Portions of this document are subject to an application for confidential
treatment, and as such have been omitted from this document. The portions that
have been omitted from this document are indicated in the text by the marking
{***}. The omitted portions have been filed separately with the Securities and
Exchange Commission.
EXHIBIT 10.3
AMENDED AND RESTATED LICENSE AGREEMENT
This Amended and Restated License Agreement entered into as of
September 15, 2003 and effective as of April 15, 2003 (the "Effective Date"), is
between the University of Massachusetts ("Medical School"), a public institution
of higher education of the Commonwealth of Massachusetts as represented by its
Medical School at the Worcester campus, having an address of ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and, CytRx Corporation, ("Company"), a
Delaware corporation, having an address of ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
R E C I T A L S
WHEREAS, Medical School and Company on April 15, 2003, entered into a
license agreement in the field of drug discovery in type 2 diabetes and/or
obesity for another Medical School technology, designated UMMC 03-05 and
entitled "Inhibition of Gene Expression in Adipocytes using Interference RNA"
(the "03-05 License");
WHEREAS, Medical School is the owner by assignment of the inventions
claimed in the United States Patent Applications listed in Exhibit A pertaining
to the Medical School's invention disclosure numbers: UMMC 00-37, entitled
"Diabetes Gene Database," 01-31 entitled "Diabetes Gene Database," UMMC 03-134,
entitled "Use of the Endoplasmic Reticulum Stress Response pathway of Adipose
cells to enhance whole body insulin sensitivity," and UMMC 93-09, entitled
"Receptor-Activated Reporter Systems";
WHEREAS, Medical School is the owner by assignment of the inventions
claimed in Medical School's invention disclosure number 02-38, entitled
"Database of Genes Related to Diabetes and Obesity" also listed in Exhibit A;
WHEREAS, Company desires to obtain an exclusive license in the field of
drug discovery in type 2 diabetes and/or obesity under the rights of Medical
School in any patent rights claiming the UMMC inventions 00-37, 01-31, 03-134,
93-09 and 02-38;
WHEREAS, Company intends to form a company based in Massachusetts,
called Araios, Inc., for the purpose of developing, manufacturing and marketing
drugs and other therapeutics in the field of type 2 diabetes and obesity;
WHEREAS, Medical School is willing to grant Company an exclusive
license on the terms set forth in this Agreement; and
WHEREAS, Medical School and Company wish to amend and restate the 03-05
License to include the grant of an exclusive license to the additional
inventions identified above.
THEREFORE, Medical School and Company agree to amend and restate the
03-05 License as follows:
1. Definitions.
1.1. "Affiliate" means any legal entity (such as a corporation,
partnership, or limited liability company) that is controlled by Company. For
the purposes of this definition, the term "control" means (a) beneficial
ownership of at least fifty percent (50%) of the voting securities of a
corporation or other business organization with voting securities or (b) a fifty
percent (50%) or greater interest in the net assets or profits of a partnership
or other business organization without voting securities.
1.2. "Biological Materials" means tangible biological materials that
are necessary for the effective exercise of the Patent Rights, which materials
are described on Exhibit A, as well as tangible materials that are routinely
produced through use of the original materials, including, for example, any
progeny derived from a cell line, monoclonal antibodies produced by hybridoma
cells, DNA or RNA replicated from isolated DNA or RNA, recombinant proteins
produced through use of isolated DNA or RNA, and substances routinely purified
from a source material included in the original materials (such as, recombinant
proteins isolated from a cell extract or supernatant by non-proprietary affinity
purification methods). Exhibit A shall be periodically amended to include any
additional Biological Materials that Medical School may furnish to Company.
1.3. "Combination Product" means a product that contains a Licensed
Product component and at least one other essential functional component.
1.4. "Confidential Information" means any confidential or proprietary
information furnished by one party (the "Disclosing Party") to the other party
(the "Receiving Party") in connection with this Agreement that is specifically
designated as confidential. Confidential Information includes, without
limitation, any diligence reports furnished to Medical School under Section 3.1.
and royalty reports furnished to Medical School under Section 5.2.
1.5. "Field" means drug discovery in type 2 diabetes and/or obesity
with therapeutic, prophylactic, or diagnostic applications and products for
treatment, prevention or diagnosis of type 2 diabetes and/or obesity.
1.6. "Licensed Product" means any "Covered Product" or "Developed
Product."
(a) "Covered Product" means any product that (i) cannot be
manufactured, used, or sold without infringing one or more claims under the
Patent Rights, (ii) incorporates some portion of one or more Biological
Materials proprietary to Medical School, or (iii) cannot be manufactured, used,
or sold without using some portion of the Related Technology.
(b) "Developed Product" means any product that is not a
Covered Product and is developed (i) using methods claimed in the Patent Rights
or (ii) using some material portion of the Related Technology.
1.7. "Licensed Service" means any service that (a) cannot be developed
or performed without using at least one process that infringes one or more
claims under the Patent Rights, (b) uses some portion of one or more Biological
Materials, or (c) uses some portion of the Related Technology.
2
1.8. "Net Sales" means the gross amount billed or invoiced on sales by
Company and its Affiliates and Sublicensees of Licensed Products and Licensed
Services, less the following: (a) customary trade, quantity, or cash discounts
to non-affiliated brokers or agents to the extent actually allowed and taken;
(b) amounts repaid or credited by reason of rejection or return; (c) to the
extent separately stated on purchase orders, invoices, or other documents of
sale, any taxes or other governmental charges levied on the production, sale,
transportation, delivery, or use of a Licensed Product or Licensed Service which
is paid by or on behalf of Company; and (d) outbound transportation costs
prepaid or allowed and costs of insurance in transit; and (e) allowance for bad
debt that is customary and reasonable for the industry and in accordance with
generally accepted accounting principles. Notwithstanding anything to the
contrary in this Section 1.8, Net Sales does not include sales of Licensed
Products at or below the fully burdened cost of manufacturing solely for
research or clinical testing or for indigent or similar public support or
compassionate use programs.
In any transfers of Licensed Products between Company and its Affiliate
or Sublicensee, Net Sales are calculated based on the final sale of the Licensed
Product to an independent third party. If Company or its Affiliate or a
Sublicensee receives non-monetary consideration for any Licensed Products or
Licensed Services, Net Sales are calculated based on the fair market value of
that consideration. If Company or its Affiliate or its Sublicensees use or
dispose of a Licensed Product in the provision of a commercial service other
than a Licensed Service, the Licensed Product is sold and the Net Sales are
calculated based on the sales price of the Licensed Product to an independent
third party during the same Royalty Period or, in the absence of sales, on the
fair market value of the Licensed Product as determined by the parties in good
faith.
In the case of Combination Products, Net Sales means the gross amount
billed or invoiced on sales of the Combination Product less the deductions set
forth above, multiplied by a proration factor that is determined as follows:
(i) If all components of the Combination Product were sold
separately during the same or immediately preceding Royalty Period, the
proration factor shall be determined by the formula [A / (A+B)], where
A is the aggregate gross sales price of all Licensed Product components
during such period when sold separately from the other essential
functional components, and B is the aggregate gross sales price of the
other essential functional components during such period when sold
separately from the Licensed Product Components; or
(ii) If all components of the Combination Product were not
sold separately during the same or immediately preceding Royalty
Period, the proration factor shall be determined by the formula [C /
(C+D)], where C is the aggregate fully absorbed cost of the Licensed
Product components during the prior Royalty Period and D is the
aggregate fully absorbed cost of the other essential functional
components during the prior Royalty Period, with such costs being
determined in accordance with generally accepted accounting principles.
3
1.9. "Patent Rights" means the United States patent applications listed
on Exhibit A and any divisional, continuation, or continuation-in-part of those
patent applications to the extent the claims are directed to subject matter
specifically described therein as well as any patents issued on these patent
applications and any reissues or reexaminations of those patents, and any
foreign counterparts to those patents and patent applications. Exhibit A shall
be periodically amended to include any additional Patent Rights that may arise.
Patent Rights include improvements to the Patent Rights developed by Dr. Michael
Czech.
1.10. "Related Technology" means know-how, technical information,
research and development information, test results, and data necessary for the
effective exercise of the Patent Rights which are owned by the Medical School
and (a) have been developed by Dr. Michael Czech and Dr. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and
their associates in their laboratories at the Medical School as of the Effective
Date or (b) are subsequently developed by Dr. Michael Czech.
1.11. "Royalty Period" means the partial calendar quarter commencing on
the date on which the first Licensed Product is sold or used or the first
Licensed Service is performed and every complete or partial calendar quarter
thereafter during which either (a) this Agreement remains in effect or (b)
Company has the right to complete and sell work-in-progress and inventory of
Licensed Products or perform Licensed Services pursuant to Section 8.5.
1.12. "Sublicense Income" means payments that Company receives from a
Sublicensee in consideration of the sublicense of the rights granted Company
under Section 2.1., including without limitation license fees, royalties,
milestone payments, and license maintenance fees, but excluding the following
payments: (a) payments made in consideration for the issuance of equity or debt
securities of Company at fair market value, and (b) payments specifically
committed to the development of Licensed Products or Licensed Services.
1.13. "Sublicensee" means any permitted sublicensee of the rights
granted Company under this Agreement, as further described in Section 2.2.
2. Grant of Rights.
2.1. License Grants.
(a) Patent Rights and Biological Materials. Medical School
grants to Company and its Affiliates an exclusive, worldwide, royalty-bearing
license (with the right to sublicense) under its commercial rights in the Patent
Rights and Biological Materials to develop, make, have made, use, and sell
Licensed Products in the Field and to develop and perform Licensed Services in
the Field.
(b) Related Technology. Medical School grants to Company and
its Affiliates a non-exclusive, royalty-bearing license (with the right to
sublicense) under its commercial rights in the Related Technology to develop,
make, have made, use, and sell Licensed Products in the Field and to develop and
perform Licensed Services in the Field.
4
2.2. Sublicenses. Company and its Affiliates may grant sublicenses of
its rights under Section 2.1. with the consent of Medical School, which consent
may not be unreasonably withheld or delayed. All sublicense agreements executed
by Company pursuant to this Article 2 shall expressly bind the Sublicensee to
the terms of this Agreement. Company shall promptly furnish Medical School with
a fully executed copy of any sublicense agreement.
2.3. Retained Rights.
(a) Medical School. Medical School retains the right to make
and use Licensed Products and to perform Licensed Services for academic
research, teaching, and non-commercial patient care, without payment of
compensation to Company. Medical School may license its retained rights under
this Section to research collaborators of Medical School faculty members,
post-doctoral fellows, and students.
(b) Federal Government. To the extent that any invention
claimed in the Patent Rights has been funded by the federal government, this
Agreement and the grant of any rights in Patent Rights are subject to and
governed by federal law as set forth in 35 U.S.C. ▇▇.▇▇. 201-211, and the
regulations promulgated thereunder, as amended, or any successor statutes or
regulations. Company acknowledges that these statutes and regulations reserve to
the federal government a royalty-free, non-exclusive, non-transferable license
to practice any government-funded invention claimed in the Patent Rights. If any
term of this Agreement fails to conform with those laws and regulations, the
relevant term is an invalid provision and shall be modified by the parties
pursuant to Section 10.11. Upon execution of this Agreement, Medical School
shall disclose in writing to Company any funding that would be subject to this
Section 2.3(b).
(c) Other Organizations. To the extent that any invention
claimed in the Patent Rights has been funded by a non-profit organization or
state or local agency, this Agreement and the grant of any rights in Patent
Rights are subject to and governed by the terms of the applicable research
grant. If any term of this Agreement fails to conform with those terms , the
relevant term is an invalid provision and shall be modified by the parties
pursuant to Section 10.11. Upon execution of this Agreement, Medical School
shall disclose in writing to Company any funding that would be subject to this
Section 2.3(c).
2.4. Improvements. Subject to applicable law or the rights of research
sponsors, the Medical School shall use its best efforts to make any improvements
to the Patent Rights available to Company.
3. Company Obligations Relating to Commercialization.
3.1. Diligence Requirements. Company shall use diligent efforts, or
shall cause its Affiliates or Sublicensees to use diligent efforts, to develop
Licensed Products or Licensed Services and to introduce Licensed Products or
Licensed Services into the commercial market. Thereafter, Company or its
Affiliates or Sublicensees shall make Licensed Products or Licensed Services
reasonably available to the public. Specifically, Company shall fulfill the
following obligations:
(a) Within six (6) months after the Effective Date of this
Agreement, Company shall furnish Medical School with a written research and
development plan under which Company intends to develop Licensed Products or
Licensed Services.
5
(b) Within sixty (60) days after each anniversary of the
Effective Date, Company shall furnish Medical School with a written report on
the progress of its efforts during the prior year to develop and commercialize
Licensed Products or Licensed Services, including without limitation research
and development efforts, efforts to obtain regulatory approval, marketing
efforts, and sales figures. The report shall also contain a discussion of
intended efforts and sales projections for the current year.
(c) Company shall obtain all necessary governmental approvals
for the manufacture, use, and sale of Licensed Products and Combination Products
or the performance of Licensed Services. Specifically, Company shall:
(i) Within eight (8) years after the Effective Date,
file an Investigational New Drug
Application ("IND") or its equivalent covering at least one Combination Product
or Licensed Product with the United States Food and Drug Administration ("FDA");
(ii) Within thirteen (13) years after the Effective
Date, file a New Drug Application ("NDA") with the FDA covering at least one
Combination Product or Licensed Product;
(iii) Within eighteen (18) months after receiving FDA
approval of the NDA for a Combination Product or Licensed Product, market at
least one Combination Product or Licensed Product in the United States; and
(iv) Reasonably fill the market demand for any
Combination Product or Licensed Product
following commencement of marketing of the product at any time during the
exclusive period of this Agreement.
(d) Within eighteen (18) months after the Effective Date,
Company shall successfully undertake a public or private offering of raising or
otherwise commit at least three million dollars ($3,000,000) to the business of
Araios or such other entity, division, or operation of Company devoted to the
development and commercialization of Licensed Products in the Field.
(e) Within three months after the Effective Date, Company shall commit
to fund basic research in the laboratory of Dr. Michael Czech at an amount of at
least {***} in direct Medical School costs in the first year, {***} in direct
Medical School costs in the second year, and {***} in direct Medical School
costs in the third year towards in support of licensed Patent Rights and/or
Related Technology. In addition to direct Medical School costs, Company
sponsored research is subject to indirect cost rates, currently fifty percent
(50%), for basic research. Company shall enter into a formal sponsored research
agreement with Medical School in a separate agreement. During the term of any
agreement covering funding described in this Section 3.1(e), if a lower indirect
cost rate is afforded to any other industrial sponsor by the Office of
Technology Management of the Medical School or if the federal indirect cost rate
is reduced, the indirect cost rate charged to the Company shall prospectively be
reduced to that lower rate.
6
Company is responsible for financing its obligations in this Section 3.1, and
the Medical School shall provide reasonable cooperation to the Company in this
regard. If Medical School determines that Company has not fulfilled its
obligations under this Section 3.1., Medical School shall furnish Company with
written notice of the determination. Within sixty (60) days after receipt of the
notice, Company shall either (i) fulfill the relevant obligation or (ii)
negotiate with Medical School a mutually acceptable schedule of revised
diligence obligations, failing which Medical School may, immediately upon
written notice to Company, terminate this Agreement or to grant additional
licenses to third parties to the Patent Rights and Biological Materials in the
Field. The Medical School may not unreasonably withhold acceptance of Company's
revised diligence obligations.
3.2. Indemnification.
(a) Indemnity. Company shall indemnify, defend, and hold
harmless Medical School and its trustees, officers, faculty, students,
employees, and agents and their respective successors, heirs and assigns (the
"Indemnitees"), against any liability, damage, loss, or expense (including
reasonable attorneys fees and expenses of litigation) incurred by or imposed
upon any of the Indemnitees in connection with any claims, suits, actions,
demands or judgments arising out of any theory of liability (including without
limitation actions in the form of tort, warranty, or strict liability and
regardless of whether the action has any factual basis) concerning any product,
process, or service that is made, used, or sold pursuant to any right or license
granted under this Agreement. However, indemnification does not apply to any
liability, damage, loss, or expense to the extent directly attributable to (i)
the negligent activities or intentional misconduct of the Indemnitees or (ii)
the settlement of a claim, suit, action, or demand by Indemnitees without the
prior written approval of Company.
(b) Procedures. The Indemnitees agree to provide Company with
prompt written notice of any claim, suit, action, demand, or judgment for which
indemnification is sought under this Agreement. Company agrees, at its own
expense, to provide attorneys reasonably acceptable to Medical School to defend
against any claim. The Indemnitees shall cooperate fully with Company in the
defense and will permit Company to conduct and control the defense and the
disposition of the claim, suit, or action (including all decisions relative to
litigation, appeal, and settlement). However, any Indemnitee may retain its own
counsel, at the expense of Company, if representation of the Indemnitee by the
counsel retained by Company would be inappropriate because of actual or
potential differences in the interests of the Indemnitee and any other party
represented by that counsel. Company agrees to keep Medical School informed of
the progress in the defense and disposition of the claim and to consult with
Medical School regarding any proposed settlement.
(c) Insurance. Company shall maintain insurance or
self-insurance that is reasonably adequate to fulfill any potential obligation
to the Indemnitees, but not less than one million dollars ($1,000,000) for
injuries to any one person arising out of a single occurrence and five million
dollars ($5,000,000) for injuries to all persons arising out of a single
occurrence. Company shall provide Medical School, upon request, with written
evidence of insurance or self-insurance. Company shall continue to maintain such
insurance or self-insurance after the expiration or termination of this
Agreement during any period in which Company or Sublicensee continues (a) to
make, use, or sell a product that was a Licensed Product under this Agreement or
(b) to perform a service that was a Licensed Service under this Agreement, and
thereafter for a period of five (5) years.
7
3.3. Use of Medical School Name. In accordance with Section 7.3.,
Company or its Affiliates and its Sublicensees may not use the name "University
of Massachusetts" or any variation of that name in connection with the marketing
or sale of any Licensed Products or Licensed Services.
3.4. Marking of Licensed Products. To the extent commercially feasible
and consistent with prevailing business practices, Company or its Affiliates
shall ▇▇▇▇ and shall cause its Sublicensees to ▇▇▇▇ all Licensed Products that
are manufactured or sold under this Agreement with the number of each issued
patent under the Patent Rights that applies to a Licensed Product.
3.5. Compliance with Law. Company or its Affiliates shall comply with,
and shall ensure that its Sublicensees comply with, all local, state, federal,
and international laws and regulations relating to the development, manufacture,
use, and sale of Licensed Products and Licensed Services. Company expressly
agrees to comply with the following:
(a) Company or its Affiliates or its Sublicensees shall obtain
all necessary approvals from the United States Food & Drug Administration and
any similar governmental authorities of any foreign jurisdiction in which
Company or Sublicensee intends to make, use, or sell Licensed Products or to
perform Licensed Services.
(b) Company or its Affiliates and its Sublicensees shall
comply with all United States laws and regulations controlling the export of
commodities and technical data, including without limitation all Export
Administration Regulations of the United States Department of Commerce. Among
other things, these laws and regulations prohibit or require a license for the
export of certain types of commodities and technical data to specified
countries. Company hereby gives written assurance that it will comply with and
will cause its Sublicensees to comply with all United States export control laws
and regulations, that it bears sole responsibility for any violation of those
laws and regulations by itself or its Sublicensees, and that it will indemnify,
defend, and hold Medical School harmless (in accordance with Section 3.2.) for
the consequences of any violation.
(c) To the extent that any invention claimed in the Patent
Rights has been partially funded by the United States government, and only to
the extent required by applicable laws and regulations, Company agrees that any
Licensed Products used or sold in the United States will be manufactured
substantially in the United States or its territories. Current law provides that
if domestic manufacture is not commercially feasible under the circumstances,
Medical School may seek a waiver of this requirement from the relevant federal
agency on behalf of Company.
4. Consideration for Grant of Rights.
4.1. License Fee. In partial consideration of the rights granted
Company under this Agreement, Company paid Medical School on or about the
Effective Date a license fee of {***}. Company shall pay to Medical School {***}
upon the signing of this Amended and Restated Agreement. These license fee
payments are nonrefundable and are not creditable against any other payments due
to Medical School under this Agreement.
8
4.2. Equity. In partial consideration of the license granted to Company
under this Agreement, on or about April 18, 2003, Company issued to Medical
School a total number of shares of Common Stock of Company ($.01 par value per
share) equal to {***} of the outstanding shares of Company. Company shall
register the shares that are issued to the Medical School within ninety (90)
days after their issuance and those shares will then be unrestricted.
4.3. License Maintenance Fee. Beginning on the first anniversary of the
Effective Date, and on each anniversary of the Effective Date thereafter during
the term of the Agreement, Company shall pay to Medical School {***}, as long as
Company has a funding agreement in place with the Medical School at the levels
described in Section 3.1(e), after which time the annual maintenance fee shall
be {***}. This annual license maintenance fee is nonrefundable and is not
creditable against any other payments due to Medical School under this
Agreement.
4.4. Milestone Payments. Company shall pay Medical School for Covered
Products the following milestone payments within thirty (30) days after the
occurrence of each event achieved by Company or its Affiliates but not by
Sublicensees:
------------------------------------------------------- ---------------------------------------------------------
Milestone Payment
------------------------------------------------------- ---------------------------------------------------------
Filing of IND or equivalent for each Licensed Product {***}
------------------------------------------------------- ---------------------------------------------------------
Entry into Phase I Clinical trial or equivalent for {***} for first product and {***}for each subsequent
each Licensed Product product
------------------------------------------------------- ---------------------------------------------------------
Entry into Phase II clinical trial or equivalent for {***} for first product and {***}for each subsequent
each Licensed Product product
------------------------------------------------------- ---------------------------------------------------------
Entry into Phase III clinical trial or equivalent for {***} for first product and {***}for each subsequent each
Licensed Product product
------------------------------------------------------- ---------------------------------------------------------
Filing for market approval (NDA or equivalent) in any {***} for first product and {***}for each subsequent
country besides the United States product
------------------------------------------------------- ---------------------------------------------------------
Commencement of product marketing in the United States {***}
------------------------------------------------------- ---------------------------------------------------------
First market approval for first three European {***}
countries in total
------------------------------------------------------- ---------------------------------------------------------
For Developed Products each milestone event payment above will be reduced by
fifty percent (50%) of the amount specified for Covered Products.
Company shall pay Medical School a one-time bonus of {***} in the event that
cumulative gross sales of Licensed Products by Company and its Affiliates or
Sublicensees exceed {***} in one calendar year in the United States. Company
shall pay Medical School a one-time bonus of {***} in the event that cumulative
gross sales of Licensed Products by Company and its Affiliates or Sublicensees
exceed {***} in one calendar year in Japan and Europe.
9
These milestone payments are nonrefundable and are not creditable against any
other payments due to Medical School under this Agreement. For any one Licensed
Product, if Company makes an equivalent payment under another agreement with the
Medical School with respect to that Licensed Product for a milestone event that
is specified in this Section 4.4, then payment under this Section is satisfied,
so that the aggregate payments under all Medical School agreements with Company
for that milestone including this Agreement do not exceed the amount specified
in this Section 4.4 for any one (1) Licensed Product.
4.5. Royalties. In partial consideration of the rights granted Company
under this Agreement, Company shall pay to Medical School the following
royalties:
(a) Covered Products. Company shall pay to Medical School a
royalty of {***} of Net Sales of Covered Products by Company or its Affiliates
but not by Sublicensees.
(b) Developed Products. Company shall pay to Medical School a
royalty of {***} of Net Sales of Developed Products by Company or its Affiliates
but not by Sublicensees.
(c) Licensed Services. Company shall pay to Medical School a
royalty of {***} of Net Sales of Licensed Services by Company or its Affiliates
but not by Sublicensees.
(d) Related Technology and Biological Materials. If a
particular Licensed Product or Licensed Service is within the definition of
"Licensed Product" or "Licensed Service" solely because it uses or incorporates
Related Technology or Biological Materials, the royalty rate applicable to such
Licensed Product or Licensed Service is fifty percent (50%) of the applicable
royalty rate set forth above.
(e) Competing Product. If there is a competing product in the
marketplace, no royalties are due for a Licensed Product that is within the
definition of "Licensed Product" because it uses or incorporates only Related
Technology or Biological Materials.
(f) Expired Patent Rights. If during the Royalty Period,
patents under the Patent Rights have expired or have been abandoned in a
particular country, (i) no royalty is payable by Company, if there is a
competing product in that country, and (ii) if Company reduces its prices for
Licensed Products or Licensed Services in that country, even if there is no
competing product or service in that country, Company and the Medical School
shall negotiate in good faith a reduction in the royalty rate to reflect the
reduction in the Company's gross margins caused by the price reduction.
(g) Laboratory Services. Company shall pay the Medical School
{***} of Net Sales of commercial clinical laboratory services by Company.
(h) Royalty Reduction. If Medical School grants additional
licenses to third parties pursuant to Section 3.1., the royalty rates set forth
in Subsection 4.5.(a) shall be adjusted, if necessary, so as not to exceed the
royalty rates charged any other licensee of the Patent Rights during the term of
the non-exclusive license.
10
4.6. Minimum Royalty. At the beginning of each calendar year during the
term of this Agreement, beginning 2016, Company shall pay to Medical School a
minimum royalty of {***}. If actual royalty payments to Medical School in any
calendar year are less than the minimum royalty payment required for that year,
Company may pay Medical School the difference between the actual royalty payment
and the minimum royalty payment in full satisfaction of its obligations under
this Section, provided the minimum payment is made to Medical School within
sixty (60) days after the conclusion of the calendar year. Waiver of any minimum
royalty payment by Medical School is not a waiver of any subsequent minimum
royalty payment. If Company fails to make any minimum royalty payment within the
sixty-day period, that failure is a material breach of its obligations under
this Agreement, and Medical School may terminate this Agreement in accordance
with Section 8.3. If Company is required to pay minimum royalties for any
Licensed Product under more than one license agreement with the Medical School,
only the minimum royalty in this Section 4.6 applies.
4.7. Sublicense Income. Company shall pay Medical School {***} of all
Sublicense Income relating to Covered Products and {***} of all Sublicense
Income relating to Developed Products. Sublicense Income is due and payable
within sixty (60) days after Company receives the relevant payment from the
Sublicensee.
4.8. Third-Party Royalties. If Company is legally required to make
royalty payments to the Medical School or payments to the Medical School based
on income it receives from Sublicensees under any agreement other than this
Agreement ("Other Medical School Licenses") or to one or more third parties in
order to make, use, or sell Licensed Products or to perform Licensed Services,
Company may offset a total of fifty percent (50%) of royalty payments that are
made to the Medical School under Other Medical School Licenses or to third-
parties against any payments that are due to Medical School under Section 4.5 or
4.7 in the same Royalty Period according to the following guidelines.
(a) Other Medical School Licenses. In the case of payments under
Other Medical School Licenses with respect to Licensed
Products or Licensed Services under this Agreement, Company
may reduce its payment to the Medical School under Section 4.5
of this Agreement for the applicable Royalty Period by fifty
percent (50%) of the aggregate amounts payable for the same
Royalty Period under the Other Medical School Licenses (before
making any similar reduction in those payments pursuant to a
corresponding reduction clause in the Other Medical School
Licenses).
(b) Third Party Payments. In the case of payments to one or more
third parties with respect to Licensed Products or Licensed
Services under this Agreement, Company may reduce its payment
to the Medical School under Section 4.5 or 4.7 for the
applicable Royalty Period by fifty percent (50%) of the amount
actually paid to third parties for the same Royalty Period.
(c) Calculation. In the case of both payments under the Other
Medical School Licenses and to third parties in the same
Royalty Period, the reduction described in (a) above shall
first be made, and then the reduction described in (b) above
shall be made, provided that only a pro rata amount of the
reduction described in (b) above shall be made against the
payments payable under this Agreement (with the pro-ration
calculated based on the relative royalty rates under this
Agreement and the Other Medical School Licenses).
11
(d) Minimum Payments. Notwithstanding any reductions in payments
made by the Company to the Medical School under this Section
4.8, in no case may royalty payments under Section 4.5 be less
than {***}.
(e) Maximum Payments. In the case of payments to the Medical
School with respect to Licensed Products and Licensed
Services, (i)in no case may the total royalty payments to the
Medical School under Section 4.5 of this Agreement and the
Other Medical School Licenses exceed in the aggregate the
highest royalty rate that the Company has agreed to pay in any
one of the Other Medical School Licenses and this Agreement,
and (ii) in no case may the Sublicense Income payments to the
Medical School under Section 4.7 of this Agreement and the
Other Medical School Licenses exceed in the aggregate the
percentage set forth in Section 4.7 of this Agreement (with
the Addendum to the 03-05 License dated April 15, 2003
relating to Sublicense Income being cancelled).
(f) Example. By way of illustration for Section 4.5 royalty
payment reductions on a Covered Product, assume a royalty of
{***} of Net Sales under the Other Medical School Licenses and
a payment of {***} of Net Sales to a third party. The
reduction calculation would be as follows:
(i) The {***} under this Agreement would be reduced to
{***} (i.e., a reduction of 50% of the {***} payable
under the Other Medical School License, with the
royalty payments under the Other Medical School
License reduced according to their terms because of
the {***} royalty in this Agreement); and
(ii) The remaining {***} would be reduced by {***} for a
net royalty to the Medical School under this
Agreement of {***} (i.e., the reduction of 50% of the
{***} of Net Sales payable to the third party is
allocated pro rata to this Agreement and the Other
Medical School Licenses, with {***} of this {***}
reduction being allocated to the royalties under this
Agreement (the {***} royalty rate under this
Agreement divided by the {***} royalty rate under
this Agreement plus the {***} royalty rate under the
Other Medical School Licenses), and {***} of this
{***} reduction being allocated to the royalties
under the Other Medical School Licenses).
12
5. Royalty Reports; Payments; Records.
5.1. First Sale. Company shall report to Medical School the date of
first commercial sale of each Licensed Product and the date of first commercial
performance of each Licensed Service within thirty (30) days after occurrence in
each country.
5.2. Reports and Payments. Within sixty (60) days after the conclusion
of each Royalty Period, Company shall deliver to Medical School a report
containing the following information:
(a) the number of Licensed Products sold to independent third
parties in each country and the number of Licensed Products used by Company in
the provision of Licensed Services and other services in each country;
(b) the number of Licensed Services provided by Company in
each country;
(c) the gross sales price for each Licensed Product and the
gross charge for each Licensed Service by Company during the applicable Royalty
Period in each country;
(d) calculation of Net Sales for the applicable Royalty Period
in each country, including a listing of applicable deductions;
(e) total royalty payable on Net Sales in United States
dollars, together with the exchange rates used for conversion; and
(f) Sublicense Income due to Medical School for the applicable
Royalty Period from each Sublicensee.
If no royalties are due to Medical School for any Royalty Period, the report
shall so state. Concurrent with this report, Company shall remit to Medical
School any payment due for the applicable Royalty Period. All reports under this
Section 5.2 are Company Confidential Information.
5.3. Payments in United States Dollars. All payments due under this
Agreement are payable in United States dollars. Conversion of foreign currency
to United States dollars shall be made at the conversion rate existing in the
United States (as reported in the Wall Street Journal) on the last working day
of the calendar quarter preceding the applicable Royalty Period. Payments shall
be without deduction of exchange, collection, or other charges.
5.4. Payments in Other Currencies. If by law, regulation, or fiscal
policy of a particular country, conversion into United States dollars or
transfer of funds of a convertible currency to the United States is restricted
or forbidden, Company shall give Medical School prompt written notice of the
restriction, within the sixty-day payment deadline described in Section 5.2.
Company shall pay any amounts due Medical School through whatever lawful methods
Medical School reasonably designates. However, if Medical School fails to
designate a payment method within thirty (30) days after Medical School is
notified of the restriction, Company may deposit payment in local currency to
the credit of Medical School in a recognized banking institution selected by
Company and identified by written notice to Medical School, and that deposit
fulfills all obligations of Company to Medical School with respect to that
payment.
13
5.5. Records. Company shall maintain and shall cause its Sublicensees
to maintain complete and accurate records of Licensed Products and Licensed
Services that are made, used, sold, or performed under this Agreement and any
amounts payable to Medical School in relation to Licensed Products and Licensed
Services, which records shall contain sufficient information to permit Medical
School to confirm the accuracy of any reports delivered to Medical School under
Section 5.2. The relevant party shall retain records relating to a given Royalty
Period for at least three (3) years after the conclusion of that Royalty Period,
during which time Medical School shall have the right, at its expense, to cause
its internal accountants or an independent, certified public accountant to
inspect records during normal business hours for the sole purpose of verifying
any reports and payments delivered under this Agreement. The accountant may not
disclose to Medical School any information other than information relating to
accuracy of reports and payments delivered under this Agreement. The parties
shall reconcile any underpayment or overpayment within thirty (30) days after
the accountant delivers the results of the audit. If any audit performed under
this Section reveals an underpayment in excess of ten percent (10%) in any
Royalty Period, Company shall bear the full cost of the audit. Medical School
may exercise its rights under this Section only once every year and only with
reasonable prior notice to Company.
5.6. Late Payments. Any payments by Company that are not paid on or
before the date payments are due under this Agreement bear interest to the
extent permitted by law at two percentage points above the Prime Rate of
interest as reported in the Wall Street Journal on the date payment is due, with
interest calculated based on the number of days that payment is delinquent.
5.7. Method of Payment. All payments under this Agreement should be
made to the "University of Massachusetts" and sent to the address identified
below. Each payment should reference this Agreement and identify the obligation
under this Agreement that the payment satisfies.
5.8. Withholding and Similar Taxes. Royalty payments and other payments
due to Medical School under this Agreement shall be reduced by reason of any
withholding or similar taxes applicable to payments to Medical School, which
shall be paid by Company as required by applicable law and reported to the
Medical School.
6. Patents and Infringement.
6.1. Responsibility for Medical School Patent Rights. Medical School
has primary responsibility at the expense of Company for the preparation,
filing, prosecution, and maintenance of all Medical School Patent Rights, using
patent counsel reasonably acceptable to Company. Medical School shall consult
with Company as to the preparation, filing, prosecution, and maintenance of all
Patent Rights reasonably prior to any deadline or action with the United States
Patent & Trademark Office or any foreign patent office and shall furnish Company
with copies of relevant documents reasonably in advance of consultation.
14
6.2. Cooperation. Company shall cooperate fully in the preparation,
filing, prosecution, and maintenance of all Patent Rights. Cooperation includes,
without limitation, (a) promptly executing all papers and instruments or
requiring employees of Company to execute papers and instruments as reasonable
and appropriate to enable Medical School to file, prosecute, and maintain Patent
Rights in any country; and (b) promptly informing the Medical School of matters
that may affect the preparation, filing, prosecution, or maintenance of Patent
Rights (such as, becoming aware of an additional inventor who is not listed as
an inventor in a patent application).
6.3. Payment of Expenses. On the signing of this Amended and Restated
License Agreement, Company shall pay the Medical School Thirty-Five Thousand
Nine Hundred Four Dollars ($35,904) to reimburse Medical School for its actual
expenses incurred as of that date in connection with obtaining the Patent
Rights. Within thirty (30) days after Medical School invoices Company, Company
shall reimburse Medical School for all patent-related expenses incurred by
Medical School pursuant to Section 6.1., including one-half (1/2) of any amounts
for patent-related expenses repaid by Medical School to a company that
previously held an option to the Patent Rights. Company may elect, upon sixty
(60) days' written notice to Medical School, to cease payment of the expenses
associated with obtaining or maintaining patent protection for one or more
Patent Rights in one or more countries. If Company elects to cease payment of
any patent expenses, Company loses all rights under this Agreement with respect
to the particular Patent Rights.
6.4. Abandonment. If Medical School desires to abandon any patent or
patent application within the Patent Rights, Medical School shall provide
Company with reasonable prior written notice of the intended abandonment or
decline of responsibility, and, in that case, Company has the right, at its
expense, to prepare, file, prosecute, and maintain the relevant Patent Rights.
6.5. Grant back. The Company agrees that for any patent rights, as
defined in the sponsored research agreement that implements Company's obligation
in Section 3.1(e), that it has not licensed, the Company grants back to the
Medical School, without limiting in any way its rights under this Agreement, a
non-exclusive license to the Patent Rights in order that the Medical School may
license the patent rights from the sponsored research to third parties. Medical
School shall pay Company {***} or {***} for Covered Products or Developed
Products, respectively, of any revenues or other consideration received by
Medical School with respect to any patent rights granted back by Company
pursuant to this Section 6.5.
6.6. Infringement.
(a) Notification of Infringement. Each party agrees to provide
written notice to the other party promptly after becoming aware of any
infringement of the Patent Rights.
(b) Company Right to Prosecute. So long as Company remains
the only licensee of the Patent Rights and Biological Materials in the Field,
Company may, under its own control and at its own expense, prosecute any third
party infringement of the Patent Rights in the Field or, together with licensees
of the Patent Rights in other fields (if any), defend the Patent Rights in any
declaratory judgment action brought by a third party which alleges invalidity,
unenforceability, or infringement of the Patent Rights. Prior to commencing any
action, Company shall consult with Medical School and shall consider the views
15
of Medical School regarding the advisability of the proposed action and its
effect on the public interest. Company may not enter into any settlement,
consent judgment, or other voluntary final disposition of any infringement
action under this Subsection without the prior written consent of Medical
School, which consent may not be unreasonably withheld or delayed. Any recovery
obtained in an action under this Subsection shall be distributed as follows: (i)
each party shall be reimbursed for any expenses incurred in the action
(including the amount of any royalty payments withheld from Medical School as
described below); (ii) as to ordinary damages, Company shall receive an amount
equal to its lost profits or a reasonable royalty on the infringing sales
(whichever measure of damages the court applied), less a reasonable
approximation of the royalties that Company would have paid to Medical School if
Company had sold the infringing products and services rather than the infringer;
and (iii) as to special or punitive damages, the parties shall share equally in
any award. Company may offset a total of fifty percent (50%) of any expenses
incurred under this Subsection against any payments due to Medical School under
this Agreement. However, payments under Section 4.5 and 4.7 may never be reduced
by more than fifty percent (50%) in any Royalty Period.
(c) Medical School as Indispensable Party. Medical School
shall permit any action under this Section to be brought in its name if required
by law, provided that Company shall hold Medical School harmless from, and if
necessary indemnify Medical School against, any costs, expenses, or liability
that Medical School may incur in connection with the action.
(d) Medical School Right to Prosecute. If Company fails to
initiate an infringement action within a reasonable time after it first becomes
aware of the basis for the action, or to answer a declaratory judgment action
within a reasonable time after the action is filed, Medical School may prosecute
the infringement or answer the declaratory judgment action under its sole
control and at its sole expense, and any recovery obtained shall be given to
Medical School.
(e) Cooperation. Both parties shall to cooperate fully in any
action under this Section 6.6 which is controlled by the other party, provided
that the controlling party reimburses the cooperating party promptly for any
costs and expenses incurred by the cooperating party in connection with
providing assistance.
7. Confidential Information; Publications; Publicity.
7.1. Confidential Information.
(a) Designation. Confidential Information that is disclosed in
writing shall be marked with a legend indicating its confidential status (such
as, "Confidential" or "Proprietary"). Confidential Information that is disclosed
orally or visually shall be documented in a written notice prepared by the
Disclosing Party and delivered to the Receiving Party within thirty (30) days of
the date of disclosure. The notice shall summarize the Confidential Information
disclosed to the Receiving Party and reference the time and place of disclosure.
(b) Obligations. For a period of five (5) years after
disclosure of any portion of Confidential Information, the Receiving Party shall
(i) maintain Confidential Information in confidence, except that the Receiving
16
Party may disclose or permit the disclosure of any Confidential Information to
its trustees or directors, officers, employees, consultants, and advisors who
are obligated to maintain the confidential nature of Confidential Information
and who need to know Confidential Information for the purposes of this
Agreement; (ii) use Confidential Information solely for the purposes of this
Agreement; and (iii) allow its trustees or directors, officers, employees,
consultants, and advisors to reproduce the Confidential Information only to the
extent necessary for the purposes of this Agreement, with all reproductions
being Confidential Information.
(c) Exceptions. The obligations of the Receiving Party under
Subsection 7.1.(b) above do not apply to the extent that the Receiving Party can
demonstrate that Confidential Information (i) was in the public domain prior to
the time of its disclosure under this Agreement; (ii) entered the public domain
after the time of its disclosure under this Agreement through means other than
an unauthorized disclosure resulting from an act or omission by the Receiving
Party; (iii) was independently developed or discovered by the Receiving Party
without use of the Confidential Information; (iv) is or was disclosed to the
Receiving Party at any time, whether prior to or after the time of its
disclosure under this Agreement, by a third party having no fiduciary
relationship with the Disclosing Party and having no obligation of
confidentiality with respect to the Confidential Information; or (v) is required
to be disclosed to comply with applicable laws or regulations or with a court or
administrative order, provided that the Disclosing Party receives reasonable
prior written notice of the disclosure.
(d) Ownership and Return. The Receiving Party acknowledges
that the Disclosing Party (or a third party entrusting its own information to
the Disclosing Party) owns the Confidential Information in the possession of the
Receiving Party. Upon expiration or termination of this Agreement, or at the
request of the Disclosing Party, the Receiving Party shall return to the
Disclosing Party all originals, copies, and summaries of documents, materials,
and other tangible manifestations of Confidential Information in the possession
or control of the Receiving Party, except that the Receiving Party may retain
one copy of the Confidential Information in the possession of its legal counsel
solely for the purpose of monitoring its obligations under this Agreement.
7.2. Publications. Medical School and its employees are free to
disclose publicly (through journals, lectures, or otherwise) the results of any
research relating to the Field or the subject matter of the Patent Rights,
except as otherwise provided by written agreement between Medical School and
Company (e.g., a sponsored research agreement).
7.3. Publicity Restrictions. Company may not use the name of Medical
School or any of its trustees, officers, faculty, students, employees, or
agents, or any adaptation of their names, or any terms of this Agreement in any
promotional material or other public announcement or disclosure without the
prior written consent of Medical School. The foregoing notwithstanding, Company
may disclose that information without the consent of Medical School in any
prospectus, offering memorandum, or other document or filing required by
applicable securities laws or other applicable law or regulation, provided that
Company provides Medical School at least ten (10) days prior written notice of
the proposed text for the purpose of giving Medical School the opportunity to
comment on the text.
17
8. Term and Termination.
8.1. Term. This Agreement commences on the Effective Date and remains
in effect until (a) the expiration of all issued patents within the Patent
Rights or (b) for a period of ten (10) years after the Effective Date if no
patents have issued within the Patent Rights within that ten-year period, unless
earlier terminated in accordance with the provisions of this Agreement.
8.2. Voluntary Termination by Company. Company may terminate this
Agreement for any reason upon ninety (90) days prior written notice to Medical
School.
8.3. Termination for Default. If either party commits a material breach
of its obligations under this Agreement and fails to cure that breach within
sixty (60) days after receiving written notice of the breach, the other party
may terminate this Agreement immediately upon written notice to the party in
breach. If the alleged breach involves nonpayment of any amounts due Medical
School under this Agreement, Company has only one opportunity to cure a material
breach for which it receives notice as described above. Any subsequent material
breach by Company will entitle Medical School to terminate this Agreement
immediately upon written notice to Company, without the sixty-day cure period.
8.4. Force Majeure. Neither party is responsible for delays resulting
from causes beyond its reasonable control, including without limitation fire,
explosion, flood, war, strike, or riot, provided that the nonperforming party
uses commercially reasonable efforts to avoid or remove those causes of
nonperformance and continues performance under this Agreement with reasonable
dispatch whenever the causes are removed.
8.5. Effect of Termination. The following provisions survive the
expiration or termination of this Agreement: Articles 1 and 9; Sections 3.2.,
3.5., 5.2. (obligation to provide final report and payment), 5.5., 6.3., 7.1.,
7.3., 8.5., and 10.9. Upon the early termination of this Agreement, Company and
its Affiliates and Sublicensees may complete and sell any work-in-progress and
inventory of Licensed Products and Licensed Services that exist as of the
effective date of termination, provided that (a) Company is current in payment
of all amounts due Medical School under this Agreement, (b) Company pays Medical
School the applicable royalty and Sublicense Income payments on sales of
Licensed Products and Licensed Services in accordance with the terms of this
Agreement, and (c) Company and its Affiliates and Sublicensees complete and sell
all work-in-progress and inventory of Licensed Products and Licensed Services
within six (6) months after the effective date of termination.
9. Dispute Resolution.
9.1. Procedures Mandatory. The parties agree that any dispute arising
out of or relating to this Agreement will be resolved solely by means of the
procedures set forth in this Article, and that these procedures constitute
legally binding obligations that are an essential provision of this Agreement.
However, all procedures and deadlines specified in this Article may be modified
by written agreement of the parties. If either party fails to observe the
procedures of this Article, as modified by their written agreement, the other
party may bring an action for specific performance in any court of competent
jurisdiction.
18
9.2. Dispute Resolution Procedures.
(a) Negotiation. In the event of any dispute arising out of or
relating to this Agreement, the affected party shall notify the other party, and
the parties shall attempt in good faith to resolve the matter within ten (10)
days after the date of notice (the "Notice Date"). Any disputes not resolved by
good faith discussions shall be referred to senior executives of each party, who
shall meet at a mutually acceptable time and location within thirty (30) days
after the Notice Date and attempt to negotiate a settlement.
(b) Mediation. If the matter remains unresolved within sixty
(60) days after the Notice Date, or if the senior executives fail to meet within
thirty (30) days after the Notice Date, either party may initiate mediation upon
written notice to the other party, whereupon both parties shall to engage in a
mediation proceeding under the then current CPR Institute for Dispute Resolution
("CPR") Model Procedure for Mediation of Business Disputes, except that specific
provisions of this Section override inconsistent provisions of the CPR Model
Procedure. The mediator will be selected from the CPR Panels of Neutrals. If the
parties cannot agree upon the selection of a mediator within ninety (90) days
after the Notice Date, then upon the request of either party, the CPR shall
appoint the mediator. The parties shall attempt to resolve the dispute through
mediation until one of the following occurs: (i) the parties reach a written
settlement; (ii) the mediator notifies the parties in writing that they have
reached an impasse; (iii) the parties agree in writing that they have reached an
impasse; or (iv) the parties have not reached a settlement within one hundred
twenty (120) days after the Notice Date.
(c) Trial Without Jury. If the parties fail to resolve the
dispute through mediation, or if neither party elects to initiate mediation,
each party may pursue any other remedies legally available to resolve the
dispute. However, the parties expressly waive the right to a jury trial in the
legal proceeding under this Section.
9.3. Preservation of Rights Pending Resolution.
(a) Performance to Continue. Each party shall continue to
perform its obligations under this Agreement pending final resolution of any
dispute arising out of or relating to this Agreement. However, a party may
suspend performance of its obligations during any period in which the other
party fails or refuses to perform its obligations.
(b) Provisional Remedies. Although the procedures specified in
this Article are the exclusive procedures for resolution of disputes arising out
of or relating to this Agreement, either party may seek a preliminary injunction
or other provisional equitable relief if, in its reasonable judgment, that
action is necessary to avoid irreparable harm to itself or to preserve its
rights under this Agreement.
(c) Statute of Limitations. The parties agree that all
applicable statutes of limitation and time-based defenses (such as, estoppel and
laches) are tolled while the procedures set forth in Subsections 9.2.(a) and
9.2(b) are pending. The parties shall take any actions necessary to effectuate
this result.
19
10. Miscellaneous.
10.1. Representations and Warranties. Medical School represents that
its employees have assigned to Medical School their entire right, title, and
interest in the Patent Rights and that it has authority to grant the rights and
licenses set forth in this Agreement, and that, to its best knowledge, Medical
School does not hold any other intellectual property rights that would be
infringed by the exploitation of the Patent Rights. MEDICAL SCHOOL MAKES NO
OTHER WARRANTIES CONCERNING THE PATENT RIGHTS, RELATED TECHNOLOGY, AND
BIOLOGICAL MATERIALS, INCLUDING WITHOUT LIMITATION ANY EXPRESS OR IMPLIED
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Specifically,
Medical School makes no warranty or representation (a) regarding the validity or
scope of the Patent Rights, (b) that the exploitation of the Patent Rights or
any Licensed Product or Licensed Service will not infringe any patents or other
intellectual property rights of a third party, and (c) that any third party is
not currently infringing or will not infringe the Patent Rights.
10.2. Compliance with Law and Policies. Company agrees to comply with
applicable law and the policies of Medical School in the area of technology
transfer and shall promptly notify Medical School of any violation that Company
knows or has reason to believe has occurred or is likely to occur. The Medical
School policies currently in effect at the Medical School are the Intellectual
Property Policy, Policy on Conflicts of Interest Relating to Intellectual
Property and Commercial Ventures, and Policy on Faculty Consulting and Outside
Activities. The Medical School policies currently in effect at the Worcester
campus are listed on the ▇▇▇▇://▇▇▇.▇▇▇▇▇▇▇▇.▇▇▇ web site.
10.3. Tax-Exempt Status. Company acknowledges that Medical School, as a
public institution of the Commonwealth of Massachusetts, is an exempt
organization under the United States Internal Revenue Code of 1986, as amended.
Company also acknowledges that certain facilities in which the licensed
inventions were developed may have been financed through offerings of tax-exempt
bonds. If the Internal Revenue Service determines, or if counsel to Medical
School reasonably determines, that any term of this Agreement jeopardizes the
tax-exempt status of Medical School or the bonds used to finance Medical School
facilities, the relevant term is invalid and shall be modified in accordance
with Section 10.11.
10.4. Counterparts. This Agreement may be executed in one or more
counterparts, each of which is an original, and all of which together are one
instrument.
10.5. Headings. All headings are for convenience only and do not affect
the meaning of any provision of this Agreement.
10.6. Binding Effect. This Agreement is binding upon and inures to the
benefit of the parties and their respective permitted successors and assigns.
10.7. Assignment. Neither party may assign this Agreement without the
prior written consent of the other party, which consent may not be unreasonably
withheld, except that Company may assign this Agreement to an Affiliate or to a
successor in connection with the merger, consolidation, or sale of all or
substantially all of its assets or that portion of its business to which this
Agreement relates.
20
10.8. Amendment and Waiver. This Agreement may be amended,
supplemented, or otherwise modified only by means of a written instrument signed
by both parties. Any waiver of any rights or failure to act in a specific
instance relates only to that instance and is not an agreement to waive any
rights or fail to act in any other instance.
10.9. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of Massachusetts irrespective of
any conflicts of law principles.
10.10. Notice. Any notices required or permitted under this Agreement
shall be in writing, shall specifically refer to this Agreement, and shall be
sent by recognized national overnight courier, or registered or certified mail,
postage prepaid, return receipt requested, to the following addresses:
If to Medical School:
Office of Commercial Ventures and
Intellectual Property
University of Massachusetts
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Acting Director
If to Company:
CytRx Corporation
Suite 650
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Chief Executive Officer
All notices under this Agreement are effective upon receipt. A party may change
its contact information immediately upon written notice to the other party in
the manner provided in this Section.
10.11. Severability. If any provision of this Agreement is held invalid
or unenforceable for any reason, the invalidity or unenforceability does not
affect any other provision of this Agreement, and the parties shall negotiate in
good faith to modify the Agreement to preserve (to the extent possible) their
original intent. If the parties fail to reach a modified agreement within sixty
(60) days after the relevant provision is held invalid or unenforceable, then
the dispute shall be resolved in accordance with the procedures set forth in
Article 9. While the dispute is pending resolution, this Agreement shall be
construed as if the provision were deleted by agreement of the parties.
10.12. Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to its subject matter and supersedes
all prior agreements or understandings between the parties relating to its
subject matter.
21
The parties have caused this Agreement to be executed by their duly
authorized representatives as of the date hereof.
UNIVERSITY OF MASSACHUSETTS
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Acting Director, Office of Commercial
Ventures and Intellectual Property
Date: 9-15-03
---------------------------------------
CYTRX CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Chief Executive Officer
Date: 9-15-03
---------------------------------------
22
EXHIBIT A
List of Patent Rights and Biological Materials
Patent Rights
Docket No.: ▇▇▇▇ ▇▇-▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Provisional Patent Application Serial number: 60/432,427,
entitled: " Method of Introducing SI RNA into adipocytes," filed on December 11,
2002, ▇▇▇▇▇▇▇ ▇. Czech, ▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇ inventors.
Docket No.: UMMC 03-37 and ▇▇▇▇ ▇▇-▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Provisional Patent Application No. 60/242,379, entitled: "Genes
Expressed in Type II diabetes and Uses Thereof," filed October 20, 2000, ▇▇▇▇▇▇▇
Czech, inventor and United States Patent Application 10/021,162, PCT/US01/49451,
and Europe National Phase application 01987792.7 that claim priority from the
provisional application, filed October 22, 2001.
▇▇▇▇▇▇ ▇▇. ▇▇▇▇ ▇▇-▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Patent Application, entitled "Database of Genes Related to
Diabetes and Obesity," being drafted.
Docket No. UMMC ▇▇-▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Patent application entitled "Methods and Compositions for
Controlling Appetite and Modulating Insulin Sensitivity," filed June 19, 2003.
▇▇▇▇▇▇ ▇▇. ▇▇▇▇ ▇▇-▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Patent 5,989,893, entitled "Receptor-Activated Reporter Systems,"
filed
Biological Materials
Protein or cDNA of the following enzymes:
Fatty Acid Synthase
Malic enzyme
Acetyl CoA Carboxylase
ATP Citrate Lyase