Exhibit 10.1
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Agreement No. A3885
STANDARD EXCLUSIVE LICENSE AGREEMENT
WITH SUBLICENSING TERMS
TABLE OF CONTENTS
Section 1 Definitions
Section 2 Grant
Section 3 Diligence
Section 4 Royalties
Section 5 Certain Warranties and Disclaimers of UFRF
Section 6 Record keeping
Section 7 Patent Prosecution
Section 8 Infringement and Invalidity
Section 9 Term and Termination
Section 10 Assignability
Section 11 Dispute Resolution Procedures
Section 12 Product Liability; Conduct of Business
Section 13 Confidentiality
Section 14 Miscellaneous
Section 15 Notices
Section 16 Contract Formation and Authority
Appendix A Development Plan
Appendix B Development Report
Appendix C UFRF Royalty Report
This Agreement is made effective the 2nd day of September, 2004, (the
"Effective Date") by and between the University of Florida Research Foundation,
Inc. (hereinafter called "UFRF"), a nonstock, nonprofit Florida corporation, and
Critical Therapeutics, Inc. (hereinafter called "CTI"), a corporation organized
and existing under the laws of Delaware;
WHEREAS, UFRF owns certain inventions that are described in the "Licensed
Patents" defined below, and UFRF is willing to grant a license to CTI under the
Licensed Patents and CTI desires a license under such Licensed Patents;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth below, the parties covenant and agree as follows:
Page 1
SECTION 1 DEFINITIONS
1.1. "Affiliate" shall mean any corporation or entity controlling,
controlled by or under the common control of UFRF or CTI or any
third party, as the case may be. For the purpose of this definition,
"control" shall mean direct or indirect ownership of fifty percent
(50%) or more of the stock or shares entitled to vote for the
election of directors.
1.2. "Compound" shall mean cinnamylidene-anabaseines. For the avoidance
of doubt, Compound shall not include benzylidene-anabaseines.
1.3. "Development Plan" shall mean a written report summarizing the
development activities that are to be undertaken by the CTI to bring
Products to the market. The Development Plan is attached as Appendix
A.
1.4. "Development Report" shall mean a written account of CTI's progress
under the Development Plan having at least the information specified
in Appendix B to this Agreement, and shall be sent to the address
specified on Appendix B.
1.5 "Field" shall mean the treatment, diagnosis or prophylaxis of a
disease in a mammal as well as any research or development
activities directed thereto.
1.6 "Improvements" shall mean any modification of an invention described
in the Licensed Patents which, if unlicensed, would infringe one or
more claims of the Licensed Patents.
1.7 "Licensed Patents" shall mean the United States patent(s)/patent
application(s) entitled "Methods of use and compositions for
benzylidene and cinnamylidene-anabaseines" filed in the United
States Patent Office on August 29, 1997, and assigned Serial Number
08/924,008, issued as US 5,977,144, and all United States patents
and foreign patents and patent applications based on this U.S.
application.
1.8 "Net Sales" shall mean the amount invoiced on sales (regardless of
uncollectible accounts) of Product after deducting, if not already
deducted in the amount invoiced:
- Trade and/or quantity discounts
- Credits on returns and allowances
- Outbound transportation costs paid
The "Net Sales" for a Licensed Product or Licensed Process that is
transferred to a third party for promotional purposes without charge
or at a discount shall be the average invoiced price to the customer
of that type of Licensed Product and/or Licensed Process during the
applicable calendar quarter.
1.9 "Product" shall mean any product or part thereof developed by or on
behalf of CTI that contains the Compound and is covered in whole or
in part by a Valid Claim in the country in which such product is
made, used or sold.
1.10 "Sublicensee" shall mean any third party to whom CTI confers the
right to make, use or sell one or more Products.
Page 2
1.11 "Territory" shall mean all of the countries of the world.
1.12 "Valid Claim" shall mean a claim of any issued, unexpired United
States or foreign patent that shall not have been donated to the
public, disclaimed, nor held invalid or unenforceable against
another Party by a court of competent jurisdiction in an unappealed
or unappealable decision.
SECTION 2 GRANT
2.1 License.
UFRF hereby grants to CTI an exclusive license under the Licensed
Patents solely to make, use and sell Products in the Field in the
Territory.
2.2 Sublicense.
2.2.1 CTI may grant sublicenses to third parties without the consent
of UFRF. CTI shall have the same responsibility for the
activities of any Sublicensee or Affiliate of CTI as if the
activities were directly those of CTI.
2.2.2 Any sublicense granted hereunder shall be on substantially the
same terms mutatis mutandis as the terms of this Agreement
insofar as they are applicable.
2.2.3 Where a sublicense has been granted under Section 2.2.1, such
sublicense shall automatically terminate if this Agreement
terminates for the country or countries covered by the
sublicense.
2.2.4 If CTI receives any fees, minimum royalties, or other payments
in consideration for any rights granted under a sublicense,
and such payments are not based directly upon the amount or
value of Licensed Products sold by the Sublicensee, then CTI
shall pay UFRF [**] percent ([**]%) of such payments in the
manner specified in Section 4.4.
2.2.5 CTI shall provide UFRF with a copy of each sublicense
agreement no more than thirty (30) days after the execution of
the sublicense agreement.
SECTION 3 DILIGENCE
3.1 Development.
3.1.1 CTI shall use its diligent efforts to develop, market and sell
the Products at its own expense. CTI shall independently
evaluate the inventions of the Licensed Patents and will
exercise best efforts to pursue the Development Plan (see
Appendix A ). All development activities and strategies and
all aspects of product design and decisions to market and the
like are entirely at the discretion of CTI.
3.1.2 Until the date of first commercial sale of Licensed Products,
CTI will supply UFRF with a written Development Report
annually thirty (30) days after the end of the calendar year
(see Appendix B ). UFRF's review of CTI's Development Plan
shall
Page 3
be solely to verify the existence of CTI's commitment to
development activity and to ensure compliance with CTI's
obligations to commercialize the inventions of the Licensed
Patents, as set forth above.
SECTION 4 ROYALTIES
4.1 License Issue Fee.
CTI agrees to pay to UFRF a $75,000 within thirty (30) days of the
Effective Date.
4.2 Running Royalty.
4.2.1 In addition to the fee paid to UFRF under Section 4.1, CTI
agrees to pay to UFRF a royalty calculated as a percentage of
Net Sales of Product in accordance with the terms and
conditions of this Agreement.
4.2.2 The royalty shall remain fixed while this Agreement is in
effect at a rate of [**] percent ([**]%) of total annual Net
Sales of Product of $[**] and [**] percent ([**]%) of total
annual Net Sales of Product of $[**].
Royalties shall be based on the total annual Net Sales of
Product in all relevant countries during a particular calendar
year for which is a royalty is due.
4.2.3 If CTI is required to pay patent royalties to third-parties to
make, use or sell Licensed Product in a particular country,
[**]% of considerations paid by licensee under such third
party licenses are creditable against royalties due, provided
that the royalties payable to UFRF in a given year shall [**]
4.2.4 Sales of Products between CTI and its Affiliates or
Sublicensees, or among such Affiliates and Sublicensees, shall
not be subject to royalties under this Article 4, but, in such
cases, the royalties shall be calculated on the Net Sales of
Product by the Affiliates or Sublicensees to a third party and
such royalties shall be payable to UFRF as provided in section
4.2.2.
4.3 Other Payments.
4.3.1 CTI agrees to pay UFRF minimum royalty payments, as follows
(a) $[**] ([**] dollars) per year up to and including
the year of the first sale of Product; and
(b) $[**] ([**] dollars) per year for the remaining Term
of the Agreement starting the year after the first sale
of Product (collectively "Minimum Royalty").
4.3.2 The Minimum Royalty shall be paid in advance on a quarterly
basis for each year in which this Agreement is in effect;
provided, however, the first Minimum Royalty payment shall be
due on January 1, 2005, and shall be in the full yearly amount
of $[**] and no additional Minimum royalty payments shall be
due in 2005. For each year after 2005, the Minimum Royalty for
a given year shall be due in advance and
Page 4
shall be paid in quarterly installments on March 31, June 30,
September 30, and December 31 for the following quarter.
4.3.3 Any Minimum Royalty paid in a calendar year will be credited
against the earned royalties for that calendar year. It is
understood that the Minimum Royalties will be applied to
earned royalties on a calendar year basis, and that sales of
Products requiring the payment of earned royalties made during
a prior or subsequent calendar year shall have no effect on
the annual Minimum Royalty due UFRF for other than the same
calendar year in which the royalties were earned.
4.3.4 In addition to all other payments required under this
Agreement, CTI agrees to pay UFRF Milestone payments within 60
days of the Event, as follows:
Payment Event
- ------- -----
$[**] [**]
$[**] [**]
$[**] [**]
4.3.5 CTI shall complete the following Development Milestones by the
noted date:
Development Milestones Date
- ---------------------- ----------------------
[**] Within [**] of Effective Date
[**] Within [**] of Effective Date
[**] Within [**] of Effective Date
Licensee agrees to make a good faith effort to meet the
milestones in Section 4.3.5 by the dates indicated. If the
milestones are not met, UFRF and Licensee will make every
attempt to renegotiate the milestones. Such renegotiation is
not to be unreasonably withheld by UFRF and if necessary,
shall be subject to the Dispute Resolution Procedures set
forth in Section 11. If renegotiation is unsuccessful,
termination according to Section 9.3 is applicable.
4.4 Accounting for Payments.
4.4.1 Amounts owing to UFRF under Sections 2.2 and 4.2 shall be paid
on a quarterly basis after the amount of Minimum Royalties
paid is exceeded, with such amounts due and received by UFRF
on or before the thirtieth day following the end of the
calendar quarter ending on March 31, June 30, September 30 or
December 31 in which such amounts were earned. The balance of
any amounts which remain unpaid more than thirty (30) days
after they are due to UFRF shall accrue interest until paid at
the rate of the lesser of one and one-half percent (1.5%) per
month or the maximum amount allowed under applicable law.
However, in no event shall this interest provision be
construed as a grant of permission for any payment delays.
Page 5
CTI shall also be responsible for repayment to UFRF of any
attorney, collection agency, or other out-of-pocket UFRF
expenses required to collect overdue payments due from this
Section 4.4.1, Section 6.2 or any other applicable section of
this Agreement.
4.4.2 Except as otherwise directed, all amounts owing to UFRF under
this Agreement shall be paid in U.S. dollars to UFRF at the
following address:
University of Florida Research Foundation, Inc.
223 Grinter Hall
PO Box 115500
Gainesville, Florida 32611-5500
Attention: Business Manager
All royalties owing with respect to Net Sales stated in currencies
other than U.S. dollars shall be converted at the rate shown in
the Federal Reserve Noon Valuation - Value of Foreign Currencies
on the day preceding the payment.
4.4.3 A full accounting statement showing how any amounts payable to
UFRF under Section 4.2 have been calculated shall be submitted
to UFRF on the date of each royalty payment. Such accounting
shall be on a per-country and product line, model or trade
name basis and shall be summarized on the form shown in
Appendix C of this Agreement. In the event no payment is owed
to UFRF because the amount of Minimum Royalties paid has not
been exceeded or otherwise, an accounting demonstrating that
fact shall be supplied to UFRF.
4.4.4 UFRF is exempt from paying income taxes under U.S. law.
Therefore, all payments due under this Agreement shall be made
without deduction for taxes, assessments, or other charges of
any kind which may be imposed on a corporation by the U.S.
government.
SECTION 5 CERTAIN WARRANTIES AND DISCLAIMERS OF UFRF
5.1 UFRF warrants that it is the owner of the Licensed Patents or
otherwise has the right to grant the licenses granted to CTI in this
Agreement and that the license granted herein does not conflict with
any other agreement to which UFRF is a party. However, nothing in
this Agreement shall be construed as:
5.1.1 a warranty or representation by UFRF as to the validity or
scope of any right included in the Licensed Patents;
5.1.2 a warranty or representation that anything made, used, sold or
otherwise disposed of under the license granted in this
Agreement will or will not infringe patents of third parties;
Page 6
5.1.3 an obligation to bring or prosecute actions or suits against
third parties for infringement of Licensed Patents;
5.1.4 an obligation to furnish any know-how not provided in Licensed
Patents or any services other than those specified in this
Agreement; or
5.1.5 a warranty or representation by UFRF that it will not grant
licenses to others to make, use or sell products not covered
by the claims of the Licensed Patents which may be similar
and/or compete with products made or sold by CTI.
5.2 EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, UFRF
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. UFRF ASSUMES NO
RESPONSIBILITIES WHATSOEVER WITH RESPECT TO USE, SALE, OR OTHER
DISPOSITION BY CTI, ITS SUBLICENSEE(S), OR THEIR VENDEES OR OTHER
TRANSFEREES OF PRODUCT INCORPORATING OR MADE BY USE OF INVENTIONS
LICENSED UNDER THIS AGREEMENT.
SECTION 6 RECORD KEEPING
6.1 CTI and its Sublicensee(s) shall keep books and records sufficient
to verify the accuracy and completeness of CTI's and its
Sublicensee(s)'s accounting referred to above, including without
limitation, inventory, purchase and invoice records, manufacturing
records, sales analysis, general ledgers, financial statements, and
tax returns relating to the Products. Such books and records shall
be preserved for a period not less than six years after they are
created, both during and after the term of this Agreement.
6.2 CTI and its Sublicensee(s) shall take all steps necessary so that
UFRF may, within thirty (30) days of its written request, audit,
review and/or copy all of the books and records relevant to the Net
Sales of Products at a single U.S. location to verify the accuracy
of CTI's and its Sublicensee(s)'s accounting. Such review may be
performed by any authorized employees of UFRF as well as by any
attorneys and/or accountants designated by UFRF, upon reasonable
notice and during regular business hours, subject to the
confidentiality provisions of this Agreement. If a deficiency with
regard to any payment hereunder is determined, CTI and its
Sublicensee(s) shall pay the deficiency within thirty (30) days of
receiving notice thereof along with applicable interest as described
in Section 4.4.1. If a royalty payment deficiency for a calendar
year exceeds five percent (5%) of the royalties paid for that year,
then CTI and its Sublicensee(s) shall be responsible for paying
UFRF's out-of-pocket expenses incurred with respect to such review.
6.3 At any time during the term of this agreement but no more than once
during a calendar year, UFRF may request in writing that CTI verify
the calculation of any past payments owed to UFRF through the means
of a self-audit. Within ninety (90) days of the request, CTI shall
complete a self-audit of its books and records to verify the
accuracy and completeness of the payments owed. Within thirty (30)
days of the completion of the self-audit, CTI shall submit to UFRF a
report detailing the findings of the self-audit and the manner in
which it was conducted in order to verify the accuracy and
completeness of the payments owed. If CTI has
Page 7
determined through its self-audit that there is any payment
deficiency, CTI shall pay UFRF the deficiency along with applicable
interest under Section 4.4.1 with the submission of the self-audit
report to UFRF.
SECTION 7 PATENT PROSECUTION
7.1 UFRF shall diligently file, prosecute and maintain the Licensed
Patents using counsel of its choice. UFRF shall provide CTI with
copies of all patent applications, amendments, and other filings
with the United States Patent and Trademark Office and foreign
patent offices no less than thirty (30) days prior to submitting
such documents with the relevant patent office. UFRF will also
provide CTI with copies of office actions and other communications
received by UFRF from the United States Patent and Trademark Office
and foreign patent offices relating to Licensed Patents. CTI shall
have the right to review and comment on all filings made with any
patent office. UFRF shall use its best efforts to incorporate any
comments made by CTI. CTI and UFRF agree to keep such information
confidential.
7.2 UFRF shall not abandon any of the Licensed Patents or Improvements.
7.3 Any Improvements made by or for CTI or UFRF and/or their respective
Affiliate(s) shall be the property of UFRF. CTI shall notify UFRF of
any Improvements made by or for CTI and/or its Affiliate(s).
7.4 CTI shall be responsible for and pay [**] percent ([**]%) of all
future costs and expenses incurred by UFRF for the preparation,
filing, prosecution, issuance, and maintenance of the Licensed
Patents within thirty (30) days of receipt of an invoice from UFRF;
provided, however, in the event UFRF grants a license to the
Licensed Patents to a large entity with respect to the U.S. patent
laws and with respect to the patent laws of any other countries, if
applicable, then CTI shall only be required to pay [**]% of any
costs and expenses that would be incurred by a small entity taking
the same actions with respect to a patent office. Further, if UFRF
licenses the Licensed Patents to more than [**] entities, then CTI
shall only be responsible for a proportionate share of the
above-noted costs and expenses based on the number of licensed
entities. For example, if there are [**] licensed entities then CTI
shall only be responsible for [**] of the relevant costs and
expenses.
7.5 It shall be the responsibility of CTI to keep UFRF fully apprised of
the "small entity" status of CTI with respect to the U.S. patent
laws and with respect to the patent laws of any other countries, if
applicable, and to inform UFRF of any changes in such status, within
thirty days of any such change.
SECTION 8 INFRINGEMENT AND INVALIDITY
8.1 CTI shall inform UFRF promptly in writing of any alleged
infringement of the Licensed Patents by a third party and of any
available evidence thereof.
8.2 During the term of this Agreement, CTI shall have the right, but not
the obligation, to prosecute at its own expense and for its own
benefit any such infringements of the Licensed Patents in the Field
as it relates to the Compounds. If CTI prosecutes any such
infringement, UFRF agrees that CTI may include UFRF as a
co-plaintiff in any such suit, without expense to UFRF.
Page 8
8.3 If within six (6) months after having been notified of any alleged
infringement, CTI shall have been unsuccessful in persuading the
alleged infringer to desist and shall not have brought and shall not
be diligently prosecuting an infringement action, or if CTI shall
notify UFRF at any time prior thereto of its intention not to bring
suit against any alleged infringer, then, and in those events only,
UFRF shall have the right, but not the obligation, to prosecute at
its own expense any infringement of the Licensed Patents, and UFRF
may, for such purposes, use the name of CTI as party plaintiff. No
settlement, consent judgment or other voluntary final disposition of
the suit may be entered into without the consent of CTI, which
consent shall not unreasonably withheld. UFRF shall indemnify CTI
against any order for costs that may be made against CTI in such
proceedings.
8.4 In the event that UFRF shall undertake the enforcement by litigation
and/or defense of the Licensed Patents by litigation, any recovery
of damages by UFRF for any such suit shall be applied first in
satisfaction of any unreimbursed expenses and legal fees of UFRF
relating to the suit, and next toward reimbursement of CTI for any
legal fees, and unreimbursed expenses. The balance remaining from
any such recovery shall be divided [**] between CTI and UFRF.
8.5 In any infringement suit that either party may institute to enforce
the Licensed Patents pursuant to this Agreement, the other party
hereto shall, at the request and expense of the party initiating
such suit, 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.
8.6 In the event a declaratory judgment action alleging invalidity or
noninfringement of any of the Licensed Patents shall be brought
against UFRF, CTI, at its option, shall have the right, within
thirty (30) days after commencement of such action, to intervene and
take over the sole defense of the action at its own expense.
8.7 In the event CTI contests the validity of any Licensed Patents, CTI
shall continue to pay royalties and make other payments pursuant to
this Agreement with respect to that patent as if such contest were
not underway until the patent is adjudicated invalid or
unenforceable by a court of last resort.
SECTION 9 TERM AND TERMINATION
9.1 The term of this license shall begin on the Effective Date of this
Agreement and continue until the earlier of the date that no
Licensed Patent remains an enforceable patent or the payment of
earned royalties under Section 4.2, once begun, ceases for more than
two (2) calendar quarters.
9.2 CTI may terminate this Agreement at any time by giving at least
sixty (60) days written notice of such termination to UFRF. Such a
notice shall be accompanied by a statement of the reasons for
termination.
9.3 If CTI at any time defaults in the timely payment of any monies due
to UFRF or the timely submission to UFRF of any Development Report,
fails to actively pursue the Development Plan, or commits any breach
of any other covenant herein contained, and CTI fails to remedy
Page 9
any such breach or default within ninety (90) days after written
notice thereof by UFRF, UFRF may, at its option, terminate this
Agreement immediately upon written notice to CTI.
9.4 If CTI shall cease to carry on its business pertaining to Licensed
Patents, this Agreement shall terminate upon thirty (30) days notice
by UFRF.
9.5 UFRF may immediately terminate this Agreement upon the occurrence of
the second separate default by Licensee within any consecutive six
month period for failure to pay royalties, patent or any other
expenses when due.
9.6 Upon the 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. CTI shall remain obligated to provide an accounting for
and to pay royalties earned to the date of termination, and any
Minimum Royalties shall be prorated as of the date of termination by
the number of days elapsed in the applicable calendar year. CTI may,
however, after the effective date of such termination, sell all
Licensed Products, and complete Licensed Products in the process of
manufacture at the time of such termination and sell the same,
provided that CTI shall remain obligated to provide an accounting
for and to pay running royalties thereon.
SECTION 10 ASSIGNABILITY
This Agreement may not be transferred or assigned by CTI except with the
prior written consent of UFRF; provided, however, that CTI shall be
entitled to assign its rights under this Agreement to an Affiliate or in
connection with the sale of all or substantially all of the business and
assets of CTI to which the subject matter of this Agreement pertains. Any
permitted assignee shall assume all obligations of its assignor under this
Agreement or under the respective rights or obligations actually assigned.
SECTION 11 DISPUTE RESOLUTION PROCEDURES
11.1 Mandatory Procedures.
In the event either party intends to file a lawsuit, other than
pursuant to Section 8.7, against the other with respect to any
matter in connection with this Agreement, compliance with the
procedures set forth in this Section shall be a condition precedent
to the filing of such lawsuit, other than for injunctive relief.
Either party may terminate this Agreement as provided in this
Agreement without following the procedures set forth in this
section.
11.1.1 When a party intends to invoke the procedures set forth in
this section, written notice shall be provided to the other
party. Within thirty (30) days of the date of such notice,
the parties agree that representatives designated by the
parties shall meet at mutually agreeable times and engage in
good faith negotiations at a mutually convenient location to
resolve such dispute.
11.1.2 If the parties fail to meet within the time period set forth
in section 11.1.1 above or if either party subsequently
determines that negotiations between the representatives of
the parties are at an impasse, the party declaring that the
negotiations are at an impasse shall give notice to the other
party stating with particularity the issues that remain in
dispute.
Page 10
11.1.3 Not more than 15 business days after the giving of such
notice of issues, each party shall deliver to the other party
a list of the names and addresses of at least three
individuals, any one of whom would be acceptable as a neutral
advisor in the dispute (the "Neutral Advisor") to the party
delivering the list. Any individual proposed as a Neutral
Advisor shall have experience in determining, mediating,
evaluating, or trying intellectual property litigation and
shall not be affiliated with the party that is proposing such
individual.
11.1.4 Within 10 days after delivery of such lists, the parties
shall agree on a Neutral Advisor. If they are unable to so
agree within that time, within 5 days, they shall each select
one individual from the lists. Within 5 days, the individuals
so selected shall meet and appoint a third individual from
the lists to serve as the Neutral Advisor. Within 30 days
after the selection of a Neutral Advisor:
(a) The parties shall each provide a written statement of the
issues in dispute to the Neutral Advisor.
(b) The parties shall meet with the Neutral Advisor in
Gainesville, Florida on a date and time established by the
Neutral Advisor. The meeting must be attended by persons
authorized to make final decisions on behalf of each party
with respect to the dispute. At the meeting, each party shall
make a presentation with respect to its position concerning
the dispute. The Neutral Advisor will then discuss the issues
separately with each party and attempt to resolve all issues
in the dispute. At the meeting, the parties will enter into a
written settlement agreement with respect to all issues that
are resolved. Such settlement agreement shall be final and
binding with respect to such resolved issues and may not be
the subject of any lawsuit between the parties, other than a
suit for enforcement of the settlement agreement.
11.1.5 The expenses of the Neutral Advisor shall be shared by the
parties equally. All other out-of-pocket costs and expenses
for the alternative dispute resolution procedure required
under this Section shall be paid by the party incurring the
same.
11.1.6 Positions taken and statements made during this alternative
dispute resolution procedure shall be deemed settlement
negotiations and shall not be admissible for any purpose in
any subsequent proceeding.
11.2 Failure to Resolve Dispute.
If any issue is not resolved at the meeting with the Neutral
Advisor, either party may file appropriate administrative or
judicial proceedings with respect to the issue that remains in
dispute. No new issues may be included in the lawsuit without the
mandatory procedures set forth in this section having first been
followed.
11.3 Survival.
The provisions of this Section shall survive termination of this
Agreement.
Page 11
SECTION 12 PRODUCT LIABILITY; CONDUCT OF BUSINESS
12.1 CTI and its Sublicensee(s) shall, at all times during the term of
this Agreement and thereafter, indemnify, defend and hold UFRF, the
Florida Board of Governors, the University of Florida Board of
Trustees, the University of Florida, and each of their directors,
officers, employees, and agents, and the inventors of the Licensed
Patents, regardless of whether such inventors are employed by the
University of Florida at the time of the claim, harmless against all
claims and expenses, including legal expenses and reasonable
attorneys fees, whether arising from a third party claim or
resulting from UFRF's enforcing this indemnification clause against
CTI, 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
(other than patent infringement claims) resulting from the
production, manufacture, sale, use, lease, consumption, marketing,
or advertisement of Licensed Products or Licensed Process(es) or
arising from any right or obligation of CTI hereunder. CTI shall
only be liable to UFRF for consequential, exemplary, incidental,
indirect or special damages or costs, including, but not limited to,
lost profits or loss of goodwill, in the event such damages are
awarded by a court of competent jurisdiction to a third party that
has brought a cause of action against UFRF and UFRF is seeking
indemnification under this Section 12.1. In any other event, CTI
shall not have any liability to UFRF for any consequential,
exemplary, incidental, indirect or special damages or costs,
including, but not limited to, lost profits or loss of goodwill.
Notwithstanding the above, UFRF at all times reserves the right to
retain counsel of its own to defend UFRF's, the Florida Board of
Governors', the University of Florida Board of Trustees', the
University of Florida's, and the inventor's interests.
12.2 CTI warrants that it shall have, at all relevant times, liability
insurance coverage appropriate to the risk involved in producing,
manufacturing, selling, marketing, using, leasing, consuming, or
advertising the products subject to this Agreement and that such
insurance coverage shall list UFRF, the Florida Board of Governors,
the University of Florida Board of Trustees, the University of
Florida, and the inventors of the Licensed Patents as additional
insureds. Within thirty(30) days after the execution of this
Agreement and thereafter annually between January 1 and January 31
of each year, CTI will present evidence to UFRF that the coverage is
being maintained with UFRF, the University of Florida, and its
inventors listed as additional insureds. In addition, CTI shall
provide UFRF with at least thirty (30) days prior written notice of
any reduction in or cancellation of the insurance coverage.
SECTION 13 CONFIDENTIALITY
13.1.1 The parties agree that it will be necessary, from time to
time, to disclose to each other confidential and proprietary
information, including inventions, works of authorship, trade
secrets, specifications, designs, data, know-how and other
proprietary information relating to the Field, the Products,
processes, services and business of the disclosing party and
the Licensed Patents. The foregoing shall be referred to
collectively as "CONFIDENTIAL INFORMATION".
13.1.2 Any Confidential Information disclosed by the disclosing
party shall be used by the receiving party exclusively for
the purposes of fulfilling the receiving party's obligations
under this Agreement and for no other purpose.
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13.1.3 Save as otherwise specifically provided herein (and in
particular subject to Clause 13.3), each party shall disclose
Confidential Information of the other party only to those
employees, representatives and agents requiring knowledge
thereof in connection with fulfilling the party's obligations
under this Agreement. Each party further agrees to inform all
such employees, representatives and agents of the terms and
provisions of this Agreement relating to Confidential
Information and their duties hereunder. Each party shall
exercise the same standard of care as it would itself
exercise in relation to its own confidential information (but
in no event less than a reasonable standard of care) to
protect and preserve the proprietary and confidential nature
of the Confidential Information disclosed to it by the other
party. Each party shall promptly, upon request of the other
party, return all documents and any copies thereof containing
Confidential Information belonging to, or disclosed by, such
other party.
13.1.4 Any breach of this Clause 13 by any person informed by one of
the parties is considered a breach by the party itself.
13.1.5 Confidential Information shall be deemed not to include:
(a) information which is in the public domain;
(b) information which is made public through no breach of
this Agreement;
(c) information which is independently developed by a party,
as evidenced by such party's records;
(d) information that becomes available to a receiving party
on a non-confidential basis, whether directly or
indirectly, from a source other than another party
hereto, which source did not acquire this information on
a confidential basis.
13.1.6 The provisions relating to confidentiality in this Clause 13
shall remain in effect during the term of this Agreement, and
for a period of 5 years following the expiration or earlier
termination of this Agreement.
13.1.7 The parties agree that the obligations of this Clause 13 are
necessary and reasonable in order to protect the parties'
respective businesses, and each party agrees that monetary
damages would be inadequate to compensate a party for any
breach by the other party of its covenants and agreements set
forth herein.
The parties agree that any such violation or threatened
violation shall cause irreparable injury to a party and that,
in addition to any other remedies that may be available, in
law and equity or otherwise, each party shall be entitled to
seek injunctive relief against the threatened breach of the
provisions of this Clause 13, or a continuation of any such
breach by the other party, specific performance and other
equitable relief to redress such breach together with damages
and reasonable counsels' fees and expenses to enforce its
rights hereunder.
13.2 Announcements:
Subject to Clause 13.3, CTI and its Sublicensee(s) shall not
use the names of UFRF, or of the University of Florida, nor
of any of either institution's employees, agents, or
affiliates, nor the name of any inventor of Licensed Patents,
nor any adaptation of such names, in any sales promotion,
advertising, or any other form of publicity without the prior
written approval of UFRF in each case, except that CTI may
state that it has
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received a license from UFRF under one or more or the patents
and/or applications comprising the Licensed Patents.
13.3 Required Disclosures:
13.3.1 A party (the "DISCLOSING PARTY") will be entitled to make an
announcement or public statement or to disclose Confidential
Information that the Disclosing Party is required to make or
disclose pursuant to:
(a) a valid order of a court or governmental authority; or
(b) any other requirement of law or any securities or stock
exchange;
provided that if the Disclosing Party becomes legally
required to make such announcement, public statement or
disclosure hereunder, the Disclosing Party shall give the
other party prompt notice of such fact to enable that other
party to seek a protective order or other appropriate remedy
concerning any such announcement, public statement or
disclosure.
13.3.2 The Disclosing Party shall fully co-operate with the other
party in connection with that other party's efforts to obtain
any such order or other remedy. If any such order or other
remedy does not fully preclude announcement, public statement
or disclosure, the Disclosing Party shall make such
announcement, public statement or disclosure only to the
extent that the same is legally required.
SECTION 14 MISCELLANEOUS
14.1 The parties hereto are independent contractors and not joint
venturers or partners.
14.2 CTI shall ensure that it applies patent markings that meet all
requirements of U.S. law, 35 U.S.C.Section 287, with respect to all
Licensed Products subject to this Agreement.
14.3 This Agreement constitutes the full understanding between the
parties with reference to the subject matter hereof, and no
statements or agreements by or between the parties, whether orally
or in writing, shall vary or modify the written terms of this
Agreement. Neither party shall claim any amendment, modification, or
release from any provisions of this Agreement by mutual agreement,
acknowledgment, or otherwise, unless such mutual agreement is in
writing, signed by the other party, and specifically states that it
is an amendment to this Agreement.
14.4 Neither CTI nor UFRF shall encumber or otherwise grant a security
interest in any of the rights granted hereunder to any third party.
14.5 CTI acknowledges that it is subject to and agrees to abide by the
United States laws and regulations (including the Export
Administration Act of 1979 and Arms Export Contract Act) controlling
the export of technical data, computer software, laboratory
prototypes, biological material, and other commodities. The transfer
of such items may require a license from the cognizant agency of the
U.S. Government or written assurances by CTI that it shall not
export such items to certain foreign countries without prior
approval of such agency. UFRF neither represents that a license is
or is not required or that, if required, it shall be issued.
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SECTION 15 NOTICES
Any notice required to be given pursuant to the provisions of this
Agreement shall be in writing and shall be deemed to have been given
- when delivered personally,
- if sent by facsimile transmission, when receipt thereof
is acknowledged at the facsimile number of the recipient
as set forth below,
- the second day following the day on which the notice has
been delivered prepaid to a national air courier
service, or
- five (5) business days following deposit in the U.S.
mail if sent certified mail, return receipt requested:
15.1 If to the University of Florida Research Foundation, Inc.:
President
University of Florida Research Foundation, Inc.
223 Grinter Hall
University of Florida
Post Office Box 115500
Gainesville, FL 32611-5500
Facsimile Number: 352-846-0491
with a copy to:
Office of Technology Licensing
Attn: Director
308 Walker Hall
University of Florida
Post Office Box 115500
Gainesville, Florida 32611-5500
Facsimile Number: 352-392-6600
15.2 If to CTI:
Chief Executive Officer
Critical Therapeutics, Inc.
60 Westview Street
Lexington, MA 02421
Facsimile number: 781-402-5729
SECTION 16 CONTRACT FORMATION AND AUTHORITY
16.1 No agreement between the parties shall exist unless the duly
authorized representative of CTI and the Director of the Office of
Technology Transfer of UFRF have signed this document within thirty
(30) days of the Effective Date written on the first page of this
Agreement.
16.2 UFRF and CTI hereby warrant and represent that the persons signing
this Agreement have authority to execute this Agreement on behalf of
the party for whom they have signed.
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16.3 Force Majeure.
No default, delay, or failure to perform on the part of CTI or UFRF
shall be considered a default, delay or failure to perform otherwise
chargeable hereunder, if such default, delay or failure to perform
is due to causes beyond either party's reasonable control including,
but not limited to: strikes, lockouts, or inactions of governmental
authorities, epidemics, war, embargoes, fire, earthquake, acts of
God, or default of common carrier. In the event of such default,
delay or failure to perform, any date or times by which either party
is otherwise scheduled to perform shall be extended automatically
for a period of time equal in duration to the time lost by reason of
the excused default, delay or failure to perform.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on
the dates indicated below.
UNIVERSITY OF FLORIDA RESEARCH FOUNDATION, INC.
/s/ David L. Day Date: September 2, 2004
- ------------------ -----------
David L. Day
Director, Office of Technology Transfer
CRITICAL THERAPEUTICS, INC.
/s/ Paul Rubin Date: September 2, 2004
- ------------------ -----------
Paul Rubin
President and Chief Executive Officer
Reviewed by UFRF's Attorney: Reviewed by CTI's Attorney
/s/ Kirsten A. Anderson
- ------------------------------------- --------------------------------------
(name typed) Kirsten A. Anderson, Esq.
(Neither attorney shall be deemed a
signatory to this Agreement.)
UFRF Ref: UF #-1471
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APPENDIX A
DEVELOPMENT PLAN
A development plan of the scope outlined below shall be submitted to UFRF by
CTI prior to the execution of this agreement. In general, the plan should
provide UFRF with a summary overview of the activities that CTI believes are
necessary to bring products to the marketplace.
I. Drug Discovery Program
Overall the goal of this program is to identify an alpha 7 agonistic
cinnamylidine anabaseine analog with the potential to ultimately make it
to market as a therapeutic for severe, life-threatening, systemic
inflammation. Additionally, the therapeutic potential for such a molecule
being used to treat chronic inflammatory disease will be evaluated.
A. Discovery activities to be undertaken
1. [**]
2. [**]
3. [**]
4. Use [**]
5. If applicable[**]
6. If applicable, [**]
7. If the data indicates, [**]
B. Estimated total discovery time
1. From the agreement initiation date [**]
2. At that time [**]
II. [**]
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APPENDIX B
DEVELOPMENT REPORT
When appropriate, indicate estimated start date and finish date for activities.
I. Date Development Plan Initiated and Time Period Covered by this Report.
II. [**]
A. [**]
B. [**]
III. [**]
A. [**] including, but not limited to, [**].
B. Estimated [**].
IV. [**]
A. [**]
B. [**]
V. [**] if Applicable:
A. [**]
B. [**]
C. [**]
PLEASE SEND DEVELOPMENT REPORTS TO:
University of Florida Research Foundation, Inc.
Attn: Director
308 Walker Hall
P.O. Box 115500
Gainesville, FL 32611-5500
Facsimile: 352-392-6600
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APPENDIX C
UFRF ROYALTY REPORT
CTI:_________________________________ AGREEMENT NO.:_______________
INVENTOR:____________________________ P#: P________________________
PERIOD COVERED: From:_______/____/2__ Through:________/________/2__
PREPARED BY__________________________ DATE:________________________
APPROVED BY:_________________________ DATE:________________________
If license covers several major product lines, please prepare a
separate report for each line. Then combine all product lines into a
summary report.
REPORT TYPE: [ ] SINGLE PRODUCT LINE REPORT:____________________________
[ ] MULTIPRODUCT SUMMARY REPORT. Page 1 of ______ Pages____
[ ] PRODUCT LINE DETAIL. Line:_______ Tradename:___________
Page:_________
REPORT CURRENCY: [ ] U. S. DOLLARS [ ] OTHER _____________________________
[**]
[**] [**] [**] [**] [**] [**] [**] [**]
[**]
[**]
[**]
[**]
[**]
TOTAL:
Total Royalty:_______________ Conversion Rate:____________ Royalty in U.S.
Dollars: $ _______
The following royalty forecast is non-binding and for UFRF's internal planning
purposes only:
Royalty Forecast Under This Agreement: Next Quarter:__________ Q2:__________
Q3:__________ Q4:__________
* On a separate page, please indicate the reasons for returns or other
adjustments if significant.
Also note any unusual occurrences that affected royalty amounts
during this period.
To assist UFRF's forecasting, please comment on any significant expected
trends in sales volume.
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