COLLABORATION AGREEMENTBY AND BETWEEN PGX HEALTH , LLC

Collaboration Agreement

AGREEMENTS / CONTRACTS

CLAUSES

COMBINATORX, INC | Clinical Data, Inc | PGXHEALTH LLC COMBINATORX, INC

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Title: COLLABORATION AGREEMENTBY AND BETWEEN PGX HEALTH , LLC
Governing Law: Massachusetts Date: 8/13/2009
Industry: Biotechnology and Drugs Law Firm: Cooley Godward Sector: Healthcare

C OLLABORATION A GREEMENT

B Y AND B ETWEEN

PG X H EALTH , LLC

AND

C OMBINATO R X , I NC .

E FFECTIVE ON A UGUST 11, 2009

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ARTICLE 1	DEFINITIONS	1
1.1	“Affiliate”	1
1.2	“Allowable Expenses”	2
1.3	“ATL”	2
1.4	“Claim”	2
1.5	“Co-Development Notice”	2
1.6	“Co-Development Option”	2
1.7	“Collaboration”	2
1.8	“Collaboration Know-How”	2
1.9	“Collaboration Information”	2
1.10	“Collaboration Patents”	2
1.11	“Collaboration Technology”	2
1.12	“Commercialization”	3
1.13	“Commercialization Plan”	3
1.14	“Compound”	3
1.15	“Confidential Information”	3
1.16	“Control”	3
1.17	“Cost of Goods Sold”	3
1.18	“CRXX Claims”	3
1.19	“CRXX Indemnitees”	3
1.20	“CRXX Know-How”	3
1.21	“CRXX Patents”	4
1.22	“CRXX Technology”	4
1.23	“Damages”	4
1.24	“Development”	4
1.25	“Development Plan”	4
1.26	“Diligent Efforts”	4
1.27	“Distribution Expenses”	5
1.28	“European Union” or “EU”	5
1.29	“Executive Officer”	5
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1.30	“Existing Confidentiality Agreement”	5
1.31	“FDA”	5
1.32	“FD&C Act”	5
1.33	“Field”	5
1.34	“First Commercial Sale”	5
1.35	“FTE”	5
1.36	“Governmental Authority”	5
1.37	“Information”	6
1.38	“Initial Development Plan”	6
1.39	“JAMS Rules”	6
1.40	“Joint Invention”	6
1.41	“Joint Patent”	6
1.42	“JSC”	6
1.43	“License Commercialization Report”	6
1.44	“License Development Report”	6
1.45	“Major EU Country”	6
1.46	“Marketing Authorization Application” or “MAA”	6
1.47	“Marketing Expenses”	6
1.48	“Marks”	6
1.49	“NDA”	6
1.50	“Net Sales”	6
1.51	“Partnering Agreement”	8
1.52	“Partnering Revenue”	8
1.53	“Patent Expenses”	8
1.54	“PGx Claims”	8
1.55	“PGx Indemnitees”	8
1.56	“PGx Know-How”	8
1.57	“PGx Patents”	8
1.58	“PGx Technology”	9
1.59	“Phase 2 Clinical Trial”	9
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1.60	“Phase 3 Clinical Trial”	9
1.61	“Phase 4 Clinical Trial”	9
1.62	“Post-Launch Product R&D Expenses”	9
1.63	“Pre-Launch Commercialization Costs”	9
1.64	“Product”	10
1.65	“Product Infringement”	10
1.66	“Product Profit”	10
1.67	“Publication”	10
1.68	“Recall Expenses”	10
1.69	“Regulatory Approval”	10
1.70	“Regulatory Authority”	10
1.71	“Regulatory Expenses”	10
1.72	“Regulatory Materials”	10
1.73	“Retained Field”	10
1.74	“Royalty Term”	11
1.75	“SEC”	11
1.76	“Section 8.4(a) Sublicensing Arrangement”	11
1.77	“Section 8.4(b) Sublicensing Arrangement”	11
1.78	“Shared Development Costs”	11
1.79	“Sole Inventions”	11
1.80	“Term”	11
1.81	“Territory”	11
1.82	“Third Party”	11
1.83	“UVA”	11
1.84	“UVA Agreement”	11
1.85	“UVAPF”	11
ARTICLE 2	LICENSES	12
2.1	License to CRXX	12
2.2	License to PGx	12
2.3	PGx Retained Rights	12
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2.4	No Non-Permitted Use	12
2.5	No Other Licenses	13
2.6	Sublicense Agreements	13
2.7	UVA Agreement	13
2.8	Other Third Party Agreements	15
2.9	Government Rights	15
2.10	Mutual Exclusivity	16
2.11	Partnering Agreements	16
ARTICLE 3	GOVERNANCE	16
3.1	Joint Steering Committee	16
3.2	Meetings of the JSC	16
3.3	Responsibilities of the JSC	17
3.4	Areas Outside the JSC’s Authority	17
3.5	JSC Decisions	18
3.6	Subcommittees	18
3.7	Operating Principles	19
3.8	Termination of JSC	19
ARTICLE 4	DEVELOPMENT	19
4.1	Overview	19
4.2	Development Plan	19
4.3	Materials Transfer	20
4.4	Diligent Development	20
4.5	Development Reports	20
4.6	Standards of Conduct	21
4.7	Development Expenses	21
4.8	Option to Co-Develop	22
4.9	License Development Reports	22
ARTICLE 5	REGULATORY	23
5.1	Regulatory Filings	23
5.2	Product Withdrawals and Recalls	23
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ARTICLE 6	COMMERCIALIZATION	24
6.1	General	24
6.2	Commercialization Plan	24
6.3	Diligent Commercialization	25
6.4	Commercialization Reports	25
6.5	Commercialization Standards of Conduct	26
6.6	License Commercialization Reports	26
ARTICLE 7	MANUFACTURE AND SUPPLY	26
7.1	Manufacturing Responsibility	26
7.2	Transfer of Manufacturing Technology	26
7.3	Supply of Product to CRXX	27
ARTICLE 8	FINANCIALS	27
8.1	License Fee	27
8.2	Development and Regulatory Milestone Payments	27
8.3	Commercialization Milestone Payments	28
8.4	Royalties	29
8.5	Reduction for Payments for Necessary Licenses	32
8.6	Profit-Share	33
8.7	Taxes	34
8.8	Blocked Currency	34
8.9	Foreign Exchange	34
8.10	Late Payments	34
8.11	Financial Records; Audits	34
ARTICLE 9	INTELLECTUAL PROPERTY	35
9.1	Ownership of Inventions	35
9.2	Disclosure of Inventions	35
9.3	Prosecution of Patents	36
9.4	Enforcement of Collaboration Patents	38
9.5	Patent Marking	41
9.6	Employee Obligations	41
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9.7	Trademarks	42
ARTICLE 10	REPRESENTATIONS AND WARRANTIES	42
10.1	Mutual Representations and Warranties	42
10.2	Disclaimer	43
10.3	No Other Representations or Warranties	43
ARTICLE 11	INDEMNIFICATION	43
11.1	Indemnification by PGx	44
11.2	Indemnification by CRXX	44
11.3	Indemnification Procedures	44
11.4	Third Party Claims Related to Products	45
11.5	Limitation of Liability	45
11.6	Insurance	45
ARTICLE 12	CONFIDENTIALITY	46
12.1	Confidentiality	46
12.2	Authorized Disclosure	46
12.3	Publicity; Terms of Agreement	47
12.4	Publications	48
ARTICLE 13	TERM AND TERMINATION	49
13.1	Term	49
13.2	Termination by Either Party for Breach	49
13.3	Termination for Patent Challenge	50
13.4	Effect of Termination of the Agreement	50
13.5	Other Remedies	52
13.6	Rights in Bankruptcy	52
13.7	Survival	52
ARTICLE 14	DISPUTE RESOLUTION	53
14.1	Disputes	53
14.2	Arbitration	53
14.3	Arbitrator	53
14.4	Governing Law	54
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14.5	Decision	54
14.6	Award	54
14.7	Costs	54
14.8	Injunctive Relief	55
14.9	Confidentiality	55
14.10	Survivability	55
14.11	Jurisdiction	55
14.12	Patent and Trademark Disputes	55
ARTICLE 15	MISCELLANEOUS	55
15.1	Entire Agreement; Amendment	56
15.2	Force Majeure	56
15.3	Notices	56
15.4	No Strict Construction; Headings	57
15.5	Assignment	57
15.6	Performance by Affiliates	57
15.7	Further Actions	58
15.8	Compliance with Applicable Law	58
15.9	Severability	58
15.10	No Waiver	58
15.11	Independent Contractors	58
15.12	Counterparts	58

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EXECUTION COPY

COLLABORATION AGREEMENT

T HIS C OLLABORATION A GREEMENT (the “Agreement” ) is entered into as of August 11, 2009 (“ Effective Date ”) by and between PGxHealth, LLC , a Delaware limited liability company having its principal offices at One Gateway Center, Suite 702, Newton, MA 02458 ( “PGx” ), a wholly owned subsidiary of Clinical Data, Inc. ( “CLDA” ), and C OMBINATO R X , I NC . , a Delaware corporation having its principal place of business at 245 First St., Third Floor, Cambridge, MA 02142 ( “CRXX” ). PGx and CRXX are sometimes referred to herein individually as a “Party” and collectively as the “Parties” .

R ECITALS

I. CRXX has discovered certain novel results and filed certain patent applications related to the use of pharmacologically active agonists of the adenosine ^A 2A ^{receptor subtype} (“ A2a Agonists ”) for the treatment of various proliferative disorders, including cancer.

II. PGx owns certain intellectual property rights relating to a therapeutic candidate known as ATL313, an A2a Agonist, including patent applications directed to the composition of matter of ATL313.

III. CRXX and PGx desire to establish a collaboration for the development and commercialization of ATL313.

N OW T HEREFORE , in consideration of the foregoing premises and the mutual promises, covenants and conditions contained in this Agreement, the Parties agree as follows:

ARTICLE 1

DEFINITIONS

As used in this Agreement, the following initially capitalized terms, whether used in the singular or plural form, shall have the meanings set forth in this Article 1.

1.1 “Affiliate” means, with respect to a particular Party, a person, corporation, partnership, or other entity that controls, is controlled by or is under common control with such Party. For the purposes of this definition, the word “control” (including, with correlative meaning, the terms “controlled by” or “under the common control with”) means the actual power, either directly or indirectly through one or more intermediaries, to direct or cause the direction of the management and policies of such entity, whether by the ownership of more than fifty percent (50%) of the voting stock of such entity, or by contract or otherwise.

1.2 “Allowable Expenses” means (a) Pre-Launch Product Commercialization Costs and (b) all costs that are actually incurred, after the First Commercial Sale of a Product in the

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Territory, by a Party or for its account and are specifically attributable to such Party’s satisfaction of its obligations pursuant to the Commercialization Plan for such Product for the purpose of promoting sales of such Product in the Territory, including without limitation any of the following expenses incurred after First Commercial Sale in the Territory of a Product, in each case to the extent consistent with the Commercialization Plan and specifically attributable to a Product: (i) Cost of Goods Sold, (ii) Marketing Expenses, (iii) Distribution Expenses, (iv) Post-Launch Product R&D Expenses, (v) Patent Expenses, (vi) Regulatory Expenses, (vii) Recall Expenses; and (viii) Allocated G&A Expenses, in each case as such terms are defined and calculated in this Article 1 and in Exhibit A . Allowable Expenses shall also include those certain costs described in Section 2.11, those certain payments set forth in Section 8.5(b), those certain expenses described in Sections 8.7(b) and 9.4(c)(ii), and those Damages described in Section 11.4.

1.3	“ATL” means Adenosine Therapeutics, LLC.

1.4	“Claim” has the meaning set forth in Section 11.3.

1.5	“Co-Development Notice” has the meaning set forth in Section 4.8(a).

1.6	“Co-Development Option” has the meaning set forth in Section 4.8(b).

1.7	“Collaboration ” means the collaborative Development and Commercialization of

the Product to be undertaken by the Parties pursuant to this Agreement, it being understood that Development and Commercialization of the Product by CRXX and/or its partners or sublicensees following the expiration of the Co-Development Option without exercise by PGx shall not be deemed to be part of the Collaboration.

1.8	“Collaboration	Know-How” means all PGx Know-How and all CRXX Know-
How.

1.9	“Collaboration	Information” has the meaning set forth in Section 13.5(f).

1.10	“Collaboration	Patents” means all PGx Patents, all CRXX Patents and all Joint
Patents.

1.11	“Collaboration	Technology” means all PGx Technology and all CRXX
Technology.

1.12 “Commercialization” means the marketing, promotion, sale and/or distribution of Product for use in Field in the Territory. “Commercialize” has a correlative meaning.

1.13	“Commercialization Plan” has the meaning set forth in Section 6.2(a).

1.14	“Compound” means the compound known as ATL313, the structure of which is

shown in Exhibit B .

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1.15 “Confidential Information” means, with respect to a Party, all Information of such Party that is disclosed to the other Party under this Agreement, which may include, without limitation, specifications, know-how, trade secrets, technical information, drawings, models, business information, inventions, discoveries, methods, procedures, formulae, protocols, techniques, data, and unpublished patent applications, whether disclosed in oral, written, graphic, or electronic form. Notwithstanding the foregoing, subject to Section 13.5(f), all Information generated or resulting from the Collaboration, whether generated by one or both Parties, shall be deemed the Confidential Information of both Parties; provided, however, that the Information required to be provided to PGx pursuant to Section 3.8 shall be deemed the Confidential Information of CRXX, subject to Section 13.5(f). All confidential Information disclosed by either Party pursuant to the Existing Confidentiality Agreement, shall be deemed to be such Party’s Confidential Information hereunder.

1.16 “Control” means, with respect to any material, Information, or intellectual property right, that a Party owns or has a license to such material, Information, or intellectual property right and has the ability to grant to the other Party access, a license, or a sublicense (as applicable) to such material, Information, or intellectual property right on the terms and conditions set forth herein without violating the terms of any then-existing agreement or other arrangement with any Third Party.

1.17	“Cost of Goods Sold” has the meaning set forth in Exhibit A .

1.18	“ CRXX Claims ” has the meaning set forth in Section 11.1.

1.19	“CRXX Indemnitees” has the meaning set forth in Section 11.1.

1.20	“CRXX Know-How” means all Information (excluding any CRXX Patents) that

is (a) Controlled as of the Effective Date by CRXX or its Affiliate; or (b) made by or on behalf of CRXX or its Affiliates or sublicensees pursuant to performing CRXX’s obligations or exercising CRXX’s rights under this Agreement (including any Sole Inventions of CRXX and any Joint Inventions) and, in the case of both (a) and (b), is reasonably necessary or useful for the research, Development, manufacture, use, importation or sale of Products.

1.21 “CRXX Patents” means all patents and patent applications that (a) are Controlled as of the Effective Date or during the Term by CRXX or its Affiliates and that claim, and only to the extent that such patents and patent applications claim, the composition of matter, manufacture, or use of the Compound, such patents and patent applications and the applicable claims thereof set forth on Exhibit C (including any future claims derived therefrom), (b) are substitutions, divisions, continuations, continuations-in-part (to the extent directed to the subject matter disclosed in a patent or patent application described in (a)) and requests for continued examination of any of the foregoing, (c) are patents arising from or claiming priority to any of the foregoing, (d) are reissues, renewals, registrations, confirmations, re-examinations, extensions, and supplementary protection certificates of any of the foregoing, and/or (e) all foreign equivalents of any of the foregoing. For the avoidance of doubt, the CRXX Patents shall include any patent or application claiming a Sole Invention of CRXX and any Joint Patent, in each case solely to the extent that such patent or patent application claims the composition of matter,

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manufacture, or use of the Compound (whether or not such patents or patent applications are listed on Exhibit C).

1.22	“CRXX Technology” means the CRXX Patents and CRXX Know-How.

1.23	“ Damages ” has the meaning set forth in Section 11.4.

1.24	“Development” means all activities that relate to (a) obtaining, maintaining or

expanding Regulatory Approval of Product or (b) developing the ability to manufacture clinical and commercial quantities of Product. This includes, without limitation, (i) research, preclinical testing, toxicology, formulation, manufacturing-related technology development, and clinical studies of Product; (ii) preparation, submission, review, and development of data or information for the purpose of submission to a governmental authority to obtain, maintain and/or expand Regulatory Approval of Product, and outside regulatory services related thereto; (iii) manufacturing process development and scale-up, bulk production and fill/finish work associated with the supply of Product for preclinical and clinical studies, and related quality assurance technical support activities; (iv) post-Regulatory Approval product support for Product (including manufacturing and quality assurance technical support, and laboratory and clinical efforts directed toward the further understanding of the safety and efficacy of Product); and (v) Product-related medical affairs (including regulatory support necessary for product maintenance). “Develop” has a correlative meaning.

1.25 “Development Plan” means the plan for conducting collaborative Development of Products for use in the Field, as set forth in Section 4.2(a).

1.26 “Diligent Efforts” means, with respect to CRXX’s obligations under this Agreement to Develop or Commercialize a Product, the efforts and resources comparable to those undertaken by CRXX in pursuing intellectual property protection and the research, discovery or commercialization of proprietary materials and the development of product candidates, as applicable, that are not subject to the Collaboration and that are at an equivalent stage of development or commercialization and have similar market potential and are at a similar stage in their lifecycle, taking into account factors such as, mechanism of action; efficacy and safety; product profile; actual or anticipated Regulatory Authority approved labeling and pricing; and the nature and extent of market exclusivity (including patent coverage, proprietary position and regulatory exclusivity; cost, time required for and likelihood of obtaining Regulatory Approval; competitiveness of alternative products and market conditions, actual or projected profitability and availability of capacity to manufacture and supply for commercial sale), as applicable. In addition, factors beyond the reasonable control of CRXX, including without limitation, regulatory delays, safety findings, unforeseen technical challenges, the failure of a Product to meet necessary scientific or regulatory endpoints, and events described in Section 15.2 shall be taken into account.

1.27	“Distribution Expenses” has the meaning set forth in Exhibit A .

1.28	“European Union” or “EU” means all of the European Union member states as

of the applicable time during the Term.

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1.29 “Executive Officer ” means (a) in the case of PGx, the Chief Executive Officer of CLDA and (b) in the case of CRXX, the Chief Executive Officer of CRXX.

1.30 “Existing Confidentiality Agreement” means the Confidentiality Agreement entered into by CRXX and PGx, as successor in interest to ATL, dated August 3, 2007.

1.31	“FDA” means the United States Food and Drug Administration or its successor.

1.32	“FD&C Act” means the United States Federal Food, Drug and Cosmetic Act, as

amended.

1.33 “Field” means the treatment, prevention and diagnosis of cancer in humans, but specifically excluding the Retained Field.

1.34 “First Commercial Sale” means, with respect to a Product and country, the first sale to a Third Party of such Product in such country after Regulatory Approval (and any pricing or reimbursement approvals, if necessary) has been obtained in such country.

1.35 “ FTE ” means a full-time equivalent person-year (consisting of a total of 1960 hours per year) of scientific, technical, or managerial work on or directly related to activities performed under the Collaboration.

1.36 “Governmental Authority” means any multi-national, federal, state, local, municipal or other government authority of any nature (including any governmental division, subdivision, department, agency, bureau, branch, office, commission, council, court or other tribunal).

1.37 “Information” means any data, results, and information of any type whatsoever, in any tangible or intangible form, including, without limitation, know-how, trade secrets, practices, techniques, methods, processes, inventions, developments, specifications, formulations, formulae, materials or compositions of matter of any type or kind (patentable or otherwise), software, algorithms, marketing reports, expertise, stability, technology, test data including pharmacological, biological, chemical, biochemical, toxicological, and clinical test data, analytical and quality control data, stability data, studies and procedures.

1.38	“Initial Development Plan” has the meaning set forth in Section 4.2(b).

1.39	“JAMS Rules” has the meaning set forth in Section 14.2.

1.40	“Joint Invention” has the meaning set forth in Section 9.1.

1.41	“Joint Patent” has the meaning set forth in Section 9.3(c).

1.42	“JSC” means the joint steering committee formed by the Parties as described in

Section 3.1.
1.43		“License Commercialization Report” has the meaning set forth in Section 6.6.

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	1.44	“License Development Report” has the meaning set forth in Section 4.9.
	1.45	“Major EU Country” means the United Kingdom, France, Germany, Italy or
Spain.
	1.46	“Marketing Authorization Application” or “MAA” means an application for

Regulatory Approval in a country, territory or possession other than the United States.

1.47	“Marketing Expenses” has the meaning set forth in Exhibit A .

1.48	“Marks” has the meaning set forth in Section 9.7.

1.49	“NDA” means a New Drug Application, as defined in the FD&C Act and

applicable regulations promulgated thereunder by the FDA.

1.50 “Net Sales” means, with respect to any Product, the gross amount invoiced by a Party, an Affiliate, or any sublicensee of a Party for sales of such Product to a Third Party less: (a) normal and customary trade, quantity and cash discounts, rebates and chargebacks, and non-affiliated broker’s, distributor’s or agent’s commissions, in each case actually taken; (b) credits actually given for returned Product (including withdrawals and recalls); (c) sales, excise, and turnover taxes and duties levied on and/or other governmental charges made as to production, sale, importation, transportation, delivery or use of a Product imposed directly on and actually paid by a Party or its Affiliates or sublicensees (but excluding any income taxes); (d) transportation costs, including insurance and shipping, freight, and handling charges, to the extent allocated to customers; and (e) the customary costs of special packaging and/or administration items packaged and sold with a Product. Sales between a Party and its Affiliates and sublicensees (including distributors) shall be disregarded for purposes of calculating Net Sales except if such purchaser is an end user.

In the event that a Product is sold as part of a Combination Product, where “Combination Product” means any unified dose (e.g., not a kit of two separate and distinct drug dosage forms) of pharmaceutical product which is comprised of Product and other therapeutically active compound(s) and/or ingredient(s) (collectively the “Other Products”), Net Sales of Product, for the purposes of determining royalty payments, shall be determined by multiplying the Net Sales of the Combination Product by the fraction, A / (A+B) where A is the weighted average sale price of the Product when sold separately in finished form, and B is the weighted average sale price of the Other Products sold separately in finished form, in each case in the country of sale of the Combination Product in the calendar quarter of such sale, provided that the Net Sales in any royalty period shall in no event be reduced by more than fifty percent (50%) by reason of the foregoing sentence. In the event that no separate sales are made of either the Product or the Other Products, the reasonably estimated commercial value thereof will be used instead of the sale price. Notwithstanding the foregoing, the adjustment of Net Sales as set forth in this paragraph shall not apply if the composition of matter of such other active ingredient is not claimed in any issued and unexpired patent claim owned by CRXX or a third party.

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Each of “weighted average sale price” and “reasonably estimated commercial value” shall be determined as set forth below: “Weighted average sale price” and “reasonably estimated commercial value,” as the case may be, for a Product and Other Products shall be calculated once at the commencement of each calendar year and such amount shall be used during all applicable royalty reporting periods for the entire following calendar year. When determining the weighted average sale price of a Product or Other Products, the weighted average sale price shall be calculated by dividing the Net Sales (translated into U.S. dollars in accordance with Section 8.9) by the units of active ingredient sold during the twelve (12) months (or the number of months sold in a partial calendar year) of the preceding calendar year for the respective Product or Other Products. “Estimated commercial value” shall be determined by agreement of the Parties using criteria to be mutually agreed upon by the Parties. If the Parties do not agree, such dispute shall be first referred to the JSC to be resolved in accordance with Section 3.5, but if not resolved as set forth in Section 3.5, shall be resolved in accordance with Article 14 hereof. In the calendar year in which the First Commercial Sale occurs, a forecasted weighted average sale price will be used for the Product and Other Products, if applicable. Any over or under payment due to a difference between forecasted and actual weighted average sale prices will be paid or credited in the first royalty payment of the following calendar year.

With respect to any sale or other disposal of any Product for any consideration other than exclusively monetary consideration on arm's length terms, for purposes of calculating the gross sales amount necessary to calculate the Net Sales under this Agreement, such Product shall be deemed to be sold exclusively for money at the average gross invoice price charged to Third Parties for cash sales during the applicable reporting period.

Net Sales shall be determined in accordance with generally accepted accounting principles in the United States.

1.51 “Partnering Agreement” means an agreement under which either or both Parties grant (or, with the written approval of both Parties, if such approval of both Parties is required under the terms of this Collaboration Agreement, one of the Parties grants) a license under the Collaboration Technology to a Third Party to Develop and/or Commercialize a Product in the Field. For the avoidance of doubt, any agreement between PGx and a Third Party (including, but not limited to, Santen Pharmaceuticals) to Develop and Commercialize the Compound for the treatment of any ophthalmic disease by topical administration into the eye shall not be treated as a Partnering Agreement.

1.52 “Partnering Revenue” means any and all forms of consideration that either Party receives from a Third Party in connection with a Partnering Agreement, which may include upfront license fees, annual license or maintenance payments, milestone payments, royalties, and other similar payments.

1.53	“Patent Expenses” has the meaning set forth in Exhibit A .

1.54	“ PGx Claims ” has the meaning set forth in Section 11.2.

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1.55	“PGx Indemnitees” has the meaning set forth in Section 11.2.

1.56	“PGx Know-How” means all Information (excluding any PGx Patents) that is (a)

Controlled as of the Effective Date by PGx ; or (b) made by or on behalf of PGx or its Affiliate pursuant to performing PGx’s obligations or exercising PGx’s rights under this Agreement (including any Sole Inventions of PGx and any Joint Inventions) and, in the case of both (a) and (b), is reasonably necessary or useful for the research, Development, manufacture, use, importation or sale of Products in the Field.

1.57 “PGx Patents” means all patents and patent applications that (a) are Controlled as of the Effective Date or during the Term by PGx and that claim the composition of matter, manufacture or use in the Field of the Compound, (b) are substitutions, divisions, continuations, continuations-in-part (to the extent directed to the subject matter disclosed in a patent or patent application described in (a)) and requests for continued examination of any of the foregoing, (c) are patents arising from or claiming priority to any of the foregoing, (d) are reissues, renewals, registrations, confirmations, re-examinations, extensions, and supplementary protection certificates of any of the foregoing, and/or (e) are foreign equivalents of any of the foregoing. For the avoidance of doubt, the PGx Patents shall include any patent or application claiming a Sole Invention of PGx and any Joint Patents, in each case solely to the extent that such patent or patent application claims the composition of matter, manufacture, or use in the Field of the Compound.

1.58	“PGx Technology” means the PGx Patents and PGx Know-How.

1.59	“Phase 2 Clinical Trial” means a human clinical trial of a Product, the principal

purpose of which is to evaluate the effectiveness of such Product in the target patient population, as described in 21 C.F.R. § 312.21(b), or a similar clinical study prescribed by the Regulatory Authorities in a country other than the United States. For purpose of this Agreement, “initiation of a Phase 2 Clinical Trial” for a Product means the first enrollment of a human in the Phase 2 Clinical Trial involving administration of such Product.

1.60 “Phase 3 Clinical Trial” means a human clinical trial of a Product on a sufficient number of subjects that is designed to (a) establish that a drug is safe and efficacious for its intended use; (b) define warnings, precautions and adverse reactions that are associated with the drug in the dosage range to be prescribed; and (c) support Regulatory Approval of such drug, as described in 21 C.F.R. § 312.12(c), or a similar clinical study prescribed by the Regulatory Authorities in a country other than the United States. For purpose of this Agreement, “initiation of a Phase 3 Clinical Trial” for a Product means the first enrollment of a human in the Phase 3 Clinical Trial involving administration of such Product.

1.61 “Phase 4 Clinical Trial” means a human clinical trial of a Product conducted after Regulatory Approval of such Product has been obtained from an appropriate Regulatory Authority, which trial is (a) conducted voluntarily by a Party to enhance marketing or scientific knowledge of the Product, or (b) conducted due to a request or requirement of a Regulatory Authority.

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1.62	“Post-Launch Product R&D Expenses” has the meaning set forth in Exhibit A .

1.63	“Pre-Launch Commercialization Costs” means all costs that are actually

incurred, prior to the First Commercial Sale of a Product in the Territory, by a Party or for its account and are specifically attributable to such Party’s satisfaction of its obligations pursuant to the Commercialization Plan for such Product for the purpose of promoting sales of such Product in the Territory, provided that such costs are less than or equal to the amount specified therefor in the budget associated with such Commercialization Plan; provided that costs incurred pursuant to Section 11.4 shall not be subject to any limitations set forth in any Commercialization Plan budget.

1.64 “Product” means a product that contains the Compound, whether as a single active pharmaceutical ingredient or combined with other active pharmaceutical ingredients.

1.65	“Product Infringement” has the meaning set forth in Section 9.4(a).

1.66	“Product Profit” means the worldwide profits or losses resulting from the

Commercialization of Products and shall be equal to Net Sales plus any Partnering Revenue, less Allowable Expenses.

1.67	“Publication” has the meaning set forth in Section 12.4.

1.68	“Recall Expenses” has the meaning set forth in Exhibit A .

1.69	“Regulatory Approval” means all approvals necessary for the manufacture,

marketing, importation and sale of a Product for one or more indications in a country or regulatory jurisdiction, which may include, without limitation, satisfaction of all applicable regulatory and notification requirements, but which shall exclude any pricing and reimbursement approvals.

1.70 “Regulatory Authority” means, in a particular country or regulatory jurisdiction, any applicable Governmental Authority involved in granting Regulatory Approval and/or, to the extent required in such country or regulatory jurisdiction, pricing or reimbursement approval of a Product in such country or regulatory jurisdiction, including without limitation, (a) the FDA, (b) the European Medicines Agency, (c) the European Commission, and (d) Japanese Ministry of Health, Labour and Welfare, and in each of (a) through (d), including any successor thereto.

1.71	“Regulatory Expenses” has the meaning set forth in Exhibit A .

1.72	“Regulatory Materials” means regulatory applications, submissions,

notifications, registrations, Regulatory Approvals and/or other filings made to or with a Regulatory Authority that are necessary or reasonably desirable in order to Develop, manufacture, market, sell or otherwise Commercialize a Product in a particular country or regulatory jurisdiction. Regulatory Materials include, without limitation, INDs, MAAs, and NDAs.

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1.73 “ Retained Field ” means the following: (a) the treatment of any ophthalmic disease (including, without limitation, cancer) by topical administration into the eye; and (b) the treatment of pain via intrathecal administration.

	1.74	“Royalty Term” has the meaning set forth in Section 8.4(d).
	1.75	“SEC” means the United States Securities and Exchange Commission.
	1.76	“Section 8.4(a) Sublicensing Arrangement” has the meaning set forth in Section
8.4(b).
	1.77	“Section 8.4(b) Sublicensing Arrangement” has the meaning set forth in

Section 8.4(b).

1.78 “Shared Development Costs” means all costs that are actually incurred by a Party or for its account and are specifically attributable to the Development of Products pursuant to such Party’s obligations under the Development Plan, as such Development Plan may be amended or adjusted pursuant to Article 4. Costs in excess of ten percent (10%) of the amount specified therefor in the budget associated with such Development Plan shall not be deemed Shared Development Costs unless consented to in writing by the Party that did not incur such costs. Shared Development Costs shall include out-of-pocket costs actually incurred by each Party, and all internal direct costs incurred by a Party in connection with the Development of Products. Each Party shall record and account for its internal direct costs for the Development of Products and shall report such costs to the other Party on a quarterly basis as provided in Section 4.8(c). Internal costs shall not include the work of general corporate or administrative personnel, but shall include a twenty percent (20%) overhead fee applied to the cost of internal personnel assigned to the Collaboration. For clarity, Shared Development Costs shall include those certain costs described in Section 2.11 and those certain payments set forth in Section 8.5(b).

1.79	“Sole Inventions” has the meaning set forth in Section 9.1.

1.80	“Term” has the meaning set forth in Section 13.1.

1.81	“Territory” means all countries in the world, except as may be reduced pursuant

to Section 13.3(b).

1.82 “Third Party” means any entity other than PGx or CRXX or an Affiliate of either of them.

1.83	“UVA” means the University of Virginia.

1.84	“UVA Agreement ” means that certain UVAPF/ATI License Agreement by and

between UVAPF and ATL, effective as of April 22, 1999, as amended.

1.85 “UVAPF” means the University of Virginia Patent Foundation.

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ARTICLE 2

LICENSES

2.1 License to CRXX. Subject to the terms and conditions of this Agreement, PGx hereby grants to CRXX an exclusive (even as to PGx), worldwide, royalty-bearing, sublicensable (subject to Sections 2.6 and 2.11) license, under the PGx Technology, to Develop, make, have made, use, import, sell, offer for sale, and market Products in the Field in the Territory. CRXX acknowledges and agrees that, as of the Effective Date, the foregoing license grants rights under the PGx Patents solely with respect to the specific patent claims set forth in Exhibit D attached hereto. The Parties acknowledge and agree that, with respect to any and all PGx Patents filed after the Effective Date, the license granted under this Section 2.1 shall include all outstanding claims included in such PGx Patents.

2.2 License to PGx. Subject to the terms and conditions of this Agreement, CRXX hereby grants to PGx, (a) a non-exclusive, royalty-free license, under the CRXX Technology, solely to the extent necessary to conduct those Development responsibilities assigned to it under the Development Plan in the Territory, sublicensable solely to PGx’s Affiliates or to any of PGx’s subcontractors approved by the JSC; and (b) a non-exclusive, worldwide, and royalty-free license, under the CRXX Patents, solely to the extent necessary to develop, make, have made, use, sell, offer for sale, import and market the Product for use in the Retained Field.

2.3 PGx Retained Rights. Notwithstanding anything in this Agreement to the contrary:

(a) PGx shall retain the right under the PGx Technology to conduct those Development responsibilities assigned to it under the Development Plan and to perform non-clinical research relating to the Compound, either internally or together with academic collaborators existing on the Effective Date. Additionally, for the avoidance of doubt, as between the Parties, PGx shall retain exclusive rights under the PGx Technology (i) with respect to all products that are not Products and (ii) with respect to any Product for use outside the Field, including, without limitation, any product for use in the Retained Field.

(b) For the avoidance of doubt, as between the Parties, CRXX shall retain exclusive rights under the CRXX Technology (i) with respect to all products that are not Products and (ii) with respect to any Product for use outside the Field, subject to the license grant set forth in Sections 2.2 and 13.5.

2.4 No Non-Permitted Use. CRXX hereby covenants that it shall not, nor shall it cause or permit any Affiliate or sublicensee to knowingly use or practice, directly or indirectly, any PGx Technology for any purposes other than those expressly permitted by this Agreement. PGx hereby covenants that it shall not, nor shall it cause or permit any Affiliate or sublicensee to knowingly use or practice, directly or indirectly, any CRXX Technology for any purposes other than those expressly permitted by this Agreement.

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2.5 No Other Licenses. Neither Party grants to the other Party any rights or licenses in or to any intellectual property, whether by implication, estoppel, or otherwise, other than the license rights that are expressly granted under this Agreement.

2.6 Sublicense Agreements. In each agreement under which CRXX grants a sublicense under the license set forth in Section 2.1 (each, a “Sublicense Agreement” ), such Sublicense Agreement(s) shall provide for the right to develop, manufacture and commercialize the Product to revert in the manner consistent with Sections 13.5(a)-(e), to CRXX if such Sublicense Agreement terminates, or, as the case may be, to PGx in the event the Sublicense Agreement terminates and this Agreement terminates for reasons other than by CRXX pursuant to Section 13.3(a). Such Sublicense Agreement shall provide for PGx to be a third party beneficiary to the provisions contained in the Sublicense Agreement equivalent to Section 13.5(a)-(e) hereof if this Agreement terminates other than by CRXX pursuant to Section 13.3(a). Each Sublicense Agreement shall also include (y) diligence obligations no less stringent than those set forth in Sections 4.4 and 6.3; and (z) the terms and conditions (A) that are incorporated into this Agreement pursuant to Section 2.7(d), modified only to indicate that CRXX’s sublicensee is obligated to CRXX as PGx is to UVAPF thereunder, and (B) that are incorporated into this Agreement pursuant to Section 2.7(e), modified only to indicate that CRXX’s sublicensee is obligated to CRXX, PGx, UVA, and UVAPF as PGx is obligated to UVA and/or UVAPF under the UVA Agreement. CRXX shall provide to PGx a copy of each Sublicense Agreement promptly following its execution.

2.7	UVA Agreement.

	(a) The Parties acknowledge that the licenses granted by PGx to CRXX under

Section 2.1 include sublicenses of Third Party intellectual property licensed to PGx under the UVA Agreement.

(b) PGx shall be solely responsible for paying all milestones, royalties and other payments owed by PGx under the UVA Agreement as result of Development, manufacture, and Commercialization of Products by CRXX, its Affiliates and sublicensees. Notwithstanding the foregoing, in the event that PGx exercises its Co-Development Option, all such milestones, royalties and other payments under the UVA Agreement shall be charged against the Collaboration as Shared Development Costs or Allowable Expenses, as appropriate based on Section 8.5(b).

(c) Notwithstanding anything to the contrary in this Agreement, CRXX shall, in exercising such sublicense rights granted under Section 2.1, comply with all applicable provisions of the UVA Agreement expressly applicable to a sublicensee other than any obligations to make payments to UVA.

(d) Without limiting the generality of Section 2.7(c), both of the parties acknowledge that under the UVA Agreement, this Agreement is required to contain and is therefore agreed and deemed to contain the following provisions of the UVA Agreement, which are incorporated herein by reference as if fully set forth herein, modified only as specifically set forth below and to provide that CRXX is obligated to PGx as PGx (as successor in interest to

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ATL) is to UVAPF and, unless the context otherwise requires, that “CRXX” is substituted for “ATI” and “PGx” is substituted for “UVAPF”:

(i) Article 5, provided that the reference in Section 5.2.4 of the UVA Agreement to “Section 4.1” is understood to mean Section 8.4 in this Agreement, the reference in Section 5.2.3 of the UVA Agreement to “Section 1.7” is understood to mean Section 1.50 of this Agreement, and Section 5.2.7 of the UVA Agreement shall not apply; further provided that it is understood that the last paragraph of Section 5.2 of the UVA Agreement, the last two sentences of Section 5.3 of the UVA Agreement and Section 5.4 of the UVA Agreement shall only apply with respect to UVAPF with respect to the subject matter of such provisions and shall not apply with respect to such subject matter between the Parties; and

(ii) Article 7, provided that (A) the incorporation of Section 7.5 of the UVA Agreement shall not grant CRXX any greater termination rights than are set forth in Article 13 hereof and (B) the incorporation of Section 7.4 of the UVA Agreement shall not apply to any provision of the UVA Agreement not incorporated pursuant to Section 2.7(d) or (e) of this Agreement.

(iii) Articles 8 (it being understood that Article 8 shall only apply with respect to Confidential Information of UVA and UVAPF and not with respect to Confidential Information of the Parties hereto, which shall be decided in accordance with Article 12 of this Agreement), 10 (it being understood that Article 10 shall only apply with respect to adjudication of UVA’s and UVAPF’s rights and not with respect to disputes solely between the Parties hereto, which shall be decided in accordance with Article 14 of this Agreement), 13, 15, 16, 18 (provided that the reference to the term sheet therein is understood to be a reference to the term sheet between CRXX and CLDA, dated March 6, 2009), 19 (it being understood that Article 19 shall only apply with respect to the law governing and the required jurisdiction of UVA’s and UVAPF’s rights and not with respect to the governing law and jurisdiction solely between the Parties hereto, which shall be decided in accordance with Sections 14.4 and 14.11 of this Agreement), and 20 through 22

(iv) The definitions in Article 1, to the extent such definitions are necessary to implement any of the foregoing.

(e) Without limiting the generality of Section 2.7(c), both of the parties further acknowledge that under the UVA Agreement, this Agreement is required to contain and is therefore agreed and deemed to contain the following provisions of the UVA Agreement, which are incorporated herein by reference as if fully set forth herein, modified only to indicate that CRXX is obligated to PGx, UVA and UVAPF as PGx (as successor in interest to ATL) is obligated to UVA and/or UVAPF under the UVA Agreement:

(i)	Sections 6.4 and 6.5; and

(ii)	Articles 11 (it being understood that Article 11 shall only apply

with respect to indemnification of UVA’s and UVAPF’s losses and not with respect to losses suffered by either of the Parties hereto, which shall be decided in accordance with Article 11 of

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this Agreement) and 12 (it being understood that Sections 12.1(a)(ii) and 12.3 of the UVA Agreement shall only apply with respect to UVA and UVAPF rights and not with respect to insurance requirements solely between the Parties hereto, which shall be decided in accordance with Section 11.6 of this Agreement).

(f) The parties agree that the provisions of the UVA Agreement incorporated into this Agreement pursuant to Sections 2.7(d) and (e) are not exhaustive with respect to the subject matter of such sections and that this Agreement contains additional obligations and rights of the Parties related to the subject matter of the UVA Agreement provisions incorporated herein and that such obligations and rights of this Agreement are still applicable to the Parties provided they do not conflict with the incorporated provisions of the UVA Agreement. For the purpose of this Section 2.7(f), two provisions shall only “conflict” if it is not possible, through the use of commercially reasonable efforts, for a Party to comply with both provisions.

2.8 Other Third Party Agreements. CRXX shall be solely responsible for obtaining, at its sole expense, any agreements with Third Parties (other than the UVA Agreement) required in order to lawfully perform Development, manufacturing, and Commercialization activities, subject to the royalty offset set forth in Section 8.5(a) and the cost sharing contemplated by Section 8.5(b). CRXX shall use commercially reasonable efforts to ensure that each material Third Party clinical trial, contract manufacturing, or service agreement entered into by CRXX or its Affiliates with respect to the Products contains provision(s) permitting such Third Party contract to be assigned in accordance with Section 13.5(d) and shall ensure that any Third Party patents, patent applications, Information, or other intellectual property that is licensed by CRXX from a Third Party and that would be CRXX Technology if Controlled by CRXX will be sublicensable to PGx pursuant to Section 13.5(a).

2.9 Government Rights. Notwithstanding anything herein to the contrary, any and all licenses and other rights granted hereunder are limited by and are subject to the rights and requirements of the United States Government which may attach as a result of Government sponsorship of research in which one or more inventions and/or discoveries covered by one or more of the PGx Patents and/or CRXX Patents was conceived or first actually reduced to practice, as set forth in 37 C.F.R. Part 401 and/or in the applicable Government research grant, and as such rights and requirements may be amended or modified by law.

2.10 Mutual Exclusivity. Except for (a) its activities pursuant to the Development Plan or Commercialization Plan and (b) the ability of PGx to Develop and Commercialize the Compound for the Retained Field, either by itself, through its Affiliates or in collaboration with any Third Party, (including, but not limited to, Santen Pharmaceuticals), each Party hereby covenants that, during the Term, neither it nor its Affiliates will, directly or indirectly, research, Develop or Commercialize, or enter into any collaboration or license agreement with any Third Party in connection with the research, Development or Commercialization of the Compound or any Product for any indication, provided, however, it being understood that this shall not prevent CRXX from entering into sublicenses pursuant to Section 2.6 or either Party from entering into Partnering Agreements pursuant to Section 2.11. Except for its activities pursuant to the Development Plan or Commercialization Plan, CRXX hereby covenants that, during the Term, neither it nor its Affiliates will, directly or indirectly, research, develop or commercialize, or

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enter into any collaboration or license agreement with any Third Party in connection with the research, development or commercialization of any A2a Agonist for use in the Field.

2.11 Partnering Agreements. If PGx exercises the Co-Development Option, then the Parties agree that (a) all discussions with potential Third Party collaborators regarding entry into a Partnering Agreement will be coordinated by, and subject to the prior approval of, the JSC and that (b) absent such approval, neither Party shall grant (or purport to grant) to any potential Third Party collaborator any rights in the Collaboration Technology in the Field. Any costs incurred by either Party in connection with negotiation, execution, or performance of any Partnering Agreement shall be charged against the Collaboration as Shared Development Costs or Allowable Expenses, as appropriate.

ARTICLE 3

G OVERNANCE

3.1 Joint Steering Committee . Within twenty (20) days after the Effective Date, PGx and CRXX shall form a joint steering committee ( “JSC”) consisting of three (3) representatives from PGx or one of its Affiliates and three (3) representatives from CRXX. Each Party may replace its JSC representatives at any time upon prior written notice to the other Party. JSC membership shall evolve over time as the project progresses so that each Party’s combined membership represents the key functions (such as Development, manufacturing or Commercialization) that are the current focus of work on Products.

3.2 Meetings of the JSC. The JSC shall meet at least two (2) times every calendar year prior to the exercise of the Co-Development Option by PGx and four (4) times every calendar year if PGx exercises the Co-Development Option unless a particular meeting is waived by mutual consent, on such dates and at such times as agreed to by CRXX and PGx, alternating between the CRXX’s and PGx’s places of business. Each Party may permit visitors to attend meetings of the JSC as the JSC determines. Each Party shall be responsible for its own expenses for participating in the JSC. Meetings of the JSC shall be effective only if at least one representative of each Party is present or participating, subject to the following sentence.

of Product in the Field in the Territory, and the manufacturing of Product in support of such activities;

(b)		Review and approve the overall strategy for Development in the Field in
the Territory;

(c)		Review and approve any proposed amendments or updates to the
Development Plan;

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(d) Monitor the Development of Product in the Field in the Territory against the Development Plan;

(e) Discuss the requirements for Regulatory Approval in applicable countries in the Territory and oversee regulatory matters with respect to Product in the Territory;

(f) Review the Commercialization Plan and any proposed amendments or updates thereto;

(g) Monitor the Commercialization of Product in the Territory against the Commercialization Plan;

(h) Establish subcommittees pursuant to Section 3.6 on an as-needed basis, oversee the activities of all subcommittees so established, and address disputes or disagreements arising in all such subcommittees; and

(i) Perform such other functions as the Parties may agree in writing.

3.4 Areas Outside the JSC’s Authority . Neither the JSC nor the Executive Officer of CRXX acting through the authority provided in Section 3.5(b) herein shall have any authority other than that expressly set forth in Section 3.3 and, specifically, shall have no authority (a) to amend or interpret this Agreement, (b) to require PGx to perform any Development activities without PGx’s express written consent (which may be withheld at PGx’s sole discretion), (c) to determine whether or not a Party has met its diligence or other obligations under the Agreement, or (d) to determine whether or not a breach of this Agreement has occurred.

3.5	JSC Decisions.

	(a) Consensus; Good Faith; Action Without Meeting. The JSC shall

decide all matters by consensus, with each Party having one collective vote. Consistent with Section 3.7, the members of the JSC shall act in good faith to cooperate with one another and to reach agreement with respect to issues to be decided by the JSC. Action that may be taken at a meeting of the JSC also may be taken without a meeting if a written consent setting forth the action so taken is signed by all members of the JSC.

(b) Failure to Reach Consensus. In the event that the members of the JSC cannot come to consensus within fifteen (15) days with respect to any matter over which the JSC has authority and responsibility, the JSC shall submit the respective positions of the Parties with respect to such matter for discussion in good faith by the Parties’ respective Executive Officers or their respective designees. If such individuals are not able to mutually agree upon the resolution to such matter within fifteen (15) days after the JSC’s submission to them, then, subject to the limitations of Section 3.4, the Executive Officer of CRXX shall have the right to decide such matter, taking into account and seeking reasonably to accommodate PGx’s legitimate interest under the Agreement, and except that in no event can the Executive Officer of CRXX unilaterally decide such matter in a manner that would significantly extend the timelines under the Development Plan without material safety, technical, or regulatory cause, or in any other

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manner that is contrary to CRXX’s obligation to use Diligent Efforts to Develop the Product. Notwithstanding the foregoing, consensus of the JSC or mutual agreement of the Chief Executive Officers shall be necessary with respect to (i) any decision that materially impairs or is reasonably likely to impair any rights or assets of PGx or any of its Affiliates, or that creates or is reasonably likely to create a financial obligation for PGx or any of its Affiliates or obligate PGx or its Affiliates to utilize any resources), and (ii) all matters following PGx’s exercise of the Co-Development Option, and unless and until the JSC reaches consensus or the Chief Executive Officers reach mutual agreement on any such matter, the Parties shall continue to operate under the status quo with respect to such matter and neither Party shall have the right, without the prior written consent of the other Party, to take any action that departs from the status quo with respect to such matter.

3.6 Subcommittees. The JSC shall have the right to establish subcommittees and to delegate certain of its powers and responsibilities thereto. Except as mutually agreed by the Parties, such subcommittees shall decide all matters by consensus, with each Party having one collective vote, and any disputes that cannot be resolved by a subcommittee in a reasonable time period shall be submitted to the JSC for resolution in accordance with Section 3.5.

3.7 Operating Principles. The Parties hereby acknowledge and agree that the deliberations and decision-making of the JSC and any subcommittee established by the JSC shall be in accordance with the following operating principle:

(a) The Parties’ mutual objective is to maximize the commercial success of the Product, consistent with sound and ethical business and scientific practices.

3.8 Termination of JSC . The JSC shall continue to exist until the first to occur of: (a) the Parties mutually agreeing to disband the committee; or (b) PGx providing to CRXX written notice of its intention to disband and no longer participate in the JSC or (c) thirty (30) days after one Party provides written notice of termination of the JSC to the other at any point after the Co-Development Option has expired and has not been exercised by PGx. Thereafter, the JSC shall have no further obligations under this Agreement, and CRXX shall continue to provide to PGx the reports, summaries, correspondences, notices, minutes, etc. and take such actions and provide such rights to PGx as required by Sections 4.5 (or, if applicable, 4.9), 5.1(c), 5.2 and 6.6.

ARTICLE 4

D EVELOPMENT

4.1 Overview. Subject to the oversight of the JSC, CRXX shall be primarily responsible for Development of Products in the Field. CRXX shall perform all Development activities in accordance with the Development Plan. The costs of Development shall be allocated between the Parties as set forth in Sections 4.7 and 4.8.

4.2 Development Plan.

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(a) Scope. The Development of each Product under this Agreement shall be governed by a worldwide Development plan (each, a “Development Plan” ). Each Development Plan shall be developed in good faith with the overall objective of optimizing the commercial potential of such Product. Each Development Plan shall describe the proposed overall program of Development for the applicable Product in the Territory, including preclinical studies, toxicology, formulation, process development, clinical studies, regulatory plans and other elements of obtaining Regulatory Approval(s) in each applicable country, as well as timelines for key regulatory authority meetings, Drug Approval Applications and Regulatory Approvals. Each Development Plan shall include a summary of estimated Development expenses of the program expected to be incurred during the Development process through obtaining Regulatory Approval for each proposed indication and route of delivery on a country-by-country basis. In the event of any inconsistency between the Development Plan and this Agreement, the terms of this Agreement shall prevail.

(b) Initial Development Plan. Within thirty (30) days after the Effective Date, CRXX shall provide PGx with a draft Development Plan for PGx’s review. The Parties shall use commercially reasonable efforts to reach agreement on the initial Development Plan within sixty (60) days after the Effective Date (the “ Initial Development Plan ”). In the event the Parties are unable, despite using commercially reasonable efforts, to agree upon the Initial Development Plan within sixty (60) days after the Effective Date, CRXX may terminate this Agreement upon thirty (30) days written notice to PGx. Such a termination shall be considered a termination at will by CRXX under Section 13.2 for purposes of this Agreement. The obligations of CRXX under Section 4.4 shall not commence until the first to occur of (i) the Parties’ mutual agreement on the Initial Development Plan or (ii) one (1) year after the Effective Date

(c) Updates to the Development Plans . Unless the Co-Development Option has expired without exercise by PGx, as early as necessary in each calendar year, CRXX shall update and prepare the Development Plan for the following calendar year to take into account completion, commencement or cessation of Development activities not contemplated by the then-current Development Plan, and submit such proposed Development Plan to the JSC no later than September 30 of such year for review and approval. CRXX may, at its election, update the Development Plan between annual updates subject to review and approval by the JSC. In the event that PGx does not exercise its Co-Development Option, CRXX shall only be obligated to provide PGx with reports pursuant to Section 4.9.

4.3 Materials Transfer. PGx shall transfer to CRXX, at CRXX’s reasonable request, and at a mutually agreed time and in a mutually agreed manner, those materials related to the Product that are described in Exhibit E , in each case to the extent Controlled by PGx (collectively, “Material” ).

4.4 Diligent Development. CRXX shall use Diligent Efforts to Develop Products in the Territory. Any failure by CRXX to comply with the obligations set forth in this Section 4.4 shall be deemed to be a material breach of this Agreement, but only with respect to such country(ies) and/or jurisdiction(s) in which such failure occurs, for which PGx may exercise its rights under Article 13 to terminate the license granted under Section 2.1 with respect to such

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country(ies) and/or jurisdiction(s); provided, however, that if CRXX fails to use Diligent Efforts to Develop Product(s) in the United States of America or any of the Major EU Countries, PGx may exercise its termination rights under Article 13 with respect to this Agreement in its entirety in addition to any other available remedies at law or in equity.

4.5 Development Reports. Each Party shall maintain complete and accurate records (in the form of technical notebooks and/or electronic files where appropriate) of all work conducted by it under the Development Plan and all Information resulting from such work. Such records, including any electronic files where such Information may also be contained, shall fully and properly reflect all work done and results achieved in the performance of the Development Plan in sufficient detail and in good scientific manner appropriate for patent and regulatory purposes. Unless the Co-Development Option has expired without exercise by PGx:

(a) each Party shall have the right to review such records maintained by the other Party at reasonable times upon reasonable notice;

(b) each Party shall provide the JSC, as applicable, with regular reports detailing its respective research and Development activities under the Development Plan and the results of such activities;

(c) unless the JSC establishes a different schedule, on or before January 31 and July 31 of each calendar year during the Term, each Party shall provide the JSC with a written report that summarizes, in reasonable detail, all Development activities performed by such Party and its Affiliates, sublicensees, and Third Party contractors during the preceding six (6) month period, and compares such performance with the goals and timelines set forth in the Development Plan; and

(d) each Party shall also promptly provide the JSC or the other Party with any additional information regarding its Development of the Product reasonably requested thereby.

4.6 Standards of Conduct. Each Party shall perform, and shall ensure that its Affiliates, sublicensees, and Third Party contractors perform, the Development activities for which it is responsible under the Development Plan in good scientific manner and in material compliance with applicable laws, rules and regulations.

4.7 Development Expenses. Except as set forth in Section 4.8, to the extent that CRXX and PGx agree in writing that PGx will perform Development activities after the Effective Date, CRXX shall be responsible for all costs and expenses incurred by or on behalf of PGx in connection with such Development activities. In particular, CRXX shall pay for such costs and expenses as follows: (a) PGx personnel time at a rate of $250,000 per FTE per day (until December 31, 2010 and thereafter subject to the adjustment mechanism set forth below); and (b) any out-of-pocket expenses incurred by PGx will be reimbursed in full. Unless the Parties agree otherwise, such payments shall be made on a quarterly basis, based on written invoices submitted by PGx, and shall be due thirty (30) days after CRXX’s receipt of the applicable invoice. PGx shall provide, upon CRXX’s request, invoices, agreements and other reasonable documentation to support and document PGx’s out-of-pocket expenses.

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Acknowledgement by email from officers of each of the Parties shall constitute “written” agreement for PGx to perform Development activities (but email will not apply for other agreements under this Agreement unless specifically stated herein). Except as set forth in Section 4.8, as between the Parties, CRXX shall be responsible for all costs and expenses incurred by or on behalf of CRXX, its Affiliates, or its sublicensees in connection with Development of Products. Commencing January 1, 2011, the FTE rate set forth above shall be adjusted each subsequent calendar year thereafter by the percentage increase or decrease, if any, between the Consumer Price Index – All Urban Consumers (CPI-U), as published by the United States Department of Labor on June 30 of the prior calendar year compared to June 30 of the second immediately preceding calendar year.

4.8	Option to Co-Develop.

	(a) No later than ten (10) days after the first availability of a final study report

from the first Phase 2 Clinical Trial for the first Product to complete a Phase 2 trial, CRXX shall provide written notice to PGx of such event, which notice shall be accompanied by an updated Development Plan for such Product, an estimated budget for Development of such Product through Regulatory Approval in the United States, the European Union, and any other anticipated major markets, and reasonably detailed description of the Shared Development Costs incurred by CRXX prior to the date of such notice (the “Co-Development Notice” ).

(b) PGx shall have the option (the “Co-Development Option” ) to co-fund fifty percent (50%) of the Shared Development Costs for Products, which option shall be exercisable by providing written notice to CRXX no later than ninety (90) days after PGx’s receipt of the Co-Development Notice. No later than thirty (30) days after PGx’s exercise of the Co-Development Option, PGx shall make a payment to CRXX equal to fifty percent (50%) of the Shared Development Costs incurred by CRXX prior to such exercise.

(c) If PGx elects to exercise the Co-Development Option, the Parties shall share equally all Shared Development Costs, and the remaining terms of this Section 4.8(c) shall apply. Within forty-five (45) days after the end of each calendar quarter for as long as either Party is incurring Shared Development Costs, each Party shall submit to the JSC a statement setting forth the Shared Development Costs it incurred in such calendar quarter. Within thirty (30) days after receipt of such reports, the JSC shall notify the Parties whether a reconciliation payment is due from one Party to the other, and if so, the amount of such reconciliation payment, so that the Parties share equally the Shared Development Costs for such calendar quarter. The Party required to pay such reconciliation payment shall submit such payment to the other Party within thirty (30) days after receiving notice from the JSC.

4.9 License Development Reports. If the Co-Development Option has expired and PGx has not exercised such option, on or before January 31 of each calendar year during the Term thereafter, CRXX shall provide the PGx with a written report that summarizes, in reasonable detail, all Development activities performed by CRXX and its Affiliates, sublicensees, and Third Party contractors during the preceding calendar year (each a, “ License Development Report”) , including safety data generated during such report period.

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ARTICLE 5

REGULATORY

5.1	Regulatory Filing s

	(a) CRXX shall be responsible for preparing and filing all Regulatory

Materials and seeking all Regulatory Approvals in the Territory, including preparing all reports necessary as part of an NDA or MAA. All Regulatory Materials for Products in the Territory shall be filed in the name of CRXX, and CRXX alone shall be responsible for all communications and other dealings with the regulatory agencies relating to the Products in the Territory. As between the Parties, CRXX shall be the legal and beneficial owner of all Regulatory Approvals in the Territory.

(b) The JSC shall develop and implement procedures for drafting and review of Regulatory Materials for Products in the Territory, which shall provide sufficient time for PGx to provide substantive comments. CRXX shall consider PGx’s comments on such Regulatory Materials in good faith.

(c) CRXX shall promptly notify PGx of all Regulatory Materials that it submits, and, at PGx’s request, shall promptly provide PGx with a copy (which may be wholly or partly in electronic form) of such Regulatory Materials. CRXX will provide PGx with reasonable advance notice of any scheduled meeting with any regulatory agency relating to Development and/or any Regulatory Approval in the Territory, and, unless the Co-Development has expired without exercise by PGx, PGx shall have the right to participate in any such meeting, to the extent permitted by law, until the first Regulatory Approval has been obtained for a Product by CRXX, its Affiliates or sublicensees. CRXX also shall promptly furnish PGx with summaries of all material correspondence or material meetings with any Regulatory Authority relating to Development, Regulatory Materials and/or a Regulatory Approval in the Territory, and CRXX shall, at PGx’s request, promptly furnish PGx with copies of such correspondence or copies of minutes of such meetings.

(d) Following approval of an NDA or MAA for a Product, CRXX shall retain primary responsibility for dealings with the applicable regulatory agency with respect to such Product, including filing all supplements and other documents with such agency with respect to such NDA or MAA.

5.2 Product Withdrawals and Recalls. In the event that any regulatory agency (a) threatens or initiates any action to remove such Product from the market in any country in the Territory or (b) requires CRXX, its Affiliates, or its sublicensees to distribute a “Dear Doctor” letter or its equivalent regarding use of Product in the Field, CRXX shall notify PGx of such event within one (1) business day after CRXX becomes aware of the action, threat, or requirement (as applicable). CRXX shall consult with PGx prior to initiating a recall or withdrawal of Product in the United States, Japan, or any Major EU Country; provided, however,

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that the final decision as to whether to recall or withdraw a Product in the Territory shall be made by CRXX in its sole discretion. CRXX shall be responsible, at its sole expense, for conducting any recalls or taking such other necessary remedial action, provided that following PGx’s exercise of the Co-Development Option, all Recall Expenses with respect to Products in the Territory shall be treated as Allowable Expenses.

ARTICLE 6

C OMMERCIALIZATION

6.1 General. Subject to the remainder of this Article 6, CRXX shall have sole responsibility and decision-making authority for Commercialization activities, all of which shall be carried out in accordance with the Commercialization Plan. Subject to Section 8.6, CRXX shall be responsible for all costs and expenses associated with the Commercialization activities.

6.2	Commercialization Plan.

	(a) If PGx has exercised the Co-Development Option, no later than sixty (60)

days prior to the anticipated initiation of the first Phase 3 Clinical Trial, CRXX shall deliver to the JSC for its review and comment a draft written Commercialization plan setting forth anticipated Commercialization activities to be performed with respect to Product in the Territory by CRXX or on its behalf by Third Parties (including without limitation market studies, launch plans, detailing and promotion), as well as projected timelines for such activities (the “Commercialization Plan” ). CRXX shall implement all such reasonable comments received from the JSC and shall submit such revised document to the JSC for review.

(b) CRXX shall thereafter update the Commercialization Plan on an annual basis as follows: CRXX shall provide the JSC with a draft update to the Commercialization Plan no later than the thirtieth (30 ^th ) of January of each year. CRXX shall implement all such comments received from the JSC and shall submit such revised document to the JSC for review. CRXX may, at its election, update the Commercialization Plan between annual updates by following this same procedure.

(c) The Commercialization Plan shall include, without limitation: (i) a description of CRXX’s anticipated marketing activities (both pre- and post-launch), including the plans to use key opinion leaders and focus groups; (ii) five (5) year sales projections, broken down by calendar quarter; (iii) any requirements for additional marketing studies; (iv) competitive analysis including specific actions to mitigate competitive threats; and (v) planned promotional material and sales/detailing protocols.

(d) It is understood that the initial Commercialization Plan delivered pursuant to Section 6.2(a) will likely include only a summary of the anticipated marketing activities and that, reasonably in advance of the First Commercial Sale of a Product, a more detailed version of the Commercialization Plan containing the items described in Section 6.2(c) will be prepared by CRXX and delivered to the JSC pursuant to Section 6.2(b). Without limiting the generality of the foregoing, no later than the filing of an NDA and/or MAA for a particular Product, provided

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that PGx has exercised the Co-Development Option, CRXX shall provide the JSC with a Commercialization Plan containing a country-by-country marketing plan for such Product in the top six (6) targeted markets.

(e) In the event of any inconsistency between the Commercialization Plan and this Agreement, the terms of this Agreement shall prevail.

6.3 Diligent Commercialization. CRXX shall use Diligent Efforts to Commercialize Products in each country in the Territory for each indication for which a Regulatory Approval has been received. Without limiting the generality of the foregoing, CRXX shall satisfy each of the following requirements:

(a) CRXX shall commence commercial sales of a Product to end users in a country, in commercially significant quantities, promptly after, and in any case not later than six (6) months after, the date upon which Regulatory Approval and any necessary pricing approval for such Product is granted with respect to such country.

(b) shall undertake a sales effort commensurate with optimizing the Commercialization of each Product taking into account the resources of CRXX and/or any sublicensee or partner.

Any failure by CRXX to comply with the obligations set forth in this Section 6.3 shall be deemed to be a material breach of this Agreement, but only with respect to such country(ies) and/or jurisdiction(s) in which such failure occurs, for which PGx may exercise its rights under Article 13 to terminate the license granted under Section 2.1 with respect to such country(ies) and/or jurisdiction(s); provided, however, that if CRXX fails to use Diligent Efforts to Commercialize Product(s) in the United States of America or any of the Major EU Countries, PGx may exercise its termination rights under Article 13 with respect to this Agreement in its entirety or any other available remedies at law or in equity.

6.4 Commercialization Reports. Unless the Co-Development Option has expired without exercise by PGx:

(a) CRXX shall keep the JSC fully informed regarding the progress and results of its Commercialization activities and those

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Responsibilities of the JSC. The JSC shall have the responsibility and authority

Oversee the Development, Regulatory Approval, and Commercialization

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