1
EXHIBIT 1O.7
CIRCE BIOMEDICAL, INC. HAS OMITTED FROM THIS EXHIBIT 10.7 PORTIONS OF THE
AGREEMENT FOR WHICH CIRCE BIOMEDICAL, INC. HAS REQUESTED CONFIDENTIAL
TREATMENT FROM THE SECURITIES AND EXCHANGE COMMISSION. THE PORTIONS OF THE
AGREEMENT FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED ARE MARKED WITH AN
ASTERISK AND SUCH CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMSSION.
BETWEEN
▇. ▇. ▇▇▇▇▇ & CO.-▇▇▇▇.
AND
RHODE ISLAND HOSPITAL
2
RI HOSPITAL-GRACE
----------------------------------------------
ARTICLE TITLE PAGE
------- ----- ----
- RECITALS............................................................1
I Definitions.........................................................2
II Performance of Project..............................................2
III Payments, Reports and Records.......................................3
IV Scientific Reports and Invention Disclosures........................4
V Publications and Publicity..........................................5
VI Ownership and Grants................................................6
VII Patents and Patent Prosecution......................................8
VIII Sampling...........................................................10
IX Negotiations.......................................................10
X Royalties and Exclusivity Term.....................................11
XI Third-Party Patent Rights and Enforcement..........................14
XII Confidentiality....................................................16
XIII Term and Termination...............................................17
XIV Addresses and Notices..............................................18
XV Assignment; Parties Bound..........................................19
XVI Governing Law......................................................19
XVII Force Majeure......................................................20
XVIII Miscellaneous......................................................20
-- Signature Page.....................................................22
-- Schedule I - Definitions.............................................
-- Exhibit A: Project Proposal.........................................
-- Exhibit B: Estimate of Costs and Expenditures.......................
-- Exhibit C: Employee Agreement.......................................
3
AGREEMENT
This AGREEMENT, effective as of December 1, 1992 through November 30, 1994,
between ▇. ▇. ▇▇▇▇▇ & Co.-▇▇▇▇. (hereinafter referred to as GRACE), a
corporation of the State of Connecticut and Rhode Island Hospital (hereinafter
referred to as RI HOSPITAL), a corporation duly organized and existing under the
laws of the State of Rhode Island;
WITNESSETH THAT:
WHEREAS, GRACE, through the Research Group located at Lexington,
Massachusetts and RI HOSPITAL, through the tissue culture laboratory of the
Department of Pathology, have been engaged in a collaborative research effort
and wish to continue and expand on that effort; and
WHEREAS, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ of RI HOSPITAL has expertise in the isolation,
purification, modification and culture of mammalian hepatocytes (hereinafter
referred to. as RI Expertise); and
WHEREAS, GRACE, through the Research Division, Columbia, Maryland, wishes
to scale-up existent versions of a liver assist device which was developed by
previous collaboration between ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ of RI HOSPITAL and GRACE; and
WHEREAS, GRACE desires to provide funding to enable RI HOSPITAL to perform
certain research projects as outlined in Exhibit A entitled "Project Proposal".
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, the parties hereto agree as follows:
4
ARTICLE I - DEFINITION
----------------------
1.01 The terms defined in Schedule I annexed hereto shall, for all purposes
of this Agreement, have the meanings specified in said Schedule I. These defined
terms are:
Commercial Sale Principal Investigator
Commercial Use Project
Confidential Technical Project Biological System
Information
Project Information
Field
Project Invention
GRACE
Project Patent Rights
GRACE Technical Information
Publication, Publish,
Licensed Patent Publication Date, Publisher
Licensed Process RI HOSPITAL Personnel
Licensed Product RI HOSPITAL Technical Information
Net Sales RI Expertise
ARTICLE II - PERFORMANCE OF PROJECT
-----------------------------------
2.01 The collaborative research efforts of this Agreement will be conducted
in the Field as described in the Proposal entitled "Liver Assist Device"
attached hereto as Exhibit A. RI HOSPITAL shall use its best efforts during the
term of this Agreement as set forth in Paragraph 13.01 to conduct research in
the Field as described in the proposal. All research shall be under the
supervision of the Principal Investigator. Any significant deviations from said
proposal shall be discussed with and approved by GRACE. In the event of a
conflict between this Agreement and the provisions of Exhibit A, the provisions
of this Agreement shall control.
2.02 RI HOSPITAL shall make no changes in: (a) the designation of the
Principal Investigator, or (b) the minimum amount of research time to be devoted
by the Principal Investigator in performing the Project, without the express
written concurrence of GRACE.
2.03 GRACE shall have the right to terminate the Agreement in the event the
Principal Investigator withdraws.
-2-
5
ARTICLE - III - PAYMENTS, REPORTS AND RECORDS
---------------------------------------------
3.01 In consideration for the performance by RI HOSPITAL of research on the
Project pursuant to Paragraph 2.01, GRACE agrees to pay RI HOSPITAL those
amounts set forth in the research budget (Exhibit B to this Agreement) as the
total estimated cost and expenditures for the Project. Such payments shall be
used solely for the conduct of the Project under this Agreement. The total
annual estimated research cost for the Project as specified in Exhibit B shall
not be exceeded without prior specific written authorization from GRACE. GRACE
is under no obligation, express or implied, to authorize expenditures pursuant
to any revised budget.
3.02 GRACE shall make quarterly payments to RI HOSPITAL, each being
one-fourth of the total annual budget of Exhibit B. The first quarterly payment
shall be made within ten (10) days following the Execution Date of this
Agreement.
3.03 RI HOSPITAL shall deliver to GRACE within thirty (30) days following
each quarterly payment by GRACE, a Progress Report of all Project Information
and a Project Invoice which reflects costs incurred during said preceding
quarterly period. These costs include: (i) salaries, wages, and established
employee benefits for the Project; (ii) costs of purchased materials and
supplies for the Project; (iii) other costs and expenses for the Project,
including but not limited to, maintenance of equipment, report preparation, and
communication costs; and (iv) the grand total. GRACE may withhold subsequent
payments if said quarterly Progress Report and/or Project Invoice is not
delivered to GRACE within said thirty (30) day period.
3.04 RI HOSPITAL represents that all invoices, financial statements,
▇▇▇▇▇▇▇▇, and financial reports to GRACE will accurately reflect all activities
and transactions handled for the account of GRACE and that such data may be
relied upon in any further recording and reporting by GRACE for whatever
purpose.
3.05 During the life of this Agreement and for two (2) years thereafter, RI
HOSPITAL shall keep or cause to be kept, in accordance with generally accepted
accounting practices, books, records, and accounts covering all information
necessary for the accurate determination of amounts payable hereunder. RI
HOSPITAL agrees to permit independent auditors (chosen by GRACE and to whom RI
HOSPITAL had no reasonable objection) or auditors of the United States Internal
Revenue Service to inspect, copy, and abstract at reasonable intervals and
during regular business hours such books, records, and accounts and all or any
part of the operations and
-3-
6
activities hereunder as may be necessary to determine the completeness or
accuracy of reports made under this Agreement. GRACE shall be solely responsible
for the costs of an independent audit conducted at GRACE's request.
ARTICLE IV - SCIENTIFIC REPORTS AND INVENTION DISCLOSURES
---------------------------------------------------------
4.01 RI HOSPITAL shall promptly inform GRACE by means of quarterly progress
reports of all Project Information. The Progress Reports shall be sufficiently
detailed to enable GRACE to understand all work undertaken and all results
obtained. Such Progress Reports shall be transmitted to GRACE's address set
forth in Article XIV. RI HOSPITAL shall also promptly inform GRACE in writing of
all Project Inventions. Said written disclosures shall indicate that RI HOSPITAL
considers the subject matter described to be inventive and shall be labeled
"Report of Invention" or the like. Following the expiration or termination of
this Agreement, RI HOSPITAL shall promptly provide GRACE with a final written
progress report which shall describe, in reasonable detail, all Project
Information.
4.02 GRACE and RI HOSPITAL agree to meet periodically at mutually agreeable
times and places to discuss the progress of the Project. Any costs associated
with such meetings, including travel and related costs as authorized by GRACE in
advance, shall be borne solely by GRACE. RI HOSPITAL will use reasonable efforts
to make available at such meetings those RI HOSPITAL Personnel requested by
GRACE. At such meetings, GRACE shall have the opportunity to review all Project
Information generated to that date and, where necessary, RI HOSPITAL (through
the RI HOSPITAL Personnel) shall use its best efforts to explain the
significance of any portion of the Project Information to GRACE. Upon request
and at its own expense, GRACE shall have the right to make copies of all or any
portion of the Project Information and utilize said copies and the information
contained therein for any purpose whatsoever.
4.03 RI HOSPITAL shall secure from all RI HOSPITAL Personnel written
agreements, in the form of Exhibit C (designated "Employee's Agreement")
attached hereto, sufficient to enable RI HOSPITAL to fulfill its obligations
with respect to Project Information, Project Inventions and Project Patent
Rights. RI HOSPITAL Personnel shall keep, or cause to be kept,
-4-
7
reasonable records of all research work funded under this Agreement, including
dated, witnessed notebooks and idea records.
ARTICLE V - PUBLICATIONS & PUBLICITY
------------------------------------
5.01 RI HOSPITAL and RI HOSPITAL Personnel shall have the right to Publish
Publications comprising the results of research performed under this Agreement,
subject to the provisions of Paragraph 12.03. However, to permit identification
of any patentable subject matter in sufficient time to file a patent application
or applications thereon, RI HOSPITAL agrees to delay Publishing any Publications
for the lesser of ninety (90) days from notice in writing to GRACE of the
intended Publication, or until all United States patent applications on Project
Inventions described in said Publications are filed. For this purpose, RI
HOSPITAL agrees to transmit copies of all proposed Publications to GRACE no
later than ninety (90) days prior to the anticipated Publication Date. When
transmitting a proposed Publication to GRACE, RI HOSPITAL shall state the
anticipated Publication Date. RI HOSPITAL agrees to treat all formal oral
presentations not delivered within RI HOSPITAL or GRACE as if they were
Publications. GRACE may waive the ninety (90) day notice provisions of this
Paragraph and, in any event, agrees not to unreasonably withhold its consent to
early Publication by RI HOSPITAL and/or RI HOSPITAL Personnel. GRACE agrees to
treat the proposed Publication as Confidential Technical Information pursuant to
Article XII, until it becomes available to the public generally.
5.02 All Publications shall contain an appropriate notice acknowledging
GRACE's financial support of the research covered by such Publications.
5.03 Notwithstanding the provisions of Paragraph 5.01, neither party hereto
shall, without obtaining the prior written consent of the other party, do any of
the following acts:
(a) make any announcements or create any publicity regarding this
Agreement; or
(b) release any advertising, promotional, or sales literature which
mentions the name of the other party hereto.
However, nothing in this Paragraph shall be construed to prohibit either party
from disclosing factual information or data relating to this Agreement which is
required by law to be disclosed.
5.04 Written consent pursuant to Paragraph 5.03 is hereby mutually given
for the release of the following information within Paragraph 5.03(a), in the
form of a press release or the
-5-
8
like or, for example, in the course of discussions of GRACE sponsored research
programs (by GRACE employees) or of sponsored research at RI HOSPITAL (by RI
HOSPITAL employees):
(a) the existence of this RI HOSPITAL- GRACE ,
(b) the Field of research covered by this Agreement, approximately as
defined herein,
(c) the identity of the Principal Investigator, and
(d) the general subject matter of Project Inventions, after all United
States patent applications covering said inventions have been filed.
ARTICLE VI - OWNERSHIP AND GRANTS
---------------------------------
6.01 GRACE shall own all right, title, and interest in and to all Project
Inventions made solely by GRACE employees and Project Information developed
solely by GRACE employees, including any patent applications and patents arising
therefrom. GRACE may use such GRACE Project Inventions and GRACE Project
Information for any purpose in its business without accounting to RI HOSPITAL.
6.02 RI HOSPITAL shall own all right, title and interest in and to all
Project Inventions made solely by RI HOSPITAL Personnel and Project Information
developed solely by RI HOSPITAL Personnel, including any patent applications and
patents arising therefrom; provided, however, that RI HOSPITAL's ownership
rights shall be subject to the grants made pursuant to the provisions of
Paragraph 6.03.
6.03(a) RI HOSPITAL hereby grants to GRACE a non-exclusive, paid-up license
to practice all Project Information and Project Inventions described in
Paragraph 6.02.
(b) RI HOSPITAL hereby grants GRACE an option to acquire one or more
exclusive licenses (with the right to grant sublicenses) to practice all Project
Information and Project Inventions described in Paragraph 6.02. Grace shall
exercise its option by providing notice in writing to RI HOSPITAL at any time
during the term of this Agreement or up to one (1) year following expiration or
termination of this Agreement.
6.04(a) Any Project Inventions made jointly by GRACE employees and RI
HOSPITAL Personnel and any Project Information developed jointly by GRACE
employees and RI HOSPITAL Personnel, including any patent applications and
patents arising therefrom, shall be owned jointly by GRACE and RI HOSPITAL. The
term "jointly" shall have the meaning
-6-
9
accorded it under United States patent law governing inventorship. Each of the
joint owners may use joint Project Inventions and joint Project Information in
its business without accounting to the other; provided, however, that such use
shall be according to the provisions of' Article V (Publication) and Article XII
(Confidentiality).
(b) RI HOSPITAL hereby grants GRACE an option to acquire one or more
exclusive licenses to RI HOSPITAL's interest in joint Project Information and
Project Inventions. GRACE shall exercise its option by providing notice in
writing to RI HOSPITAL at any time during the term of this Agreement or up to
one (1) year following expiration or termination of this Agreement.
6.05 GRACE shall have the first option to negotiate a with RI HOSPITAL to fund additional research projects in the Field set
forth in this Agreement and the Exhibits hereto. This option shall be available
to GRACE for the lesser of: (i) six (6) months after the term of this Agreement
or (ii) three (3) months after any such proposal for further research is
presented to GRACE.
6.06 RI HOSPITAL hereby grants to GRACE an irrevocable, worldwide,
royalty-free, nonexclusive license to utilize for any purpose any copyrightable
work created in the performance of the research funded under this Agreement.
6.07 Licenses granted by RI HOSPITAL pursuant to this Article may be
subject to restrictions due to partial sponsorship of the research project by a
Government entity. RI HOSPITAL shall provide GRACE with prompt written notice of
any past, present or future sponsored project agreement which may create such
restrictions.
6.08 GRACE is under no obligation to grant sublicenses to utilize any
License Patent, but may, in its sole discretion, decide to grant sublicenses. If
GRACE decides to grant sublicense(s), the rights of RI HOSPITAL shall be as
follows:
(i) The sublicensee(s) shall pay to GRACE a royalty on all activities
conducted under the sublicense;
(ii) GRACE shall pay RI HOSPITAL the same running royalties provided if
GRACE were to conduct the activities sublicensed; provided, however,
that if a sublicensee defaults on its royalty obligation to GRACE or
declines for any reason to pay said
-7-
10
royalty to GRACE, GRACE will not be obligated to pay RI HOSPITAL the
defaulted royalties until such time as the default is cured by the
sublicensee;
(iii) [*]
(iv) GRACE shall provide RI HOSPITAL with a true copy of each executed
sublicense agreement within thirty (30) days of the effective date
thereof.
ARTICLE VII - PATENTS AND PATENT PROSECUTION
--------------------------------------------
7.01 Each party shall be responsible, at its own expense, for filing,
prosecuting and maintaining patent applications and patents covering Project
Information and Project Inventions owned pursuant to Article VI; provided,
however, that:
(a) Preparation and prosecution of patent applications by RI HOSPITAL for
any Project Information and/or Project Invention(s) owned by it
pursuant to Article VI shall be conducted in consultation with GRACE
and GRACE's attorneys. Drafts of all patent applications and
prosecution documents shall be exchanged in a timely manner to permit
adequate review, comments and discussion, as appropriate.
(b) Each party filing a U.S. patent application under this Article
("filing party") shall notify the other ("non-filing party") of the
countries in which it will file counterparts. The non-filing party may
designate additional countries at the non-filing party's expense.
(c) If RI HOSPITAL declines to file any patent application which it is
entitled to file pursuant to this Paragraph 7.01, it shall promptly
notify GRACE and GRACE may thereafter file and obtain U.S. and foreign
patents at its own expense and at its sole discretion.
(d) With respect to Project Information and/or Project Inventions jointly
owned pursuant to Paragraph 6.04(a), RI HOSPITAL and GRACE shall
jointly determine whether to file one or more patent applications and
shall consult together with respect to the application, filing and
prosecution as in Paragraph 7.01(a). Expenses of filing, prosecuting,
and maintaining joint patent applications shall be shared equally by
RI HOSPITAL and GRACE.
-8-
11
(e) All expenses incurred by GRACE in filing, prosecuting, and maintaining
Licensed Patents in any country shall be fully creditable against
royalties generated from the sale or use of Licensed Products or
practice of Licensed Processes in that country.
7.02 RI HOSPITAL Personnel shall render all necessary cooperation and shall
promptly execute all documents as may be necessary for the preparation, filing,
prosecution, issuance, reissuance, and maintenance of all patents covering
Project Inventions, and for the assignment of rights thereto as contemplated by
Article VII.
7.03 RI HOSPITAL shall require RI HOSPITAL personnel who shall be involved
in performing research pursuant to this Agreement to sign a written
acknowledgment of their obligations:
(a) to maintain complete and appropriately documented laboratory notebooks
for all research conducted pursuant to this Agreement,
(b) to assign all right, title and interest in any Project Inventions,
whether patentable or not, to the owning party as designated in
Article VI,
(c) to fully cooperate in filing, prosecuting and maintaining all patent
applications and patents, and
(d) to refrain from disclosing GRACE's Confidential Technical Information
pursuant to the terms and conditions of this Agreement. This
acknowledgment shall be in the form of Exhibit C (designated
"Employee's Agreement") attached hereto.
-9-
12
ARTICLE VIII - SAMPLING
-----------------------
8.01 RI HOSPITAL agrees that at any time during the term of this Agreement
or any extension thereof agreed upon in writing by the parties, upon written
request by GRACE, RI HOSPITAL will promptly supply GRACE with representative
samples of any Project Biological System, if such transfer is technically
feasible. GRACE shall have the right to use said Project Biological Systems in
conducting research and shall have the exclusive, worldwide right and license to
utilize them commercially. Following expiration of the applicable Licensed
Patent Rights, GRACE shall have a paid- up, irrevocable, worldwide,
non-exclusive license to utilize the Project Biological Systems for any purpose.
8.02 Representative samples of Project Biological Systems shall not be
provided to persons and entities not party to this Agreement.
ARTICLE IX - NEGOTIATIONS
-------------------------
9.01 Pursuant to Article VI, GRACE and RI HOSPITAL shall negotiate one or
more exclusive licenses to practice any of the Project Information and/or
Project Inventions for which GRACE has exercised its option, and will exercise
good faith and will attempt to reach agreement and conclude said negotiations as
promptly as possible. The negotiated royalty rates shall fall within the limits
set forth in Paragraphs 10.01, 10.02 and 10.03.
9.02 In any negotiations conducted pursuant to this Agreement, RI HOSPITAL
shall be represented by ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ shall
be represented by the President of the Research Division, or their respective
duly authorized representatives.
9.03 If, after three (3) months from the date the parties begin
negotiating, or one party attempts to begin negotiating pursuant to Paragraph
9.01, the parties have been unable to agree upon all terms of a license
agreement, either party may submit the issues in dispute to arbitration as
provided in this Article IX. The party requesting arbitration shall appoint an
arbitrator by giving notice in writing to the other party, specifying the name
and address of such arbitrator and the issues which said party desires to submit
to arbitration. Within fourteen (14) days following such notification, the
second party shall appoint a second arbitrator by notice in writing to the first
party specifying the name and address of such arbitrator and the issues which
said second party wishes to submit to arbitration. The two arbitrators thus
appointed shall jointly appoint a third
-10-
13
arbitrator within fourteen (14) days following the appointment of the second
arbitrator. Should one of the parties fail to appoint an arbitrator, or should
the two arbitrators not agree upon the appointment of the third arbitrator
within fourteen (14) days following the appointment of the second arbitrator,
the missing arbitrator or arbitrators shall be appointed by the American
Arbitration Association (AAA), ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
said appointment to be made at the request of either party or arbitrator. The
same procedure and the same possible resort to the AAA shall apply if any
arbitrator refuses or is unable to act or has resigned.
9.04 The arbitrators shall decide, by majority vote, all issues submitted
to them. The arbitration proceedings shall be conducted in New York, New York or
any other location which the parties agree upon. The arbitrators shall determine
freely the time and procedures of the arbitration, but always with a view to
avoiding unnecessary delay and expense. The arbitrators shall render their
decision within three (3) months following the appointment of the third
arbitrator. They may order any provisional, conservatory or informative action.
The time necessary for inquiries or expert opinions, set by the arbitrators,
shall be added to the three month time limit herein above provided. The opinion
shall be filed by the arbitrators with any appropriate court at the request of
either party. The expenses and fees of the arbitrators shall be divided equally
between the two parties.
9.05 The arbitration award shall be final and binding on the parties and
shall not be subject to any appeal or other legal recourse delaying or
preventing its enforcement.
ARTICLE X - ROYALTIES AND EXCLUSIVITY TERM
------------------------------------------
10.01 Except as provided in Paragraph 10.02, GRACE shall pay an earned
royalty on all Commercial Sales of Licensed Products which are covered by one or
more issued claims of a Licensed Patent. Said royalty rate shall not exceed [*]
and shall reflect the relative contribution made by the Project Invention to the
overall Licensed Product.
10.02 For each Licensed Product, only one royalty shall be paid regardless
of the number of Licensed Patents applicable to the manufacture, use, or sale of
the Licensed Product. Following the Commercial Sale of a Licensed Product, any
subsequent use or sale shall not create any additional obligation by GRACE or a
GRACE sublicensee to pay a further royalty to RI
-11-
14
HOSPITAL. No royalty shall be due on Licensed Products employed (directly or
indirectly) in the preparation of one or more subsequent Licensed Products(s)
which are transferred in a Commercial Sale. If a Licensed Product is used
internally by GRACE and is not used directly or indirectly to prepare another
Licensed Product, GRACE shall pay an earned royalty based on the Net Sales
attributable to the most recent Commercial Sale of the same amount of the
internally used Licensed Product; if there are no Commercial Sales within one
(1) year immediately preceding the date of manufacture of such Licensed Product,
the royalty rate of Paragraph 10.01 shall be applied to [*] of the internally
used Licensed Product, determined in accordance with generally accepted
accounting principles consistently applied.
10.03 GRACE shall pay a running royalty on all Commercial Uses of a
Licensed Process which is covered by one or more issued claims of a Licensed
Patent. If GRACE or a GRACE licensee uses the Licensed Process to manufacture
one or more Licensed Products the royalty obligation shall be satisfied by
payment of a royalty on the Licensed Product(s) as specified in Paragraph 10.01.
If GRACE or a GRACE licensee uses the Licensed Process in conjunction or
connection with one or more Licensed Products, the royalty obligation shall be
satisfied by payment of a royalty on the Licensed Product(s) as specified in
Paragraph 10.01. If the Licensed Process is not used to manufacture a Licensed
Product or in conjunction or connection with a Licensed Product, the royalty
shall be determined by agreement between the parties, but shall not exceed [*]
of the economic benefits enjoyed by GRACE (or a GRACE licensee) as a direct
result of using the Licensed Process. In determining the economic benefits to
GRACE or its licensee, the following factors shall be considered: all expenses
to redesign and equip existing facilities to implement the economically
beneficial Licensed Process; any expenses for purchasing and equipping new
facilities; any nonproductive use of existing facilities necessitated by
implementation of the Licensed Process; and measurable savings in plant,
equipment, wages, and salaries. In the calculation of economic benefits,
standard accounting principles and procedures shall be consistently applied. In
negotiating any license agreement for use of the economically beneficial
Licensed Process, GRACE will provide to RI HOSPITAL an accurate calculation of
economic benefits which shall serve as the basis for calculation of royalties.
GRACE shall permit RI HOSPITAL, through RI HOSPITAL's agents or employees or
through independent accountants selected by RI HOSPITAL and at RI HOSPITAL's
expense and to whom GRACE
-12-
15
has no reasonable objection, during regular business hours to inspect, copy, and
abstract any books, records, and accounts and any of GRACE's operations having a
bearing on such calculation(s). GRACE shall have the obligation to pay royalties
for use of the Licensed Process as running royalties.
10.04 GRACE shall pay to RI HOSPITAL a minimum annual royalty for each
Licensed Patent for which GRACE has acquired an exclusive license. The minimum
annual royalty shall be [*] and shall be payable only if the applicable earned
royalty calculated pursuant to Article X is zero or is less than [*]. In the
event that a minimum annual royalty of [*] is paid because earned royalties are
less than that amount, the earned royalties shall not also be paid. All patent
costs paid by GRACE pursuant to Article VII shall be credited against the
minimum annual royalty to the extent of said royalty, or [*]. In the event that
an earned royalty is paid for a Licensed Patent, patent costs shall be credited
against the earned royalty to the same extent, that is, up to [*] annually. To
the extent that patent costs paid by GRACE are not fully credited (I.E., the
annual costs exceed [*], uncredited patent costs may be carried over to
succeeding years. Failure by GRACE to pay RI HOSPITAL said minimum annual
royalty on a Licensed Patent will give RI HOSPITAL the right to convert GRACE's
exclusive license under Paragraph 6.03 to an irrevocable, royalty-free,
worldwide non-exclusive license with respect to said Licensed Patent. In any
such conversion to a non-exclusive license, GRACE shall be entitled to "most
favored nation" treatment, that is, in the event that RI HOSPITAL grants a
license to any third party that is in any way more favorable than the license
granted to GRACE, RI HOSPITAL shall notify GRACE promptly of such third party
license and shall give GRACE the opportunity of the more favorable term(s) or
provision(s).
10.05 Notwithstanding the provisions of Paragraph 10.04, GRACE shall have
no obligation to pay minimum annual royalties for the first five (5) years
following the filing of any patent application for which the exclusive licensing
provisions of Paragraph are applicable. After the first five years, GRACE shall
be excused from paying minimum annual royalties as long as commercialization for
the relevant Licensed Product(s) or Licensed Process(es) is being pursued with
due diligence. In any year GRACE claims that no minimum annual royalty is due
for this reason, GRACE shall communicate that to RI HOSPITAL. GRACE must be able
to demonstrate that reasonable steps toward commercialization are being taken.
Examples of diligence in this
-13-
16
regard include, but are not limited to, attempting to sell products or to
license processes, seeking approval from a government agency for use or sale of
one or more products, conducting further research necessary for
commercialization, or having a sublicensee or contractor pursue any of these
activities.
10.06 During the life of any license agreement entered into hereunder and
for two (2) years thereafter, GRACE shall keep in accordance with generally
accepted accounting practices, books, records, and accounts covering its
operations and activities under such license agreement and containing all
information necessary for the complete and accurate determination of amounts
payable to RI HOSPITAL under such license agreement. GRACE also agrees to permit
RI HOSPITAL, through RI HOSPITAL's agents or employees or through independent
accountants selected by RI HOSPITAL and at RI HOSPITAL's expense and to whom
GRACE has no reasonable objection, to inspect, copy, and abstract, at reasonable
intervals and during regular business hours, such books, records, and accounts
and all or any part of GRACE's operations and activities under such license
agreement as may be necessary to determine the completeness or accuracy of any
royalties deemed payable to RI HOSPITAL under such license agreement. If any
such report is not complete or accurate, a correct report shall be provided
promptly by GRACE, and GRACE shall promptly pay any further royalty owed RI
HOSPITAL. GRACE shall not unreasonably withhold its consent to the timing or
performance of such audits.
ARTICLE XI - THIRD-PARTY PATENT RIGHTS AND ENFORCEMENT
------------------------------------------------------
11.01 The parties recognize that unaffiliated third parties may now have or
in the future obtain conflicting United States and/or foreign patents. Any
exclusive license entered into pursuant to this Agreement shall provide that if
any or all of said third-party patents can be licensed, and GRACE, in its sole
discretion, but only after prior consultation with RI HOSPITAL, deems such a
license necessary to practice a Licensed Process or to make, use, or sell a
Licensed Product, GRACE shall be free to enter into a license agreement to
enable GRACE to practice said third-party patents, and the royalties due under
said license shall be fully credited against GRACE's royalty obligations to RI
HOSPITAL. Other than as a credit as described in the preceding sentence, RI
HOSPITAL shall have no obligation to GRACE with respect to any royalties payable
to unaffiliated third-parties. If GRACE or any GRACE sublicensee or customer
-14-
17
is sued for infringing a third-party patent where the allegation of infringement
arises from manufacture, use, or sale of a Licensed Product or Licensed Process,
the royalty payable to RI HOSPITAL shall be reduced by fifty percent (50%)
during the pendency of any such suit. RI HOSPITAL agrees to fully cooperate with
GRACE in the defense of said infringement suit. Should GRACE prevail in such
legal action, all such obligation by GRACE to pay royalties to RI HOSPITAL shall
be fully and retroactively restored; provided, however, that GRACE shall be
entitled to deduct all expenses reasonably connected with the defense of said
infringement suit from said royalties, up to an amount equal to fifty percent
(50%) of said royalties.
11.02 GRACE shall have the right, but not the obligation, to initiate and
prosecute legal action for infringement by a third party of any claim of a
Licensed Patent. RI HOSPITAL shall voluntarily join such legal action, and RI
HOSPITAL and all RI HOSPITAL Personnel shall render all necessary cooperation
and shall promptly execute all documents as may be necessary during the course
of such legal action. During the prosecution of such legal action, GRACE may, at
its option, pay or withhold payment of royalties to RI HOSPITAL with regard to
the Licensed Patent alleged to be infringed. Should GRACE withhold payment of
royalties and subsequently prevail in such legal action, all such withheld
royalties shall be paid to RI HOSPITAL, together with interest. Any monies
recovered by GRACE as a result of such legal action shall be included in Net
Sales for payment of royalties, pursuant to the terms of this Agreement, after
having deducted all expenses reasonably connected with the litigation.
11.03 If, at any time during the term of a Licensed Patent, GRACE believes,
based upon reasonable evidence, that a material infringement of such Licensed
Patent is being committed by a third party, GRACE may so notify RI HOSPITAL and
at the same time shall furnish to RI HOSPITAL information upon which GRACE's
belief is based. In such notice, GRACE shall advise RI HOSPITAL whether it,
pursuant to Paragraph 11.02 above, will elect to initiate and prosecute legal
action for infringement against such third party. In the event that GRACE elects
not to initiate and prosecute legal action for infringement against such third
party, GRACE may request RI HOSPITAL to advise GRACE whether RI HOSPITAL will
initiate and prosecute such action If RI HOSPITAL declines to initiate and
prosecute such action or if within a period of ninety (90) days after receipt of
such request RI HOSPITAL fails to notify GRACE that it will
-15-
18
initiate and prosecute such action, GRACE shall be relieved of its obligation to
pay royalties with regard to the Licensed Patent alleged to be infringed. If RI
HOSPITAL initiates and diligently and successfully prosecutes said action,
GRACE's obligation to pay royalties with respect to the Licensed Patent alleged
to be infringed shall remain in full force and effect, and RI HOSPITAL shall be
entitled to keep any monies or retain any other benefits derived therefrom.
ARTICLE XII - CONFIDENTIALITY
-----------------------------
12.01 GRACE may, from time to time, make available to RI HOSPITAL such
GRACE Technical Information as GRACE, in its sole discretion, believes would be
useful to RI HOSPITAL in carrying out research under this Agreement. Part or all
of the GRACE Technical Information may consist of GRACE Confidential Technical
Information. Similarly, RI HOSPITAL may, from time to time, make available to
GRACE such RI HOSPITAL Technical Information as RI HOSPITAL, in its sole
discretion, believes would be useful to GRACE in carrying out research under
this Agreement. Part or all of the RI HOSPITAL Technical Information may consist
of RI HOSPITAL Confidential Technical Information.
12.02 Acceptance by either party of any Confidential Technical Information
of the other party shall be subject to the following:
(a) The transferring party's Confidential Technical Information must be
marked or designated in writing on its face as proprietary to that
party and confidential;
(b) Each party retains the right to refuse to accept any such Confidential
Technical Information which it does not consider to be essential to
performance of research pursuant to this Agreement, or which it
believes to be improperly designated, or for any other reason;
(c) Where either party does accept the other party's Confidential
Technical Information (as evidenced by receipt thereof without
objection), it agrees not to Publish or otherwise reveal said
Confidential Technical Information to third parties without the
permission of the transferring party, and shall restrict dissemination
of said Confidential Technical Information within the receiving party
to those personnel who have executed an employee's agreement as set
forth in Exhibit C; and
-16-
19
(d) No provision of Paragraph 12.02 shall be construed to prevent
commercial use by GRACE, of any Project Information, RI HOSPITAL:
Technical Information, or RI HOSPITAL Confidential Technical
Information, or to require GRACE to pay royalties for such use unless
such use is pursuant to rights in a Licensed Patent.
12.03 During the period of pre-publication review by GRACE of any RI
HOSPITAL Publication as provided in Paragraph 5.01, GRACE shall be obligated (a)
to examine such Publication to determine whether such Publication inadvertently
discloses any GRACE Confidential Technical Information, (b) to notify RI
HOSPITAL promptly in writing of such determination, and (c) to request the
deletion of such GRACE Confidential Technical Information from such Publication.
RI HOSPITAL agrees to be particularly sensitive to any GRACE request for
deletion of GRACE Confidential Technical Information encompassed by the Field.
Failure by GRACE to promptly provide to RI HOSPITAL the notice contemplated by
this Paragraph shall constitute a full and complete waiver, and RI HOSPITAL
shall thereafter have no liability for the disclosure of such GRACE Confidential
Technical Information.
ARTICLE XIII - TERM AND TERMINATION
-----------------------------------
13.01 Unless renewed or extended by mutual agreement by the parties hereto
or earlier terminated as provided in Paragraph 13.02, this Agreement shall
continue in effect for two (2) years from the effective date hereof. The
Agreement may be renewed by written agreement of the parties, any renewal being
in the complete discretion of both parties. Renewal shall be subject to a
mutually acceptable annual Project proposal (Exhibit A) and Project budget
(Exhibit B).
13.02 Either party may, for any reason whatsoever, terminate this Agreement
by giving written notice of termination to the other party and specifying a
termination date not less than three (3) months subsequent to the date of such
notice. Grace shall in accordance with Paragraph 2.02, have the exclusive right
to immediately terminate this agreement in the event the Principal Investigator
withdraws.
13.03 In the event this Agreement is terminated as provided in Paragraph
13.02, RI HOSPITAL shall exercise its best efforts to provide for an orderly,
gradual phase- out of research during the interval between the date of the
termination notice and the termination date specified in such notice. The
invoicing and payment provisions of Article III shall not apply during
-17-
20
said interval, but instead GRACE shall be obligated to pay RI HOSPITAL, in
accordance with monthly invoices submitted by RI HOSPITAL, an amount equal to:
(i) actual salaries and wages paid by RI HOSPITAL during said interval for
research performed under this Agreement by RI HOSPITAL Personnel assigned to
perform such research prior to the date of the termination notice; (ii) employee
benefits, if any, and indirect costs; (iii) other itemized costs, if any,
(including travel costs) associated with the performance of research during said
interval; and (iv) noncancellable commitments incurred by RI HOSPITAL prior to
the date of the termination notice. After receipt of the notice of termination,
RI HOSPITAL shall cancel its outstanding commitments covering the procurement of
materials, supplies, equipment and miscellaneous items and shall exercise
reasonable diligence to accomplish where possible the cancellation or diversion
of its outstanding commitments covering personal services and extending beyond
the date of such notice to the extent they relate to the performance of any work
terminated by the notice; provided, however, that GRACE shall reimburse RI
HOSPITAL for commitments for such personal services for the remainder of the
term of this Agreement, as specified in Paragraph 13.01, if such cancellation or
diversion is not possible.
13.04 The expiration of the term of this Agreement or any earlier
termination thereof shall not release either party hereto from any claim of the
other party accrued prior to such expiration or earlier termination.
13.05 The following provisions of this Agreement shall survive the
expiration of the term of this Agreement or any earlier termination thereof:
Articles I and IV through XVIII.
13.06 The following provisions of this Agreement shall not survive the
expiration of the term of this Agreement or any earlier termination thereof:
Articles II and III.
ARTICLE XIV - ADDRESSES AND NOTICES
-----------------------------------
14.01 The addresses of the parties hereto are as follows, but either party
may change its address for the purpose of this Agreement by notice in writing to
the other party:
GRACE: ▇. ▇. ▇▇▇▇▇ & Co.-▇▇▇▇.
Ledgemont Research Center
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-18-
21
RI HOSPITAL: ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Chief Financial Officer
14.02 All notices, payments, statements and reports required or permitted
to be given under this Agreement shall be in writing and shall be sent by
first-class mail, postage prepaid, to the addresses set forth in Paragraph
14.01; provided, however, that any notice of termination shall be sent by
certified or registered mail. When any of said notices, payments, statements, or
reports are sent by certified or registered mail to the other party entitled
thereto at its address as set forth above, they shall be deemed to have been
given or made as of the date so mailed.
ARTICLE XV - ASSIGNMENT: PARTIES BOUND
--------------------------------------
15.01 This Agreement shall not be assignable by either party hereto,
whether by instrument or by operation of law, without the prior written consent
of the other party. Any and all assignments of this Agreement or of any
interests therein not made in accordance with this Paragraph 16.01 shall be
void. Any licenses granted by RI HOSPITAL to GRACE pursuant to this Agreement
may be assigned by GRACE upon receiving RI HOSPITAL's consent in writing, which
consent shall not be unreasonably withheld.
ARTICLE XVI - GOVERNING LAW
---------------------------
16.01 The validity and interpretation of this Agreement and the legal
relations of the parties to it shall be governed by the laws of the Commonwealth
of Massachusetts, with the exclusion of the choice of laws provisions of that
state. Interpretation of any agreements with the United States Government and
determination of any government rights in inventions and patents, as specified
in Paragraph 6.07, shall be in accordance with published regulations of the
United States Government and, where applicable, decisions of the U.S. Court of
Appeals for the Federal Circuit and any court preceding or succeeding to the
jurisdiction thereof.
-19-
22
ARTICLE XVII - FORCE MAJEURE
----------------------------
17.01 Neither party hereto shall be responsible to the other for failure to
perform any of the obligations imposed by this Agreement, provided such failure
shall be occasioned by fire, flood, explosion, lightning, windstorm, earthquake,
subsidence of soil, failure or destruction, in whole or in part, of machinery or
equipment or failure of supply of materials, discontinuity in the supply of
power, governmental interference, civil commotion, riot, war, strikes, labor
disturbance, transportation difficulties, labor shortage, or any cause beyond
the reasonable control of the party in question.
ARTICLE XVIII - MISCELLANEOUS
-----------------------------
18.01 RI HOSPITAL's relationship to GRACE under this Agreement shall be
that of an independent contractor, and the RI HOSPITAL Personnel shall not, by
virtue of this Agreement, be considered as employees, agents, or consultants of
GRACE. As between RI HOSPITAL and GRACE, RI HOSPITAL shall have complete and
sole control and responsibility over the RI HOSPITAL Personnel and the physical
surroundings and regulations whereby the work is performed under this Agreement.
18.02 RI HOSPITAL hereby warrants that it complies with the Worker's
Compensation laws of the State of Rhode Island with respect to RI HOSPITAL
Personnel. Each party shall indemnify and hold the other party harmless from any
and all claims, costs or liability for any loss, damage, injuries or loss of
life incurred in the indemnifying party's own performance of the research work
that is conducted on the indemnifying party's own premises; provided, however,
that such indemnification shall not apply for any loss, damage, injuries, or
loss of life attributable in whole or in part to the other party's fault or
negligence.
18.03 RI HOSPITAL shall, subsequent to the expiration or termination of
this Agreement, retain title to all equipment purchased and/or fabricated by RI
HOSPITAL with funds provided by GRACE under Articles III and XIII hereinabove,
and shall be free to use or dispose of said equipment as it sees fit.
18.04 This Agreement embodies the entire understanding between RI HOSPITAL
and GRACE for GRACE's support of this Project at RI HOSPITAL, and any prior or
contemporaneous representations, either oral or written, are hereby superseded.
No amendment,
-20-
23
change, or modification of this Agreement shall be effective unless in writing
and signed by each of the parties hereto. Any license agreement between GRACE
and RI HOSPITAL arising pursuant to this Agreement shall be consistent herewith
and shall not grant additional rights or impose additional obligations, either
expressly or by implication, unless agreed upon in writing by both parties.
18.05 RI HOSPITAL and GRACE agree to comply with all applicable government
regulations and requirements for protecting health, safety, and the environment.
RI HOSPITAL and GRACE agree to cooperate with any Government agency(ies)
authorized to monitor compliance with such regulations and requirements.
18.06 ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ will have the right, subsequent to the
expiration or termination of this Agreement or in a situation coexistent with
this Agreement, to develop other technologies that will result in the
development of different versions of a liver support device. This new LAD
version or versions should be substantially different in terms of its biological
component. Specifically, ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ should be able to generate
technological data supporting [*]. GRACE shall have the first option to
negotiate the acquisition of or license to [*] or their products.
▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ should be able to pursue any other technological
developments of [*] in order to create new versions of LADs which are not using
technological applications of any research sponsored at RI HOSPITAL by GRACE.
18.07 In the event that a court of competent jurisdiction holds that any
particular provision or requirement of this Agreement is in violation of any
applicable law or is otherwise unenforceable, this Agreement shall be construed
as if such provision or requirement were not written into this Agreement, or,
upon the request of either party, such provision or requirement may be reformed
and construed in a manner which will be valid and enforceable to the maximum
extent permitted by law.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate in their respective corporate names by their respective
officers thereunto duly authorized.
-21-
24
RHODE ISLAND HOSPITAL ▇. ▇. ▇▇▇▇▇ & CO.-▇▇▇▇.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By /s/ F. ▇▇▇▇▇ ▇▇▇▇
--------------------------- -----------------------------
Name ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Name F. ▇▇▇▇▇ ▇▇▇▇
Title Chief Financial Officer Title Executive Vice President
Date 12/23/93 Date 12/17/93
-22-
25
SCHEDULE I
----------
All terms used in this Agreement with initial capital letters are defined
terms and shall have the meaning set forth in the following definitions.
DEFINITIONS
-----------
1. "Commercial Sale" shall mean the initial transfer by GRACE or any of its
sublicensees of a Licensed Product to a customer in exchange for cash or a
common commercial equivalent of cash. The date of said sale shall be the date
when the Licensed Product is shipped or billed to the customer, whichever occurs
first.
2. "Commercial Use" shall mean use of a Licensed Process to manufacture a
Licensed Product or, if no Licensed Product is prepared, to confer a substantial
economic benefit upon GRACE. "Commercial Use" does not include use for
experimental purposes and shall not include use of a Licensed Process in a pilot
plant.
3. "Confidential Technical Information" shall mean any and all RI HOSPITAL
or GRACE Technical Information, marked or designated in writing on its face as
proprietary to the transferring party and confidential, which is disclosed
pursuant to the provision of Article XII of this Agreement, except:
(a) technical information which at the time of disclosure is in the public
domain;
(b) technical information which after disclosure is published or otherwise
becomes part of the public domain through no fault of the receiving
party (but only after it is published or otherwise becomes part of the
public domain);
(c) technical information which the receiving party can show by written or
other tangible evidence was in its possession at the time of
disclosure hereunder and which the receiving party without breach of
any obligation is free to disclose to others;
(d) technical information which was received by the receiving party after
the time of disclosure hereunder from a third party who did not
acquire it, directly or indirectly, from the transferring party under
an obligation of confidentiality and which the third party without
breach of any obligation is free to disclose to others;
26
(e) technical information which is required to be disclosed by a court of
law; or
(f) technical information which is independently developed by the
receiving party and which the receiving party can show by written or
other tangible evidence was so independently developed.
For the purposes of this Paragraph, specific disclosures made shall not be
deemed to be within the foregoing exceptions merely because they are embraced by
general disclosures in the public domain or in the possession of the receiving
party. In addition, any combination of features disclosed hereunder shall not be
deemed to be within the foregoing exceptions merely because individual features
are separately in the public domain or in the possession of the receiving party,
but only if the combination itself and its principle of operation are in the
public domain or in the possession of the receiving party.
4. "Field" shall mean Liver Assist Device.
5. "GRACE" shall mean ▇. ▇. ▇▇▇▇▇ & Co.-▇▇▇▇. and any company in which ▇.
▇. ▇▇▇▇▇ & Co.-Conn. now or hereafter owns or controls, directly or indirectly,
fifty percent (50%) or more of the stock having the right to vote for directors
thereof. For the purpose of this definition, the stock owned or controlled by ▇.
▇. ▇▇▇▇▇ & Co.-▇▇▇▇. shall be deemed to include all stock owned or controlled,
directly or indirectly, by any other company of which ▇. ▇. ▇▇▇▇▇ & Co.-Conn.
owns or controls, directly or indirectly, fifty percent (50%) or more of the
stock having the right to vote for directors thereof.
6. "GRACE Technical Information" shall mean all technical information and
data relating to the Field of this Agreement acquired independently by GRACE
prior to the execution of this Agreement which GRACE is free to disclose to RI
HOSPITAL. All technical information and data relating to the Field of this
Agreement which is developed, produced, or generated during the term of this
Agreement shall be considered Project Information.
7. "Licensed Patent" shall mean any patent application or patent having one
or more claims which cover a Project Invention or Project Information, and which
is licensed to GRACE pursuant to Article VI.
8. "Licensed Process" shall mean any process described in one or more
claims of a Licensed Patent which has not been held invalid by a court decision
from which no appeal may be taken.
27
9. "Licensed Product" shall mean any material manufactured, used, or sold
by GRACE or any of its sublicensees under one or more claims of a Licensed
Patent which has not been held invalid by a court decision from which no appeal
may be taken.
10. "Net Sales" shall mean the invoice amount charged to customers for each
Commercial Sale of a Licensed Product less the amount, if any, for packing,
discounts (including discounts for quantity and prompt payment), charges for
insurance and freight, taxes and/or duties paid or payable to governmental
authorities, and credits for returns and allowances actually granted. Amounts
invoiced to customers in any currency other than United States dollars shall be
converted from the currency or currencies in which sales were made to the U.S.
dollar equivalent based upon the prevailing open market currency conversion rate
(commercial selling rate) as quoted by the City Bank NATIBANK of New York, New
York, U.S.A., ten (10) days prior to the date when any royalty payments
hereunder are due to RI HOSPITAL. If a Licensed Product is not sold
independently, but rather is sold in combination or admixture with another
chemical compound or material which is not a Licensed Product, then (i) the Net
Sales of said Licensed Product shall be deemed to be the current equivalent Net
Sales for the same quantity of said Licensed Product which is sold
independently; or (ii) if there are no independent current sales of said
Licensed Product, the Net Sales shall be deemed to be equal to one hundred fifty
percent (150%).of the direct manufacturing cost of producing said Licensed
Product, determined in accordance with generally accepted accounting procedures
consistently applied.
11. "Principal Investigator" shall mean ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ or such other
member of the RI HOSPITAL staff upon which the parties shall mutually agree,
should ▇▇. ▇▇▇▇▇▇▇▇ withdraw.
12. "Project" shall mean the research program described in Exhibit A and
shall include any modifications, extensions, or additions thereto.
13. "Project Biological System" shall mean and include all biological
systems (E.G., cell cultures, cell-ligand combinations and/or cell
culture-apparatus combinations) and all parts or sub-parts thereof, used in any
manner in the performance of research pursuant to this Agreement.
14. "Project Information" shall mean all scientific or technical
information and data, regardless of form or characteristics, including
descriptions of and information regarding all unpatented inventions relating to
the Field of this Agreement, which have been developed,
28
produced, or generated in the course of, in connection with, or as a result of
the Project. "[I]n the course of, in connection with, or as a result of" as used
in this definition, shall mean (i) during the period of funding under this
Agreement, or (ii) up to six (6) months following the termination or expiration
of this Agreement; provided that Project Inventions made during the six (6)
months following termination or expiration must reasonably be based on or
derived from Project Information required to be disclosed to GRACE pursuant to
Paragraph 4.01 of this Agreement. "Project Information" as used herein shall not
include financial information incidental to administration of this Agreement.
15. "Project Invention" shall mean any invention, improvement or discovery
in the Field set forth in this Agreement which is first conceived or first
actually reduced to practice in the course of, in connection with, or as a
result of the research funded under this Agreement and includes any method,
process, machine, manufacture, design, or composition of matter or any new or
useful improvement thereof whether or not patentable under the patent laws of
the United States or any foreign country. "In the course of, in connection with,
or as a result of," as used in this definition, shall be defined as in
Definition 14 ("Project Information").
16. "Project Patent Rights" shall mean patents and patent applications in
all countries to the extent that they or the claims thereof describe one or more
features of a Project Invention.
17. "Progress Report" shall mean the quarterly progress report of Project
Information and/or Project Inventions, to be prepared and submitted by RI
HOSPITAL as described in Paragraphs 3.03 and 4.01.
18. "Project Invoice" shall mean the quarterly invoice of expenses for the
Project, to be prepared and submitted by RI HOSPITAL as described in Paragraph
3.03.
19(a) "Publication" shall mean any document, scientific paper, thesis,
report, article, commentary, or notebook, whether in written form or
a tangible form equivalent thereto, (E.G., printed material,
microfilm, microfiche, photocopy, or computer printout) or in the
form of a presentation to persons not bound by this Agreement, which
discloses any Project Invention or Project Information. "Publication"
as used herein shall not include any patent application or patent
within the Project Patent Rights.
29
(b) "Publish," "Publishing" and "Published" shall mean the act of making a
Publication available to persons other than RI HOSPITAL or GRACE
personnel by any means and in any manner without a restriction
preserving the confidential nature, if any, of the Publication;
(c) "Publication Date" shall mean the date on which the Publication is
Published.
(d) "Publisher" shall mean and include any person or organization
authorized by RI HOSPITAL or any RI HOSPITAL Personnel to Publish a
Publication.
20. "RI HOSPITAL Personnel" shall mean the Principal Investigator, any
individual specifically identified in the budget, Exhibit B to this Agreement,
and any other RI HOSPITAL employee who performs any part of the research work
contemplated by this Agreement.
21. "RI HOSPITAL Technical Information" shall mean all technical
information and data relating to the Field of this Agreement acquired
independently by RI HOSPITAL prior to the execution of this Agreement which RI
HOSPITAL is free to disclose to GRACE. All technical information and data
relating to the Field of this Agreement which is developed, produced, or
generated by RI HOSPITAL during the term of this Agreement shall be considered
Project Information.
22. "RI Expertise" shall mean modified isolation, purification,
modification and culture of mammalian hepatocytes and hepatocyte-like cells.
30
EXHIBIT A
(four and one-third pages.)
[*]
31
RHODE ISLAND HOSPITAL
1994 RESEARCH PLAN
(12/93 - 11/94)
(Two and one half pages.)
[*]
32
EXHIBIT B
RHODE ISLAND HOSPITAL
OPERATING BUDGET
92-93 93-94
--------- ---------
[*]
33
EXHIBIT C
EMPLOYEE AGREEMENT
------------------
I, the undersigned employee of Rhode Island Hospital, hereby acknowledge
that I have read and understand the provisions of the Agreement to be made
effective ___________________, 1984 by and between Rhode Island Hospital (RI
HOSPITAL) and ▇. ▇. ▇▇▇▇▇ & Co. (GRACE). I hereby agree as follows:
1. To assign all my rights, title and interest in any invention, whether or
not patentable, forming part of the Project Information encompassed by
Technologies 1 and 2 (as defined in said Agreement) to GRACE;
2. To assign all my right, title, and interest in any invention, whether or
not patentable, forming part of the Project Information encompassed by
Technologies 3 and 4 (as defined in said Agreement) to RI HOSPITAL;
3. To cooperate fully with GRACE and RI HOSPITAL in filing, prosecuting and
maintaining all U.S. and foreign patents and patent applications;
4. To cooperate fully with GRACE and RI HOSPITAL in any litigation
involving any Licensed Patent, Licensed Product, or Licensed Process (as defined
in said Agreement); and
5. Not to disclose GRACE's or RI HOSPITAL's Confidential Technical
Information pursuant to the terms and conditions of said Agreement.
----------------------- -------------------------------
(Date) (name of employee)
WITNESSED BY:
----------------------- -------------------------------
(Date) (name of witness)