Exhibit 10.59
AMENDED AND RESTATED
EXCLUSIVE LICENSE AGREEMENT
This Amended and Restated Exclusive License Agreement (the
"Agreement"), effective as of December 22, 2003 (the "Effective Date"), is by
and among the University of Massachusetts Medical School ("Medical School"), a
public institution of higher education of the Commonwealth of Massachusetts
having an address of 55 Lake Avenue North, Worcester, MA 01655, CytRx
Corporation ("Company"), a Delaware corporation having an address of 11726 San
Vicente Boulevard, Suite 650, Los Angeles, California 90049, and Advanced
BioScience Laboratories, Inc. ("ABL"), a Delaware corporation having its
principal place of business at 5510 Nicholson Lane, Kensington, Maryland 20895.
R E C I T A L S
WHEREAS, Medical School is owner by assignment of the invention listed
in Exhibit A pertaining to the Medical School's invention disclosure number UMMC
03-24 entitled Primary and Polyvalent HIV-1 Envelope Glycoprotein DNA Vaccines
(the "03-24 Technology");
WHEREAS, Medical School granted Company effective as of April 15, 2003
an exclusive worldwide license in the field of therapeutics limited to the
generation of DNA-based primary and polyvalent HIV-1 envelope vaccines under the
rights of Medical School in any patent rights claiming those inventions of the
03-24 Technology pursuant to an Exclusive License Agreement, dated as of April
25, 2003 between Medical School and Company (the "Original License Agreement");
WHEREAS, in December 2002, Medical School filed a provisional patent
application, U.S. Patent Application Serial Number 60/430,732 (the "03-24 Patent
Filing") with the United States Patent and Trademark Office covering the 03-24
Technology;
WHEREAS, in June 2000, ABL was awarded a $15 million contract from the
National Institutes of Health (NIAID Prime Contract N01-05394) (the "NIH Prime
Contract") in connection with the development of a DNA-based HIV vaccine and on
June 26, 2000, ABL entered into a subcontract with Medical School (Subcontract
No. 00454B-UMM-NAID-N01-A1-05395) (the "Medical School Subcontract") in
connection with the development of an HIV vaccine using the 03-24 Technology and
03-111 Technology (as hereinafter defined) and currently being developed by
Medical School and ABL under the NIH Prime Contract and Medical School
Subcontract. The HIV Vaccine will include for purposes of this Agreement the
foregoing vaccine product notwithstanding the expiration or early termination of
either the NIH Prime Contract or the Medical School Subcontract;
WHEREAS, ABL anticipates filing in late December 2003 or early January
2004 an investigational new drug application (as defined in the United States
Federal Food, Drug and Cosmetic Act of 1938, as amended from time to time (the
"Act")) with the United States Food and Drug Administration ("FDA") for a Phase
I clinical trial of the HIV Vaccine (the "ABL
IND") and expects to commence this Phase I trial (the "Phase I Trial") within 30
to 60 days following the ABL IND being cleared by the FDA;
WHEREAS, in September 2003, ABL filed a provisional patent application,
U. S. Patent Application Serial Number 60/503,907 (the "03-111 Patent Filing")
covering an HIV protein boost technology invention referred to by Medical School
and ABL as UMMC 03-111 (the "03-111 Technology");
WHEREAS, on December 3, 2003, ABL, Medical School and Company agreed to
make and Medical School and ABL made a joint filing with the United States
Patent and Trademark Office of a combined patent application for the 03-24
Technology and the 03-111 Technology that included all of the claims of the
03-24 Patent Filing and 03-111 Patent Filing and other claims relating to the
03-24 Technology and 03-111 Technology, with both a U.S. non-provisional patent
application and a PCT application designating all countries being filed
simultaneously and with both the non-provisional and the PCT applications
claiming priority to the 03-24 Patent Filing (the "Joint Patent Filing");
WHEREAS, in conjunction with the Joint Patent Filing, ABL, Company and
Medical School entered into an Agreement, dated as of December 3, 2003,
regarding the development and commercialization of the HIV Vaccine and providing
for the framework for negotiation of a definitive agreement covering such
development and commercialization (the "Definitive Collaborative Agreement");
WHEREAS, ABL, Company and Medical School have entered into the
Definitive Collaborative Agreement, effective as of December 22, 2003, which
provides for the Original License Agreement to be amended to add the 03-111
Technology to the license granted by the Original License Agreement and which
also provides for certain other amendments to the Original License Agreement;
WHEREAS, Medical School and ABL are willing to grant Company an
exclusive license to the 03-111 Technology on the terms set forth in this
Agreement; and
WHEREAS, Company has agreed pursuant to the Definitive Collaborative
Agreement to grant ABL a non-exclusive sublicense to the Patent Rights (as
hereinafter defined) (the "ABL Sublicense");
WHEREAS, ABL has agreed pursuant to the Definitive Collaborative
Agreement to grant Company and its Affiliates the right to acquire a
non-exclusive, worldwide, royalty-bearing license to any additional technologies
outside of the 03-24 Technology and the 03-111 Technology that (i) are now or
subsequently owned or licensed to ABL, including any technologies that may be
acquired by ABL pursuant to its option for an exclusive license under Section 9
of the Medical School Subcontract, (ii) result from work done by the Medical
School under the Medical School Subcontract for a DNA-based HIV vaccine with
protein boost, and (iii) are deemed necessary or advantageous by Company for the
development or commercialization of the HIV Vaccine (the "ABL Related
Technologies License").
WHEREAS, Medical School, Company and ABL are willing to amend and
restate the Original License Agreement on the terms set forth in this Agreement.
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NOW, THEREFORE, Medical School, Company and ABL hereby agree as
follows:
1. Definitions.
1.1 "Affiliate" means any legal entity (such as a corporation,
partnership, or limited liability company) that is controlled by Company or ABL,
as the case may be. For the purposes of this definition, the term "control"
means (a) beneficial ownership of at least fifty percent (50%) of the voting
securities of a corporation or other business organization with voting
securities or (b) a fifty percent (50%) or greater interest in the net assets or
profits of a partnership or other business organization without voting
securities.
1.2 "ABL Related Technologies" means any additional technologies
outside of the 03-24 Technology and the 03-111 Technology that SATISFIES ALL OF
THE FOLLOWING: (i) are now or subsequently owned or licensed to ABL, including
any technologies that may be acquired by ABL pursuant to its option for an
exclusive license under Section 9 of the Medical School Subcontract, (ii) result
from work done by Medical School under the Medical School Subcontract for a
DNA-based HIV vaccine with protein boost, and (iii) are deemed necessary or
advantageous by Company for the development or commercialization of the HIV
Vaccine.
1.3 "Biological Materials" means certain tangible biological
materials that are necessary for the effective exercise of the Patent Rights,
which materials are described on Exhibit A, as well as tangible materials that
are routinely produced through use of the original materials, including, for
example, any progeny derived from a cell line, monoclonal antibodies produced by
hybridoma cells, DNA or RNA replicated from isolated DNA or RNA, recombinant
proteins produced through use of isolated DNA or RNA, and substances routinely
purified from a source material included in the original materials (such as
recombinant proteins isolated from a cell extract or supernatant by
non-proprietary affinity purification methods). These Biological Materials shall
be listed on Exhibit A, which will be periodically amended to include any
additional Biological Materials that Medical School may furnish to Company.
1.4 "Combination Product" means a product that contains a Licensed
Product component and at least one other essential functional component.
1.5 "Confidential Information" means any confidential or
proprietary information furnished by one party (the "Disclosing Party") to the
other party (the "Receiving Party") in connection with this Agreement, provided
that such information is specifically designated as confidential. Such
Confidential Information shall include, without limitation, any diligence
reports furnished to Medical School under Section 3.1 and royalty reports
furnished to Medical School and ABL under Section 5.2.
1.6 "Field" means therapeutics and prophylactics limited to the
generation of DNA-based HIV-1 vaccines.
1.7 "Licensed Product" means the HIV Vaccine and any product that
cannot be developed, manufactured, used, or sold without (a) infringing one or
more claims under the Patent Rights, (b) using or incorporating some portion of
one or more Biological Materials, or (c) using some portion of the Related
Technology.
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1.8 "Net Sales" means the gross amount billed or invoiced on sales
by Company and its Affiliates and Sublicensees of Licensed Products, less the
following: (a) customary trade, quantity, or cash discounts and commissions to
non-affiliated brokers or agents to the extent actually allowed and taken; (b)
amounts repaid or credited by reason of rejection or return; (c) to the extent
separately stated on purchase orders, invoices, or other documents of sale, any
taxes or other governmental charges levied on the production, sale,
transportation, delivery, or use of a Licensed Product which is paid by or on
behalf of Company; (d) outbound transportation costs prepaid or allowed and
costs of insurance in transit; and (e) allowance for bad debt that is customary
and reasonable for the industry and in accordance with generally accepted
accounting principles. Notwithstanding anything to the contrary in this Section
1.7, Net Sales does not include sales of Licensed Products at or below the fully
burdened cost of manufacturing solely for research or clinical testing or for
indigent or similar public support or compassionate use programs.
In any transfers of Licensed Products between Company and an Affiliate
or Sublicensee, Net Sales shall be calculated based on the final sale of the
Licensed Product to an independent third party. In the event that Company or an
Affiliate or Sublicensee receives non-monetary consideration for any Licensed
Products, Net Sales shall be calculated based on the fair market value of such
consideration.
In the case of Combination Products, Net Sales means the gross amount
billed or invoiced on sales of the Combination Product less the deductions set
forth above, multiplied by a proration factor that is determined as follows:
(i) If all components of the Combination Product
were sold separately during the same or immediately preceding Royalty Period,
the proration factor shall be determined by the formula [A / (A+B)], where A is
the aggregate gross sales price of all Licensed Product components during such
period when sold separately from the other essential functional components, and
B is the aggregate gross sales price of the other essential functional
components during such period when sold separately from the Licensed Product
Components; or
(ii) If all components of the Combination Product
were not sold separately during the same or immediately preceding Royalty
Period, the proration factor shall be determined by the formula [C / (C+D)],
where C is the aggregate fully absorbed cost of the Licensed Product components
during the prior Royalty Period and D is the aggregate fully absorbed cost of
the other essential functional components during the prior Royalty Period, with
such costs being determined in accordance with generally accepted accounting
principles.
1.9 "Patent Rights" means the U.S. and international patent
applications listed on Exhibit A, and any divisional, continuation, or
continuation-in-part of such patent applications to the extent the claims are
directed to subject matter specifically described therein, as well as any patent
issued thereon and any reissue or reexamination of such patent, and any foreign
counterparts to such patents and patent applications. Exhibit A shall be
periodically amended to include any additional Patent Rights that may arise.
"Patent Rights" shall not include patents or patent applications covering any of
the ABL Related Technologies, to the extent that such
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technologies would not if owned by a third party infringe any of the claims of
the Patent Rights.
1.10 "Related Technology" means any know-how, technical
information, research and development information, test results, and data
necessary for the effective exercise of the Patent Rights which (a) has been
developed by Dr. Shan Lu and his associates in his laboratory at the Medical
School as of the Effective Date and (b) which is owned by Medical School.
"Related Technology" shall not include any of the ABL Related Technologies.
1.11 "Royalty Period" means the partial calendar quarter commencing
on the date on which the first Licensed Product is sold or used and every
complete or partial calendar quarter thereafter during which either (a) this
Agreement remains in effect or (b) Company has the right to complete and sell
work-in-progress and inventory of Licensed Products pursuant to Section 8.5.
1.12 "Sublicense Income" means any payments that Company receives
from a Sublicensee in consideration of the sublicense of the rights granted
Company under Section 2.1., including without limitation license fees,
royalties, milestone payments, and license maintenance fees, but excluding the
following payments: (a) payments made in consideration for the issuance of
equity or debt securities of Company at fair market value, and (b) payments
specifically committed to the development of Licensed Products.
1.13 "Sublicensee" means any permitted sublicensee of the rights
granted Company under this Agreement, as further described in Section 2.2.
2. Grant of Rights.
2.1 License Grants.
(a) Patent Rights and Biological Materials. Subject to
the terms of this Agreement, Medical School and ABL each hereby grants to
Company and its Affiliates an exclusive, worldwide, royalty-bearing license
(with the right to sublicense) under their respective commercial rights in the
Patent Rights and Biological Materials to develop, make, have made, use, and
sell Licensed Products in the Field.
(b) Related Technology. Subject to the terms of this
Agreement, Medical School hereby grants to Company and its Affiliates a
non-exclusive, royalty-bearing license (with the right to sublicense) under its
commercial rights in the Related Technology to develop, make, have made, use,
and sell Licensed Products in the Field and ABL hereby consents to such grant by
Medical School.
(c) Subject to applicable law or the rights of research
sponsors, the Medical School shall use its best efforts to make any improvements
to the Patent Rights available to Company.
(d) ABL hereby grants to Company and its Affiliates the
right to acquire a non-exclusive, worldwide, royalty-bearing license (with the
right to sublicense) to any ABL Related Technologies. ABL shall promptly
disclose in writing to Company each of the ABL
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Related Technologies at the time such technologies are acquired or licensed by
ABL. ABL and Company shall negotiate in good faith the terms of the ABL Related
Technologies License.
2.2 Sublicenses. Company shall have the right to grant sublicenses
of its rights under Section 2.1. with the consent of Medical School, which
consent shall not be unreasonably withheld or delayed. All sublicense agreements
executed by Company pursuant to this Article 2 shall expressly bind the
Sublicensee to the terms of this Agreement. Company shall promptly furnish
Medical School and ABL with a fully executed copy of any such sublicense
agreement. Medical School hereby consents to the ABL Sublicense, which shall be
in the form attached as Exhibit B.
2.3 Retained Rights.
(a) Medical School. Medical School retains the right to
make and use Licensed Products for academic research, teaching, and
non-commercial patient care, without payment of compensation to Company. Medical
School may license its retained rights under this Section to research
collaborators of Medical School faculty members, post-doctoral fellows, and
students.
(b) Federal Government. To the extent that any invention
claimed in the Patent Rights has been partially funded by the federal
government, this Agreement and the grant of any rights in such Patent Rights are
subject to and governed by federal law as set forth in 35 U.S.C. Sections
201-211, and the regulations promulgated thereunder, as amended, or any
successor statutes or regulations. Company acknowledges that these statutes and
regulations reserve to the federal government a royalty-free, non-exclusive,
non-transferable license to practice any government-funded invention claimed in
any Patent Rights. If any term of this Agreement fails to conform with such laws
and regulations, the relevant term shall be deemed an invalid provision and
modified in accordance with Section 10.1 Upon execution of this Agreement, the
Medical School shall disclose in writing to Company any funding that would be
subject to this Section 2.3(b).
(c) Other Organizations. To the extent that any invention
claimed in the Patent Rights has been partially funded by a non-profit
organization or state or local agency, this Agreement and the grant of any
rights in such Patent Rights are subject to and governed by the terms and
conditions of the applicable research grant. If any term of this Agreement fails
to conform with such terms and conditions, the relevant term shall be deemed an
invalid provision and modified by the parties pursuant to Section 10.1 Upon
execution of this Agreement, the Medical School shall disclose in writing to
Company any funding that would be subject to this Section 2.3(c).
(d) ABL shall retain the right to use the Patent Rights
to develop and commercialize HIV vaccines other than the HIV Vaccine pursuant to
the terms of the ABL Sublicense.
3. Company Obligations Relating to Commercialization.
3.1 Diligence Requirements. Company shall use diligent efforts, or
shall cause its Affiliates and Sublicensees to use diligent efforts, to develop
Licensed Products and to
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introduce Licensed Products into the commercial market; thereafter, Company or
its Affiliates or Sublicensees shall make Licensed Products reasonably available
to the public. Specifically, Company or Affiliate or Sublicensee shall fulfill
the following obligations:
(a) Within ninety (90) days after the initiation of the
Phase I Trial, Company shall furnish Medical School and ABL with a written
research and development plan under which Company intends to develop Licensed
Products.
(b) Within sixty (60) days after each anniversary of the
Effective Date, Company shall furnish Medical School and ABL with a written
report on the progress of its efforts during the prior year to develop and
commercialize Licensed Products, including without limitation research and
development efforts, efforts to obtain regulatory approval, marketing efforts,
and sales figures. The report shall also contain a discussion of intended
efforts and sales projections for the current year.
(c) Company shall endeavor to obtain all necessary
governmental approvals for the manufacture, use and sale of Combination Product
and Licensed Product. Specifically, Company shall:
(i) Within eight (8) years after the Effective
Date, file an Investigational New Drug Application ("IND") or its equivalent
covering at least one Combination Product or Licensed Product with the FDA with
this requirement to be deemed to have been satisfied upon the filing of the ABL
IND;
(ii) Within thirteen (13) years after the
Effective Date, file a New Drug Application ("NDA") with the FDA covering at
least one Combination Product or Licensed Product;
(iii) Within eighteen (18) months after receiving
FDA approval of the NDA for a Combination Product or Licensed Product, market at
least one Combination Product or Licensed Product in the U.S. ; and
(iv) reasonably fill the market demand for any
Combination Product or Licensed Product following commencement of marketing of
such product at any time during the exclusive period of this Agreement.
Company shall have the responsibility to finance its obligations in this Section
3.1, and the Medical School and ABL shall provide reasonable cooperation to
Company in this regard. In the event that Medical School or ABL determines that
Company (or an Affiliate or Sublicensee) has not fulfilled its obligations under
this Section 3.1., Medical School or ABL shall furnish Company with written
notice of such determination. Within sixty (60) days after receipt of such
notice, Company shall either (i) fulfill the relevant obligation or (ii)
negotiate with Medical School and ABL a mutually acceptable schedule of revised
diligence obligations, failing which Medical School and ABL shall have the
right, immediately upon written notice to Company and subject to Sections 8.2
and 9, to terminate this Agreement or to grant additional licenses to third
parties to the Patent Rights and Biological Materials in the Field. Neither
Medical School nor ABL may not unreasonably withhold acceptance of Company's
revised diligence obligations.
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3.2 Indemnification.
(a) Indemnity. Company shall indemnify, defend, and hold
harmless Medical School and its trustees, officers, faculty, students,
employees, and agents and their respective successors, heirs and assigns and ABL
and its officers, directors and agents and their respective successors, heirs
and assigns (the "Indemnitees"), against any liability, damage, loss, or expense
(including reasonable attorneys fees and expenses of litigation) incurred by or
imposed upon any of the Indemnitees in connection with any claims, suits,
actions, demands or judgments arising out of any theory of liability (including
without limitation actions in the form of tort, warranty, or strict liability
and regardless of whether such action has any factual basis) concerning any
product, process, or service that is made, used, or sold pursuant to any right
or license granted under this Agreement; provided, however, that such
indemnification shall not apply to any liability, damage, loss, or expense to
the extent directly attributable to (i) the negligent activities or intentional
misconduct of the Indemnitees or (ii) the settlement of a claim, suit, action,
or demand by Indemnitees without the prior written approval of Company.
(b) Procedures. The Indemnitees agree to provide Company
with prompt written notice of any claim, suit, action, demand, or judgment for
which indemnification is sought under this Agreement. Company agrees, at its own
expense, to provide attorneys reasonably acceptable to Medical School and ABL to
defend against any such claim. The Indemnitees shall cooperate fully with
Company in such defense and will permit Company to conduct and control such
defense and the disposition of such claim, suit, or action (including all
decisions relative to litigation, appeal, and settlement); provided, however,
that any Indemnitee shall have the right to retain its own counsel, at the
expense of Company, if representation of such Indemnitee by the counsel retained
by Company would be inappropriate because of actual or potential differences in
the interests of such Indemnitee and any other party represented by such
counsel. Company agrees to keep Medical School and ABL informed of the progress
in the defense and disposition of such claim and to consult with Medical School
and ABL with regard to any proposed settlement. Any settlement that requires any
payment by an Indemnitee or the sublicensing by Company of any of its rights
granted under this Agreement that has an adverse economic impact on ABL or
Medical School shall require the consent of Medical School and ABL, to the
extent that such party is so impacted.
(c) Insurance. Company shall maintain insurance or
self-insurance that is reasonably adequate to fulfill any potential obligation
to the Indemnitees, but in any event not less than one million dollars
($1,000,000) for injuries to any one person arising out of a single occurrence
and five million dollars ($5,000,000) for injuries to all persons arising out of
a single occurrence. Company shall provide Medical School and ABL, upon request,
with written evidence of such insurance or self-insurance. Company shall
continue to maintain such insurance or self-insurance after the expiration or
termination of this Agreement during any period in which Company or any
Affiliate or Sublicensee continues to make, use, or sell a product that was a
Licensed Product under this Agreement and thereafter for a period of two (2)
years.
3.3 Use of Medical School and ABL Name. In accordance with Section
7.3. and except as otherwise required by law, Company and its Affiliates and
Sublicensees shall not use
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the name "University of Massachusetts Medical School" or any variation of that
name or ABL's name in connection with the marketing or sale of any Licensed
Products.
3.4 Marking of Licensed Products. To the extent commercially
feasible and consistent with prevailing business practices, Company shall mark,
and shall cause its Affiliates and Sublicensees to mark, all Licensed Products
that are manufactured or sold under this Agreement with the number of each
issued patent under the Patent Rights that applies to such Licensed Product.
3.5 Compliance with Law. Company shall comply with, and shall
ensure that its Affiliates and Sublicensees (to the extent commercially
feasible) comply with, all local, state, federal, and international laws and
regulations relating to the development, manufacture, use, and sale of Licensed
Products. Company expressly agrees to comply with the following:
(a) Company or its Affiliates or Sublicensees shall
obtain all necessary approvals from the FDA and any similar governmental
authorities of any foreign jurisdiction in which Company or an Affiliate or
Sublicensee intends to make, use, or sell Licensed Products.
(b) Company and its Affiliates and Sublicensees shall
comply with all United States laws and regulations controlling the export of
certain commodities and technical data, including without limitation all Export
Administration Regulations of the United States Department of Commerce. Among
other things, these laws and regulations prohibit, or require a license for, the
export of certain types of commodities and technical data to specified
countries. Company hereby gives written assurance that it will comply with, and
will cause its Affiliates and Sublicensees to comply with, all United States
export control laws and regulations, that it bears sole responsibility for any
violation of such laws and regulations by itself or its Affiliates or
Sublicensees, and that it will indemnify, defend, and hold Medical School and
ABL harmless (in accordance with Section 3.2.) for the consequences of any such
violation.
(c) To the extent that any invention claimed in the
Patent Rights has been partially funded by the United States government, and
only to the extent required by applicable laws and regulations, Company agrees
that any Licensed Products used or sold in the United States will be
manufactured substantially in the United States or its territories. Current law
provides that if domestic manufacture is not commercially feasible under the
circumstances, Medical School may seek a waiver of this requirement from the
relevant federal agency on behalf of Company.
4. Consideration for Grant of Rights.
4.1 License Fee. In partial consideration of the rights granted
Company under this Agreement, Company paid the Medical School prior to the
Effective Date (a) a license fee of {***}, and (b) a payment in the amount of
{***} to reimburse Medical School for its actual expenses incurred as of January
31, 2003 in connection with obtaining the Patent Rights. These license fee
payments are nonrefundable and are not creditable against any other payments due
to Medical School or ABL under this Agreement.
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4.2 Equity. In partial consideration of the license granted to
Company under this Agreement, Company issued to Medical School prior to the
Effective Date a total number of shares of Common Stock of Company, ($.01 par
value per share) equal to {***} of the outstanding shares of Company. Company
registered the shares that were issued to the Medical School within ninety (90)
days after their issuance and those shares are now unrestricted.
4.3 License Maintenance Fee. Beginning on the first anniversary of
the Effective Date, and on each anniversary of the Effective Date thereafter
during the term of the Agreement, Company shall pay to Medical School {***} and
to ABL {***}. This annual license maintenance fee is nonrefundable and is not
creditable against any other payments due to Medical School or ABL under this
Agreement.
4.4 Milestone Payments. Company shall pay Medical School and ABL
the following milestone payments within thirty (30) days after the occurrence of
each event with such payments to be allocated between Medical School and ABL as
follows:
- ------------------------------------------------------------------------------------------------------------------
Milestone Total Payment Payee
--------- ------------- -----
- ------------------------------------------------------------------------------------------------------------------
Filing of ABL IND {***} shares of Company common stock {***} to {***}
- ------------------------------------------------------------------------------------------------------------------
Filing of ABL IND {***} {***} to {***}
- ------------------------------------------------------------------------------------------------------------------
Filing of IND or equivalent for each {***} {***} to Medical School; {***}
Licensed Product other than the HIV to ABL
Vaccine
- ------------------------------------------------------------------------------------------------------------------
Entry into Phase II clinical trial or {***} for first product and {***} {***} to Medical School;
equivalent for each Licensed Product for each subsequent product {***} to ABL
- ------------------------------------------------------------------------------------------------------------------
Entry into Phase III clinical trial or {***} for first product and {***} {***} to Medical School;
equivalent for each Licensed Product for each subsequent product {***} to ABL
- ------------------------------------------------------------------------------------------------------------------
Filing for market approval (NDA or {***} for first product and {***} {***} to Medical School;
equivalent) in any country besides the for each subsequent product {***} to ABL
United States
- ------------------------------------------------------------------------------------------------------------------
Commencement of product marketing in {***} {***} to Medical School;
the United States {***} to ABL
- ------------------------------------------------------------------------------------------------------------------
First market approval for first three {***} {***} to Medical School;
European countries in total {***} to ABL
- ------------------------------------------------------------------------------------------------------------------
These milestone payments are nonrefundable and are not creditable against any
other payments due to Medical School or ABL under this Agreement. In the event
Company is required to pay any of the expenses to complete the Phase I Trial and
submit the data generated from the Phase I Trial to the FDA, the total amount of
such expenses shall be offset against the next milestone payment or payments set
forth above, except that no offset shall be permitted against
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the milestone payments with respect to the ABL IND filing. In the event any
license fee or milestone payments are required to be paid by Company to
Antigenics in connection with any Licensed Product, two-thirds of the total
amount of such fees and payments shall be offset against the next milestone
payment or payments set forth above, except that no offset shall be permitted
against the milestone payments with respect to the ABL IND filing.
Company shall pay Medical School a one-time bonus in the amount of {***} in the
event that cumulative gross sales of Licensed Products by Company and its
Affiliates or Sublicense Income exceed {***} in one calendar year in the United
States. Company shall pay Medical School a one-time bonus in the amount of {***}
in the event that cumulative gross sales of Licensed Products by Company and its
Affiliates or Sublicense Income exceed {***} in one calendar year in Japan and
Europe.
4.5 Royalties.
(a) Base Royalty. In partial consideration of the rights
granted Company under this Agreement, Company shall pay to Medical School and
ABL each a royalty of {***} of Net Sales of Licensed Products by Company and its
Affiliates (but not Sublicensees).
(i) If a particular Licensed Product is within
the definition of "Licensed Product" solely because it uses or incorporates
Related Technology, the royalty rate applicable to such Licensed Product shall
be reduced by {***}.
(ii) If there is a competing product in the
marketplace, no royalties are due for a Licensed Product that is within the
definition of "Licensed Product" because it uses or incorporates only Related
Technology or Biological Materials.
(iii) If during the Royalty Period, patents under
the Patent Rights have expired or have been abandoned in a particular country,
(I) no royalty is payable by Company for Net Sales in that country, if there is
a competing product in that country, and (II) if Company reduces its prices for
Licensed Products in that country, even if there is no competing product in that
country, Company and Medical School and ABL shall negotiate in good faith a
reduction in the royalty rate to reflect the reduction in Company's gross
margins caused by the price reduction.
(iv) Company shall pay Medical School and ABL
each {***} of Net Sales of commercial clinical laboratory services by Company
and its Affiliates.
(b) Royalty Reduction. If Medical School and ABL grant
additional licenses to third parties pursuant to Section 3.1, the royalty rates
set forth in Subsection 4.5.(a) shall be adjusted, if necessary, so as not to
exceed the royalty rates charged any other licensee of the Patent Rights during
the term of the non-exclusive license.
4.6 Minimum Royalty. At the beginning of each calendar year during
the term of this Agreement, beginning January 1, 2016, Company shall pay to
Medical School and ABL each a minimum royalty of {***}. If the actual royalty
payments to Medical School and ABL in any calendar year are less than the
minimum royalty payment required for that year, Company shall have the right to
pay Medical School and ABL the difference between the
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actual royalty payment and the minimum royalty payment in full satisfaction of
its obligations under this Section, provided such minimum payment is made to
Medical School and ABL within sixty (60) days after the conclusion of the
calendar year. Waiver of any minimum royalty payment by Medical School or ABL
shall not be construed as a waiver of any subsequent minimum royalty payment. If
Company fails to make any minimum royalty payment within the sixty-day period,
such failure shall constitute a material breach of its obligations under this
Agreement, and Medical School and ABL shall have the right to terminate this
Agreement in accordance with Sections 8.2 and 9.
4.7 Sublicense Income. Company shall pay Medical School and ABL
each {***} of all Sublicense Income; except that in the case of Sublicense
Income that is received by Company from the ABL Sublicense, Company shall pay
ABL {***} and Medical School {***} of such Sublicense Income. Such amounts shall
be due and payable within sixty (60) days after Company receives the relevant
payment from the Sublicensee.
4.8 Third-Party and Other Payments. If Company is legally required
to make royalty or sublicense income payments to Medical School under any other
license agreement as well as this Agreement or to one or more third parties as
well as this Agreement in the same Royalty Period for which payments are due
under Section 4.5 or 4.7 in order for Company to make, use or sell Licensed
Products or have its Sublicensee make, use, or sell Licensed Products:
(a) Other Medical School Payments. In the case of
payments to Medical School and ABL under Sections 4.5 and 4.7 with respect to
any Licensed Product, Company shall pay only the highest rate among this
Agreement and any other Medical School licenses, and that one payment shall be
deemed to satisfy the payment requirements for the applicable period under not
only this Agreement but each of the other Medical School licenses.
(b) Third Party Payments. In the case of payments to one
or more third parties with respect to any Licensed Product under this Agreement,
Company may reduce its payment to Medical School and ABL under Section 4.5 or
4.7 of this Agreement for the applicable Royalty Period by fifty percent (50%)
of the amount actually paid to third parties. However, in no event will the
reductions made pursuant to this Section 4.8(b) result in more than a fifty
percent (50%) reduction in the payments that would otherwise be payable to
Medical School and ABL under Section 4.5 and 4.7 (after taking into account
Section 4.8(a)).
(c) Example: Royalty Reductions. By way of illustration
for Section 4.5 royalty payment reductions, for a particular Licensed Product,
assume a royalty of {***} under another Medical School license and a payment of
{***} to a third party. The reduction calculation would be as follows: The total
{***} royalty rate in this Agreement would apply, and Company would reduce that
rate by {***} of the {***} due to the third party, resulting in a {***} royalty
each to Medical School and ABL under this Agreement, and {***} royalties payable
to the Medical School under the other Medical School license.
(d) Example: Sublicense Income Payments. By way of
illustration for Section 4.7 Sublicense Income payment reductions, assume (i)
the total Sublicense Income received by Company from the Sublicensee is {***},
and (ii) Company paid a third party
12
{***} in order to allow the sublicensee to make Licensed Products. Company would
then be required to pay the Medical School and ABL under this Agreement each
{***} (Medical School and ABL sharing equally {***} of the {***} reduced by
{***} paid to the third party). If Company also sublicensed another Medical
School license with respect to the Licensed Products, Company would not be
required to make additional sublicense income payments.
5. Royalty Reports; Payments; Records.
5.1 First Sale. Company shall report to Medical School and ABL the
date of first commercial sale of each Licensed Product within thirty (30) days
of occurrence in each country.
5.2 Reports and Payments. Within sixty (60) days after the
conclusion of each Royalty Period, Company shall deliver to Medical School and
ABL a report containing the following information:
(a) the number of Licensed Products sold to independent
third parties in each country;
(b) the gross sales price for each Licensed Product sold
by Company and its Affiliates during the applicable Royalty Period in each
country;
(c) calculation of Net Sales for the applicable Royalty
Period in each country, including a listing of applicable deductions;
(d) total royalty payable on Net Sales in U.S. dollars,
together with the exchange rates used for conversion; and
(e) the portion of royalty-based Sublicense Income due to
Medical School and ABL for the applicable Royalty Period from each Sublicensee.
All such reports shall be considered Company Confidential Information. If no
royalties are due to Medical School and ABL for any Royalty Period, the report
shall so state. Concurrent with this report, Company shall remit to Medical
School and ABL any payment due for the applicable Royalty Period.
5.3 Payments in U.S. Dollars. All payments due under this
Agreement shall be payable in United States dollars. Conversion of foreign
currency to U.S. dollars shall be made at the conversion rate existing in the
United States (as reported in the Wall Street Journal) on the last working day
of the calendar quarter preceding the applicable Royalty Period. Such payments
shall be without deduction of exchange, collection, or other charges.
5.4 Payments in Other Currencies. If by law, regulation, or fiscal
policy of a particular country, conversion into United States dollars or
transfer of funds of a convertible currency to the United States is restricted
or forbidden, Company shall give Medical School and ABL prompt written notice of
such restriction, which notice shall satisfy the sixty-day payment deadline
described in Section 5.2. Company shall pay any amounts due Medical School and
ABL through whatever lawful methods Medical School and ABL reasonably
13
designates; provided, however, that if Medical School or ABL fails to designate
such payment method within thirty (30) days after Medical School or ABL is
notified of the restriction, Company may deposit such payment in local currency
to the credit of Medical School or ABL in a recognized banking institution
selected by Company and identified by written notice to Medical School or ABL,
and such deposit shall fulfill all obligations of Company to Medical School or
ABL with respect to such payment.
5.5 Records. Company shall maintain, and shall cause its
Affiliates and Sublicensees to maintain, complete and accurate records of
Licensed Products that are made, used, sold, or performed under this Agreement
and any amounts payable to Medical School and ABL in relation to such Licensed
Products, which records shall contain sufficient information to permit Medical
School and ABL to confirm the accuracy of any reports delivered to Medical
School and ABL under Section 5.2. The relevant party shall retain such records
relating to a given Royalty Period for at least three (3) years after the
conclusion of that Royalty Period, during which time Medical School or ABL shall
have the right, at its expense, to cause its internal accountants or an
independent, certified public accountant to inspect such records during normal
business hours for the sole purpose of verifying any reports and payments
delivered under this Agreement. Such accountant shall not disclose to Medical
School or ABL any information other than information relating to accuracy of
reports and payments delivered under this Agreement. The parties shall reconcile
any underpayment or overpayment within thirty (30) days after the accountant
delivers the results of the audit. In the event that any audit performed under
this Section reveals an underpayment in excess of the greater of (a) five
thousand dollars ($5,000) or (b) ten percent (10%) in any Royalty Period,
Company shall bear the full cost of such audit. Medical School and ABL may each
exercise its rights under this Section only once every year and only with
reasonable prior notice to Company.
5.6 Late Payments. Any payments by Company that are not paid on or
before the date such payments are due under this Agreement shall bear interest,
to the extent permitted by law, at two percentage points above the Prime Rate of
interest as reported in the Wall Street Journal on the date payment is due, with
interest calculated based on the number of days that payment is delinquent.
5.7 Method of Payment. All payments under this Agreement should be
made in the name of the "University of Massachusetts Medical School" or
"Advanced BioScience Laboratories, Inc.," as the case may be, and sent to the
address identified below. Each payment should reference this Agreement and
identify the obligation under this Agreement that the payment satisfies.
5.8 Withholding and Similar Taxes. Royalty payments and other
payments due to Medical School or ABL under this Agreement shall be reduced by
reason of any withholding or similar taxes applicable to such payments to
Medical School or ABL, which shall be paid by Company as required by applicable
law and reported by Company to Medical School or ABL.
6. Patents and Infringement.
6.1 Responsibility for Patent Rights. Medical School shall have
primary responsibility, at the expense of Company, for the preparation, filing,
prosecution, and
14
maintenance of all Patent Rights, using patent counsel reasonably acceptable to
Company and ABL. The Joint Patent Filing shall be filed in the United States and
any foreign countries requested by Company or ABL. Medical School shall consult
with Company and ABL as to the preparation, filing, prosecution, and maintenance
of all Patent Rights reasonably prior to any deadline or action with the U.S.
Patent & Trademark Office or any foreign patent office and shall furnish Company
and ABL with copies of all relevant proposed filings or submissions reasonably
in advance of such consultation and copies of all material correspondence with
any patent office within a reasonable amount of time. ABL shall reimburse
Company for the patent office fees and legal fees and expenses for any filings
prepared, submitted or prosecuted and patents maintained for any foreign
jurisdiction requested by ABL.
6.2 Cooperation. Medical School, Company and ABL shall cooperate
fully in the preparation, filing, prosecution, and maintenance of all Patent
Rights. Such cooperation includes, without limitation, (a) promptly executing
all papers and instruments or requiring employees of Medical School, Company or
ABL to execute such papers and instruments as reasonable and appropriate so as
to enable Medical School, ABL or Company to file, prosecute, and maintain such
Patent Rights in any country; and (b) promptly informing the other parties of
matters that may affect the preparation, filing, prosecution, or maintenance of
any such Patent Rights (such as becoming aware of an additional inventor who is
not listed as an inventor in a patent application).
6.3 Payment of Expenses. Within thirty (30) days after Medical
School invoices Company, Company shall reimburse Medical School for all
reasonable patent-related expenses incurred by Medical School pursuant to
Section 6.1. Company may elect, upon sixty (60) days written notice to Medical
School, to cease payment of the expenses associated with obtaining or
maintaining patent protection for one or more Patent Rights in one or more
countries. In such event, Company shall lose all rights under this Agreement
with respect to such Patent Rights in such countries for which it has elected
not to pay.
6.4 Abandonment. In the event that Medical School desires to
abandon any patent or patent application within the Patent Rights for which it
has primary responsibility, Medical School shall provide the other parties with
reasonable prior written notice of such intended abandonment or decline of
responsibility, and the other parties shall have the right, at their expense, to
prepare, file, prosecute, and maintain the relevant Patent Rights.
6.5 Infringement.
(a) Notification of Infringement. Each party agrees to
provide written notice to the other parties promptly after becoming aware of any
infringement of the Patent Rights.
(b) Company Right to Prosecute. So long as Company
remains the only licensee of the Patent Rights and Biological Materials in the
Field, Company shall have the right, under its own control and at its own
expense, to prosecute any third party infringement of the Patent Rights in the
Field or, together with licensees of the Patent Rights in other fields (if any),
to defend the Patent Rights in any declaratory judgment action brought by a
third party which alleges invalidity, unenforceability, or non-infringement of
the Patent Rights. Prior to commencing any such action, Company shall consult
with Medical School and ABL and shall
15
consider the views of Medical School and ABL regarding the advisability of the
proposed action and its effect on the public interest. Company shall not enter
into any settlement, consent judgment, or other voluntary final disposition of
any infringement action under this Subsection without the prior written consent
of Medical School and ABL, which consent shall not be unreasonably withheld or
delayed. Any recovery obtained in an action under this Subsection shall be
distributed as follows: (i) each party shall be reimbursed for any expenses
incurred in the action (including the amount of any royalty payments withheld
from Medical School and ABL as described below), (ii) as to ordinary damages,
Company shall receive an amount equal to its lost profits or a reasonable
royalty on the infringing sales (whichever measure of damages the court shall
have applied), less a reasonable approximation of the royalties that Company
would have paid to Medical School and ABL if Company had sold the infringing
products and services rather than the infringer, and (iii) as to special or
punitive damages, the parties shall share any award fifty percent (50%) to
Company, twenty-five percent (25%) to Medical School and twenty-five percent
(25%) to ABL. Company may offset a total of fifty percent (50%) of any expenses
incurred under this Subsection against any royalty payments due to Medical
School and ABL under this Agreement, provided that in no event shall the royalty
payments or sublicense income payments under Section 4.5 and 4.7., when
aggregated with any other offsets and credits allowed under this Agreement, be
reduced by more than fifty percent (50%) in any Royalty Period.
(c) Medical School and ABL as Indispensable Parties.
Medical School and ABL each shall permit any action under this Section to be
brought in its name if required by law, provided that Company shall hold Medical
School and ABL harmless from, and if necessary indemnify Medical School and ABL
against, any costs, expenses, or liability that Medical School or ABL may incur
in connection with such action.
(d) Medical School Right to Prosecute. In the event that
Company fails to initiate an infringement action within a reasonable time after
it first becomes aware of the basis for such action, or to answer a declaratory
judgment action within a reasonable time after such action is filed, Medical
School (or ABL if Medical School does not elect on a timely basis to act) shall
have the right to prosecute such infringement or answer such declaratory
judgment action, under its sole control and at its sole expense, and any
recovery obtained shall be given to Medical School and ABL, who shall share such
recovery equally after Medical School or ABL, as the case may be, first recovers
all of its expenses incurred in prosecuting such infringement.
(e) Cooperation. Each party agrees to cooperate fully in
any action under this Section 6.6 which is controlled by another party, provided
that the controlling party reimburses the cooperating party promptly for any
costs and expenses incurred by the cooperating party in connection with
providing such assistance.
7. Confidential Information; Publications; Publicity.
7.1 Confidential Information.
(a) Designation. Confidential Information that is
disclosed in writing shall be marked with a legend indicating its confidential
status (such as "Confidential" or "Proprietary"). Confidential Information that
is disclosed orally or visually shall be
16
documented in a written notice prepared by the Disclosing Party and delivered to
the Receiving Party within thirty (30) days of the date of disclosure; such
notice shall summarize the Confidential Information disclosed to the Receiving
Party and reference the time and place of disclosure.
(b) Obligations. For a period of five (5) years after
disclosure of any portion of Confidential Information, the Receiving Party shall
(i) maintain such Confidential Information in strict confidence, except that the
Receiving Party may disclose or permit the disclosure of any Confidential
Information to its directors, officers, employees, consultants, and advisors who
are obligated to maintain the confidential nature of such Confidential
Information and who need to know such Confidential Information for the purposes
of this Agreement; (ii) use such Confidential Information solely for the
purposes of this Agreement; and (iii) allow its trustees or directors, officers,
employees, consultants, and advisors to reproduce the Confidential Information
only to the extent necessary for the purposes of this Agreement, with all such
reproductions being considered Confidential Information.
(c) Exceptions. The obligations of the Receiving Party
under Subsection 7.1.(b) above shall not apply to the extent that the Receiving
Party can demonstrate that certain Confidential Information (i) was in the
public domain prior to the time of its disclosure under this Agreement; (ii)
entered the public domain after the time of its disclosure under this Agreement
through means other than an unauthorized disclosure resulting from an act or
omission by the Receiving Party; (iii) was independently developed or discovered
by the Receiving Party without use of the Confidential Information; (iv) is or
was disclosed to the Receiving Party at any time, whether prior to or after the
time of its disclosure under this Agreement, by a third party having no
fiduciary relationship with the Disclosing Party and having no obligation of
confidentiality with respect to such Confidential Information; or (v) is
required to be disclosed to comply with applicable laws or regulations,
including without limitation in connection with the development or
commercialization of Licensed Products, or with a court or administrative order,
provided that the Disclosing Party receives reasonable prior written notice of
such disclosure.
(d) Ownership and Return. The Receiving Party
acknowledges that the Disclosing Party (or any third party entrusting its own
information to the Disclosing Party) claims ownership of its Confidential
Information in the possession of the Receiving Party. Upon the expiration or
termination of this Agreement, and at the request of the Disclosing Party, the
Receiving Party shall return to the Disclosing Party all originals, copies, and
summaries of documents, materials, and other tangible manifestations of
Confidential Information in the possession or control of the Receiving Party,
except that the Receiving Party may retain one copy of the Confidential
Information in the possession of its legal counsel solely for the purpose of
monitoring its obligations under this Agreement.
7.2 Publications. Medical School and ABL and their employees will
be free to publicly disclose (through journals, lectures, or otherwise) the
results of any research in the Field or relating to the subject matter of the
Patent Rights, except as otherwise provided by written agreement between Medical
School and Company (e.g., a sponsored research agreement) and subject to the
obligations and the government rights stated in the NIH Prime Contract and the
Medical School Subcontract.
17
7.3 Publicity Restrictions. Company shall not use the name of
Medical School or ABL or any of their trustees, officers, faculty, students,
employees, or agents, or any adaptation of such names, or any terms of this
Agreement in any promotional material or other public announcement or disclosure
without the prior written consent of Medical School or ABL, as the case may be.
The foregoing notwithstanding, Company shall have the right to disclose such
information without the consent of Medical School or ABL in any prospectus,
offering memorandum, or other document or filing required by applicable
securities laws or other applicable law or regulation, provided that Company
shall have given Medical School or ABL at least ten (10) days (or such prior
shorter period in order to enable Company to make a timely announcement, while
affording the Medical School or ABL the maximum feasible time to review the
announcement) prior written notice of the proposed text for the purpose of
giving Medical School or ABL the opportunity to comment on such text.
8. Term and Termination.
8.1 Term. This Agreement shall remain in effect until (a) the
expiration of all issued patents within the Patent Rights or (b) for a period of
ten (10) years after the Effective Date if no such patents have issued within
that ten-year period, unless earlier terminated in accordance with the
provisions of this Agreement.
8.2 Termination for Default. In the event that any party commits a
material breach of its obligations under this Agreement and fails to cure that
breach within sixty (60) days after receiving written notice thereof, the other
parties who are materially damaged by such breach may terminate this Agreement
immediately upon written notice to the party in breach and any other party to
this Agreement. If the alleged breach involves nonpayment of any amounts due
Medical School or ABL under this Agreement, Company shall have only one
opportunity to cure a material breach for which it receives notice as described
above; any subsequent material breach by Company will entitle Medical School or
ABL to terminate this Agreement immediately upon written notice to Company,
without the sixty-day cure period. If there are two parties who are materially
damaged by any material breach under this Agreement and they cannot agree that
this Agreement should be terminated, this disagreement shall be resolved under
the procedures set forth in Section 9.
8.3 Force Majeure. No party to this Agreement will be responsible
for delays resulting from causes beyond the reasonable control of such party,
including without limitation fire, explosion, flood, war, strike, or riot,
provided that the nonperforming party uses commercially reasonable efforts to
avoid or remove such causes of nonperformance and continues performance under
this Agreement with reasonable dispatch whenever such causes are removed.
8.4 Effect of Termination. The following provisions shall survive
the expiration or termination of this Agreement: Articles 1 and 9; Sections
3.2., 3.5., 5.2 (obligation to provide final report and payment), 5.5., 6.4.,
7.1., 7.3., 8.4., and 10.9. Upon the early termination of this Agreement,
Company and its Affiliates and Sublicensees may complete and sell any
work-in-progress and inventory of Licensed Products that exist as of the
effective date of termination, provided that (a) Company is current in payment
of all amounts due Medical School and ABL under this Agreement, (b) Company pays
Medical School and ABL the applicable royalty on
18
such sales of Licensed Products in accordance with the terms and conditions of
this Agreement, and (c) Company and its Affiliates and Sublicensees shall
complete and sell all work-in-progress and inventory of Licensed Products within
six (6) months after the effective date of termination.
9. Dispute Resolution.
9.1 Procedures Mandatory. The parties agree that any dispute
arising out of or relating to this Agreement shall be resolved solely by means
of the procedures set forth in this Article, and that such procedures constitute
legally binding obligations that are an essential provision of this Agreement;
provided, however, that all procedures and deadlines specified in this Article
may be modified by written agreement of the parties. If any party fails to
observe the procedures of this Article, as modified by their written agreement,
either of the other parties may bring an action for specific performance in any
court of competent jurisdiction.
9.2 Dispute Resolution Procedures.
(a) Negotiation. In the event of any dispute arising out
of or relating to this Agreement, the affected party shall notify the other
parties, and the parties shall attempt in good faith to resolve the matter
within ten (10) days after the date of such notice (the "Notice Date"). Any
disputes not resolved by good faith discussions shall be referred to senior
executives of each party, who shall meet at a mutually acceptable time and
location within thirty (30) days after the Notice Date and attempt to negotiate
a settlement.
(b) Mediation. If the matter remains unresolved within
sixty (60) days after the Notice Date, or if the senior executives fail to meet
within thirty (30) days after the Notice Date, any party may initiate mediation
upon written notice to the other parties, whereupon all of the parties shall be
obligated to engage in a mediation proceeding under the then current Center for
Public Resources ("CPR") Model Procedure for Mediation of Business Disputes,
except that specific provisions of this Section shall override inconsistent
provisions of the CPR Model Procedure. The mediator will be selected from the
CPR Panels of Neutrals. If the parties cannot agree upon the selection of a
mediator within ninety (90) days after the Notice Date, then upon the request of
any party, the CPR shall appoint the mediator. The parties shall attempt to
resolve the dispute through mediation until one of the following occurs: (i) the
parties reach a written settlement; (ii) the mediator notifies the parties in
writing that they have reached an impasse; (iii) the parties agree in writing
that they have reached an impasse; or (iv) the parties have not reached a
settlement within one hundred and twenty (120) days after the Notice Date.
(c) Trial Without Jury. If the parties fail to resolve
the dispute through mediation, or if neither party elects to initiate mediation,
each party shall have the right to pursue any other remedies legally available
to resolve the dispute, provided, however, that the parties expressly waive any
right to a jury trial in any legal proceeding under this Section.
9.3 Preservation of Rights Pending Resolution.
(a) Performance to Continue. Each party shall continue to
perform its obligations under this Agreement pending final resolution of any
dispute arising out or relating
19
to this Agreement; provided, however, that a party may suspend performance of
its obligations during any period in which another party fails or refuses to
perform its obligations.
(b) Provisional Remedies. Although the procedures
specified in this Article are the sole and exclusive procedures for the
resolution of disputes arising out of relating to this Agreement, any party may
seek a preliminary injunction or other provisional equitable relief if, in its
reasonable judgment, such action is necessary to avoid irreparable harm to
itself or to preserve its rights under this Agreement.
(c) Statute of Limitations. The parties agree that all
applicable statutes of limitation and time-based defenses (such as estoppel and
laches) shall be tolled while the procedures set forth in Subsections 9.2.(a)
and 9.2(b) are pending. The parties shall take any actions necessary to
effectuate this result.
10. Miscellaneous.
10.1 Representations and Warranties. Medical School and ABL each
represents and warrants that its employees have assigned to Medical School or
ABL, as the case may be, their entire right, title, and interest in the Patent
Rights, that it has authority to grant the rights and licenses set forth in this
Agreement, and that, to its best knowledge, it does not hold any other
intellectual property rights that would be infringed by the exploitation of the
Patent Rights. Neither MEDICAL SCHOOL NOR ABL MAKES ANY OTHER WARRANTIES
CONCERNING THE PATENT RIGHTS, RELATED TECHNOLOGY, AND BIOLOGICAL MATERIALS,
INCLUDING WITHOUT LIMITATION ANY EXPRESS OR IMPLIED WARRANTY OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE. Specifically, neither Medical School nor
ABL makes any warranty or representation (a) regarding the validity or scope of
the Patent Rights, (b) that the exploitation the Patent Rights or any Licensed
Product will not infringe any patents or other intellectual property rights of a
third party, and (c) that any third party is not currently infringing or will
not infringe the Patent Rights.
10.2 Compliance with Law and Policies. Company agrees to comply
with applicable law and the policies of Medical School in the area of technology
transfer and shall promptly notify Medical School of any violation that Company
knows or has reason to believe has occurred or is likely to occur. The Medical
School policies currently in effect at the Worcester campus are listed on the
http://www.umassmed.edu web site.
10.3 Tax-Exempt Status. Company and ABL acknowledge that Medical
School, as a public institution of the Commonwealth of Massachusetts, holds the
status of an exempt organization under the United States Internal Revenue Code.
Company and ABL also acknowledge that certain facilities in which the licensed
inventions were developed may have been financed through offerings of tax-exempt
bonds. If the Internal Revenue Service determines, or if counsel to Medical
School reasonably determines, that any term of this Agreement jeopardizes the
tax-exempt status of Medical School or the bonds used to finance Medical School
facilities, the relevant term shall be deemed an invalid provision and modified
in accordance with Section 10.11.
20
10.4 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
together shall be deemed to be one and the same instrument.
10.5 Headings. All headings are for convenience only and shall not
affect the meaning of any provision of this Agreement.
10.6 Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the parties and their respective permitted successors and
assigns.
10.7 Assignment. This Agreement may not be assigned by any party
without the prior written consent of the other party, except that Company and
ABL may assign this Agreement to an Affiliate or to a successor in connection
with the merger, consolidation, or sale of all or substantially all of their
assets or that portion of its business to which this Agreement relates.
10.8 Amendment and Waiver. This Agreement may be amended,
supplemented, or otherwise modified only by means of a written instrument signed
by all of the parties. Any waiver of any rights or failure to act in a specific
instance shall relate only to such instance and shall not be construed as an
agreement to waive any rights or fail to act in any other instance, whether or
not similar.
10.9 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts
irrespective of any conflicts of law principles.
10.10 Notice. Any notices required or permitted under this Agreement
shall be in writing, shall specifically refer to this Agreement, and shall be
sent by hand, recognized national overnight courier, confirmed facsimile
transmission, confirmed electronic mail, or registered or certified mail,
postage prepaid, return receipt requested, to the following addresses or
facsimile numbers of the parties:
21
If to Medical School:
Office of Technology Management
University of Massachusetts Medical School
365 Plantation Street, Suite 130
Worcester, MA 01605
Attention: Chester A. Bisbee
Acting Director
Tel: (508) 856-1626
Fax: (508) 856-5004
If to Company:
CytRx Corporation
11726 San Vicente Boulevard, Suite 650
Los Angeles, California 90049
Attention: Steven A. Kriegsman
Chief Executive Officer
Invoices to: Steven A. Kriegsman
Tel: (310) 826-5648
Fax: (310) 826-6139
If to ABL:
Advanced BioScience Laboratories, Inc.
5510 Nicholson Lane
Kensington, Maryland 20895
Attention: Johannes Burlin
President and CEO
Tel: (301) 881-5600
Fax: (301) 984-3608
All notices under this Agreement shall be deemed effective upon receipt. A party
may change its contact information immediately upon written notice to the other
party in the manner provided in this Section.
10.11 Severability. In the event that any provision of this
Agreement shall be held invalid or unenforceable for any reason, such invalidity
or unenforceability shall not affect any other provision of this Agreement, and
the parties shall negotiate in good faith to modify the Agreement to preserve
(to the extent possible) their original intent. If the parties fail to reach a
modified agreement within sixty (60) days after the relevant provision is held
invalid or unenforceable, then the dispute shall be resolved in accordance with
the procedures set forth in Article 9. While the dispute is pending resolution,
this Agreement shall be construed as if such provision were deleted by agreement
of the parties.
10.12 Entire Agreement. Except for the Definitive Collaborative
Agreement, this Agreement constitutes the entire agreement among the parties
with respect to its subject matter
22
and supersedes all prior agreements or understandings between the parties
relating to its subject matter.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives as of the Effective Date.
UNIVERSITY OF CYTRX CORPORATION ADVANCED BIOSCIENCE
MASSACHUSETTS MEDICAL LABORATORIES, INC.
SCHOOL
By: /s/ CHESTER A. BISBEE By: /s/ STEVEN A. KRIEGSMAN By: /s/ Johannes Burlin
--------------------- ----------------------- -------------------
Acting Director Steven A. Kriegsman Johannes Burlin
Office of Technology Chief Executive Officer President and CEO
Management
23
EXHIBIT A
List of Patent Rights
United States Provisional Patent Application filed December 3, 2002 serial
number 60/430,732 entitled " Polyvalent, Primary HIV-1 Envelope Glycoprotein DNA
Vaccine.
United States Provisional Patent Application filed in September 2003, serial
number 60/503/907 entitled "Polyvalent DNA and Protein Vaccines."
United States Utility Patent Application filed December 3, 2003 and its foreign
counterparts referred to by the parties as the Joint Patent Filing.
NO BIOLOGICAL MATERIALS AS OF THE EFFECTIVE DATE
A-1
EXHIBIT B
Form of ABL Sublicense
FILED SEPARATELY IN CYTRX CORPORATION'S FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2003