is under common
Control with such entity.
“Agreement”
means this
agreement and each of the Schedules as amended from time to time in
accordance with Section
11.3
.
“Arising Intellectual
Property”
means all Intellectual Property, including
Know-How, conceived, created or invented after the Effective Date
by or on behalf of either Party; and any Patents which claim any
inventions described or comprised in such Know-How, but excluding
Intellectual Property, including Know-How, comprised in the
Licensed Intellectual Property.
“Audit for Cause”
has the
meaning set forth in Section
2.2.3
.
“Bankruptcy Code”
has the
meaning set forth in Section
9.4
.
“Breaching Party”
has he
meaning set forth in Section
9.2.1
.
“Business Day”
means a day
other than a Saturday, Sunday or any public holiday in Paris,
France or New York, New York, United States.
“Clinical Data”
means any
Know-How that is included in, or supports, a regulatory submission
for approval of the testing of drugs in man or for approval for the
placing of medicinal products on the market (including submissions
to the FDA, the EMA or other competent Regulatory
Authorities).
“Combination Product”
means
any product that comprises a Licensed Product sold in conjunction
with another active component so as to be a combination product
(whether packaged together or in the same therapeutic
formulation).
“Commencement”
means, in
relation to a clinical trial, the date upon which a Licensed
Product is first administered to a human subject, whether such
subject is a healthy volunteer or a patient.
“Commercialization”
or
“Commercialize”
means activities directed to obtaining pricing and reimbursement
approvals, marketing, promoting, distributing, offering for sale,
or selling a Licensed Product. For clarity,
“Commercialization” shall not include manufacturing
activities, but shall include importation, exportation and use
related to offering for sale or selling a Licensed
Product.
“Commercially Reasonable
Efforts”
means efforts of a Party to carry out its
obligations in a diligent and sustained manner using such effort
and employing such resources normally used by an established
biopharmaceutical company in the exercise of its reasonable
business discretion relating to the research, development or
commercialization of a similar product owned by such Party or to
which such Party has exclusive rights, with similar product
characteristics, that is of similar market potential at a similar
stage in its development or product life, taking into account
issues of market exclusivity (including Patent coverage and
Regulatory Exclusivity), safety and efficacy, product profile, the
competitiveness of the marketplace, the proprietary position of the
compound or product, the regulatory structure involved, the
profitability of the applicable products (including pricing and
reimbursement status achieved), and other relevant factors,
including technical, legal, scientific, and/or medical
factors.
“Confidential Information”
means any information, in tangible or non-tangible form (including
oral disclosure) including Know-How, research and development
plans, information relating to the customers, suppliers, business
partners, clients, finances, business plans and products (in each
case actual or prospective) of a Party, the terms of this
Agreement, and any other technical or business information, which
is obtained by either Party from the other (or its representatives)
pursuant to this Agreement and is marked as confidential, or
indicated by notice as being confidential no more than five (5)
Business Days after its disclosure. Licensed Know-How shall be
deemed the Confidential Information of Onxeo.
“Control”
means:
(a)
the possession
(directly or indirectly) of fifty per cent (50%) or more of the
voting stock or other equity interest of a subject entity with the
power to vote, or the power in fact to control the management
decisions of such entity through the ownership of securities or by
contract or otherwise;
(b)
in respect of any
Patent Rights, Know-How or other Intellectual Property whether
owned by or licensed to an entity, the possession of the legal
right and ability to grant the respective licenses or sublicenses
as provided in this Agreement without violating the terms of any
agreement or other arrangement with any Third Party;
and
“Controlling”
and
“Controlled
by”
shall be construed accordingly.
“Cure Period”
has the
meaning set forth in Section
9.2.1
.
“Development”
means
pre-clinical and clinical drug development activities reasonably
relating to the discovery and development of pharmaceutical
compounds and submission of information to a Regulatory Authority,
including toxicology, pharmacology, and other discovery and
pre-clinical studies, test method development and stability
testing, manufacturing process development (including validation
test methods and procedures), formulation development, delivery
system development, quality assurance and quality control
development, statistical analysis, clinical trials and activities
relating to obtaining Regulatory Approval, but excluding
Commercialization activities. When used as a verb,
“Develop” means to engage in Development.
“Disclosing Party”
has the
meaning set forth in Section
8.1
.
“Effective Date”
means the
date this Agreement is made.
“EMA”
means the European
Medicines Agency
or any successor to
it.
“Executive Officers”
means a
representative of Onxeo authorized by notice to Monopar, and the
Chief Executive Officer of Monopar or such other authorized senior
manager of a Party as may be substituted from time to time upon the
giving of written notice to the other Party.
“Extended Exclusivity
Period”
means any period during which one of the
following subsists in respect of a Licensed Product: orphan drug
designation or exclusivity, pediatric designation or exclusivity,
new chemical entity exclusivity, or other exclusivity (excluding a
Patent) granted by a Regulatory Authority beyond the expiry of the
relevant Patent.
“FDA”
means the United
States Food and Drug Administration or any successor to
it.
“Field”
means any and all
uses.
“First Commercial Sale”
means the first transfer of a Licensed Product
by Monopar to the first Third
Party (other than a Sublicensee or a distributor) in any country in
the Territory, in exchange for cash or some equivalent to which
value can be assigned for the purpose of determining Net Sales,
after Regulatory Approval of such Licensed Product has been
granted, or such marketing and sale is otherwise permitted, by the
Regulatory Authority of such country, excluding registration
samples, compassionate use, and use in Phase IV
Trials.
“Force Majeure”
means in
relation to either Party any event or circumstance which is beyond
the reasonable control of that Party, which event or circumstance
that Party could not reasonably be expected to have taken into
account at the Effective Date and which results in or causes the
failure of that Party to perform any or all of its obligations
under this Agreement including an act of God, lightning, fire,
storm, flood, earthquake, strike, lockout or other industrial
disturbance, war, a terrorist act, blockade, revolution, riot,
insurrection, civil commotion, public demonstration, sabotage, act
of vandalism, explosion, provided that lack of funds shall not be
interpreted as a cause beyond the reasonable control of that
Party.
“GAAP”
shall mean generally
accepted accounting principles as applicable in the United States,
consistently applied; provided that, to the extent that a Party
adopts International Financial Reporting Standards (IFRS), then
“GAAP” means International Financial Reporting
Standards (IFRS), consistently applied.
“Inactive Party”
has the
meaning set forth in Section
5.3.5
.
“IND”
means an
investigational new drug application filed with the FDA, or an
application filed with any Regulatory Authority outside the United
States of America (including any supranational agency such as the
EMA) necessary to commence human clinical trials in such
jurisdiction.
“Indemnified Party”
has the
meaning set forth in Section
7.1.3
.
“Indemnifying Party”
has the
meaning set forth in Section
7.1.3
.
“Indication”
means
a disease
classification block as defined within the International
Statistical Classification of Diseases and Related Health Problems
as published from time to time by the World Health Organization
(e.g. “C50 Malignant neoplasm of Breast”, “C92
Myeloid leukemia”, “B20 Human immunodeficiency virus
[HIV] disease resulting in infectious and parasitic
diseases”, “M34 Systemic sclerosis”). For the
avoidance of doubt, therapeutic indications having the same
histology (such as first-line to second-line therapies) do not
constitute a different Indication.
“Intellectual Property”
means Patents, Know-How and Trademarks.
“Intellectual Property
Rights”
means all Patent Rights, rights to Know-How,
copyrights, database rights, design rights, rights in Trademarks
and domain names, and all rights or forms of protection of a
similar nature or having equivalent or similar effect to any of
them which may subsist anywhere in the world, whether or not any of
them are registered including any application for registration of
any of them.
“Know-How”
means any
unpatented, technical and other information which is not in the
public domain including, ideas, concepts, inventions (whether or
not patentable), discoveries, data, designs, formulae, algorithms,
methods, models, specifications, clinical data, information
relating to biological and chemical structures, properties and
functions as well as methods for synthesizing chemical compounds,
procedures for experiments and tests (including diagnostic tests),
results of experimentation and testing, results of research and
development including laboratory records and data analyses.
Information in a compilation or a compilation of information may be
Know-How notwithstanding that some or all of its individual
elements are in the public domain.
“Laws”
means all applicable
laws, statutes, rules, regulations, ordinances and other
pronouncements having the effect of law in any federation, nation,
multinational governmental entity, state, province, county, city or
other political subdivision, domestic or foreign.
“License Fee”
has the
meaning set forth in Section
4.2
.
“Licensed Intellectual
Property”
means the Licensed Know-How, Licensed
Patents and Licensed Trademarks.
“Licensed Know-How”
means
the Know-How directly and solely relating to the Licensed Product
that is Controlled by Onxeo or its Affiliates at the Effective Date
as further described in
SCHEDULE
2
.
“Licensed Patents”
means
Patents further described in
SCHEDULE
1
.
“Licensed Product”
means all
products containing clonidine or its analogues, salts, prodrugs,
and any derivatives thereof, formulated using Onxeo’s
Lauriad® technology, including the product referred to as
Validive® or Clonidine Lauriad®.
“Licensed Trademarks”
means
Trademarks further described in SCHEDULE 3.
“Losses”
means any cost,
expense or loss actually suffered resulting from any or all claims,
causes of action or demands made by a Third Party, including
reasonable attorneys' fees.
“Material”
means any
chemical or biological material and any property rights relating to
any of the foregoing other than Intellectual Property
Rights.
“Milestone
Event”
has the meaning
given in Section
4.3.1
.
“Milestone
Payment”
has the meaning
given in Section
4.3.1
“Monopar Indemnified
Parties”
means Monopar and its Affiliates and their
respective directors, officers, employees and agents.
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
“Monopar Validive Option”
has the meaning specified in Section
2.1
.
“Monopar Validive Option
Period”
has the meaning specified in Section
2.1.1
.
“NDA”
means an application
for approval to market a product commercially such as a New Drug
Application filed pursuant to the requirements of the FDA, as more
fully defined in 21 CFR § 314.3 et seq, or a Biologics License
Application filed pursuant to the requirements of the FDA, as more
fully defined in 21 CFR § 601, or a marketing authorization
application filed pursuant to the requirements of European
Directive 2001/83/EC, or any equivalent or similar application
filed with any other Regulatory Authority in any country or region
in the Territory, together, in each case, with all additions,
deletions or supplements thereto.
“
Net Sales
” means the aggregate
gross invoice prices of all Licensed Products sold by Monopar, its
Affiliates or its Sublicensees to Third Parties (that are not
Sublicensees) anywhere within the Territory, including wholesale
distributors, less deductions from such amounts calculated in
accordance with GAAP so as to arrive at net sales under GAAP, and
further reduced by [***] or increased for [***].
Any and
all set-offs against gross invoice prices shall be calculated in
accordance with GAAP. Sales or other commercial dispositions of
Licensed Products between Monopar and its Affiliates and its
Sublicensees, and Licensed Products provided to Third Parties
without charge, in connection with research and development,
clinical trials, compassionate use, humanitarian and charitable
donations, or indigent programs or for use as samples shall be
excluded from the computation of Net Sales, and no payments will be
payable on such sales or such other commercial dispositions, except
where such an Affiliate or Sublicensee is an end user of the
Licensed Product.
If a
Licensed Product is sold or otherwise commercially disposed of for
consideration other than cash or in a transaction that is not at
arm’s length between the buyer and the seller, then the gross
amount to be included in the calculation of Net Sales shall be the
amount that would have been invoiced had the transaction been
conducted at arm’s length and for cash. Such amount that
would have been invoiced shall be determined, wherever possible, by
reference to the average selling price of the relevant Licensed
Product in arm’s length transactions in the relevant
country.
Notwithstanding the
foregoing, in the event a Licensed Product is sold as a Combination
Product, Net Sales shall be calculated by multiplying the Net Sales
of the Combination Product by the fraction A/(A+B), where A is the
gross invoice price of the Licensed Product if sold separately in a
country and B is the gross invoice price of the other product(s)
included in the Combination Product if sold separately in such
country. If no such separate sales are made by Monopar, its
Affiliates or Sublicensees in a country, Net Sales of the
Combination Product shall be calculated in a manner to be
negotiated and agreed upon by the Parties, reasonably and in good
faith, prior to any sale of such Combination Product, which shall
be based upon the respective cost of goods sold of the active
components of such Combination Product. In the event that the
Parties are not able to so agree on the calculation of Net Sales of
the Combination Product within three (3) months after commencement
of such negotiations, the dispute shall be submitted to final and
binding arbitration, as provided in Section
10.3
“Non-Breaching Party”
has
the meaning set forth in Section
9.2.1
.
“Onxeo Indemnified Parties”
means Onxeo and its Affiliates and their respective directors,
officers, employees and agents.
“Parties”
means Monopar and
Onxeo and
“Party”
shall mean any of
them.
“Patents” and “Patent
Rights”
means any patent applications, patents, author
certificates, inventor certificates, utility models, and all
foreign counterparts of them and includes all divisionals,
renewals, continuations, continuations-in-part, extensions,
reissues, reexaminations, substitutions, confirmations,
registrations, revalidations and additions of or to them, as well
as any Supplementary Protection Certificate, or any like form of
protection.
“Person”
means any
individual, firm, corporation, partnership, limited liability
company, trust, business trust, joint venture, Regulatory
Authority, association, or other entity.
“Phase III Trial”
means a
human clinical trial of a Licensed Product, which trial is
designed: (a) to establish that the Licensed Product is safe and
efficacious for its intended use; (b) to define warnings,
precautions and adverse reactions that are associated with the
Licensed Product in the dosage range to be prescribed; and (c)
consistent with 21 CFR § 312.21(c).
“Phase III Clinical Trial
Report”
means a full clinical study report in relation
to a Phase III Trial which is written by or on behalf of
Monopar.
“Phase IV Trial”
means (i)
any clinical trial in humans conducted to satisfy a requirement of
a Regulatory Authority in order to maintain a Regulatory Approval
and (ii) any clinical trial in humans conducted after the first
Regulatory Approval in the same disease state for which the
Licensed Product received Regulatory Approval in the
Territory.
“Price Approval”
means, in
those countries in the Territory where a Regulatory Authority may
approve or determine pricing and/or pricing reimbursement for
pharmaceutical products, such approval or
determination.
“Progress Report”
means
a written report
produced by Monopar setting out brief details of: (i) the progress
of development of the Licensed Product; (ii) the progress of any
applications for Regulatory Authorization and (where relevant)
Price Approvals; and (iii) the progress of and plans for marketing
and sale of the Licensed Product.
“Prosecution”
means the
preparation, filing, procuring, and maintenance of Patents, such as
before national, international, and regional patent offices,
including any interferences, derivation proceedings, reissue
proceedings, reexaminations, and post-grant proceedings (such as
inter partes reviews, post-grant reviews, and oppositions). When
used as a verb, “Prosecute” means to engage in
Prosecution.
“Quarter”
means any of the
three (3) monthly periods commencing on the first day of any of the
months of January, April, July, and October in any year and
“Quarterly”
has
a corresponding meaning.
“Receiving Party”
has the
meaning set forth in Section
8.1
.
“Regulatory Approval”
means,
with respect to any Licensed Product in any jurisdiction, all
approvals (including Pricing Approvals) from any Regulatory
Authority necessary for the development, commercial manufacture,
marketing and sale of the Licensed Product in such jurisdiction in
accordance with Laws.
“Regulatory Authority”
means
any national or supranational governmental authority, including the
FDA, EMEA, or Koseisho (i.e., the Japanese Ministry of Health and
Welfare, or any successor agency thereto), that has responsibility
in countries in the Territory over the Development and/or
Commercialization of a Licensed Product.
“Regulatory Filings”
means
any and all regulatory applications and filings and associated
correspondence made in order to obtain Regulatory
Approvals.
“Sublicensee”
means a person
to whom a sublicense is granted in accordance with Section
3.2
in respect of the whole or any part of the
rights granted under this Agreement or any person to whom such
Sublicensee grants a sublicense in accordance with Section
3.2
.
“Supplementary Protection
Certificate”
means a right based on a patent pursuant
to which the holder of the right is entitled to exclude Third
Parties from using, making, having made, selling or otherwise
disposing or offering to dispose of, importing or keeping the
product to which the right relates, such as supplementary
protection certificates in Europe, and any similar right anywhere
in the world.
“Term”
means the term of
this Agreement determined in accordance with Section
9.1.4
.
“Territory”
means any and
all countries in the world.
“Third Party”
means any
Person other than Monopar, Onxeo and their respective Affiliates
and Sublicensees.
“Trademark”
means any word,
name, symbol, color, designation, or device or any combination
thereof, whether registered or unregistered, including any
trademark, trade dress, service mark, service name, brand mark,
trade name, brand name, logo, or business symbol.
“United States”
or
“U.S.”
means the
United States of America and all its territories and
possessions.
“Valid Claim”
means a claim
within an issued United States Patent or any foreign Patent that
has not expired, lapsed, or been cancelled or abandoned, and that
has not been dedicated to the public, disclaimed, or held
unenforceable, invalid, or been cancelled by a court or
administrative agency of competent jurisdiction in an order or
decision from which no appeal has been or can be taken, including,
without limitation, through opposition, reexamination, reissue or
disclaimer; provided that, on a country- by-country basis, a patent
application or subject matter of a claim thereof pending for more
than five (5) years from the earliest filing date to which such
patent application or claim is entitled shall not be considered to
have any Valid Claim for purposes of this Agreement unless and
until a patent with respect to such application issues with such
claim.
“Validive”
or
“
Validive
®
” means the Licensed Product
when used in association with the Trademark
“Validive®” or “Clonidine
Lauriad®.”
“Validive Materials”
means
the Materials further described in
SCHEDULE 4
.
“Year”
means a calendar
year.
1.2.1
unless the context
requires otherwise, all references to a particular Article, Section
or Schedule shall be references to that article, section or
schedule, of or to this Agreement;
1.2.2
the table of
contents and headings are inserted for convenience only and shall
be ignored in construing this Agreement;
[
***] = Confidential Information has been
omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
1.2.3
unless the contrary
intention appears, words importing the masculine gender shall
include the feminine and vice versa and words in the singular
include the plural and vice versa;
1.2.4
unless the contrary
intention appears, words denoting persons shall include any
individual, partnership, company, corporation, joint venture,
trust, association, organization or other entity, in each case
whether or not having separate legal personality;
1.2.5
reference to any
statute or regulation includes any modification or re-enactment of
that statute or regulation, provided that the modification or
re-enactment does not diminish the rights or extend the obligations
of any Party;
1.2.6
references to the
words “include” or “including” shall be
construed without limitation to the generality of the preceding
words;
1.2.7
where either
Party’s approval or consent is required hereunder, except as
otherwise specified herein, such Party’s approval or consent
shall be a prior written consent which may be granted or withheld
in such Party’s discretion, but shall not be unreasonably
conditioned, delayed or denied; and
1.2.8
all references to
“dollars” shall be to the lawful currency of the United
States of America.
2.
MONOPAR VALIDIVE OPTION;
MONOPAR DEVELOPMENT AND COMMERCIALIZATION
2.1
Monopar Validive Option.
Subject to the
terms and conditions of this Agreement, including the payment of
amounts to Onxeo as and when such amounts become due under this
Agreement, Onxeo hereby grants to Monopar the exclusive right,
exercisable at Monopar’s sole discretion, in accordance with
Sections 2.1.1 through 2.1.7, to elect to obtain an exclusive
worldwide license under Section
3.1
to
Develop, Commercialize, and manufacture Licensed Products under the
terms and conditions set forth in this Agreement (the
“Monopar Validive
Option”
).
2.1.1
Monopar Validive Option Period.
As from
the Effective Date, Monopar shall:
(a)
have [***] to
submit a new application for orphan drug designation in the United
States;
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
(b)
from the time
of receiving feedback from the orphan drug office of the FDA, have
[***] to prepare the materials for and request a meeting with the
FDA;
(c)
from the date
of the FDA meeting, have [***] to exercise the Monopar Validive
Option.
The
periods described in Sections
2.1.1(a)
,
2.1.1(b)
, and
2.1.1(c)
shall together be known as the
“Monopar Validive Option
Period”.
2.1.2
Monopar Validive Option Termination;
Expiration
. The Monopar Validive Option shall terminate or
expire if:
(a)
Monopar fails
timely to achieve 2.1.1(a), 2.1.1(b), or 2.1.1(c) without first
having exercised the Monopar Validive Option, and with Onxeo having
promptly responded to information requests during the Monopar
Validive Option Period (any such period of delay by Onxeo shall
cause an automatic equivalent time period extension to the Monopar
Validive Option Period); or
(b)
Monopar voluntarily
terminates the Monopar Validive Option at any time and for any
reason;
If one
of 2.1.1(a), 2.1.1(b), or 2.1.1(c) is not satisfied, or if Monopar
voluntarily terminates the Monopar Validive Option at any time and
for any reason:
(c)
the Monopar
Validive Option shall terminate, and all rights to the Licensed
Product shall remain with Onxeo unencumbered by Monopar’s
option; and
(d)
Onxeo shall have
the right to request from Monopar a copy of all documents and
correspondence exchanged with the FDA, at no cost. Such documents
shall be delivered within thirty (30) days of such
request.
2.1.3
Monopar Validive Option Exercise
. The
Monopar Validive Option shall only be exercisable during the
Monopar Validive Option Period. Monopar shall exercise its Monopar
Validive Option, if at all, by written notice to Onxeo, which
notice shall make reference to this Agreement and
Validive.
2.1.4
Monopar Rights on Exercise of the Monopar
Validive Option
. Following exercise of the Monopar Validive
Option, Monopar shall have responsibility for Development and
Commercialization of Licensed Products, subject to its obligations
under this Agreement. Upon Monopar’s exercise of the Monopar
Validive Option, Onxeo shall provide Monopar with all information
and data for Licensed Products and the Validive Materials, and
Onxeo shall cooperate with Monopar to provide a smooth transfer of
such information and data and the Validive Materials as soon as
reasonably practical after exercise of the Monopar Validive
Option.
2.1.5
Early Exercise of Monopar Validive
Option.
Monopar may exercise the Monopar Validive Option at
any time during the Monopar Validive Option Period upon written
notice to Onxeo.
2.1.6
Onxeo’s obligations during the Monopar
Validive Option Period
. Onxeo shall authorize Monopar to
reference Onxeo’s Validive IND as filed with the FDA, to
submit a new orphan designation dossier for Validive, and to
organize a meeting with the FDA regarding Validive, all in
Monopar’s Name. Onxeo shall provide Monopar with all
authorizations, consents and rights of reference that Monopar may
reasonably request in order to (a) facilitate the submission of the
new orphan designation dossier for Validive, and (b) request for
and conduct a meeting with the FDA regarding Validive in
Monopar’s name. Onxeo shall provide reasonable support to
Monopar in connection with the meeting with the FDA, without
(except as the Parties may otherwise agree) any obligation for
Onxeo to incur any expenses. Onxeo shall not initiate any further
Development efforts during this Monopar Validive Option
Period.
2.1.7
Monopar’s obligations during the Monopar
Validive Option Period
. Monopar shall, at its own cost and
expense, re-file for orphan drug designation for Validive, and
prepare all required materials, request and lead a meeting with the
FDA regarding development of Validive in the Field and Territory as
specifically related to the treatment of oral mucositis. Without
Onxeo’s permission, or unless required by applicable law,
rules or regulations or request from a stock exchange on which
shares are listed, Monopar shall make no public statement
mentioning Onxeo and/or Validive until the results of the FDA
meeting are known.
2.1.8
Monopar’s Failure to Exercise the Monopar
Validive Option
. If Monopar does not exercise the Monopar
Validive Option during the Monopar Validive Option Period, then the
Monopar Validive Option shall expire. All rights granted to Monopar
hereunder shall terminate, and Onxeo will thereafter have all such
rights previously granted to Monopar, for Onxeo to Develop and
Commercialize Validive at Onxeo’s sole expense.
Monopar’s rights and licenses granted hereunder to Validive
shall terminate.
2.2
Monopar
Development and Regulatory Responsibilities.
2.2.1
Development Responsibilities and Costs.
Monopar, at its sole cost and expense, shall have responsibility
for conducting, and shall use Commercially Reasonable Efforts to
conduct, all Development activities with respect to Licensed
Products following exercise of the Monopar Validive
Option.
2.2.2
Regulatory Responsibilities and Costs.
Promptly after Monopar’s exercise of the Monopar Validive
Option, Onxeo shall (a) assign to Monopar all Regulatory Filings
for Licensed Products and, (b) upon Monopar’s request, assign
to Monopar all clinical trial or other subcontractor agreements
relating solely to Licensed Products. Following exercise of the
Monopar Validive Option, Monopar shall prepare, file, maintain, and
own all Regulatory Filings and related submissions relating to
Licensed Products. Monopar shall have responsibility for, and shall
prepare, all Regulatory Filings and related submissions with
respect to Licensed Products. At Monopar’s election,
following exercise of the Monopar Validive Option, Monopar shall be
responsible for all safety reporting obligations globally with
respect to such Licensed Products, and to take over and maintain
the global safety database for Licensed Products.
2.2.3
Record Keeping; Audit for Cause.
Each
Party shall maintain, or cause to be maintained, records of its
respective Development and regulatory activities with respect to
the Licensed Product in the Field in the Territory in sufficient
detail and in good scientific manner appropriate for patent and
regulatory purposes, which shall be complete and accurate and shall
fully and properly reflect all work done and results achieved in
the performance of its respective development activities, and which
shall be retained by such Party for at least ten (10) years after
the termination of this Agreement, or for such longer period as may
be required by applicable law. Each Party shall have the right,
during normal business hours, upon at least ten (10) Business Days
prior notice and without charge, to inspect and copy any such
records, except in the event of an audit for safety reason;
provided, however, that, except in the event of an “audit for
cause,” neither Party shall have the right to conduct more
than one such inspection in any twelve (12) month period.
“Audit for
cause”
shall mean any audit conducted by Onxeo in
reason of any material deficiencies of Monopar or its Affiliates or
Sublicensees relating to the activities contemplated
hereunder.
2.3
Monopar Commercialization Responsibilities and
Costs.
Monopar, at its sole cost and expense, shall have
responsibility for conducting, and shall use Commercially
Reasonable Efforts to conduct, all Commercialization activities
with respect to Licensed Products following exercise of the Monopar
Validive Option.
2.4
Manufacture and Supply.
Monopar, at its
sole option and expense, may choose to continue with Onxeo’s
current contract manufacturing partners for part or all presently
sourced manufacturing or manufacturing related activities,
including API and Licensed Product manufacture, for part or all of
the Term. In such event, Monopar shall be solely responsible for
negotiating agreements with such manufacturing partners, it being
understood and agreed that Onxeo’s sole obligation in this
respect shall be to introduce Monopar to such manufacturing
partners. Under all circumstances, Monopar reserves the exclusive
right to manufacture and supply any and all Licensed
Products.
2.5
Reporting
and Right of Inspection.
2.5.1
Monopar shall
provide Onxeo upon Monopar’s exercise of the Monopar Validive
Option with a copy of an initial Development and Commercialization
plan for the Licensed Products. Thereafter, Monopar shall provide
Onxeo with an updated Development and Commercialization plan for
each Year no later than December 1 of the Year for each Year.
Additionally, every Year within thirty (30) days after
Monopar’s annual financial reports have been completed,
but in no event later than April 1, the Parties shall
meet by teleconference to discuss the progress in and results of
the Development and Commercialization of the Licensed Products
during the previous year.
2.5.2
During the Term,
Monopar shall also keep (and shall cause its Affiliates and
Sublicensees to keep), and shall make available to Onxeo for
inspection on Onxeo’s reasonable demand once per year
complete and accurate records pertaining to the progress in and
results of the Development and Commercialization activities in the
Territory, in sufficient detail to permit Onxeo to ensure the
satisfaction of Monopar’s contractual obligations
hereunder.
Monopar
may have performed by subcontractors any activities required of
Monopar hereunder. Monopar shall be solely responsible for the
performance by any of its subcontractors of Monopar’s
obligations hereunder.
2.7
No
Onxeo Financial Obligation
Except
as expressly provided herein, all costs relating to the Development
and Commercialization of the Licensed Product after Monopar’s
exercise of the Monopar Validive Option shall be borne solely by
Monopar, and Onxeo shall not be obligated to take any action which
may subject Onxeo to any cost, expense or liability with respect to
other matters.
3.
LICENSES; TECHNOLOGY TRANSFER;
EXCLUSIVITY
3.1
License to Monopar for Validive
and Licensed Products.
3.1.1
Licensed Intellectual Property.
Subject
to the terms and conditions of this Agreement, Onxeo hereby grants
to Monopar and its Affiliates the exclusive (even as to Onxeo and
its Affiliates), worldwide license, with the right to grant
sublicenses under the Licensed Intellectual Property as described
in Section
3.2
below, to use,
sell, offer to sell, import, make and have made, and otherwise
Develop, Commercialize or manufacture Licensed Products during the
Term, in the Territory and in the Field, and to apply for
Regulatory Approval in its own name for Licensed Products in any
jurisdiction, such license to be effective upon Monopar’s
exercise of the Monopar Validive Option and payment of the License
Fee.
3.1.2
License to Trademark
. Subject to the
terms and conditions of this Agreement, and at no additional cost
to Monopar or its Affiliates, Onxeo hereby grants to Monopar and
its Affiliates an exclusive right and license during the Term, with
the right to grant sublicenses as described in Section
3.2
below, to the Licensed Trademarks, such
Licensed Trademarks to be used by Monopar solely in connection with
the Development and Commercialization of Licensed Products and in
Monopar’s corporate communications with respect thereto. A
complete list of such Licensed Trademarks, and existing
registrations thereof, is attached as
SCHEDULE 3
. Monopar shall be in charge of
securing and maintaining the registration(s) of the Licensed
Trademarks in the Territory in the name of Monopar and at its sole
cost and expense. Onxeo shall provide upon request, and at no cost
to Onxeo, any assistance reasonably required by
Monopar.
3.2
Sublicenses.
Monopar shall have the
right to grant sublicenses to Third Parties without the prior
written consent of Onxeo. Monopar shall ensure that there are
included in the terms of any sublicense substantially equivalent
obligations and undertakings on the part of the Sublicensee to
those applying to Monopar in this Agreement. Any such sublicenses
shall be without limitation on Monopar’s obligations
hereunder and Monopar shall be solely responsible for the
performance by any of its Sub-Licenses of Monopar’s
obligations hereunder.
3.3
Use of Names; Logo.
Monopar, at its sole
cost and expense, shall be responsible for the selection,
registration, and maintenance of all Trademarks which it employs in
connection with its activities conducted pursuant to this
Agreement, including those licensed hereunder.
3.4
No other licenses.
No license to use any
Intellectual Property is granted to Monopar, or any Sublicensee,
except the rights expressly granted in this Agreement.
3.5
Technology Transfer by Onxeo after Exercise by
Monopar of the Monopar Validive Option.
As soon as
reasonably practical after Monopar exercises its Monopar Validive
Option, Onxeo shall transfer to Monopar, at no cost to Monopar, all
Onxeo Licensed Know-How and other information in Onxeo’s
possession and Control or reasonably available to Onxeo that are
necessary or useful for the exercise by Monopar and its Affiliates
of the rights granted under Section 3.1 with respect to Licensed
Products and the Validive Materials. Onxeo shall provide all
reasonable assistance, including making its personnel reasonably
available for meetings or teleconferences, to support and assist
Monopar, at no cost to Onxeo, in the Development and
Commercialization of Licensed Products, for a period of one (1)
year after Monopar exercises its Monopar Validive Option. Within
thirty (30) days of receiving the License Fee, Onxeo
shall:
3.5.1
transfer title to
all IND’s for Licensed Products to Monopar;
3.5.2
assign Licensed
Patents to Monopar;
3.5.3
assign Licensed
Trademarks to Monopar;
3.5.4
submit to the
appropriate authorities the necessary paperwork to transfer title
to all orphan drug designations for Licensed Products to
Monopar;
3.5.5
transfer title in
the Validive Materials to Monopar. Such materials are purchased
‘as is’ and “where is” and it shall be
Monopar’s responsibility to check the quality of such
materials and that they are suitable for Monopar’s use
thereof; and
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
3.5.6
provide Monopar
with such information and Know-How relating to the manufacture of
Validive as is relevant to the efficient production of a sufficient
quantity of Validive for clinical trials.
3.6
Exclusivity
. During the Term, Onxeo will
not engage in the research, discovery, optimization, development or
commercialization of any products that would be considered a
Licensed Product. Notwithstanding the foregoing, following
termination of this Agreement, Onxeo shall be free to research,
optimize, develop or commercialize, either on its own or with or
through a Third Party, any Licensed Product.
3.7
Acquisition of Rights.
Should
Monopar wish, at
any time during the Term, to acquire all right, title, and interest
in and to the Licensed Intellectual Property, then held by Onxeo or
any successor or permitted assignee, it may by giving notice to
Onxeo request that Onxeo enter into negotiations in this regard.
Any such acquisition on terms and conditions (including financial
terms and conditions) acceptable to each Party in its sole
discretion.
4.1
Option Fee.
[***] for entering into this
Agreement.
4.2.1
Monopar shall pay
to Onxeo within ten (10) Business Days of exercising the Monopar
Validive Option the sum of one million dollars ($1,000,000.00), the
“
License Fee
”.
The License Fee is a one-time, non-refundable, non-creditable
payment.
4.3
Development and Sales
Milestones.
4.3.1
Monopar shall
pay the following payments (each, a “
Milestone Payment
”) to Onxeo upon
the first occurrence only of the following events (each, a
“
Milestone
Event
”) in relation to Licensed Product:
(a)
[***] upon [***]
for a Licensed Product;
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
(b)
t[***] upon [***]
for a Licensed Product;
(c)
[***] upon [***]
for a Licensed Product;
(d)
[***] upon [***]
for a Licensed Product;
(i)
[***] upon [***];
and
4.4
Royalty.
Monopar shall pay royalties to
Onxeo on a Licensed Product-by-Licensed Product and
country-by-country basis until the later of (1) the date when the
Licensed Product is no longer within the scope of a Valid Claim of
a Licensed Patent in the country of sale or manufacture, (2) the
expiry of any Extended Exclusivity Period in the relevant country,
or [***] after the First Commercial Sale of the Licensed Product in
such country. The rate shall be [***] of Net Sales ex-US. For the
United States, the rate shall be [***] of Net Sales for the [***]
starting from the First Commercial Sale of Licensed Product [***]
of Net Sales for [***] after the First Commercial Sale of Licensed
Product, and [***] of Net Sales from [***] onward after the First
Commercial Sale of Licensed Product. The otherwise applicable rate
shall be reduced by [***] on a Licensed Product-by-Licensed Product
and country-by-country basis if a royalty payment is due solely by
reason of subparagraph (3) above.
4.5
Payments.
All payments due to Onxeo
under this Agreement shall be made in dollars by bank wire transfer
of immediately available funds, with fees of the transmitting bank
paid by Monopar, to such bank account as Onxeo may notify to
Monopar in writing from time to time.
4.6.1
The payments due
under Section
4.3
shall be payable
within sixty (60) Business Days after when they are
due.
4.6.2
Any royalties due
pursuant to Section
4.4
shall be paid
Quarterly within sixty (60) days of the end of each Quarter with
respect to Net Sales in such Quarter; and
4.6.3
After Monopar
exercises the Monopar Validive Option, any costs or expenses
related to the Prosecution, registration or maintenance of Licensed
Patents or Licensed Trademarks shall be paid by
Monopar.
4.7
Taxes.
All payments to Onxeo under this
Agreement are expressed to be inclusive of value added tax (or any
other sale goods tax) howsoever arising.
4.8
Withholding.
In the event that Monopar
is required by law to withhold or pay to any government authority
any taxes on behalf of Onxeo, with respect to any payments to it
hereunder, the amount payable to Onxeo shall not be increased such
that the amount that Onxeo actually receives is equal to the amount
that Onxeo would have received had no withholding been made.
Monopar shall furnish Onxeo with proper evidence of the taxes so
paid and Onxeo shall be responsible for reclaiming such tax. Each
Party shall furnish the other Party with appropriate documents to
secure application of the most favorable rate of withholding tax
under applicable Law. Notwithstanding the above, in the event that
Monopar, by reason of an assignment of its rights hereunder or
other actions, causes Onxeo to be subject to withholding to which
Onxeo is not subject as of the Effective Date, if Onxeo is unable
to reclaim such withholding tax payments, Monopar shall increase
such payments made hereunder such that the amount that Onxeo
actually receives is equal to the amount that Onxeo would have
received had no withholding been made.
4.9
Quarterly Report
. Within forty-five (45)
days after the end of each Quarter, Monopar shall send to Onxeo a
written statement detailing in respect of that Quarter (including a
nil report if appropriate):
4.9.1
any Milestone Event
achieved by it or any Sublicensee and any Milestone Payment which
became due to Onxeo;
4.9.2
the quantity of
Licensed Products sold or otherwise disposed of by Monopar at the
wholesale and retail levels, its Affiliates or any Sublicensees in
the Territory;
4.9.3
the Net Sales in
respect of Licensed Products in each country of the Territory in
sufficient detail to allow Onxeo to calculate all payments due
under Section
4.3
and Section
4.4
, including, without limitation, the
numbers of units of Licensed Products sold, the aggregate gross
sales price for such units (in its native currency), and a
description of the amount and justification for an any deductions
made to such aggregate gross sales in determining the reported Net
Sales;
4.9.4
the aggregate Net
Sales in respect of that Quarter for Licensed Product;
4.9.5
any currency
conversions, showing the rates used; and
4.9.6
the amount of the
royalties due to Onxeo in respect of that Quarter.
4.10
Interest.
Where the payee does not
receive payment within the relevant period of any sums that are
finally determined to be due and payable to it under this
Agreement, interest shall accrue on the sum due and payable from
the date payment was first due to the date payment is made at the
rate equivalent to an annual rate of two percent (2%) over the then
current base rate of one (1) month LIBOR, calculated on a daily
basis, without prejudice to payee’s right to receive payment
within the relevant period, provided always the provisions of this
Section
4.10
shall not apply to the
extent and for the period that a Force Majeure event prevents
payment.
(a)
keep and,
notwithstanding the expiry or termination of this Agreement,
maintain for at least six (6) years, true and accurate accounts and
records (including any underlying documents supporting such
accounts and records) in sufficient detail to enable the amount of
all sums payable under this Agreement to be determined;
and
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
(b)
during the Term
and thereafter until the said period of six (6) years relevant to
the accounts and records has expired, at the reasonable request of
Onxeo and (subject to Section
4.11.2
)
at the expense of Onxeo from time to time, permit or procure
permission for a qualified accountant nominated by Onxeo and
reasonably acceptable to Monopar to inspect and audit those
accounts and records.
4.11.2
If, following
any inspection pursuant to Section
4.11.1(b)
, Onxeo's nominated accountant
confirms to Onxeo that the payments in respect of any Year fall
short of the sums which were properly payable in respect of that
Year under this Agreement, Onxeo shall send a copy of the
certificate to Monopar and Monopar shall (subject to Section
4.11.3
) within [***] of the date of
receipt of the certificate pay the shortfall to Onxeo and, if the
shortfall exceeds the greater of [***] of the sum properly payable
or [***], Monopar shall also reimburse to Onxeo the reasonable
costs and expenses of Onxeo in making the inspection, provided that
costs and expenses so reimbursed shall not exceed [***] of the
shortfall so determined.
4.11.3
If within
thirty (30) days of the date of receipt by Monopar of any
certificate produced pursuant to Section
4.11.2
Monopar notifies Onxeo in writing that
it disputes the certificate, the dispute shall be referred for
resolution by an independent expert jointly appointed by the
Parties. If the Parties fail to jointly appoint an independent
expert, shall be finally resolved as provided in Article
10
(Dispute Resolution).
5.1
Ownership of Arising Intellectual
Property
. All right, title and interest in and to any data,
Patents, and extensions thereof, Know-How and other information
created, developed, or arising on or after the Effective Date and
pertaining to Licensed Products shall be solely owned by Monopar.
For the avoidance of doubt, Arising Intellectual Property generated
through CMC, Quality, data, or clinical observations will be owned
by Monopar. As of the Effective Date, at its own cost, Monopar
shall have the full and exclusive benefit of, and right to apply
for and obtain, patents or other similar forms of protection in
respect of any part or parts of the subject-matter of the Licensed
Patents throughout the world, and the right to claim priority from
the Licensed Patents.
5.2
Ownership of Clinical Data.
Any Clinical
Data generated by or on behalf of Monopar will be owned by
Monopar.
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
5.3
Intellectual Property
Management.
5.3.1
Upon Monopar
exercising its Monopar Validive Option, Monopar shall be
responsible for, and shall bear or pay all costs and expenses
related to, the Prosecution and maintenance, of the Licensed
Patents and Patents claiming any Arising Intellectual Property, and
the registration, renewal and maintenance of the Licensed
Trademarks, until the termination of this agreement. The Parties
shall hold all information they know or acquire under this Section
5.3.1
that is related to all such
Patents as confidential, subject to the provisions of this
Agreement.
5.3.2
Monopar shall keep
Onxeo reasonably informed in writing as to the Prosecution,
registration and/or maintenance status of the Licensed Patents and
Licensed Trademarks, and shall at Onxeo's request promptly provide
Onxeo with a copy of all submissions made to or responses received
from the relevant patent and trademark offices and all
correspondence to and responses received from the relevant patent
and trademark agents in relation to the Licensed Patents and
Licensed Trademarks in each country of the Territory.
5.3.3
If Monopar elects
not to file an application or otherwise not prosecute, register
and/or maintain a Licensed Patent or Licensed Trademark in any
country of the Territory, Monopar shall notify Onxeo in writing
promptly of its decision and shall use its reasonable efforts to
provide Onxeo with at least [***] notice prior to the expiration of
any applicable time bars. During the aforementioned [***] notice
period, Monopar shall retain the responsibility for the
Prosecution, registration and maintenance of the relevant Licensed
Patent or Licensed Trademark. On the expiry of such notice
period:
(a)
the license granted
pursuant to Section
3.1.1
shall
terminate in respect of that country and that relevant Licensed
Product for any relevant Licensed Patent or Licensed Trademark
which is the subject of such a notice;
(b)
Monopar shall, at
Onxeo's request, promptly transfer to Onxeo (or any person
nominated by Onxeo) any and all documents and information in
Monopar's control relating to such relevant Licensed Patent or
Licensed Trademark; and
(c)
Onxeo shall be free
to Prosecute, register or abandon such relevant Licensed Patent or
Licensed Trademark at its sole discretion and to grant rights
thereunder to any Person without further reference to Monopar, and
Onxeo shall thereafter be responsible for the expense of filing,
prosecuting, registering and maintaining the relevant Patents and
Trademarks.
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
5.3.4
Infringement.
Each Party will promptly
notify the other Party in writing within [***] of it becoming aware
of any infringement or suspected infringement by a Third Party of
any of the Licensed Patents or Licensed Trademarks, or any
unauthorized use of the Licensed Know-How. In respect of the
Licensed Patents, Patents claiming Arising Intellectual Property or
Licensed Trademarks, Monopar may (a) at its own cost and expense
and subject to Section
5.3.5
, bring
proceedings in its own name or, if required by law, jointly with
Onxeo, for infringement of the Licensed Patents, Patents claiming
Arising Intellectual Property or Licensed Trademarks; and (b) in
any such proceedings settle any claim for infringement of the
Licensed Patents, Patents claiming Arising Intellectual Property or
Licensed Trademarks, provided that Monopar shall not, without the
consent of Onxeo (which consent shall not be unreasonably withheld,
conditioned or delayed), enter into any settlement that (a) imposes
any liability or obligation on Onxeo, or (b) unreasonably reduces
(i) the scope of the subject matter claimed in any Licensed Patent
or (ii) the right to use any Licensed Trademark. Should Monopar
fail to initiate such infringement proceedings within ten (10)
Business Days of a demand therefor from Onxeo, Onxeo may do so at
its own cost and subject to Section
5.3.5
.
Monopar
shall be solely responsible for the defense of any claims that its
activities with respect to Licensed Products infringe the
Intellectual Property Rights of any Third Parties and shall bear
and pay the costs and expenses thereof.
5.3.5
Entitlement to Proceeds.
Any damages,
profits and awards of whatever nature recovered by a Party in any
proceedings referred to in this Section
5.3
shall be retained solely by the Party
directing or defending such suit or proceeding. In any such
proceedings, the Party bringing or defending the proceedings (the
“
Active Party
”)
and the other Party (the “
Inactive Party
”) will bear all of
its own costs, including attorneys’ fees, relating to such
legal proceedings; provided that the Active Party shall bear the
Inactive Party’s out-of-pocket expenses, including
attorneys’ fees, incurred in complying with requests for
cooperation made by the Active Party. The Inactive Party shall
promptly provide the Active Party with all documents and assistance
as the Active Party may reasonably require. The Active Party shall
promptly provide the Inactive Party with notice of such proceedings
and keep the Inactive Party regularly informed of progress and
promptly provide the Inactive Party with such information as the
Inactive Party may reasonably require including copies of all
documents filed at court in the proceedings.
5.3.6
Confirmatory Patent Licenses.
The
Parties shall, at the request of either of them and at the expense
of the requesting Party but for no further consideration, enter
into such confirmatory patent licenses relating to the Licensed
Patents, substantially in the form set out in
SCHEDULE 5
, as may be necessary or desirable
in accordance with the relevant Law and practice in each country in
the Territory for registration at the relevant patent offices so
that this Agreement need not be registered or recorded unless the
Parties are required to do so by law. If there are any
inconsistencies between the terms of any such confirmatory patent
license and the provisions of this Agreement, this Agreement shall
prevail.
5.3.7
Patent Term Extension.
With respect to
Licensed Products, Onxeo grants Monopar the exclusive right to
apply for, in its own name where possible, a Supplementary
Protection Certificate, patent term extension and/or any other
exclusivity in respect of any Licensed Product. At Monopar's
reasonable request, Onxeo shall provide, at no cost to itself,
reasonable assistance to Monopar in connection with any such
applications.
6.
WARRANTIES AND LIMITATION OF
LIABILITY
6.1.1
No reliance on warranties not in the
Agreement.
Each Party acknowledges that, in entering into
this Agreement, it does not do so in reliance on any warranty or
other provision except as expressly provided in this Agreement, and
all conditions, warranties, terms and undertakings implied by
statute or otherwise are excluded from this Agreement to the
fullest extent permissible by law.
6.1.2
Warranties.
Each Party hereby warrants
to the other Party that, as of the Effective Date:
(a)
it is duly
organized and validly existing under the laws of its place of
incorporation;
(b)
it has legal power,
authority and right to enter into this Agreement;
(c)
the execution and
performance by it of its obligations hereunder will not constitute
a breach of, or conflict with, its organizational documents nor any
other material agreement or arrangement, whether written or oral,
by which it is bound;
(d)
it has full
corporate power and authority and has taken all corporate action
necessary to enter into and perform this Agreement, and that this
Agreement has been duly authorized, executed, and delivered by that
Party; and
(e)
that this Agreement
is a valid, binding, and legally enforceable obligation of that
Party (subject to applicable Laws of insolvency and bankruptcy and
customary conditions and limitations as concerns equitable
remedies).
6.1.3
Additional Warranties of Onxeo.
Onxeo
warrants to Monopar at the Effective Date that:
(a)
it does not Control
any Intellectual Property which is required for the use, import,
development or sale of the Licensed Product in the Territory which
is not included in the licenses granted under this
Agreement;
(b)
as far as it is
aware there is no pending or existing, nor has Onxeo received
notice of any threatened, litigation, actions, suits or claims
against it before any court or governmental agency or other
tribunal with regard to the Licensed Intellectual
Property;
(c)
as far as it is
aware there are no oppositions, inter partes reviews, post grant
reviews, derivation proceedings, or interferences concerning the
Licensed Patents pending before any governmental agency or other
tribunal;
(d)
as far as it is
aware there are no inventors of the Licensed Patents other than the
inventors named therein;
(e)
it is the legal and
beneficial owner of the Licensed Intellectual Property free of any
third party rights or encumbrances,
(f)
as far as it is
aware all maintenance fees and annual payments due in respect of
the Licensed Patents have been paid;
(g)
as far as it is
aware the use and possession of Validive or Validive Materials by
Monopar shall not infringe the rights (including without limitation
any Intellectual Property Rights) of any third party;
(h)
it has not done
anything whereby the whole or any part of the rights assigned or
licensed under the Agreement might be invalidated or registration
of them refused;
(i)
it has not and will
not enter into any agreement which prevents it fulfilling its
obligations under this Agreement; and
(j)
as far as it is
aware there is no material Know-How that is necessary or useful to
the Development, Commercialization or manufacturing of the Product
that is not included in the Licensed Know-How.
6.1.4
No Further Representations or
Warranties.
No director, officer, employee or agent of any
Party or its Affiliates is authorized to make any further
representation or warranty to the other Party which is not
contained in this Agreement, and each Party acknowledges that it
has not relied on any such oral or written representations or
warranties.
6.2
Limitation of Liability.
Neither Party,
nor any Onxeo Indemnified Party, nor any Monopar Indemnified Party,
nor their respective directors, officers, employees and agents
shall have any liability under or in connection with this Agreement
whether under statute or in tort (including but not limited to
negligence), contract or otherwise in respect of: (i) any
consequential or indirect loss; and/or (ii) any loss of goodwill,
profit, opportunity or contract, in either case even if advised in
advance of the possibility of such losses. However, nothing in this
Agreement shall be construed as excluding or limiting the liability
of any person for any liability which cannot be limited or excluded
by law, such as for personal injury or death. This Section 6.2 in
no way shall be construed to limit the liability of one Party to
the other Party for milestones and royalties payable under the
terms of this Agreement.
7.1.1
Indemnification by Monopar.
Monopar
shall indemnify, defend and hold harmless the Onxeo Indemnified
Parties against any and all Losses incurred or suffered by the
Onxeo Indemnified Parties to the extent any Loss arises out of or
was caused by an act or omission of Monopar arising from or in
connection with: (a) the exercise of the rights granted in Section
3.1
or the actions of Monopar in
relation to its Development, Commercialization or manufacture of a
Licensed Product; or (b) in the performance of its obligations
under this Agreement; except, in all cases, to the extent that such
Loss arises out of or was caused by the violation by Onxeo of a
legal or contractual duty owed to Monopar.
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
7.1.2
Indemnification by Onxeo.
Onxeo shall
indemnify, defend and hold harmless the Monopar Indemnified Parties
against any and all Losses incurred or suffered by the Monopar
Indemnified Parties to the extent such Loss arises out of or was
caused by an act or omission of Onxeo in the performance of its
obligations under this Agreement except, in all cases, to the
extent that such Loss arises out of or was caused by the violation
by Monopar of a legal or contractual duty owed to
Onxeo.
7.1.3
Notification of Liabilities/Losses.
A
person or entity entitled to indemnification under this Section
7.1
(an “
Indemnified Party
”) shall give
prompt written notification [***] to the Party from whom
indemnification is sought (the “
Indemnifying Party
”) of the
commencement or notice of any claim or proceeding relating to a
Loss for which indemnification may be sought or, if earlier, upon
the assertion of any such Loss, (it being understood and agreed
that the failure by an Indemnified Party to give notice of a Loss
of which it has knowledge as provided in this Section
7.1.3
within [***] shall relieve the
Indemnifying Party of its indemnification obligation under this
Agreement). The Indemnifying Party shall be liable for any
reasonable legal fees and expenses subsequently incurred in
connection with the defense of such Loss after receiving such
notice. The Parties shall thereafter keep the other Party informed
of any Losses.
(a)
In the case of
a Loss for which Onxeo seeks indemnification under Section
7.1.1
, Onxeo shall permit Monopar to direct
and control the defense of the Loss and shall provide such
reasonable assistance as is reasonably requested by Monopar (at
Monopar’s cost) in the defense of the Loss; provided that
nothing in this Section
7.1.3(a)
shall
permit Monopar to make any admission on behalf of Onxeo, or to
settle any claim or litigation which would impose any financial
obligations on Onxeo without the prior written consent of Onxeo,
such consent not to be unreasonably conditioned, withheld, or
delayed.
(b)
In the case of
a Loss for which Monopar seeks indemnification under Section
7.1.2
, Monopar shall permit Onxeo to
direct and control the defense of the Loss and shall provide such
reasonable assistance as is reasonably requested by Onxeo (at
Onxeo’s cost) in the defense of the Loss, provided always
that nothing in this Section
7.1.3(b)
shall permit Onxeo to make any admission on behalf of Monopar, to
settle any claim or litigation which would impose any financial
obligations on Monopar without the prior written consent of
Monopar, such consent not to be unreasonably conditioned, withheld
or delayed.
7.2
Insurance.
Each Party, at its own
expense, and reasonably prior to Commencement of any human being
dosed with the Licensed Product, shall put in place and thereafter
maintain, at its own cost, insurance through a reputable insurance
company. For clarification, such insurance shall be maintained for
an amount within the range that is customary for similar products
in the Territory, on a country-by-country basis, where they are
sold.
8.1
Nondisclosure.
Each Party agrees that,
during the Term and for a period of seven (7) years thereafter, a
Party (the “
Receiving
Party
”) receiving Confidential Information of the
other Party (the “
Disclosing
Party
”) (or that has received any such Confidential
Information from the other Party prior to the Effective Date) shall
(a) maintain in confidence such Confidential Information using not
less than the efforts such Receiving Party uses to maintain in
confidence its own proprietary industrial information of similar
kind and value, (b) not disclose such Confidential Information to
any Third Party without the prior written consent of the Disclosing
Party, except for disclosures expressly permitted below, and (c)
not use such Confidential Information for any purpose except those
permitted by this Agreement (it being understood that this clause
(c) shall not create or imply any rights or licenses not expressly
granted under this Agreement).
8.2
Exceptions.
The obligations in Section
8.1
shall not apply with respect to
any portion of the Confidential Information that the Receiving
Party can show by competent written proof:
8.2.1
is publicly
disclosed by the Disclosing Party, either before or after it is
disclosed to the Receiving Party hereunder;
8.2.2
was known to the
Receiving Party or any of its Affiliates, without any obligation to
keep it confidential or any restriction on its use, prior to
disclosure by the Disclosing Party;
8.2.3
is subsequently
disclosed to the Receiving Party or any of its Affiliates by a
Third Party lawfully in possession thereof and without any
obligation to keep it confidential or any restriction on its
use;
8.2.4
is published by a
Third Party or otherwise becomes publicly available or enters the
public domain, either before or after it is disclosed to the
Receiving Party; or
8.2.5
is independently
developed by or for the Receiving Party or its Affiliates without
reference to or reliance upon the Disclosing Party’s
Confidential Information.
8.3
Authorized Disclosure.
The Receiving
Party may disclose Confidential Information belonging to the
Disclosing Party, and Confidential Information deemed to belong to
both Parties under the terms of this Agreement, to the extent (and
only to the extent) such disclosure is reasonably necessary in the
following instances:
(b)
Regulatory Filings
and obtaining Regulatory Approvals;
(c)
Prosecuting or
defending litigation, including responding to a subpoena in a third
party litigation;
(d)
Subject to Section
8.4
, complying with Laws (including
the rules and regulations of the Securities and Exchange Commission
or any securities exchange) and with judicial process, if in the
reasonable opinion of the Receiving Party’s counsel, such
disclosure is necessary for such compliance; and
(e)
Disclosure, solely
on a “need to know basis,” to Affiliates.
8.4
Securities Filings.
In the event either
Party proposes to file with the Securities and Exchange Commission
or the securities regulators of any state or other jurisdiction a
registration statement or any other disclosure document which
describes or refers to the terms and conditions of this Agreement
under the Securities Act of 1933, as amended, the Securities
Exchange Act of 1934, as amended, or any other applicable
securities Law, the Party shall notify the other Party of such
intention and shall provide such other Party with a copy of
relevant portions of the proposed filing prior to such filing (and
any revisions to such portions of the proposed filing a reasonable
time prior to the filing thereof), including any exhibits thereto
relating to the terms and conditions of this Agreement, and shall
use reasonable and diligent efforts to obtain confidential
treatment of the terms and conditions of this Agreement that such
other Party requests be kept confidential, and shall only disclose
Confidential Information that it is advised by counsel that it
legally is required to disclose. No such notice shall be required
under this Section
8.4
if the
description of or reference to this Agreement contained in the
proposed filing has been included in any previous filing made by
either Party hereunder or otherwise approved by the other
Party.
8.5
Publications.
After exercise of the
Monopar Validive Option, Monopar shall have the exclusive right to
publish or present data and/or results relating to Licensed
Products.
8.6
Effect of Disclosure.
The Receiving
Party agrees that the disclosure of the Disclosing Party's
Confidential Information without the express written consent of the
Disclosing Party may cause irreparable harm to the Disclosing
Party, and that any breach or threatened breach of this Agreement
by the Receiving Party may entitle the Disclosing Party to
injunctive relief, in addition to any other legal remedies
available to it, in any court of competent
jurisdiction.
8.7
Relationship to Confidentiality
Agreement.
This Agreement supersedes the Mutual Confidential
Disclosure Agreement between the Parties executed as of January 19,
2016; provided that all “Confidential Information”
disclosed or received by the Parties thereunder shall be deemed
“Confidential Information” hereunder and shall be
subject to the terms and conditions of this Agreement.
9.1
Term; Expiration.
This Agreement shall
become effective as of the Effective Date and shall continue in
force and effect until expiration as described in this
Section
9.1
, unless earlier
terminated pursuant to Section
9.2
,
9.3
, or
9.4
, and shall expire as follows:
9.1.1
on a Licensed
Product-by-Licensed Product and country-by-country basis, on the
date of expiration of all payment obligations of Monopar under this
Agreement with respect to each Licensed Product in each country, as
applicable;
9.1.2
in its entirety
upon the expiration of all payment obligations under this Agreement
with respect to the last Licensed Product Commercialized in the
last country in the Territory; or
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
9.1.3
if Monopar does
not exercise the Monopar Validive Option in accordance with Section
2.1
, then this Agreement will
terminate in its entirety upon the expiration of the Monopar
Validive Option.
9.1.4
The period
beginning on the Effective Date and ending on expiration or
termination of this Agreement, or as the case may be, until the
date of expiration or termination of a Licensed Product, shall be
the “
Term
” of
this Agreement in its entirety or with respect to a given Licensed
Product, as applicable.
9.2.1
Material Breach.
Either Party (the
“
Non-Breaching
Party
”) may, without prejudice to any other remedies
available to it at law or in equity, terminate this Agreement in
its entirety, or terminate any Licensed Product in any portion of
the Territory that is affected by a material breach, in its sole
discretion, in the event the other Party (the “
Breaching Party
”) has materially
breached this Agreement, and such breach, if curable, has continued
for [***] (the “
Cure
Period
”) after written notice thereof is provided to
the Breaching Party by the Non-Breaching Party, such notice
describing the alleged material breach in sufficient detail to put
the Breaching Party on notice; provided that, if such breach is not
susceptible to cure within the Cure Period, then, the Non-Breaching
Party’s right to termination shall be suspended only if and
for so long as the Breaching Party has provided to the
Non-Breaching Party a written plan that is reasonably calculated to
effect a cure and such plan is reasonably acceptable to the
Non-Breaching Party, and the Breaching Party commits to and does
carry out such plan. In all circumstances, if within the Cure
Period the Breaching Party pays the Non-Breaching Party an amount
equal to the costs, damages, expenses and losses incurred as a
result of the material breach, the material breach shall be
considered cured.
9.2.2
Disagreement as to Material Breach; Cure
Period.
If the Parties reasonably and in good faith disagree
as to whether there has been a material breach, the Party that
disputes that there has been a material breach may contest the
allegation in accordance with Article
10
(Dispute Resolution). Notwithstanding the
preceding sentence, the Cure Period for any allegation made in good
faith as to a material breach under this Agreement will run from
the date that written notice thereof was first provided to the
Breaching Party by the Non-Breaching Party. The right of either
Party to terminate this Agreement, in whole or in part, as provided
in this Section
9.2
, shall not be
affected in any way by such Party’s waiver or failure to take
action with respect to any previous default. It is understood and
acknowledged that, during the pendency of such a dispute, all of
the terms and conditions of this Agreement shall remain in effect,
and the Parties shall continue to perform all of their respective
obligations under this Agreement.
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
9.3
Monopar Unilateral Termination
Rights.
9.3.1
Termination of Agreement in Its
Entirety.
Monopar may, in its sole discretion, exercisable
at any time during the Term, terminate this Agreement in its
entirety for any reason or no reason at all, upon [***] written
notice to Onxeo.
9.3.2
Termination on a Licensed Product-by-Licensed
Product basis.
Monopar may, in its sole discretion,
exercisable at any time during the Term, terminate this Agreement
on a Licensed Product-by-Licensed Product basis for any reason or
no reason at all, upon [***] written notice to Onxeo.
9.4
Termination for Insolvency.
To the
extent permitted under Law, either Party may terminate this
Agreement, (a) if, at any time, the other Party files in any court
or agency pursuant to any statute or regulation of any state or
country, a petition in bankruptcy or insolvency or for
reorganization or for an arrangement or for the appointment of a
receiver or trustee of the Party or of substantially all of its
assets, or (b) if the other Party is served with an involuntary
petition against it, filed in any insolvency proceeding, and such
petition shall not be dismissed within [***] after the filing
thereof, or (c) if the other Party shall propose or be a party to
any dissolution or liquidation, or (d) if the other Party shall
make an assignment of substantially all of its assets for the
benefit of creditors. Each Party agrees to give the other Party
prompt notice of the foregoing events giving rise to termination
under this Section
9.4
. All rights and
licenses granted under or pursuant to any section of this Agreement
are and shall otherwise be deemed to be for purposes of Section
365(n) of Title 11, United States Code (the “
Bankruptcy Code
”) licenses of
rights to “intellectual property” as defined in Section
101(35A) of the Bankruptcy Code. The Parties shall retain and may
fully exercise all of their respective rights and elections under
the Bankruptcy Code. All materials required to be delivered by the
non-bankrupt Party under this Agreement (including all
manufacturing information), and all materials relating to the
Licensed Intellectual Property that, in the course of dealing
between the Parties under this Agreement, are or would be
customarily delivered, shall be considered to be
“embodiments” of such intellectual property for
purposes of Section 365(n) of the Bankruptcy Code. Upon the
bankruptcy of any Party, the non-bankrupt Party shall further be
entitled to a complete duplicate of, or complete access to, any
Intellectual Property licensed to the non-bankrupt Party, and such,
if not already in its possession, shall be promptly delivered to
the non-bankrupt Party, unless the bankrupt Party elects to
continue, and continues, to perform all of its obligations under
this Agreement. All written agreements entered into in connection
with the Parties’ performance under this Agreement from time
to time shall be considered agreements “supplementary”
to this Agreement for purposes of Section 365(n) of the Bankruptcy
Code.
9.5
Consequences of Expiration or
Termination.
All of the following effects of expiration or
termination, as applicable, are in addition to the other rights and
remedies that may be available to the Parties at law or in
equity.
9.5.1
Consequences of Expiration of the Term.
Upon expiration of the Term, as determined on a Licensed
Product-by-Licensed Product and country-by-country basis, Monopar
shall have an exclusive, fully-paid, royalty-free, perpetual right
and license, with the right to grant sublicenses, under all
Licensed Patents and Licensed Know-How to use, sell, offer to sell,
import, make and have made any Licensed Product in the Field and in
the Territory.
9.5.2
Consequences of Termination of this Agreement
by Monopar Pursuant to Section
9.3.1
or by Onxeo Pursuant to
Section
9.1.3
,
9.2.1
, or
9.4
.
In the event of a termination of this
Agreement in its entirety by Monopar pursuant to Section
9.3.1
or a termination of this Agreement in
its entirety by Onxeo pursuant to Section
9.1.3
(failure to exercise the Monopar
Validive Option) or
9.2.1
(for cause)
or
9.4
(insolvency):
(a)
notwithstanding
anything contained in this Agreement to the contrary, all rights
and licenses granted herein to Monopar with respect to any Licensed
Products shall terminate;
(b)
all payment
obligations hereunder shall terminate, other than those that are
accrued and unpaid as of the effective date of such
termination;
(c)
should Onxeo so
demand, Monopar shall assign to Onxeo any Patents or Know-How
(other than the Licensed Patents and Licensed Know-How) Controlled
by Monopar that Monopar both actually uses and are necessary to
Develop or Commercialize Licensed Products and shall negotiate in
good faith with Onxeo the amount of contingent milestone and/or
royalty payments which shall be the sole consideration for such
assignment. The transfer of such rights to Onxeo shall be
automatically effective upon Onxeo’s demand even if the
amount of each milestone and/or royalty payments are not
determined. In the event that the Parties are not able to agree
amount of milestone and/or royalty payments within three (3) months
after commencement of such negotiations, the dispute shall be
submitted to final and binding arbitration, as provided in Section
10.3
(d)
Monopar shall
promptly either, at Onxeo’s election, return to Onxeo or
destroy, at no cost to Onxeo, all Onxeo Licensed Know-How,
Materials, and other data and information transferred by Onxeo to
Monopar, including all Onxeo Licensed Know-How, Validive Materials,
and other information transferred to Monopar pursuant to Section
3.5
; and Onxeo, except as provided in
Section
9.5.2(e)
or
9.5.2(f)
shall promptly either, at
Monopar’s election, return to Monopar or destroy, at no cost
to Monopar, all Monopar Confidential Information;
(e)
Monopar will
provide, as soon as reasonably practical after Monopar’s
notice of such termination, to Onxeo, to the extent permitted under
any applicable Third Party contract, (i) any information, Validive
Materials, and data for, including copies of all clinical study
data and results, and all other information, and the like developed
by or for the benefit of Monopar directly and solely relating to
Licensed Products, and (ii) other documents to the extent directly
and solely related to the Licensed Products that are necessary in
the continued Development and Commercialization of Licensed
Products throughout the Territory. Notwithstanding the foregoing,
this Section
9.5.2(e)
shall not apply
in the case of a termination of this Agreement in its entirety by
Onxeo pursuant to Section
9.1.3
(failure to exercise the Monopar Validive Option); and
(f)
should Onxeo so
demand, Monopar shall assign to Onxeo any and all title to
Regulatory Approvals directly and solely related to Licensed
Products (including orphan drug designations), all title to
Licensed Intellectual Property or registrations thereof, and
Regulatory Filings directly and solely related to Licensed
Products; provided that this Section
9.5.2(f)
shall also apply in the case of a
termination of this Agreement in its entirety by Onxeo pursuant to
Section
9.1.3
(failure to exercise the
Monopar Validive Option).
9.5.3
Consequences of Termination by Monopar Pursuant
to Section
9.2.1
or
9.4
.
In the event of termination by Monopar
of this Agreement in its entirety or with respect to a Licensed
Product pursuant to Section
9.2
(for
cause) or pursuant to Section
9.4
(insolvency):
(a)
all licenses
granted to Monopar with respect to Licensed Products shall continue
in full force in perpetuity;
(b)
all future
milestones and royalties payable by Monopar under this Agreement
shall be reduced by a percentage agreed to by Monopar and Onxeo. In
the event the Parties are not able to agree on the percentage
amount within three (3) months after commencement of such
negotiations, the dispute shall be submitted to final and binding
arbitration as provided in Section 10.3; and
(c)
Onxeo shall
promptly either, at Monopar’s election, return to Monopar or
destroy, at no cost to Monopar, all Monopar Confidential
Information, materials, and other data and information transferred
by Monopar to Onxeo.
9.5.4
Sell-Down.
If Monopar, its Affiliates or
Sublicensees at termination of this Agreement possess Licensed
Product, have started the manufacture thereof or have accepted
orders therefor, Monopar, its Affiliates or Sublicensees shall have
the right, for up to one (1) year following the date of
termination, to sell their inventories thereof, complete the
manufacture thereof and Commercialize such fully-manufactured
Licensed Product, in order to fulfill such accepted orders or
distribute such fully-manufactured Licensed Product, but only in
the ordinary course of business and on the same terms and
conditions of sale as previously applied and subject to the
obligation of Monopar to pay Onxeo any and all payments as provided
in this Agreement.
9.6
Provisions to continue on termination.
The termination of this Agreement howsoever arising will be without
prejudice to the rights and duties of either Party accrued prior to
termination. The following Articles will continue to be enforceable
notwithstanding termination: Articles
6
,
8
,
10
and
11
and
Sections
4.5
,
4.6
,
4.7
,
4.8
,
4.9
,
4.10
,
4.11
,
5.1
,
5.2
,
7.1
and
9.5
inclusive.
10.1
The Parties
recognize that disputes as to certain matters arising under this
Agreement may arise from time-to-time. It is the objective of the
Parties to seek to resolve any disputes arising under this
Agreement in an expedient manner and, if at all possible, without
resort to litigation, and to that end the Parties agree to abide by
the procedures set forth in this Section
10
to resolve any such disputes. The Parties
initially shall attempt to resolve any issues through good faith
negotiations in the spirit of mutual cooperation between senior
managers of the Parties with authority to resolve the dispute, for
a period of thirty (30) days after receipt of the first notice by
either Party requesting negotiations. Should any issue not be
timely resolved by good faith negotiations, any dispute with
respect thereto shall be submitted to final and binding
arbitration, as provided below.
10.2
Any controversy
or claim arising out of or relating to this Agreement, or the
interpretation or breach thereof, shall be resolved by final and
binding arbitration administered by the International Centre for
Dispute Resolution in accordance with its International Arbitration
Rules as then in force. The number of arbitrators shall be three
(3), or one (1) if the amount in controversy is less than one
million dollars ($1,000,000), and the place of arbitration shall be
New York County, New York. When three (3) arbitrators are required
based on the amount in controversy, each Party shall appoint an
arbitrator and the Parties shall mutually agree on the appointment
of the third arbitrator. When one (1) arbitrator is required based
on the amount in the controversy, the Parties shall mutually agree
on the appointment of an arbitrator within one (1) month of
submission of the request for arbitration, failing which the sole
arbitrator shall be selected by the International Centre for
Dispute Resolution. The language of the arbitration shall be
English. The arbitrator(s) shall be entitled to award interim and
conservatory relief to the fullest extent permitted by New York
law, shall apply the International Bar Association Rules on the
Taking of Evidence in International Commercial Arbitration as now
in effect, and shall otherwise apply New York procedural
law.
10.3
In the event
that the Parties are unable to complete negotiations as described
in the definition of “Net Sales”, in Section
9.5.2(c)
or in Section 9.5.3(b) within the
time period there indicated, each Party shall, no later than the
last day of such period, submit its final and best offer to the
other Party, and a single arbitrator appointed pursuant to Section
10.2
(and without further negotiations
as provided in Section
10.1
), whose
sole authority shall be to select one of the final offers so
submitted.
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
11.1
Severability.
If any one or more of the
provisions of this Agreement is held to be invalid or
unenforceable, the provision shall be considered severed from this
Agreement and shall not serve to invalidate any remaining
provisions hereof. The Parties shall make a good faith effort to
replace any invalid or unenforceable provision with a valid and
enforceable one such that the objectives contemplated by the
Parties when entering this Agreement may be realized.
11.2
Notices.
All notices shall be in writing
and sent by hand, email, or recorded delivery and shall be deemed
to be properly served: (i) if sent by hand, when delivered at the
relevant address; (ii) if sent by recorded delivery, three (3)
Business Days after posting; (iii) if sent by email, when
transmitted, provided a confirmatory copy is sent by post within
twenty four (24) hours of transmission, and shall be sent to the
following addresses or email address as may be amended by the
relevant Party in writing:
If to
Onxeo:
Onxeo
S.A.
49,
boulevard du Général Martial Valin, 1
st
Floor
75015
Paris, France
Attention: Judith
Greciet
email:
[***]
If to
Monopar:
Monopar
Therapeutics Inc.
598
Rockefeller Rd
Lake
Forest, IL 60045
Attention: Chandler
Robinson
email:
[***]
11.3
Variation.
No variation, modification,
amendment, extension or release from any provision of this
Agreement shall be effective unless it is in writing, signed by
both Parties.
11.4
Force Majeure.
Except for the payment of
money, neither Party shall be liable for delay or failure in the
performance of any of its obligations hereunder if such delay or
failure is due to causes beyond its reasonable control, including
acts of God, fires, earthquakes, acts of war, terrorism, or civil
unrest (“
Force
Majeure
”); provided, however, that the affected Party
promptly notifies the other Party and further provided that the
affected Party shall use its Commercially Reasonable Efforts to
avoid or remove such causes of non-performance and to mitigate the
effect of such occurrence, and shall continue performance with the
utmost dispatch whenever such causes are removed. When such
circumstances arise, the Parties shall negotiate in good faith any
modifications of the terms of this Agreement that may be necessary
or appropriate in order to arrive at an equitable
solution.
11.5
Entire Agreement.
This Agreement and the
attached Schedules constitutes the entire agreement between the
Parties as to the subject matter of this Agreement, and supersedes
and merges all prior and contemporaneous negotiations,
representations, agreements and understandings regarding the
same.
11.6
Further Assurance.
Each Party hereby
undertakes to do all such other acts and things, and execute and
provide all such documents at the other Party's request and cost as
may be necessary or desirable to give effect to the purposes of
this Agreement.
11.7
Waiver.
No relaxation, forbearance,
waiver or indulgence by either Party in enforcing any of the terms
or conditions of this Agreement or the granting of time by either
Party to the other shall prejudice, affect or restrict the rights
and powers of such Party, unless contained in a writing signed by
the Party charged with such waiver. The waiver of any breach of any
term or any condition of this Agreement shall not be construed as a
waiver of any subsequent breach of a term or condition of the same
or of a different nature.
11.8
Relationship of the Parties.
Each Party
is an independent contractor under this Agreement. Nothing
contained herein is intended or is to be construed so as to
constitute Onxeo and Monopar as partners, agents or joint
venturers. Neither Party shall have any express or implied right or
authority to assume or create any obligations on behalf of or in
the name of the other Party or to bind the other Party to any
contract, agreement or undertaking with any Third Party. There are
no express or implied third party beneficiaries
hereunder.
11.9
Execution.
This Agreement may be
executed in any one or more number of counterpart agreements, and
as scanned email attachments, and all signatures and counterparts
so exchanged shall be considered as original and shall be deemed to
form part of and together constitute this Agreement.
11.10
Assignment.
Neither Party may, without
the consent of the other Party, assign or transfer any of its
rights and obligations hereunder; provided that no such consent is
required for an assignment or transfer to an Affiliate of or to a
successor in interest by reason of merger or consolidation or sale
of all or substantially all of the assets of such Party relating to
the subject matter of this Agreement; provided further that (a)
with respect to an assignment to a successor in interest, such
assignment includes all rights and obligations under this
Agreement, (b) such successor in interest or Affiliate shall have
agreed as of such assignment or transfer to be bound by the terms
of this Agreement in a writing provided to the non-assigning Party,
and (c) where this Agreement is assigned or transferred to an
Affiliate, the assigning Party remains responsible for the
performance of this Agreement. Subject to the foregoing, this
Agreement shall inure to the benefit of and be binding on the
Parties’ successors and assigns. Any assignment or transfer
in violation of the foregoing shall be null and void and wholly
invalid, the assignee or transferee in any such assignment or
transfer shall acquire no rights whatsoever, and the non-assigning,
non-transferring Party shall not recognize, nor shall it be
required to recognize, such assignment or transfer.
11.11
Public Announcements.
The text of any
press release, shareholders’ report or other communication to
be published or disclosed in any way naming the other Party or this
Agreement, other than as required by law or by any regulatory or
government authority, shall be submitted to the other Party at
least seven (7) days in advance of publication or disclosure for
approval, such approval not to be unreasonably withheld; provided
that insofar as a disclosure repeats or restates a prior public
disclosure permitted by this Agreement, such disclosure need not be
submitted to the other Party for approval.
11.12
Governing Law.
This Agreement shall be
governed by and construed in accordance with the laws of the State
of New York without giving effect to the principles of conflicts of
laws (other than Section 5-1401 of the New York General Obligations
Law).
[Signature Page Follows]
IN WITNESS
whereof this Agreement has been executed by duly
authorized officers of the Parties on the day first above
written.
For and
on behalf of
ONXEO
S.A.
Signed
by:
/s/ Judith Greciet
For and
on behalf of
MONOPAR THERAPEUTICS
INC.
Signed
by:
/s/ Chandler D. Robinson
Name:
Chandler D. Robinson
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
SCHEDULE
1
LICENSED
PATENTS
Validive patent status
26/04/20
Onxeo's
Reference
|
Country/Region
|
Application
Number
|
Grant
Date
|
Patent
Number
|
Status
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
Onxeo's
Reference
|
Country/Region
|
Application
Number
|
Grant
Date
|
Patent
Number
|
Status
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
SCHEDULE
2
LICENSED
KNOW-HOW
The
Licensed Know-How shall include all regulatory and technical
documents that the personnel of Onxeo responsible for Development
and Commercialization of Onxeo’s products maintain in the
ordinary course of business with respect to the Licensed Products,
including:
(1)
a copy of the
submissions to and correspondence to and from the regulatory
authorities;
(2)
the list of the
composition thereof;
(3)
reports and filings
concerning complaints and adverse incidents not otherwise provided;
and
(4)
marketing and
promotional materials, if any.
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
LICENSED
TRADEMARKS
ONXEO-Ref
|
Title
|
Jurisdiction
|
Filing Number
|
Filing Date
|
Registration Number
|
Registration Date
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***]
|
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
VALIDIVE
MATERIALS
Raw
materials
|
|
|
|
Description
|
Expiry
|
[***]
|
[***]
|
[***]
(development)
|
[***]
|
|
|
Stability
Study
|
|
|
|
|
|
Description
|
Study
point ongoing
|
Location
|
Clinical Batches
|
[***]
|
[***]
|
[***]
|
Technical Batches
|
[***]
[***]
[***]
|
|
|
|
SCHEDULE
5
CONFIRMATORY
PATENT LICENSE
THIS DEED is made the ___________day
of______________________201[●]
1)
MONOPAR THERAPEUTICS INC
, whose
principal office is 598 Rockefeller Road, Lake Forest, Illinois,
USA, 60045 (“
Monopar
”); and
2)
ONXEO S.A.
, with its principal place of
business located at 49, boulevard du Général Martial
Valin, 75015 Paris, France (hereinafter “
Onxeo
”).
RECITALS:
By an
agreement (the
“Main
Agreement”
) dated __________________ and made between
Monopar and Onxeo. Onxeo agreed for the consideration therein
contained, among other things, to grant to Monopar a license under
[
Country/region Patent
No
.__________] (the
“Patent”
) of which this
Agreement is a confirmatory license.
OPERATIVE
PROVISIONS:
1.
In pursuance of the
Main Agreement and for the consideration referred to in the Main
Agreement Onxeo hereby grants to Monopar the exclusive license from
the ________ day of_____________ 20___ to research, develop, use,
keep, make, have made, import, sell and otherwise dispose of
Licensed Products (as defined in the Main Agreement) in the Field
(as defined in the Main Agreement) in the Territory (as defined in
the Main Agreement) for the life of the Patent and subject to the
provisions of the Main Agreement.
2.
Subject to the
provisions of the Main Agreement this Agreement shall terminate
without notice in the event of the termination of the Main
Agreement in accordance with its terms.
IN
WITNESS of which this Agreement has been executed as a deed and
delivered the day and year first above written.
EXECUTED
as a deed
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ONXEO S.A.
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acting
by a Director and its Secretary / two Directors
EXECUTED
as a deed
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(PRINT):
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on behalf of
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MONOPAR THERAPEUTICS INC
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acting
by a Director and its Secretary / two Directors
AMENDMENT No. 1 to
VALIDIVE
OPTION AND LICENSE
AGREEMENT
This
amendment number one (“
Amendment
”) to the Validive Option
and License Agreement dated June 17, 2016 (the “
Agreement
”) is by and between
Monopar Therapeutics Inc., a Delaware corporation having a place of
business at 5 Revere Drive, Suite 200, Northbrook, Illinois 60062
(“
Monopar
”), and
Onxeo S.A., a French société anonyme à Conseil
d’administration located at 49, boulevard du
Général Martial Valin, 75015 Paris, France
(“
Onxeo
”).
Monopar and Onxeo shall also hereinafter be referred to as a Party
or collectively as the Parties.
RECITALS
WHEREAS, the
Parties entered into the Agreement effective June 17, 2016
(“
Effective
Date
”);
WHEREAS, Monopar
has exercised the licensing option and paid the License Fee as
provided in the Agreement; and
WHEREAS, the
Parties now wish to amend the Agreement as more particularly set
forth below.
NOW,
THEREFORE, in consideration of the covenants contained herein the
Parties hereto, intending to be legally bound hereby, agree to and
hereby do amend the Agreement as follows:
1.
All capitalized
terms used herein and not otherwise defined shall have the same
meaning as defined in the Agreement.
2.
Schedule 3 of the
Agreement is replaced in its entirety with the attached Schedule
3.
3.
For the avoidance
of doubt, the Trademarks added to Schedule 3 by this Amendment
(“
Additional
Trademarks
”) shall be deemed Licensed Trademarks under
the Agreement as of the Effective Date and within the rights
granted by Onxeo to Monopar including assignment upon
Monopar’s exercise of the Monopar Validive
Option.
4.
Onexo agrees to execute and deliver documents as may be necessary
or desirable to give effect to the assignment of the Additional
Trademarks.
5.
Except as otherwise
amended hereby, the Agreement shall remain in full force and effect
as presently written, and the rights, duties, liabilities and
obligations of the Parties thereto will continue in full
effect.
IN
WITNESS WHEREOF, the Parties have caused this Amendment to be
executed by their duly authorized representatives, effective of the
Effective Date.
MONOPAR
THERAPEUTICS INC.
Signature:
/s/ Chandler D.
Robinson
Print
Name: Chandler Robinson
Title:
CEO
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ONXEO
S.A.
Signature:
/s/ Judith
Greciet
Print
Name: Judith Greciet
Title:
CEO
|
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
Schedule 3 Licensed Trademarks
Title
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Jurisdiction
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Filing
Number
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Filing
Date
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Registration
Number
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Registration
Date
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[***]
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[***]
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[***]
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[***]
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[***]
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[***]
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[***] =
Confidential Information has been
omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
CONTRIBUTION AGREEMENT (351)
This Contribution
Agreement (this “
Agreement
”) is
entered into as of August 25, 2017 (the “
Effective
Date
”), among TacticGem LLC, a Delaware limited
liability company (the “
Company
”),
Monopar Therapeutics Inc., a Delaware corporation
(“
Monopar
”), Gem
Pharmaceuticals, LLC, an Alabama limited liability company
(“
Gem
”) and
Tactic Pharma, LLC, an Illinois limited liability company
(“
Tactic
”, and
collectively with Gem, the owners of 100% of the issued and
outstanding limited liability company interests of the Company).
The Company, Monopar, Tactic, and Gem are sometimes hereinafter
referred to collectively as the “
Parties
”, and
each individually as a “
Party
”
.
BACKGROUND INFORMATION
A. The
parties have entered into that certain Contribution Agreement by
and among the Company, Tactic, and Gem, dated as of August 24, 2017
(the “
721
Contribution Agreement
”) whereby Gem contributed to
the Company all of Gem’s right, title and interest in and to
the property and assets described on
Exhibit A
attached hereto
(collectively, the “
Gem Contributed
Assets
”) and Tactic contributed to the Company the
Tactic Contributed Assets (as defined in the 721 Contribution
Agreement).
B. Pursuant
to this Agreement and subsequent to the contributions contemplated
by the 721 Contribution Agreement, the Company will contribute (the
“
Company
Contribution
”) to Monopar all of the Company’s
right, title and interest in and to the Gem Contributed Assets in
exchange for 3,055,394.12 shares of Monopar’s common stock.
Subsequent to the transactions contemplated by the 721 Contribution
Agreement and this Agreement, the Company will own 7,166,667 shares
of Monopar common stock, which will constitute 79.70% of the total
number of shares outstanding of Monopar. By a separate agreement
(the “
Investor Contribution
Agreement
”), entered into on or before this Agreement,
between Monopar and a third party investor (the “
Investor
”),
the Investor will contribute $2,000,004 to Monopar in exchange for
333,334 shares of common stock (the “
Investor
Contribution
”, and together with the Company
Contribution, the “
351
Transaction
”). The Company and the Investor,
collectively, will own at least 80% of the total combined voting
power of all classes of stock entitled to vote and at least 80% of
the total number of shares of all classes of stock of Monopar
subsequent to the 351 Transaction.
C. It
is the intent of the Parties hereto that the 351 Transaction
constitutes a tax-free transfer pursuant to Section 351 of the
Internal Revenue Code of 1986, as amended.
STATEMENT OF AGREEMENT
NOW,
THEREFORE, in consideration of the mutual covenants herein
contained and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the Parties
agree as follows:
ARTICLE I
COMPANY CONTRIBUTION
§1.1
Contribution
. As of the Effective Date, (a) the Company hereby
contributes the Gem Contributed Assets to Monopar, and (b) Monopar
hereby accepts the Gem Contributed Assets, and
assumes and
agrees to perform all obligations, restrictions and conditions
which are applicable to the Gem Contributed Assets to the extent
such obligations arise or accrue from and after the Effective Date
(except as otherwise provided in this Agreement). Monopar does not
assume or otherwise accept responsibility for any Liabilities (as
defined in the 721 Agreement) or obligations of Gem, Tactic, or the
Company, provided that Monopar will assume the obligations of Gem
accruing or arising after the Effective Date under the agreements
listed on the attached
Exhibit B
(the
“
Assigned
Contracts
”), with Gem being responsible for all such
liabilities and obligations accruing or arising prior to the
Effective Date.
§1.2
Shares
Issued
. In exchange for the Gem
Contributed Assets, Monopar shall issue
3,055,394.12 shares
of its common stock (the “
Issued Stock
”)
to the Company. The Company shall hold
such shares as a separate block of stock that may be specifically
indentified as separate from the other 4,111,272.88 shares of
Monopar common stock held by the Company.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
§2.1
Representations and Warranties
of the Company, Tactic, and Gem.
The representations and warranties of the Company,
Tactic, and Gem set forth in Article 5 of the 721 Agreement are
hereby made by them to Monopar and incorporated by reference in
this Agreement as if fully rewritten herein.
§ 2.2
Representations and Warranties
of Monopar.
Monopar hereby represents and warrants to each
of the other Parties hereto
that the statements contained in
this §2.2 are, except as would not be reasonably expected to
have a material adverse effect, true and correct as of the
Effective Date.
(a)
Organization;
Authority; Enforceability
.
Monopar is a corporation
duly organized, validly existing
and in good standing under the laws of the State of Delaware, and
has full corporate power and authority to execute and deliver this
Agreement and perform its obligations hereunder. This Agreement
constitutes the legal, valid, and binding obligation of Monopar,
enforceable against Monopar in accordance with its terms, subject
to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium, and other similar laws relating to
and/or affecting creditors’ rights generally and to general
equitable principles. The Issued Stock, when issued pursuant to the
terms and conditions of this Agreement, will be duly authorized,
validly issued, fully paid, and non-assessable, and issued in
compliance with all applicable federal and state securities
laws.
(b)
Non-Contravention
.
Neither the execution and delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, will (i)
violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of
any government, governmental agency, or court to which
Monopar
is subject or
any provision of Monopar’s
Organizational Documents or any
other governing document of Monopar or (ii) conflict with, result
in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate,
terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other
arrangement to which any assets of Monopar are subject (or result
in the imposition of any Encumbrance upon any assets of
Monopar).
(c)
Private
Placement Memorandum of Monopar
.
The Private Placement Memorandum of Monopar dated
August 22, 2017, which includes the private placement memorandum
dated March 25, 2017 (the “
PPM
”)
contains information about Monopar. The PPM was prepared for an
offering limited to accredited investors and does not contain all
of the information that would be included in a registration
statement filed with the SEC. Monopar is not aware of any
inaccurate statements of fact in the PPM.
(d)
Capitalization
.
(i) The authorized capital of Monopar as of July 31, 2017 consisted
of 40,000,000 shares of common stock, $0.001 par value per share,
and 8,675,919.61 shares of common stock outstanding
(non-dilutive)
; (ii) on a fully
diluted basis, accounting for all issued options, there were
9,231,439.61 shares of common stock outstanding as of July 31,
2017; (iii) following the surrender of 2,888,727.12 shares of
Tactic’s Monopar common stock back to Monopar, Monopar would
have shares outstanding of 5,787,192.5 shares of common stock
(non-dilutive), and 6,342,712.5 shares of common stock on a
fully-diluted basis; and (iv) 700,000 shares of Common Stock have
been reserved for issuance under Monopar’s 2016 Stock
Incentive Plan, of which 555,520 shares are subject to issued and
outstanding options. All outstanding shares of Monopar common stock
have been
duly authorized and validly issued, are fully paid
and non-assessable, and to Monopar’s knowledge, issued in
compliance with all applicable federal and state securities
laws.
(e)
Disclosure
. No representation
or warranty or other statement made by Monopar in this Agreement,
or otherwise in connection with the transactions contemplated
hereby contains any material untrue statement or omits to state a
material fact necessary to make any of them, in light of the
circumstances in which it was made, not misleading in any adverse
respect.
(f)
No
Other Representations and Warranties
. Except for the
representations and warranties set forth in this Agreement, each of
the Company, Tactic, and Gem acknowledges and agrees that no
representation or warranty of any kind whatsoever, express or
implied, at law or in equity, is made or shall be deemed to have
been made by or on behalf of Monopar to the Company, Tactic, or
Gem, and Monopar hereby disclaims any such representation or
warranty, whether by or on behalf of Monopar.
ARTICLE III
POST-CLOSING MATTERS
§3.1
Tax
Matters
.
Each Party
shall cooperate fully, as and to the extent reasonably requested by
any other Party, in connection with the preparation and filing of
any Tax Return (as defined in the 721 Agreement) and any audit with
respect to Tax (as defined in the 721 Agreement), with respect to
the Gem Contributed Assets. Such cooperation shall include the
retention and, upon request, the provision of records and
information which are reasonably relevant to any such Tax Return or
audit or any tax planning and shall also include making employees
available on a mutually convenient basis to provide additional
information and explanation of any material provided hereunder.
Each Party further agrees, upon request, to use its commercially
reasonable efforts to obtain any certificate or other document from
any taxing authority or any other individual, corporation,
partnership, limited liability company, association, trust or any
other entity or organization as may be necessary to mitigate,
reduce or eliminate any Tax that could be imposed (including any
sales, use, documentary, stamp, gross receipts, registration,
transfer, conveyance, excise, recording, license, stock transfer
stamps and other similar taxes and fees arising out of or in
connection with or attributable to the transactions effected
pursuant to this Agreement (collectively, “
Transfer
Taxes
”; but for purposes of clarification, Transfer
Taxes do not include any income taxes incurred by or allocable to
any party i
n connection with or
attributable to the transfer of the Gem Contributed Assets, and the
transactions affected pursuant to this Agreement).
The
Company shall bear and be responsible for the timely payment of,
and to such extent shall indemnify and hold harmless Monopar
against any Transfer Taxes, and Gem and Tactic shall each in turn
bear and be responsible for the timely payment of, and to such
extent shall indemnify and hold harmless the Company against, fifty
percent (50%) of such Transfer Taxes so paid.
§3.2
Consulting
Relationship with Gem Personnel.
Each of Gerald M. Walsh and Richard D. Olson shall
become consultants of Monopar at the Effective Date and Monopar
will execute a consulting agreement with such individuals in
substantially the form of the attached
Exhibit
C
.
§ 3.3
Indemnification
.
(a)
Notwithstanding any investigation
conducted at any time with regard thereto, by or on behalf of the
Company, Tactic, Gem or Monopar, all representations, warranties,
covenants and agreements of the Parties in this Agreement
(including those incorporated by reference) and in any other
documents executed or delivered by any of them pursuant to this
Agreement or in connection with the transactions contemplated by
this Agreement (collectively, the “
Additional
Documents
”) shall survive the execution, delivery, and
performance of this Agreement and the Additional
Documents.
(b) (i)
Each Party shall defend, indemnify and hold harmless the other
Parties, and their directors, officers, employees and
representatives from and against any and all Damages asserted
against, resulting to, imposed upon, or incurred or suffered by
such Party, directly or indirectly, as a result of or arising from
any Indemnifiable Claims as set forth in
Sections 9.2, 9.3, 9.4, 9.5, 9.7, 9.8 and 9.9 of
the 721 Contribution Agreement (the “
Indemnification
Provisions
”), which are
hereby incorporated by reference; and (ii) Monopar shall
defend, indemnify and hold harmless each of the Parties from and
against any and all Damages asserted against, resulting to, imposed
upon, or incurred or suffered by Gem, directly or indirectly, as a
result of or arising from any material breaches of the
representations and warranties of Monopar in §2.2 pursuant to
the Indemnification Provisions
.
Indemnification by any Party to this Agreement shall be governed by
the Indemnification Provisions. References to the
“Agreement” in such Sections shall be interpreted to
refer to this Agreement in the context of Indemnifiable Claims
under this Agreement.
§3.4.
Tax Treatment
. Each of the Parties
acknowledges and agrees that the contribution of the Gem
Contributed Assets to Monopar is intended to qualify for treatment
as an exchange described in Section 351(a) of the Internal Revenue
Code of 1986, as amended (the "
Code
"). All Parties agree to
prepare or cause to be prepared their Tax Returns in accordance
with the immediately preceding sentence, including complying with
the record keeping requirements of Treasury Regulation Section
1.351-3.
ARTICLE
IV
REGISTRATION RIGHTS
§ 4.1
Registration
Rights.
(a)
Monopar shall, upon direction by the Company at any time after
Monopar has been subject to the reporting requirements of the
Securities and Exchange Act of 1934 for at least 12 months (the
“
Initial
Holding Period
”), file with the U.S. Securities and
Exchange Commission (“SEC”) a Form S-3 or other
appropriate form of registration statement, covering the resale of
any Monopar common stock by the Company, Gem, or Tactic and shall
use its best efforts to have such registration statement declared
effective as soon as practical thereafter. During the period that
the registration statement is effective, Monopar shall make all
public filings required in the normal course of its business and
necessary to maintain the effectiveness of the registration
statement during the period of resale of any Monopar common stock
by the Company, Gem, or Tactic; provided that the Company, Gem, and
Tactic agree that Monopar may, from time to time, inform the
Company, Gem, and Tactic that it may not sell Monopar common stock
until further notice if circumstances exist which have not been
disclosed publicly and the omission of which, in the reasonable
opinion of Monopar, would result in a material omission of fact in
the registration statement. The Company, Gem, and Tactic agree that
upon receipt of such notice and until otherwise informed by
Monopar, the Company, Gem, and Tactic shall not sell, or permit to
be
sold,
the Monopar common stock. The Company, Gem, and Tactic acknowledge
that Monopar cannot guarantee receipt of approval from the SEC, and
in the event that approval is not granted, the Company, Gem, and/or
Tactic, as applicable, must hold the Monopar common stock until
such time as the Company, Gem, and/or Tactic may be permitted to
sell the Monopar common stock pursuant to applicable securities
laws or exemptions therefrom. Monopar shall pay the costs to
prepare and file the registration statement, including the
registration fee due to the SEC and all legal and accounting
expenses and the cost of compliance with the securities or blue sky
laws in the State of Delaware or any other state. The Company, Gem,
or Tactic, as applicable (the party which is the seller of such
Monopar common stock) shall pay all other costs of sale of the
Monopar common stock, including any underwriting fees, commissions
on sale or stock transfer taxes resulting from the sale of the
Monopar common stock. In the event that a registration statement
for the resale of the Monopar common stock is not approved by the
SEC, Monopar shall, upon written request of the Company, prepare
and file a registration statement on Form S-1 registering for sale
any of the common stock and use its best efforts to have such
registration statement declared effective as soon as practical
thereafter. Monopar shall pay the costs to prepare and file such
registration statement, including the registration fee due to the
SEC and all legal and accounting expenses and the cost of
compliance with the securities or blue sky laws in the State of
Delaware or any other State. Additionally, the Company, Gem, and
Tactic shall receive the piggyback registration rights set forth in
(b) below.
(b) At
any time following the Effective Date (but without obligation to do
so) if Monopar proposes to register any of its common stock under
the Securities Act of 1933, as amended (the “
Securities
Act
”) in connection with the public offering of such
securities solely for cash (other than a registration effected
solely to implement an employee benefit plan or a transaction to
which Rule 145 of the Securities Act is applicable or a
registration using any form that does not permit secondary sales of
securities), Monopar will give written notice to the Company, Gem,
and Tactic of its intention to do so and, upon written request of
the Company, Gem, or Tactic, delivered to Monopar within 15 days
after receipt of notice, Monopar will use its best efforts at its
own expense (but excluding any underwriting commissions and stock
transfer taxes accruing to any common stock registered by the
Company, Gem, or Tactic) to cause to be registered under the
Securities Act the shares of common stock specified by the Company,
Gem, or Tactic, subject to (1) the right of other holders of
restricted stock to include their stock in any such registration
prior to the inclusion of the common stock, including but not
limited to rights of parties acquiring shares of common stock under
any agreement that Monopar will register the resale thereof, (2)
the Company’s acceptance of the terms of any underwriting
agreement entered into or proposed to be entered into between
Monopar and any underwriter of such offering, and (3) if the sole
or managing underwriter of such offering determines that the
aggregate number of shares of common stock which have been
requested by the Company, Gem, or Tactic to be included in the
registration should be limited to a lesser number or not included
due to market conditions, then Monopar may only sell the lesser
portion, if any. If a limitation is imposed on the number of common
stock includable by Monopar in any such offering, Monopar shall
give the Company, Gem, and Tactic, as applicable, prompt written
notice thereof.
§4.2
Form
10
.
Monopar shall
exert its commercially reasonable best efforts to cause to be filed
with the Securities and Exchange Commission (the
“
SEC
”),
under the Securities Exchange Act of 1934 (the “
1934 Act
”), a
registration statement on Form 10 (or another appropriate form), to
register Monopar’s shares of common stock, $0.001 par value
per share, within ninety (90) days after the Effective
Date.
ARTICLE V
MISCELLANEOUS PROVISIONS
§5.1
Severability
.
Any term or provision of this Agreement that is invalid or
unenforceable in any situation in any jurisdiction (as determined
by a court) shall not affect the validity or enforceability of the
remaining terms and provisions hereof or the validity or
enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
§5.2
Notices
.
All notices, requests, demands, claims, and other communications
hereunder shall be made as set forth in Section 11.1 of the 721
Contribution Agreement.
§5.3
Construction
.
The parties have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question
of intent or interpretation arises, this Agreement shall be
construed as if drafted jointly by the parties and no presumption
or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this
Agreement. Any reference to any federal, state, local, or foreign
statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires
otherwise.
§5.4
Entire
Agreement; Amendment; Waivers, etc.
This Agreement
(including its schedules and exhibits), along with the 721
Agreement and the Investor Contribution Agreement constitutes the
entire agreement among the Parties and supersedes all prior
agreements and understandings, agreements or representations by or
among the Parties, written and oral, with respect to their subject
matter. No amendment, supplement, waiver or termination of this
Agreement is binding unless executed in writing by the Party to be
bound thereby. No waiver of any of the provisions of this Agreement
constitutes a waiver of any other provision of this Agreement,
whether or not similar, unless otherwise expressly
provided
.
§5.5
Successors
and Assigns
. Except as otherwise expressly permitted in this
Agreement, the Parties agree not to assign this Agreement or any of
the rights, interests, or obligations hereunder to any other person
or entity (whether in whole or in part, whether directly or
indirectly, and whether voluntarily or, to the fullest extent
permitted by applicable law, involuntarily), except with the prior
written consent of the other Party, which consent such Party may
grant or withhold in its sole discretion, and which consent, if
granted, does not imply any other consent in the future. Any
purported assignment in violation of this Section will be void and
of no legal effect. This Agreement will inure to the benefit of and
be binding upon each Party to this Agreement and each Party’s
successors, heirs, permitted assigns, and legal
representatives
.
§5.6
Captions
.
The headings of the Sections and Articles of this Agreement are
inserted for convenience only and shall not constitute a part
hereof or affect in any way the meaning or interpretation of this
Agreement
.
§5.7
Counterparts
.
This Agreement may be executed in any number of separate
counterparts (including facsimile and electronic transmission),
each of which upon execution and delivery will constitute an
original and all of which taken together will constitute one
agreement
.
§5.8
Governing
Law; Consent to Jurisdiction and Venue.
(a) THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO ANY
CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE
STATE OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE
LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE TO BE
APPLIED.
(b) Each
of
the Parties hereto irrevocably submits itself to the exclusive
jurisdiction of the United States District Court of the Northern
District of Illinois (unless such court lacks jurisdiction under
Applicable Law, in which case each Party submits itself exclusively
to the jurisdiction of the state courts of Illinois sitting in Cook
County) for the purpose of any Action arising out of or relating to
this Agreement and/or the transactions contemplated
hereby.
(c) Each
of the Parties hereto irrevocably agrees that all claims with
respect to any such Action arising out of or relating to this
Agreement and/or the transactions contemplated hereby shall be
heard and determined exclusively in United States District Court of
the Northern District of Illinois (unless such court lacks
jurisdiction under Applicable Law, in which case each Party submits
itself exclusively to the jurisdiction of the state courts of
Illinois sitting in Cook County).
§ 5.9
WAIVER
OF JURY TRIAL
. AS A SPECIFICALLY BARGAINED INDUCEMENT FOR
EACH OF THE PARTIES TO ENTER INTO THIS AGREEMENT (EACH PARTY HAVING
HAD OPPORTUNITY TO CONSULT COUNSEL), EACH PARTY EXPRESSLY WAIVES
THE RIGHT TO TRIAL BY JURY IN ANY LAWSUIT, ACTION OR PROCEEDING
RELATING TO OR ARISING IN ANY WAY FROM THIS AGREEMENT OR ANY
TRANSACTIONS RELATED HERETO OR CONTEMPLATED HEREBY.
§ 5.10
Defined
Terms.
Any terms not defined in this Agreement shall have
the meanings assigned to them in the 721 Agreement.
The
Parties have duly executed this Agreement as of the date first
above written.
MONOPAR THERAPEUTICS, INC.
|
TACTICGEM LLC
By: CDR
Pharma LLC
Its:
Manager
|
By:/s/ Chandler
Robinson
Chandler Robinson, CEO
|
By: /s/ Chandler Robinson
Its:
Member of the Manager
|
TACTIC PHARMA, LLC
|
GEM PHARMACEUTICALS, LLC
|
By:
/s/ Chandler
Robinson
Its: Manager
|
By:
/s/ Arthur
Klausner
Arthur Klausner, CEO
|
EXHIBIT
A
Gem
Contributed Assets
See
Attached.
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
“Gem
Contributed Assets” means, collectively, the following (each
as defined herein):
2.
All right, title
and interest, tangible and intangible, in and to the following
(individually and collectively, the
“Compounds”):
4.
All of the Gem
Contributed Intellectual Property
5.
All of the Gem
Contracts including:
b.
Research and
Collaboration Agreements
c.
Manufacturing,
Clinical Research and Compound Storage Agreements
6.
All inventory of
product, including raw materials, work in process and finished
product
7.
All works-made-for
hire agreements relating to the Compounds.
8.
After Closing, Gem
will use reasonable good faith efforts to cause Monopar and the
Company to be added as additional insureds to its product liability
and comprehensive general liability insurance policies (the
“Gem Insurance Policies”). Such rights as additional
insureds shall be transferred to each of Monopar and the Company
and shall be considered Gem Contributed Assets.
1.
[***]
2.
[***]
3. Any
[***]
4.
[***]
5. Any
formulation of [***]
6. Any
uses of [***]
4.
Any formulation of
[***]
1.
[***]
2.
[***]
3.
[***]
4.
[***]
5. Any
formulation of [***]
6. Any
uses of [***]
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
1.
[***]
2.
[***]
3. Any
[***]
4.
[***]
5. Any
formulation of [***]
6. Any
uses and formulations of [***] and
1.
[***]
2.
[***] and [***].
3. Any
[***]
4.
[***]
5. Any
formulation of [***]
6. Any
uses and formulations of [***]
G.
“Related
Assets” means:
1.
All assets related
to Gem’s use and development of the Compounds (including
without limitation [***] for any purpose, all assets used by Gem,
and necessary or useful to Gem as of Closing, in conducting
research, development, testing, marketing, selling, manufacturing
and/or distributing the Compounds and any other analogs derived
from them and their use (including without limitation [***] or any
other analogs derived from GPX-100, GPX-150, GPX-160, GPX-170, or
GPX-180)) as such activity is presently conducted and as such
activity is presently planned to be conducted, including, but not
limited to, all inventory of Compounds, all other inventory,
agreements, contracts, licenses, Intellectual Property related to
or useful for the Business, intellectual property assignments, ,
orphan drug or other regulatory designations, pending orphan drug
or other regulatory applications, trademarks, service marks and all
goodwill associated therewith, pre-clinical and clinical data,
manufacturing equipment; anthracycline molecules that,
[***].
3.
Manufacturing
agreements.
4.
Written reports,
regulatory documents, case reports, and manufacturing
methods.
5.
All FDA and other
regulatory authorities filings and scientific studies relating to
the Compounds and the Related Assets including the
following:
a.
Orphan drug
designation [***]
b.
[***] GPX-150
[***]. All relevant filings and approvals in the US for GPX-150
have been made to this IND and are part of the IND record. [Date
February 7, 2007]
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
H.
“Gem
Contributed Intellectual Property” has the meaning set forth
in Section 10 of the Agreement. “Intellectual Property”
means:
All
domestic and foreign (1) patents and patent applications, and all
patents issuing thereon, including without limitation utility,
model and design patents and certificates of invention, together
with all reissue patents, patents of addition, divisionals,
provisional applications, renewals, continuations,
continuations-in-part, substitutions, additions, extensions,
confirmations, re-examinations, and all foreign counterparts of the
forgoing which are in the process of being prepared, and all
inventions and improvements disclosed therein including the right
to claim priority benefit of or to any of the foregoing
(collectively, “Patents”); (2) trademarks, service
marks, trade dress, trade names, brand names, designs, logos,
commercial symbols and corporate names, and all registrations,
applications and goodwill associated therewith (collectively,
“Trademarks”); (3) copyrights and all works of
authorship, whether or not registered or copyrightable, and all
applications, registrations, and renewals in connection therewith
(collectively, “Copyrights”); (4) confidential and
proprietary information, including without limitation, trade
secrets, know-how, formulae, ideas, concepts, discoveries,
innovations, improvements, results, reports, information and data,
research, laboratory and programmer notebooks, methods, procedures,
proprietary technology, operating and maintenance manuals,
engineering and other drawings and sketches, customer lists,
supplier lists, pricing information, cost information, business
manufacturing and production processes and techniques, designs,
specifications, and blueprints (collectively, “Trade
Secrets”); and (5) all other intellectual property and
proprietary rights in any form or medium known or later devised,
all copies and tangible embodiments of the foregoing, and all
goodwill associated with any of the foregoing; and (6) the right to
bring suit, the right to claim and retain all damages and/or seek
other remedies for the past, present, and future infringement
and/or misappropriation of and the right to collect royalties and
other payments under or on account of any of the foregoing; in each
case whether registered or unregistered.
U.S.
patents and patent applications within the Gem Contributed
Intellectual Property:
8.
Patent pending
[***], filed [***]: covers the composition of [***] and the
[***].
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
Foreign
patents and patent applications within the within the Gem
Contributed Intellectual Property:
Country
|
Patent
#
|
Based
on U.S. Patent No.
|
[***]
|
[***]
|
[***]
|
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
Copyrights
and Trade Secrets within the Gem Contributed Intellectual
Property:
1.
Analysis of [***]
for GPX-150
2.
Analysis of
[***]for GPX-150
3.
Analysis of [***]
for GPX-100
Unpatented
inventions within the Gem Contributed Intellectual
Property:
1.
GPX-160, GPX-170 and GPX-180
Trademarks
within the Gem Contributed Intellectual Property:
1. Gem
Pharmaceuticals (unregistered
2.
On [***], Gem submitted an International Non-Proprietary Name
(INN)request to the World Health Organization for GPX-150,
[***]
License
Agreements (no active license agreements)
1.
Non-binding term
sheet with Vitel Laboratories, expired on August 1,
2017.
2.
Coronado
Biosciences agreement, expired on October 8, 2010.
3.
[AOI, expired on
February 5, 2003]
Assigned
Research and Collaboration Agreements (no active agreements other
than [***])
1.
[***]:
-- two
Service Agreements, each expired April 30, 2016; fully completed
and fully paid
--
Service Agreement expired August 14, 2017; work complete but final
report due to be delivered soon after Closing. Gem agrees to
promptly deliver to Monopar said report upon receipt, to pay in
full all amounts owed under said Agreement, and if requested, to
use reasonable good faith efforts to obtain a consent from BSU in
substantially the same form as Exhibit E to the Contribution
Agreement.
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
--Service
Agreement expiring August 31, 2017; work complete and final report
has been delivered. Gem agrees to pay in full all amounts owed
under said Agreement.
2.
[***], expired on June 24, 2015.
3.
Agreements with [***] as reflected in proposals of [***] dated
April 21, 2016, June 24, 2016, July 5, 2016, and December 6,
2016.
Assigned
Manufacturing, Clinical Research and Compound Storage
Agreements
1.
Manufacturing (All
manufacturing agreements other than [***] have
expired)
a.
Tetrionics, expired
January, 2005.
b.
SAFC, expired
August, 2015.
c.
[***], dated May
31, 2017.
d.
Bioserv, expired
January, 2016.
2.
Clinical Research
Organizations (no active agreements)
a.
Premier Research ,
expired on May 14, 2014.
b.
Clinical Trial Data
Services, expired on March 26, 2017.
a.
Clinical Supplies
Management, Inc., dated October 16, 2014.
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
Other
Gem Contracts
1.
Renewal Service
Agreement between Gem Pharmaceuticals, LLC and CPAGlobaldated
August 31, 2016.
J.
All inventory of
product, including raw materials, work in process and finished
product
1.
Inventory of
GPX-150 and GPX-100 located in [***]
●
200 vials of
GPX-150 product (about 50 mg/vial = about 10 grams of GPX-150 mixed
with lactose)
●
6.8 grams of
GPX-150 from a batch made in 2006
2.
Inventory of
clinical-grade GPX-150 located at CSM in [***]
●
GPX-150 Powder
14.11 grams – expired 17 Nov 2016
●
GPX-150 50mg vial
406 vials – expired 31 Oct 2016
3.
Inventory of
GPX-150 (approximately 15 grams) located at [***]
EXHIBIT
B
Assigned
Contracts
1.
Master Services Agreement by and between Gem and Clinical Supplies
Management, Inc., dated October 1, 2014
2.
Renewal Service Agreement between Gem Pharmaceuticals, LLC and CPA
Global dated August 31, 2016
EXHIBIT
C
Form of
Consulting Agreement
See
attached.
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
CONSULTING AGREEMENT
This
Consulting Agreement (herein referred to as “
Agreement
”) is made and entered
into as of this day of , 2017 (the “
Effective Date
”), by and between
Monopar Therapeutics, Inc. (herein referred to as
“
Monopar
”), a
Delaware corporation, located at 5 Revere Dr., Suite 200,
Northbrook, IL 60062, and Gerald M. Walsh (herein referred to as
“
Jerry
”) who
resides at [***] (
each herein referred
to as “
Party
” and collectively as
“
Parties
”).
RECITALS
WHEREAS, Jerry
specializes in the fields of pharmacology, toxicology, intellectual
property, and pharmaceutical management.
WHEREAS, Monopar
desires to contract with Jerry to provide certain consultation
services, as requested by Monopar, and Jerry wishes to provide such
services to Monopar, upon the terms and conditions set forth
below.
NOW,
THEREFORE, in consideration of the premises and mutual covenants
contained herein, the Parties agree as follows:
1.
Consulting Arrangement
. Jerry
agrees to perform consulting services as described herein upon the
terms and conditions herein set forth.
2.
Term of Agreement
. Subject to
the provision for early termination set forth below in
Section 5
of this Agreement, this
Agreement shall commence as of the Effective Date and shall
continue from the Effective Date
through one year later
(the
“Term”
).
3.1
Specific Duties
. Jerry shall
provide consulting services to Monopar, such duties to include: See
Appendix A (herein referred to as the “
Services
”).
3.2
Obligations
. Jerry shall be
diligent in the performance of Services, and be professional in his
commitment to meeting his obligations hereunder. Jerry represents
and warrants that he is not party to any other existing agreement,
which would prevent him from entering into this Agreement or which
would adversely affect this Agreement. Jerry may be engaged or
employed in any other business, profession, or other activity but
Jerry shall not perform Services for any other individuals or
entities in direct competition with Monopar, within the scope of
Services under this Agreement, during the Term of this Agreement,
and for two years after its termination, except as provided for by
mutual written agreement of the Parties. Jerry shall not perform
services for any party which would require or facilitate the
unauthorized disclosure of any confidential or proprietary
information of Monopar.
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
3.3
Reporting
. Jerry will report to
Andrew P. Mazar, Ph.D. and liase with Chandler Robinson, M.D.,
Patrice Rioux, M.D. and/or any other assigned Monopar employee or
consultant as may be designated in writing by Monopar.
3.4
Compensation
. Monopar shall pay
Jerry as follows:
a.
[***] per month payable within thirty (30) days of the end of each
month.
b.
[***] per hour for consulting work that exceeds fifteen (15) hours
per month, and has been approved by Monopar. Jerry will document
all hours, including the initial fifteen (15) hours, and invoice
Monopar monthly for the hours above the first fifteen (15)
hours.
Jerry
shall not be reimbursed, and is responsible for the facilities
and equipment necessary to perform Services required under
this Agreement.
4.
Reimbursement of Expenses
.
Monopar shall promptly reimburse Jerry for all direct expenses
incurred in providing the Services to Monopar pursuant to this
Agreement, including travel, meals and lodging as long as
Monopar’s prior approval has been obtained. Invoices
submitted by Jerry pursuant to this
Section 4
shall also include a detail of
all reimbursable expenses incurred during the period covered by
such invoice as well as receipts. Per diem for food will be
reimbursed as per IRS specified rates in effect at that
time.
5.
Termination of Agreement - Failure to
perform
. In the event that Jerry ceases to perform the
Services or breaches his obligations as required hereunder for any
reason and such cessation or breach remains uncured for ten (10)
business days following Monopar’s written notice thereof to
Jerry, Monopar shall have the right to immediately terminate this
Agreement upon notice to Jerry and to enforce such other rights and
remedies under this Agreement as it may have as a result of said
breach.
In the
event that Monopar breaches its obligations under this Agreement
and such breach remains uncured for ten (10) business days
following Jerry’s written notice thereof to Monopar, Jerry
shall have the right to immediately terminate this Agreement upon
notice to Monopar and to enforce such other rights and remedies
under this Agreement as it may have as a result of said
breach.
6.
Certain Liabilities
. It is
understood and agreed that Jerry shall be acting as an independent
contractor and not as an agent or employee of, or partner, joint
venturer or in any other relationship with Monopar. Jerry will be
solely responsible for all insurance, employment taxes, FICA taxes
and all obligations to governments or other organizations for its
employees arising out of this consulting assignment. Jerry
acknowledges that no income, social security or other taxes shall
be withheld or accrued by Monopar for Jerry’s benefit. Jerry
assumes all risks and hazards encountered in the performance of
duties under this Agreement. Unless Monopar has provided prior
written approval, Jerry shall not use any sub-contractors to
perform obligations hereunder. Jerry shall be solely responsible
for any and all injuries, including death, to all persons and any
and all loss or damage to property, which may result from
performance under this Agreement.
7.
Indemnities
. Jerry hereby
agrees to indemnify Monopar and hold Monopar harmless from and
against all claims (whether asserted by a person, firm, entity or
governmental unit or otherwise), liabilities, losses, damages,
expenses, charges and fees which Monopar may sustain or incur
arising out of or attributable to any gross negligence or willful
misconduct by Jerry, as applicable, in the performance under this
Agreement. Monopar hereby agrees to indemnify Jerry and hold Jerry
harmless from and against all liabilities, losses, damages,
expenses, charges and fees which Jerry may sustain or incur by
reason of any claim which may be asserted against Jerry by any
person, firm, corporation or governmental unit and which may arise
out of or be attributable to any gross negligence or willful
misconduct by Monopar or its employees or contractors, as
applicable, in the performance of this Agreement.
8.
Warranties
. The Services shall
be performed in a professional manner, consistent with industry
standards. In performing the Services under this Agreement, Jerry
shall not make any unauthorized use of any confidential or
proprietary information of any other party or infringe the
intellectual property rights of any other party. Monopar represents
and warrants that it has full right, power, and authority to enter
into this Agreement and to perform its obligations
hereunder.
9.
Arbitration
. Any controversy or
claim between Monopar and Jerry arising out of or relating to this
Agreement, or the breach thereof, shall be submitted to arbitration
in accordance with the rules of the American Arbitration
Association. The site of the arbitration shall be Chicago, IL, and
except as provided herein the arbitration shall be conducted in
accordance with the Rules of the American Arbitration Association
prevailing at the time the demand for arbitration is made
hereunder. At least one member of the arbitration panel shall be a
financial expert knowledgeable in the area of biopharmaceutical
corporate compliance. Judgment upon any award rendered by the
arbitrator(s) may be entered in any court of competent jurisdiction
and shall be binding and final. The cost of arbitration shall be
borne by the losing Party, as determined by the
arbitrator(s).
10.
Confidential Information
. Jerry
has executed the attached confidential disclosure agreement
referenced herein as
Appendix
B
prior to commencement of the Services. Jerry hereby
represents and warrants that the obligations thereunder shall be
binding.
11.
Inventions
. Jerry agrees that
all ideas, developments, suggestions and inventions conceived or
reduced to practice, as a result of Services provided by Jerry
under this Agreement, shall be the exclusive property of Monopar
and shall be promptly communicated and assigned to Monopar. Jerry
shall require any other parties contracted by Jerry to disclose the
same to Jerry and to be bound by the provisions of this paragraph.
During the period of this Agreement and thereafter at any
reasonable time when called upon to do so by Monopar, Jerry shall
require any employees of or other parties contracted by Jerry to
execute patent applications, assignments to Monopar (or any
designee of Monopar) and other papers and to perform acts which
Monopar believes necessary to secure to Monopar full protection and
ownership of the rights in and to the services performed by Jerry
and/or for the preparation, filing and prosecution of applications
for patents or inventions made by any employees of or other parties
contracted by Jerry hereunder. The decision to file patent
applications on inventions made by any employees of or other
parties contracted by Jerry shall be made by Monopar and shall be
for such countries, as Monopar shall elect. Monopar agrees to bear
all the expense in connection with the preparation, filing and
prosecution of applications for patents and for all matters
provided in this paragraph requiring the time and/or assistance of
Jerry as to such inventions. Notwithstanding the foregoing, ideas,
developments, suggestions, and inventions conceived or reduced to
practice by Jerry that do not directly arise from Jerry’s
performance under this Agreement, shall be owned by
Jerry.
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
12.1
Notice
. Any notices to be given
hereunder by either Party to the other may be effectuated, in
writing, by personal delivery, by electronic mail, or by mail,
registered or certified, postage prepaid, with return receipt
requested or by Federal Express. Mailed notices shall be addressed
to the parties at the following addresses:
If to
Monopar:
Monopar Therapeutics, Inc
5
Revere Dr.
Suite
200
Attention: Chandler
Robinson, M.D.
Email:
[***]
If to
Jerry:
Gerald
M.Walsh
[***]
or at
such other addresses as either Monopar or Jerry may designate by
written notice to each other. Notices delivered personally shall be
deemed duly given on the date of actual receipt, mailed notices
shall be deemed duly given as of the fourth day after the date so
mailed, and electronic mail shall be deemed duly given upon
confirmation of receipt by recipient.
12.2
Waiver of Breach
. The waiver by
either Party to a breach of any provision in this Agreement cannot
operate or be construed as a waiver of any subsequent breach by
either Party.
12.3
Severability
. If any provision
of this Agreement is determined by a court of competent
jurisdiction to be invalid or unenforceable, that provision shall
be deemed modified to the extent necessary to make it valid or
enforceable, or if it cannot be so modified, then severed, and the
remainder of the Agreement shall continue in full force and effect
as if the Agreement had been signed with the invalid portion so
modified or severed.
12.4
Choice of Law
. This Agreement
has been made and entered into in the State of Illinois, and the
laws of such state, excluding its choice of law rules,
shall govern the validity and
interpretation of this Agreement and the performance due hereunder.
The losing party in any dispute hereunder shall pay the
attorneys’ fees and disbursements of the prevailing
party.
12.5
Integration
. The drafting,
execution and delivery of this Agreement by the Parties have been
induced by no representations, statements, warranties or agreements
other than those expressed herein. This Agreement embodies the
entire understanding of the Parties, and there are no further or
other agreements or understandings, written or oral, in effect
between the Parties relating to the subject matter hereof unless
expressly referred to herein.
12.6
Modification
. This Agreement
may not be modified unless such is in writing and signed by both
Parties to this Agreement.
12.7
Assignment
. Jerry shall not be
permitted to assign this Agreement to any other person or entity
without the prior written consent of Monopar. Jerry hereby agrees
that Monopar shall be permitted to assign this Agreement to any
affiliate of Monopar. This Agreement shall be binding upon and
shall inure to the benefit of the successors and permitted assigns
of the parties.
12.8
Survival
. The provisions of
Sections 7, 8, 9, 10,
and
11
shall survive expiration
or termination of this Agreement for any reason. Expiration or
termination of this Agreement shall not affect Monopar’s
obligations to pay any amounts that may then be due to
Jerry.
12.9
Force Majeure
. If Jerry’s
performance of his obligations under this Agreement is prevented or
delayed due to a flood, earthquake, war, terrorist act, revolution,
riot, or insurrection, Jerry shall not be deemed in breach of his
obligations under this Agreement or otherwise liable for any costs,
charges or losses sustained or incurred by Monopar, to the extent
arising directly from such force majeure event.
IN
WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the day and year first above written.
ACCEPTED
AND AGREED TO:
Gerald
M. Walsh
|
|
Monopar Therapeutics Inc
|
|
|
|
By: Individual
|
|
By: Chandler Robinson
Its: Chief Executive Officer
|
APPENDIX A
Services
include, but are not limited to, assisting the Monopar Management
team with the following:
1.
Near and long term
planning of product development for existing Monopar drugs such as
Validive, ATN-658, GPX-150, GPX-160, GPX-170, and
GPX-180.
2.
Developing near and
long term budgets for product development programs: preclicnal,
clinical, manufacturing, and related regulatory
affairs.
3.
Designing,
managing, evaluating, and reporting for preclinical and clinical
studies and for manufacturing API and drug product.
4.
Data storage and
retrieval for preclinical, clinical, manufacturing, and regulatory
programs.
5.
Identifying and
evaluating suitable in-licensing drug products, including
evaluation of strength and scope of patent protection.
6.
Identifying
patentable IP based on data from Monopar’s preclinical,
clinical, and manufacturing programs.
7.
Creating
presentation content for Board Meetings, fund raising, and M&A
activities.
8.
Evaluating
qualifications of employment candidates for Monopar.
9.
Any other Services
required by Monopar.
Appendix
B
See
executed CDA attached
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
MONOPAR THERAPEUTICS INC.
CONFIDENTIAL DISCLOSURE AGREEMENT
AGREEMENT
between the individual Gerald M. Walsh (“Recipient”)
and Monopar Therapeutics Inc.
(“Monopar”).
In
consideration for the mutual agreements contained herein and the
other provisions of this Agreement, the receipt of which is hereby
acknowledged by the parties, the parties hereto agree as
follows:
1. Scope of Confidential Information
“Confidential
Information” means, subject to the other provisions of this
Section:
(a) all
information, whether oral or written, disclosed by Monopar that is
described in Schedule A under “Description of Confidential
Information”. Confidential Information may relate to the
activities or property of Monopar or any of Monopar’s
members, directors, officers, employees, consultants, agents,
representatives or affiliated entities (collectively,
“Associated Persons”); and
(b) any
written material prepared by Recipient or Recipient’s
partners, directors, officers, employees, agents, representatives
or affiliated entities (collectively, “Associated
Persons”) containing any Monopar Confidential
Information.
“Confidential
Information” does not include information that: (i) was
available to Recipient (free of any confidentiality obligation in
favor of Monopar) prior to disclosure of such information by
Monopar to Recipient; (ii) is made available to Recipient from a
third party which (at the time of such availability) was not, to
Recipient’s knowledge, subject to a confidentiality
obligation with respect to such information; (iii) is made
available to third parties by Monopar without restriction on the
disclosure of such information, (iv) is or becomes available to the
public on or after the date of this Agreement (other than as a
result of disclosure prohibited by any confidentiality obligation
contained herein); or (v) is developed independently by Recipient
or its Associated Persons without reference to the Confidential
Information.
Recipient
agrees that it will not disclose to Monopar or to any of its
employees or consultants any confidential, proprietary, or trade
secret information, or any other form of confidential protectable
intellectual property, regardless of whether such information is
the property of Recipient itself or of some other individual or
organization.
2. Use and Disclosure of Confidential Information
(a)
Recipient agrees: (i) to preserve the confidentiality of
Confidential Information for [***] from the date of signing this
Agreement; (ii) to use and/or permit the use of Confidential
Information only for the purposes of, and to the extent necessary
for, evaluating a business relationship between the parties and, if
such a relationship is consummated, carrying out such relationship;
(iii) to disclose Confidential Information to, and to permit the
use of Confidential Information by, only such persons within
Recipient who Recipient reasonably determines need to know such
information in connection with the activities described in (ii)
above; and (iv) to use reasonable care to maintain the
confidentiality of Confidential Information, provided that such
care shall be at least as great as the precautions taken by
Recipient to protect its own confidential and/or proprietary
information.
(b)
Notwithstanding anything to the contrary herein, Recipient is free
to make (and this Agreement does not restrict) disclosure of any
Confidential Information in a judicial, legislative, or
administrative investigation or proceeding or to a government or
other regulatory agency; provided that, to the extent permitted by,
and practicable under, the circumstances, Recipient provides to
Monopar (i) prior notice of the intended disclosure or (ii) if
prior notice is not permitted or practicable under the
circumstances, prompt notice of such disclosure.
3. Certain Rights and Limitations
(a) All
Confidential Information shall remain the property of Monopar. The
provision of Confidential Information hereunder shall not transfer
any right, title or interest in such information to Recipient.
Monopar does not grant any express or implied right to Recipient to
or under Monopar’s patents, copyrights, trademarks, trade
secret information or other proprietary rights.
(b)
Recipient agrees to adhere to all applicable laws and regulations
relating to the export of technical data received
hereunder.
(c)
This Agreement imposes no obligations on either party to purchase,
sell, license, transfer or otherwise transact in any technology,
services or products. This Agreement does not create any agency or
partnership relationship between the parties hereto.
(d) All
information disclosed hereunder is without representation or
warranty of any kind whatsoever, including without limitation, any
representation or warranty as to accuracy or completeness, whether
express or implied.
4. Remedies
(a)
Upon Monopar’s reasonable request, Recipient agrees to return
promptly to Monopar all Confidential Information that is in writing
and in the possession of Recipient and, upon written request, to
certify the return or destruction (at Monopar’s option) of
all Confidential Information.
(b)
Recipient agrees that monetary damages may not be an adequate
remedy for improper disclosure or use of Confidential Information,
that Monopar, upon breach of this contract, shall be entitled to
such injunctive or equitable relief as may be deemed proper by a
court of competent jurisdiction, without waiving any other right or
remedy, and that Recipient shall not resist an application for such
relief on the ground that Monopar has an adequate remedy at
law.
5. Miscellaneous
(a)
Except where expressly indicated otherwise, the words
“written” or “in writing” shall include,
but not be limited to, written or printed documents, electronic and
facsimile transmissions and computer disks or tapes (whether
machine or user readable).
(b) In
the event that any one or more of the provisions of this Agreement
will for any reason be held to be invalid, illegal or unenforceable
by a court of competent jurisdiction, the remaining provisions of
this Agreement will be unimpaired, and the invalid, illegal or
unenforceable provisions will be replaced by a mutually acceptable
provision, which being valid, legal or enforceable, comes closest
to the intention of the parties underlying the invalid, illegal or
unenforceable provision.
(c) No
amendment or alteration of the terms of this Agreement shall be
effective unless made in writing and executed by both parties
hereto.
(d) A
failure or delay in exercising any right in respect of this
Agreement will not be presumed to operate as a waiver, and a single
or partial exercise of any right will not be presumed to preclude
any subsequent or further exercise of that right or the exercise of
any other right. Any modification or waiver of any provision of
this Agreement shall not be effective unless made in writing. Any
such waiver shall be effective only in the specific instance and
for the purpose given.
(e)
This Agreement and its enforcement
shall be governed by, and construed in accordance with, the laws of
the State of Illinois, without regard to conflicts-of-law
principles.
[***] = Confidential Information has
been omitted and filed separately with the Securities and Exchange
Commission.
Confidential
treatment has been approved with respect to the omitted
informatio
n, pursuant to an Order dated January 8,
2018.
[SIGNATURE PAGE
FOLLOWS]
IN
WITNESS WHEREOF, the parties hereto have executed this
Agreement.
“RECIPIENT”
By:_______________________________________
Name:
Gerald M. Walsh
Title:
Consultant
Date:_____________________________________
Notices
hereunder shall be sent to:
Gerald
M. Walsh
[***]
|
“MONOPAR”
Monopar
Therapeutics Inc.
By:_______________________________________
Name:
Chandler D. Robinson
Title:
CEO
Date:
_____________________________________
Notices
hereunder shall be sent to:
[***]
|
|
|
SCHEDULE A
Description
of Confidential Information Disclosed by Monopar:
(a) The
identity of the particular compound or compounds under
investigation by Monopar; (b) the medical indication and/or other
purpose for which any of these compounds are being investigated by
Monopar; (c) the (known or putative) mechanism of action of any of
these compounds; (d) any techniques used by Monopar to discover,
develop, produce, or test any of these compounds; and (e) any
non-public business, financial, regulatory, clinical or scientific
information pertaining to Monopar or the compound or compounds that
Monopar identifies as confidential when disclosed.
MONOPAR
THERAPEUTICS INC. 2016 STOCK INCENTIVE PLAN
1.
Purpose of the
Plan.
The
purpose of this Plan is to enhance shareholder value by linking the
compensation of officers, directors, key employees and consultants
of the Company to increases in the price of Monopar Therapeutics
Inc. common stock and the achievement of other performance
objectives, and to encourage ownership in the Company by key
personnel and consultants whose long-term employment and retention
is considered essential to the Company’s continued progress
and success. The Plan is also intended to assist the Company in the
recruitment of new employees and consultants and to motivate,
retain and encourage such employees, directors and consultants to
act in the shareholders’ interest and share in the
Company’s success.
2.
Definitions.
As used
herein, the following definitions shall apply:
(a)
“Administrator”
means the
Board, any Committee or such delegates as shall be administering
the Plan in accordance with Section 4 of the Plan.
(b)
“Affiliate”
means any
Subsidiary or other entity that is directly or indirectly
controlled by the Company or any entity in which the Company has a
significant ownership interest as determined by the Administrator.
The Administrator shall, in its sole discretion, determine which
entities are classified as Affiliates and designated as eligible to
participate in this Plan.
(c)
“Applicable Law”
means the
requirements relating to the administration of stock option plans
under U.S. federal and state laws, any stock exchange or quotation
system on which the Company has listed or submitted for quotation
the Common Shares to the extent provided under the terms of the
Company’s agreement with such exchange or quotation system
and, with respect to Awards subject to the laws of any foreign
jurisdiction where Awards are, or will be, granted under the Plan,
the laws of such jurisdiction.
(d)
“Award”
means a Stock Award,
Option, Stock Appreciation Right, or Other Stock-Based Award
granted in accordance with the terms of the Plan, or any other
property (including cash) granted pursuant to the provisions of the
Plan.
(e)
“Awardee”
means an Employee,
Director or Consultant who has been granted an Award under the
Plan.
(f)
“Award Agreement”
means a
Stock Award Agreement, Option Agreement, Stock Appreciation Right
Agreement, or Other Stock-Based Award Agreement, which may be in
written or electronic format, in such form and with such terms as
may be specified by the Administrator, evidencing the terms and
conditions of an individual Award. Each Award Agreement is subject
to the terms and conditions of the Plan. The effectiveness of an
Award shall not be subject to the Award Agreement’s being
signed by
the
Company and/or the Participant receiving the Award unless
specifically so provided in the Award Agreement.
(g)
“Board”
means the Board of
Directors of the Company.
(h)
“Change of Control”
shall
mean, except as otherwise provided in an Award Agreement, one of
the following shall have taken place after the date of this
Plan:
(i)
any
“person” (as such term is used in Sections 13(d) or
14(d) of the Exchange Act) (other than the Company, any majority
controlled subsidiary of the Company, or the fiduciaries of any
Company benefit plans) becomes the beneficial owner (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act), directly or
indirectly, of 30% or more of the total voting power of the voting
securities of the Company then outstanding and entitled to vote
generally in the election of directors of the Company; provided,
however, that no Change of Control shall occur upon the acquisition
of securities directly from the Company;
(ii)
individuals
who, as of the beginning of any 24 month period, constitute the
Board (as of the date hereof, the “
Incumbent Board
”) cease for any
reason during such 24 month period to constitute at least a
majority of the Board, provided that any individual becoming a
Director subsequent to the date hereof whose election, or
nomination for election by the Company’s shareholders, was
approved by a vote of at least a majority of the Directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding for
this purpose any such individual whose initial assumption of office
is in connection with an actual or threatened election contest
relating to the election of the Directors of the Company;
or
(iii)
consummation
of (A) a merger, consolidation or reorganization of the Company, in
each case, with respect to which all or substantially all of the
individuals and entities who were the respective beneficial owners
of the voting securities of the Company immediately prior to such
merger, consolidation or reorganization do not, following such
merger, consolidation or reorganization, beneficially own, directly
or indirectly, at least 65% of the combined voting power of the
then outstanding voting securities entitled to vote generally in
the election of directors of the entity or entities resulting from
such merger, consolidation or reorganization, (B) a complete
liquidation or dissolution of the Company, or (C) a sale or other
disposition of all or substantially all of the assets of the
Company, unless at least 65% of the combined voting power of the
then outstanding voting securities entitled to vote generally in
the election of directors of the entity or entities that acquire
such assets are beneficially owned by individuals or entities who
or that were beneficial owners of the voting securities of the
Company immediately before such sale or other
disposition.
Notwithstanding the
foregoing, if any payment or distribution event applicable to an
Award is subject to the requirements of Section 409A(a)(2)(A) of
the Code, the determination of the occurrence of a Change of
Control shall be governed by applicable
provisions of
Section 409A(a)(2)(A) of the Code and regulations and rulings
issued thereunder for purposes of determining whether such payment
or distribution may then occur.
(i)
“Code”
means the United
States Internal Revenue Code of 1986, as amended, and any successor
thereto, the Treasury Regulations thereunder and other relevant
interpretive guidance issued by the Internal Revenue Service or the
Treasury Department. Reference to any specific section of the Code
shall be deemed to include such regulations and guidance, as well
as any successor provision of the Code.
(j)
“Committee”
means a
committee of Directors appointed by the Board in accordance with
Section 4 of the Plan or, in the absence of any such special
appointment, the Compensation Committee of the Board.
(k)
“Common Shares”
means the
common shares, $0.001 par value, of the Company, or any security of
the Company issued in substitution, exchange or lieu
thereof.
(l)
“Company”
means Monopar
Therapeutics Inc., a Delaware corporation, or, except as utilized
in the definition of Change of Control, its successor.
(m)
“Consultant”
means an
individual providing services to the Company or any of its
Affiliates as an independent contractor, and includes prospective
consultants who have accepted offers of consultancy for the Company
or any of its Affiliates, so long as such person (i) renders bona
fide services that are not in connection with the offer and sale of
the Company’s securities in a capital-raising transaction,
(ii) does not directly or indirectly promote or maintain a market
for the Company’s securities, and (iii) otherwise qualifies
as a consultant under the applicable rules of the SEC for
registration of shares of stock on a Form S-8 registration
statement
(n)
“
Conversion Award
” has the meaning
set forth in Section 4(b)(xii) of the Plan.
(o)
“Director”
means a member of
the Board. Any Director who does not serve as an employee of the
Company is referred to herein as a “
Non-employee
Director
.”
(p)
“Disability”
means (i)
“Disability” as defined in any employment, consulting
or similar agreement to which the Participant is a party, or (ii)
if there is no such agreement or it does not define
“Disability,” (A) permanent and total disability as
determined under the Company’s long-term disability plan
applicable to the Participant, or (B) if there is no such plan
applicable to the Participant or the Committee determines otherwise
in an applicable Award Agreement, “Disability” shall
mean the Participant’s continuous illness, injury or
incapacity for a period of six consecutive months, as determined by
the Administrator in its discretion. Notwithstanding the above,
with respect to an Incentive Stock Option, Disability shall mean
permanent and total disability as defined in Section 22(e)(3) of
the Code and, with respect to any Award that constitutes
“nonqualified deferred compensation” within the meaning
of Section 409A of the Code, the foregoing definition shall apply
for purposes of vesting of such Award, provided that such Award
shall not be settled until the earliest of: (x) the
Participant’s “disability” within the meaning of
Section 409A of the Code, (y) the Participant’s
“separation from service”
within
the meaning of Section 409A of the Code and (z) the date such Award
would otherwise be settled pursuant to the terms of the Award
Agreement.
(q)
“Disaffiliation”
means a
Subsidiary’s or Affiliate’s ceasing to be a Subsidiary
or Affiliate for any reason (including, without limitation, as a
result of a public offering, or a spin-off or sale by the Company,
of the stock of the Subsidiary or Affiliate) or a sale of a
division of the Company and its Affiliates.
(r)
“Employee”
means a regular,
active employee of the Company or any Affiliate, including an
Officer or Director who is also a regular, active employee of the
Company or any Affiliate. The Administrator shall determine whether
the Chairman of the Board qualifies as an “Employee.”
For any and all purposes under the Plan, the term
“Employee” shall not include a person hired as an
independent contractor, leased employee, consultant or a person
otherwise designated by the Administrator, the Company or an
Affiliate at the time of hire as not eligible to participate in or
receive benefits under the Plan or not on the payroll, even if such
ineligible person is subsequently determined to be a common law
employee of the Company or an Affiliate or otherwise an employee by
any governmental or judicial authority. Unless otherwise determined
by the Administrator in its sole discretion, for purposes of the
Plan, an Employee shall be considered to have terminated employment
and to have ceased to be an Employee if his or her employer ceases
to be an Affiliate, even if he or she continues to be employed by
such employer.
(s)
“Exchange Act”
means the
United States Securities Exchange Act of 1934, as amended, and any
successor thereto.
(t)
“Fair Market Value”
means a
valuation performed by a qualified independent appraiser within the
previous twelve months, taking into consideration all available
information.
(u)
“Grant Date”
means, with
respect to each Award, the date upon which the Award is granted to
an Awardee pursuant to this Plan, which may be a designated future
date as of which such Award will be effective, as determined by the
Committee.
(v)
“Incentive Stock Option”
means an Option that is identified in the Option Agreement as
intended to qualify as an incentive stock option within the meaning
of Section 422 of the Code and the regulations promulgated
thereunder, and that actually does so qualify.
(w)
“Nonqualified Stock Option”
means an Option that is not an Incentive Stock Option.
(x)
“Officer”
means a person who
is an officer of the Company within the meaning of Section 16 of
the Exchange Act and the rules and regulations promulgated
thereunder.
(y)
“Option”
means a right
granted under Section 8 of the Plan to purchase a number of Shares
at such exercise price, at such times, and on such other terms and
conditions as are specified in the agreement or other documents
evidencing the Award (the “Option
Agreement”).
Both Incentive Stock Options and Nonqualified Stock Options may be
granted under the Plan.
(z)
“Other Stock-Based Award”
means an Award granted pursuant to Section 12 of the Plan on such
terms and conditions as are specified in the agreement or other
documents evidencing the Award (the “
Other Stock-Based Award
Agreement
”).
(aa)
“Participant”
means the Awardee or any person (including any estate) to whom an
Award has been assigned or transferred as permitted
hereunder.
(bb)
“Plan”
means
this 2016 Stock Incentive Plan, as set forth herein and as
hereafter amended from time to time.
(cc)
“Qualifying Performance
Criteria”
shall have the meaning set forth in Section
13(b) of the Plan.
(dd)
“Retirement”
means, unless the Administrator determines otherwise, Termination
of Employment, voluntary or involuntary, by a Participant from the
Company and its Affiliates, other than a Termination for Cause,
after attaining age fifty-five (55) and having at least five (5)
years of service with the Company and its Affiliates, excluding
service with an Affiliate of the Company prior to the time that
such Affiliate became an Affiliate of the Company. For Plan
purposes, a “voluntary” Termination of Employment is a
Termination of Employment where the Participant does not qualify
for severance benefits, whether under a severance agreement or the
Company’s or any of its Affiliate’s severance policy,
plan or other arrangement.
(ee)
“Securities Act”
means the
United States Securities Act of 1933, as amended. (ff)
“Share”
means a Common
Share, as adjusted in accordance with Section 15 of
the
Plan.
(gg)
“Stock Appreciation
Right”
means a right granted under Section 10 of the
Plan on such terms and conditions as are specified in the agreement
or other documents evidencing the Award (the “
Stock Appreciation Right
Agreement
”).
(hh)
“Stock Award”
means an award or issuance of Shares or Stock Units made under
Section 11 of the Plan, the grant, issuance, retention, vesting
and/or transferability of which is subject during specified periods
of time to such conditions (including, without limitation,
continued employment or performance conditions) and terms as are
expressed in the agreement or other documents evidencing the Award
(the “
Stock Award
Agreement
”).
(ii)
“Stock Unit”
means a bookkeeping entry representing an amount equivalent to the
Fair Market Value of one Share, payable in cash, property or
Shares. Stock Units represent an unfunded and unsecured obligation
of the Company, except as otherwise provided for by the
Administrator.
(jj)
“Subsidiary”
means any company (other than the Company) in an unbroken chain of
companies beginning with the Company, provided each company in the
unbroken chain (other than the Company) owns, at the time of
determination, stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other companies
in such chain.
(kk)
“Termination for
Cause”
means, unless otherwise provided in an Award
Agreement, Termination of Employment on account of any act of fraud
or intentional misrepresentation or embezzlement, misappropriation
or conversion of assets of the Company or any Affiliate, or the
intentional and repeated violation of the written policies or
procedures of the Company, provided that, for an Employee who is
party to an individual severance or employment agreement defining
Cause, “Cause” shall have the meaning set forth in such
agreement except as may be otherwise provided in such agreement.
For purposes of this Plan, a Participant’s Termination of
Employment shall be deemed to be a Termination for Cause if, after
the Participant’s employment has terminated, facts and
circumstances are discovered that would have justified, in the
opinion of the Committee, a Termination for Cause.
(ll)
“Termination of
Employment”
means for purposes of this Plan, unless
otherwise determined by the Administrator, ceasing to be an
Employee (as determined in accordance with Section 3401(c) of the
Code and the regulations promulgated thereunder) of the Company or
one of its Subsidiaries or Affiliates. Unless otherwise determined
by the Committee in the terms of an Award Agreement or otherwise,
if a Participant’s employment with the Company and its
Affiliates terminates but such Participant continues to provide
services to the Company and its Affiliates in a Non-employee
Director capacity, such change in status shall be deemed a
Termination of Employment. A Participant employed by, or performing
services for, a Subsidiary or an Affiliate or a division of the
Company and its Affiliates shall be deemed to incur a Termination
of Employment if, as a result of a Disaffiliation, such Subsidiary,
Affiliate, or division ceases to be a Subsidiary, Affiliate or
division, as the case may be, and the Participant does not
immediately thereafter become an Employee of (or service provider
for), or member of the board of directors of, the Company or
another Subsidiary or Affiliate. Temporary absences from employment
because of illness, vacation or leave of absence and transfers
among the Company and its Subsidiaries and Affiliates shall not be
considered Terminations of Employment. In addition, Termination of
Employment shall mean a “separation from service” as
defined in regulations issued under Code Section 409A whenever
necessary to ensure compliance therewith for any payment or
settlement of a benefit conferred under this Plan that is subject
to such Code section, and, for such purposes, shall be determined
based upon a reduction in the bona fide level of services performed
to a level equal to twenty percent (20%) or less of the average
level of services performed by the Employee during the immediately
preceding 36-month period. For the purposes of this Plan,
Termination of Employment shall also mean the termination of a
Consultant’s services to the Company and the termination of a
Director’s position as a member of the Board of Directors of
the Company.
3.
Stock Subject to the Plan.
(a)
Aggregate Limit.
Subject to the
provisions of Section 15(a) of the Plan, the maximum aggregate
number of Shares which may be subject to Awards granted under the
Plan is 10,000 Shares, less one Share for every one Share that was
subject to an option or stock appreciation right granted under any
prior plan, and one share for every one Share that was subject to
an award other than an option or stock appreciation right granted
under any prior plan. Any Shares that are subject to Options or
Stock Appreciation Rights shall be counted against this limit as
one Share for every one Share granted, and any Shares that are
subject to Awards other than Options or Stock Appreciation Rights
shall be counted against this limit as one Share for every one
Share granted. After the Effective Date of the Plan (as provided in
Section 6), no awards may be granted under any prior plan. Shares
subject to or delivered under Conversion Awards shall not reduce
the aggregate number of Shares which may be subject to or delivered
under Awards granted under this Plan. The Shares issued under the
Plan may be either Shares reacquired by the Company, including
Shares purchased in the open market, or authorized but unissued
Shares.
Notwithstanding any
other provision of this Plan, the Company has no prior
plans.
(b)
Code Section 162(m) and 422 Limits; Other
Share Limitations.
Subject to the provisions of Section
15(a) of the Plan, no Employee may be granted under this Plan (i)
Options or Stock Appreciation Rights during any calendar year with
respect to more than 1,000 Shares, and (ii) Stock Awards and Other
Stock-Based Awards that are intended to comply with the
performance-based exception under Code Section 162(m) and are
denominated in Shares under which more than 1,000 Shares may be
earned for each calendar year (or other 12 month period) in the
vesting or performance period. During any calendar year, no
Participant may be granted an Award that is intended to comply with
the performance-based exception under Code Section 162(m) and is
denominated in cash under which more than one million dollars
($1,000,000.00) may be earned for each calendar year (or other 12
month period) in the performance period. The foregoing limitations
in this section shall be multiplied by two with respect to Awards
granted to a Participant during the first calendar year in which
the Participant commences employment with the Company and its
Affiliates. Subject to the provisions of Section 15(a) of the Plan,
the aggregate number of Shares that may be subject to all Incentive
Stock Options granted under the Plan shall not exceed 10,000
Shares. Notwithstanding anything to the contrary in the Plan, the
limitations set forth in this Section 3(b) shall be subject to
adjustment under Section 15(a) of the Plan only to the extent that
such adjustment will not affect the status of any Award intended to
qualify as “performance-based compensation” under
Section 162(m) of the Code.
(c)
Limit on Awards to Directors
.
Notwithstanding any other provision of the Plan to the contrary,
the aggregate Grant Date Fair Market Value (computed as of the date
of grant in accordance with applicable financial accounting rules)
of all Awards granted to any Non-employee Director during any
single calendar year (excluding Awards made at the election of the
Non-employee Director in lieu of all or a portion of annual and
committee cash retainers) shall not exceed one million dollars
($1,000,000.00).
(d)
Share Counting Rules
.
(i)
For purposes of
this Section 3 of the Plan, Shares subject to Awards that have been
canceled, expired, settled in cash, or forfeited for any reason (in
whole or in part) shall not reduce the aggregate number of Shares
which may be subject to Awards granted under this Plan and shall be
available for future Awards granted under this Plan in accordance
with Section 3(d)(iii). In addition, if any Shares subject to an
award under any prior plan are canceled, expired, settled in cash,
or forfeited for any reason (in whole or in part) after December
31, 2015, then such Shares subject to an award under any prior plan
shall, to the extent of such cancellation, expiration, settlement
in cash, or forfeiture, again be available for grant under this
Plan in accordance with Section 3(d)(iii). Notwithstanding the
foregoing, Shares added back under the provisions of this
subsection (d) shall not be counted when determining the limit on
Shares that may be granted as Incentive Stock Options under
subsection (b), above.
(ii)
Notwithstanding
anything to the contrary contained herein, the following Shares
shall not be added to the Shares authorized for grant under
paragraph (i) of this Section: (a) Shares tendered by the
Participant or withheld by the Company in payment of the purchase
price of an Option or, after December 31, 2015, an option under any
prior plan, (b) Shares tendered by the Participant or withheld by
the Company to satisfy any tax withholding obligation with respect
to Options or Stock Appreciation Rights or, after December 31,
2015, options or stock appreciation rights under any prior plan,
(c) Shares subject to a Stock Appreciation Right or, after December
31, 2015, a stock appreciation right under any prior plan, that are
not issued in connection with its stock settlement on exercise
thereof, and (d) Shares reacquired by the Company on the open
market or otherwise using cash proceeds from the exercise of
Options or, after December 31, 2015, options under any prior plan.
Shares subject to Awards that have been retained by the Company in
payment or satisfaction of the tax withholding obligation of an
Awardee, other than for an Option or Stock Appreciation Right as
described above, and Shares that have been delivered (either
actually or constructively by attestation) to the Company in
payment or satisfaction of the tax withholding obligation of an
Awardee, other than for an Option or Stock Appreciation Right as
described above, shall again be available for grant under the Plan.
Similarly, if any Shares subject to an award under any prior plan
are, after December 31, 2015, either retained by the Company in
payment or satisfaction of the tax withholding obligation of an
awardee, other than for an option or a stock appreciation right as
described above, or if Shares are delivered (either actually or
constructively by attestation) to the Company in payment or
satisfaction of the tax withholding obligation of an awardee under
a prior plan, other than for an option or stock appreciation right,
as described above, then such Shares subject to an award under any
prior plan shall, to the extent of such tendering or withholding,
again be available for grant under this Plan.
(iii)
Any
Shares that again become available for grant pursuant to this
Section shall be added back as (i) one Share for every one Share
subject to Options or Stock Appreciation Rights granted under the
Plan or options or stock appreciation rights
granted
under any prior plan, and (ii) as one Share for every one Share
subject to Awards other than Options or Stock Appreciation Rights
granted under the Plan or awards other than options or stock
appreciation rights granted under any prior plan.
(iv)
Conversion
Awards shall not reduce the Shares authorized for grant under the
Plan or the limitations on Awards to a Participant under subsection
(b), above, nor shall Shares subject to a Conversion Award again be
available for an Award under the Plan as provided in this
subsection (d).
4.
Administration of
the Plan.
(a)
Procedure
.
(i)
Multiple Administrative Bodies.
The
Plan shall be administered by the Board, a Committee designated by
the Board to so administer this Plan and/or their respective
delegates.
(ii)
Section
162(m)
. To the extent that the Administrator determines it
to be desirable to qualify Awards granted hereunder as
“performance-based compensation” within the meaning of
Code Section 162(m), Awards to “covered employees”
(within the meaning of Code Section 162(m)) or to Employees that
the Committee determines may be “covered employees” in
the future shall be made by a Committee of two or more
“outside directors” within the meaning of Section
162(m) of the Code. References herein to the Administrator in
connection with Awards intended to qualify as
“performance-based compensation” shall mean a Committee
meeting the “outside director” requirements of Code
Section 162(m). Notwithstanding any other provision of the Plan,
the Administrator shall not have any discretion or authority to
make changes to any Award that is intended to qualify as
“performance-based compensation” to the extent that the
existence of such discretion or authority would cause such Award
not to so qualify.
(iii)
Rule
16b-3
. To the extent desirable to qualify transactions
hereunder as exempt under Rule 16b-3 promulgated under the Exchange
Act (“
Rule
16b-3
”), Awards to Officers and Directors shall be
made by the entire Board or a Committee of two or more
“non-employee directors” within the meaning of Rule
16b-3.
(iv)
Other Administration.
To the extent
required by the rules of the principal
U.S.
national securities exchange on which the Shares are traded, the
members of the Committee shall also qualify as “independent
directors” as set forth in such rules. Except to the extent
prohibited by Applicable Law, the Board or a Committee may delegate
to a Committee of one or more Directors or to authorized officers
of the Company the power to approve Awards to persons eligible to
receive Awards under the Plan who are not (A) subject to Section 16
of the Exchange Act or (B) at the time of such approval,
“covered employees” under Section 162(m) of the
Code.
(v)
Awards to Directors
. The Board shall
have the power and authority to grant Awards to Non-employee
Directors, including the authority to determine the number and type
of awards to be granted; determine the terms and conditions,
not
inconsistent with
the terms of this Plan, of any award; and to take any other actions
the Board considers appropriate in connection with the
administration of the Plan.
(vi)
Delegation
of Authority for the Day-to-Day Administration of the Plan.
Except to the extent prohibited by Applicable Law, the
Administrator may delegate to one or more individuals the
day-to-day administration of the Plan and any of the functions
assigned to it in this Plan. Such delegation may be revoked at any
time.
(b)
Powers of the Administrator.
Subject to
the provisions of the Plan and, in the case of a Committee or
delegates acting as the Administrator, subject to the specific
duties delegated to such Committee or delegates, the Administrator
shall have the authority, in its discretion:
(i)
to select the
Non-employee Directors, Consultants and Employees of the Company or
its Affiliates to whom Awards are to be granted
hereunder;
(ii)
to
determine the number of Common Shares to be covered by each Award
granted hereunder;
(iii)
to
determine the type of Award to be granted to the selected Employees
and Non-employee Directors;
(iv)
to approve forms of
Award Agreements;
(v)
to determine the
terms and conditions, not inconsistent with the terms of the Plan,
of any Award granted hereunder. Such terms and conditions include,
but are not limited to, the exercise and/or purchase price, the
time or times when an Award may be exercised (which may or may not
be based on performance criteria), the vesting schedule, any
vesting and/or exercisability provisions, terms regarding
acceleration of Awards or waiver of forfeiture restrictions, the
acceptable forms of consideration for payment for an Award, the
term, and any restriction or limitation regarding any Award or the
Shares relating thereto, based in each case on such factors as the
Administrator, in its sole discretion, shall determine and may be
established at the time an Award is granted or
thereafter;
(vi)
to correct
administrative errors;
(vii)
to
construe and interpret the terms of the Plan (including sub-plans
and Plan addenda) and Awards granted pursuant to the
Plan;
(viii)
to
adopt rules and procedures relating to the operation and
administration of the Plan to accommodate the specific requirements
of local laws and procedures. Without limiting the generality of
the foregoing, the Administrator is specifically authorized (A) to
adopt rules and procedures regarding the conversion of local
currency, the shift of tax liability from employer to employee
(where legally permitted) and withholding procedures and handling
of stock certificates which vary with local requirements, and (B)
to adopt sub-plans and Plan addenda as the
Administrator deems
desirable, to accommodate foreign laws, regulations and
practice;
(ix)
to
prescribe, amend and rescind rules and regulations relating to the
Plan, including rules and regulations relating to sub-plans and
Plan addenda;
(x)
to modify or amend
each Award, including, but not limited to, the acceleration of
vesting and/or exercisability, provided, however, that any such
modification or amendment (A) is subject to the plan amendment
provisions set forth in Section 16 of the Plan, and (B) may not
materially impair any outstanding Award unless agreed to in writing
by the Participant, except that such agreement shall not be
required if the Administrator determines in its sole discretion
that such modification or amendment either (Y) is required or
advisable in order for the Company, the Plan or the Award to
satisfy any Applicable Law or to meet the requirements of any
accounting standard, or (Z) is not reasonably likely to
significantly diminish the benefits provided under such Award, or
that adequate compensation has been provided for any such
diminishment, except following a Change of Control;
(xi)
to
allow or require Participants to satisfy withholding tax amounts by
electing to have the Company withhold from the Shares to be issued
upon exercise of a Nonqualified Stock Option or vesting of a Stock
Award that number of Shares having a Fair Market Value equal to the
amount required to be withheld. The Fair Market Value of the Shares
to be withheld shall be determined in such manner and on such date
that the Administrator shall determine or, in the absence of
provision otherwise, on the date that the amount of tax to be
withheld is to be determined. All elections by a Participant to
have Shares withheld for this purpose shall be made in such form
and under such conditions as the Administrator may
provide;
(xii)
to
authorize conversion or substitution under the Plan of any or all
stock options, stock appreciation rights or other stock awards held
by awardees of an entity acquired by the Company (the
“
Conversion
Awards
”). Any conversion or substitution shall be
effective as of the close of the merger or acquisition. The
Conversion Awards may be Nonqualified Stock Options or Incentive
Stock Options, as determined by the Administrator, with respect to
options granted by the acquired entity;
(xiii)
to
authorize any person to execute on behalf of the Company any
instrument required to effect the grant of an Award previously
granted by the Administrator;
(xiv)
to
impose such restrictions, conditions or limitations as it
determines appropriate as to the timing and manner of any resale by
a Participant or of other subsequent transfers by the Participant
of any Shares issued as a result of or under an Award or upon the
exercise of an Award, including, without limitation, (A)
restrictions under an insider trading policy, (B) restrictions as
to the use of a specified brokerage firm for such resale or other
transfers, and (C) institution of “blackout” periods on
exercises of Awards;
(xv)
to
provide, either at the time an Award is granted or by subsequent
action, that an Award shall contain as a term thereof, a right,
either in tandem with the other rights under the Award or as an
alternative thereto, of the Participant to receive, without payment
to the Company, a number of Shares, cash or a combination thereof,
the amount of which is determined by reference to the value of the
Award; and
(xvi)
to
make all other determinations deemed necessary or advisable for
administering the Plan and any Award granted
hereunder.
(c)
Effect of Administrator’s
Decision.
All questions arising under the Plan or under any
Award shall be decided by the Administrator in its total and
absolute discretion. All decisions, determinations and
interpretations by the Administrator regarding the Plan, any rules
and regulations under the Plan and the terms and conditions of any
Award granted hereunder, shall be final and binding on all
Participants. The Administrator shall consider such factors as it
deems relevant, in its sole and absolute discretion, to making such
decisions, determinations and interpretations, including, without
limitation, the recommendations or advice of any officer or other
employee of the Company and such attorneys, consultants and
accountants as it may select.
(d)
Indemnity
. To the extent allowable
under Applicable Law, each member of the Committee or of the Board
and any person to whom the Board or Committee has delegated any of
its authority under the Plan shall be indemnified and held harmless
by the Company from any loss, cost, liability, or expense that may
be imposed upon or reasonably incurred by such person in connection
with or resulting from any claim, action, suit, or proceeding to
which he or she may be a party or in which he or she may be
involved by reason of any action or failure to act pursuant to the
Plan, and against and from any and all amounts paid by him or her
in satisfaction of judgment in such action, suit, or proceeding
against him or her; provided he or she gives the Company an
opportunity, at its own expense, to handle and defend the same
before he or she undertakes to handle and defend it on his or her
own behalf. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such
persons may be entitled pursuant to the Company’s Articles of
Incorporation or By-laws, as a matter of law, or otherwise, or any
power that the Company may have to indemnify them or hold them
harmless.
5.
Eligibility.
Awards
may be granted only to Directors, Employees and Consultants of the
Company or any of its Affiliates; provided, however, that Incentive
Stock Options may be granted only to Employees of the Company and
its Subsidiaries (within the meaning of Section 424(f) of the
Code).
6.
Term of Plan.
The
Plan shall become effective upon its approval by shareholders of
the Company. It shall continue in effect for a term of ten (10)
years from the date the Plan is approved by the
shareholders of the
Company (the “
Effective
Date
”) unless terminated earlier under Section 16 of
the Plan.
7.
Term of Award.
Subject
to the provisions of the Plan, the term of each Award shall be
determined by the Administrator and stated in the Award Agreement,
and may extend beyond the termination of the Plan. In the case of
an Option or a Stock Appreciation Right, the term shall be ten (10)
years from the Grant Date or such shorter term as may be provided
in the Award Agreement. Notwithstanding the foregoing, the term of
Awards other than Awards that are structured to qualify as
Incentive Stock Options under Section 9 shall be extended
automatically if the Award would expire at a time when trading in
Common Shares is prohibited by law or the Company’s insider
trading policy to the 30th day after the expiration of the
prohibition.
8.
Options.
The
Administrator may grant an Option or provide for the grant of an
Option, either from time to time in the discretion of the
Administrator or automatically upon the occurrence of specified
events, including, without limitation, the achievement of
performance goals.
(a)
Option Agreement.
Each Option Agreement
shall contain provisions regarding (i) the number of Shares that
may be issued upon exercise of the Option, (ii) the type of Option,
(iii) the exercise price of the Option and the means of payment of
such exercise price, (iv) the term of the Option, (v) such terms
and conditions regarding the vesting and/or exercisability of an
Option as may be determined from time to time by the Administrator,
(vi) restrictions on the transfer of the Option and forfeiture
provisions, and
(vii)
such further terms and conditions, in each case not inconsistent
with this Plan, as may be determined from time to time by the
Administrator.
(b)
Exercise Price
. The per share exercise
price for the Shares to be issued upon exercise of an Option shall
be determined by the Administrator, except that the per Share
exercise price shall be no less than 100% of the Fair Market Value
per Share on the Grant Date, except with respect to Conversion
Awards.
(c)
No Option Repricings.
Subject to
Section 15 of the Plan, the exercise price of an Option may not be
reduced without shareholder approval, nor may outstanding Options
be cancelled in exchange for cash, other Awards or Options with an
exercise price that is less than the exercise price of the original
Option without shareholder approval.
(d)
No Reload Grants.
Options shall not be
granted under the Plan in consideration for and shall not be
conditioned upon the delivery of Shares to the Company in payment
of the exercise price and/or tax withholding obligation under any
other employee stock option.
(e)
Vesting Period and Exercise Dates.
Options granted under this Plan shall vest and/or be exercisable at
such time and in such installments during the period prior to the
expiration of the Option’s term as determined by the
Administrator and as specified in the Option Agreement. The
Administrator shall have the right to make the timing of
the
ability
to exercise any Option granted under this Plan subject to continued
active employment (or retention in the case of a consultant or
Director), the passage of time and/or such performance requirements
as deemed appropriate by the Administrator. At any time after the
grant of an Option, the Administrator may reduce or eliminate any
restrictions surrounding any Participant’s right to exercise
all or part of the Option.
(f)
Form of Consideration.
The
Administrator shall determine the acceptable form of consideration
for exercising an Option, including the method of payment, either
through the terms of the Option Agreement or at the time of
exercise of an Option. Acceptable forms of consideration may
include:
(i)
cash;
(ii)
check or wire
transfer (denominated in U.S. Dollars);
(iii)
subject
to any
conditions or limitations established by the
Administrator, other Shares which were held for a period of more
than six (6) months on the date of surrender and which have a Fair
Market Value on the date of surrender equal to or greater than the
aggregate exercise price of the Shares as to which said Option
shall be exercised (it being agreed that the excess of the Fair
Market Value over the aggregate exercise price, if any, shall be
refunded to the Awardee in cash);
(iv)
subject
to any conditions or limitations established by the Administrator,
the Company withholding Shares otherwise issuable upon exercise of
an Option;
(v)
consideration
received by the Company under a broker-assisted sale and remittance
program acceptable to the Administrator and in compliance with
Applicable Law;
(vi)
such
other consideration and method of payment for the issuance of
Shares to the extent permitted by Applicable Law; or
(vii)
any combination of
the foregoing methods of payment.
(g)
Procedure for Exercise; Rights as a
Shareholder
.
(i)
Any Option granted
hereunder shall be exercisable according to the terms of the Plan
and at such times and under such conditions as determined by the
Administrator and set forth in the applicable Option
Agreement.
(ii)
An
Option shall be deemed exercised when (A) the Company receives (1)
written or electronic notice of exercise (in accordance with the
Option Agreement or procedures established by the Administrator)
from the person entitled to exercise the Option and (2) full
payment for the Shares with respect to which the related Option is
exercised, and (B) with respect to Nonqualified Stock Options,
provisions acceptable to the Administrator have been made for
payment of all applicable withholding taxes.
(iii)
Unless
provided otherwise by the Administrator or pursuant to this Plan,
until the Shares are issued (as evidenced by the appropriate entry
on the books of the Company or of a duly authorized transfer agent
of the Company), no right to vote or receive dividends or any other
rights as a shareholder shall exist with respect to the Shares
subject to an Option, notwithstanding the exercise of the
Option.
(iv)
The
Company shall issue (or cause to be issued) such Shares as soon as
administratively practicable after the Option is exercised. An
Option may not be exercised for a fraction of a Share.
(h)
Termination of Employment, Consultancy or Board
Membership.
(i)
The Administrator
shall determine as of the Grant Date (subject to modification
subsequent to the Grant Date) the effect a Termination of
Employment due to (A) Disability, (B) Retirement, (C) death, or (D)
otherwise (including Termination for Cause) shall have on any
Option.
(ii)
Unless otherwise provided in the Award Agreement:
(A) Upon termination from
membership on the Board by a Non- employee Director for reasons
other than Retirement as set forth in subparagraph
(D)
below, any Option held by such Director that (1) has not vested and
is not exercisable as of the effective date of such termination
from membership on the Board shall be subject to immediate
cancellation and forfeiture or (2) is vested and exercisable as of
the effective date of such termination shall remain exercisable for
five (5) years thereafter, or the remaining term of the Option, if
less;
(B) Upon Termination of
Employment, excluding termination from membership on the Board by a
Non-employee Director, due to death or Disability, any Option held
by such Employee that is vested and exercisable as of the effective
date of such Termination of Employment shall remain exercisable for
one year after such Termination of Employment due to death or
Disability or the remaining term of the Option, if
less;
(C) Upon Termination of
Employment, excluding termination from membership on the Board by a
Non-employee Director, due to death or Disability, any Option held
by such Employee that is not yet vested shall vest in full as of
the date of death or Disability, and any such vested Options shall
remain exercisable for one year after such Termination of
Employment due to death or Disability or the remaining term of the
Option, if less;
(D) Upon Termination of
Employment due to Retirement, (1) any Option held by such Awardee
shall, to the extent not already vested, become ratably vested
(rounded up or down to the nearest whole Share) based upon the full
months of the applicable vesting period elapsed as of the end of
the month in which the Termination of Employment due to Retirement
occurs over the total number of months in such period; provided,
however, that, in the case of a
Retirement due to a
voluntary Termination of Employment, the terms of this Section
8(h)(ii)(D)(1) shall not apply with respect to any Option granted
less than six (6) months prior to the effective date of such
Termination of Employment; and
(2) any Option held
by an Awardee at Retirement, to the extent vested and exercisable
as of the effective date of such Retirement (including, without
limitation, any Options that have ratably vested pursuant to the
preceding clause (1)), will remain outstanding for the lesser of
five (5) years or the remaining term of the Option;
and
(E)
"
Any other Termination of
Employment, termination from membership on the Board by a
Non-employee Director, shall result in immediate cancellation and
forfeiture of all outstanding Options that have not vested as of
the effective date of such Termination of Employment, and any
vested and exercisable Options held at the time of such Termination
of Employment shall remain exercisable for ninety (90) days
thereafter, or the remaining term of the Option, if less.
Notwithstanding the foregoing, all outstanding and unexercised
Options shall be immediately cancelled in the event of a
Termination for Cause.
9.
Incentive Stock Option Limitations/Terms.
(a)
Eligibility.
Only employees (as
determined in accordance with Section 3401(c) of the Code and the
regulations promulgated thereunder) of the Company or any of its
Subsidiaries may be granted Incentive Stock Options. No Incentive
Stock Option shall be granted to any such employee who as of the
Grant Date owns stock possessing more than 10% of the total
combined voting power of the Company, except in compliance with
Section 422 of the Code regarding 10 – percent
shareholders.
(b)
$100,000 Limitation.
Notwithstanding
the designation “Incentive Stock Option” in an Option
Agreement, if and to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options
are exercisable for the first time by the Awardee during any
calendar year (under all plans of the Company and any of its
Subsidiaries) exceeds U.S. $100,000, such Options shall be treated
as Nonqualified Stock Options. For purposes of this Section 9(b) of
the Plan, Incentive Stock Options shall be taken into account in
the order in which they were granted. The Fair Market Value of the
Shares shall be determined as of the Grant Date.
(c)
Transferability.
The Option Agreement
must provide that an Incentive Stock Option is not transferable by
the Awardee otherwise than by will or the laws of descent and
distribution, and, during the lifetime of such Awardee, must not be
exercisable by any other person. If the terms of an Incentive Stock
Option are amended to permit transferability, the Option will be
treated for tax purposes as a Nonqualified Stock
Option.
(d)
Exercise Price.
The per Share exercise
price of an Incentive Stock Option shall in no event be
inconsistent with the requirements for qualification of the
Incentive Stock Option under Section 422 of the Code.
(e)
Other Terms.
Option Agreements
evidencing Incentive Stock Options shall contain such other terms
and conditions as may be necessary to qualify, to the extent
determined desirable by the Administrator, with the applicable
provisions of Section 422 of the Code. If any such terms and
conditions, as of the Grant Date or any later date, do not so
comply, the Option will be treated thereafter for tax purposes as a
Nonqualified Stock Option.
10.
Stock
Appreciation Rights.
A
“Stock Appreciation Right” is a right that entitles the
Awardee to receive, in cash or Shares (as determined by the
Administrator), value equal to or otherwise based on the excess
of
(i)
the Fair Market
Value of a specified number of Shares at the time of exercise over
(ii) the aggregate exercise price of the right, as established by
the Administrator on the Grant Date. Stock Appreciation Rights may
be granted to Awardees either alone (“freestanding”) or
in addition to or in tandem with other Awards granted under the
Plan and may, but need not, relate to a specific Option granted
under Section 8 of the Plan. Any Stock Appreciation Right granted
in tandem with an Option may be granted at the same time such
Option is granted or at any time thereafter before exercise or
expiration of such Option, and shall be based on the Fair Market
Value of one Share on the Grant Date or, if applicable, on the
Grant Date of the Option with respect to a Stock Appreciation Right
granted in exchange for or in tandem with, but subsequent to, the
Option (subject to the requirements of Section 409A of the Code).
All Stock Appreciation Rights under the Plan, other than Conversion
Awards, shall be granted subject to the same terms and conditions
applicable to Options as set forth in Section 8 of the Plan.
Subject to the provisions of Section 8 of the Plan, the
Administrator may impose such other conditions or restrictions on
any Stock Appreciation Right as it shall deem
appropriate.
11.
Stock Awards.
(a)
Stock Award Agreement.
Each Stock Award
Agreement shall contain provisions regarding (i) the number of
Shares subject to such Stock Award or a formula for determining
such number, (ii) the purchase price of the Shares, if any, and the
means of payment for the Shares, (iii) the performance criteria, if
any, and level of achievement versus these criteria that shall
determine the number of Shares granted, issued, retainable and/or
vested, (iv) such terms and conditions on the grant, issuance,
vesting and/or forfeiture of the Shares as may be determined from
time to time by the Administrator, (v) restrictions on the
transferability of the Stock Award, and (vi) such further terms and
conditions, in each case not inconsistent with this Plan, as may be
determined from time to time by the Administrator. The Committee
may, in its sole discretion, waive the vesting restrictions and any
other conditions set forth in any Award Agreement under such terms
and conditions as the Committee shall deem appropriate, subject to
the limitations imposed under Code Section 162(m) and the
regulations thereunder in the case of an Award intended to comply
with the performance-based exception under Code Section 162(m),
unless determined otherwise under the circumstances by the
Committee.
(b)
Restrictions and Performance Criteria.
The grant, issuance, retention and/or vesting of Stock Awards
issued to Employees may be subject to such performance criteria and
level of achievement versus these criteria as the Administrator
shall determine, which
criteria may be
based on financial performance, personal performance evaluations
and/or completion of service by the Awardee. Notwithstanding
anything to the contrary herein, the performance criteria for any
Stock Award that is intended to satisfy the requirements for
“performance-based compensation” under Section 162(m)
of the Code (a “
Performance
Stock Award
”) shall be established by the
Administrator based on one or more Qualifying Performance Criteria
selected by the Administrator and specified in writing not later
than ninety (90) days after the commencement of the period of
service (or, if earlier, the elapse of 25% of such period) to which
the performance goals relate or otherwise within the time period
required by the Code or the applicable Treasury Regulations,
provided that the outcome is substantially uncertain at that time.
Stock Awards for which vesting is not based on the attainment of
performance criteria are referred to as “
Restricted Stock
Awards
.”
(c)
Termination of Employment or Board Membership.
(i)
The Administrator
shall determine as of the Grant Date (subject to modification
subsequent to the Grant Date) the effect a Termination of
Employment due to (A) Disability, (B) Retirement (C) death, or (D)
otherwise (including Termination for Cause) shall have on any Stock
Award.
(ii)
Unless otherwise
provided in the Award Agreement:
(A) A Termination of Employment
due to Disability or death shall result in immediate full vesting
of any as yet unvested Stock Award, and in the case of a Stock
Award that vests upon the achievement of performance goals, the
vested amount shall be based upon the target award
amount;
(B) A Termination of Employment
due to Retirement shall result in vesting of a prorated portion of
any Stock Award (rounded up or down to the nearest whole Share),
based upon the full months of the applicable performance period,
vesting period or other period of restriction elapsed as of the end
of the month in which the Termination of Employment due to
Retirement occurs over the total number of months in such period;
provided, however, that, in the case of a Retirement due to
voluntary Termination of Employment, the terms of this Section
11(c)(ii)(B) shall not apply with respect to any Stock Award
granted less than six (6) months prior to the effective date of
such Termination of Employment; and
(C) Any other Termination of
Employment shall result in immediate cancellation and forfeiture of
all outstanding, unvested Stock Awards.
If
clause (B) of this Section 11(c)(ii) applies to a Stock Award under
which vesting is based on the attainment of performance criteria
over a performance period, the ratable vesting percentage
determined by the portion of the performance period during which
the Awardee was an Employee of the Company or an Affiliate shall be
applied to determine the portion of the Stock
Award
that is vested based upon actual performance results after the
completion of the performance period.
(d)
Rights as a Shareholder.
Unless
otherwise provided for by the Administrator, the Participant shall
have the rights equivalent to those of a shareholder and shall be a
shareholder only after Shares are issued (as evidenced by the
appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company) to the
Participant.
12.
Other Stock-Based Awards.
(a)
Other Stock-Based Awards
. An
“Other Stock-Based Award” means any other type of
equity-based or equity-related Award not otherwise described by the
terms of this Plan (including the grant or offer for sale of
unrestricted Shares), as well as any cash bonus based on the
attainment of Qualifying Performance Criteria as described in
Section 13(b), in such amount and subject to such terms and
conditions as the Administrator shall determine. Such Awards may
involve the transfer of actual Shares to Participants, or payment
in cash or otherwise of amounts based on the value of Shares or
pursuant to attainment of a performance goal. Each Other
Stock-Based Award will be evidenced by an Award Agreement
containing such terms and conditions as may be determined by the
Administrator.
(b)
Value of Other Stock-Based Awards
. Each
Other Stock-Based Award shall be expressed in terms of Shares or
units based on Shares or a target amount of cash, as determined by
the Administrator. The Administrator may establish performance
goals in its discretion. If the Administrator exercises its
discretion to establish performance goals, the number and/or value
of Other Stock-Based Awards that will be paid out to the
Participant will depend on the extent to which the performance
goals are met. Notwithstanding anything to the contrary herein, the
performance criteria for any Other Stock-Based Award that is
intended to satisfy the requirements for “performance-based
compensation” under Section 162(m) of the Code shall be
established by the Administrator based on one or more Qualifying
Performance Criteria selected by the Administrator and specified in
writing not later than ninety (90) days after the commencement of
the period of service (or, if earlier, the elapse of 25% of such
period) to which the performance goals relate and otherwise within
the time period required by the Code and the applicable Treasury
Regulations, provided that the outcome is substantially uncertain
at that time.
(c)
Payment of Other Stock-Based Awards
.
Payment, if any, with respect to Other Stock-Based Awards shall be
made in accordance with the terms of the Award, in cash or Shares
or a combination thereof, as the Administrator
determines.
(
d)
Termination of Employment, Consultancy, or Board
Membership.
(i)
The Administrator
shall determine as of the Grant Date (subject to modification
subsequent to the Grant Date) the effect a Termination of
Employment
due to
(A) Disability, (B) Retirement, (C) death, or (D) otherwise
(including Termination for Cause) shall have on any Other
Stock-Based Award.
(ii)
Unless otherwise
provided in the Award Agreement:
(A) A Termination of Employment
due to Disability or death shall result in immediate full vesting
of any as yet unvested Other Stock-Based Award, and in the case of
an Other Stock-Based Award which vests on the basis of attainment
of a performance goal, the vested amount shall be based upon the
target award amount;
(B) A Termination of Employment
due to Retirement shall result in vesting of a prorated portion of
any Other Stock-Based Award (rounded up or down to the nearest
whole Share or unit based on Shares, as applicable), based upon the
full months of the applicable performance period, vesting period or
other period of restriction elapsed as of the end of the month in
which the Termination of Employment due to Retirement occurs over
the total number of months in such period; provided, however, that,
in the case of a Retirement due to voluntary Termination of
Employment, the terms of this Section 12(d)(ii)(B) shall not apply
with respect to any Other Stock-Based Award granted less than six
(6) months prior to the effective date of such Termination of
Employment; and
(C) Any other Termination of
Employment shall result in immediate cancellation and forfeiture of
all outstanding, unvested Other Stock-Based Awards.
If
clause (B) of this Section 12(d)(ii) applies to an Other
Stock-Based Award under which vesting is based on the attainment of
performance criteria over a performance period, the ratable vesting
percentage determined by the portion of the performance period
during which the Awardee was an Employee of the Company or an
Affiliate shall be applied to determine the portion of the Other
Stock-Based Award that is vested based upon actual performance
results after the completion of the performance
period.
13.
Other Provisions Applicable to Awards.
(a)
Non-Transferability of Awards.
Unless
determined otherwise by the Administrator, an Award may not be
sold, pledged, assigned, hypothecated, transferred or disposed of
in any manner other than by beneficiary designation, will or by the
laws of descent or distribution, including but not limited to any
attempted assignment or transfer in connection with the settlement
of marital property or other rights incident to a divorce or
dissolution, and any such attempted sale, assignment or transfer
shall be of no effect prior to the date an Award is vested and
settled. The Administrator may only make an Award transferable to
an Awardee’s family member or any other person or entity
provided the Awardee does not receive consideration for such
transfer. If the Administrator makes an Award transferable, either
as of the Grant Date or thereafter, such Award shall
contain
such
additional terms and conditions as the Administrator deems
appropriate, and any transferee shall be deemed to be bound by such
terms upon acceptance of such transfer.
(b)
Qualifying Performance
Criteria.
For purposes of this
Plan, the term “Qualifying
Performance Criteria”
shall mean any one or more of the following performance criteria,
either individually, alternatively or in any combination, on a
basis consistent with U.S. Generally Accepted Accounting Principles
(“
GAAP
”) or on a
non-GAAP or adjusted GAAP basis, applied to either the Company as a
whole or to a Subsidiary, business unit, Affiliate or business
segment, either individually, alternatively or in any combination,
and measured either annually or cumulatively over a period of
years, on an absolute basis or relative to a pre-established
target, to previous years’ results or to a designated
comparison group, in each case as specified by the Committee in the
Award or by duly adopted resolution: (i) sales or cash return on
sales; (ii) cash flow or free cash flow or net cash from operating
activity; (iii) earnings (including gross margin, earnings before
or after interest and taxes, earnings before taxes, and net
earnings); (iv) basic or diluted earnings per share; (v) growth in
earnings or earnings per share; (vi) stock price; (vii) return on
equity or average shareholders’ equity; (viii) total
shareholder return; (ix) return on capital; (x) return on assets or
net assets; (xi) return on investments; (xii) revenue or gross
profits; (xiii) income before or after interest, taxes,
depreciation and amortization, or net income; (xiv) pretax income
before allocation of corporate overhead and bonus; (xv) operating
income or net operating income; (xvi) operating profit or net
operating profit (whether before or after taxes); (xvii) operating
margin; (xviii) return on operating revenue; (xix) working capital
or net working capital; (xx) market share; (xxi) asset velocity
index; (xxii) contract awards or backlog; (xxiii) overhead or other
expense or cost reduction; (xxiv) growth in shareholder value
relative to the moving average of the S&P 500 Index or a peer
group index; (xxv) credit rating; (xxvi) strategic plan development
and implementation; (xxvii) improvement in workforce diversity;
(xxviii) customer satisfaction; (xxvix) employee satisfaction;
(xxx) management succession plan development and implementation;
and (xxxi) employee or customer retention. With respect to any
Award that is intended to satisfy the requirements for
“performance-based compensation” under Section 162(m)
of the Code, the performance criteria must be Qualifying
Performance Criteria, and the Administrator will (within the first
quarter of the performance period, but in no event more than ninety
(90) days into that period) establish the specific performance
targets (including thresholds and whether to exclude certain
extraordinary, non-recurring, or similar items) and Award amounts
(subject to the right of the Administrator to exercise discretion
to reduce payment amounts following the conclusion of the
performance period). Extraordinary, non-recurring items that may be
the basis of adjustment include acquisitions or divestitures,
restructurings, discontinued operations, extraordinary items, and
other unusual or non-recurring charges, an event either not
directly related to the operations of the Company, Subsidiary,
division, business segment or business unit or not within the
reasonable control of management, the cumulative effects of tax or
accounting changes in accordance with U.S. GAAP, and foreign
exchange gains or losses.
(c)
Certification.
Prior to the payment of
any compensation under an Award intended to qualify as
“performance-based compensation” under Section 162(m)
of the Code, the Administrator shall certify in writing the extent
to which any Qualifying Performance
Criteria and any
other material terms under such Award have been satisfied (other
than in cases where such criteria relate solely to the increase in
the value of the Common Shares).
(d)
Discretionary Adjustments Pursuant to Section
162(m).
Notwithstanding satisfaction or completion of any
Qualifying Performance Criteria, to the extent specified as of the
Grant Date, the number of Shares, Options or other benefits
granted, issued, retainable and/or vested under an Award on account
of satisfaction of such Qualifying Performance Criteria may be
reduced (but not increased) by the Administrator on the basis of
such further considerations as the Administrator in its sole
discretion shall determine.
(e)
Six Month Holding Period for Purposes of Rule
16b-3.
If the Company is subject to the reporting
requirements of Section 13 of the Exchange Act, the Plan
Administrator shall ensure that transactions between the Company
and an Officer or Director under this Plan are exempt from Section
16(b) of the Exchange Act pursuant to one of the exemptions
available under 17 C.F.R. 240.16b-3. If the Administrator
determines that the exemption pursuant to 17 C.F.R. 240.16b-3(d)(3)
is to be used, then (i) shares purchased upon exercise of an Option
or another derivative security (as defined in Exchange Act Rule
16a-1(c)) issued under this Plan by an Officer or Director may not
be sold before at least six months have elapsed from the date the
Option or other derivative security was granted; and (ii) any other
equity securities of the Company acquired by an Officer or Director
under this Plan other than as described in subparagraph (i) above
may not be sold before at least six months have elapsed from the
date they equity security was acquired.
14.
Dividends and Dividend Equivalents.
Awards
other than Options and Stock Appreciation Rights may provide the
Awardee with the right to receive dividend payments or dividend
equivalent payments on the Shares subject to the Award, whether or
not such Award is vested. Notwithstanding the foregoing, dividends
or dividend equivalents shall not be paid with respect to Stock
Awards or Other Stock-Based Awards that, in either case, vest based
on the achievement of performance goals prior to the date the
performance goals are satisfied and the Award is earned, and then
shall be payable only with respect to the number of Shares or Stock
Units actually earned under the Award. Such payments may be made in
cash, Shares or Stock Units or may be credited as cash or Stock
Units to an Awardee’s account and later settled in cash or
Shares or a combination thereof, as determined by the
Administrator. Such payments and credits may be subject to such
conditions and contingencies as the Administrator may
establish.
15.
Adjustments upon Changes in Capitalization, Organic Change or
Change of Control.
(a)
Adjustment Clause.
In the event of (i)
a stock dividend, extraordinary cash dividend, stock split, reverse
stock split, share combination, or recapitalization or similar
event affecting the capital structure of the Company (each, a
“
Share Change
”),
or (ii) a merger, consolidation, acquisition of property or shares,
separation, spin-off, reorganization, liquidation, Disaffiliation,
or similar event affecting the Company or any of its Subsidiaries
(each, an “
Organic
Change
”), the Administrator or the Board may in its
discretion make such substitutions or adjustments as it deems
appropriate and equitable
to (i)
the Share limitations set forth in Section 3 of the Plan, (ii) the
number and kind of Shares covered by each outstanding Award, and
(iii) the price per Share subject to each such outstanding Award.
In the case of Organic Changes, such adjustments may include,
without limitation, (x) the cancellation of outstanding Awards in
exchange for payments of cash, property or a combination thereof
having an aggregate value equal to the value of such Awards, as
determined by the Administrator or the Board in its sole discretion
(it being understood that in the case of an Organic Change with
respect to which shareholders receive consideration other than
publicly traded equity securities of the ultimate surviving entity,
any such determination by the Administrator that the value of an
Option or Stock Appreciation Right shall for this purpose be deemed
to equal the excess, if any, of the value of the consideration
being paid for each Share pursuant to such Organic Change over the
exercise price of such Option or Stock Appreciation Right shall
conclusively be deemed valid); (y) the substitution of other
property (including, without limitation, cash or other securities
of the Company and securities of entities other than the Company)
for the Shares subject to outstanding Awards; and (z) in connection
with any Disaffiliation, arranging for the assumption of Awards, or
replacement of Awards with new awards based on other property or
other securities (including, without limitation, other securities
of the Company and securities of entities other than the Company),
by the affected Subsidiary, Affiliate, or division or by the entity
that controls such Subsidiary, Affiliate, or division following
such Disaffiliation (as well as any corresponding adjustments to
Awards that remain based upon Company securities). The Committee
may adjust in its sole discretion the Qualifying Performance
Criteria applicable to any Awards to reflect any Share Change and
any Organic Change and any unusual or non-recurring events and
other extraordinary items, impact of charges for restructurings,
discontinued operations, and the cumulative effects of accounting
or tax changes, each as defined by GAAP or as identified in the
Company’s financial statements, notes to the financial
statements, management’s discussion and analysis or the
Company’s other SEC filings, provided that in the case of
Qualifying Performance Criteria applicable to any performance-based
Awards intended to qualify under Code Section 162(m), such
adjustment does not violate Section 162(m) of the Code. Any
adjustment under this Section 15(a) need not be the same for all
Participants.
(b)
Change of Control.
In the event of a
Change of Control, unless otherwise determined by the Administrator
as of the Grant Date of a particular Award (or subsequent to the
Grant Date), the following acceleration, exercisability and
valuation provisions shall apply:
(i)
On the date that
such Change of Control occurs, any or all Options and Stock
Appreciation Rights awarded under this Plan not previously
exercisable and vested shall become fully exercisable and
vested.
(ii)
Except
as may be provided in an individual severance or employment
agreement (or severance plan) to which an Awardee is a party, in
the event of an Awardee’s Termination of Employment within
two (2) years after a Change of Control for any reason other than
because of the Awardee’s death, Retirement, Disability or
Termination for Cause, each Option and Stock Appreciation Right
held by the Awardee (or a transferee) that is vested shall remain
exercisable until the
earlier
of the third (3
rd
) anniversary
of such Termination of Employment (or any later date until which it
would remain exercisable under such circumstances by its terms) or
the expiration of its original term. In the event of an
Awardee’s Termination of Employment more than two (2) years
after a Change of Control, or within two (2) years after a Change
of Control because of the Awardee’s death, Retirement,
Disability or Termination for Cause, the provisions of Sections
8(h) and 10 of the Plan shall govern (as applicable).
(iii)
On
the date that such Change of Control occurs, the restrictions and
conditions applicable to any or all Stock Awards and Other
Stock-Based Awards shall lapse and such Awards shall be fully
vested. Unless otherwise provided in an Award at the Grant Date,
upon the occurrence of a Change of Control, any performance based
Award shall be deemed fully earned at the target amount as of the
date on which the Change of Control occurs. All Stock Awards, Other
Stock-Based Awards and cash Awards shall be settled or paid within
thirty (30) days of vesting hereunder. Notwithstanding the
foregoing, if the Change of Control would not qualify as a
permissible date of distribution under Section 409A(a)(2)(A) of the
Code, and the regulations thereunder, the Awardee shall be entitled
to receive the payment of cash or settlement of Shares under the
Award, as applicable, from the Company on the date that would have
applied absent this provision.
(iv)
The
Administrator, in its discretion, may determine that, upon the
occurrence of a Change of Control of the Company, each Option and
Stock Appreciation Right outstanding shall terminate within a
specified number of days after notice to the Participant, and/or
that each Participant shall receive, with respect to each Share
subject to such Option or Stock Appreciation Right, an amount equal
to the excess of the Fair Market Value of such Share immediately
prior to the occurrence of such Change of Control over the exercise
price per Share of such Option and/or Stock Appreciation Right;
such amount to be payable in cash, in one or more kinds of stock or
property (including the stock or property, if any, payable in the
transaction) or in a combination thereof, as the Committee, in its
discretion, shall determine, and if there is no excess value, the
Committee may, in its discretion, cancel such Awards.
(c)
Section 409A
. Notwithstanding the
foregoing: (i) any adjustments made pursuant to Section 15(a) of
the Plan to Awards that are considered “deferred
compensation” within the meaning of Section 409A of the Code
shall be made in compliance with the requirements of Section 409A
of the Code; (ii) any adjustments made pursuant to Section 15(a) of
the Plan to Awards that are not considered “deferred
compensation” subject to Section 409A of the Code shall be
made in such a manner as to ensure that after such adjustment, the
Awards either continue not to be subject to Section 409A of the
Code or comply with the requirements of Section 409A of the Code;
(iii) the Administrator shall not have the authority to make any
adjustments pursuant to Section 15(a) of the Plan to the extent
that the existence of such authority would cause an Award that is
not intended to be subject to Section 409A of the Code to be
subject thereto; and (iv) if any Award is subject to Section 409A
of the Code, Section 15(b) of the Plan shall be applicable only to
the extent specifically provided in the Award Agreement and
permitted pursuant to
Section
24 of the Plan in order to ensure that such Award complies with
Code Section 409A.
16.
Amendment and
Termination of the Plan.
(a)
Amendment and Termination.
The Board
may amend, alter or discontinue the Plan or any Award Agreement,
but any such amendment shall be subject to approval of the
shareholders of the Company in the manner and to the extent
required by Applicable Law. In addition, without limiting the
foregoing, unless approved by the shareholders of the Company and
subject to Section 16(b), no such amendment shall be made that
would:
(i)
increase the
maximum aggregate number of Shares which may be subject to Awards
granted under the Plan;
(ii)
reduce
the minimum exercise price for Options or Stock Appreciation Rights
granted under the Plan; or
(iii)
reduce
the exercise price of outstanding Options or Stock Appreciation
Rights, as prohibited by Section 8(c) without shareholder
approval.
(b)
Effect of Amendment or Termination.
No
amendment, suspension or termination of the Plan shall materially
impair the rights of any Participant with respect to an outstanding
Award, unless mutually agreed otherwise between the Participant and
the Administrator, which agreement must be in writing and signed by
the Participant and the Company, except that no such agreement
shall be required if the Administrator determines in its sole
discretion that such amendment either (i) is required or advisable
in order for the Company, the Plan or the Award to satisfy any
Applicable Law or to meet the requirements of any accounting
standard, or (ii) is not reasonably likely to significantly
diminish the benefits provided under such Award, or that any such
diminishment has been adequately compensated, except that this
exception shall not apply following a Change of Control.
Termination of the Plan shall not affect the Administrator’s
ability to exercise the powers granted to it hereunder with respect
to Awards granted under the Plan prior to the date of such
termination.
(c)
Effect of the Plan on Other
Arrangements.
Neither the adoption of the Plan by the Board
or a Committee nor the submission of the Plan to the shareholders
of the Company for approval shall be construed as creating any
limitations on the power of the Board or any Committee to adopt
such other incentive arrangements as it or they may deem desirable,
including without limitation, the granting of restricted shares or
restricted share units or stock options otherwise than under the
Plan, and such arrangements may be either generally applicable or
applicable only in specific cases.
17.
Designation of Beneficiary.
(a)
An Awardee may file
a written designation of a beneficiary who is to receive the
Awardee’s rights pursuant to Awardee’s Award or the
Awardee may include his or her Awards in an omnibus beneficiary
designation for all benefits under the Plan. To the extent that
Awardee has completed a designation of beneficiary while employed
with the
Company, such
beneficiary designation shall remain in effect with respect to any
Award hereunder until changed by the Awardee to the extent
enforceable under Applicable Law.
(b)
Such designation of
beneficiary may be changed by the Awardee at any time by written
notice. In the event of the death of an Awardee and in the absence
of a beneficiary validly designated under the Plan who is living at
the time of such Awardee’s death, the Company shall allow the
legal representative of the Awardee’s estate to exercise the
Award.
18.
No Right to Awards or to Employment.
No
person shall have any claim or right to be granted an Award and the
grant of any Award shall not be construed as giving an Awardee the
right to continue in the employ of the Company or its Affiliates.
Further, the Company and its Affiliates expressly reserve the
right, at any time, to dismiss any Employee or Awardee at any time
without liability or any claim under the Plan, except as provided
herein or in any Award Agreement entered into
hereunder.
19.
Legal Compliance.
Shares
shall not be issued pursuant to an Option, Stock Appreciation
Right, Stock Award or Other Stock-Based Award unless such Option,
Stock Appreciation Right, Stock Award or Other Stock-Based Award
and the issuance and delivery of such Shares shall comply with
Applicable Law, specifically including without limitation all
applicable federal and state securities laws and regulations, and
shall be further subject to the approval of counsel for the Company
with respect to such compliance. Unless the Awards and Shares
covered by this Plan have been registered under the Securities Act
or the Company has determined that such registration is
unnecessary, each person receiving an Award and/or Shares pursuant
to any Award may be required by the Company (a) to give a
representation in writing that such person is acquiring such Shares
for his or her own account for investment and not with a view to,
or for sale in connection with, the distribution of any part
thereof, and (b) to make such additional representations,
warranties, and agreements with respect to the investment intent of
such person or persons as the Company may request.
All
certificates for Shares or certificates, agreements, or other
documents evidencing securities delivered under the Plan shall be
subject to such stop-transfer orders and other restrictions as the
Company may deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange Commission, any
securities law, and the Company may cause a legend or legends to be
put on any such certificates, agreements or other documents to make
appropriate reference to such restrictions.
In the
case of the exercise of an Option by a person or estate acquiring
the right to exercise such Option by bequest or inheritance, the
Administrator may require reasonable evidence as to the ownership
of such Option and may require such consents and releases of taxing
authorities as the Administrator deems advisable.
20.
Inability to Obtain Authority.
To the
extent the Company is unable to or the Administrator deems it
unfeasible to obtain authority from any regulatory body having
jurisdiction, which authority is deemed by the Company’s
counsel to be advisable or necessary to the lawful issuance and
sale of any Shares hereunder, the Company shall be relieved of any
liability with respect to the failure to issue or sell such Shares
as to which such requisite authority shall not have been
obtained.
21.
Reservation of Shares.
The
Company, during the term of this Plan, will at all times reserve
and keep available such number of Shares as shall be sufficient to
satisfy the requirements of the Plan.
22.
Notice.
Any
written notice to the Company required by any provisions of this
Plan shall be addressed to the Secretary of the Company and shall
be effective when received. Any notice to a Participant hereunder
shall be addressed to the last address of record with the Company
and shall be effective when sent via first class mail, courier
service, or electronic mail to such last address of
record.
23.
Governing Law; Interpretation of Plan and Awards.
(a)
This Plan and all
determinations made and actions taken pursuant hereto shall be
governed by the substantive laws, but not the choice of law rules,
of the state of Delaware, except as to matters governed by U.S.
federal law.
(b)
In the event that
any provision of the Plan or any Award granted under the Plan is
declared to be illegal, invalid or otherwise unenforceable by a
court of competent jurisdiction, such provision shall be reformed,
if possible, to the extent necessary to render it legal, valid and
enforceable, or otherwise deleted, and the remainder of the terms
of the Plan and/or Award shall not be affected except to the extent
necessary to reform or delete such illegal, invalid or
unenforceable provision.
(c)
The headings
preceding the text of the sections hereof are inserted solely for
convenience of reference, and shall not constitute a part of the
Plan, nor shall they affect its meaning, construction or
effect.
(d)
The terms of the
Plan and any Award shall inure to the benefit of and be binding
upon the parties hereto and their respective permitted heirs,
beneficiaries, successors and assigns.
24.
Section 409A.
It is
the intention of the Company that no Award shall be “deferred
compensation” subject to Section 409A of the Code, unless and
to the extent that the Administrator specifically determines
otherwise, and the Plan and the terms and conditions of all Awards
shall be interpreted accordingly. The terms and conditions
governing any Awards that the Administrator
determines will be
subject to Section 409A of the Code, including any rules for
elective or mandatory deferral of the delivery of cash or Shares
pursuant thereto and any rules regarding treatment of such Awards
in the event of a Change of Control, shall be set forth in the
applicable Award Agreement, deferral election forms and procedures,
and rules established by the Administrator, and shall comply in all
respects with Section 409A of the Code. The following rules will
apply to Awards intended to be subject to Section 409A of the Code
(“
409A
Awards
”):
(a)
If a Participant is
permitted to elect to defer an Award or any payment under an Award,
such election will be permitted only at times in compliance with
Code Section 409A.
(b)
The Company shall
have no authority to accelerate distributions relating to 409A
Awards in excess of the authority permitted under Section
409A.
(c)
Any distribution of
a 409A Award following a Termination of Employment that would be
subject to Code Section 409A(a)(2)(A)(i) as a distribution
following a separation from service of a “specified
employee” as defined under Code Section 409A(a)(2)(B)(i),
shall occur no earlier than the expiration of the six-month period
following such Termination of Employment.
(d)
In the case of any
distribution of a 409A Award, if the timing of such distribution is
not otherwise specified in the Plan or an Award Agreement or other
governing document, the distribution shall be made not later than
the end of the calendar year during which the settlement of the
409A Award is specified to occur.
(e)
In the case of an
Award providing for distribution or settlement upon vesting or the
lapse of a risk of forfeiture, if the time of such distribution or
settlement is not otherwise specified in the Plan or an Award
Agreement or other governing document, the distribution or
settlement shall be made not later than March 15 of the year
following the year in which the Award vested or the risk of
forfeiture lapsed.
(f)
Notwithstanding
anything herein to the contrary, in no event shall the Company or
the Administrator be liable for the payment of, or any gross up
payment in connection with, any taxes or penalties owed by the
Participant pursuant to Code Section 409A.
25.
Limitation on Liability.
The
Company and any Affiliate which is in existence or hereafter comes
into existence shall not be liable to a Participant, an Employee,
an Awardee or any other persons as to:
(a)
The Non-Issuance of Shares.
The
non-issuance or sale of Shares as to which the Company has been
unable to obtain from any regulatory body having jurisdiction the
authority deemed by the Company’s counsel to be necessary to
the lawful issuance and sale of any shares hereunder;
and
(b)
Tax or Exchange Control Consequences.
Any tax consequence or any exchange control obligation owed, by any
Participant, Employee, Awardee or other person due to the receipt,
exercise or settlement of any Option or other Award granted
hereunder.
26.
Unfunded Plan.
Insofar
as it provides for Awards, the Plan shall be unfunded. Although
bookkeeping accounts may be established with respect to Awardees
who are granted Stock Awards or Other Stock-Based Awards under this
Plan, any such accounts will be used merely as a bookkeeping
convenience. The Company shall not be required to segregate any
assets which may at any time be represented by Awards, nor shall
this Plan be construed as providing for such segregation. Neither
the Company nor the Administrator shall be deemed to be a trustee
of stock or cash to be awarded under the Plan. Any liability of the
Company to any Participant with respect to an Award shall be based
solely upon any contractual obligations which may be created by the
Plan; no such obligation of the Company shall be deemed to be
secured by any pledge or other encumbrance on any property of the
Company. Neither the Company nor the Administrator shall be
required to give any security or bond for the performance of any
obligation which may be created by this Plan.
27.
Foreign Employees.
Awards
may be granted hereunder to Employees and Consultants who are
foreign nationals, who are located outside the United States or who
are not compensated from a payroll maintained in the United States,
or who are otherwise subject to (or could cause the Company to be
subject to) legal or regulatory provisions of countries or
jurisdictions outside the United States, on such terms and
conditions different from those specified in the Plan as may, in
the judgment of the Administrator, be necessary or desirable to
foster and promote achievement of the purposes of the Plan, and, in
furtherance of such purposes, the Administrator may make such
modifications, amendments, procedures, or subplans as may be
necessary or advisable to comply with such legal or regulatory
provisions.
28.
Tax Withholding.
Each
Participant shall pay to the Company, or make arrangements
satisfactory to the Company regarding the payment of, any federal,
state, local or foreign taxes of any kind required by law to be
withheld with respect to any Award under the Plan no later than the
date as of which any amount under such Award first becomes
includible in the gross income of the Participant for any tax
purposes with respect to which the Company has a tax withholding
obligation. Unless otherwise determined by the Company, withholding
obligations may be settled with Shares, including Shares that are
part of the Award that gives rise to the withholding requirement;
provided, however, that not more than the legally required minimum
withholding may be settled with Shares that are part of the Award.
The obligations of the Company under the Plan shall be conditional
on such payment or arrangements, and the Company and its Affiliates
shall, to the extent permitted by law, have the right to deduct any
such taxes from any vested Shares or any other payment due to the
participant at that time or at any future time. The Administrator
may establish such procedures as it deems appropriate, including
making irrevocable elections, for the settlement of withholding
obligations with Shares.
29.
Cancellation of Award; Forfeiture of
Gain
.
Notwithstanding
anything to the contrary contained herein, an Award Agreement may
provide that the Award will be cancelled and the Participant will
forfeit the Shares or cash received or payable on the vesting or
exercise of the Award, and that the amount of any proceeds of the
sale or gain realized on the vesting or exercise of the Award must
be repaid to the Company, under such conditions as may be required
by Applicable Law or established by the Committee in its sole
discretion.
30.
Data
Privacy and Transfer
As a
condition of acceptance of an Award, the Participant explicitly
thereby consents to the collection, use and transfer, in electronic
or other form, of personal data by and among, as applicable, the
Company and its Affiliates for the exclusive purpose of
implementing, administering and managing the Participant’s
participation in the Plan. The Participant understands that the
Company and its Affiliates hold certain personal information about
the Participant, including the Participant’s name, home
address and telephone number, date of birth, social security or
other identification number, salary, nationality, job title, Shares
held in the Company or any Subsidiary, details of all Awards or any
other entitlement to Shares awarded, canceled, exercised, vested,
unvested or outstanding in the Participant’s favor, for the
purpose of implementing, managing and administering the Plan (the
“
Data
”). The
Participant further understands that the Company and its Affiliates
may transfer the Data among themselves as necessary for the purpose
of implementation, management and administration of the Plan, and
that the Company and its Affiliates may each further transfer the
Data to any third parties assisting the Company in the
implementation, management, and administration of the Plan. The
Participant understands that these recipients may be located in the
Participant’s country, or elsewhere, and that the
recipient’s country may have different data privacy laws and
protections than the Participant’s country. The Participant
understands that he or she may request a list with the names and
addresses of any potential recipients of the Data by contacting his
or her local human resources representative. The Participant,
through participation in the Plan and acceptance of an Award under
the Plan, authorizes such recipients to receive, possess, use,
retain and transfer the Data, in electronic or other form, for the
purposes of implementing, administering and managing the Plan,
including any requisite transfer of such Data as may be required to
a broker or other third party with whom the Participant may elect
to deposit any Shares. In addition, by accepting an Award under the
Plan, each Participant agrees and acknowledges (i) that the Data
will be held only as long as is necessary to implement, manage, and
administer the Plan; (ii) that the Participant may, at any time,
view the Data, request additional information about the storage and
processing of the Data, require any necessary amendments to the
Data, or refuse or withdraw consent to the use and transfer of the
Data, without cost, by delivering such revocation or withdrawal of
consent in writing to a designated human resources representative;
and (iii) that refusal or withdrawal of consent may affect the
Participant’s ability to participate in the Plan
thereafter.
This
Plan was adopted by the Board of Directors of the Company on April
4, 2016.
This
Plan was approved by the stockholders of the Company on April 4,
2016.
MONOPAR
THERAPEUTICS INC.
04/04/2016
By:
/s/ Chandler D.
Robinson
Name:
Chandler D. Robinson
Title:
CEO
.
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement (the
"Agreement")
is entered into as of January 1, 2017,
by and between Chandler D. Robinson
("Executive")
and Monopar Therapeutics Inc.
(the
"Company").
Whereas,
the Company desires to employ Executive as its
Chief Executive Officer effective as of January 1, 2017 (the
"Effective
Date"),
and Executive desires to serve in such
capacity, pursuant to the terms and conditions set forth in this
Agreement; and
Now, Therefore,
in consideration of the mutual
promises and covenants contained herein, it is hereby agreed by and
between the parties hereto as follows:
ARTICLE
I
DEFINITIONS
For
purposes of the Agreement, the following terms are defined as
follows:
1.1.
"Board"
means the Board of Directors of the
Company.
1.2.
"Cause"
means any of the following events
described below:
(a)
Executive's
conviction of a felony or other crime involving moral
turpitude;
(b)
any
willful act or acts of dishonesty undertaken by Executive and
intended to result in substantial gain or personal enrichment of
Executive, Executive's family or any third party at the expense of
the Company;
(c)
any
willful act of gross misconduct which is materially and
demonstrably injurious to the Company; and/or
(d)
Executive's
inability under applicable law to continue to work lawfully in the
United States.
For the purpose of this Agreement, no act, or
failure to act, by Executive shall be considered
"willful"
if done, or omitted to be done, by him in good
faith and in the reasonable belief that his act or omission was in
the best interest of the Company and/or required by applicable
law.
1.3.
"Change in Control"
means the occurrence of any of the
following events: (i) any sale or exchange of the capital stock by
the stockholders of the Company in one transaction or series of
related transactions where more than fifty percent (50%) of the
outstanding
voting
power of the Company is acquired by a person or entity or group of
related persons or entities; or (ii) any reorganization,
consolidation or merger of the Company where the outstanding voting
securities of the Company immediately before the transaction
represent or are converted into less than fifty percent (50%) of
the outstanding voting power of the surviving entity (or its parent
corporation) immediately after the transaction; or (iii) the
consummation of any transaction or series of related transactions
that results in the sale of all or substantially all of the assets
of the Company; or (iv) any "person" or "group" (as defined in the
Securities Exchange Act of 1934, as amended (the "Exchange Act")
becoming the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act) directly or indirectly of securities representing
more than fifty percent (50%) of the voting power of the Company
then outstanding. Except that any change in the beneficial
ownership of the securities of the Company as a result of a private
financing of the Company that is approved by the Board, shall not
be deemed to be a Change in Control.
1.4.
"Change
in Control
Multiple"
shall mean one and a
half (1.5).
1.5.
"Change in Control
Period"
means that period
commencing on the consummation of a Change in Control and ending on
the first anniversary thereof.
1.6.
"COBRA"
means the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended.
1.7.
"Code"
means the Internal Revenue Code of
1986, as amended.
1.8.
"Company"
means Monopar Therapeutics
Inc
.
or any successor thereto.
1.9.
"Confidential Disclosure
Agreement"
means the
Confidential Disclosure Agreement entered into between Executive
and the Company.
1.10.
"Covered
Termination"
means (a) an
Involuntary Termination Without Cause or
(b)
a voluntary termination for Good Reason, provided that the
termination constitutes a Separation from Service.
1.11.
"Good Reason"
means Executive's resignation as a
result of a Good Reason Condition. In order to resign for Good
Reason, Executive must provide written notice to the Company of the
existence of the Good Reason Condition within thirty (30) days of
the initial existence of such Good Reason Condition. Upon receipt
of such notice of the Good Reason Condition, the Company will be
provided with a period of thirty (30) days during which it may
remedy the Good Reason Condition and not be required to provide for
the payments and benefits described in Section 4 as a result of
such proposed resignation due to the Good Reason Condition
specified in the notice. If the Good Reason Condition is not
remedied within the period specified in the preceding sentence,
Executive may resign for Good Reason based on the Good Reason
Condition specified in the notice, provided
that
such
resignation must occur within sixty (60) days after the initial
existence of such Good Reason Condition.
1.12.
"Good Reason Condition"
means that any of the following are
undertaken without Executive's express written
consent:
(a) a material reduction in Executive's Base
Salary;
(b) a material diminution in Executive's
responsibilities;
(c) the Company's material breach of any material
term of this Agreement; or
(d)
a
requirement that Executive relocate to an office that would
increase Executive's one-way commute distance by more than fifty
(50) miles based on Executive's primary residence at the time such
relocation is announced.
1.13.
"Involuntary Termination
Without Cause"
means
Executive's dismissal or discharge by the Company other than for
Cause. The termination of Executive's employment as a result of
Executive's death or inability to perform the essential functions
of his job due to disability will not be deemed to be an
Involuntary Termination Without Cause.
1.14.
"Separation
from Service"
means Executive's termination of
employment or service where such termination of employment or
service constitutes a "separation from service" within the meaning
of Treasury Regulation Section l.409A-l(h).
ARTICLE
II
EMPLOYMENT BY THE COMPANY
2.1.
Position and Duties.
Subject to terms set forth herein, as
of the Effective Date, Executive shall serve as the Company's Chief
Executive Officer and perform such duties as are customarily
associated with the position of Chief Executive Officer and such
other duties as are assigned to Executive by the Board. During the
term of Executive's employment with the Company, Executive will
devote Executive's best efforts and substantially all of
Executive's business time and attention (except for vacation
periods and reasonable periods of illness or other incapacities
permitted by the Company's general employment policies, if any, or
as otherwise set forth in this Agreement) to the business of the
Company.
2.2.
Employment at Will.
Both the Company and Executive shall
have the right to terminate Executive's employment with the Company
at any time, with or without Cause, and without prior notice. If
Executive's employment with the Company is terminated, Executive
will be eligible to receive severance benefits to the extent
provided in this
Agreement.
2.3.
Employment Policies.
The employment relationship between
the parties shall also be governed by the general employment
policies and practices of the Company, if any, including those
relating to protection of confidential information and assignment
of inventions, except that when the terms of this Agreement differ
from or are in conflict with the Company's general employment
policies or practices, this Agreement shall
control.
ARTICLE
ID
COMPENSATION
3.1.
Base Salary.
As of the Effective Date, Executive
shall receive for services to be rendered hereunder an annual base
salary of $300,000
("Base Salary"),
payable on the regular payroll dates
of the Company, subject to increase in the sole discretion of the
Board.
3.2.
Annual Bonus.
Executive is subject to an annual
bonus at the discretion of the Board.
3.3.
Standard Company
Benefits.
Executive shall be
entitled to all rights and benefits for which Executive is eligible
under the terms and conditions of the standard Company benefits and
compensation practices, if any, that may be in effect from time to
time and are provided by the Company to its executive employees
generally
.
Executive shall be entitled each year to four (4)
weeks leave for vacation at full pay, provided, that the maximum
amount Executive may have accrued at any point in time is four (4)
weeks (meaning that once Executive has accrued four (4)
weeks,
Executive
will not accrue any additional
vacation time until he takes vacation and falls below the four (4)
week accrual cap). Executive shall also be entitled to reasonable
holidays and illness days with full pay in accordance with the
policies applicable to the Company and its affiliates, if any, from
time to time in effect. Employee acknowledges and agrees that in
order to maintain flexibility, the Company and its affiliates have
the right to amend or terminate any employee benefit plan at any
time. Until the Company obtains both retirement and healthcare
benefits for eligible employees,
Executive
shall be entitled to an additional cash payment of
at least
$6,250 per month or such greater amount as
determined by the Board; reduced, however, for any given month by
any employer contributions made for that month by the company to a
qualified retirement plan/account established by the company
for
Executive.
3.4.
Stock Options.
Subject to approval by the
Board,
Executive
may be granted options to purchase
shares of the Company's common stock with an exercise price per
share as determined by the Compensation Committee or similar
function of the Board.
3.5.
Expenses.
The Company will reimburse
Executive
for
all reasonable and necessary expenses incurred by
Employee
in connection with the Company's business,
provided at such expenses incurred and
are
properly
documented and accounted for m accordance with
the
policy of the Company and requirements of the Internal Revenue
Service.
ARTICLE
IV
SEVERANCE AND CHANGE IN CONTROL BENEFITS
4.1.
Severance Benefits.
Upon Executive's termination of
employment, Executive shall receive any accrued but unpaid Base
Salary and other accrued and unpaid compensation, including any
Annual Bonus that has been earned with respect to a prior year, but
remains unpaid as of the date of the termination. If the
termination is due to a Covered Termination or permanent
disability, provided that Executive first returns all Company
property in his possession and, within sixty (60) days following
the Covered Termination, executes and does not revoke an effective
general release of all claims against the Company and its
affiliates in a form reasonably acceptable to the Company and
Executive
(a
"Release of
Claims"),
Executive shall also
be entitled to receive the following severance benefits described
in this Section 4.1.
(a)
Covered Termination Not Related
to a Change in Control.
If
Executive's employment terminates due to a Covered Termination
which occurs outside of a Change in Control Period, Executive shall
receive the following:
(i)
An amount equal to twelve (12) months of
Executive's Base Salary payable in substantially equal installments
in accordance with the Company's normal payroll policies, if any,
less applicable withholdings, with such installments to commence as
soon as administratively practicable following the date the Release
of Claims
is
not subject to revocation and, in any
event, within sixty (60) days following the date of the Covered
Termination.
(ii)
If Executive elects to receive continued
healthcare coverage pursuant to the provisions of COBRA, the
Company shall directly pay, or reimburse Executive for, the premium
for Executive and Executive's covered dependents through the
earlier of (i) the first anniversary of the date of Executive's
termination of employment and (ii) the date Executive and
Executive's covered dependents, if any, become eligible for
healthcare coverage under another employer's
plan(s)
.
Notwithstanding the foregoing, (i) if any plan
pursuant to which such benefits are provided is not, or ceases
prior to the expiration of the period of continuation coverage to
be, exempt from the application of Section 409A of the Code under
Treasury Regulation Section 1.409A-l(a)(5), or (ii) the Company is
otherwise unable to continue to cover Executive under its group
health plans without penalty under applicable law (including
without limitation, Section 2716 of the Public Health Service Act),
then, in either case, an amount equal to each remaining Company
subsidy shall thereafter be paid to Executive in substantially
equal monthly installments. After the Company ceases to pay
premiums pursuant to this Section 4.l(a)(ii), Executive may, if
eligible, elect to continue healthcare coverage at Executive's
expense in accordance with the
provisions
of COBRA.
(iii)
All
of Employee's vested options or stock appreciation rights with
respect to the Company's common stock shall remain exercisable
until the first anniversary of Executive's termination of
employment (or, if earlier, the maximum period specified in the
award documents and plans governing such options or stock
appreciation rights, as applicable, assuming Executive's employment
had not terminated).
(b)
Covered Termination Related to
a Change in Control.
If
Executive's employment terminates due to a Covered Termination that
occurs during a Change in Control Period, Executive shall receive
the following:
(i)
Executive shall be entitled to receive an amount
equal to the Change in Control Multiplier multiplied by the sum of:
(i) Executive's Base Salary and (ii) Executive's target Annual
Bonus for the fiscal year of Executive's termination, in each case,
at the rate equal to the higher of (x) the rate in effect
immediately prior to Executive's termination of employment or (y)
the rate in effect immediately prior to the Change
in
Control payable in a cash lump sum, less
applicable withholdings, as soon as administratively practicable
following the date the Release of Claims is not subject to
revocation and, in any event, within sixty (60) days following the
date of the Covered Termination.
(ii)
If Executive elects to receive continued
healthcare coverage pursuant to the provisions of COBRA, the
Company shall directly pay, or reimburse Executive for, the premium
for Executive and Executive's covered dependents through the
earlier of (i) the date that is that number of years equal to the
Change in Control Multiplier following the date of Executive's
termination of employment and (ii) the date Executive and
Executive's covered dependents, if any, become eligible for
healthcare coverage under another employer's plan(s).
Notwithstanding the foregoing, (i) if any plan pursuant to which
such benefits are provided is not, or ceases prior to the
expiration of the period of continuation coverage to be, exempt
from the application of Section 409A of the Code under Treasury
Regulation Section l.409A-l(a)(5), or (ii) the Company is otherwise
unable to continue to cover Executive under its group health plans
without penalty under applicable law (including without
limitation
,
Section 2716 of the Public Health Service Act),
then, in either case, an amount equal to each remaining Company
subsidy shall thereafter be paid to Executive in substantially
equal monthly installments. After the Company ceases to pay
premiums pursuant to this Section 4.l(b)(ii), Executive may, if
eligible, elect to continue healthcare coverage at Executive's
expense in accordance with the provisions of
COBRA.
(iii)
Each
outstanding equity award, including, without limitation, each stock
option and restricted stock award, held by Executive shall
automatically become vested and, if applicable, exercisable and any
forfeiture restrictions or rights of repurchase thereon shall
immediately lapse, in each case, with respect to one hundred
percent (100%) of the shares subject thereto. To the extent vested
after giving effect to the acceleration provided in
the
preceding
sentence, each stock option held by Executive shall remain
exercisable until the earlier of the original expiration date for
such stock option or the second anniversary of Executive's Covered
Termination.
(c)
Termination for Death or
Disability.
If Executive's
employment is terminated due to death or permanent disability where
the Company makes a determination in good faith that, due to a
mental or physical incapacity, Executive has been unable to perform
his duties under this Agreement for a period of not less than six
(6) consecutive months or 180 days in the aggregate in any 12-month
period, Executive shall receive the following:
(i)
An
amount equal to three (3) months of Executive's Base Salary payable
in substantially equal installments in accordance with the
Company's normal payroll policies, less applicable withholdings,
with such installments to commence as soon as administratively
practicable following the date the Release of Claims is not subject
to revocation and, in any event, within sixty (60) days following
the date of the Covered Termination.
(ii)
If Executive (or in the event of death, his
designee) elects to receive continued healthcare coverage pursuant
to the provisions of COBRA, the Compan:Y shall directly pay, or
reimburse Executive for, the premium for Executive and Executive's
covered dependents through the earlier of (i) the three (3) month
anniversary of the date of Executive's termination of employment
and (ii) the date Executive and Executive's covered dependents, if
any, become eligible for healthcare coverage under another
employer's plan(s). Notwithstanding the foregoing, (i) if any plan
pursuant to which such benefits are provided is not, or ceases
prior to the expiration of the period of continuation coverage to
be, exempt from the application of Section 409A of the Code under
Treasury Regulation Section l.409A-l(a)(5), or (ii) the Company is
otherwise unable to continue to cover Executive under its group
health plans without penalty under applicable law (including
without limitation, Section 2716 of the Public Health Service Act),
then, in either case, an amount equal to each remaining Company
subsidy shall thereafter be paid to Executive in substantially
equal monthly installments. After the Company ceases to pay
premiums pursuant to this Section 4.l(b)(ii),
Executive
may,
if eligible, elect to continue healthcare coverage at
Executive's
expense in accordance the provisions of
COBRA.
4.2.
280G Provisions.
Notwithstanding anything in this
Agreement to the contrary, if any payment or distribution Executive
would receive pursuant to this Agreement or otherwise
("Payment")
would (a) constitute a
"parachute
payment" within the meaning of Section 280G of the
Code, and (b) but for this sentence, be subject to the excise tax
imposed by Section 4999 of the Code (the
"Excise
Tax"),
then such Payment shall either be (i) delivered in
full, or (ii) delivered as to such lesser extent which would result
in no portion of
such
Payment being subject to the
Excise
Tax, whichever of the foregoing amounts, taking
into account the applicable federal, state and local income taxes
and the
Excise
Tax, results in the receipt by
Executive
on an after-tax basis, of the largest payment,
notwithstanding
that all or some portion the Payment may be
taxable under Section 4999 of the Code. The accounting firm engaged
by the Company for general audit purposes as of the day
prior
to
the effective date of the Change in Control shall
perform the foregoing calculations. The Company shall bear all
expenses with respect to the determinations by such accounting firm
required to be made hereunder. The accounting firm shall provide
its calculations to the Company and Executive within fifteen (15)
calendar days after the date on which Executive's right to a
Payment is triggered (if requested at that time by the Company or
Executive) or such other time as requested by the Company or
Executive. Any good faith determinations of the accounting firm
made hereunder shall be final, binding and conclusive upon the
Company and Executive. Any reduction in payments and/or benefits
pursuant to this Section 4.2 will occur in the following
order:
(1)
reduction of cash payments; (2) cancellation of
accelerated vesting of equity awards other
than
stock
options; (3) cancellation of accelerated vesting of stock options;
and (4) reduction of other benefits payable to
Executive.
4.3.
Section 409A
.
(a)
Notwithstanding any provision to the contrary
in
this
Agreement, if Executive is deemed at the
time
·
of his Separation from Service to be a "specified
employee" for purposes of Section 409A(a)(2)(B)(i) of the Code, to
the extent delayed commencement of any portion of the benefits to
which Executive is entitled under this Agreement is required in
order to avoid a prohibited distribution under Section
409A(a)(2)(B)(i) of the Code which would subject Executive to a tax
obligation under Section 409A of the Code, such portion of
Executive's benefits shall not be provided to Executive prior to
the earlier of (i) the expiration of the six- month period measured
from the date of the Executive's Separation from Service or (ii)
the date of
Executive's
death. Upon the expiration of the
applicable Code Section 409A(a)(2)(B)(i) period, all payments
deferred pursuant to this Section 4.3(a) shall be paid in a lump
sum
to
Executive, and any remaining payments due under
the Agreement shall be paid as otherwise provided
herein.
(b)
Any reimbursements payable to
Executive
pursuant to the Agreement shall be paid to
Executive no later than 30 days after Executive provides the
Company with a written request for reimbursement, and to the extent
that any such reimbursements are deemed to constitute "nonqualified
deferred compensation" within the meaning of Section 409A of the
Code (i) such amounts shall be paid or reimbursed to
Executive
promptly, but in no event later than December 31
of the year following the year in which the expense is
incurred,
(ii)
the amount of any such payments
eligible for reimbursement in one year shall not affect the
payments or expenses that are eligible for payment or reimbursement
in any other taxable
year,
and
(iii) Executive's right to such payments or reimbursement shall not
be subject
to
liquidation or exchange for any other
benefit.
(c)
For
purposes of Section 409A of the Code (including, without
limitation, for purposes of Treasury Regulation Section
l.409A-2(b)(2)(iii)), Executive's right to receive
installment
payments under the Agreement shall be treated as a right to receive
a series of separate payments and, accordingly, each installment
payment hereunder shall at all times be considered a separate and
distinct payment.
4.4.
Mitigation.
Executive shall not be required to mitigate
damages or the amount of any payment provided under this Agreement
by seeking other employment or otherwise, nor shall the amount of
any payment provided for under this Agreement be reduced by any
compensation earned by Executive as a result of employment by
another employer or by any retirement benefits received by
Executive after the date of the Covered Termination, or
otherwise
.
ARTICLEV
PROPRIETARY INFORMATION OBLIGATIONS
5.1.
Agreement.
Executive agrees to continue to abide by the
Confidential Disclosure Agreement
5.2.
Remedies.
Executive's duties under the Confidential
Disclosure
·
Agreementshall survive termination of Executive's
employment with the Company and the termination of this Agreement.
Executive acknowledges that a remedy at law for any breach or
threatened breach by Executive of the provisions of the
Confidential Disclosure Agreement, as well as Executive's
obligations pursuant to Section 6.2 and Article 7 below, would be
inadequate
,
and Executive therefore agrees that the Company
shall be entitled to seek injunctive relief in case of any such
breach or threatened breach.
ARTICLE VI OUTSIDE ACTIVITIES
6.1. Other Activities.
(a)
Executive
shall not, during the term of this Agreement undertake or engage in
any other employment, occupation or business enterprise, other than
ones in which Executive is a passive investor, unless he obtains
the prior written consent of the Board.
(b)
Executive may engage in civic and not-for-profit
activities so long as such activities do not materially interfere
with the performance of Executive's duties hereunder. In addition,
Executive shall be allowed to serve as a member of the board of
directors of up to two (2) other for profit entities at any time
during the term of this Agreement, which service shall not
materially interfere with the performance of Executive's duties
hereunder; provided, however, that the Board may require that
Executive resign from one or both of such director positions if it
can reasonably and in good faith demonstrate that such
resignation(s) would be in the best interests of the Company in a
significant and material way
.
6.2.
Competition.
Executive agrees that, from the date
hereof until a period of twelve
(12) months following the date of termination of
Executive's employment with the Company, Executive will not
directly or indirectly, either as an employee, employer,
consultant, agent, principal, partner, corporate officer, director,
or in any other individual or representative capacity, engage or
participate in any "Competitive Business" anywhere in the United
States of America
.
As used herein, a "Competitive
Business" is defined as any business developing uPAR antibodies to
treat cancer, or clonidine to treat oral
mucositis.
ARTICLE VII NONINTERFERENCE
In addition to Executive's obligations under the
Confidential Disclosure Agreement
,
Executive
shall not for a period of one (1) year following Executive's
termination of employment for any reason, either on Executive's own
account or jointly with or as a manager, agent, officer,
employee
,
consultant, partner, joint venturer, owner or
stockholder or otherwise on behalf of any other person, firm or
corporation
,
directly or indirectly solicit or
attempt to solicit away from the Company any of its officers or
employees or offer employment to any person who is an officer or
employee of the
Company;provided,
however,
that a general
advertisement to which an employee of the Company responds shall in
no event be deemed to result in a breach of this Article 7.
Executive also agrees not to harass or disparage the Company or its
employees, clients
,
directors or agents or divert or
attempt to divert any actual or potential business of the Company.
The provisions of this Article 7 shall survive the termination or
expiration of the applicable Executive
'
s employment
with the Company and shall be fully enforceable thereafter. If it
is determined by a court of competent jurisdiction in any state
that any restriction in this Article 7 is excessive in duration or
scope or is unreasonable or unenforceable under the laws of that
state, it is the intention of the parties that such restriction may
be modified or amended by the court to render it enforceable to the
maximum extent permitted by the law of that
state
.
ARTICLE VIII GENERAL PROVISIONS
8.1.
Notices.
Any notices provided hereunder must be in writing
and shall be deemed effective upon the earlier of personal delivery
(including personal delivery by facsimile) or the third day after
mailing by first class mail, to the Company at its primary office
location and to Executive at Executive's address as listed on the
Company payroll.
8.2.
Tax Withholding.
Executive acknowledges that all
amounts and benefits payab
l
e under this
Agreement are subject to deduction and withholding to the extent
required by applicable law.
Severability.
Whenever possible
,
each
prov1s1on of this Agreement will be interpreted in such manner as
to be effective and valid under applicable law
,
but if
any
provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality or
unenforceability will not affect any other provision or any other
jurisdiction, but this Agreement will be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or
unenforceable provisions had never been contained
herein
.
8.3.
Waiver.
If either party should waive any breach of any
prov1s1ons of this Agreement, they shall not thereby be deemed to
have waived any preceding or succeeding breach of the same or any
other provision of this Agreement.
·
8.4.
Complete Agreement.
This Agreement constitutes the entire
agreement between Executive and the Company and is the complete,
final, and exclusive embodiment of their agreement with regard to
this subject matter, and will supersede all prior agreements,
understandings, discussions, negotiations and undertakings, whether
written or oral, between the parties with respect to the subject
matter hereof, including without limitation, the Prior Agreement.
This Agreement is entered into without reliance on any promise or
representation other than those expressly contained herein or
therein. and cannot be modified or amended except in a writing
signed by an officer
·
-
of
the
.
Company and Executive.
8.5.
Counterparts.
This Agreement may be executed in
separate counterparts, any one of which need not contain signatures
of more than one party, but all of which taken together will
constitute one and the same Agreement.
8.6.
Headings.
The headings of the sections hereof are inserted
for convenience only and shall not be deemed to constitute a part
hereof nor to affect the meaning thereof.
8.7.
Successors and Assigns.
This Agreement is intended to bind and
inure to the benefit of and be enforceable by Executive and the
Company, and their respective successors, assigns, heirs, executors
and administrators, except that Executive may not assign his rights
or delegate his duties or obligations hereunder without the prior
written consent of the Company.
8.8.
Arbitration.
Unless otherwise prohibited by law or
specified below, all disputes, claims and causes of action, in law
or equity, arising from or relating to this Agreement or its
enforcement, performance, breach, or interpretation shall be
resolved solely and exclusively by final and binding arbitration
held in Illinois in conformity with the then existing
employment arbitration rules and Illinois law. The arbitrator
shall
:
(a) provide adequate discovery for the resolution
of the dispute; and (b) issue a written arbitration decision, to
include the arbitrator's essential findings and conclusions and a
statement of the award. However, nothing in this section is
intended to prevent either party from obtaining injunctive relief
in court to prevent irreparable harm pending the conclusion of any
such arbitration. The Company shall bear the costs of any such
arbitration.
8.9.
Executive
Acknowledgement.
Executive
acknowledges that (a) he has consulted with or has had the
opportunity to consult with independent counsel of his own
cho
i
ce concerning this Agreement, and has been advised
to do so by the Company, and (b) that he has read and understands
the Agreement, is fully aware of its legal effect and has entered
into it freely based on his own judgment.
8.10.
Choice
of Law. All questions concerning the construction, validity and
interpretation of this Agreement will be governed by the law of the
State of Illinois without regard to the conflicts of law provisions
thereof.
In Witness Whereof,
the parties have executed this
Agreement as of the date first written
above
.
On behalf of Monopar Therapeutics
Inc
.
/s/ Christopher M.
Starr
Christopher M.
Starr, Ph.D.
Executive
Chairman
Accepted and Agreed
:
/s/ Chandler D. Robinson
Chandler D.
Robinson
AMENDED
AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT
This
Amended and Restated Executive Employment Agreement (the
“
Agreement
”) is
entered into as of November 1, 2017, by and between Chandler D.
Robinson (“
Executive
”) and Monopar
Therapeutics Inc. (the “
Company
”) and replaces in its
entirety the Executive Employment Agreement by and between
Executive and the Company dated January 1, 2017.
Whereas
, the Company desires to retain
the employment of Executive as its Chief Executive Officer
effective as of November 1, 2017 (the “
Effective Date
”), and Executive
desires to serve in such capacity, pursuant to the terms and
conditions set forth in this Agreement; and
Now, Therefore
, in consideration of the
mutual promises and covenants contained herein, it is hereby agreed
by and between the parties hereto as follows:
ARTICLE
I DEFINITIONS
For
purposes of the Agreement, the following terms are defined as
follows:
1.1.
“
Board
”
means the Board of Directors of the Company.
1.2.
“
Cause
”
means any of the following events described below:
(a)
Executive’s
conviction of a felony or other crime involving moral
turpitude;
(b)
any
willful act or acts of dishonesty undertaken by Executive and
intended to result in substantial gain or personal enrichment of
Executive, Executive’s family or any third party at the
expense of the Company;
(c)
any
willful act of gross misconduct which is materially and
demonstrably injurious to the Company; and/or
(d)
Executive’s
inability under applicable law to continue to work lawfully in the
United States.
For the
purpose of this Agreement, no act, or failure to act, by Executive
shall be considered “willful” if done, or omitted to be
done, by him in good faith and in the reasonable belief that his
act or omission was in the best interest of the Company and/or
required by applicable law.
1.3.
“
Change
in Control
” means the occurrence of any of the
following events: (i) any sale or exchange of the capital stock by
the stockholders of the Company in one transaction or series of
related transactions where more than fifty percent (50%) of the
outstanding voting power of the Company is acquired by a person or
entity or group of related persons or entities; or (ii) any
reorganization, consolidation or merger of the Company where the
outstanding voting securities of the Company immediately before the
transaction represent or are converted into less than fifty percent
(50%) of the outstanding voting power of the surviving entity (or
its parent corporation) immediately after the transaction; or (iii)
the consummation of any transaction or series of related
transactions that results in the sale of all or substantially all
of the assets of the Company; or (iv) any “person” or
“group” (as defined in the Securities Exchange Act of
1934, as amended (the “Exchange Act”) becoming the
“beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act) directly or indirectly of securities representing
more than fifty percent (50%) of the voting power of the Company
then outstanding. Except that any change in the beneficial
ownership of the securities of the Company as a result of a private
financing of the Company that is approved by the Board, shall not
be deemed to be a Change in Control.
1.4.
“
Change
in Control Multiple
” shall mean one and a half
(1.5).
1.5.
“
Change
in Control Period
” means that period commencing on the
consummation of a Change in Control and ending on the first
anniversary thereof.
1.6.
“
COBRA
”
means the Consolidated Omnibus Budget Reconciliation Act of 1985,
as amended.
1.7.
“
Code
”
means the Internal Revenue Code of 1986, as amended.
1.8.
“
Company
”
means Monopar Therapeutics Inc. or any successor
thereto.
1.9.
“
Confidential
Disclosure Agreement
” means the Confidential
Disclosure Agreement entered into between Executive and the
Company.
1.10.
“
Covered
Termination
” means (a) an Involuntary Termination
Without Cause or
(b) a
voluntary termination for Good Reason, provided that the
termination constitutes a Separation from Service.
1.11.
“
Good
Reason
” means Executive’s resignation as a
result of a Good Reason Condition. In order to resign for Good
Reason, Executive must provide written notice to the Company of the
existence of the Good Reason Condition within thirty (30) days of
the initial existence of such Good Reason Condition. Upon receipt
of such notice of the Good Reason Condition, the Company will be
provided with a period of thirty (30) days during which it may
remedy the Good Reason Condition and not be required to provide for
the
payments and
benefits described in Section 4 as a result of such proposed
resignation due to the Good Reason Condition specified in the
notice. If the Good Reason Condition is not remedied within the
period specified in the preceding sentence, Executive may resign
for Good Reason based on the Good Reason Condition specified in the
notice, provided that such resignation must occur within sixty (60)
days after the initial existence of such Good Reason
Condition.
1.12.
“
Good
Reason Condition
” means that any of the following are
undertaken without Executive’s express written
consent:
(a)
a
material reduction in Executive’s Base Salary;
(b)
a material
diminution in Executive’s responsibilities;
(c)
the Company’s
material breach of any material term of this Agreement;
or
(d)
a requirement that Executive relocate to an office that would
increase Executive’s one-way commute distance by more than
fifty (50) miles based on Executive’s primary residence at
the time such relocation is announced.
1.13.
“
Involuntary
Termination Without Cause
” means Executive’s
dismissal or discharge by the Company other than for Cause. The
termination of Executive’s employment as a result of
Executive’s death or inability to perform the essential
functions of his job due to disability will not be deemed to be an
Involuntary Termination Without Cause.
1.14.
“
Separation
from Service
” means Executive’s termination of
employment or service where such termination of employment or
service constitutes a “separation from service” within
the meaning of Treasury Regulation Section
1.409A-1(h).
ARTICLE
II EMPLOYMENT BY THE COMPANY
2.1.
Position
and Duties.
Subject to terms set forth herein, as of the
Effective Date, Executive shall serve as the Company’s Chief
Executive Officer and perform such duties as are customarily
associated with the position of Chief Executive Officer and such
other duties as are assigned to Executive by the Board. During the
term of Executive’s employment with the Company, Executive
will devote Executive’s best efforts and substantially all of
Executive’s business time and attention (except for vacation
periods and reasonable periods of illness or other incapacities
permitted by the Company’s general employment policies, if
any, or as otherwise set forth in this Agreement) to the business
of the Company.
2.2.
Employment
at Will.
Both the Company and Executive shall have the right
to terminate Executive’s employment with the Company at any
time, with or without Cause, and without prior notice. If
Executive’s employment with the Company is terminated,
Executive will be eligible to receive severance benefits to the
extent provided in this Agreement.
2.3.
Employment
Policies.
The employment relationship between the parties
shall also be governed by the general employment policies and
practices of the Company, if any, including those relating to
protection of confidential information and assignment of
inventions, except that when the terms of this Agreement differ
from or are in conflict with the Company’s general employment
policies or practices, this Agreement shall control.
ARTICLE
III COMPENSATION
3.1. Base Salary.
As of the
Effective Date, Executive shall receive for services to be rendered
hereunder an annual base salary of $375,000 (“
Base Salary
”), payable on the
regular payroll dates of the Company, subject to increase in the
sole discretion of the Board.
3.2 Retention Bonus.
Executive shall be paid a one-time retention bonus of $3,813.97
(gross before taxes) payable with Executive’s next regular
paycheck.
3.3.
Annual
Bonus.
Executive is subject to an annual bonus at the
discretion of the Board, which bonus is initially being targeted
for up to 50% of the annualized amount of Base Salary.
3.4.
Standard
Company Benefits
. Executive shall be entitled to all rights
and benefits for which Executive is eligible under the terms and
conditions of the standard Company benefits and compensation
practices, if any, that may be in effect from time to time and are
provided by the Company to its executive employees generally.
Executive shall be entitled each year to four (4) weeks leave for
vacation at full pay, provided, that the maximum amount Executive
may have accrued at any point in time is four (4) weeks (meaning
that once Executive has accrued four (4) weeks, Executive will not
accrue any additional vacation time until he takes vacation and
falls below the four (4) week accrual cap). Executive shall also be
entitled to reasonable holidays and illness days with full pay in
accordance with the policies applicable to the Company and its
affiliates, if any, from time to time in effect. Employee
acknowledges and agrees that in order to maintain flexibility, the
Company and its affiliates have the right to amend or terminate any
employee benefit plan at any time. Until such time as the Company
obtains healthcare benefits for eligible employees and Executive
elects to opt in to such benefits, Executive shall be entitled to
an additional salary of at least $4,583.33 per month or such
greater amount as determined by the Board.
3.5.
Stock
Options
. Subject to approval by the Board, Executive may be
granted options to purchase shares of the Company’s common
stock with an exercise price per share as determined by the
Compensation Committee or similar function of the
Board.
3.6.
Expenses.
The Company will reimburse Executive for all reasonable and
necessary expenses incurred by Employee in connection with the
Company’s business, provided that such expenses incurred and
are properly documented and accounted for in accordance with the
policy of the Company and requirements of the Internal Revenue
Service.
ARTICLE
IV
SEVERANCE
AND CHANGE IN CONTROL BENEFITS
4.1.
Severance
Benefits.
Upon Executive’s termination of employment,
Executive shall receive any accrued but unpaid Base Salary and
other accrued and unpaid compensation, including any Annual Bonus
that has been earned with respect to a prior year, but remains
unpaid as of the date of the termination. If the termination is due
to a Covered Termination or permanent disability, provided that
Executive first returns all Company property in his possession and,
within sixty (60) days following the Covered Termination, executes
and does not revoke an effective general release of all claims
against the Company and its affiliates in a form reasonably
acceptable to the Company and Executive (a “
Release of Claims
”), Executive
shall also be entitled to receive the following severance benefits
described in this Section 4.1.
(a)
Covered
Termination Not Related to a Change in Control.
If
Executive’s employment terminates due to a Covered
Termination which occurs outside of a Change in Control Period,
Executive shall receive the following:
(i)
An
amount equal to twelve (12) months of Executive’s Base Salary
payable in substantially equal installments in accordance with the
Company’s normal payroll policies, if any, less applicable
withholdings, with such installments to commence as soon as
administratively practicable following the date the Release of
Claims is not subject to revocation and, in any event, within sixty
(60) days following the date of the Covered
Termination.
(ii)
If
Executive elects to receive continued healthcare coverage pursuant
to the provisions of COBRA, the Company shall directly pay, or
reimburse Executive for, the premium for Executive and
Executive’s covered dependents through the earlier of (i) the
first anniversary of the date of Executive’s termination of
employment and (ii) the date Executive and Executive’s
covered dependents, if any, become eligible for healthcare coverage
under another employer’s plan(s). Notwithstanding the
foregoing, (i) if any plan pursuant to which such benefits are
provided is not, or ceases prior to the expiration of the period of
continuation coverage to be, exempt from the application of Section
409A of the
Code
under Treasury Regulation Section 1.409A-1(a)(5), or (ii) the
Company is otherwise unable to continue to cover Executive under
its group health plans without penalty under applicable law
(including without limitation, Section 2716 of the Public Health
Service Act), then, in either case, an amount equal to each
remaining Company subsidy shall thereafter be paid to Executive in
substantially equal monthly installments. After the Company ceases
to pay premiums pursuant to this Section 4.1(a)(ii), Executive may,
if eligible, elect to continue healthcare coverage at
Executive’s expense in accordance with the provisions of
COBRA.
(iii)
All
of Employee’s vested options or stock appreciation rights
with respect to the Company’s common stock shall remain
exercisable until the first anniversary of Executive’s
termination of employment (or, if earlier, the maximum period
specified in the award documents and plans governing such options
or stock appreciation rights, as applicable, assuming
Executive’s employment had not terminated).
(b)
Covered
Termination Related to a Change in Control.
If
Executive’s employment terminates due to a Covered
Termination that occurs during a Change in Control Period,
Executive shall receive the following:
(i)
Executive
shall be entitled to receive an amount equal to the Change in
Control Multiplier multiplied by the sum of: (i) Executive’s
Base Salary and (ii) Executive’s target Annual Bonus for the
fiscal year of Executive’s termination, in each case, at the
rate equal to the higher of (x) the rate in effect immediately
prior to Executive’s termination of employment or (y) the
rate in effect immediately prior to the Change in Control payable
in a cash lump sum, less applicable withholdings, as soon as
administratively practicable following the date the Release of
Claims is not subject to revocation and, in any event, within sixty
(60) days following the date of the Covered
Termination.
(ii)
If
Executive elects to receive continued healthcare coverage pursuant
to the provisions of COBRA, the Company shall directly pay, or
reimburse Executive for, the premium for Executive and
Executive’s covered dependents through the earlier of (i) the
date that is that number of years equal to the Change in Control
Multiplier following the date of Executive’s termination of
employment and (ii) the date Executive and Executive’s
covered dependents, if any, become eligible for healthcare coverage
under another employer’s plan(s). Notwithstanding the
foregoing, (i) if any plan pursuant to which such benefits are
provided is not, or ceases prior to the expiration of the period of
continuation coverage to be, exempt from the application of Section
409A of the Code under Treasury Regulation Section 1.409A-1(a)(5),
or (ii) the Company is otherwise unable to continue to cover
Executive under its group health plans without penalty under
applicable law (including without limitation, Section 2716 of the
Public Health Service Act), then, in either case, an amount equal
to each remaining Company subsidy shall thereafter be paid to
Executive in substantially equal monthly installments. After the
Company ceases to pay premiums pursuant to this Section 4.1(b)(ii),
Executive may, if eligible, elect to continue
healthcare coverage
at Executive’s expense in accordance with the provisions of
COBRA.
(iii)
Each
outstanding equity award, including, without limitation, each stock
option and restricted stock award, held by Executive shall
automatically become vested and, if applicable, exercisable and any
forfeiture restrictions or rights of repurchase thereon shall
immediately lapse, in each case, with respect to one hundred
percent (100%) of the shares subject thereto. To the extent vested
after giving effect to the acceleration provided in the preceding
sentence, each stock option held by Executive shall remain
exercisable until the earlier of the original expiration date for
such stock option or the second anniversary of Executive’s
Covered Termination.
(c)
Termination
for Death or Disability
. If Executive’s employment is
terminated due to death or permanent disability where the Company
makes a determination in good faith that, due to a mental or
physical incapacity, Executive has been unable to perform his
duties under this Agreement for a period of not less than six (6)
consecutive months or 180 days in the aggregate in any 12-month
period, Executive shall receive the following:
(i)
An
amount equal to three (3) months of Executive’s Base Salary
payable in substantially equal installments in accordance with the
Company’s normal payroll policies, less applicable
withholdings, with such installments to commence as soon as
administratively practicable following the date the Release of
Claims is not subject to revocation and, in any event, within sixty
(60) days following the date of the Covered
Termination.
(ii)
If
Executive (or in the event of death, his designee) elects to
receive continued healthcare coverage pursuant to the provisions of
COBRA, the Company shall directly pay, or reimburse Executive for,
the premium for Executive and Executive’s covered dependents
through the earlier of (i) the three (3) month anniversary of the
date of Executive’s termination of employment and (ii) the
date Executive and Executive’s covered dependents, if any,
become eligible for healthcare coverage under another
employer’s plan(s). Notwithstanding the foregoing, (i) if any
plan pursuant to which such benefits are provided is not, or ceases
prior to the expiration of the period of continuation coverage to
be, exempt from the application of Section 409A of the Code under
Treasury Regulation Section 1.409A-1(a)(5), or (ii) the Company is
otherwise unable to continue to cover Executive under its group
health plans without penalty under applicable law (including
without limitation, Section 2716 of the Public Health Service Act),
then, in either case, an amount equal to each remaining Company
subsidy shall thereafter be paid to Executive in substantially
equal monthly installments. After the Company ceases to pay
premiums pursuant to this Section 4.1(b)(ii), Executive may, if
eligible, elect to continue healthcare coverage at
Executive’s expense in accordance the provisions of
COBRA.
4.2.
280G
Provisions.
Notwithstanding anything in this Agreement to
the contrary, if any payment or distribution Executive would
receive pursuant to this Agreement or
otherwise
(“
Payment
”)
would (a) constitute a “parachute payment” within the
meaning of Section 280G of the Code, and (b) but for this sentence,
be subject to the excise tax imposed by Section 4999 of the Code
(the “
Excise
Tax
”), then such Payment shall either be (i) delivered
in full, or (ii) delivered as to such lesser extent which would
result in no portion of such Payment being subject to the Excise
Tax, whichever of the foregoing amounts, taking into account the
applicable federal, state and local income taxes and the Excise
Tax, results in the receipt by Executive on an after-tax basis, of
the largest payment, notwithstanding that all or some portion the
Payment may be taxable under Section 4999 of the Code. The
accounting firm engaged by the Company for general audit purposes
as of the day prior to the effective date of the Change in Control
shall perform the foregoing calculations. The Company shall bear
all expenses with respect to the determinations by such accounting
firm required to be made hereunder. The accounting firm shall
provide its calculations to the Company and Executive within
fifteen (15) calendar days after the date on which
Executive’s right to a Payment is triggered (if requested at
that time by the Company or Executive) or such other time as
requested by the Company or Executive. Any good faith
determinations of the accounting firm made hereunder shall be
final, binding and conclusive upon the Company and Executive. Any
reduction in payments and/or benefits pursuant to this Section 4.2
will occur in the following order: (1) reduction of cash payments;
(2) cancellation of accelerated vesting of equity awards other than
stock options; (3) cancellation of accelerated vesting of stock
options; and (4) reduction of other benefits payable to
Executive.
(a)
Notwithstanding
any provision to the contrary in this Agreement, if Executive is
deemed at the time of his Separation from Service to be a
“specified employee” for purposes of Section
409A(a)(2)(B)(i) of the Code, to the extent delayed commencement of
any portion of the benefits to which Executive is entitled under
this Agreement is required in order to avoid a prohibited
distribution under Section 409A(a)(2)(B)(i) of the Code which would
subject Executive to a tax obligation under Section 409A of the
Code, such portion of Executive’s benefits shall not be
provided to Executive prior to the earlier of (i) the expiration of
the six- month period measured from the date of the
Executive’s Separation from Service or (ii) the date of
Executive’s death. Upon the expiration of the applicable Code
Section 409A(a)(2)(B)(i) period, all payments deferred pursuant to
this Section 4.3(a) shall be paid in a lump sum to Executive, and
any remaining payments due under the Agreement shall be paid as
otherwise provided herein.
(b)
Any
reimbursements payable to Executive pursuant to the Agreement shall
be paid to Executive no later than 30 days after Executive provides
the Company with a written request for reimbursement, and to the
extent that any such reimbursements are deemed to constitute
“nonqualified deferred compensation” within the meaning
of Section 409A of the Code (i) such amounts shall be paid or
reimbursed to Executive promptly, but in no event later than
December 31 of the year following the year in which the expense is
incurred, (ii)
the
amount of any such payments eligible for reimbursement in one year
shall not affect the payments or expenses that are eligible for
payment or reimbursement in any other taxable year, and (iii)
Executive’s right to such payments or reimbursement shall not
be subject to liquidation or exchange for any other
benefit.
(c)
For
purposes of Section 409A of the Code (including, without
limitation, for purposes of Treasury Regulation Section
1.409A-2(b)(2)(iii)), Executive’s right to receive
installment payments under the Agreement shall be treated as a
right to receive a series of separate payments and, accordingly,
each installment payment hereunder shall at all times be considered
a separate and distinct payment.
4.4.
Mitigation.
Executive shall not be required to mitigate damages or the amount
of any payment provided under this Agreement by seeking other
employment or otherwise, nor shall the amount of any payment
provided for under this Agreement be reduced by any compensation
earned by Executive as a result of employment by another employer
or by any retirement benefits received by Executive after the date
of the Covered Termination, or otherwise.
ARTICLE
V
PROPRIETARY
INFORMATION OBLIGATIONS
5.1.
Agreement.
Executive agrees to continue to abide by the Confidential
Disclosure Agreement.
5.2.
Remedies.
Executive’s duties under the Confidential Disclosure
Agreement shall survive termination of Executive’s employment
with the Company and the termination of this Agreement. Executive
acknowledges that a remedy at law for any breach or threatened
breach by Executive of the provisions of the Confidential
Disclosure Agreement, as well as Executive’s obligations
pursuant to Section 6.2 and Article 7 below, would be inadequate,
and Executive therefore agrees that the Company shall be entitled
to seek injunctive relief in case of any such breach or threatened
breach.
ARTICLE
VI OUTSIDE ACTIVITIES
(a)
Executive
shall not, during the term of this Agreement undertake or engage in
any other employment, occupation or business enterprise, other than
ones in which Executive is a passive investor, unless he obtains
the prior written consent of the Board.
(b)
Executive
may engage in civic and not-for-profit activities so long as such
activities do not materially interfere with the performance of
Executive’s duties
hereunder. In
addition, Executive shall be allowed to serve as a member of the
board of directors of up to two (2) other for profit entities at
any time during the term of this Agreement, which service shall not
materially interfere with the performance of Executive’s
duties hereunder; provided, however, that the Board may require
that Executive resign from one or both of such director positions
if it can reasonably and in good faith demonstrate that such
resignation(s) would be in the best interests of the Company in a
significant and material way.
6.2.
Competition.
Executive agrees that, from
the date hereof until a period of twelve
(12) months
following the date of termination of Executive’s employment
with the Company, Executive will not directly or indirectly, either
as an employee, employer, consultant, agent, principal, partner,
corporate officer, director, or in any other individual or
representative capacity, engage or participate in any
“Competitive Business” anywhere in the United States of
America. As used herein, a “Competitive Business” is
defined as any business developing uPAR antibodies to treat cancer,
or clonidine to treat oral mucositis.
ARTICLE
VII NONINTERFERENCE
In
addition to Executive’s obligations under the Confidential
Disclosure Agreement, Executive shall not for a period of one (1)
year following Executive’s termination of employment for any
reason, either on Executive’s own account or jointly with or
as a manager, agent, officer, employee, consultant, partner, joint
venturer, owner or stockholder or otherwise on behalf of any other
person, firm or corporation, directly or indirectly solicit or
attempt to solicit away from the Company any of its officers or
employees or offer employment to any person who is an officer or
employee of the Company;
provided,
however
, that a general advertisement to which an employee
of the Company responds shall in no event be deemed to result in a
breach of this Article 7. Executive also agrees not to harass or
disparage the Company or its employees, clients, directors or
agents or divert or attempt to divert any actual or potential
business of the Company. The provisions of this Article 7 shall
survive the termination or expiration of the applicable
Executive’s employment with the Company and shall be fully
enforceable thereafter. If it is determined by a court of competent
jurisdiction in any state that any restriction in this Article 7 is
excessive in duration or scope or is unreasonable or unenforceable
under the laws of that state, it is the intention of the parties
that such restriction may be modified or amended by the court to
render it enforceable to the maximum extent permitted by the law of
that state.
ARTICLE
VIII GENERAL PROVISIONS
8.1.
Notices.
Any notices provided hereunder must be in writing and shall be
deemed effective upon the earlier of personal delivery (including
personal delivery by facsimile) or the third day after mailing by
first class mail, to the Company at its primary office location and
to Executive at Executive’s address as listed on the Company
payroll.
8.2.
Tax
Withholding.
Executive acknowledges that all amounts and
benefits payable under this Agreement are subject to deduction and
withholding to the extent required by applicable law.
8.3.
Severability.
Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to
be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity,
illegality or unenforceability will not affect any other provision
or any other jurisdiction, but this Agreement will be reformed,
construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provisions had never been contained
herein.
8.4.
Waiver.
If either party should waive any breach of any provisions of this
Agreement, they shall not thereby be deemed to have waived any
preceding or succeeding breach of the same or any other provision
of this Agreement.
8.5.
Complete
Agreement.
This Agreement constitutes the entire agreement
between Executive and the Company and is the complete, final, and
exclusive embodiment of their agreement with regard to this subject
matter, and will supersede all prior agreements, understandings,
discussions, negotiations and undertakings, whether written or
oral, between the parties with respect to the subject matter
hereof, including without limitation, the Prior Agreement. This
Agreement is entered into without reliance on any promise or
representation other than those expressly contained herein or
therein, and cannot be modified or amended except in a writing
signed by an officer of the Company and Executive.
8.6.
Counterparts.
This Agreement may be executed in separate counterparts, any one of
which need not contain signatures of more than one party, but all
of which taken together will constitute one and the same
Agreement.
8.7.
Headings.
The headings of the sections hereof are inserted for convenience
only and shall not be deemed to constitute a part hereof nor to
affect the meaning thereof.
8.8.
Successors
and Assigns.
This Agreement is intended to bind and inure to
the benefit of and be enforceable by Executive and the Company, and
their respective successors, assigns, heirs, executors and
administrators, except that Executive may not assign his rights or
delegate his duties or obligations hereunder without the prior
written consent of the Company.
8.9.
Arbitration.
Unless otherwise prohibited by law or specified below, all
disputes, claims and causes of action, in law or equity, arising
from or relating to this Agreement or its enforcement, performance,
breach, or interpretation shall be resolved solely and
exclusively by final and binding arbitration held
in Illinois in co onnity with the then existing employment
arbitration rules and Illinois law. The arbitrator shall: (a)
provide adequate discovery for the resolution of the dispute;
and
(b)
issu
e
a written arbitration decision,
to
include the arbitrator's essential
findings and conclusion and a statement of the award. However,
nothing in
this
section is intended to prevent either party from
obtaining injunctive relief in court to prevent irreparable harm
pending the inclusion of any such
arbitration. The Company
shall
bear the
costs
of any such
arbitration.
I
8.10.
Eiecutive
Acknowledgement.
Executive acknowledges that (a)
he has consulted with or
has
had the opportunity
to consult with independent counsel of his own choice concerning
this Agreement, and
has
been advised to do so
by the Company, and (b) that he has read and understands the
Agreement, is fully aware of its legal effect, and has entered into
it freely based on his own judgment.
8.11.
Choice of Law.
All questions
concerning the construction, validity and interpretation of this
Agreement will be governed by the law of the State of Illinois
without regard to the conflicts of law provisions
thereof.
In Witness
Whereof,
the parties have
executed this Agreement as
o
f
the date first written above.
On
behalf of Monopar Therapeutics Inc.
/
s/ Christopher M.
Starr
Christopher M.
Starr
Executive
Chairman
Accepted
and Agreed:
/s/ Chandler D. Robinson
Chandler
D. Robinson
CONSULTING AGREEMENT
This Consulting Agreement (herein referred to
as
"Agreement")
is made and entered into as of this
December 15, 2016 (the
"
Effective Date"),
by and between Monopar Therapeutics
Inc
.
(herein referred to as
"Monopar"),
a Delaware limited liability corporation, located
at corporation, located at 5 Revere Dr., Suite 200, Northbrook, IL
60062
,
and Kim
.
R. Tsuchimoto
(herein referred to as "TSUCHIMOTO") who resides at # (each herein
referred to as
"Party"
and collectively as
"Parties")
.
RECITALS
WHEREAS, TSUCHIMOTO specializes in the field of
finance and strategy, including but not limited
to
:
pre-IPO readiness, internal and external financial
reporting, SEC and Nasdaq compliance, internal controls
,
forecasting/budgeting
;
and
WHEREAS
,
Monopar
desires to contract with TSUCHIMOTO to provide certain consultation
services, as requested by Monopar, and TSUCHIMOTO wishes to
prov
i
de such services to Monopar, upon the terms and
conditions set forth below.
NOW, TIIEREFORE, in consideration of the premises
and mutual covenants contained herein, the Parties agree as
follows
:
1.
Consulting
Arrangement
. TSUCHIMOTO agrees
to perform consulting services as described herein upon the terms
and conditions herein set forth.
2.
Term of
Agreement
. Subject to the
provision for early termination set forth below in
Section 5
of this Agreement, this Agreement
shall commence as of the Effective Date and shall continue for a
period of twelve (12) months from the Effective Date (the
"Term")
.
Either Party may terminate this Agreement without
cause with 10-days
'
prior written
notice
.
3.
Duties of
TSUCHIMOTO
.
3.1
Specific
Duties
.
TSUCHIMOTO shall provide consulting services to
Monopar, such duties to include, managing finances and
accounting
,
investor and public relations, financial
reporting, preparation and management of public trading or listing,
SEC or other regulatory body financial reporting and compliance,
with such other specific requirements as Monopar may specify from
time to time during the Term (herein referred to as the
"
Services")
.
3.2
TSUCHIMOTO's
Obligations
.
TSUCHIMOTO shall be diligent in the
performance of Services
,
and be professional in her commitment
to meeting her obligations hereunder. TSUCHIMOTO represents and
warrants that TSUCHIMOTO is not party to any other existing
agreement, which any of them would prevent her from entering into
this Agreement or which would ad
v
ersely affect
this Agreement. TSUCHIMOTO shall not perform Services for any other
individuals or entities in direct competition with Monopar, except
as provided for by mutual written agreement of the Parties.
TSUCHIMOTO shall not perform
- 1 -
services
for any party which would require or facilitate the unauthorized
disclosure of any confidential or proprietary information of
Monopar.
3.3
Reporting
.
TSUCHIMOTO will report to and liaise with Chandler Robinson,
M.D
.
, and Christopher M. Starr, Ph.D. and/or any other
assigned Monopar employee or consultant as may be designated in
writing by Monopar.
3.4
Compensation
.
Monopar shall pay TSUCHIMOTO a cash retainer of $5,000 per month
not to exceed $60,000 for the period of this Agreement, unless
modified in writing by mutual agreement amongst the
Parties.
TSUCHIMOTO
shall not be reimbursed, and is responsible for the facilities and
equipment necessary to perform Services required under this
Agreement.
4.
Reimbursement of Other
Expenses
. So long as Monopar's
prior approval has been obtained, Monopar shall promptly reimburse
TSUCHIMOTO for all direct expenses incurred in providing the
Services to Monopar pursuant to this Agreement, including travel,
meals and lodging. The invoice submitted by TSUCHIMOTO pursuant to
this
Section
4
shall also include a detail
of all reimbursable expenses incurred during the period covered by
such invoice.
5.
Termination of
Agreement - Failure to perform
.
In the event
that TSUCHIMOTO ceases to perform the Services or breaches its
obligations as required hereunder for any reason, Monopar shall
have the right to immediately terminate this Agreement upon notice
to TSUCHIMOTO and to enforce such other rights and remedies as it
may have as a result of said breach.
6.
Certain
Liabilities
. It is understood
and agreed that TSUCHIMOTO shall be acting as an independent
contractor and not as an agent or employee of, or partner, joint
venturer or in any other relationship with Monopar. TSUCHIMOTO will
be solely responsible for all her insurance, employment taxes, FICA
taxes and all obligations to governments or other organizations
arising out of this consulting assignment. TSUCHIMOTO acknowledges
that no income, social security or other taxes shall be withheld or
accrued by Monopar for TSUCHIMOTO's benefit. TSUCHIMOTO assumes all
risks and hazards encountered in the performance of duties under
this Agreement. Unless Monopar has provided prior written approval,
TSUCHIMOTO shall not use any sub-contractors to perform
TSUCHIMOTO's obligations hereunder. TSUCHIMOTO shall be solely
responsible for any and all injuries, including death, to all
persons and any and all loss or damage to property, which may
result from performance under this Agreement.
7.
Indemnities
.
TSUCHIMOTO hereby agrees to indemnify Monopar and hold Monopar
harmless from and against all claims (whether asserted by a person,
firm, entity or governmental unit or otherwise), liabilities,
losses, damages, expenses, charges and fees which Monopar may
sustain or incur arising out of or attributable to any breach,
gross negligence or willful misconduct by TSUCHIMOTO, as
applicable, in the performance under this Agreement. Monopar hereby
agrees to indemnify TSUCHIMOTO and hold TSUCHIMOTO harmless from
and against all liabilities, losses, damages, expenses, charges and
fees which TSUCHIMOTO may sustain or incur by reason of any claim
which
-
2
-
may be asserted against TSUCHIMOTO by any person,
firm, corporation or governmental unit and which may arise out of
or be attributable
to
an
y gross negligence or willful
misconduct by Monopar or its employees or contractors, as
applicable, in the performance of this
Agreement.
8.
Warranties
.
The Services shall be performed in a professional manner,
consistent with industry standards. In performing the Services,
TSUCHIMOTO shall not make any unauthorized use of any confidential
or proprietary information of any other party or infringe the
intellectual property rights of any other party.
·
9.
Arbitration
.
Any controversy or claim between Monopar and TSUCHIMOTO arising out
of or relating to this Agreement, or the breach thereof, shall be
submitted to arbitration in accordance with the rules of the
American Arbitration Association. The site of the arbitration shall
be Chicago, Illinois, and except as provided herein the arbitration
shall be conducted in accordance with the Rules of the American
Arbitration Association prevailing at the time the demand for
arbitration is made hereunder. At least one member of the
arbitration panel shall be a financial expert knowledgeable in the
area of biopharmaceutical corporate compliance. Judgment upon any
award rendered by the arbitrator(s) may be entered in any court of
competent jurisdiction and shall be binding and final. The cost of
arbitration shall be borne by the losing Party, as determined by
the arbitrator(s).
10.
Confidential
Information
. TSUCHIMOTO has
executed the attached confidential disclosure agreement referenced
herein as
Appendix A
prior to commencement of the Services. TSUCHIMOTO
hereby represents and warrants that the obligations thereunder
shall be binding.
11.
Inventions
.
TSUCHIMOTO agrees that all ideas, developments, suggestions and
inventions conceived or reduced to practice arising out of or
during the course of performance under this Agreement shall be the
exclusive property of Monopar and shall be promptly communicated
and assigned to Monopar. TSUCHIMOTO shall require any employees of
or other parties contracted by TSUCHIMOTO to disclose the same to
TSUCHIMOTO and to be bound by the provisions of this paragraph.
During the period of this Agreement and thereafter at any
reasonable time when called upon to do so by Monopar, TSUCHIMOTO
shall require any employees of or other parties contracted by
TSUCHIMOTO to execute patent applications, assignments to Monopar
(or any designee of Monopar ) and other papers and to perform acts
which Monopar believes necessary to secure to Monopar full
protection and ownership of the rights in and to the services
performed by TSUCHIMOTO and/or for the preparation, filing and
prosecution of applications for patents or inventions made by any
employees of or other parties contracted by TSUCHIMOTO hereunder.
The decision to file patent applications on inventions made by any
employees of or other parties contracted by TSUCHIMOTO shall be
made by Monopar and shall be for such countries, as Monopar shall
elect. Monopar agrees to bear all the expense in connection with
the preparation, filing and prosecution of applications for patents
and for all matters provided in this paragraph requiring the time
and/or assistance of TSUCHIMOTO as to such
inventions.
-
3
-
12.l
Notice
.
Any notices to be given hereunder by either Party to the other may
be effectuated, in writing, by personal delivery or by mail,
registered or certified, postage prepaid, with return receipt
requested. Mailed notices shall be addressed to the parties at the
following addresses:
If to
Monopar:
Monopar Therapeutics Inc.
5 Revere Dr., Suite
200
Northbrook, IL, 60062
Attention:
Chandler Robinson, MD MBA MSc
Email: #
If to
TSUCHIMOTO:
Kim R. Tsuchimoto
#
Email:
#
or at such other addresses as either Monopar or
TSUCHIMOTO may designate by written notice to each other. Notices
delivered personally shall be deemed duly given on the date of
actual receipt
;
mailed notices shall be deemed duly
given as of the fourth day after the date so
mailed.
12.2
Waiver of
Breach
. The waiver by either
Party to a breach of any provision in this Agreement cannot operate
or be construed as a waiver of any subsequent breach by either
Party.
·
12.3
Severability.
If any provision of this Agreement is
determined by a court of competent jurisdiction to be invalid or
unenforceable, that provision shall be deemed modified to the
extent necessary to make it valid or enforceable
,
or if it
cannot be so modified, then severed, and the remainder of the
Agreement shall continue in full force and effect as if the
Agreement had been signed with the invalid portion so modified or
severed.
12.4
Choice of
Law
. This Agreement has been
made and entered into in the State of Illinois, and the laws of
such state, excluding its choice of law rules, shall govern the
validity and interpretation of this Agreement and the performance
due hereunder. The losing party in any dispute hereunder shall pay
the attorneys'
fees
and disbursements of the prevailing
party.
12.5
Integration
.
The drafting, execution and delivery of this Agreement by the
Parties have been induced by no representations, statements,
warranties or agreements other than those expressed herein. This
Agreement embodies the entire understanding of the Parties, and
there are no further or other agreements or understandings, written
or oral, in effect between the Parties relating to the subject
matter hereof unless expressly referred to
herein.
-
4
-
12.6
Modification
.
This Agreement may not be modified unless such is in writing and
signed by both Parties to this Agreement.
12.7
Assignment
.
TSUCHIMOTO shall not be permitted to assign this Agreement to any
other person or entity without the prior written consent of
Monopar. TSUCHIMOTO hereby agrees that Monopar shall be permitted
to assign this Agreement to any affiliate of Monopar. This
Agreement shall be binding upon and shall inure to the benefit of
the successors and permitted assigns of the
parties.
12.8
Survival
.
The provisions of
Sections
7,
8, 9, 10,
and
11
shall survive expiration or termination of this
Agreement for any reason. Expiration or termination of this
Agreement shall not affect Monopar's obligations to pay any amounts
that may then be due to TSUCHIMOTO.
IN
WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the day and year first above written.
ACCEPTED
AND AGREED TO:
Kim
R. Tsuchimoto
/s/ Kim R. Tsuchimoto
Kim R.
Tsuchimoto
MONOPAR THERAPEUTICS INC.
/s/ Chandler Robinson
BY:
CHANDLER ROBINSON
ITS:
CHIEF EXECUTIVE OFFICER
-
5
-
See
executed CDA attached
-
6
-
MONOPARTHERAPEUTICS LLC
CONFIDENTIAL DISCLOSURE AGREEMENT
AGREEMENT
between Kim Tsuchimoto ('' Recipient”) ) and Monopar
Therapeutics LLC (“Monopar").
For purposes of this Agreement, the term
"Recipient'' shall include, individually and/or collectively the
partners, directors. officers, employees, agents, and/or
representatives of K
i
m
Tsuchimoto.
In
consideration for the mutual agreements contained herein and the
other provisions of this Agreement, the receipt of which is hereby
acknowledged by the parties. the parties hereto agree as
follows:
I.
Scope of Confidential
Information
·'Confidential
Information" means, subject to the other provisions of this
Section:
(a)
all information, whether oral or written, disclosed by Monopar that
is described in Schedule A under "Description of Confidential
Information” Confidential Information may relate to the
activities or property of Monopar or any of Monopar's members.
directors, officers, employees, consultants, agents,
representatives or affiliated entities (collectively,
·'Associated Persons"); and
( )
any written material prepared by Recipient or Recipient's
partners,
directors,
officers, employees, agents, representatives or affiliated entities
(collectively, ''Associated Persons") containing any other Monopar
Confidential Information.
·'Confidential
Information'' does not include information that: (i) was available
to Recipient (free of any confidentiality obligation in favor of
Monopar) prior to disclosure of such information by Monopar to
Recipient; (ii) is made available to Recipient from a third party
which (at the time of such availability) was not, to Recipient's
knowledge, subject to a confidentiality obligation with respect to
such information; (iii) is made available to third parties by
Monopar without restriction on the disclosure of such information,
(iv) is or becomes available to the public on or after the date of
this Agreement (other than as a result of disclosure prohibited by
any confidentiality obligation contained herein): or (v) is
developed independently by Recipient or its Associated Persons
without
intended
disclosure or (ii) if prior notice is not permitted or practicable
under the circumstances, prompt notice of such
disclosure.
3.
Certain Right s and Limitations
(a)
All
Confidential Information shall remain the property of Monopar. The
provision of Confidential Information hereunder shall not transfer
any right, title or interest in such information to Recipient.
Monopar does not gram any express or implied right to Recipient to
or under Monopar's patents, copyrights, trademarks. trade secret
information or other proprietary rights.
(b)
Recipient
agrees to adhere to all applicable laws and regulations relating to
the export of technical data received hereunder.
(c)
This
Agreement imposes no obligations on either party to purchase, sell,
license, transfer or otherwise transact in any technology, services
or products. This Agreement does not create any agency or
partnership relationship between the parties hereto.
(a)
Upon
Monopar's reasonable request, Recipient agrees to return promptly
to Monopar all Confidential Information that is in writing and in
the possession of Recipient and, upon written request, to certify
the return or destruction (at Monopar's option) of all Confidential
Information.
(b)
Recipient
agrees that monetary damages may not be an adequate remedy for
improper disclosure or use of Confidential Information, that
Monopar, upon breach of this contract, shall be entitled to such
injunctive or equitable relief as may be deemed proper by a court
of competent jurisdiction, without waiving any other right or
remedy, and that Recipient shall not resist an application for such
relief on the ground that Monopar has an adequate remedy at
law.
(a)
Except where expressly indicated otherwise, the words
"written" or
reference
to the Confidential Information.
Recipient
agrees that it will not disclose to Monopar or to any of its
employees or consultants any confidential. proprietary,
patented.
copyrighted,
or trade secret information, or any other form of protectable
intellectual property, regardless of whether such information is
the property of Recipient itself or of some other individual or
organization.
2. Use and Disclosure of Confidential Information
(a)
Recipient
agrees: (i) to preserve the confidentiality of Confidential
Information; (ii) to use and/or permit the use of Confidential
information onyr for the purpose of, and to the extent necessary
for, evaluating a business relat1onsh1p between the parties and, if
such a relationship is consummated, carrying out such relationship:
(iii) to disclose Confidential Information to, and to permit the
use of Confidential Information by, only such persons within
Recipient who Recipient reasonably determines need to know such
information in connection with the activities described in (ii)
above; and (iv) to use reasonable care to maintain the
confidentiality of Confidential (information, provided that such
care hall be at least as great as the precautions taken by
Recipient to protect its own confidential and/or proprietary
information.
(b)
Notwithstanding
anything to the contrary herein, Recipient is free to make (and
this Agreement does not restrict) disclosure of any Confidential
Information in a judicial, legislative, or administrative
investigation .or proceeding or to a government or other
regulatory
agency;
provided that, to the extent permitted by, and practicable under,
the circumstances, Recipient provides to Monopar (i) prior notice
of the
"in
writing" shall include, but not be limited to, written or
printed
documents,
electronic and facsimile transmissions and computer disks or tapes
(whether machine or user readable).
(b)
In
the event that any one or more of the provisions of this Agreement
will for any reason be held to be invalid, illegal or unenforceable
by a court of competent jurisdiction, the remaining provisions of
this
Agreement
will be unimpaired, and the invalid, illegal or unenforceable
pr?v1s1on will be replaced by a mutually acceptable provision,
which being valid, legal or enforceable, comes closest to the
intention of the parties underlying the invalid, illegal or
unenforceable provision.
(c)
No
amendment or alteration of the terms of this Agreement shall
be
effective
unless made in writing and executed by both parties
hereto.
(d)
A
failure or delay in exercising any right in respect of this
Agreement will not be presumed to operate as a waiver, and a single
or partial exercise of any right will! not be presumed to preclude
any subsequent or further exercise of that right or the exercise of
any other right. Any
modification
or waive of any provision of this Agreement shall not be effective
unless made in writing. Any such waiver shall be effective only in
the specific instance and for the purpose given.
This Agreement and its
enforcement shall be governed by and construed in accordance with,
the laws of the State of Illinois
without regard to
conflicts-of-law principles.
(SIGNATURE
PAGE FOLLOWS]
IN
WITNESS WHEREOF. the parties hereto have executed this
Agreement.
·'RECIPIENT'"
'
MONOPAR"
/s/ Kim R. Tsuchimoto
By
Kim
R. Tsuchimoto
Title: Individual
Date:
April 21, 2015
Notices
hereunder shall be sent to
:
#
Monopar
Therapeutics LLC
By:
/s/ Chandler D.
Robinson
Name:
Chandler D. Robinson
Date:
April 21, 2015
Notices hereunder shall be sent to:
#
SCHEDULE A
Description of Confidential Information Disclosed
by Monopar
:
(
a) The
identity
of the projects and compounds that Monopar
is
researching
;
(
b
)
the
methods
of
research and research
collaborators
being used to pursue these projects and
compounds;
(
c) the
(known
or
putative) mechanism
of
action of any of these
compounds;
(
d) any techniques used by Monopar to discover,
develop, produce, purify, or test any of
the
se
compounds; and
(e)
any
non-public
scienti
fic,
business,
or financial information pertaining to Monopar
,
its
projects,
or
compounds, including all documents and
agreements already
signed
or
currently being negotiated
with Cancer Research
U
K and
Cancer
Research Technology)
.
EXECUTIVE EMPLOYMENT AGREEMENT
This
Executive Employment Agreement (the “
Agreement
”) is entered into as of
November 1, 2017, by and between Kim R. Tsuchimoto
(“
Executive
”)
and Monopar Therapeutics Inc. (the “
Company
”).
Whereas
, the Company desires to employ Executive as its
Chief Financial Officer effective as of November 1, 2017 (the
“
Effective
Date
”), and Executive desires to serve in such
capacity, pursuant to the terms and conditions set forth in this
Agreement; and
Now, Therefore
, in consideration of the mutual promises and
covenants contained herein, it is hereby agreed by and between the
parties hereto as follows:
ARTICLE I
DEFINITIONS
For
purposes of the Agreement, the following terms are defined as
follows:
1.1.
“
Board
” means the Board of
Directors of the Company.
1.2.
“
Cause
” means any of the following
events described below:
(a)
Executive’s commission
of a felony or other crime involving moral turpitude;
(b)
any
willful act or acts of dishonesty undertaken by Executive and
intended to result in substantial gain or personal enrichment of
Executive, Executive’s family or any third party at the
expense of the Company;
(c)
any
willful act of gross misconduct which is materially and
demonstrably injurious to the Company; and/or
(d)
Executive’s inability to
lawfully work in the United States.
For the
purpose of this Agreement, no act, or failure to act, by Executive
shall be considered “willful” if done, or omitted to be
done, by Executive in good faith and in the reasonable belief that
Executive’s act or omission was in the best interest of the
Company and/or required by applicable law.
1.3.
“
Change in
Control
” means the occurrence of any of the following
events: (i) any sale or exchange of the capital stock by the
stockholders of the Company in one transaction or series of related
transactions where more than fifty percent (50%) of the outstanding
voting power of the Company is acquired by a person or entity or
group of related persons or entities; or (ii) any reorganization,
consolidation or merger of the Company where the outstanding voting
securities of the Company immediately before the transaction
represent or are converted into less than fifty percent (50%) of
the outstanding voting power of the surviving entity (or its parent
corporation) immediately after the transaction; or (iii) the
consummation of any transaction or series of related transactions
that results in the sale of all or substantially all of the assets
of the Company; or (iv) any “person” or
“group” (as defined in the Securities Exchange Act of
1934, as amended (the “Exchange Act”) becoming the
“beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act) directly or indirectly of securities representing
more than fifty percent (50%) of the voting power of the Company
then outstanding. Except that any change in the beneficial
ownership of the securities of the Company as a result of a private
financing of the Company that is approved by the Board, shall not
be deemed to be a Change in Control.
1.4.
“
Change in Control Multiple
” shall
mean one-quarter (0.25).
1.5.
“
Change in
Control Period
” means that period commencing on the
consummation of a Change in Control and ending on the first
anniversary thereof.
1.6.
“
COBRA
” means
the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended.
1.7.
“
Code
” means the Internal Revenue
Code of 1986, as amended.
1.8.
“
Company
” means Monopar
Therapeutics Inc. or any successor thereto.
1.9.
“
Confidential Disclosure Agreement
”
means the Confidential Disclosure Agreement entered into between
Executive and the Company.
1.10.
“
Covered
Termination
” means (a) an Involuntary Termination
Without Cause or (b) a voluntary termination for Good Reason,
provided that the termination constitutes a Separation from
Service.
1.11.
“
Good
Reason
” means Executive’s resignation as a
result of a Good Reason Condition. In order to resign for
Good Reason, Executive must provide written notice to the Company
of the existence of the Good Reason Condition within thirty (30)
days of the initial existence of such Good Reason Condition.
Upon receipt of such notice of the Good Reason Condition, the
Company will be provided with a period of thirty (30) days during
which it may remedy the Good Reason Condition and not be required
to provide for the payments and benefits described in Section 4 as
a result of such proposed resignation due to the Good Reason
Condition specified in the notice. If the Good Reason
Condition is not remedied within the period specified in the
preceding sentence, Executive may resign for Good Reason based on
the Good Reason Condition specified in the notice, provided that
such resignation must occur within sixty (60) days after the
initial existence of such Good Reason Condition.
1.12.
“
Good
Reason Condition
” means that any of the following are
undertaken without Executive’s express written
consent:
(a)
a material reduction in Executive’s Base Salary
(other than as part of a reduction in the base salary of at least a
majority of the Company’s executives of the same or greater
percentage);
(b)
the Company’s material breach of any material
term of this Agreement (a change in job title or role does not
constitute a material breach); or
(c)
a requirement that Executive relocate to an office
that would increase Executive’s one-way commute distance by
more than fifty (50) miles based on Executive’s primary
residence at the time such relocation is announced.
1.13.
“
Involuntary
Termination Without Cause
” means Executive’s
dismissal or discharge by the Company other than for Cause.
The termination of Executive’s employment as a result of
Executive’s death or inability to perform the essential
functions of his job due to disability will not be deemed to be an
Involuntary Termination Without Cause.
1.14.
“
Separation
from Service
” means Executive’s termination of
employment or service constitutes a “separation from
service” within the meaning of Treasury Regulation Section
1.409A-1(h).
ARTICLE II
EMPLOYMENT BY THE COMPANY
2.1.
Position and
Duties.
Subject to terms set forth herein, as of the
Effective Date, Executive shall serve as the Company’s Chief
Financial Officer and perform such duties as are customarily
associated with the position of Chief Financial Officer and such
other duties as are assigned to Executive by the Chief Executive
Officer. During the term of Executive’s employment with
the Company, Executive will devote Executive’s best efforts
and 25% of Executive’s business time and attention (except
for vacation periods and reasonable periods of illness or other
incapacities permitted by the Company’s general employment
policies or as otherwise set forth in this Agreement) to the
business of the Company.
2.2.
Employment at Will.
Both the
Company and Executive shall have the right to terminate
Executive’s employment with the Company at any time, with or
without Cause, and without prior notice. If Executive’s
employment with the Company is terminated, Executive will be
eligible to receive severance benefits to the extent provided in
this Agreement.
2.3.
Employment Policies.
The
employment relationship between the parties shall also be governed
by the general employment policies and practices of the Company,
including those relating to protection of confidential information
and assignment of inventions, except that when the terms of this
Agreement differ from or are in conflict with the Company’s
general employment policies or practices, this Agreement shall
control.
ARTICLE III
COMPENSATION
3.1.
Base Salary.
As of the Effective
Date,
Executive shall
receive for services to be rendered hereunder an annual base salary
of $68,750 (“
Base
Salary
”), payable on the regular payroll dates of the
Company, subject to increase in the sole discretion of the Board.
Base salary represents a part-time salary (25% of full-time) as
noted in section 2.1 above.
3.2.
Annual
Bonus.
Executive is subject to an annual bonus at the
discretion of the Board.
3.3.
Standard Company
Benefits
. Upon reaching full-time status (over 30
hours per week of employment with the Company) Executive shall be
entitled to all rights and benefits for which Executive is eligible
under the terms and conditions of the standard Company benefits and
compensation practices that may be in effect from time to time and
are provided by the Company to its executive employees generally.
Based on 25% service, Executive shall be entitled each year to one
(1) week leave for vacation at full pay, provided, that the maximum
amount Executive may have accrued at any point in time is one (1)
week (meaning that once Executive has accrued one (1) week,
Executive will not accrue any additional vacation time until
Executive takes vacation and falls below the one (1) week accrual
cap). Executive shall also be entitled to reasonable holidays and
illness days with full pay in accordance with the policies
applicable to the Company and its affiliates from time to time in
effect. Employee acknowledges and agrees that in order to maintain
flexibility, the Company and its affiliates have the right to amend
or terminate any employee benefit plan at any time.
3.4.
Stock
Options
. Subject to approval by the Board, Executive may be
granted options to purchase shares of the Company’s common
stock with an exercise price per share as determined by the
Compensation Committee or similar function of the
Board.
3.5.
Expenses.
The Company will reimburse
Executive for all reasonable and necessary expenses incurred by
Employee in connection with the Company’s business, provided
that such expenses incurred and are properly documented and
accounted for in accordance with the policy of the Company and
requirements of the Internal Revenue Service.
ARTICLE IV
SEVERANCE AND CHANGE IN CONTROL BENEFITS
4.1.
Severance
Benefits.
Upon Executive’s termination of
employment, Executive shall receive any accrued but unpaid Base
Salary and other accrued and unpaid compensation, including any
Annual Bonus that has been earned with respect to a prior bonus
year, but remains unpaid as of the date of the termination.
If the termination is due to a Covered Termination or permanent
disability, provided that Executive first returns all Company
property in his possession and, within sixty (60) days following
the Covered Termination, executes and does not revoke an effective
general release of all claims against the Company and its
affiliates in a form reasonably acceptable to the Company (a
“
Release of
Claims
”), Executive shall also be entitled to receive
the following severance benefits described in this Section
4.1.
(a)
Covered Termination
Not Related to a Change in Control.
If
Executive’s employment terminates due to a Covered
Termination which occurs outside of a Change in Control Period,
Executive shall receive the following:
(i)
An amount equal to three (3) months of Executive’s Base
Salary payable in substantially equal installments in accordance
with the Company’s normal payroll policies, less applicable
withholdings, with such installments to commence as soon as
administratively practicable following the date the Release of
Claims is not subject to revocation and, in any event, within sixty
(60) days following the date of the Covered
Termination.
(ii)
If Executive is a full time employee at the time, then
if Executive elects to receive continued healthcare coverage
pursuant to the provisions of COBRA, the Company shall directly
pay, or reimburse Executive for, the premium for Executive and
Executive’s covered dependents through the earlier of (i) the
first anniversary of the date of Executive’s termination of
employment and (ii) the date Executive and Executive’s
covered dependents, if any, become eligible for healthcare coverage
under another employer’s plan(s). Notwithstanding the
foregoing, (i) if any plan pursuant to which such benefits are
provided is not, or ceases prior to the expiration of the period of
continuation coverage to be, exempt from the application of Section
409A of the Code under Treasury Regulation Section 1.409A-1(a)(5),
or (ii) the Company is otherwise unable to continue to cover
Executive under its group health plans without penalty under
applicable law (including without limitation, Section 2716 of the
Public Health Service Act), then, in either case, an amount equal
to each remaining Company subsidy shall thereafter be paid to
Executive in substantially equal monthly installments. After the
Company ceases to pay premiums pursuant to this Section 4.1(a)(ii),
Executive may, if eligible, elect to continue healthcare coverage
at Executive’s expense in accordance the provisions of
COBRA.
(iii)
All of Employee’s vested options or stock appreciation rights
with respect to the Company’s common stock shall remain
exercisable until the first anniversary of Executive’s
termination of employment (or, if earlier, the maximum period
specified in the award documents and plans governing such options
or stock appreciation rights, as applicable, assuming
Executive’s employment had not terminated).
(b)
Covered Termination Related to a
Change in Control.
If Executive’s employment
terminates due to a Covered Termination that occurs during a Change
in Control Period, Executive shall receive the
following:
(i)
Executive shall be entitled to receive an amount equal to the
Change in Control Multiplier multiplied by the sum of: (i)
Executive’s Base Salary and (ii) Executive’s target
Annual Bonus for the fiscal year of Executive’s termination,
in each case, at the rate equal to the higher of (x) the rate in
effect immediately prior to Executive’s termination of
employment or (y) the rate in effect immediately prior to the
Change in Control payable in a cash lump sum, less applicable
withholdings, as soon as administratively practicable following the
date the Release of Claims is not subject to revocation and, in any
event, within sixty (60) days following the date of the Covered
Termination.
(ii)
If Executive is a full time employee at the time, then if Executive
elects to receive continued healthcare coverage pursuant to the
provisions of COBRA, the Company shall directly pay, or reimburse
Executive for, the premium for Executive and Executive’s
covered dependents through the earlier of (i) the date that is that
number of years equal to the Change in Control Multiplier following
the date of Executive’s termination of employment and (ii)
the date Executive and Executive’s covered dependents, if
any, become eligible for healthcare coverage under another
employer’s plan(s). Notwithstanding the foregoing, (i)
if any plan pursuant to which such benefits are provided is not, or
ceases prior to the expiration of the period of continuation
coverage to be, exempt from the application of Section 409A of the
Code under Treasury Regulation Section 1.409A-1(a)(5), or (ii) the
Company is otherwise unable to continue to cover Executive under
its group health plans without penalty under applicable law
(including without limitation, Section 2716 of the Public Health
Service Act), then, in either case, an amount equal to each
remaining Company subsidy shall thereafter be paid to Executive in
substantially equal monthly installments. After the Company ceases
to pay premiums pursuant to this Section 4.1(b)(ii), Executive may,
if eligible, elect to continue healthcare coverage at
Executive’s expense in accordance with the provisions of
COBRA.
(iii)
Each outstanding equity award, including, without limitation, each
stock option and restricted stock award, held by Executive shall
automatically become vested and, if applicable, exercisable and any
forfeiture restrictions or rights of repurchase thereon shall
immediately lapse, in each case, with respect to one hundred
percent (100%) of the shares subject thereto. To the extent
vested after giving effect to the acceleration provided in the
preceding sentence, each stock option held by Executive shall
remain exercisable until the earlier of the original expiration
date for such stock option or the second anniversary of
Executive’s Covered Termination.
(c)
Termination for Death or
Disability
. If Executive’s employment is terminated
due to death or permanent disability where the Company makes a
determination in good faith that, due to a mental or physical
incapacity, Executive has been unable to perform his duties under
this Agreement for a period of not less than one-and-a-half (1.5)
consecutive months or 45 days in the aggregate in any 12-month
period, Executive shall receive the following:
(i)
An amount equal to three (3) months of Executive’s Base
Salary payable in substantially equal installments in accordance
with the Company’s normal payroll policies, less applicable
withholdings, with such installments to commence as soon as
administratively practicable following the date the Release of
Claims is not subject to revocation and, in any event, within sixty
(60) days following the date of the Covered
Termination.
(ii)
If Executive (or in the event of death, his designee)
elects to receive continued healthcare coverage pursuant to the
provisions of COBRA, the Company shall directly pay, or reimburse
Executive for, the premium for Executive and Executive’s
covered dependents through the earlier of (i) the three (3) month
anniversary of the date of Executive’s termination of
employment and (ii) the date Executive and Executive’s
covered dependents, if any, become eligible for healthcare coverage
under another employer’s plan(s). Notwithstanding the
foregoing, (i) if any plan pursuant to which such benefits are
provided is not, or ceases prior to the expiration of the period of
continuation coverage to be, exempt from the application of Section
409A of the Code under Treasury Regulation Section 1.409A-1(a)(5),
or (ii) the Company is otherwise unable to continue to cover
Executive under its group health plans without penalty under
applicable law (including without limitation, Section 2716 of the
Public Health Service Act), then, in either case, an amount equal
to each remaining Company subsidy shall thereafter be paid to
Executive in substantially equal monthly installments. After the
Company ceases to pay premiums pursuant to this Section 4.1(b)(ii),
Executive may, if eligible, elect to continue healthcare coverage
at Executive’s expense in accordance with the provisions of
COBRA.
4.2.
280G
Provisions.
Notwithstanding anything in this Agreement
to the contrary, if any payment or distribution Executive would
receive pursuant to this Agreement or otherwise
(“
Payment
”)
would (a) constitute a “parachute payment” within the
meaning of Section 280G of the Code, and (b) but for this sentence,
be subject to the excise tax imposed by Section 4999 of the Code
(the “
Excise
Tax
”), then such Payment shall either be (i) delivered
in full, or (ii) delivered as to such lesser extent which would
result in no portion of such Payment being subject to the Excise
Tax, whichever of the foregoing amounts, taking into account the
applicable federal, state and local income taxes and the Excise
Tax, results in the receipt by Executive on an after-tax
basis,
of the
largest payment, notwithstanding that all or some portion the
Payment may be taxable under Section 4999 of the Code. The
accounting firm engaged by the Company for general audit purposes
as of the day prior to the effective date of the Change in Control
shall perform the foregoing calculations. The Company shall
bear all expenses with respect to the determinations by such
accounting firm required to be made hereunder. The accounting
firm shall provide its calculations to the Company and Executive
within fifteen (15) calendar days after the date on which
Executive’s right to a Payment is triggered (if requested at
that time by the Company or Executive) or such other time as
requested by the Company or Executive. Any good faith
determinations of the accounting firm made hereunder shall be
final, binding and conclusive upon the Company and Executive.
Any reduction in payments and/or benefits pursuant to this Section
4.2 will occur in the following order: (1) reduction of cash
payments; (2) cancellation of accelerated vesting of equity awards
other than stock options; (3) cancellation of accelerated vesting
of stock options; and (4) reduction of other benefits payable to
Executive.
4.3.
Section
409A
.
(a)
Notwithstanding any provision to the contrary in this Agreement, if
Executive is deemed at the time of his Separation from Service to
be a “specified employee” for purposes of Section
409A(a)(2)(B)(i) of the Code, to the extent delayed commencement of
any portion of the benefits to which Executive is entitled under
this Agreement is required in order to avoid a prohibited
distribution under Section 409A(a)(2)(B)(i) of the Code which would
subject Executive to a tax obligation under Section 409A of the
Code, such portion of Executive’s benefits shall not be
provided to Executive prior to the earlier of (i) the expiration of
the six- month period measured from the date of the
Executive’s Separation from Service or (ii) the date of
Executive’s death. Upon the expiration of the
applicable Code Section 409A(a)(2)(B)(i) period, all payments
deferred pursuant to this Section 4.3(a) shall be paid in a lump
sum to Executive, and any remaining payments due under the
Agreement shall be paid as otherwise provided herein.
(b)
Any reimbursements payable to Executive pursuant to the Agreement
shall be paid to Executive no later than 30 days after Executive
provides the Company with a written request for reimbursement, and
to the extent that any such reimbursements are deemed to constitute
“nonqualified deferred compensation” within the meaning
of Section 409A of the Code (i) such amounts shall be paid or
reimbursed to Executive promptly, but in no event later than
December 31 of the year following the year in which the expense is
incurred, (ii) the amount of any such payments eligible for
reimbursement in one year shall not affect the payments or expenses
that are eligible for payment or reimbursement in any other taxable
year, and (iii) Executive’s right to such payments or
reimbursement shall not be subject to liquidation or exchange for
any other benefit.
(c)
For purposes of Section 409A of the Code (including, without
limitation, for purposes of Treasury Regulation Section
1.409A-2(b)(2)(iii)), Executive’s right to receive
installment payments under the Agreement shall be treated as a
right to receive a series of separate payments and, accordingly,
each installment payment hereunder shall at all times be considered
a separate and distinct payment.
4.4.
Mitigation.
Executive shall not be
required to mitigate damages or the amount of any payment provided
under this Agreement by seeking other employment or otherwise, nor
shall the amount of any payment provided for under this Agreement
be reduced by any compensation earned by Executive as a result of
employment by another employer or by any retirement benefits
received by Executive after the date of the Covered Termination, or
otherwise.
ARTICLE V
PROPRIETARY INFORMATION OBLIGATIONS
5.1.
Agreement.
Executive agrees to
continue to abide by the Confidential Disclosure
Agreement.
5.2.
Remedies.
Executive’s duties under the
Confidential Disclosure Agreement shall survive termination of
Executive’s employment with the Company and the termination
of this Agreement. Executive acknowledges that a remedy at
law for any breach or threatened breach by Executive of the
provisions of the Confidential Disclosure Agreement, as well as
Executive’s obligations pursuant to Section 6.2 and Article 7
below, would be inadequate, and Executive therefore agrees that the
Company shall be entitled to seek injunctive relief in case of any
such breach or threatened breach.
ARTICLE VI
OUTSIDE ACTIVITIES
6.1.
Other Activities.
(a)
Except for activities disclosed in
Exhibit A
attached, Executive shall not,
during the term of this Agreement undertake or engage in any other
employment, occupation or business enterprise, other than ones in
which Executive is a passive investor, unless Executive obtains the
prior written consent of the Board.
(b)
Executive may engage in civic and not-for-profit activities so long
as such activities do not materially interfere with the performance
of Executive’s duties hereunder. In addition, Executive
shall be allowed to serve as a member of the board of directors of
up to two (2) other for profit entities at any time during the term
of this Agreement, which service shall not materially interfere
with the performance of Executive’s duties hereunder;
provided, however, that the Board, in its discretion, may require
that Executive resign from one or both of such director positions
if it determines that such resignation(s) would be in the best
interests of the Company.
6.2.
Competition/Investments.
During
the term of Executive’s employment by the Company, except on
behalf of the Company, Executive shall not directly or indirectly,
whether as an officer, director, stockholder, partner, proprietor,
associate, representative, consultant, or in any capacity
whatsoever engage in, become financially interested in, be employed
by or have any business connection with any other person,
corporation, firm, partnership or other entity whatsoever which
were known by Executive to compete directly with the Company,
throughout the world, in any line of business engaged in (or
planned to be engaged in) by the Company; provided, however, that
anything above to the contrary notwithstanding, Executive may own,
as a passive investor, securities of any competitor corporation, so
long as Executive’s direct holdings in any one such
corporation shall not in the aggregate constitute more than 1% of
the voting stock of such corporation.
ARTICLE VII
NONINTERFERENCE
In
addition to Executive’s obligations under the Confidential
Disclosure Agreement, Executive shall not for a period of one (1)
year following Executive’s termination of employment for any
reason, either on Executive’s own account or jointly with or
as a manager, agent, officer, employee, consultant, partner, joint
venturer, owner or stockholder or otherwise on behalf of any other
person, firm or corporation, directly or indirectly solicit or
attempt to solicit away from the Company any of its officers or
employees or offer employment to any person who is an officer or
employee of the Company;
provided,
however
, that a general advertisement to which an employee
of the Company responds shall in no event be deemed to result in a
breach of this Article 7. Executive also agrees not to harass
or disparage the Company or its employees, clients, directors or
agents or divert or attempt to divert any actual or potential
business of the Company. The provisions of this Article 7 shall
survive the termination or expiration of the applicable
Executive’s employment with the Company and shall be fully
enforceable thereafter. If it is determined by a court of
competent jurisdiction in any state that any restriction in this
Article 7 is excessive in duration or scope or is unreasonable or
unenforceable under the laws of that state, it is the intention of
the parties that such restriction may be modified or amended by the
court to render it enforceable to the maximum extent permitted by
the law of that state.
ARTICLE VIII
GENERAL PROVISIONS
8.1.
Notices.
Any notices provided hereunder must be in writing and shall be
deemed effective upon the earlier of personal delivery (including
personal delivery by facsimile) or the third day after mailing by
first class mail, to the Company at its primary office location and
to Executive at Executive’s address as listed on the Company
payroll.
8.2.
Tax
Withholding.
Executive acknowledges that all amounts
and benefits payable under this Agreement are subject to deduction
and withholding to the extent required by applicable
law.
8.3.
Severability.
Whenever possible,
each provision of this Agreement will be interpreted in such manner
as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in
any jurisdiction, such invalidity, illegality or unenforceability
will not affect any other provision or any other jurisdiction, but
this Agreement will be reformed, construed and enforced in such
jurisdiction as if such invalid, illegal or unenforceable
provisions had never been contained herein.
8.4.
Waiver.
If either party should
waive any breach of any provisions of this Agreement, they shall
not thereby be deemed to have waived any preceding or succeeding
breach of the same or any other provision of this
Agreement.
8.5.
Complete
Agreement.
This Agreement constitutes the entire
agreement between Executive and the Company and is the complete,
final, and exclusive embodiment of their agreement with regard to
this subject matter, and will supersede all prior agreements,
understandings, discussions, negotiations and undertakings, whether
written or oral, between the parties with respect to the subject
matter hereof, including without limitation, the Prior
Agreement. This Agreement is entered into without reliance on
any promise or representation other than those expressly contained
herein or therein, and cannot be modified or amended except in a
writing signed by an officer of the Company and
Executive.
8.6.
Counterparts.
This Agreement may
be executed in separate counterparts, any one of which need not
contain signatures of more than one party, but all of which taken
together will constitute one and the same Agreement.
8.7.
Headings.
The headings of the
sections hereof are inserted for convenience only and shall not be
deemed to constitute a part hereof nor to affect the meaning
thereof.
8.8.
Successors and Assigns.
This
Agreement is intended to bind and inure to the benefit of and be
enforceable by Executive and the Company, and their respective
successors, assigns, heirs, executors and administrators, except
that Executive may not assign his rights or delegate his duties or
obligations hereunder without the prior written consent of the
Company.
8.9.
Arbitration.
Unless
otherwise prohibited by law or specified below, all disputes,
claims and causes of action, in law or equity, arising from or
relating to this Agreement or its enforcement, performance, breach,
or interpretation shall be resolved solely and exclusively by final
and binding arbitration held in Illinois in conformity with the
then-existing employment arbitration rules and Illinois law.
The arbitrator shall: (a) provide adequate discovery for the
resolution of the dispute; and (b) issue a written arbitration
decision, to include the arbitrator’s essential findings and
conclusions and a statement of the award. However, nothing in
this section is intended to prevent either party from obtaining
injunctive relief in court to prevent irreparable harm pending the
conclusion of any such arbitration. The Company shall bear
the costs of any such arbitration.
8.10.
Executive
Acknowledgement.
Executive acknowledges that (a)
Executive has consulted with or has had the opportunity to consult
with independent counsel of Executive’s own choice concerning
this Agreement, and has been advised to do so by the Company, and
(b) that Executive has read and understands the Agreement, is fully
aware of its legal effect, and has entered into it freely based on
his own judgment.
8.11.
Choice
of Law.
All questions concerning the construction,
validity and interpretation of this Agreement will be governed by
the law of the State of Illinois without regard to the conflicts of
law provisions thereof.
In Witness Whereof,
the parties have executed this Agreement
as of the date first written above.
On
behalf of Monopar Therapeutics Inc.
/
s/
Chandler D. Robinson
Chandler
D. Robinson
Chief
Executive Officer
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Accepted
and Agreed:
|
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/s/ Kim R. Tsuchimoto
Kim
R. Tsuchimoto
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Exhibit A
6.1(a) Other
Activities.
50% of full-time employment plus
benefits at Mercaptor Discoveries Inc. as Chief Financial Officer,
Secretary, Treasurer and Co-Founder
25% of full-time employment (paid
and unpaid) at DNAcheckup (nonprofit) as Chief Financial Officer,
Secretary and Treasurer
CONSULTING AGREEMENT
This Consulting Agreement (herein referred to
as
"Agreement")
is made and entered into as of this
December 1
,
2016 (the
"Effective
Date")
,
by and between Monopar Therapeutics Inc. (herein
referred to as
"Monopar"),
a Delaware limited liability corporation. located
at corporation
,
located at 5 Revere Dr., Suite 200,
Northbrook, IL 60062, and Andrew P. Mazar (herein referred
to as "MAZAR") who resides at # (each
herein referred to as
"Party"
and collectively as
"
Parties'').
RECITALS
WHEREAS
,
MAZAR
specializes in the field of pre-clinical and clinical
developmen
t,
including but not limited to:
pre-clinical study design, clinical trial design, clinical
operations
,
manufacturing operations, regulatory
strategy
,
drug candidate evaluation, and investor due
diligence
;
and
WHEREAS, Monopar desires to contract with MAZAR to
provide certain consultation services
,
as requested
by Monopar, and MAZAR wishes to provide such services to
Monopar
,
upon the terms and conditions set forth
below.
NOW, THEREFORE, in consideration of the premises
and mutual covenants contained herein
,
the Parties
agree as follows:
1.
Consulting
Arrangement
.
MAZAR
agrees to perform consulting services as described herein upon the
terms and conditions herein set forth
.
2.
Term of
Agreemen
t Subject to the
provision for early termination set forth below in
Section S
of this Agreement, this Agreement
shall commence as of the Effective Date and shall continue for a
period of twelve (12) months from the Effective Date (the
"Term"
)
.
Either Party may terminate this Agreement without
cause with 10-days
’
prior
written notice.
3.1
Specific
Duties
. MAZAR shall provide
consulting services to Monopar, such duties to include
pre
-
clinical study design, clinical trial design,
clinical operations overs
i
ght,
manufacturing oversight, regulatory strategy, drug candidate
evaluation, and investor due diligence with such other specific
requirements as Monopar may specify from time to time during the
Term (herein referred to as the
"Services
"
).
3.2
MAZAR
'
s
Obligations
.
MAZAR
shall be diligent in the performance of Service
s,
and be
professional in his commitment to meeting his obligations
hereunder
.
MAZAR represents and warrants that MAZAR is not
party to an
y
other existing agreement, which any of
them would prevent him from entering into this Agreement or which
would adversely affect this Agreement. MAZAR shall not perform
Services for any other individuals or entities in direct
competition with Monopar
,
except as
provided for by mutual written agreement o
f
the
Parties
.
MAZAR shall not perform services for any party
which would require or facilita
te
t
he unauthorized disclosure of any confidential or
proprietary information of Monopar.
3.3
Reporting
.
MAZAR will report to and liaise with Chandler Robinson, M.D., and
Christopher M. Starr, Ph.D. and/or any other assigned Monopar
employee
or
consultant as may be designated in writing by
Monopar.
3.4
Compensation
.
Monopar shall pay MAZAR
a
cash
retainer of $25,000 per month not to exceed $300,000 for the period
of this Agreement, unless modified in writing by mutual agreement
amongst the Parties.
MAZAR
shall not be reimbursed, and is responsible for the facilities and
equipment necessary to perform Services required under this
Agreement.
4.
Reimbursement of Other
Expenses
. So long as Monopar's
prior approval
has
been obtained, Monopar shall
promptly
reimburse
MAZAR for all direct
expenses
incurred
in
providing
the Services to Monopar pursuant to this Agreement, including
travel, meals
and lodging.
The
invoice submitted by MAZAR
pursuant to this
Section 4
shall also include a detail of all reimbursable
expenses incurred during the period covered by such
invoice.
5.
Termination of
Agreement
-
Failure to
perform
. In the event that
MAZAR
ceases
to perform the Services or breaches
its obligations as required hereunder for
any reason,
Monopar shall have the right to immediately
terminate this Agreement upon notice to MAZAR and to enforce such
other rights and remedies as it may have as a result
of said
breach.
6.
Certain
Liabilities
. It is understood
and agreed that MAZAR
shall
be
acting
as
an
independent contractor and not as an
agent or employee of, or partner, joint
venturer or
in
any other relationship with Monopar MAZAR will be solely
responsible
for all
his insurance, employment taxes, FICA
taxes and all obligations
to
governments
or
other
organizations arising out of this consulting assignment. MAZAR
acknowledges
that no
income, social security or other taxes
shall be withheld or accrued by
Monopar for
MAZAR
'
s
benefit. MAZAR assumes all risks and hazards
encountered in
the
performance of duties under this
Agreement. Unless Monopar has provided prior written approval,
MAZAR shall not
use
any sub-contractors to perform MAZAR's
obl
i
gations
hereunder. MAZAR shall be solely responsible for
any and all injuries, including death, to all persons and any and
all
loss
or damage to property, which may result from
performance under
this
Agreement.
7.
Indemnities. MAZAR
hereby
agrees to indemnify Monopar and hold
Monopar harmless
from and against all claims
(whether asserted by a person,
firm
,
entity or
governmental unit
or otherwise). liabilities,
losses,
damages,
expenses, charges
and
fees
which
Monopar
may
sustain or incur arising
out of or attributable to any breach, gross
negligence or willful
misconduct by MAZAR, as applicable, in the
performance under this
Agreement. Monopar
hereby agrees to indemnify MAZAR and hold
MAZAR
harmless from
and against all
liabilities losses, damages,
expenses
,
charges and fees which
MAZAR may sustain or
incur by
reason
of any
claim
which
may be
asserted against MAZAR
by
any person,
firm
,
corporation or
governmental
unit and
which
may
arise out
of or be attributable to an
y
gr
o
s
s
negligence or willful misconduct by Monopar or its
employees or contractor
s,
as
applicable, in the performance of this
Agreement.
8.
Warranties
.
The Services shall be performed in a
professional manner, consi
s
tent with
industry standards. In performing the Services, MAZAR shall not
make an
y
unauthorized use of any confidential or
proprietary information of any other party or infringe
th
e
intellectual property rights of any other
party.
9.
Arbitration
.
Any controversy or claim between Monopar and MAZAR
ari
s
ing out of or relating to this Agreement, or the
breach thereof
,
shall be submitted to arbitration in
accordance with the rules of the American Arbitration Association.
The s
i
te of the arbitration shall be Chicago, Illinois,
and except as provided herein the arbitration shall be conducted in
accordance with the Rules of the American Arbitration Association
prevailing at the time the demand for arbitration is made
hereunder
.
At leas
t
one member
of the arbitration panel shall be an expert knowledgeable in the
area of biopharmaceutical clinical development. Judgment upon any
award rendered by the arbitrator(s) may be entered in any court of
competent jurisdiction and shall be binding and final. The cost of
ar
b
itration shall be borne by the losing
Party
,
as determined by the
arbitrator(s)
.
10.
Confidential
Information
.
MAZAR has executed the attached
confidential disclosure agreement referenced herein as
Appendix A
prior to commencement of the
Services
.
MAZAR hereby represents and warrants
that the obligations thereunder shall be
binding.
11.
Inventions
.
MAZAR agrees that all ideas, developments
,
suggestions
and inventions conceived or reduced to practice arising out of or
during the course of performance under this Agreement shall be the
exclusive property of Monopar and shall be promptly communicated
and assigned to Monopar. MAZAR shall require any employees of or
other parties contracted by MAZAR to disclose the same to MAZAR and
to be bound by the provisions of this paragraph. During the period
of this Agreement and thereafter at any reasonable time when called
upon to do so by Monopar
,
MAZAR shall
require an
y
emp
l
oyees of or
other parties contracted by MAZAR to execute patent applications,
assignments to Monopar (or any designee of Monopar) and other
papers and to perform acts which Monopar believes necessary to
secure to Monopar full protection and ownership of the rights in
and to the services performed by MAZAR and/or for the preparation,
filing and prosecution of applications for patents or inventions
made by any employees of or other parties contracted by MAZAR
hereunder. The decision to file patent applications on inventions
made by any employees of or other parties contracted by MAZAR shall
be made by Monopar and shall be for such countries, as Monopar
shall elect. Monopar agrees to bear all the expense in connection
with the preparation
,
filing and prosecution of applications
for patents and for all matters provided in this paragraph
requiring the time and/or assistance of MAZAR as to such
inventions
.
12.1
Notice
.
Any notices to be given hereunder by
either Party to the other may be effectuated,
in
writing
,
by personal
delivery or by mail, registered or certified,
postage prepaid
,
with return
receipt requested. Mailed notices shall be addressed to the parties
at the following addresses:
If to
Monopar:
If to MAZAR:
Monopar Therapeutics Inc. 5 Revere Dr., Suite 200
Northbrook, IL, 60062
Attention: Chandler Robinson, MD MBA MSc
Email: #
Andrew P. MAZAR
#
Email: #
or at such other addresses as either Monopar or
MAZAR may designate by written notice to each other. Notices
delivered personally shall be deemed duly gi
v
en on the
date of actual receipt; mailed notices shall be deemed duly given
as of the fourth day after th
e
date so
mailed.
12.2
Waiver of
Breach
.
The waiver by either Party to a breach of any
provision in thi
s
Agreement cannot operate or be
construed as a waiver of any subsequent breach by either
Party.
12.3
Severability
.
If any provision of this Agreement is determined by a court of
competent jurisdiction to be invalid or unenforceable, that
provision shall be deemed modified to the extent necessary to make
it valid or enforceable
,
or if it cannot be so modified, then
severed, and the remainder of the Agreement shall continue in full
force and effect as if the Agreement had been signed with the
invalid portion so modified or severed.
12.4
Choice of
Law
. This Agreement has been
made and entered into in the State of Illinois, and the laws of
such state, excluding its choice of law rules
,
shall govern
the validity and interpretation of this Agreement and the
performance due hereunder
.
The losing
party in any dispute hereunder shall pay the
attorneys
'
fees and disbursements of the prevailing
party
.
12.5
Integration
.
The drafting, execution and delivery of this Agreement by the
Parties have been induced by no representations
,
statements
,
warranties
or agreements other than those expressed herein. This Agreement
embodies the entire understanding of the Parties
,
and there
are no further or other agreements or understandings, written or
oral, in effect between the Parties relating to the subject matter
hereof unless expressly referred to herein
.
12.6
Modification
.
This Agreement may not be modified unless such is in writing and
signed by both Parties to this Agreement.
12.7
Assignment
.
MAZAR shall
not be
permitted to assign this Agreement to
any other person or entity without the prior written consent of
Monopar. MAZAR hereby agrees that Monopar shall be permitted
to
assign this Agreement
to
any
affiliate of Monopar. This Agreement shall be binding upon
and
s
hall
inure
to
the
benefit
of
the
successors and permitted assigns of the
parties.
12.8
Survival
.
The
provisions
of
Sections 7, 8, 9, 10, and
11
shall
survive
expiration or termination of this Agreement for
any reason.
Expiration
or termination of this Agreement shall
not affect Monopar's obligations to pay any amounts that may then
be due to MAZAR
IN WITNESS WHEREOF, the Parties hereto
have
executed this Agreement as of the day and year
first above written
.
ACCEPTED AND AGREED
TO:
.
Andrew P.
Mazar
MONOPAR THERAPEUTICS INC.
/s/ Andrew
P. Mazar
/s/ Chandler D. Robinson
BY: ANDREW P.
MAZAR
BY: CHANDLER D. ROBINSON
ITS:
CHIEF EXECUTIVE OFFICER
APPENDIX A
See exec
uted CDA attached
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment
Agreement (the
"Agreement")
is entered into as of
November 1, 2017, by and between Andrew P. Mazar
("Executive")
and Monopar
Therapeutics Inc. (the
"Company").
Whereas,
the Company desires to employ
Executive as its Executive Vice President, Research and Development
and Chief Scientific Officer, effective as of November 1, 2017
(the
"Effective
Date"),
and Executive desires
to serve in such capacity, pursuant to the terms and conditions set
forth in this Agreement; and
Now,
Therefore,
in consideration of
the mutual promises and covenants contained herein, it is hereby
agreed by and between the parties hereto as
follows:
ARTICLE
I
DEFINITIONS
For
purposes of the Agreement, the following terms are defined as
follows:
1.1.
"Board"
means the Board of Directors of
the Company.
1.2.
"Cause"
means any of the following events
described below:
(a)
Executive's
conviction of a felony or other crime involving moral
turpitude;
(b)
any
willful act or acts of dishonesty undertaken by Executive and
intended to result in substantial gain or personal enrichment of
Executive, Executive's family or any third party at the expense of
the Company;
(c)
any
willful act of gross misconduct which is materially and
demonstrably injurious to the Company; and/or
(d)
Executive's
inability under applicable law to continue to work lawfully in the
United States.
For
the purpose of this Agreement, no act, or failure to act, by
Executive shall be considered "willful" if done, or omitted to be
done, by him in good faith and in the reasonable belief that his
act or omission was in the best interest of the Company and/or
required by applicable law.
1.3.
"Change in Control"
means the occurrence
of any of the following events: (i) any sale or exchange of the
capital stock by the stockholders of the Company in one
transaction
or series of related transactions where more than
fifty percent (50%) of the outstanding voting power of the Company
is acquired by a person or entity or group of related persons or
entities; or (ii) any reorganization, consolidation or merger of
the Company where the outstanding voting securities of the Company
immediately before the transaction represent or are converted into
less than fifty percent (50%) of the outstanding voting power of
the surviving entity (or its parent corporation) immediately after
the transaction; or
(iii)
the consummation of any transaction or series of
related transactions that results in the sale of all or
substantially all of the assets of the Company; or (iv) any
"person" or "group" (as defined in the Securities Exchange Act of
1934, as amended (the "Exchange Act") becoming the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act) directly
or indirectly of securities representing more than fifty percent
(50%) of the voting power of the Company then outstanding. Except
that any change in the beneficial ownership of the securities of
the Company as a result of a private financing of the Company that
is approved by the Board, shall not be deemed to be a Change in
Control.
1.4.
"Change in Control
Multiple"
shall mean one and a half
(1.5).
1.5.
"Change in Control
Period"
means
that period commencing on the consummation of a Change in Control
and ending on the first anniversary thereof.
1.6.
COBRA"
means the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended.
1.7.
"Code"
means the Internal Revenue Code
of 1986, as amended.
1.8.
"Company"
means Monopar Therapeutics Inc.
or any successor thereto.
1.9.
"Confidential Disclosure
Agreement"
means the Confidential Disclosure
Agreement entered into between Executive and the
Company.
1.10.
"Covered Termination"
means (a) an Involuntary
Termination Without Cause or
(b)
a voluntary termination for Good Reason, provided that the
termination constitutes a Separation
from Service.
1.11.
"Good Reason"
means
Executive
'
s resignation as a result of a
Good Reason Condition. In order to resign for Good Reason,
Executive must provide written notice to the Company of the
existence of the Good Reason Condition within thirty (30) days of
the initial existence of such Good Reason Condition. Upon receipt
of such notice of the Good Reason Condition, the Company will be
provided with a period of thirty (30) days during which it may
remedy the Good Reason Condition and not be required to provide for
the payments and benefits described in Section 4 as a result of
such proposed resignation due to the Good Reason Condition
specified in the notice. If the Good Reason Condition is not
remedied within the period specified in the preceding sentence,
Executive may resign for
Good
Reason based on the Good Reason Condition specified in the notice,
provided that such resignation must occur within sixty (60) days
after the initial existence of such Good Reason
Condition.
1.12.
"Good Reason Condition"
means that any of the
following are undertaken without Executive's express written
consent:
(a)
a
material reduction in Executive's Base Salary;
(b)
a
material diminution in Executive's responsibilities;
(c)
the
Company's material breach of any material term of this Agreement;
or
(d)
a
requirement that Executive relocate to an office that would
increase Executive's one-way commute distance by more than fifty
(50) miles based on Executive's primary residence at the time such
relocation is announced.
1.13.
"Involuntary Termination
Without Cause"
means Executive's dismissal or
discharge by the Company other than for Cause. The termination of
Executive's employment as a result of Executive's death or
inability to perform the essential functions of his job due to
disability will not be deemed to be an Involuntary Termination
Without Cause.
1.14.
"Separation from
Service"
means
Executive's termination of employment or service where such
termination of employment or service constitutes a "separation from
service" within the meaning of Treasury Regulation Section
1.409A-l(h).
ARTICLE
II
EMPLOYMENT BY THE COMPANY
2.1.
Position and Duties.
Subject to terms set
forth herein, as of the Effective Date, Executive shall serve as
the Company's Executive Vice President, Research and Development
and Chief Scientific Officer, and perform such duties as are
customarily associated with the position of Executive Vice
President, Research and Development and Chief Scientific Officer,
and such other duties as are assigned to Executive by the Chief
Executive Officer or the Board. During the term of Executive's
employment with the Company, Executive will devote Executive's best
efforts and substantially all of Executive's business time and
attention (except for vacation periods and reasonable periods of
illness or other incapacities permitted by the Company's general
employment policies, if any, or as otherwise set forth in this
Agreement) to the business of the Company.
2.2.
Employment at Will.
Both the Company and
Executive shall have the right to terminate Executive's employment
with the Company at any time, with or without
Cause,
and
without prior notice. If Executive's employment with the Company is
terminated, Executive will be eligible to receive severance
benefits to the extent provided in this Agreement.
2.3.
Employment Policies.
The employment relationship between
the parties shall also be governed by the general employment
policies and practices of the Company, if any, including those
relating to protection of confidential information and assignment
of inventions, except that when the terms of this Agreement differ
from or are in conflict with the Company's general employment
policies or practices, this Agreement shall
control.
ARTICLE
III
COMPENSATION
3.1.
Base
Salary.
As of the Effective
Date, Executive shall receive for services to be rendered hereunder
an annual base salary of $350,000
("Base Salary"),
payable on the regular payroll dates
of the Company, subject to increase in the sole discretion of the
Board.
3.2.
Sign-on
Bonus.
Executive shall be paid
a one-time sign-on bonus of $8,750 (gross before taxes) payable
with Executive's first regular paycheck.
3.3.
Annual
Bonus.
Executive is subject to
an annual bonus at the discretion of the Board, which bonus is
initially being targeted for up to 40% of the annualized amount of
Base Salary.
3.4.
Standard
Company Benefits.
Executive
shall be entitled to all rights and benefits for which Executive is
eligible under the terms and conditions of the standard Company
benefits and compensation practices, if any, that may be in effect
from time to time and are provided by the Company to its executive
employees generally. Executive shall be entitled each year to four
(4) weeks leave for vacation at full pay, provided, that the
maximum amount Executive may have accrued at any point in time is
four (4) weeks (meaning that once Executive has accrued four (4)
weeks, Executive will not accrue any additional vacation time until
he takes vacation and falls below the four (4) week accrual cap).
Executive shall also be entitled to reasonable holidays and illness
days with full pay in accordance with the policies applicable to
the Company and its affiliates, if any, from time to time in
effect. Employee acknowledges and agrees that in order to maintain
flexibility, the Company and its affiliates have the right to amend
or terminate any employee benefit plan at any time. Until such time
as the Company obtains healthcare benefits for eligible employees
and Executive elects to opt in to such benefits, Executive shall be
entitled to an additional salary of at least $4,583.33 per month or
such greater amount as determined by the Board.
3.5.
Stock
Options.
Subject to approval by
the Board, Executive may be granted options to purchase shares of
the Company's common stock with an exercise price per
share
as
determined by the Compensation Committee or similar function of the
Board.
3.6.
Expenses.
The Company will reimburse Executive
for all reasonable and necessary expenses incurred by Employee in
connection with the Company's business, provided that such expenses
incurred and are properly documented and accounted for in
accordance with the policy of the Company and requirements of the
Internal Revenue Service.
ARTICLE IV
SEVERANCE AND CHANGE IN CONTROL BENEFITS
4.1.
Severance Benefits.
Upon Executive's termination of
employment, Executive shall receive any accrued but unpaid Base
Salary and other accrued and unpaid compensation, including any
Annual Bonus that has been earned with respect to a prior year, but
remains unpaid as of the date of the termination.
If
the termination is due to a Covered
Termination or permanent disability, provided that Executive first
returns all Company property in his possession and, within sixty
(60) days following the Covered Termination, executes and does not
revoke an effective general release of all claims against the
Company and its affiliates in a form reasonably acceptable to the
Company and Executive (a
"Release of Claims"),
Executive shall also be entitled to
receive the following severance benefits described in this Section
4.1.
(a)
Covered Termination Not Related
to a Change in Control.
If
Executive's employment terminates due
to a Covered Termination which occurs outside of a Change in
Control Period, Executive shall receive the
following:
(i)
An
amount equal to twelve (12) months of Executive's Base Salary
payable in substantially equal installments in accordance with the
Company's normal payroll policies, if any, less applicable
withholdings, with such installments to commence as soon as
administratively practicable following the date the Release of
Claims is not subject to revocation and, in any event, within sixty
(60) days following the date of the Covered
Termination.
(ii)
If
Executive elects to
receive continued healthcare coverage pursuant to the provisions of
COBRA, the Company shall directly pay, or reimburse Executive for,
the premium for Executive and Executive's covered dependents
through the earlier of (i) the first anniversary of the date of
Executive's termination of employment and
(ii)
the date Executive and
Executive's covered dependents, if any, become eligible for
healthcare coverage under another employer's plan(s).
Notwithstanding the foregoing, (i) if any plan pursuant to which
such benefits are provided is not, or ceases prior to the
expiration of the period of continuation coverage to be, exempt
from the application of Section 409A of the Code under Treasury
Regulation Section l.409A-l(a)(5), or (ii) the Company is otherwise
unable to continue to cover Executive under its group health plans
without penalty under
applicable
law (including without limitation, Section 2716 of the Public
Health Service Act), then, in either case, an amount equal to each
remaining Company subsidy shall thereafter be paid to Executive in
substantially equal monthly installments. After the Company ceases
to pay premiums pursuant to this Section 4.l(a)(ii), Executive may,
if eligible, elect to continue healthcare coverage at Executive's
expense in accordance with the provisions of COBRA.
(iii)
All
of Employee's vested options or stock appreciation rights with
respect to the Company's common stock shall remain exercisable
until the first anniversary of Executive's termination of
employment (or, if earlier, the maximum period specified in the
award documents and plans governing such options or stock
appreciation rights, as applicable, assuming Executive's employment
had not terminated).
(b)
Covered Termination Related to
a Change in Control.
If
Executive's
employment terminates due to a Covered Termination that occurs
during a Change in Control Period, Executive shall receive the
following:
(i)
Executive shall be entitled to
receive an amount equal to the Change in Control Multiplier
multiplied by the sum of:
(i)
Executive's Base
Salary and (ii) Executive
'
s target Annual Bonus for the
fiscal year of Executive's termination, in each case, at the rate
equal to the higher of (x) the rate in effect immediately prior to
Executive's termination of employment or (y) the rate in effect
immediately prior to the Change in Control payable in a cash lump
sum, less applicable withholdings, as soon as administratively
practicable following the date the Release of Claims is not subject
to revocation and, in any event, within sixty (60) days following
the date of the Covered Termination.
(ii)
If
Executive
elects to receive continued healthcare coverage pursuant to the
provisions of COBRA, the Company shall directly pay, or reimburse
Executive for, the premium for Executive and Executive's covered
dependents through the earlier of (i) the date that is that number
of years equal to the Change in Control Multiplier following the
date of Executive's termination of employment and (ii) the date
Executive and Executive's covered dependents, if any, become
eligible for healthcare coverage under another employer's plan(s).
Notwithstanding the foregoing, (i) if any plan pursuant to which
such benefits are provided is not, or ceases prior to the
expiration of the period of continuation coverage to be, exempt
from the application of Section 409A of the Code under Treasury
Regulation Section 1.409A-l(a)(5), or (ii) the Company is otherwise
unable to continue to cover Executive under its group health plans
without penalty under applicable law (including without limitation,
Section 2716 of the Public Health Service Act), then, in either
case, an amount equal to each remaining Company subsidy shall
thereafter be paid to Executive in substantially equal monthly
installments. After the Company ceases to pay premiums pursuant to
this Section 4.l(b)(ii), Executive may, if eligible, elect to
continue healthcare coverage at Executive's expense in accordance
with the provisions of COBRA.
(iii)
Each
outstanding equity award, including, without limitation, each stock
option and restricted stock award, held by Executive shall
automatically become vested and, if applicable, exercisable and any
forfeiture restrictions or rights of repurchase thereon shall
immediately lapse, in each case, with respect to one hundred
percent (100%) of the shares subject thereto. To the extent vested
after giving effect to the acceleration provided in the preceding
sentence, each stock option held by Executive shall remain
exercisable until the earlier of the original expiration date for
such stock option or the second anniversary of Executive's Covered
Termination.
(c)
Termination for Death or
Disability.
If
Executive's employment is terminated
due to death or permanent disability where the Company makes a
determination in good faith that, due to a mental or physical
incapacity, Executive has been unable to perform his duties under
this Agreement for a period of not less than six (6) consecutive
months or 180 days in the aggregate in any 12-month period,
Executive shall receive the following:
(i)
An
amount equal to three (3) months
of Executive's Base Salary payable in substantially equal
installments in accordance with the Company's normal payroll
policies, less applicable withholdings, with such installments to
commence as soon as administratively practicable following the date
the Release of Claims is not subject to revocation and, in any
event, within sixty (60) days following the date of the Covered
Termination.
(ii)
If
Executive (or in the
event of death, his designee) elects to receive continued
healthcare coverage pursuant to the provisions of COBRA, the
Company shall directly pay, or reimburse Executive
for
,
the premium for
Executive and Executive's covered dependents through the earlier of
(i) the three (3) month anniversary of the date of Executive's
termination of employment and
(ii)
the date Executive and
Executive's covered dependents, if any, become eligible for
healthcare coverage under another employer's
plan(s)
.
Notwithstanding the
foregoing,
(i)
if any plan pursuant
to which such benefits are provided is not, or ceases prior to the
expiration of the period of continuation coverage to be, exempt
from the application of Section 409A of the Code under Treasury
Regulation Section l.409A-l(a)(5), or
(ii)
the Company is otherwise unable
to continue to cover Executive under its group health plans without
penalty under applicable law (including without limitation, Section
2716 of the Public Health Service Act), then, in either case, an
amount equal to each remaining Company subsidy shall thereafter be
paid to Executive in substantially equal monthly
installments
.
After the Company ceases to pay
premiums pursuant to this Section 4.l(b)(ii), Executive may, if
eligible, elect to continue healthcare coverage at Executive's
expense in accordance the provisions of COBRA.
4.2.
280G Provisions.
Notwithstanding anything in this
Agreement to the contrary
,
if any
payment or dis
tribution
Executive would receive pursuant to this Agreement or
otherwise
("Payment")
would (a) constitute a "parachute
paymen
"
t within the meaning of
Section 280G of the Code, and
(b)
but for this sentence, be subject to the excise
tax imposed
by Section 4999 of the Code (the
"Excise
Tax"),
then such Payment shall
either be
(i)
delivered in full, or
(ii)
delivered as to such lesser extent
which would result in no portion of such Payment being subject to
the Excise Tax, whichever of the foregoing amounts, taking into
account the applicable federal, state and local income taxes and
the Excise Tax, results in the receipt by Executive on an after-tax
basis, of the largest payment, notwithstanding that all or some
portion the Payment may be taxable under Section 4999 of the Code.
The accounting firm engaged by the Company for general audit
purposes as of the day prior to the effective date of the Change in
Control shall perform the foregoing calculations. The Company shall
bear all expenses with respect to the determinations by such
accounting firm required to be made hereunder. The accounting firm
shall provide its calculations to the Company and Executive within
fifteen (15) calendar days after the date on which Executive's
right to a Payment is triggered (if requested at that time by the
Company or Executive) or such other time as requested by the
Company or Executive. Any good faith determinations of the
accounting firm made hereunder shall be final, binding and
conclusive upon the Company and Executive. Any reduction in
payments and/or benefits pursuant to this Section 4.2 will occur in
the following order:
(1)
reduction of cash payments; (2) cancellation of
accelerated vesting of equity awards other than stock
options;
(3)
cancellation of accelerated vesting of
stock options; and
(
4) reduction
of other benefits payable to Executive.
(a)
Notwithstanding any provision to
the contrary in this Agreement, if Executive is deemed at the time
of his Separation from Service to be a
"specified
employee" for purposes of Section
409A(a)(2)(B)(i) of the Code, to the extent delayed commencement of
any portion of the benefits to which Executive is entitled under
this Agreement is required in order to avoid a prohibited
distribution under Section 409A(a)(2)(B)(i) of the Code which would
subject Executive to a tax obligation under Section 409A of the
Code, such portion of Executive's benefits shall not be provided to
Executive prior to the earlier of
(i)
the expiration of the
six- month period measured from the date of the Executive's
Separation from Service or
(ii)
the date of
Executive's
death. Upon the expiration of the
applicable Code Section 409A(a)(2)(B)(i) period, all payments
deferred pursuant to this Section 4.3(a) shall be paid in a lump
sum to Executive, and any remaining payments due under the
Agreement shall be paid as otherwise provided
herein.
(b)
Any reimbursements payable to
Executive pursuant to the Agreement shall be paid to
Executive
no later than 30 days
after
Executive
provides the Company with a
written request for reimbursement, and to the extent that any such
reimbursements are deemed to constitute
"nonqualified
deferred compensation" within the
meaning of Section 409A of the Code
(i)
such amounts shall be paid or
reimbursed to Executive promptly
,
but in no event later than
December 31 of the year following the year in which the expense is
incurred,
(ii)
the amount of any
such payments eligible for reimbursement in one year shall not
affect the payments or expenses that are eligible for payment or
reimbursement in any other taxable
year,
and (iii) Executive's right to such payments or reimbursement shall
not be subject to liquidation or exchange for any other
benefit.
(c)
For
purposes of Section 409A of the Code (including, without
limitation, for purposes of Treasury Regulation Section
1.409A-2(b)(2)(iii)), Executive's right to receive installment
payments under the Agreement shall be treated as a right to receive
a series of separate payments and, accordingly, each installment
payment hereunder shall at all times be considered a separate and
distinct payment.
4.4.
Mitigation.
Executive shall not be required
to mitigate damages or the amount of any payment provided under
this Agreement by seeking other employment or otherwise, nor shall
the amount of any payment provided for under this Agreement be
reduced by any compensation earned by Executive as a result of
employment by another employer or by any retirement benefits
received by Executive after the date of the Covered Termination, or
otherwise.
ARTICLE V
PROPRIETARY INFORMATION OBLIGATIONS
5.1.
Agreement.
Executive agrees to continue to abide
by the Confidential Disclosure Agreement.
5.2.
Remedies.
Executive's duties under the
Confidential Disclosure Agreement shall survive termination of
Executive's employment with the Company and the termination of this
Agreement. Executive acknowledges that a remedy at law for any
breach or threatened breach by Executive of the provisions of the
Confidential Disclosure Agreement
,
as well as
Executive's obligations pursuant to Section 6.2 and Article 7
below
,
would be inadequate, and Executive therefore
agrees that the Company shall be entitled to seek injunctive relief
in case of any such breach or threatened breach
.
ARTICLE VI OUTSIDE ACTIVITIES
(a)
Executive
shall not, during the term of this Agreement undertake or engage in
any other employment, occupation or business enterprise, other than
ones in which Executive is a passive investor, unless he obtains
the prior written consent of the Board.
(b)
Executive
may engage in civic and not-for-profit activities so long as such
activities do not materially interfere with the performance of
Executive's duties hereunder. In addition, Executive shall be
allowed to serve as a member of the board of directors of up to two
(2) other for profit entities at any time during the term of
this
Agreement,
which service shall not materially interfere with the performance
of Executive's duties hereunder; provided, however, that the Board
may require that Executive resign from one or both of such director
positions if it can reasonably and in good faith demonstrate that
such resignation(s) would be in the best interests of the Company
in a significant and material way.
6.2.
Competition.
Executive agrees that, from the
date hereof until a period of twelve
(12)
months following the date of termination of Executive's employment
with the Company, Executive will not directly or indirectly, either
as an employee, employer, consultant, agent, principal, partner,
corporate officer, director, or in any other individual or
representative capacity, engage or participate in any "Competitive
Business" anywhere in the United States of America. As used herein,
a "Competitive Business" is defined as any business developing uPAR
antibodies to treat cancer, or clonidine to treat oral
mucositis.
ARTICLE VII NONINTERFERENCE
In addition to Executive's obligations under the
Confidential Disclosure Agreement, Executive shall not for a period
of one (1) year following Executive's termination of employment for
any reason, either on Executive's own account or jointly with or as
a manager, agent, officer, employee, consultant, partner, joint
venturer, owner or stockholder or otherwise on behalf of any other
person, firm or corporation, directly or indirectly solicit or
attempt to solicit away from the Company any of its officers or
employees or offer employment to any person who is an officer or
employee of the Company;
provided,
however,
that a general
advertisement to which an employee of the Company responds shall in
no event be deemed to result in a breach of this Article 7.
Executive also agrees not to harass or disparage the Company or its
employees, clients, directors or agents or divert or attempt to
divert any actual or potential business of the Company. The
provisions of this Article 7 shall survive the termination or
expiration of the applicable Executive's employment with the
Company and shall be fully enforceable thereafter.
If
it is determined by a court of
competent jurisdiction in any state that any restriction in this
Article 7 is excessive in duration or scope or is unreasonable or
unenforceable under the laws of that state, it is the intention of
the parties that such restriction may be modified or amended by the
court to render it enforceable to the maximum extent permitted by
the law of that state.
ARTICLE VIII GENERAL PROVISIONS
8.1.
Notices.
Any notices provided hereunder
must be in writing and shall be deemed effective upon the earlier
of personal delivery (including personal delivery by facsimile) or
the third day after mailing by first class mail, to the Company at
its primary office location and to Executive at Executive's address
as listed on the Company payroll.
8.2.
Tax Withholding.
Executive acknowledges that all
amounts and benefits payable under this Agreement are subject to
deduction and withholding to the extent required by applicable
law.
8.3.
Severability.
Whenever possible, each prov1s1on of
this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of
this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction,
such invalidity, illegality or unenforceability will not affect any
other provision or any other jurisdiction, but this Agreement will
be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provisions had never been
contained herein.
8.4.
Waiver.
If either party should waive any breach of any
provisions of this Agreement
,
they shall
not thereby be deemed to have waived any preceding or succeeding
breach of the same or any other provision of this
Agreement.
8.5.
Complete Agreement.
This Agreement constitutes the entire
agreement between Executive and the Company and is the complete,
final, and exclusive embodiment of their agreement with regard to
this subject matter, and will supersede all prior
agreements
,
understandings, discussions, negotiations and
undertakings, whether written or oral, between the parties with
respect to the subject matter hereof, including without limitation,
the Prior Agreement. This Agreement is entered into without
reliance on any promise or representation other than those
expressly contained herein or therein, and cannot be modified or
amended except in a writing signed by an officer of the Company and
Executive.
8.6.
Counterparts.
This Agreement may be executed in
separate counterparts, any one of which need not contain signatures
of more than one party, but all of which taken together will
constitute one and the same Agreement.
8.7.
Headings.
The headings of the sections hereof are inserted
for convenience only and shall not be deemed to constitute a part
hereof nor to affect the meaning thereof.
8.8.
Successors and Assigns.
This Agreement is intended to bind and
inure to the benefit of and be enforceable by Executive and the
Company, and their respective successors, assigns,
heirs
,
executors and administrators, except that
Executive may not assign his rights or delegate his duties or
obligations hereunder without the prior written consent of the
Company.
8.9.
Arbitration.
Unless otherwise prohibited by law or
specified below, all disputes, claims and causes of action, in law
or equity, arising from or relating to this Agreement or its
enforcement, performance, breach
,
or
interpretation shall be resolved solely and exclusively by final
and binding arbitration held in Illinois in conformity with the
then-
existing
employment arbitration rules and Illinois law. The arbitrator
shall: (a) provide adequate discovery for the resolution of the
dispute; and (b) issue a written arbitration decision, to include
the arbitrator's essential findings and conclusions and a statement
of the award. However, nothing in this section is intended to
prevent either party from obtaining injunctive relief in court to
prevent irreparable harm pending the conclusion of any such
arbitration. The Company shall bear the costs of any such
arbitration.
8.10.
Executive
Acknowledgement.
Executive
acknowledges that (a) he has consulted with or has had the
opportunity to consult with independent counsel of his own choice
concerning this Agreement, and has been advised to do so by the
Company, and (b) that he has read and understands the Agreement, is
fully aware of its legal effect, and has entered into it freely
based on his own judgment.
8.11.
Choice of Law.
All questions concerning the
construction, validity and interpretation of this Agreement will be
governed by the law of the State of Illinois without regard to the
conflicts of law provisions thereof.
In Witness Whereof,
the parties have executed this
Agreement as of the date first written above.
On
behalf of Monopar Therapeutics Inc.
/s/ Chandler D.
Robinson
Chandler D. Robinson
Chief Executive Officer
Accepted
and Agreed:
/s/ Andrew P. Mazar
Andrew
P. Mazar
CONSUL
TING
AGREEMENT
This Consulting Agreement (herein
r
eferred
to
as
"'A
greement'
'
)
is made and entered into as of
this December
15, 2016 (the
"
Effective
Date
"),
by
and
between Monopar
Therapeutics
,
Inc.
(herein
referred
t
o as
"
Monopar
'
·).
a Delaware
corporation
,
located
at
5
Revere Dr.,
Suite 200
,
Northbrook,
IL
60062
,
and
pRx
Consulting
,
LLC
(herein
referred to
as
pRx)
,
a
Delaware
corporation
located
at
#
(each
herein referred to
as
'
Party
'
and
co
ll
ectively
as
"
Parties'
').
RECITALS
WHEREAS
.
pRx
specializes
in
the
field
of
clinical development, including
bu
t
not
limit
ed
to:
clinical
trial
design,
statistical
modeling
,
clinical
operations
,
r
eg
ulat
ory
s
tr
ategy
and
investor due diligence.
WHEREAS. Monopar
de
sires
to
contract
with
pRx
to
provide certain
consu
ltati
on
services, as
requested
by
Monopar
,
and
pRx
wishes
to
pro
v
ide
s
uch
serv
ice
s
to Monopar, upon the
t
erms and
conditions
set
forth
below.
NOW, THEREFORE,
in consideration of
the
premises
and
mutual
co
v
enan
ts
contained herein.
the
Parties
agree
as
follows:
1.
Consulting
Arrangement.
pRx
agrees
to
perform
c
ons
ulting
se
rvice
s
as
de
scribed
herein
upon
the terms and conditions
herein
set
forth.
2.
Term of
Agreement
.
Subject
to
the
provision for early termination
s
et
forth
below
in
Section
5
of this Agreement, this
Agreement
shal
l
commence
as of
the Effecti
ve
Date
and
shall
continue
for a
period
of six (6)
months
from
the
Effective
Date
(
the
"Term"
).
Either Party may
terminate
this
Agreement
without
cause with
10-days
'
prior
written notice.
3.1
Specific
Dutie
s.
pRx
shall
provide consulting
se
rvices to
Monopar
, suc
h dutie
s
to
include
clinical
trial
design,
statistical
modeling
,
clinical
operations oversight,
regulatory
s
trategy and
in
ves
tor due diligence
with such
other
s
pecific
requirements
as
Monopar may
specify
from
time
to time
during the
Term
(herein referred
to as the
"
Services
")
.
3.2
pRx's
Obligations
.
pRx
s
hall be
diligent in the performance
of
Services, and
be
profe
ss
ional in its commitment
to
meeting
its
obligations
hereunder. pRx
represent
s
and
warrant
s
that pRx
i
s
not party to
any other
exi
s
ting
agreement,
which
any
of
them
would
prevent
pRx
from
entering into thi
s
Agreement
or
which would
adversely
affe
ct
this Agreement. pRx
shall
not
perform Services for
any
other
individuals
or
entities in direct
competition
with Monopar
,
except
as
provided
for
by mutual
written agreement of the Parties. pRx
shall
not
perform
services
for
any
party
which would require
or
facilitate the unauthorized
disclo
s
ure
of any
confidential or
proprietary
information
of
Monopar
.
3.3
Reporting.
pRx will
report
to and
liaise with Andrew P. Mazar
,
Ph.D.
,
Chandler
Robin
so
n,
M.D.
,
and/or any other
assigned
Monopar
employee
or
consultant
as
may be designated in writing
by Monopar.
3.4
Compensation.
Monopar
shall
pay pRx as follows:
a.
Five
thousand dollars
($5,000)
per
month in arrears payable on 15-Jan-2017
,
15-Feb-
2017,
15-Mar-201
,
7
15-Apr-
2017.
15-Ma
y-2017
and
15-Jun-2017.
b.
Upon
approval of the Monopar Board of
Directors
,
Dr. P. Rioux. president of pRx
Consulting,
LLC
shall
be
granted
s
tock options
to purchase up to 100
sha
r
es of
Monopar
's
common
stock at
an
exercise
price
of $0.001
(representing
Monopar
's
par value
of its common
stock).
Such
stock option s
hall
ve
s
t
as follows
:
on
January 15
,
2017,
options
to purchase up
to
1
7
s
hares
;
on February
15
,
2017,
options to purchase up to 16
shares;
on
March 15,
2017, options
to purchase up to 17
s
hares; on April
15
,
2017, options to purchase up to
16
shares;
on May
15
,
20
17
,
options to
purchase up to 17
shares;
and
on
June 15
,
2017
options
t
o
purchase up
to
17
shares
of
Monopar's common
stock.
Such
vesting shall
terminate upon the
termination
of
this Agreement. The number of
shares,
the
exercise price thereof and the rights granted under this Agreement
are subject to adjustment and modification as provided in the
Monopar Therapeutics
Inc.
2016
Stock Incentive Plan.
pRx
shall
not be
reimbursed, and
is
re
s
pon
s
ible
for
the
facilities
and equipment necessary to perform Services required
under this
Agreement.
4.
Reimbursement of Other
Expenses.
So long as
Monopar
'
s prior approval has been obtained, Monopar shall
promptly reimburse pR.x for
all
direct expenses incurred in providing the Services
to Monopar pursuant
to
this
Agreement, including
travel, meals and lodging. The invoice submitted
by
pR.x pursuant to this
Section 4
shall also include a detail of all reimbursable
expenses
incurred
during the
period
covered
by
such
invoice.
5.
Termination of
Agreement
-
Failure
to
perform
.
In the
event
that
pR.x ceases
to
perform the
Services or
breaches its
obligations as required
hereunder
for
any
reason, Monopar shall have the right
to immediately terminate this Agreement upon
notice
to
pRx
and to enforce such other rights
and
remedies as it may
have
as a result of said
breach.
6.
Certain
Liabilities
.
It
is
understood
and
agreed
that pRx
shall
be acting
as
an
independent
contractor and
not
as an
agent or employee
of, or
partner
,
joint
venturer
or in any other relationship with
Monopar. pRx will be
solely
responsible
for
all
insurance, employment
taxes
,
FICA taxes and all obligations to governments or
other organizations for it and
its
employees
arising out of
this
consulting assignment.
pRx
acknowledges that
no
income
,
social security or other taxes
shall
be withheld
or
accrued by
Monopar for
pRx
' s
or
its
employees'
benefit. pRx
assumes all risks and
hazards
encountered
in
the
performance of
duties by
it
or its
employees
under this
Agreement. Unless Monopar
has
provided
prior
written
approval,
pRx
shall
not use any
sub-contractors to
perform pRx
'
s
obligations
hereunder. pRx
shall
be
solely
responsible for any
and
all injuries,
including death
,
to
all
-
2
-
persons and any and all loss or damage to
property, which
may
result
from performance
under this Agreement.
7.
Indemniti
es.
pRx hereby agrees to indemnify Monopar and hold Monopar
harmless from
and against
all
claims
(whether asserted
by a person
,
firm
,
entity or
governmental unit or otherwise),
liabilities, losses,
damages
,
expenses, charges
and
fees
which
Monopar may sustain
or
incur
arising out
of or
attributable
to any breach,
gross
negligence
or
willful
misconduct by pRx or
its
employees
or contractors, as
applicable
,
in
the
performance under this Agreement. Monopar hereby
agrees
to indemnify pRx and hold pRx. harmless
from
and against
all
liabilities
,
losses.
damages, expenses
,
charges
and
fees
which
pRx
may sustain or
incur by reason of any claim which may be asserted
against pRx by
any
per
son,
firm,
corporation
or
governmental
unit and which may arise
out
of or be
attributable to
any
gross
negligence or willful
misconduct by Monopar
or
its
employees
or
contractors,
as
applicable,
in the performance
of this Agreement.
8.
Warranties
.
The
Services
shall
be
performed in a professional manner, consistent with
industry standards.
In performing the
Services
,
neither pR.x nor any of its employees
shall
make any unauthorized use of any confidential or
proprietary information
of
any
other
party
or
infringe
the intellectual property rights of any other
party.
9.
Arbitration.
Any controversy or claim between
Monopar and pRx arising out of
or
relating to
this Agreement, or the breach thereof,
shall
be
submitted
to
arbitration in accordance with the rules of the American
Arbitration Association. The
site
of the
arbitration
shall
be Chicago
,
IL, and
except as provided herein the arbitration
shall
be
conducted in accordance with the Rules of the American Arbitration
Association prevailing at the time the demand for arbitration is
made hereunder. At least one member of the arbitration panel
shall
be an expert knowledgeable in the area of
biopharmaceutical clinical development. Judgment upon any award
rendered by the arbitrator(s) may be entered in any court of
competent jurisdiction and shall be binding and final. The cost of
arbitration shall be borne by the losing Party
,
as
determined by the arbitrator(s).
10.
Confidentia
l
Information. pRx has executed the attached confidential disclosure
agreement referenced herein as
Appendix A
prior to commencement of the Services. pRx hereby
represents and warrants that the obligations thereunder shall be
binding upon it and its employees, and that it shall obtain written
commitments from such employees thereto.
11.
Inventions
.
pRx agrees that all ideas, developments,
suggestions
and inventions
which
an
employee or other parties contracted conceive or reduce to practice
arising out of or during the course of performance under this
Agreement shall be the exclusive property of Monopar and shall be
promptly communicated and assigned to Monopar. pRx
shall
require any employees of or other parties
contracted by pRx to disclose the same to pRx and to be bound by
the provisions of this paragraph. During the period of this
Agreement and thereafter at any reasonable time when called upon to
do so by Monopar
,
pRx shall require any employees of or
other parties contracted by pRx to execute patent
applications,
assignments to Monopar (or any designee of
Monopar) and other papers and to perform acts which Monopar
believes necessary to secure to Monopar full protection and
ownership of the rights in and to the
services
performed by pRx and/or for the
preparation,
- 3
-
filing and prosecution of
applications for
patents or inventions made by
an
y
emplo
y
ees of
or
other
parties
contracted
by
pRx hereunder. The decision to
file
patent
applications on
inventions made by any employees of
or other
parties contracted by pRx
s
hall be
made
b
y
Monopar and
shall be for such
countries
as
Monopar
shall
elect.
Monopar
agree
s
to
bear all the expense in
connection
with the preparation
,
filing and
prosecution
of applications
for
patents and
for
all matters provided in thi
s
paragraph
requiring the time
and/or
assistance
of pRx
as
to
such
inventions.
12.1
No
ti
ce.
Any
notices to be given hereunder by either Party to the
other
may be effectuated, in writing
,
by personal
delivery
or
by mail,
regi
s
tered
or
certified, postage prepaid, with return receipt
requested. Mailed notices
shall
be
addressed to the parties at the following
addresses:
If to
Monopar:
Monopar Therapeutics Inc
5 Revere Dr., Suite200
Northbrook, IL, 60062
Attention:
Chandler
Robinson, MD MBA
MSc
Email:
#
If to pRx:
pRx
Consulting
#
Attention:
Patrice Rioux, MD, PhD
Email:
#
or at
such
other
addresses as either Monopar or pRx may designate by written notice
to each other. Notices delivered personally shall be deemed duly
given on the date of actual receipt; mailed notices
shall
be deemed duly given as of the fourth day after
the date
so
mailed.
12.2
Waiver of
Breach
. The waiver by either
Party to a breach of any provision in this Agreement cannot operate
or be construed as a waiver of any subsequent breach by either
Party.
12.3
Severability
.
If any provision of this Agreement is determined by a court of
competent jurisdiction to be invalid or unenforceable, that
provision
shall
be deemed modified to the extent
necessary to make it valid or enfo
r
ceable, or if
it cannot be so modified, then severed, and the remainder of the
Agreement
shall
continue in full force and effect as
if the Agreement had been signed with the invalid portion so
modified or severed.
12.4
Choice of Law. This Agreement has been made and
entered into in the State of Illinois, and the
l
aws of such
state, excluding its choice of law rules, shall
govern
the
validity and interpretation of this Agreement and the performance
due
-
4 -
hereunder.
The
losing
party in any dispute
hereunder
shall
pay
the attorneys· fees
and disbursements of the prevailing
party.
12.5
Integration
.
The drafting
,
execution
and delivery
of
this
Agreement
by the Parties have been induced by no
representations,
statements,
warranties
or
agreements
other than those
expressed
herein. This Agreement
embodies
the
entire
understanding of the Parties
,
and there
are no further
or other
agreements or understandings,
written
or oral,
in
effect
between
the Parties relating to the
subject
matter
hereof unless
expressly
referred to
herein.
12.6
Mod
if
ication
.
This
Agreement may not be modified unless
such
is in
writing and
signed
by both Parties to this
Agreement.
12.7
Assignment.
pRx
shall
not be permitted to
assign
this
Agreement to any other person
or entity
without the prior written consent of Monopar. pRx
hereby agrees that Monopar shall be permitted to assign this
Agreement
to
any affiliate of Monopar.
This
Agreement
shall
be
binding upon and
shall
inure to the benefit of the
successors
and permitted assigns of the
parties.
12.8
S
ur
vival. The provisions of
Sections 7, 8, 9, 10,
and
11
shall survive
expiration or termination of this Agreement for
any reason. Expiration or termination of this Agreement
shall
not affect Monopar's obligations to pay any
amounts that may then be due to pRx.
IN WITNESS WHEREOF, the Parties hereto have
executed this Agreement as of the day and
year
first
above written.
ACCEPTED
AND AGREED TO:
PRx
CONSULTING
,
LLC
/s/
Patrice Rioux
BY:
PATRICE RIOUX, MD, PhD
ITS:
PRESIDENT
MONOPAR
THERAPEUTICS INC.
/s/ Chandler Robinson
BY:CHANDLER
ROBINSON
ITS: CHIEF
EXECUTIVE
OFFICER
-
5
-
APPENDIX
A
See
execu
ted
CDA
attached
- 6
-
EXECUTIVE EM
P
LOYMEN
T
AGREEMEN
T
This Executive
Emp
loyment
Agreement (the
"
Agreement
")
is entered
into
as of
October 4, 2017
,
by and
between
Kirsten Anderson
("Ex
ecutive
")
and Monopar
Therapeutics
Inc
.
(the
"
Co
mpan
y")
.
Whereas
,
the Company desires to employ
Executive
as
its Sen
i
or Vice P
r
esiden
t
,
C
li
nica
l
Development effective as of
November
1
,
2017 (the
"
E
ff
ective
Dat
e
"
),
and
Executive
desir
es
to serve in such
capacity
,
pursuant
to
the
terms
and conditions set forth in this Agreement;
and
Now,
T
herefore
,
in consideration
of
the
mutual
promises
and
covenan
t
s contained
herein,
it
is hereby agreed by and
between
the
parties
hereto
as follows
:
ARTICLE
I
DEFINITION
S
Fo
r purposes
of the Agreement
,
the following terms are defined
as
fo
ll
ows
:
1.1.
"
Board
"
means
the
Board
of
Directors
of
the Company.
1.2
"C
ause
"
means
any
of
the
following events
d
escribed
below:
(a)
Executive's commission of a felony or
other
crime
involving
moral turp
i
tude;
(b)
any willful
act or
ac
t
s of
dishonesty
undertaken by Executive and intended to
result
in
substantia
l
g
ain
or
persona
l
enrichment
of Execut
i
ve, Executive
'
s
fami
l
y
or
any
third
party
at
the
expense
of
the
Company;
(c)
any willful act
of
gross
misconduct
which is
materially and demonstrably
injurious to the Company;
and/or
(d)
Exec
utive'
s
i
nability
to
l
awfully
work
in
the
U
nited
States.
For the
purpose
of
this Agreement,
no
act
,
or failure
to
act
,
by
Executive
shall
be considered
" w
illful
"
i
f
d
one,
or
omitted to be
done
,
by
her
in good faith and in the
reasonable bel
i
ef that her
act or omission was
in the
best
interest of the Company
and
/
or
requ
ir
ed by
applicable
la
w.
1.3.
"C
han
ge
in
Co
ntr
o
l
"
means the occurrence of any of
the following
events: (i) any sale or exchange of the
capital
stock by
the stockholders
of the
Company
in
one
transaction
or
series
of
r
e
l
ated
transact
ion
s where more
than
fifty
percent (50%) of the
outstanding
voting power
of
the Company
is acquired by a person or entity or group of related
persons
or
entities; or (ii) any
reorganization
,
consolidation or merger of the
Company
where the outstanding voting securities
of
the Co
mpany
immediatel
y
before the transaction represent or are converted
into less than fifty percent (50%) of
the
outstanding voting power of the
surviving entity
(or its parent corporation) immediately after the
transaction; or (iii) the consummation of any transaction
o
r
series of related transactions that
r
esults
in the
sale of all or substantially all of the assets of the Company; or
(iv) any
"person"
or
"gr
oup"
(as
defined in the Securities
Exchange
Act
of 1934, as amended
(the
"Exchange Act")
becoming
the
"beneficial owner"
(as
defined in
Rule 13d-3 under the
Exchange
Act)
directly or indirectly of securities representing more
than
fifty percent (50%) of
the
voting
power
of the
Company
then outstanding
.
Except
that
any change in the
beneficial ownership of
the
securities
of the Company as a result of a private financing of the Company
tha
t
is approved by the Board
,
shall
not be deemed to be a Change in
Contro
l
.
1.4.
"
C
han
ge
in Control
Multiple
"
shall mean one-ha
l
f
(0.5).
1.5.
"C
han
ge
in
Co
ntrol
Period
"
means that period commencing on the
consummation
of a
Change
in
Control and ending on the six month anniversary
thereof.
1.6.
"
COBRA
"
means the Consolidated Omnibus Budget
Reconciliation Act of
1985
,
as
amended.
1.7.
"C
ode
"
means the Internal Revenue Code of
1986
,
as amended.
1.8.
"
Co
mpan
y"
means Monopar Therapeutics Inc. or any successor
thereto.
1.9.
"
Co
nfiden
t
i
al Disc
lo
s
ur
e Ag
r
ee
m
ent
"
mean
s
the Confidential Disclosure Agreement
entered into
between
Executive and the
Company.
1.10.
"
Cove
r
ed Ter
min
at
ion
"
means
(a)
an
Involuntary Termination Without Cause
o
r
(b)
a
voluntary termination for Good Reason, provided that the
termination constitutes a Separation from
Service.
1.11.
"
Goo
d
Reaso
n
"
means
E
xecutive
'
s
resignation
as
a result of a Good Reason
Condit
ion.
In order
to resign for Good Reason,
E
xecutive must
provide written notice
to
the Company
of the
existence
of the Good Reason Condition within
thirty (30)
days
of the initial existence of
such
Good Reason Condition. Upon receipt of
such
notice of the Good Reason
Condition,
the
Company
will
be provided
with
a period of thirty
(30)
days
during which it may remedy the Good
Reason
Condition and not be required to provide
for
the
payments and benefits described in Section 4 as a
result of
such
proposed resignation due
to
the Good Reason
Condition
specified
in
the
not
ice.
If
the
Good
Reason
Condition is
not
remedied within the period
specified
in
the preceding
sentence
,
Executive may
resign for Good Reason based on the Good Reason
Condition
specified
in the
notice
,
provided that
such
resignation must occur within sixty (60) days after the initial
existence of such Good Reason Condition.
1.12.
"Good
Reason
Condition
"
means
that any
of the following are undertaken without
Executive's
express written consent:
(a)
a material reduction in Executive's
Base
Salary (other than as part of a reduction in the
base salary of at
leas
t
a majority of the
Company's executives
of the same or greater
percentage);
(b)
a
material diminution in Executive's responsibilities;
(c)
the
Company's
material breach of any material term of this
Agreement
;
or
1.13.
"
Involuntary Termination
Without
Cause"
means
Exec
utive
'
s dismissal
or
discharge
by the Company other than for Cause.
The termination of Executive
'
s employment
as a
result
o
f
E
xecutive
' s
death or
inability
to
perform the essential functions of her
job due to disability will not
be
deemed
to
be
an Involuntary
T
ermination
Without
C
ause.
1.14.
"
Separation
from Service"
means Executive
'
s
termination of employment or service
co
nstitutes
a
"separat
ion
from
service
"
within
the
meaning of
Treasury Regulation
Section
l.409A-l(h).
ARTICLE
II
EMPLOYMENT
BY THE
COMPANY
2.1.
Position and Duties.
Subject to terms set forth herein, as
of the Effective Date
,
Executive shall
serve as
th
e
Company's Senior Vice President,
Clinical Development and perform
such
duties as
are customarily associated with the position of
Senior
Vice
President, Clinical Development as
we
ll
as any other duties as are
assigned
to Executive
by either the Chief Scientific Officer
or other officer designated
b
y
the Chief
Executive
Officer. During the
term
of
Executive's
employment with the Company,
E
xecutive will
devote Executive's best efforts and substantially all of
Executive's business
time and attention
(except for vacation
periods and reasonable periods of illness or
other
incapaci
ties
permitted
by the Company
'
s general employment policies or as
otherwise set forth in this Agreement) to the business of the
Company.
2.2.
Employment
at Will.
Both the Company and Executive shall have
the
right to terminate
E
xecutive
'
s
emp
lo
yment
with the Company at any
time
,
with or without Cause
,
and without
prior notice. If
Executive's
employment with the Company
is term
inated
,
Executive
will be eligible lo receive severance benefits to
the extent provided in this Agreement.
2.3.
Employ
m
e
nt
Policies.
The employment relationship between the parties
shall also be governed by the general employment policies
and
practices
of the Company, including those
relating to protection of confidential information and assignment
o
f
inventions,
except that when the terms of this Agreement
differ from or are
in
conflict with the
Company
'
s general employment policies or
practices
,
this
Agreement
shall control.
ARTICLE III
COMPENSATION
3.1.
Base
Salary.
As of the Effective
Date
,
Executive shall receive for services to be
rendered hereunder an annual base salary of $260
,
000
("Base
Salary
"
)
,
payable on the regular payroll dates of the
Company, which are currently bi
-
weekly
,
subject
to
incr
e
ase in the
so
l
e discretion of the Board.
3.2
Sig
n-on
Bonus.
Executive shall be paid a one-time sign-on bonus
of $25
,
000 (gross before taxes) payable with
E
xecutive's
first
regular
paycheck
.
3.3.
Annual Bonus.
Executive is eligible for an annual
bonus which
is
at the discretion of the
Board.
3.4.
Stan
dard
Company
Benefits.
Executive shall
be
entitled
to
all rights
and benefits for which
E
xecutive
is
eligible under the terms and
conditions
of
the standard Compan
y
benefits
and
compensation practices that may be in effect from time to time and
are provided by the Company to
i
ts executive
emp
l
oyees genera
ll
y. Executive
shall be entitled each year to four (4) weeks leave for vacation at
full pay, provided
,
that the maximum amount Executive may
have accrued at any point in time is four (4) weeks (meaning
t
h
at once Executive has accrued four (4) weeks,
Executive will not accrue any additiona
l
vacation
time until she takes vacation and falls below the four (4) week
accrual cap
)
. Executive shall also be entitled to reasonable
holidays and
illness
days with full pay in accordance with
the policies applicable to the Company and its
affi
l
iates from time
to
time in
effect. Employee acknowledges and agrees that in order to
maintain
flexibility, the Company and
its
affiliates
have the right to amend or terminate any employee benefit
plan
at any time
.
3.5.
S
tock
Options.
Subject to approval by the
Board
,
Executive will be granted options to
purchase up to 40,000 shares of the Company's common stock with an
exercise price per share as determined by
the
Compensation Committee or similar function of the
Board. Such options shall vest 6
/
48ths
upon
the
six
-
month
anniversary of grant date
and
l/48lh per
month thereafter and shall expire ten years from the grant
date.
3.6.
Expenses.
The Company will reimburse Executive for all
reasonable and necessary expenses incurred by Employee in
connection with the Company's business
,
provided
that
such expenses
incurred and are properly
documented
and
accoun
t
e
d
for in accordance w
i
th the policy
of
the
Company and
requirements of
the Internal
Revenue
Service.
ARTICLE IV
SEVE
RANCE
AND CHANGE
IN
CONTROL
BENEFITS
4.1.
Seve
ranc
e
Benefits.
Upon Executive's termination of employment
Executive
shall receive any
accrued but unpaid
Base Salary and other
accrued
and
unpaid
compensat
i
on,
inc
l
uding any Annua
l
Bonus
that
has been
earned with respect to a prior
year
,
but
remains
unpaid
as of
the
date
of
the
termination.
If the termination
is
due
to a Covered Termination or
perm
an
ent
disability,
provided that Executive first
returns
all
Company
property
in
her possession
and, within s
i
xty
(60)
days
following the Covered Termina
t
ion
,
executes and
does
not
r
evoke
an
effective general release of
all
claims
against the Company and its affiliates
i
n a form
reasonably acceptab
l
e to the
Company (a
"
Re
l
ease
of
C
l
aims"),
E
xecutive
shall
also
be
entitled to receive
t
he
fo
ll
ow
i
ng severance
benefits described
in
th
i
s
Sect
i
on 4
.
1.
(a)
Covered
Termination
Not
Related to a
C
han
ge
in
Control.
If Executiv
e’
s
emp
l
oyment terminates
due
to a
Covered Termination which
occurs
outside
of a Change in Control
Period,
Executive shall receive the
follow
i
ng:
(i)
An
amount
equal to
three
(3)
months of Executive's Base Salary
payable
in
substantially equal installmen
t
s in
accordance with the Company's normal payroll
policies,
less
applicable withholdings
,
with such installments to commence as
soon as administratively
practicable
following the date the
Release
of
Claims
is
not subject to revocat
i
on and, in
any even
t
,
within sixty
(60)
days
following the date of the Covered
Termination.
(ii)
I
f
Executive elects to receive continued healt
hc
are coverage
pursuant to the provisions of COBRA, the Company shall
d
i
rect
l
y pay,
or
reimburse Executive for
,
the premium
for Executive and E
x
ecutive
'
s
covered
dependents
through the earlier
of
(i) the six
month
ann
i
versary of
the
date
of Executive's termination of employment and (ii)
the date Executive and
E
xecutive
'
s
covered
dependents
,
if
any,
become
eligible for healthcare coverage under another
employer's plan(s). Notwithstanding the foregoing,
(
i
)
if
any plan
pursuant
to
which such benefits are provided
is not,
or
ceases prior to the expi
r
ation of
the
period
of continuation coverage to be
,
exempt from
the
application
of Section 409A of the Code
under
Treasury
Regulation
Section
I
.
409
A
-
l(a)(S), or
(ii) t
h
e Company is
otherwise
unable
to continue to cover Executive
under
its
group hea
l
th plans
without penalty
under
applicable law (including without
limitation
,
Section 2716 of the Public Hea
l
th
Serv
i
ce Act), then, in either case, an amount
equal
to
each remaining Company subs
id
y
sha
ll
thereafter be
paid
to
Execu
t
i
v
e
in
su
b
stantially
equal monthly
installments.
After t
h
e Company
ceases to
pay
premiums pursuant to this Section
4.l(a)(ii), Execut
i
ve
may
,
if
eligib
l
e,
elec
t
to co
n
t
i
nue
h
ealthca
r
e coverage
a
t
Execu
ti
ve
'
s expense in
accordance the p
r
ov
i
sions of
COBRA.
(
iii)
All
of Emp
l
oyee's vested o
p
t
i
ons or stock
app
r
e
ci
at
i
on rights
with respec
t
to the Company
'
s common
stock shall remain e
x
e
r
cisab
l
e until the
six month anniversary of Executive's
t
erm
i
nation of
employment (or, if earlier, the maximum period specified in the
award documents and plans governing such opt
i
ons or
s
t
ock appreciation rights, as
applicab
l
e, assum
in
g
Executive
'
s employment had not
terminated).
(b)
C
overed T
e
rmina
t
ion
R
e
lat
e
d to a
C
hange
in
C
ontrol.
If Executive's employment terminates
d
u
e to a Covered Termination
t
hat occurs
d
u
ring a Change
i
n Control
Per
i
od
,
Executive shall receive the
following:
(i)
Execut
i
ve
shall be entit
l
ed to
rece
i
ve an amount equal to the C
h
ange
i
n
Contro
l
Multiplier multiplied by the Executive's Base
Salary
,
at the rate equa
l t
o the
higher of (
x
) the rate
i
n effect
immediately prior to Executive's term
i
nation of
employment or (y) the rate in effect
i
mme
d
iately prior
to the Change in Contro
l
payab
l
e in a cash
lump sum
,
l
ess
applicable withho
l
dings, as
soon as administratively pract
i
cable
following the date the Release of C
l
aims is not
subject to revocation and,
i
n any event,
wi
t
hin sixty (60) days following the date of the
Cove
r
ed Termination.
(ii)
If
Executive elects to receive continued healthcare coverage pursuant
to the provisions of COBRA, the Company shall directly
pay
,
or reimburse Executive for, the premium for
Executive and Executive's covered dependen
t
s through the
earlier of (i)
t
he date that
is that number of years equal to the Change in Control Multiplier
fo
ll
ow
i
ng the date
of Executive
'
s termination
of employment and (ii) the date Executive and
Execut
i
ve' s covered dependents, if
any
,
become eligible for healthcare coverage
w
i
der another employer
'
s plan(s).
Notwithstanding the foregoing, (i) if any pla
n
pursuan
t
to which
such
b
enefits are provided is not, or ceases prior to
the expiration of the period of continuation coverage to be, exempt
from the application of Section 409A of the Code under Treasury
Regulation Section l. 409A
-
l (a)(5), or
(ii) the Company is otherwise unab
l
e to continue
to cover
E
xecu
t
ive under its
group health plans w
i
thout penalty
under applicable law (including without limitation, Section 2716 of
the Public Hea
l
th Service
Act)
,
then
,
in e
i
ther
case
,
an amount equa
l
to each
remaining Compa
n
y subsidy
sha
ll
thereafter be paid to Execut
i
ve in
substan
t
ially equa
l
monthly
installments. After the Company ceases to pay p
r
emiums
pursuant to this Section 4
.
l
(b)(ii)
,
Executive may
,
i
f
eligible
,
e
l
ect to
continue hea
l
thcare
coverage at Executive
'
s expense in
accordance with the provisions of COBRA.
(iii)
Each
outstanding equity award
,
includ
i
ng
,
wi
t
hout
l
imitation, each stock opt
i
on and
restricted s
t
ock
award
,
held by
E
xecutive
shall automatically become vested and
,
i
f
applicable
,
exercisable
and any forfeiture restr
i
ctions or
rights of repurchase thereon shal
l
immediately
lapse
,
i
n each
case
,
with respect to one hun
d
red percent
(100%) of the shares sub
j
ect
thereto
.
To the extent vested after giving effect to the
acceleration provided in the
preceding sentence, each stock option held by
Executive shall remain exercisable
u
n til the
earlier of the or
i
ginal
expiration date for such stock option or the second anniversary of
Executive's Covered Termination
.
(c)
T
e
rmination
for D
e
a
t
h or Di
s
abili
ty
.
If Executive's employment
i
s
term
i
nated due to death o
r
permanent
disability w
h
ere the
Company makes a determination in good faith that, due to a
menta
l
or physical incapacity
,
Executive
has been unable to perform her duties under this Agreement
fo
r
a period of no
t l
ess than
three (3) consecutive months or 90 days in the aggregate in any
12
-
month period
,
Executive
sha
ll
rece
i
ve the
following:
(i)
An
amount equa
l
to two (2) months of
Executive
'
s Base Sa
l
ary payable
in substantially equal installments in accordance
wi
t
h the Co
m
pany
'
s norma
l
payroll
po
li
cies
,
less app
l
icable
withhold
i
ngs, with such installments to commence as soon as
administratively practicable following the date the Release of
Claims is not subject to revocation and
,
in any
event
,
w
i
thin
si
x
ty (60) days following the date of the Covered
Termination.
(ii)
If
Executive (o
r
in the event of death, her designee)
elects to receive continued healthcare coverage pursuant to the
provisions of COBRA, the Company shall directly
pay
,
or reimburse Executive for, the premium for
Executive and Executive
'
s covered dependents through the
earlier of (i) the two (2) month anniversary of the date of
E
xecutive' s termination of emp
l
oyment and
(ii) the date Executive and Executive
'
s covered
dependents
,
i
f any, become
eligible for healthcare coverage unde
r
another
employer
'
s plan(s). Notwithstanding the foregoing, (i) if
any plan pu
r
suant to wh
i
ch such
benefi
t
s a
r
e provided is
not, or ceases prior to the expiration of the period of
continuation coverage to be, exempt from the application of Section
409A of the Code under Treasury Regulation Section l. 409A-l
(a)(5)
,
or (ii) the Company is otherwise unable to
continue to cover Executive under its group health plans without
penalty under app
l
icab
l
e law
(including without limitat
i
on, Section
2716 of the Public Hea
l
th
Serv
i
ce Act), then, in either case
,
an amount
equal to each remaining Company subs
i
dy shall
thereafter be paid to Executive in substantially equal monthly
installments
.
After the Company ceases to pay
premiums pursuant to this Section 4
.
l
(b)(ii)
,
Executive may
,
if
eligible
,
elect to continue healthcare coverage at
E
xecutive
'
s
e
x
pense in accordance with the provisions of
COBRA.
4.2.
2
80G
Pr
ov
i
s
i
o
n
s
.
Notwithstanding anything in this Agreement to the
contrary, if any payment or distribution Executive would receive
pursuant to this Agreement or otherwise
("
Pa
y
m
e
n
t
"
)
would (a) constitute a "parachute
payment
"
within the meaning of Section 280G of the
Code
,
and (b) but for this sentence, be subject to the
excise tax imposed by Section 4999 of the Code (the
"
E
xci
s
e
T
ax
"
)
,
then such Payment shall either be (i)
delivered in full
,
or (ii) delive
r
ed as to such
lesser extent which wou
l
d result in
no portion of such Payment being subject to the
E
xcise
Tax
,
whichever of the foregoing amounts, taking into
account the applicable federa
l
, state and
local income taxes and the Exc
i
se
Tax
,
results in the receipt by Executive on an
after
-
tax basis
,
of the
largest payment, notwithstanding
that all or some portion of the Payment may
be
taxable
under Section 4999 of the
Code.
The
accounting firm
engaged
by the Company for general audit
purposes as of the day prior to the effective date of the Change in
Control shall perform the foregoing calculations.
The
Company shall bear all
expenses
with
respect to
the
determinations by such accounting firm
required to be made hereunder.
T
he
accounting firm shall provide its
calculations to the
Company
and
Executive within thirty
(30)
calendar
days after
t
he
date on
which
Executive's
right to a Payment is triggered (if
requested at that
time
by the Company or Executive) or such
other time as
requ
ested
by the
Company or
Executive.
Any good
faith
determinations of the accounting firm made
hereunder shall be
final,
bindin
g
and conclusive upon
the Company
and Executive. Any reduction
in
payments
and/or benefits pursuant to this Section 4.2
will
occur in the following order:
(
l) reduction
of cash payments;
(2)
cancellation of accelerated vesting
of
equity
awards other than stock options;
(3) cancellation
of accelerated vesting of stock options;
and
(4) reduction of other benefits payable to
Execu
tive
.
(a)
Notwithstanding any provision to the contrary in
this Agreement
,
if
Executive
i
s
deemed
at
the time of
her Separation
from
Service to be a "specified
emp
lo
yee"
for purposes of Section
409A(a)(2)(B)(i) of the
Code,
to
the
extent delayed
commencement
of
any
portion of
the
benefits
to which Executive is entitled under
this
Agreement
is required in order to avoid a prohibited distribution
under
Section 409A(a)(2)(B)(i) of the Code which
would subject Executive to
a tax obligation under
Section
409A of the Code
,
such portion
of
Executive's
benefits shall not be provided
to Execut
ive
prior to
the earlier of
(i) the
expiration
of the six- month
period measured
from
the date of the
Executive's
Separation
from
Service
or (ii) the date of
Executive's
death.
Upon
t
he
expiration of the applicable
Code
Section
409A(a)(2)(B)(i) period
,
all payments deferred pursuant to this
Section
4.3(a) shall
be paid in a
lump
sum
to
Execut
iv
e,
and any remaining payments due
under
the
Agreement shall be paid as otherwise provided
herein.
(b)
Any reimbursements payable to Executive
pursuant
to
the Agreement shall be paid
to
E
xecutive
no
lat
er
than 30
days after
Executive
provides the
Company with a
written
request
for
reimbursement
,
and to the extent that
any such reimbursements
are deemed to
constitute
"
nonqualified
deferred compensation" within
the
meaning of
Section 409A of
the Code (i)
such amounts
shall be paid or
reimbursed to Executive promptly
,
but in
no
event
la
ter
than December 31 of the
year
following the
year
in
which
the expense is incurred, (ii)
the amount
of
any such payments eligible
for
reimbursement in one
year
shall not
affect
the payments
or expenses
that
are
eligible for payment or reimbursement in any other taxable
year,
and (iii)
Executive's
right to
such
payments
or reimbursement shall not be
subject
to
liquidation
or
exchange
for
any other benefit.
(c)
For
purposes
of Section 409A of the
Code
(including, without limitation, for
purposes
of
Treasury
Regulation Section l. 409A
-
2(b)(2)(iii)),
Executive's
right
to
receive
installment payments under
the
Agreement
shall be treated
as
a right to receive a series of
separate payments and
,
accordingly
,
each
installment payment
hereunder shall at all
tim
e
s be
considered a separate and
distinct
payment.
4.4.
Mitigati
on.
Executive shall not be required to mitigate
damages
or the amount of any payment provided under this
Agreement
by
seeking other
employmen
t
or otherwise, nor shall the amount of any
payment
provided for under this Agreement
be reduced
by any compensation earned
by
E
xecutive as a
result of employment
by
another emp
l
oyer
or
by
any retirement benefits received by
E
xecutive after the date of the Covered
Termination
,
or otherwise.
ARTICLE V
PROPRIETARY INFORMATION
OBLIGATIONS
5.1.
Agree
ment.
Executive agrees to continue
to
abide by the Confidential Disclosure
Agreement.
5.2.
Remedies.
Executive's duties under the
Confidential Disclosure Agreement shall survive termination of
Executive
'
s employment with
the
Company
and the termination of this Agreement. Executive acknowledges that
a remedy at law for any
breach
or
threatened
breach by
Executive of the provisions of the
Confidential Disclosure Agreement
,
as well
as
E
xecutive
'
s obligations
pursuant
to
Section 6.2 and Article 7 below
,
would be
inadequate
,
and Executive
therefore agrees
that the Company shall be entitled
to seek
injunctive
relief
in case
of any such
breach
or threatened
breach.
ARTICLE VI
OUTSIDE ACTIVITIES
6.1.
Other
Activities.
(a)
Executive shall not
,
during
the
term of
this
Agr
e
ement
undertake or
engage in any other employment, occupation or
business enterprise
,
other than ones
in
which
Executive is
a
passive investor, unless she obtains
the
prior
written consent of the Board.
(b)
Executive may engage in civic and
not-for
-
profit
activities so
long
as
such
activities
do not materially
interfere
with
the performance of Executive's duties hereunder
.
In
addition
,
Executive shall be allowed to serve as a member of
the
board
of directors of up to two (2) other for profit
entities at any time
during
the
term of this
Agreement
,
which service shall not materially
interfere
with the performance of
Executive
'
s duties hereunder
;
provided
,
however
,
that the
Board
,
in its discretion
,
may require
that Executive resign from one or both of such director
positions
if it determines that such resignation(s) would be
in
the
best
interests
of
the
Company.
6.2.
Co
mpetition/Inv
es
tm
e
nts.
Executive agrees that, from the
date
hereof until a period of twelve (12) months
following the
date
of termination of Executive's
employment with the Company, Executive w
ill
not
directly
or indirectly, either
as an employee
,
emp
l
oyer,
consultant
,
agent, princ
i
pal, partner,
corporate officer
,
director, or in any other individual
or representative capacity, engage or participate in any
"
Competitive Business
"
anywhere in
the world. As used herein
,
a
"Competitive
Business" is
defined
as any
business
developing
uP
AR antibodies to treat
cancer
,
clonidine to treat oral mucositis, non
cardiotoxic forms of anthracyc
lin
es
to
treat cancer
,
or any other
drug
programs
which are deemed
by
Monopar, at
that point in time in the future
,
to be
directly competit
i
ve to
Monopar
'
s
drug
programs in development
at
that point in
time
in the
future.
ARTICLE VII
NONINTERFERENCE
In addition to
Exe
cutive
's
ob
l
igations
under the Confidential D
i
sclosure
Agreement
,
Exec
utive
shall
not for a period of one (I)
year
fo
ll
owing
Execut
ive
'
s termination
of employment for any reason
,
either
on
Executive's
own
acco
un
t or jointly
with or
as
a manager, agent
,
officer,
employee, consultant, partner, joint venturer, owner or stockholder
or otherwise
on
behalf of any other person,
firm
or
corporation
,
direct
l
y
or indirect
l
y solicit or
attempt to so
li
cit away
from the Company any of
its
officers
or employees or offer employment
to
any person
who is an officer or employee of the Company;
provided
,
however,
that
a
general advertisement to which an
emp
l
oyee
o
f
the Company responds shall
in no
event
be
deemed
to result in a
breach
of this Article 7.
E
xecutive
also
agrees not to harass or disparage the Company or its
emp
l
oyees,
clients
,
directors
or
agents or divert or attempt to divert any actual or potential
business of the
Compa
ny.
The
provisions of this Article 7 shall
survive the termination or expira
t
ion of
the
appl
i
cable
Exec
utiv
e'
s
Emp
l
oyment with
the Company and shall
be
fully enforceable
thereafter.
If
it is
det
erm
ined
by a
court of competent
jurisd
iction
in
any state that any
restriction in this Article 7 is excessive
in duration or
scope or
i
s
unreasonable
or unenforceable
under the
laws
of
that
state,
i
t is
the intention
of the parties that such restriction may be
modified or amended by the court to render
it
enforceable
to the maximum extent permitted by the
law
of that
state.
ARTICL
E
VIII
GEN
E
RAL PROVISIONS
8.1.
No
tices.
Any notices provided
hereunder must
be in wr
i
ting and
will
be
given and
will
be
deemed
to have
been
duly
given (a)
on the business day sent, when delivered by hand or facsimile
transmission (with
confirmation)
during normal business hours, (b) upon
confirmation of receipt by recipient if sent
by
e
l
ectronic
mail
,
or (c) on the
business
day
following the business day
of
send
in
g
,
if delivered b
y
a
nationa
ll
y recognized overnight courier, in each case to
the Company at
its
pr
i
mary
office
location
and to
Exec
utive
at
Executive
'
s
address as
listed on
the
Company payroll.
8.2.
Tax Withholding.
Executive acknowledges
th
at all amounts and benefits
payable
under
this Agreement are subject to
deduction and
withholding to the extent required by applicable
law.
8.3.
Seve
rability.
Whenever possible, each prov1s1on of this
Agreement will be interpreted in such manner as
to
be
effective and valid under applicable law, but if any provision of
this Agreement
is held
to be
invalid
,
illegal
or
unenforceable in any respect under any applicable law
or
rule in any jurisdiction
,
such
invalidi
ty,
illegality
or unenforceabi
li
ty will not
affect any other provision or any other jurisdiction, but this
Agreement wi
ll
be reformed, construed and enforced in
such jurisdiction as if such invalid, illegal or unenforceable
provisions had never been contained herein
.
8.4.
Waiver.
If either party should waive any breach of any
provisions of
thi
s
Agreement,
the
y
shall not thereby be
deemed
to
ha
ve
wa
ived
any preceding or succeeding breach of
the
same
or any
other provision of
this
Agreement.
8.5.
Comp
l
ete Ag
reement
.
This Agreement constitutes the entire agreement
between
Executive
and the Company and
is
the complete
,
final
,
and exclusive embod
i
ment
of
their
agreement
with
regard to this subject matter, and will supersede all prior
agreements
,
understandings
,
discussions,
nego
tia
tions
and
undertakings
,
whether
written or oral
,
between the
parties with respect to the subject
matter
hereof,
including
without
limitation
,
the Prior
Agreement. This Agreement is entered into without reliance on any
promise or representation oilier than those expressly contained
herein or therein, and cannot be modified or amended except in a
writing
signed
by an officer of
the
Company
and
Executive
.
8.6.
Co
unterpart
s.
This Agreement may
be
e
x
ecuted
in
separate counterparts, any one of which
need
not contain
signatures
of
more than one party
,
but all of which taken together
w
ill
constitute
one and
the
same Agreement.
8.7.
Headings.
The headings of the sections
hereof
are
inserted for convenience only and shall not be
deemed
to
constitute a part hereof nor
to
affect the
meaning thereof.
8.8.
S
ucces
so
r
s
and Assigns.
This Agreement
is int
en
ded
to bind and inure
to
the benefit
of and be enforceable by Executive and the Company, and
their
r
espective
successors, assigns, heirs, executors
and
administrators,
exce
pt
that Executive may not assign her
rights or de
l
egate her
duties or obligations hereunder without
t
he
prior written consent of the
Company.
8.9.
Arbitration.
Unless otherwise prohibited by law or
specified below, all disputes
,
claims and causes of action, in law or
equity
,
arising from or relating to this Agreement or its
enforcement, performance, breach, or
interpretation
shall be resolved solely and exclusively by
final
and binding arbitration
held in
Illinois in conformity with the then
existing employment arbitration rules and Illinois law. The
arbitrator shall: (a) provide adequate discovery for the resolution
of the dispute; and (b) issue a written arbitration decision, to
include the arbitrator's essential findings and
conc
l
usions and a statement of the
award.
However, nothing in this section is intended to
prevent either party from obtaining
injunctive
relief in
court
to
prevent irreparable harm pending the conclusion of any
such
arbitration. The arbitrator shall determine who
shall bear the costs of any such arbitration.
8.10.
Executive
Acknowledgement.
Executive
acknowledges that (a) she has consulted with or
has
had the
opportunity to consu
l
t
with independent counsel of her own
choice concerning this Agreement, and has been advised to do so by
the Company, and (b) that she has read and understands the
Agreement, is fully aware of its legal effect, and bas entered into
it freely based
on
her own judgment.
8.11.
Choice of Law.
All questions concerning the
construction, validity and interpretation of this Agreement will be
governed by the law of the State of
Illinois
without regard to the conflicts of law provisions
thereo£
In Witness Whereof,
the parties have executed this
Agreement as of the date first written
above.
On
behalf of Monopar Therapeutics Inc.
/s/ Chandler D.
Robinson
Chandler
D. Robinson, MD MBA MSc
Chief
Executive Officer
Accepted
and Agreed
/s/ Kirsten
Anderson
October 6, 2017
Kirsten
Anderson
CONSULTING
AGREEMENT
This
Consulting Agreement (herein referred to as “
Agreement
”) is made and entered
into
on
December 8, 2017, effective as of January 1, 2018 (the
“
Effective
Date
”), by and between Monopar Therapeutics, Inc.
(herein referred to as “
Monopar
”), a Delaware corporation,
located at 5 Revere Dr., Suite 200, Northbrook, IL 60062, and pRx
Consulting, LLC (herein referred to as pRx), a Delaware corporation
located at # (each herein referred to as “
Party
” and collectively as
“
Parties
”).
RECITALS
WHEREAS, pRx
specializes in the field of clinical development, including but not
limited to: clinical trial design, statistical modeling, clinical
operations, regulatory strategy, investor due diligence, and the
duties of a Chief Medical Officer.
WHEREAS, Monopar
desires to contract with pRx to provide certain consultation
services as requested by Monopar, and pRx wishes to provide such
services to Monopar, upon the terms and conditions set forth
below.
NOW,
THEREFORE, in consideration of the premises and mutual covenants
contained herein, the Parties agree as follows:
1.
Consulting Arrangement
. pRx
agrees to perform consulting services as described herein upon the
terms and conditions herein set forth.
2.
Term of Agreement
. Subject to
the provision for early termination set forth below in
Section 5
of this Agreement, this
Agreement shall commence as of the Effective Date and shall
continue for a period of twelve (12) months from the Effective Date
(the
“Term”
).
Either Party may terminate this Agreement without cause with
10-days’ prior written notice.
3.1
Specific Duties
. pRx shall
provide consulting services to Monopar, such duties to include the
general duties of a Chief Medical Officer, clinical trial design,
statistical modeling, clinical operations oversight, regulatory
strategy, and investor due diligence, with such other specific
requirements as Monopar may specify from time to time during the
Term (herein referred to as the “
Services
”).
3.2
pRx’s Obligations
. The
president of pRx, Dr. P. Rioux, shall spend on the average over the
course of the Term one-and-a-half (1.5) work days per week working
on Monopar matters, be diligent in the performance of Services, and
be professional in its commitment to meeting its obligations
hereunder. pRx represents and warrants that pRx is not party to any
other existing agreement, which any of them would prevent pRx from
entering into this Agreement or which would adversely affect this
Agreement. pRx shall not perform Services for any other individuals
or entities in direct competition with Monopar, except as provided
for by mutual written agreement of the Parties. pRx shall not
perform services for any party
which
would require or facilitate the unauthorized disclosure of any
confidential or proprietary information of Monopar.
3.3
Reporting
. pRx will report to
and liaise with Andrew P. Mazar, Ph.D., Chandler Robinson, M.D.,
and/or any other assigned Monopar employee or consultant as may be
designated in writing by Monopar.
3.4
Compensation
. Monopar shall pay
pRx as follows:
a.
Four
thousand dollars ($4,000) per month payable within thirty (30) days
of the end of each month.
b.
Dr.
P. Rioux, president of pRx Consulting, LLC shall be granted stock
options to purchase up to 32,004 shares of Monopar’s common
stock at an exercise price of $6.00. Such stock option shall vest
as follows: on January 1, 2018, options to purchase up to 12,000
shares; and options to purchase up to 1,667 shares on the
1
st
of each subsequent month
thereafter. Such vesting shall terminate upon the termination of
this Agreement. The number of shares, the exercise price thereof
and the rights granted under this Agreement are subject to
adjustment and modification as provided in the Monopar Therapeutics
Inc. 2016 Stock Incentive Plan.
pRx
shall not be reimbursed, and is responsible for the facilities and
equipment necessary to perform Services required under this
Agreement.
4.
Reimbursement of Other
Expenses
. So long as Monopar’s prior approval has been
obtained, Monopar shall promptly reimburse pRx for all direct
expenses incurred in providing the Services to Monopar pursuant to
this Agreement, including travel, meals and lodging. The invoice
submitted by pRx pursuant to this
Section 4
shall also include a detail of
all reimbursable expenses incurred during the period covered by
such invoice.
5.
Termination of Agreement - Failure to
perform
. In the event that pRx ceases to perform the
Services or breaches its obligations as required hereunder for any
reason, Monopar shall have the right to immediately terminate this
Agreement upon notice to pRx and to enforce such other rights and
remedies as it may have as a result of said breach.
6.
Certain Liabilities
. It is
understood and agreed that pRx shall be acting as an independent
contractor and not as an agent or employee of, or partner, joint
venturer or in any other relationship with Monopar. pRx will be
solely responsible for all insurance, employment taxes, FICA taxes
and all obligations to governments or other organizations for it
and its employees arising out of this consulting assignment. pRx
acknowledges that no income, social security or other taxes shall
be withheld or accrued by Monopar for pRx’s or its
employees’ benefit. pRx assumes all risks and hazards
encountered in the performance of duties by it or its employees
under this Agreement. Unless Monopar has provided prior written
approval, pRx shall not use any sub-contractors to perform
pRx’s obligations hereunder. pRx shall be solely responsible
for any and all injuries, including death, to all persons and any
and all loss or damage to property, which may result from
performance under this Agreement.
7.
Indemnities
. pRx hereby agrees
to indemnify Monopar and hold Monopar harmless from and against all
claims (whether asserted by a person, firm, entity or governmental
unit or otherwise), liabilities, losses, damages, expenses, charges
and fees which Monopar may sustain or incur arising out of or
attributable to any breach, gross negligence or willful misconduct
by pRx or its employees or contractors, as applicable, in the
performance under this Agreement. Monopar hereby agrees to
indemnify pRx and hold pRx harmless from and against all
liabilities, losses, damages, expenses, charges and fees which pRx
may sustain or incur by reason of any claim which may be asserted
against pRx by any person, firm, corporation or governmental unit
and which may arise out of or be attributable to any gross
negligence or willful misconduct by Monopar or its employees or
contractors, as applicable, in the performance of this
Agreement.
8.
Warranties
. The Services shall
be performed in a professional manner, consistent with industry
standards. In performing the Services, neither pRx nor any of its
employees shall make any unauthorized use of any confidential or
proprietary information of any other party or infringe the
intellectual property rights of any other party.
9.
Arbitration
. Any controversy or
claim between Monopar and pRx arising out of or relating to this
Agreement, or the breach thereof, shall be submitted to arbitration
in accordance with the rules of the American Arbitration
Association. The site of the arbitration shall be Chicago, IL, and
except as provided herein the arbitration shall be conducted in
accordance with the Rules of the American Arbitration Association
prevailing at the time the demand for arbitration is made
hereunder. At least one member of the arbitration panel shall be an
expert knowledgeable in the area of biopharmaceutical clinical
development. Judgment upon any award rendered by the arbitrator(s)
may be entered in any court of competent jurisdiction and shall be
binding and final. The cost of arbitration shall be borne by the
losing Party, as determined by the arbitrator(s).
10.
Confidential Information
. pRx
has executed the attached confidential disclosure agreement
referenced herein as
Appendix
A
prior to commencement of the Services. pRx hereby
represents and warrants that the obligations thereunder shall be
binding upon it and its employees, and that it shall obtain written
commitments from such employees thereto.
11.
Inventions
. pRx agrees that all
ideas, developments, suggestions and inventions which an employee
or other parties contracted conceive or reduce to practice arising
out of or during the course of performance under this Agreement
shall be the exclusive property of Monopar and shall be promptly
communicated and assigned to Monopar. pRx shall require any
employees of or other parties contracted by pRx to disclose the
same to pRx and to be bound by the provisions of this paragraph.
During the period of this Agreement and thereafter at any
reasonable time when called upon to do so by Monopar, pRx shall
require any employees of or other parties contracted by pRx to
execute patent applications, assignments to Monopar (or any
designee of Monopar ) and other papers and to perform acts which
Monopar believes necessary to secure to Monopar full protection and
ownership of the rights in and to the services performed by pRx
and/or for the preparation, filing and prosecution of applications
for patents or inventions made by any employees of or other parties
contracted by pRx hereunder. The decision to file patent
applications on inventions made by any employees of or other
parties contracted by pRx shall be made by
Monopar
and shall be for such countries as Monopar shall elect. Monopar
agrees to bear all the expense in connection with the preparation,
filing and prosecution of applications for patents and for all
matters provided in this paragraph requiring the time and/or
assistance of pRx as to such inventions.
12.1
Notice
. Any notices to be given
hereunder by either Party to the other may be effectuated, in
writing, by personal delivery or by mail, registered or certified,
postage prepaid, with return receipt requested, or by electronic
mail. Mailed notices shall be addressed to the Parties at the
following addresses:
If to
Monopar:
Monopar
Therapeutics Inc.
Attention: Chandler
Robinson, MD MBA MSc
If to
pRx: pRx Consulting, LLC
#
Attention: Patrice
Rioux, MD, PhD
Email:
#
or at
such other addresses as either Monopar or pRx may designate by
written notice to each other. Notices delivered personally shall be
deemed duly given on the date of actual receipt; mailed notices
shall be deemed duly given as of the fourth day after the date so
mailed. If sent by electronic mail, such notice will be deemed
given upon confirmation of receipt by recipient.
12.2
Waiver of Breach
. The waiver by
either Party to a breach of any provision in this Agreement cannot
operate or be construed as a waiver of any subsequent breach by
either Party.
12.3
Severability
. If any provision
of this Agreement is determined by a court of competent
jurisdiction to be invalid or unenforceable, that provision shall
be deemed modified to the extent necessary to make it valid or
enforceable, or if it cannot be so modified, then severed, and the
remainder of the Agreement shall continue in full force and effect
as if the Agreement had been signed with the invalid portion so
modified or severed.
12.4
Choice of Law
. This Agreement
has been made and entered into in the State of Illinois, and the
laws of such state, excluding its choice of law rules, shall govern
the validity and interpretation of this Agreement and the
performance due
hereunder.
The losing party in any dispute hereunder shall pay the attorneys'
fees and disbursements of the prevailing party.
12.5
integration.
The drafting, execution and delivery
of this Agreement by the Parties have been induced by no
representations, statements, warranties or agreements other than
those expressed herein. This Agreement embodies the entire
understanding of the Parties, and there are no further or other
agreements or understandings, written or oral, in effect between
the Parties relating to the subject matter hereof unless expressly
referred to herein.
12.6
Modification.
This Agreement may not be modified
unless such is in writing and signed by both Parties to this
Agreement.
12.7
Assignment.
pRx shall not be permitted to assign
this Agreement to any other person or entity without the prior
written consent of Monopar. pRx hereby agrees that Monopar shall be
permitted to assign this Agreement to any affiliate of Monopar.
This Agreement shall be binding upon and shall inure to the benefit
of the successors and permitted assigns of the
parties.
12.8
Survival
.
The provisions of
Sections 7, 8, 9, 10, and
11
shall survive expiration or
termination of this Agreement for any reason. Expiration or
termination of this Agreement shall not affect Monopar's
obligations to pay any amounts that may then be due to
pRx.
IN
WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the day and year first above written.
ACCEPTED
AND AGREED TO:
pRx
Consulting LLC
Monopar Therapeutics
Inc.
/s/ Patrice
Rioux
/s/
Chandler Robinson
BY: PATRICE RIOUX. MD, PHD
BY: CHANDLER ROBINSON
ITS:
PRESIDENT
ITS: CHIEF EXECUTIVE OFFICER
APPENDIX
A
See
executed CDA attached
- 6
-
First
Amendment to Employment Agreement between Kim R. Tsuchimoto
(“Executive”) and Monopar Therapeutics Inc.
(“Company”) dated November 1, 2017. The following
amendments are made effective March 1, 2018. All other unrevised
sections remain in full force.
2.1 Position and Duties
, Executive will
devote Executive’s best efforts and
50%
of Executive’s
business time and attention (except for vacation periods and
reasonable periods of illness or other incapacities permitted by
the Company’s general employment policies or as otherwise set
forth in this Agreement) to the business of the
Company.
3.1 Base Salary
, Executive shall receive
for services to be rendered hereunder an annual base salary of
$137,500 representing 50% of full-time.
3.3 Standard Company Benefits
, Executive
shall be entitled to all benefits offered by the Company so long as
Executive devotes 50% or more time to the business of the Company.
In lieu of benefits, Executive shall be reimbursed up to $1,800 per
month for out-of-pocket expenses for medical, dental and vision
benefits until such time the Company has benefit plans in place.
Based upon 50% service, Executive shall be entitled each year to
two (2) weeks leave for vacation at full pay, provided, that the
maximum amount Executive may have accrued at any point in time is
two (2) weeks (meaning that once Executive has accrued two (2)
weeks, Executive will not accrue any additional vacation time until
she takes vacation and falls below the two (2) week accrual
cap).
Pursuant to section
6.1(a) Other Activities, Exhibit
A
25% of
full-time employment with no benefits at Mercaptor Discoveries Inc.
as Chief Financial Officer, Secretary, Treasurer and
Co-Founder
Minimal
time, as needed, at DNAcheckup as a volunteer Chief Financial
Officer, Secretary and Treasurer
Requested
by:
/s/ Kim
R. Tsuchimoto
February 26,
2018
Approved
by:
/s/
Chandler D. Robinson
Chandler D.
Robinson
Date
Monopar
Therapeutics Inc.
Co-Founder, Chief
Executive Officer and Director
Chandler
Robinson Chief Executive Officer
Monopar
Therapeutics LLC 598 Rockefeller Road
Lake
Forest, IL USA 60045
Cancer Research UK
Angel Building 407 St John Street London
ECl
V
4AD United Kingdom
020
7242 0200
cruk.org
2ist
March
2018
Dear
Chandler,
Clinical Tri.al and Option Agreement between
Monopar Therapeutics LLC, Cancer Research UK and Cancer Research
Technology Limited dated 15
th
May 2015 ("the Agreement")
As
part of a recent portfolio reprioritisation, Cancer Research UK and
Cancer Research Technology have decided to close the project Which
is the subject of the Agreement. We will be working with Monopar
Therapeutics over the coming months to formalise the arrangements
necessary to effect termination of the Agreement.
Yours
faithfully,
/s/
Nigel Blackburn
Nigel
Blackburn
Director
of Drug Development CRUK Centre for Drug Development
Patron
Her
Majesty
The Queen
Presidents HRH
The Duke of Gloucester KG GCVO
and
HRH
Princess Al
exa
ndra, the
Hon Lady
Ogilvy KG
GCVO Chief
Executive
Sir
Harpal
S
Kumar
Regist
e
red
Charity
in
England
and
Wales (1089464),
Scotland
(SC041666)
and
the Isle
of Man (1103)
Regi st
e
red
Company
limited by
guarantee
in
England
and
Wales (4325234)
and
registered
r
n the Isle of
Man (5713F) Registered Address Angel Building, 407 St John
Street,
London
EC1V
·
4AD
Exhibit
11
Statement
Regarding Computation of Per Share Earnings
The
statement regarding computation of per share earnings is set forth
in Note 2 of the Notes to the Financial Statements of the Company
for the years ended December
31, 2017
and 2016.
MONOPAR THERAPEUTICS INC.
CODE OF BUSINESS CONDUCT AND ETHICS
Introduction
Monopar
Therapeutics Inc. and its subsidiaries (the “Company”)
are committed to maintaining the highest standards of business
conduct and ethics. This Code of Business Conduct and Ethics (the
“Code”) reflects the business practices and principles
of behavior that support this commitment. We expect every employee,
officer and non-employee director to read and understand this Code
and its application to the performance of his or her business
responsibilities. References in this Code to employees are intended
to cover staff, supervisors, managers, officers and, as applicable,
non-employee directors.
Officers, managers
and other supervisors are expected to develop in staff a sense of
commitment to the spirit, as well as the letter, of this Code.
Supervisors are also expected to ensure that all agents and
contractors conform to Code standards when working for or on behalf
of the Company. The compliance environment within each
supervisor’s assigned area of responsibility will be a factor
in evaluating the quality of that individual’s performance.
In addition, any employee who makes an exemplary effort to
implement and uphold our legal and ethical standards will be
recognized for that effort in his or her performance review.
Nothing in this Code alters the at-will employment policy of the
Company.
This
Code addresses conduct that is particularly important to proper
dealings with the people and entities with whom we interact, but
reflects only a part of our commitment. From time to time we may
adopt additional policies and procedures with which our employees,
officers and non-employee directors are expected to comply, if
applicable to them. However, it is the responsibility of each
employee to apply common sense, together with his or her own
highest personal ethical standards, in making business decisions
where there is no stated guideline in this Code.
Action
by members of your immediate family, significant others or other
persons who live in your household (referred to in this Code as
“family members”) also may potentially result in
ethical issues to the extent that they involve the Company’s
business. For example, acceptance of inappropriate gifts by a
family member from one of our suppliers could create a conflict of
interest and result in a Code violation attributable to you.
Consequently, in complying with this Code, you should consider not
only your own conduct, but also that of your immediate family
members, significant others and other persons who live in your
household.
YOU
SHOULD NOT HESITATE TO ASK QUESTIONS ABOUT WHETHER ANY CONDUCT MAY
VIOLATE THIS CODE, VOICE CONCERNS OR CLARIFY GRAY AREAS. SECTION 20
BELOW DETAILS THE COMPLIANCE RESOURCES AVAILABLE TO YOU. IN
ADDITION, YOU SHOULD BE ALERT TO POSSIBLE VIOLATIONS OF THIS CODE
BY OTHERS AND REPORT SUSPECTED VIOLATIONS, WITHOUT FEAR OF ANY FORM
OF RETALIATION, AS FURTHER DESCRIBED IN SECTION 20. Violations of
this Code will not be tolerated. Any employee who violates the
standards in this Code may be subject to disciplinary action,
which, depending on the nature of the violation and the history of
the employee, may range from a warning or reprimand to and
including termination of employment and, in appropriate cases,
civil legal action or referral for regulatory or criminal
prosecution.
1.
Honest and Ethical Conduct
It is
the policy of the Company to promote high standards of integrity by
conducting our affairs in an honest and ethical manner. The
integrity and reputation of the Company depends on the honesty,
fairness and integrity brought to the job by each person associated
with us. Unyielding personal integrity is the foundation of
corporate integrity.
Obeying
the law, both in letter and in spirit, is the foundation of this
Code. Our success depends upon each employee’s operating
within legal guidelines and cooperating with local, national and
international authorities. We expect employees to understand the
legal and regulatory requirements applicable to their business
units and areas of responsibility. We hold periodic training
sessions to ensure that all employees comply with the relevant
laws, rules and regulations associated with their employment,
including laws prohibiting insider trading (which are discussed in
further detail in Section 3 below). While we do not expect you to
memorize every detail of these laws, rules and regulations, we want
you to be able to determine when to seek advice from others. If you
do have a question in the area of legal compliance, it is important
that you not hesitate to seek answers from your supervisor or the
Compliance Officer (as further described in Section
20).
Disregard of the
law will not be tolerated. Violation of domestic or foreign laws,
rules and regulations may subject an individual, as well as the
Company, to civil and/or criminal penalties. You should be aware
that conduct and records, including emails, are subject to internal
and external audits and to discovery by third parties in the event
of a government investigation or civil litigation. It is in
everyone’s best interests to know and comply with our legal
obligations.
Employees who have
access to confidential (or “inside”) information are
not permitted to use or share that information for stock trading
purposes or for any other purpose except to conduct our business.
All non- public information about the Company or about companies
with which we do business is considered confidential information.
To use material non-public information in connection with buying or
selling securities, including “tipping” others who
might make an investment decision on the basis of this information,
is not only unethical, it is illegal. Employees must exercise the
utmost care when handling material inside information.
4.
International Business Laws
Our
employees are expected to comply with the applicable laws in all
countries to which they travel, in which they operate and where we
otherwise do business, including laws prohibiting bribery,
corruption or the conduct of business with specified individuals,
companies or countries. The fact that, in some countries, certain
laws are not enforced or that violation of those laws is not
subject to public criticism will not be accepted as an excuse for
noncompliance. In addition, we expect employees to comply with U.S.
laws, rules and regulations governing the conduct of business by
its citizens and corporations outside the U.S.
These
U.S. laws and regulations, which extend to all our activities
outside the U.S., include:
●
The Foreign Corrupt
Practices Act, which prohibits directly or indirectly giving
anything of value to a government official to obtain or retain
business or favorable treatment and requires the maintenance of
accurate books of account, with all company transactions being
properly recorded;
●
U.S. Embargoes,
which generally prohibit U.S. companies, their subsidiaries and
their employees from doing business with countries, or traveling
to, subject to sanctions imposed by the U.S. government (including,
for example, Belarus, Cuba, Eritrea, Iran, North Korea, Syria and
Venezuela), as well as specific companies and individuals
identified on lists published by the U.S. Treasury
Department;
●
U.S. Export
Controls, which restrict exports from the U.S. and re-exports from
other countries of goods, software and technology to many
countries, and prohibits transfers of U.S.-origin items to denied
persons and entities; and
●
Anti-boycott
Regulations, which prohibit U.S. companies from taking any action
that has the effect of furthering or supporting a restrictive trade
practice or boycott imposed by a foreign country against a country
friendly to the U.S. or against any U.S. person.
If you
have a question as to whether an activity is restricted or
prohibited, seek assistance before taking any action, including
giving any verbal assurances that might be regulated by
international laws.
Antitrust laws are
designed to protect the competitive process. These laws are based
on the premise that the public interest is best served by vigorous
competition and will suffer from illegal agreements or collusion
among competitors. Antitrust laws generally prohibit:
●
agreements, formal
or informal, with competitors that harm competition or customers,
including price fixing and allocations of customers, territories or
contracts;
●
agreements, formal
or informal, that establish or fix the price at which a customer
may resell a product; and
●
the acquisition or
maintenance of a monopoly or attempted monopoly through
anti-competitive conduct.
Certain
kinds of information, such as pricing, production and inventory,
should not be exchanged with competitors, regardless of how
innocent or casual the exchange may be and regardless of the
setting, whether business or social.
In addition,
the U.S. Federal Trade
Commission Act declares "unfair methods of competition in commerce,
and unfair or deceptive acts or practices in commerce" unlawful. It
is a violation of that Act to engage in deceptive, unfair or
unethical practices and to make misrepresentations in connection
with sales activities.
Antitrust laws
impose severe penalties for certain types of violations, including
criminal penalties and potential fines and damages of millions of
dollars, which may be tripled under certain circumstances.
Understanding the requirements of antitrust and unfair competition
laws of the various jurisdictions where we do business can be
difficult, and you are urged to seek assistance from your
supervisor or the Compliance Officer whenever you have a question
relating to these laws.
6.
Environmental Compliance
Federal
law imposes criminal liability on any person or company that
contaminates the environment with any hazardous substance that
could cause injury to the community or environment. Violation of
environmental laws can involve monetary fines and imprisonment. We
expect employees to comply with all applicable environmental
laws.
It is
our policy to conduct our business in an environmentally
responsible way that minimizes environmental impacts. We are
committed to minimizing and, if practicable, eliminating the use of
any substance or material that may cause environmental damage,
reducing waste generation and disposing of all waste through safe
and responsible methods, minimizing environmental risks by
employing safe technologies and operating procedures, and being
prepared to respond appropriately to accidents and
emergencies.
We are
committed to the following:
●
Providing a safe,
violence-free workplace. Violent or threatening behavior is
strictly prohibited by anyone on Company premises or engaged in a
Company-related activity. This behavior includes, but is not
limited to, threats of any kind; intimidating or physically
aggressive actions; excessive arguing or swearing; defacing Company
property; sabotage; demonstrated pattern of refusing to follow
Company policies; and possession of weapons or firearms on Company
premises. All reports of workplace violence will be taken with the
upmost seriousness and will be investigated promptly and
thoroughly.
●
Providing a
workplace that is free from unlawful harassment, bullying and
discrimination. Harassment is unwelcome conduct that is based on
race, color, sex, pregnancy, age, national origin, religion,
disability, genetic information, sexual orientation, veteran
status, gender reassignment or other classes protected by
applicable law. We will not tolerate
conduct that is severe or pervasive enough to
create a work environment that a reasonable person would consider
intimidating, hostile, or abusive.
No employee will be
disadvantaged for reporting this type of conduct in good faith to
Human Resources or the Compliance Officer.
●
P
roviding an environment free from combative,
verbally abusive or disrespectful behavior. These behaviors can
create a climate of fear, hostility, distraction and
unproductivity. Such incidents should be reported to your
Supervisor or to Human Resources. All reports will be investigated
thoroughly and, if found to be valid, may lead to disciplinary
action including termination.
●
Pr
oviding
equal employment opportunity for all applicants and employees. We
do not discriminate on any basis prohibited under federal, state or
local law. This applies to all areas of employment, including
recruitment, hiring, training, promotion, compensation, benefits,
transfer, disciplinary action, and social and recreational
programs.
●
Creating a fully
inclusive and stimulating environment in which our workforce is
free to innovate to meet the needs of our customers around the
world. We respect employment laws wherever we operate in the world,
including international labor standards, laws governing freedom of
expression and rights of association, privacy and equal
opportunities.
We
respect the rights of our employees to manage their personal
affairs and investments and do not wish to impinge on their
personal lives. At the same time, employees should avoid conflicts
of interest that occur when their personal interests may interfere
in any way with the performance of their duties or the best
interests of the Company. A conflicting personal interest could
result from an expectation of personal gain now or in the future or
from a need to satisfy a prior or concurrent personal obligation.
We expect our employees to be free from influences that conflict
with the best interests of the Company or might deprive the Company
of their undivided loyalty in business dealings. Even the
appearance of a conflict of interest where none actually exists can
be damaging and should be avoided. Whether or not a conflict of
interest exists or will exist can be unclear. Conflicts of interest
are prohibited unless specifically authorized as described
below.
If you
have any questions about a potential conflict or if you become
aware of an actual or potential conflict, and you are not an
officer or director of the Company, you should discuss the matter
with your supervisor or the Compliance Officer. Supervisors may not
authorize conflict of interest matters or make determinations as to
whether a problematic conflict of interest exists without first
seeking the approval of the Compliance Officer and providing the
Compliance Officer with a written description of the activity. If
the supervisor is involved in the potential or actual conflict, you
should discuss the matter directly with the Compliance Officer.
Officers and directors may seek authorizations and determinations
from the Audit Committee of the Board of Directors.
Factors
that may be considered in evaluating a potential conflict of
interest are, among others:
●
whether it may
interfere with the employee’s job performance,
responsibilities or morale;
●
whether the
employee has access to confidential information;
●
whether it may
interfere with the job performance, responsibilities or morale of
others within the organization;
●
any potential
adverse or beneficial impact on our business;
●
any potential
adverse or beneficial impact on our relationships with our
customers or suppliers or other service providers;
●
whether it would
enhance or support a competitor’s position;
●
the extent to which
it would result in financial or other benefit (direct or indirect)
to the employee;
●
the extent to which
it would result in financial or other benefit (direct or indirect)
to one of our customers, suppliers or other service providers;
and
●
the extent to which
it would appear improper to an outside observer.
Although no list
can include every possible situation in which a conflict of
interest could arise, the following are examples of situations that
may, depending on the facts and circumstances, involve problematic
conflicts of interests:
●
Employment by
(including consulting for) or service on the board of a competitor,
customer or supplier or other service provider. Activity that
enhances or supports the position of a competitor to the detriment
of the Company is prohibited, including employment by or service on
the board of a competitor. Employment by or service on the board of
a customer or supplier or other service provider is generally
discouraged and you must seek authorization in advance if you plan
to take such a position.
●
Owning, directly or
indirectly, a significant financial interest in any entity that
does business, seeks to do business or competes with us. In
addition to the factors described above, persons evaluating
ownership in other entities for conflicts of interest will consider
the size and nature of the investment; the nature of the
relationship between the other entity and the Company; the
employee’s access to confidential information and the
employee’s ability to influence the Company’s
decisions. If you would like to acquire a financial interest of
that kind, you must seek approval in advance.
●
Soliciting or
accepting gifts, favors, loans or preferential treatment from any
person or entity that does business or seeks to do business with
us. See Section 12 for further discussion of the issues involved in
this type of conflict.
●
Soliciting
contributions to any charity or for any political candidate from
any person or entity that does business or seeks to do business
with us.
●
Taking personal
advantage of corporate opportunities. See Section 9 for further
discussion of the issues involved in this type of
conflict.
●
Moonlighting
without permission.
●
Conducting our
business transactions with your family member or a business in
which you have a significant financial interest. Material
related-party transactions approved by the Audit Committee of the
Board of Directors and involving any executive officer or director
will be publicly disclosed as required by applicable laws and
regulations.
●
Exercising
supervisory or other authority on behalf of the Company over a
co-worker who is also a family member. The employee’s
supervisor and/or the Compliance Officer will consult with the
Human Resources department to assess the advisability of
reassignment.
●
Loans to, or
guarantees of obligations of, employees or their family members by
the Company could constitute an improper personal benefit to the
recipients of these loans or guarantees, depending on the facts and
circumstances. Some loans are expressly prohibited by law and
applicable law requires that our Board of Directors approve all
loans and guarantees to employees. As a result, all loans and
guarantees by the Company must be approved in advance by the Audit
Committee of the Board of Directors.
9.
Corporate Opportunities
You may
not take personal advantage of opportunities for the Company that
are presented to you or discovered by you as a result of your
position with us or through your use of corporate property or
information, unless authorized by your supervisor, the Compliance
Officer or the Audit Committee of the Board of Directors, as
described in Section 8. Even opportunities that are acquired
privately by you may be questionable if they are related to our
existing or proposed lines of business. Significant participation
in an investment or outside business opportunity that is directly
related to our lines of business must be pre- approved. You may not
use your position with us or corporate property or information for
improper personal gain, nor should you compete with us in any
way.
10.
Maintenance of Corporate Books, Records, Documents and Accounts;
Financial Integrity; Public Reporting
The
integrity of our records and public disclosure depends upon the
validity, accuracy and completeness of the information supporting
the entries to our books of account. Therefore, our corporate and
business records should be completed accurately and honestly. The
making of false or misleading statements and entries, whether they
relate to financial results or test results, is strictly
prohibited. Our records serve as a basis for managing our business
and are important in meeting our obligations to customers,
suppliers, creditors, employees and others with whom we do
business. As a result, it is important that our books, records and
accounts accurately and fairly reflect, in reasonable detail, our
assets, liabilities, revenues, costs and expenses, as well as all
transactions and changes in assets and liabilities. We require
that:
●
no entry be made in
our books and records that intentionally hides or disguises the
nature of any transaction or of any of our liabilities, or
misclassifies any transactions as to accounts or accounting
periods;
●
transactions
be supported by appropriate documentation and internal
approval;
●
the
terms of sales and other commercial transactions be accurately and
timely reflected in the documentation for those transactions and
all such documentation be reflected accurately in our books and
records;
●
employees
comply with our system of internal controls; and
●
no cash
or other assets be maintained for any purpose in any unrecorded or
“off-the-books” fund.
Our
accounting records are also relied upon to produce reports for our
management, stockholders and creditors, as well as for governmental
agencies. In particular, we rely upon our accounting and other
business and corporate records in preparing the periodic and
current reports that we file with the SEC. Securities laws require
that these reports provide full, fair, accurate, timely and
understandable disclosure and fairly present our financial
condition and results of operations. Employees who collect, provide
or analyze information for or otherwise contribute in any way in
preparing or verifying these reports should strive to ensure that
our financial disclosure is accurate and transparent and that our
reports contain all of the information about the Company that would
be important to enable stockholders and potential investors to
assess the soundness and risks of our business and finances and the
quality and integrity of our accounting and
disclosures.
In
addition:
●
no
employee may take or authorize any action that would cause our
financial records or financial disclosure to fail to comply with
generally accepted accounting principles, the rules and regulations
of the SEC or other applicable laws, rules and
regulations;
●
all
employees must cooperate fully with our Finance Department, as well
as our independent registered public accounting firm and legal
counsel, respond to their questions with candor and provide them
with complete and accurate information to help ensure that our
books and records, as well as our reports filed with the SEC, are
accurate and complete; and
●
no
employee should knowingly make (or cause or encourage any other
person to make) any false or misleading statement in any of our
reports filed with the SEC or knowingly omit (or cause or encourage
any other person to omit) any information necessary to make the
disclosure in any of our reports accurate in all material
respects.
Any
employee who becomes aware of any departure from these standards
has a responsibility to report his or her knowledge promptly to a
supervisor, the Compliance Officer or one of the other compliance
resources described in Section 20.
We
strive to outperform our competition fairly and honestly.
Advantages over our competitors are to be obtained through superior
performance of our products and services, not through unethical or
illegal business practices. Acquiring proprietary information from
others through improper means, possessing trade secret information
that was improperly obtained, or inducing improper disclosure of
confidential information from past or present employees of other
companies is prohibited, even if motivated by an intention to
advance our interests. If information is obtained by mistake that
may constitute a trade secret or other confidential information of
another business, or if you have any questions about the legality
of proposed information gathering, you must consult your supervisor
or the Compliance Officer, as further described in Section
20.
You are
expected to deal fairly with our customers, suppliers, employees
and anyone else with whom you have contact in the course of
performing your job. Be aware that the Federal Trade Commission Act
(the “FTC Act”) provides that “unfair methods of
competition in commerce, and unfair or deceptive acts or practices
in commerce, are declared unlawful.” It is a violation of the
FTC Act to engage in deceptive, unfair or unethical practices and
to make misrepresentations in connection with sales
activities.
Employees involved
in procurement have a special responsibility to adhere to
principles of fair competition in the purchase of products and
services by selecting suppliers based exclusively on normal
commercial considerations, such as quality, cost, availability,
service and reputation, and not on the receipt of special
favors.
12.
Gifts and Other Benefits
Gifts,
hospitality and other benefits may not be offered, provided or
accepted by any employee in the course of business without the
express permission of the Compliance Officer, the Chief Executive
Officer, or the Audit Committee of the Board of Directors and must
be consistent with customary business practices and not (a) of more
than token or nominal monetary value, (b) in cash or cash
equivalent, (c) susceptible of being construed as a bribe or
kickback, (d) made or received on a regular or frequent basis, (e)
pose a potential conflict of interest, or (f) in violation of any
laws, regulations, or industry guidance. This principle applies to
our transactions everywhere in the world, even where the practice
is widely considered “a way of doing business.”
Employees should not accept gifts or entertainment that may
reasonably be deemed to affect their judgment or actions in the
performance of their duties. Our customers, suppliers and the
public at large should know that our employees’ judgment is
not for sale.
The
Company is further committed to interacting with healthcare
professionals in an ethical and professional manner, in compliance
with all applicable laws, rules and regulations. Offering anything
of value to a healthcare professional intended to influence that
person to recommend or purchase a product or service that may be
reimbursed through a government-funded system is strictly
prohibited by law and Company policy. Employees must avoid engaging
in any activity that would inappropriately influence a healthcare
professional’s medical judgment or treatment decisions. Meals
and other nominally-valued items allowable under Company policy
must be entered into our expense management system for accurate
tracking and reporting purposes.
Under
some statutes, such as the U.S. Foreign Corrupt Practices Act
(further described in Section 4), giving anything of value to a
government official to obtain or retain business or favorable
treatment is a criminal act subject to prosecution and conviction.
Discuss with your supervisor or the Compliance Officer any proposed
entertainment or gifts if you are uncertain about their
appropriateness.
13.
Political Contributions & Activity
Political
contributions are highly regulated and violations are subject to
serious penalties. Accordingly, employees should not make any
political contributions on behalf of the Company anywhere in the
world. This includes financial and in-kind contributions made by
the Company. If you engage in personal political activity, you must
do so on your own time with your own resources. Be careful to
separate your own political activities from those of the Company
and do not use Company property or equipment for personal political
purposes, because even the appearance of a Company contribution of
time or resources could be viewed as a violation.
The
Company is committed to quality and integrity in all its research,
development, and manufacturing operations. Each employee is
responsible for knowing and abiding by the laws and regulations
that apply to these activities, including without limitation, good
laboratory practices, good clinical practices, good manufacturing
practices, good distribution practices, and applicable
country-specific regulation. The Company will not tolerate the
falsification or fabrication of research, clinical or manufacturing
data.
15.
Product Promotion & Advertising
The
Company is committed to complying with all applicable laws, rules
and regulation for the countries in which it markets products. No
employee, or consultant acting on behalf of the Company, may
promote a product for use before the product is approved for such
use. This limitation however, does not restrict the appropriate
exchange of scientific information in medical forums and upon
specific unsolicited request for such information. The promotion of
approved Company products shall be done in a factually accurate and
balanced manner, shall not be false nor misleading in any way, and
facilitated by only those unaltered materials reviewed and approved
by an internal cross-functional committee.
16.
Protection and Proper Use of Company Assets
All
employees are expected to protect our assets and ensure their
efficient use. Theft, carelessness and waste have an effect on our
profitability. Our property, such as office supplies, lab
equipment, computer equipment, buildings and products, are expected
to be used only for legitimate business purposes, although
incidental personal use may be permitted. You may not, however, use
our corporate name, any brand name or trademark owned or associated
with the Company or any letterhead stationery for any personal
purpose.
You may
not, while acting on behalf of the Company or while using our
computing or communications equipment or facilities,
either:
●
access
confidential systems (also known as “hacking”) or other
resource of another entity without express written authorization
from the entity responsible for operating that resource;
or
●
commit
any unlawful or illegal act, including harassment, libel, fraud,
sending of unsolicited bulk email (also known as
“spam”) in violation of applicable law, trafficking in
contraband of any kind or espionage.
If you
receive authorization to access another entity’s internal
computer system or other resource, you must make a permanent record
of that authorization so that it may be retrieved for future
reference, and you may not exceed the scope of that
authorization.
Unsolicited bulk
email is regulated by law in a number of jurisdictions. If you
intend to send unsolicited bulk email to persons outside of the
Company, either while acting on our behalf or using our computing
or communications equipment or facilities, you should contact your
supervisor or the Compliance Officer for approval.
All
data residing on or transmitted through our computing and
communications facilities, including email and word processing
documents, is the property of the Company and subject to
inspection, retention and review by the Company, with or without an
employee’s or third party’s knowledge, consent or
approval, in accordance with applicable law. Any misuse or
suspected misuse of our assets must be immediately reported to your
supervisor or the Compliance Officer.
One of
our most important assets is our confidential information. As an
employee of the Company, you may learn of information about the
Company that is confidential and proprietary. You also may learn of
information before that information is released to the general
public. Employees who have received or have access to confidential
information should take care to keep this information confidential.
Confidential information includes non-public information that might
be of use to competitors or harmful to the Company or its customers
if disclosed, such as business, marketing and service plans,
financial information, product architecture, source codes,
inventions, chemical structures, designs, databases, customer
lists, pricing strategies, personnel data, personally identifiable
information pertaining to our employees, customers or other
individuals (including, for example, names, addresses, telephone
numbers and social security numbers), and similar types of
information provided to us by our customers, suppliers and
partners. This information may be protected by patent, trademark,
copyright and trade secret laws.
In
addition, because we interact with other companies and
organizations, there may be times when you learn confidential
information about other companies before that information has been
made available to the public. You must treat this information in
the same manner as you are required to treat our confidential and
proprietary information. There may even be times when you must
treat as confidential the fact that we have an interest in, or are
involved with, another company.
You are
expected to keep confidential and proprietary information
confidential unless and until that information is released to the
public through approved channels (usually through a press release,
an SEC filing or a formal communication from a member of senior
management, as further described in Section 18). Every employee has
a duty to refrain from disclosing to any person confidential or
proprietary information about us or any other company learned in
the course of employment here, until that information is disclosed
to the public through approved channels. This policy requires you
to refrain from discussing confidential or proprietary information
with outsiders and even with other Company employees, unless those
fellow employees have a legitimate need to know the information in
order to perform their job duties. Unauthorized use or distribution
of this information could also be illegal and result in civil
liability and/or criminal penalties.
You
should also take care not to inadvertently disclose confidential
information. Materials that contain confidential information, such
as memos, notebooks, computer disks and laptop computers, should be
stored securely. Unauthorized posting or discussion of any
information concerning our business, information or prospects on
the Internet is prohibited. You may not discuss our business,
information or prospects in any non-Company hosted public
“chat room,” web log (“blog”), or other
similar electronic environment, regardless of whether you use your
own name or a pseudonym. Be cautious when discussing sensitive
information in public places like elevators, airports, restaurants
and “quasi-public” areas within the Company. All
Company emails, voicemails and other communications are presumed
confidential and
should
not be forwarded or otherwise disseminated outside of the Company
except where required for legitimate business
purposes.
In
addition to the above responsibilities, if you are handling
information protected by any privacy policy published by us, then
you must handle that information in accordance with the applicable
policy.
18.
Media/Public Discussions
It is
our policy to disclose material information concerning the Company
to the public only through specific limited channels to avoid
inappropriate publicity and to ensure that all those with an
interest in the Company will have equal access to information. All
inquiries or calls from the press and financial analysts should be
referred to the Chief Executive Officer, Chief Scientific Officer
or Chief Financial Officer. We have designated these individuals as
our official spokespersons for financial matters, marketing,
technical and other related information. Unless they have made a
specific exception, these designees are the only people who may
communicate with the press on behalf of the Company. You also may
not provide any information to the media about us off the record,
for background, confidentially or secretly.
Any
waiver of this Code for executive officers (including, where
required by applicable laws, our principal executive officer,
principal financial officer, principal accounting officer or
controller (or persons performing similar functions)) or directors
may be authorized only by our Board of Directors or, to the extent
permitted by the rules of Nasdaq, a committee of the Board of
Directors and will be disclosed to stockholders as required by
applicable laws, rules and regulations.
20.
Compliance Standards and Procedures
Compliance
Resources
To
facilitate compliance with this Code, we have established the
position of Compliance Officer to oversee this program. The
Compliance Officer is a person to whom you can address any
questions or concerns. Our Chief Financial Officer serves as our
Compliance Officer. In addition to fielding questions or concerns
with respect to potential violations of this Code, the Compliance
Officer is responsible for:
●
investigating
possible violations of this Code, both autonomously and in
partnership with other functions as needed (e.g., supporting Human
Resources on matters of workplace violence, harassment or
discrimination);
●
training
new employees on the Code and supporting policies;
●
maintaining
access to an electronic version of the Code and ensuring that each
employee receives annual refresher training and certifies to their
understanding of and compliance with the Code;
●
distributing
copies of this Code annually via email to each employee with a
reminder that each employee is responsible for reading,
understanding and complying with this Code;
●
collaborating
with Human Resources, management, and other departments as needed
on corrective actions to ensure consistent enforcement of
disciplinary measures;
●
updating
this Code as needed and alerting employees to any updates, with
appropriate approval of the Audit Committee of the Board of
Directors, to reflect changes in the law, Company operations and in
recognized best practices, and to reflect Company experience; and
otherwise promoting an atmosphere of responsible and ethical
conduct.
Your
most immediate resource for any matter related to this Code is your
supervisor. He or she may have the information you need or may be
able to refer the question to another appropriate source. There
may, however, be times when you prefer not to go to your
supervisor. In these instances, you should feel free to discuss
your concern with the Compliance Officer. If you are uncomfortable
speaking with the Compliance Officer because he or she works in
your department or is one of your supervisors, please contact the
Chief Executive Officer. Of course, if your concern involves
potential misconduct by another person and relates to questionable
accounting or auditing matters, you may report that violation
directly to the Audit Committee of the Board of
Directors.
Clarifying
Questions and Concerns; Reporting Possible Violations
If you
encounter a situation or are considering a course of action and its
appropriateness is unclear, discuss the matter promptly with your
supervisor or the Compliance Officer; even the appearance of
impropriety can be very damaging and should be
avoided.
If you
are aware of a suspected or actual violation of Code standards by
others, you have a responsibility to report it. You are expected to
promptly provide a compliance resource with a specific description
of the violation that you believe has occurred, including any
information you have about the persons involved and the time of the
violation. Whether you choose to speak with your supervisor or the
Compliance Officer, you should do so without fear of any form of
retaliation. We will take prompt disciplinary action against any
employee who retaliates against you, including termination of
employment.
Supervisors must
promptly report any complaints or observations of Code violations
to the Compliance Officer. If you believe your supervisor has not
taken appropriate action, you should contact the Compliance Officer
directly. The Compliance Officer will investigate all reported
possible Code violations promptly and with the highest degree of
confidentiality that is possible under the specific circumstances.
Neither you nor your supervisor may conduct any preliminary
investigation, unless authorized to do so by the Compliance
Officer. Your cooperation in the investigation will be expected. As
needed, the Compliance Officer will consult with the Human
Resources department and/or the Audit Committee of the Board of
Directors. It is our policy to employ a fair process by which to
determine violations of this Code.
With
respect to any complaints or observations of violations that may
involve accounting, internal accounting controls and auditing
concerns, the Compliance Officer shall promptly inform the Audit
Committee of the Board of Directors, and the Audit Committee of the
Board of Directors shall be responsible for supervising and
overseeing the inquiry and any investigation that is
undertaken.
If any
investigation indicates that a violation of this Code has probably
occurred, we will take such action as we believe to be appropriate
under the circumstances. If we determine that an employee is
responsible for a Code violation, he or she will be subject to
disciplinary action up to, and including, termination of employment
and, in appropriate cases, civil action or referral for criminal
prosecution. Appropriate action may also be taken to deter any
future Code violations.
Exhibit 31.1
CERTIFICATION
I,
Chandler D. Robinson, certify that:
1.
I have reviewed
this Annual Report on Form 10-K of Monopar Therapeutics
Inc.;
2.
Based on my
knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period
covered by this report;
3.
Based on my
knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in
this report;
4.
The
registrant’s other certifying officer(s) and I are
responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) for the registrant and have:
a)
designed such
disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant is made
known to us by others within those entities, particularly during
the period in which this report is being prepared;
b)
designed such
internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally
accepted accounting principles;
c)
evaluated the
effectiveness of the registrant’s disclosure controls and
procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the
end of the period covered by this report based on such evaluation;
and
5.
The
registrant’s other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant’s auditors and
the audit committee of the registrant’s board of directors
(or persons performing the equivalent functions):
a)
all significant
deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably
likely to adversely affect the registrant’s ability to
record, process, summarize and report financial information;
and
b)
any fraud, whether
or not material, that involves management or other employees who
have a significant role in the registrant’s internal control
over financial reporting.
Date:
March 26, 2018
/s/
CHANDLER D. ROBINSON
Chief
Executive Officer
Exhibit 31.2
CERTIFICATION
I, Kim
R. Tsuchimoto, certify that:
1.
I have reviewed
this Annual Report on Form 10-K of Monopar Therapeutics
Inc.;
2.
Based on my
knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period
covered by this report;
3.
Based on my
knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in
this report;
4.
The
registrant’s other certifying officer(s) and I are
responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) for the registrant and have:
a)
designed such
disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant is made
known to us by others within those entities, particularly during
the period in which this report is being prepared;
b)
designed such
internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally
accepted accounting principles;
c)
evaluated the
effectiveness of the registrant’s disclosure controls and
procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the
end of the period covered by this report based on such evaluation;
and
5.
The
registrant’s other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant’s auditors and
the audit committee of the registrant’s board of directors
(or persons performing the equivalent functions):
a)
all significant
deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably
likely to adversely affect the registrant’s ability to
record, process, summarize and report financial information;
and
b)
any fraud, whether
or not material, that involves management or other employees who
have a significant role in the registrant’s internal control
over financial reporting.
Date:
March 26, 2018
/s/ KIM
R. TSUCHIMOTO
Kim R.
Tsuchimoto
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report on Form 10-K of Monopar
Therapeutics Inc. (the Company) for the year ended
December 31, 2017, as filed with the Securities and Exchange
Commission on the date hereof (the Report), we, Chandler D.
Robinson, and Kim R. Tsuchimoto, hereby certify, pursuant to 18
U.S.C. §1350, as adopted pursuant to §906 of the
Sarbanes-Oxley Act of 2002, that:
(1)
the Report fully
complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and
(2)
the
information contained in the Report fairly presents, in all
material respects, the financial condition and results of
operations of the Company.
/s/ CHANDLER D. ROBINSON
Chandler D. Robinson
Chief Executive Officer
March 26, 2018
/s/ KIM R. TSUCHIMOTO
Kim R. Tsuchimoto
Chief Executive Officer
March 26, 2018
This certification accompanies the Form 10-K to which it relates,
is not deemed filed with the Securities and Exchange Commission and
is not to be incorporated by reference into any filing of Monopar
Therapeutics Inc. under the Securities Act of 1933, as amended, or
the Securities Exchange Act of 1934, as amended (whether made
before or after the date of the Form 10-K), irrespective of any
general incorporation language contained in such
filing.