EXHIBIT 10.18
RESEARCH AND LICENSE AGREEMENT (SK#4826)
for SKI's technology
"Heat Sensitive Gene Therapy"
(SK 797)
TABLE OF CONTENTS
PREAMBLE
ARTICLES:
I DEFINITIONS
II RESEARCH PROGRAM
III GRANT
IV DUE DILIGENCE
V PAYMENTS
VI REPORTS AND RECORDS
VII PATENT PROSECUTION
VIII INFRINGEMENT
IX PRODUCT LIABILITY
X EXPORT CONTROLS
XI NON-USE OF NAMES
XII ASSIGNMENTS
XIII TERMINATION
XIV PAYMENTS, NOTICES AND OTHER COMMUNICATIONS
XV MISCELLANEOUS PROVISIONS
This Agreement is effective on the date last subscribed below (the
"Effective Date"), and is by and between SLOAN-KETTERING INSTITUTE FOR
CANCER RESEARCH (HEREINAFTER referred to as "SKI"), a New York, membership
corporation with principal offices at 1275 York Avenue, New York, New York
10021, and CELSION CORPORATION, a corporation with principal offices located
at 10220-1 Old Columbia Road, Columbia, Maryland 210461705 ("LICENSEE").
WITNESSETH
WHEREAS, SKI is the owner of certain Patent Rights (as later defined herein)
and has the right to grant licenses under said Patent Rights; and
WHEREAS, SKI desires to have the Patent Rights utilized in the public
interest and is willing to grant a license to its interest thereunder; and
WHEREAS, LICENSEE seeks to commercially develop the Patent Rights through a
thorough, vigorous and diligent program of exploiting the Patent Rights whereby
public utilization shall result therefrom; and
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto agree as follows:
ARTICLE I - DEFINITIONS
For the purpose of this Agreement, the following words and phrases shall have
the following meanings:
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1.1. "LICENSEE" shall include Affiliates, that is, any person, firm,
corporation or other entity controlling, controlled by, or under common control
with a party hereto. The term "control" wherever used throughout this Agreement
shall mean ownership, directly or indirectly, of more than 50% of the equity
capital. With regard to SKI, "Affiliate" shall mean the Memorial Sloan-Kettering
Cancer Center and the Memorial Hospital for Cancer and Allied Diseases.
1.2. "Patent Rights" shall mean all of the following SKI intellectual
property:
(a) The United States and foreign patents and patent applications listed in
Exhibit A;
(b) United States and foreign patents issued from the applications listed in
Exhibit A, and from divisionals and continuations of these applications;
(c) claims of U.S. and foreign continuation-in-part applications, and of the
resulting patents, which are directed to subject matter specifically described
in the U.S. and foreign patent applications listed in Exhibit A;
(d) any reissues or re-examinations of patents described in (a), (b), or
(c), above.
1.3. A "Licensed Process" shall mean any process which is covered in whole
or in part by an issued, unexpired claim or a pending claim contained in the
Patent Rights in any country in which such process is practiced.
1.4. A "Licensed Product" shall mean any product or part thereof made,
leased, used or sold by or on behalf of LICENSEE which:
(a) is covered in whole or in part by an issued, unexpired claim or a
pending claim contained in the Patent Rights in the country in which any
product or part thereof is made, leased, used or sold; or
(b) is manufactured by using a Licensed Process.
1.5. "Net Sales" shall mean LICENSEE's and its sublicensees' billings for
sales of Licensed Products or Licensed Processes produced hereunder less the sum
of the following:
(a) Discounts allowed in amounts customary in the trade;
(b) Sales, tariff duties and/or use taxes directly imposed and with
reference to particular sales;
(c) Outbound transportation prepaid or allowed;
(d) Amounts allowed or credited on returns; and
(e) Bad debts and uncollectible receivables.
No deductions shall be made for commissions paid to individuals whether they
be with independent sales agencies or regularly employed by LICENSEE or
Affiliates and on its payroll, or for cost of collections. Licensed Products
shall be considered "sold" when billed or invoiced.
1.6. "Royalty Year" shall mean each twelve-month period commencing January 1
and ending December 31 during the term of this Agreement. For the first year of
this Agreement, the Royalty Year shall be the period of time between the signing
of the Agreement and December 31.
1.7. "Field of Use" shall mean the use of the Patent Rights in the field of
treatment of human disease.
1.8. "Research Program" shall mean investigations to be conducted by SKI
under this Agreement, as described in Exhibit B attached hereto, and as
described in revisions of Exhibit B which may be agreed upon in writing by the
parties.
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ARTICLE II - RESEARCH PROGRAM
2.1. SKI shall perform studies of Research Program. The Principal
Investigator assigned by SKI for directing the performance of the work is Dr.
Gloria Li. If for any reasons the Principal Investigator becomes unavailable,
SKI shall notify the LICENSEE . If a mutually acceptable successor is not
identified, the Research Program will be terminated in accordance with Section
2.9 below.
2.2. It is understood that SKI and the personnel performing the Research
Program hereunder may be or become involved in other activities and projects
which entail commitments to other sponsors. SKI will use its best efforts to
avoid conflicts with the Research Program; however, it is agreed that unless
provided to the contrary herein, SKI's Research Program obligations outlined in
Article II are subject to SKI's commitments to such other sponsors.
2.3. In consideration of SKI carrying out the Research Program, LICENSEE
shall pay to SKI annually in advance such sums as are agreed and set out in
Exhibit B. Subject to prior written notification by SKI, LICENSEE shall also pay
additional sums for salaries (and reasonable overheads thereon) in order to
accommodate reasonable salary increases which take effect after the Effective
Date, the timing of such additional payment to be agreed between the parties.
2.4. SKI shall inform LICENSEE of the progress of the Research Program on a
regular basis as mutually agreed to by both parties. A final written report
shall be submitted by SKI to LICENSEE within one month of completion of the
Research Program.
2.5. While it is understood that SKI is free to publish the results of its
research carried out under this Article 2, LICENSEE shall be given an
opportunity to review any proposed manuscripts regarding this work prior to
submission for publication. LICENSEE agrees to complete its review and to inform
SKI of its comments within thirty (30) days of receipt of SKI's manuscripts; if
no response is received within such thirty (30) days, it may be conclusively
presumed that the publication may proceed without delay. If LICENSEE determines
that the proposed publication contains patentable matter which requires
protection, LICENSEE may require the delay of the publication for a period of
time not to exceed sixty (60) days for the purpose of allowing the pursuit of
such protection. Without the prior written consent of LICENSEE, SKI shall not
publish or permit to be published any information which LICENSEE reasonably
deems to be LICENSEE's Confidential Information. When publishing, SKI shall
appropriately acknowledge LICENSEE's financial support of this research.
2.6. All original research results, data, records and work product generated
under this Agreement, including all tangible and intangible property, shall be
owned by SKI.
2.7.(a) Any inventions or discoveries ("Inventions") made under the
Research Program solely by SKI employees shall belong to SKI. SKI shall
promptly disclose potentially patentable Inventions to LICENSEE,
provided that LICENSEE shall hold all such disclosures in confidence and
shall not further disclose or use same in ways not previously approved
in writing by SKI. At LICENSEE's request and expense, SKI shall promptly
prepare, file and/or maintain patent applications or issued patents in
the United States and foreign countries for any such Inventions. Any
inventions or discoveries made during the Research Program jointly by
SKI employees and by the LICENSEE's employees shall be jointly owned by
SKI and LICENSEE. LICENSEE shall have the rights to obtain patent
protection in the United States and foreign countries for such joint
inventions, at its expense, unless otherwise agreed upon by the parties.
(b) SKI grants to LICENSEE an option to obtain a license to each Invention
solely owned by SKI, and to SKI's interest in any joint inventions,
through good faith negotiations and on commercially reasonable terms.
The option shall extend for a period of three (3) months following
disclosure of the Invention to the LICENSEE. In the event the parties,
acting in good faith, fail to reach a mutually acceptable agreement
within three (3) months after commencing negotiations, SKI shall be
entitled to negotiate a license with a third party for such Invention.
2.8. SKI MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED,
REGARDING ITS PERFORMANCE UNDER THE RESEARCH PROGRAM, INCLUDING BUT NOT LIMITED
TO THE MARKETABILITY, USE OR FITNESS FOR ANY PARTICULAR PURPOSE OF THE RESULTS
DEVELOPED UNDER THIS WORK, OR THAT SUCH RESULTS DO NOT INFRINGE UPON ANY THIRD
PARTY PROPERTY RIGHTS. LICENSEE shall indemnify, defend and hold harmless SKI
and its affiliates and its employees from any liability resulting from
LICENSEE's use of the Results or materials provided by SKI, or other LICENSEE's
activities in the course of the Research Program.
2.9. The Research Program may be terminated by either party giving to the
other a minimum of ninety (90) days prior written notice. In the event of
termination of the Research Program, LICENSEE shall pay to SKI, within thirty
(30) days of invoice from SKI, for all direct costs, up to and including the
effective date of termination, and all applicable indirect costs and all
non-cancelable obligations made before receipt of notice of termination, even
though such obligations may extend beyond the termination date.
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ARTICLE III - GRANT
3.1. SKI hereby grants to LICENSEE an exclusive worldwide right and license
in the Field of Use, including the right to sublicense, to make, have made, use,
lease and sell Licensed Products and to use Licensed Processes derived from the
Patent Rights until the Patent Rights expire, unless this Agreement is
terminated before that time according to the terms hereof, and subject to the
rights reserved or observed in Section 2.2 below.
3.2. Notwithstanding any other provisions of this Agreement, it is agreed
that SKI and its Affiliates shall retain the right to practice the licensed
Patent Rights for its own teaching, research and patient care activities. All
rights reserved to the United States Government and others under 35 USC
33200-212, as amended, shall remain and shall in no way be affected by this
Agreement.
3.3. LICENSEE hereby agrees that every sublicensing agreement to which it
shall be party and which shall relate to the rights, privileges and license
granted hereunder shall contain a statement describing the date upon which
LICENSEE'S exclusive rights, privileges and license hereunder shall terminate.
3.4. LICENSEE agrees that any sublicenses granted by it shall provide that
the obligations to SKI of Article IV, VI, VIII, IX, X, XI, XII, XIII and XV of
this Agreement shall be binding upon the sublicensee as if it were a party to
this Agreement. LICENSEE further agrees to attach copies of these Articles to
sublicense agreements.
3.5. LICENSEE agrees to forward to SKI a copy of any and all fully executed
sublicense agreements, and further agrees to timely forward to SKI a copy of
such reports received by LICENSEE from its sublicensees during the preceding
Royalty Year.
3.6. If LICENSEE receives from sublicensees anything of value in lieu of
cash payments based upon payment obligations of any sublicense under this
Agreement, LICENSEE shall pay SKI royalty or other payments as required by
Clause 5.1(b), based on the fair market value of such payment, unless SKI waives
in writing such payment obligation.
3.7. The license granted hereunder shall not be construed to confer any
rights upon LICENSEE by implication, estoppel or otherwise as to any technology
not included in the Patent Rights.
ARTICLE IV - DUE DILIGENCE
4.1. LICENSEE and its sublicensees shall use their best efforts to bring
Licensed Products or Licensed Processes to market through a thorough, vigorous
and diligent program for exploitation of the Patent Rights and to continue
active, diligent marketing efforts for one or more Licensed Products or Licensed
Processes throughout the life of this Agreement.
4.2. In addition, LICENSEE shall adhere to the following milestones:
(a) Within three (3) months of LICENSEE's receipt of final report of
Research Program or within eighteen (18) months of the Effective Date of
this Agreement, whichever is earlier, LICENSEE shall deliver to SKI, its
detailed business, research and development plan including, for example,
relevant schedules of capital investments needed to implement the plan,
financial, equipment, facility plans, number and kind of personnel and
time planned for each phase of development of the Patents Rights for a
three year period. Similar reports shall be provided to SKI annually to
relay update and status information on LICENSEE's business, research and
development progress, including projections of activity anticipated for
the next reporting year. In the event SKI, after full examination of
each such report, determines the report is insufficient in detail or in
LICENSEE's progress in bringing a Licensed Product to market in
accordance with Section 4.1, SKI shall notify LICENSEE. If within two
(2) months of such notification, LICENSEE fails to so satisfy SKI, then
SKI shall give notice of same and may terminate this Agreement pursuant
to Section 13.4 below.
(b) LICENSEE shall be responsible for diligently and promptly taking all
reasonable steps to secure all required and/or necessary governmental
approvals to sell, exploit, or market any and all Licensed Products.
LICENSEE shall advise SKI, through annual reports described in Section
4.2(a) above of its program of development for obtaining said approvals.
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(c) LICENSEE's failure to perform in accordance with Sections 4.1 and 4.2
above shall be grounds for SKI to terminate this Agreement pursuant to
Section 13.4 below.
ARTICLE V - PAYMENTS
5.1. For the rights, privileges and licenses granted hereunder, LICENSEE
shall pay to SKI, in the manner hereinafter provided, until termination of this
Agreement:
(a) A license issue fee of fifty thousand dollars ($50,000), payable
immediately upon signing this Agreement.
(b) A royalty in an amount equal to five percent (5%) of the Net Sales by
LICENSEE or any sublicensee of the Licensed Products or Licensed
Processes, provided that such Licensed Product or Licensed Process is
covered by at least one valid claim of an issued patent. In all other
cases, LICENSEE shall pay to SKI a royalty in the amount of three
percent (3%) of the Net Sales by LICENSEE or any sublicensee of the
Licensed Products or Licensed Processes. In addition, LICENSEE shall pay
SKI fifty percent (50%) of income from sublicensees which is not based
on Net Sales, e.g. up-front licensing fees, milestone payments.
(c) Milestone payments as follows: (i) $25,000 upon the filing of an
Investigative New Drug (IND) with the United States Food and Drug
Administration (FDA), or two years after the Effective Date, whichever
is earlier. (ii) $ 75,000 upon commencement of Phase III clinical
studies, or five years months after the Effective Date,, whichever is
earlier. (iii) $100,000 upon filing of a New Drug Application (NDA) with
the FDA for each Licensed Product or eight years after the Effective
Date, whichever is earlier. (iv) $300,000 upon receipt of a New Drug
Application (NDA) from the FDA for each Licensed Product for which
LICENSEE receives a NDA.
(d) Annual minimum royalty payments, starting two years after the Execution
Date, in the amount of ten thousand dollars ($10,000) per Royalty Year
pending issuance of a U.S. Patent, and after issuance of one or more
such patents, annual minimum royalty payments of twenty thousand dollars
($20,000) per Royalty Year, and after the issuance of an NDA, annual
minimal royalty payments of fifty thousand dollars ($50,000). Such
minimum royalty payments shall be prorated for the year of issuance. The
minimum royalty payments shall be credited against the earned royalty
payments required in Section 5.1 (b) above for the same Royalty Year.
(e) Patent expenses according to the terms of Article VII.
5.2. No multiple royalties shall be payable because any Licensed Product,
its manufacture, use, lease or sale are or shall be covered by more than one of
the Patent Rights patent applications or Patent Rights patents licensed under
this Agreement.
5.3. Royalty payments shall be paid in United States dollars in New York,
NY, or at such other place as SKI may reasonably designate consistent with the
laws and regulations controlling in any foreign country, but not in any other
currency. If any currency conversion shall be required in connection with the
payment of royalties hereunder, such conversion shall be made by using the
exchange rate prevailing at the Chase Manhattan Bank (N.A.) on the last business
day of the calendar quarterly reporting period to which such royalty payments
relate.
5.4. Interest
(a) LICENSEE shall pay to SKI interest on any amounts not paid when due.
Such interest will accrue from the fifteenth (15th) day after the
payment was due at a rate two percent (2%) above the daily prime
interest rate, as determined by The Chase Manhattan Bank (N.A.) or its
successor entity, on each day the payment is delinquent, and the
interest payment will be due and payable on the first day of each month
after interest begins to accrue, until full payment of all amounts due
SKI is made.
(b) SKI's rights to receive such interest payments shall be in addition to
any other rights and remedies available to SKI.
(c) If the interest rate required in this Subsection exceeds the legal rate
in a jurisdiction where a claim for such interest is being asserted, the
required interest rate shall be reduced, for such claim only, to the
maximum interest rate allowable in the jurisdiction.
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ARTICLE VI - REPORTS AND RECORDS
6.1. LICENSEE shall keep full, true and accurate books of account containing
all particulars that may be necessary for the purpose of showing the amounts
payable to SKI hereunder. Said books and records shall be maintained for a
period of no less than five (5) years following the period to which they
pertain. For the term of this Agreement, upon reasonable written notice,
LICENSEE shall allow SKI or its agents to inspect such books and records for the
purpose of verifying LICENSEE's royalty statement or compliance in other
respects with this Agreement. Such inspections shall be during normal working
hours of LICENSEE. Should such inspection lead to the discovery of a greater
than ten percent (10%) discrepancy in reporting to SKI's detriment, LICENSEE
agrees to pay the full cost of such inspection.
6.2. LICENSEE, within thirty (30) days after March 31, June 30, September 30
and December 31 of each year, shall deliver to SKI true and accurate reports,
giving such particulars of the business conducted by LICENSEE and its
sublicensees during the preceding three-month period under this Agreement as
shall be pertinent to a royalty accounting hereunder. These shall include at
least the following, to be itemized per Licensed Product and Licensed Process:
(a) Number of Licensed Products and Licensed Processes commercially used,
manufactured and sold, rented or leased.
(b) Total billings for Licensed Products and Licensed Processes commercially
used, sold, rented or leased.
(c) Deductions applicable as provided in Paragraph 1.7.
(d) Total royalties due.
(e) Names and addresses of all sublicensees of LICENSEE.
(f)Total royalty income from all revenues subject to sublicensees'
royalties.
(g) Total sublicensing fee income.
6.3. With each such report submitted, LICENSEE shall pay to SKI the
royalties due and payable under this Agreement. If no royalties shall be due,
LICENSEE shall so report.
6.4. Milestone payments shall be reported and paid when due.
ARTICLE VII - PATENT PROSECUTION
7.1. LICENSEE shall be responsible for and pay all past and future costs and
expenses incurred by SKI for the preparation, filing, prosecution, issuance, and
maintenance of the Patent Rights. Such payments will be due within thirty (30)
days of LICENSEE's receipt of invoice of patent expenses from SKI or SKI's
patent counsel.
7.2. SKI shall diligently prosecute and maintain the Patent Rights in the
United States and in such countries as are determined by SKI and agreed to by
LICENSEE, using counsel of its choice. If LICENSEE does not agree to bear the
expense of filing patent applications in any foreign countries in which SKI
wishes to obtain patent protection, then SKI may file and prosecute such
applications at its own expense and any license granted hereunder shall exclude
such countries.
7.3. SKI shall provide LICENSEE with copies of all relevant documentation so
that LICENSEE may be informed and to give LICENSEE reasonable opportunity to
advise SKI of the continuing prosecution, and LICENSEE agrees to keep this
documentation confidential.
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ARTICLE VIII - INFRINGEMENT
8.1. LICENSEE as the exclusive commercial user of the Patent Rights shall
assume primary responsibility for enforcing the Patent Rights within relevant
commercial markets in the Field of Use. In exercising these responsibilities,
LICENSEE shall promptly contact alleged third party infringers and take all
reasonable steps to persuade such third parties to desist from infringing the
Patent Rights, including initiating and prosecuting an infringement action if
necessary, or defending a challenge to the validity of the Patent Rights.
LICENSEE also shall notify SKI of each instance of alleged infringement and
shall keep SKI informed of all stages of Patent Rights enforcement. LICENSEE may
use the name of SKI as party plaintiff. All costs of any action to enforce the
Patent Rights taken by LICENSEE shall be borne by LICENSEE and LICENSEE shall
keep any recovery of damages derived therefrom, the excess of such recovery over
such costs shall be included in LICENSEE's Net Sales. No settlement, consent
judgment or other voluntary final disposition of the suit may be entered into
without the prior written consent of SKI, which consent shall not unreasonably
be withheld.
8.2. In the event LICENSEE becomes aware of unlicensed infringement of the
Patent Rights, either through notice from SKI or by other means, and does not,
within three months (a) secure cessation of the infringement; or (b) enter suit
against the infringer; or (c) provide SKI with evidence of pendency of a bona
fide negotiation for sublicensing the infringer, then, thirty days after giving
written notice to LICENSEE, SKI shall have the right to (a) sue for the
infringement at SKI's own expense, and to collect for its own use any damages,
profits and awards of whatever nature that it may recover for such infringement;
and (b) terminate this Agreement according to terms of Article XII.
8.3. Each party shall promptly notify the other in writing in the event that
a third party shall bring a claim of infringement against SKI or LICENSEE,
either in the United States or in any foreign country in which there are Patent
Rights.
8.4. In the event LICENSEE is sued for patent infringement, threatened with
such suit, or enjoined from exercising its license rights granted hereunder,
LICENSEE may terminate this Agreement according to Article XII or contest the
action against it. In any such action, LICENSEE shall be fully responsible for
all its costs, including expenses, judgements and settlements, and shall be
entitled to proceeds that it may recover, including judgements, settlements and
awards, the excess of such recovery over such costs shall be included in
LICENSEE's Net Sales.
8.5. In any infringement suit as either party may institute to enforce the
Patent Rights against third parties pursuant to this Agreement, or in any
infringement action brought against either party by a third party, each party
hereto shall, at the request and expense of the other party, cooperate in all
respects and, to the extent possible, have its employees testify when requested
and make available relevant records, papers, information, samples, specimens,
and the like.
ARTICLE IX - INDEMNIFICATION.
PRODUCT LIABILITY
9.1. LICENSEE shall at all times during the term of this Agreement and
thereafter, indemnify, defend and hold SKI and its Affiliates, their Board of
Managers, officers, employees and affiliates, harmless against all claims and
expenses, including legal expenses and reasonable attorneys' fees, arising out
of the death of or injury to any person or persons or out of any damage to
property and against any other claim, proceeding, demand, expense and liability
of any kind whatsoever resulting from the production, manufacture, sale, use,
lease, consumption or advertisement of the Licensed Product(s) and/or Licensed
Process(es) or arising from any obligation of LICENSEE hereunder.
9.2. For the term of this Agreement, upon the commencement of clinical use,
production, sale, or transfer, whichever occurs first, of any Licensed Product
or Licensed Process, LICENSEE shall obtain and carry in full force and effect
general liability insurance which shall protect LICENSEE and SKI in regard to
events covered by Section 9.1 above. Such insurance shall be written by a
reputable insurance company, shall list SKI as an additional named insured
thereunder, shall be endorsed to include liability coverage, and shall require
thirty (30) days written notice to be given to SKI prior to any cancellation or
material change thereof. The limits of such insurance shall not be less than one
million dollars ($1,000,000) per occurrence with an annual aggregate of three
million dollars ($3,000,000) for personal injury, death or property damage.
LICENSEE shall provide SKI with Certificates of Insurance evidencing the same.
9.3. Except as otherwise expressly set forth in this Agreement, SKI MAKES NO
REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR
IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY, FITNESS FOR
A PARTICULAR PURPOSE, AND VALIDITY OF PATENT RIGHTS CLAIMS, ISSUED OR PENDING.
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ARTICLE X - EXPORT CONTROLS
It is understood that SKI is subject to United States Laws and regulations
controlling the export of technical data, computer software, laboratory
prototypes and other commodities (including the Arms Export Control Act, as
amended and the Export Administration Act of 1979), and that its obligations
hereunder are contingent on compliance with applicable United States export laws
and regulations. The transfer of certain technical data and commodities may
require a license from the cognizant agency of the United States Government
and/or written assurances by LICENSEE that LICENSEE shall not export data or
commodities to certain foreign countries without prior approval of such agency.
SKI neither represents that a license shall not be required nor that, if
required, it shall be issued.
ARTICLE XI - NON-USE OF NAMES
LICENSEE shall not use the names of SKI or its Affiliates, nor any of their
employees, nor any adaptation thereof, in any advertising, promotional or sales
literature without prior written consent obtained from SKI in each case.
ARTICLE XII - ASSIGNMENT
12.1. This Agreement may not be assigned by LICENSEE without prior written
consent from SKI.
12.2. Notwithstanding the foregoing prohibition, LICENSEE may without SKI's
consent assign this Agreement to any entity that it may merge into, consolidate
with, or transfer substantially all of its assets ("substantially" being EIGHTY
PERCENT (80%) or more thereof) as an entirety, so long as the successor
surviving corporation in any such merger, consolidation, transfer or
reorganization assumes in writing the obligations of this Agreement. Such
merger, consolidation, transfer or reorganization shall not in itself be a
breach of this Article XI, nor be any default under this Agreement.
ARTICLE XIII - TERMINATION
13.1. Unless earlier terminated pursuant to this Article XII, this Agreement
shall terminate upon the later to occur of (a) the last to expire of the Patent
Rights or (b) twenty (20) years.
13.2. SKI may terminate this Agreement if LICENSEE becomes insolvent or, a
petition in bankruptcy is filed against LICENSEE and is consented to, acquiesced
in or remains undismissed for thirty (30) days; or makes a general assignment
for the benefit of creditors, or a receiver is appointed for LICENSEE, and
LICENSEE does not return to solvency before the expiration of a thirty (30) day
period.
13.3. Should LICENSEE fail to pay SKI license fees, royalties and patent
expenses due and payable hereunder for more than thirty (30) days, SKI shall
have the right to terminate this Agreement on thirty (30) days written notice,
unless LICENSEE shall pay SKI within the thirty (30) day period, all such
license fees, royalties and patent expenses and interest due and payable. Upon
the expiration of the thirty (30) day period, if LICENSEE shall not have paid
all such royalties, patent expenses and interest due and payable, the rights,
privileges and license granted hereunder shall terminate.
13.4. Upon failure of LICENSEE to perform in accordance with Article 4 or
any other material breach of this Agreement by LICENSEE, other than those
occurrences set out in Sections 13.2 and 13.3, hereinabove, which shall always
take precedence in that order over any material breach or default referred to in
this Section 13.4, SKI shall have the right to terminate this Agreement and the
rights, privileges and license granted hereunder by sixty (60) days' notice to
LICENSEE. Such termination shall become effective unless LICENSEE shall have
cured any such breach prior to the expiration of the sixty (60) day period.
13.5. LICENSEE shall be entitled to terminate this Agreement upon sixty (60)
days advance written notice to SKI, provided that LICENSEE and any of its
Affiliates or sublicensees cease making, using or selling Licensed Products.
13.6. Upon termination of this Agreement for any reason, nothing herein
shall be construed to release either party from any obligation that matured
prior to the effective date of such termination. LICENSEE must return to SKI all
materials [Know-How, biological, chemical, FDA files, etc] relating to Licensed
Product, Licensed Process, and the Patent Rights; provided, however, that,
unless terminated under Sections 13.3 or 13.4, LICENSEE shall have the right for
one year thereafter to dispose of all Licensed Products then in its inventory,
and shall pay royalties thereon, in accordance with the provisions of Article IV
and shall submit the related reports as required by Article V, as though this
Agreement had not terminated.
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13.7. Other than any claim arising from LICENSEE's failure to pay license
fees or patent expenses due under this contract, any controversy or bona fide
disputed claim arising between the parties to this Agreement, which dispute
cannot be resolved by mutual agreement shall, by the election of either party,
be resolved by submitting to dispute resolution before a fact-finding mediation
body composed of one or more experts in the field, selected by mutual agreement
within thirty days of written request by either party. Said dispute resolution
shall be held in New York at such place as shall be mutually agreed upon in
writing by the parties. The fact-finding body shall determine who shall bear the
cost of said resolution. In the event that the parties cannot mutually agree
within said thirty (30) days on the dispute resolution body, the parties will go
to arbitration in accordance with the Commercial Arbitration Rules of the
American Arbitration Association.
13.8. Upon termination of this Agreement for any reason all sublicenses
shall terminate. Any sublicensees not then in default shall have the right to
seek a license from SKI. SKI agrees to negotiate such licenses in good faith
under reasonable terms and conditions substantially similar to the ones set
forth in the License agreement between Celsion and such sublicensee or as set
forth in this Agreement, at the discretion of SKI.
13.9. Article IX, Article XI, and Section 13.6 of this Agreement shall
survive termination.
ARTICLE XIV - PAYMENTS, NOTICES AND OTHER COMMUNICATIONS
14.1. Payments shall be made by remittance to "Sloan-Kettering Institute for
Cancer Research". Payments shall be sufficiently made when delivered by courier
of other means providing proof of delivery to SKI. Payment shall show "PAYMENT,
CONTRACT SK# 4826" on the check stub or attached correspondence, and shall be
sent to:
Office of Industrial Affairs
Memorial Sloan-Kettering Cancer Center
1275 York Avenue
New York, New York 10021
14.2. All notices or other communication pursuant to this Agreement shall be
sufficiently made or given when delivered by courier or other means providing
proof of delivery to such party at its address below or as it shall designate by
written notice given to the other party:
In the case of SKI:
Sloan-Kettering Institute for Cancer Research
1275 York Avenue
New York, New York 10021
Attention: James S. Quirk
Senior Vice President
Research Resources Management
In the case of LICENSEE:
Celsion Corporation
10220-1 Old Columbia Road
Columbia, MD 21046-1705
Attention: Augustine Y. Cheung, Ph.D.
Chairman
36
ARTICLE XV - MISCELLANEOUS PROVISIONS
15.1. This Agreement shall be construed, governed, interpreted and applied
in accordance with the laws of the State of New York, except that questions
affecting the construction and effect of any patent shall be determined by the
law of the country in which the patent was granted.
15.2. The provisions of this Agreement are severable, and in the event that
any provisions of this Agreement shall be determined to be invalid or
unenforceable under any controlling body of the law, such invalidity or
unenforceability shall not in any way affect the validity or enforceability of
the remaining provisions hereof.
15.3. LICENSEE agrees to mark the Licensed Products sold in the United
States with all applicable United States patent numbers. All Licensed Products
shipped to or sold in other countries shall be marked in such a manner as to
conform with the patent laws and practice of the country of manufacture or sale.
15.4. The failure of either party to assert a right hereunder or to insist
upon compliance with any term or condition of this Agreement shall not
constitute a waiver of that right or excuse a similar subsequent failure to
perform any such term or condition by the other party.
15.5. This Agreement may be executed in any number of counterparts and each
of such counterparts shall for all purposes be an original and all such
counterparts shall together constitute but one and the same agreement.
IN WITNESS WHEREOF, authorized representatives of the parties have signed
and dated this Agreement below.
Sloan-Kettering Institute for Cancer Research Celsion Corporation
- --------------------------------------------- -------------------
By: /s/ MR. GUSTAVE J. BERNHARDT By: /s/ AUGUSTINE Y. CHEUNG, PH.D.
--------------------------------- ----------------------------------
James S. Quirk Augustine Y. Cheung, Ph.D.
Senior Vice President Chairman
Research Resources Management
Date: 5/19/00 Date: 5/17/2000
------------- ---------------
37
EXHIBIT A
PCT International Application No. PCT/US99/14702 entitled "Uses of DNA-PK filed
June 30, 1999, claiming the benefit of U.S. Provisional Application No.
60/091,181 filed June 30, 1998.
38
EXHIBIT B
Project Summary
DNA-PK and Heat-Shock Targeted (Adenoviral) Genetic Radiotherapy
Gloria C. Li, Ph.D.
Department of Medical Physics and Department of Radiation Oncology
Memorial Sloan-Kettering Cancer Center
1275 York Avenue,
New York, NY 10021
Ku is a complex of two proteins, Ku70 and Ku80, that functions as a
heterodimer to bind DNA double-strand breaks and activate DNA-dependent
protein kinase (DNA-PK). To determine the physiological roles of Ku70 and
Ku80, we generated Ku70-/- and Ku80-/- knockout mice via targeted gene
disruption (Nussenzweig, et al., 1996, Ouyang, et al., 1997). These mutant
mice show profound deficiency in V(D)J recombination, impaired lymphocyte
development, and inability to rejoin the radiation-induced DNA double strand
breaks. To further characterize the Ku-deficieny associated phenoptype,
mouse embryo fibroblast cell lines were established from these Ku70-/- and
Ku80-/- mice, and were tested for their sensitivity to DNA-damaging agents.
Ku70-/- and Ku80-/- cells were extremely sensitive to ionizing radiation,
deficient in the recovery of sublethal and potentially lethal damage.
Furthermore, these cells were also sensitive to other DNA-damaging agents
such as adriamycin, bleomycin, and etoposide. We have performed
complementation experiments and show that expression of human Ku70 in
Ku70-/- cells (and human Ku80 in Ku80-/- cells) restored their Ku-DNA
binding activity and x-ray resistance phenotype. These results confirm that
Kudeficiency compromises the ability of cells to repair DNA strand breaks,
presumably by inhibiting the function of DNA-PK.
Three specific aims are proposed in this grant application to test a working
hypothesis, inferred from our pilot studies described above, that DNA-PK
plays an important role in modulating the response of human cancer cells to
ionizing radiation and to chemotherapeutic agents. Specifically, we plan to
down-regulate the DNA-PK activity by either genetic approach (via expression
of antisense RNA targeting DNA-PK subunits) or pharmacological means (with
the use of DNA-PK inhibitors), and to determine whether the reduction of
DNA-PK activity will enhance the cytotoxicity of various drugs and ionizing
radiation. Knowledge gained in these investigations will lead to strategies
for optimizing the efficacy of chemotherapy, radiation and hyperthermia
therapy in the management of human cancer, which constitutes the goals of
this proposal.
SPECIFIC AIM I:
Using established cell lines deficient in DNA-PKcs or Ku70 or Ku80, in
comparison with their wild-type controls, we will determine:
(a) the cell's sensitivity to various chemotherapeutic drugs, e.g., cisplatin
and doxorubicin.
(b) the cells' sensitivity to ionizing radiation.
(c) the cells' sensitivity to hyperthermia treatment.
SPECIFIC AIM II:
To modify the cellular level of individual DNA-PK subunits through the use of
DNA-mediated gene transfer techniques, or through pharmacological means.
Specifically, we plan:
(a) To generate and characterize cell lines stably and constitutively expressing
antisense RNA targeting each of the DNA-PK subunits (e.g., DNA-PKcs, Ku70 or
Ku80) in order to down-regulate the endogenous level of DNA-PKcs, Ku70 or
Ku80. Expression of DNA-PK subunit will be determined by Northern and
Western blot analysis, and further examined using DNA-PK kinase activity
assay.
39
(b) To place the Ku70, Ku80 or DNA-PKcs gene fragment in the antisense
orientation and under the control of a heat-shock responsive promoter (e.g.,
hsp70 promoter), to transfect these gene constructs into mammalian cells,
and to determine the heat inducibility (the efficiency of the promoter), the
residual level of DNA-PK subunit (in terms of expression, kinase activity,
and DNA-binding activity).
(c) Using cell lines generated in II-(a) and II-(b), in which DNA-PK activity is
modified, in comparison to control cells, we plan to determine the cells'
sensitivity to ionizing radiation, to chemotherapeutic drugs and to heat
shock exposure.
(d) An additional approach to modify the cellular level of DNA-PK is to use
DNA-PK kinase inhibitor to reduce the endogenous level of DNA-PK activity in
cells.
SPECIFIC AIM III:
To verify cell culture studies listed in Specific Aim II in animal tumor models.
Specifically, we plan:
(a) To deplete the cellular level of individual DNA-PK subunits in animal tumors
(e.g. MCF-7 tumors implanted in nude mice, or FSa-II fibrosarcomas implanted
in C3H mice), by intratumoral injection of an adenoviral vector containing
the heat-shock inducible hsp70 promoter (or a constitutive CMV promoter),
ligated to the antisense Ku70 cDNA (asKu70), the antisense Ku80 cDNA
(asKu80) or the antisense DNA-PKcs cDNA (asDNA-PKcs).
(b) To regionally heat shock the tumors (to activate the hsp70 promoter and
antisense expression) and followed by radiation therapy. The radiation
response of these animal tumors and human xenografts will be assessed in
vitro (colony forming assay) and/or in vivo (tumor growth assay).
Budget & Payment Schedule
$111,645.00 per year for a period of two (2) years, payable semi-annually, in
advance, in four equal payments of $55,822.50. The first such payment will be
due upon execution of this Agreement. Subsequent payments will be made 6 months,
12 months and 18 months thereafter.
Detailed budget for Celsion Sponsored Research
DETAILED BUDGET FOR NEXT
PERIOD - DIRECT COSTS From Through
ONLY 6/1/00 5/31/00
PERSONNEL
---------
Type Appt. % Effort on
Name Role on Project (months) Project
-------------- ------------------ ----------- ----------
Gloria C. Li Principal 12 5
------------ ---------- --- ------------
Investigator
Ling Bo Shen Technician 12 30
------------ ---------- --- ------------
Rachel Shao Post-Doc Fellow 12 100
----------- --------------- --- ------------
SUBTOTALS
PERSONNEL
---------
Fringe
Name Salary Requested Benefits Totals
-------------- ----------------------------------
Gloria C. Li $ 0 $ 0 $ 0
------------ -------- ------ -------
Ling Bo Shen $ 9,000 $1,980 $10,980
------------ -------- ------ -------
Rachel Shao $ 35,000 $7,700 $42,700
----------- -------- ------ -------
$ 44,000 $9,680 $53,680
LABORATORY SUPPLIES
-------------------------------------------------------------------------
tissue culture $ 5,000 chemicals $ 2,000
serum $ 5,000 antibodies $ 3,000
media $ 5,000 oligonucleotides $ 1,000
antibotics $ 500 mice & housing $ 10,000 $ 31,500
---------- ------- -------------- -------- ---------
SUBTOTAL DIRECT COSTS FOR
40
NEW BUDGET PERIOD $ 85,180
OVERHEAD AT 62.3% (excludes $ 26,465
Post-Doc)
-----------------------------------------------------------------------
TOTAL COSTS FOR NEXT
BUDGET PERIOD $ 111,645
[MEMORIAL SLOAN-KETTERING LETTERHEAD]
May 17, 2000
TO WHOM IT MAY CONCERN:
In my absence, Mr. Gustave J. Bernhardt, Director, Research Resources
Management, will sign as an institutional official for the Sloan-Kettering
Institute for Cancer Research.
/s/ JAMES S. QUIRK
-------------------------
James S. Quirk
Senior Vice President
41