Right of First Negotiation Agreement, as amended, dated March 31, 2015, by and between Brickell Biotech, Inc. and Kaken Pharmaceutical Co., Ltd

THIS AMENDMENT NO. 2 (this “Amendment”), dated October 6, 2017 (the “Amendment Effective Date”), is entered into by and between Brickell Biotech, Inc., a Delaware corporation (“Brickell”), and Kaken Pharmaceutical Co., Ltd., a company legally organized and existing under the law of Japan (“Kaken”).

WHEREAS, Brickell and Kaken entered into a License, Development and Commercialization Agreement on March 31, 2015 and thereafter amended it on April 7, 2015 and on February 24, 2016 (the agreement, as amended, shall be referred to herein as the “Agreement”); and

WHEREAS, Brickell and Kaken desire to amend the Agreement as set forth in this Amendment.

NOW THEREFORE, in consideration of the foregoing premises and the mutual promises, covenants and conditions contained in this Amendment, the parties agree as follows:

“[***] $10,000,000 [***].”

“As used in this Agreement, the term “Confidential Information” means all information, whether it be written or oral, including all production schedules, lines of products, volumes of business, processes, new product developments, product designs, formulae, technical information, laboratory data, clinical data, patent information, know-how, trade secrets, financial and strategic information, marketing and promotional information and data, and other material relating to any products, projects or processes of one Party (the “Disclosing Party”) that is provided to, or otherwise obtained by, the other Party (the “Receiving Party”) in connection with (i) this Agreement (including information exchanged prior to the date hereof in connection with the transactions set forth in this Agreement, including any information disclosed by either Party pursuant

to the Confidential Disclosure Agreement between the Parties dated September 9, 2013) or (ii) the ROFN Agreement.”

“Each of Kaken and Brickell shall keep all Confidential Information received from or on behalf of the other Party with the same degree of care with which it maintains the confidentiality of its own Confidential Information, but in all cases no less than a reasonable degree of care. Neither Party shall use such Confidential Information for any purpose other than in performance of its obligations or the exercise of its rights pursuant to this Agreement or the ROFN Agreement or disclose the same to any other Person other than to such of its and its Affiliates’ directors, managers, employees, independent contractors, agents, consultants or sublicensees who have a need to know such Confidential Information to implement the terms of this Agreement or the ROFN Agreement or enforce its rights under this Agreement or the ROFN Agreement; provided, however, that a Receiving Party shall advise any of its and its Affiliates’ directors, managers, employees, independent contractors, agents, consultants or sublicensees who receives such Confidential Information of the confidential nature thereof and of the obligations contained in this Agreement relating thereto, and the Receiving Party shall ensure (including, in the case of a Third Party, by means of a written agreement with such Third Party having terms at least as protective as those contained in this Article 12) that all such directors, managers, employees, independent contractors, agents, consultants or sublicensees comply with such obligations.”

“Notwithstanding Section 12.2, (i) either Party may disclose Confidential Information belonging to the other Party only to the extent such disclosure is reasonably necessary to: (a) comply with or enforce any of the provisions of this Agreement or the ROFN Agreement, (b) comply with applicable Law or (c) only to the extent such disclosure is reasonably necessary to obtain or maintain regulatory approval of a Product, as applicable, to the extent such disclosure is made to a Governmental Authority.”

IN WITNESS WHEREOF, Brickell and Kaken have executed this Amendment by their respective officers hereunto duly authorized, as of the Amendment Effective Date.

[***]
Brickell Biotech, Inc.
5777 Central Avenue, Suite 102
Boulder, Colorado USA 80301

Re: [***]

Dear [***]:

Pursuant to Section 8.2 of the License, Development and Commercialization Agreement entered into on March 31, 2015 and thereafter amended on April 7, 2015, February 24, 2016 and October 6, 2017 (the “Agreement”), by and between Brickell Biotech, Inc., a Delaware corporation (“Brickell”), and Kaken Pharmaceutical Co., Ltd., a company legally organized and existing under the law of Japan (“Kaken”), Kaken hereby [***] (as defined in the Agreement) on the terms and conditions set forth in the Agreement.

Kaken shall [***] designated by Brickell [***].

Very truly yours,

Kaken Pharmaceutical Co., Ltd.

By:                    
Name:
Title:

THIS RIGHT OF FIRST NEGOTIATION AGREEMENT (this “ROFN Agreement”), dated October 6, 2017 is entered into by and between Brickell Biotech, Inc., a Delaware corporation (“Brickell”), and Kaken Pharmaceutical Co., Ltd., a company legally organized and existing under the law of Japan (“Kaken”). Brickell and Kaken are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”

WHEREAS, Brickell and Kaken entered into a License, Development and Commercialization Agreement on March 31, 2015 and thereafter amended it on April 7, 2015, February 24, 2016 and October 6, 2017 (the agreement, as amended, shall be referred to herein as the “Agreement”); and

WHEREAS, contingent upon and subject to Kaken [***] (as defined in the Agreement), Brickell desires to grant Kaken as of the Effective Date (as defined below) certain rights with respect to Brickell development products.

NOW THEREFORE, in consideration of the foregoing premises and the mutual promises, covenants and conditions contained in this ROFN Agreement, the Parties agree as follows:

1.Definitions. The following terms shall have the following meanings:

capital stock of such Person, or (iii) such Person transfers all or substantially all of its assets to any Person other than a wholly owned affiliate of such Person.

2.    Rights of First Negotiation.

potential advisors, agents and representatives and/or (y) any third party contract research organization or contract manufacture or other service provider.

3.    Miscellaneous.

agreements, warranties, representations, conditions and understandings between the Parties hereto with respect to the subject matter hereof No subsequent alteration, amendment, change or addition to this ROFN Agreement shall be binding upon the Parties unless reduced to writing and signed by an authorized representative of each Party.

IN WITNESS WHEREOF, Brickell and Kaken have executed this ROFN Agreement by their respective officers hereunto duly authorized, as of the date set forth above.

THIS AMENDMENT (this “Amendment”), effective as of the Amendment Effective Date (as defined below), is entered into by and between Brickell Biotech, Inc., a Delaware corporation (“Brickell”), and Kaken Pharmaceutical Co., Ltd., a company legally organized and existing under the law of Japan (“Kaken”).

WHEREAS, Brickell and Kaken entered into a License, Development and Commercialization Agreement on March 31, 2015 and thereafter amended it on April 7, 2015, February 24, 2016, and October 6, 2017 (as amended, the “Agreement”);

WHEREAS, the Agreement provides, among other things, that Kaken has the [***] by [***];

WHEREAS, Brickell and [***]; and

WHEREAS, Brickell and Kaken desire to further amend the ROFN Agreement as set forth in this Amendment.

NOW THEREFORE, in consideration of the foregoing premises and the mutual promises, covenants and conditions contained in this Amendment, the Parties agree as follows:

“WHEREAS, Kaken [***] as of the Effective Date (as defined below) certain rights with respect to [***].

“1.4. “Effective Date” shall mean [***].

“1.8 “Subsequent Clinical Trial” means, with respect to [***], the first (and not any subsequent) study of that pharmaceutical product in human patients occurring after the Initial Proof of Concept Clinical Trial, regardless of the goal of the study.

The defined term “Territory” shall be renumbered as 1.9.”

2.1.    Brickell Products. As of the Effective Date, Brickell hereby grants Kaken the rights set out in this Section 2 (each, a “ROFN Right”) to first negotiate with Brickell for an [***].

2.2.    [***] ROFN Rights.

2.2.1    Condition Precedent to [***] ROFN Rights. If Brickell conducts and completes an [***], Brickell shall provide written notice to Kaken upon [***] and Kaken will have a first right to negotiate with Brickell for [***] if the ROFN Rights in respect of [***] have (a) [***], as set forth in this [***] or (b) [***] in accordance with Section [***]. At the time Brickell issues the [***], Brickell shall also physically or electronically deliver to Kaken, or provide Kaken access via secure electronic data room (any such delivery method, “make available,” and “made available” shall have a corresponding meaning) all material data related to [***], including from such [***], that Brickell then possesses (the “[***]”).

2.2.2    [***] ROFN Evaluation Period. Kaken shall be entitled to exercise its right of first negotiation with respect to such [***] by providing written notice to Brickell (the “[***] ROFN Exercise Notice”) within thirty (30) days after Kaken’s receipt of the [***] and the [***] (the “[***] ROFN Evaluation Period”).

2.2.3    [***] Negotiation Period. Upon Brickell’s receipt of the [***], Kaken shall have a period of [***] with Brickell [***]concerning the terms of an [***].

2.3.    [***] ROFN Rights.

2.3.1    Conditions Precedent to [***] ROFN Rights. If Brickell conducts and completes a [***], Brickell shall provide written notice to Kaken upon completion of the [***] ([***]) and Kaken will have a first right to negotiate with Brickell for [***], regardless of whether Kaken exercised its ROFN Rights with respect to such Brickell Product pursuant to Section 2.2, provided, however, that Kaken shall [***] or (ii) [***]. At the time Brickell issues the [***], Brickell shall make available to Kaken [***].

2.3.2    [***] Evaluation Period. Kaken shall be entitled to exercise its right of first negotiation with respect to [***] by providing written notice to Brickell (the “[***] ROFN Exercise Notice”) within [***] after Kaken’s receipt of [***] and [***] (the “[***] ROFN Evaluation Period”).

2.3.3    [***] Negotiation Period. Upon Brickell’s receipt of the [***], Kaken shall have a period of [***] (the [***]) to negotiate [***].

2.4    [***].

2.4.1    [***] ROFN Rights. Until Kaken receives [***] and thereafter during [***] Evaluation Period and, if [***] ROFN Exercise Notice, thereafter during the [***] Negotiation Period, Brickell shall not (other than in connection with a Change in Control transaction), without the prior written consent of Kaken, directly or indirectly [***].

2.4.2    [***] ROFN Rights. If the conditions precedent for Kaken’s ROFN Rights set forth in Section 2.3.1 are satisfied then from the date [***] until [***] and, if [***], thereafter [***] Negotiation Period, Brickell [***].

2.4.3    Brickell Rights. Nothing in this Section 2 shall restrict Brickell or its affiliates from negotiating with, soliciting proposals from, entering into agreements with, or providing information to, (x) its own actual and potential advisors, agents and representatives and/or (y) any third party contract research organization or contract manufacture or other service provider.

2.5.    Termination of ROFN Rights.

2.5.1.    The ROFN Right set forth in Section 2.2 with respect to a Brickell Product which was the subject of [***] shall terminate effective upon the earlier of (i) Kaken’s failure to issue a [***] ROFN Exercise Notice prior to the expiration of [***] and (ii) the [***].

2.5.2.    The ROFN Right set forth in Section 2.3 with respect to [***] which was the subject of the [***] shall terminate effective upon the earlier of [***].

2.5.3.    If (i) Kaken terminates the Agreement or (ii) Brickell terminates the Agreement as a result of an uncured breach by Kaken, Brickell shall have the right to terminate this ROFN Agreement upon written notice to Kaken.

IN WITNESS WHEREOF, Brickell and Kaken have executed this Amendment by their respective officers hereunto duly authorized, as of the Amendment Effective Date.