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Exhibit 10.15
CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
CONFIDENTIAL
LICENSE AGREEMENT
BETWEEN
CASE WESTERN RESERVE UNIVERSITY
AND
ATHERSYS, INC.
THIS AGREEMENT, effective as of the first day of November, 1995, between
Athersys, Inc., a corporation domiciled in the state of Delaware, having a
principal place of business at 11000 Cedar Avenue, Cleveland, Ohio ("Company"),
Suite 205A, and Case Western Reserve University, a non-profit corporation having
its principal office at 10900 Euclid Avenue, Cleveland, Ohio ("University").
BACKGROUND
University, with principal activities in teaching and scholarship, makes its
developed technology available to commercial entities through licenses to the
extent that it complements and does not conflict with University's principal
activities. In this spirit, University is prepared to license to Company certain
technology which Company desires to obtain. To accomplish these ends, University
and Company have entered into this License Agreement and a Sponsored Research
Agreement of even date hereto, and have agreed as follows:
AGREEMENT
ARTICLE I: LICENSE
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1.1 GRANT AND SUBJECT MATTER. University grants Company a License to United
States Patent Application No. 08/487, 929 entitled "Method for Stably Cloning
Large Repeating Units of DNA", filed June 7, 1995, and all continuations,
continuations-in-part, divisionals, and foreign counterparts, and all know-how,
concepts, ideas and technology related thereto which have been co-developed by
Dr. Huntington Willard, Dr. John Harrington and Dr. Gil Van Bokkelen ("Licensed
Technology").
1.2 EXCLUSIVITY. The Licensed Technology shall be exclusive in the field of
human gene therapeutics and diagnostics. However, University shall retain a
royalty-free right to practice the subject matter of the Licensed Technology for
any research, testing, or educational purpose of
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University and to commercialize the results of such research, testing and
educational use. University agrees not to exercise this right in a manner which
(i) shall materially and adversely affect the commercial value of the subject
matter of the Licensed Technology or (ii) shall breach Article IV of this
Agreement. In addition, the Licensed Technology shall be subject to such rights
as are required to be accorded to any governmental agency as a consequence of
prior or contemporaneous funding for research or development of the subject
matter of the Licensed Technology.
1.3 TERM. The term of the Licensed Technology shall be twenty (20) years or the
life of last patent to expire on the Technology, whichever is longer.
1.4 SUBLICENSES. Company may grant Sublicenses upon thirty (30) days written
notice, which shall include a copy of the proposed transaction. Company agrees
to ensure that any sublicensee agrees to the terms of Article II, Article III,
Article V, Article VII and Article IX of this Agreement.
ARTICLE II: TITLE
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University shall retain title to the subject matter of the Licensed Technology.
ARTICLE III: PATENTS
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3.1 COST. Company shall pay the costs of all patent applications covering the
Technology through its designated patent counsel.
3.2 PAYMENT. Company shall pay patent costs directly to patent counsel promptly
upon receipt of an invoice for such costs.
3.3 REPORTS. University and Company shall keep each other apprised of the status
of the patent application(s) and patent(s) in a timely manner.
3.4 INFRINGEMENT. If either party becomes aware of any infringement of any
patent(s) licensed as part of this Agreement, it shall promptly notify the other
party. Neither Company nor University shall have any obligation to initiate
litigation to protect any patent or proprietary right granted under this
Agreement. However, each party shall have the unqualified right to protect its
interests by initiating legal action, or participating fully in the legal action
initiated by the other party. Each party and its respective attorney shall
cooperate fully with the other party in any litigation. If Company elects to
bring suit against a third party to protect patent or proprietary rights granted
under this Agreement, fifty percent (50%) of the associated costs (including
reasonable attorney's fees) paid by Company may be offset against any amount due
to University pursuant to Article V. All damages awarded in any suit shall
belong exclusively to the party initiating the suit, except that Company shall
reimburse University any amounts offset pursuant to Section 3.4 from damages
awarded to Company after Company's own legal costs have been reimbursed.
ARTICLE IV: CONFIDENTIALITY
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University and Company agree to advise their respective employees that it is
necessary to hold in confidence all technical information and know-how
(collectively "Knowledge") received from the other party in connection with the
Licensed Technology, for a period of three years from the date of
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CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
written disclosure or until a patent is issued on the Technology, whichever
occurs first. University and Company shall use reasonable efforts to prevent
disclosure of such Knowledge during the three year period. This Section shall
not apply, however, to Knowledge which:
A. is now in or shall enter the public domain as the result of
its disclosure in a publication, the issuance of a patent, or
otherwise without the legal fault of the receiving party;
B. the receiving party can prove was in its possession in written
form at the time of disclosure by the other party;
C. comes into the hands of the receiving party by means of a
third party who is entitled to make such disclosure and who
has no obligation of confidentiality toward the disclosing
party; or
D. must be disclosed as required by law.
ARTICLE V: ROYALTIES, PAYMENTS, REPORTS AND PERFORMANCE
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5.1 CONSIDERATION. As consideration for the Licensed Technology, Company shall
pay University a royalty on all products sold under the authority of Company,
including those under the authority of any sublicensees, if the products are
covered by any patent licensed under this Agreement or patent application or are
based on technical information and know-how developed and related to the subject
matter of the patent, whether patentable or unpatentable. The royalty shall be
[***](1).
In addition to the royalty described in the preceding paragraph, prior to or
concurrently with the Effective Date, Company shall issue in the name of CWRU
fifty-four (54) shares of the Company common stock (out of a total of three
thousand shares of Company stock authorized). After the Effective Date and for
as long as the Sponsored Research Agreement is in effect, Company shall issue
additional shares of its common stock at a rate of four (4) shares per month for
twenty-four (24) months, commencing on the one month anniversary of the
Effective Date, to a maximum of ninety-six (96) additional shares of common
stock (Additional Shares). In the event either the Company or CWRU terminate the
Sponsored Research Agreement for any reason, or if the Sponsored Research
Agreement expires and is not renewed for at least one additional year by the
election of either Company or CWRU, then Company shall not be obligated to issue
Additional Shares to CWRU after the effectiveness of such termination or
expiration. Any Additional Shares issued to CWRU by the Company prior to the
termination or expiration of the Sponsored Research Agreement shall remain the
property of CWRU.
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(1) CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
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CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
5.2 ROYALTY DUE. The royalties under this Article shall be paid by Company to
University within thirty (30) days following the close of each calendar quarter.
5.3 REPORTS. Company shall submit to University at the same time as each royalty
payment is made, written reports of gross sales of products described in Section
5.1. The number of each such product sold, and the calculation of royalty due
and payable, on a country-by-country basis. These reports shall be subject to
audit. Therefore, upon thirty (30) days written notice, Company shall make
reasonably necessary records available to University, at the place where the
reports are regularly kept.
5.4 MINIMUM ROYALTY. Commencing seven (7) years from the date of this Agreement,
Company shall pay an annual minimum royalty (Minimum Royalty) to University. The
Minimum Royalty owed to University shall be [***](2) per year or [***](3) of the
amount of the previous year's royalty on all products, whichever is greater. The
Minimum Royalty shall increase to [***](4) per year commencing ten (10) years
from the date of this Agreement. Each Minimum Royalty payment shall be fully
creditable against any earned royalties due under this Agreement, during each
applicable 12
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(2) CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
(3) CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
(4) CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
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CONFIDENTIAL MATERIAL OMITTED AND
FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
month period; provided, however, earned royalties due during any semi-annual
period shall not be reduced by more than [***](5) as a result of such offsets.
In the event Company fails to pay the Minimum Royalty, then this license shall
automatically terminate without further action by either the Company or the
University, and the University shall be free to license the Technology to any
third party; provided, however, that the proceeds of any such license shall be
divided between the Company and the University on an [***](6) basis, net of any
University expenses, with [***](7) of such net proceeds paid to the Company and
[***](8) of such proceeds retained by the University.
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(5) CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
(6) CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
(7) CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
(8) CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
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ARTICLE VI: REPRESENTATIONS AND WARRANTIES
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6.1 AGREEMENTS OF UNIVERSITY. University represents and warrants that to the
best of its knowledge this Agreement does not violate any of University's prior
commitments or agreements.
6.2 AGREEMENTS OF COMPANY. Company represents and warrants that this Agreement
does not violate any of Company's commitments or agreements.
6.3 CLAIMS AGAINST UNIVERSITY. University warrants that to the best of its
knowledge there are no legal actions, pending or threatened which would question
this Agreement, the Research Program, or the right of University to perform its
obligations under this Agreement.
6.4 CLAIMS AGAINST COMPANY. Company warrants that there are no legal actions,
pending or threatened which would question this Agreement or the right of
Company to perform its obligations under this Agreement.
6.5 AUTHORIZATION BY UNIVERSITY. University warrants that execution and
performance of this Agreement have been duly authorized by all necessary
corporate actions.
6.6 AUTHORIZATION BY COMPANY. Company warrants that execution and performance of
this Agreement have been duly authorized by all necessary corporate actions.
6.7 NO OTHER WARRANTY. UNIVERSITY DISCLAIMS ALL OTHER WARRANTIES, INCLUDING, BUT
NOT LIMITED TO WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE.
ARTICLE VII: INDEMNIFICATION
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Company shall defend, indemnify and hold University harmless from any loss,
cost, damage, liability or expense imposed on University as a result of any
claim arising from Company's use or marketing of any product or right arising
from this Agreement.
ARTICLE VIII: BREACH AND TERMINATION
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8.1 BREACH. If either party at any time commits any material breach of the
Agreement, and fails to remedy it within thirty (30) days after receiving
written notice of the breach, the aggrieved party, at its option, may cancel
this Agreement by notifying the other in writing. This remedy is in addition to
any other remedies to which it may be entitled. Any failure to cancel this
Agreement for any breach shall not constitute a waiver by the aggrieved party of
its right to cancel this Agreement for any other breach whether similar or
dissimilar in nature.
8.2 FORCE MAJEURE. Each of the parties shall be excused from performance of this
Agreement only to the extent that performance is prevented by conditions beyond
the reasonable control of the party affected. The parties shall, however, use
their best efforts to avoid or cure such conditions. The party claiming such
conditions as an excuse for delaying performance shall give prompt written
notice of the conditions, and its intent to delay performance, to the other
party and shall resume its performance as soon as performance is possible.
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8.3 EFFECT OF TERMINATION. Company's License shall terminate simultaneously with
any termination of this Agreement. Expiration, cancellation or termination of
this Agreement shall not affect University's previously vested or accrued rights
under this Agreement.
ARTICLE IX: INSURANCE
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Company shall purchase and maintain during the term of this Agreement
Comprehensive General Liability Insurance, including Contractual Liability
coverage and, prior to initiating its first human clinical trials, Product
Liability Insurance and product recall insurance for all products developed,
manufactured or marketed as a result of this Agreement. Company shall maintain
insurance stipulated above with limits of $2,000,00 per occurrence/$2,000,000
aggregate. Coverage for product recall expense shall also be provided, with a
coverage limit of at least $5,000,000. All policies shall name University as
additional insured as respects the subject matter of this Agreement. To the
extent that Company has coverage under any such policies with limits above those
stated, such policies shall also name University as additional insured. The
insurance stipulated herein shall be effected by insurers of recognized
responsibility, well rated by national ratings organizations, and approved by
University. Evidence of all required insurance shall be delivered to University
within ten (10) days of the policy's effective date. Each policy shall contain a
provision that the insurer shall not terminate the policy or materially reduce
its coverage without forty-five (45) days advance written notice to University.
The amounts of insurance referred to above shall be increased by Company, at its
sole cost and expense, not less than once every three years during the term of
this Agreement, said increased amount to be in the same percentage as the net
increase in the Consumer Price Index (CPI-W) over said three-year period. Each
policy shall be maintained for at least five years after the termination or
expiration of this Agreement.
ARTICLE X: USE OF NAME
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Company may use the name of the University and its School of Medicine in the
course of its normal business operations to describe the relationship
established by this License Agreement and the Sponsored Research Agreement
attached hereto, but oniy after the CWRU Dean of Graduate Studies and Research
has given his written approval of each proposed use.
ARTICLE XI: NOTICES
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Notices to University under this Agreement shall be in writing and sent to:
Dean of Graduate Studies and Research
Case Western Reserve University
10900 Euclid Avenue
Cleveland, OH 44106
All notices to Company under this Agreement shall be in writing and sent to:
President
Athersys, Inc.
11000 Cedar Avenue, Suite 205A
Cleveland, OH 44106
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ARTICLE XII: ASSIGNMENT
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This Agreement is not assignable or transferable except with the written consent
of both parties; consent shall not be withheld unreasonably. Any assignment or
transfer without such consent is void.
ARTICLE XIII: MISCELLANEOUS
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13.1 CHOICE OF LAW. This Agreement shall be construed in accordance with the
laws of the State of Ohio except for those laws applicable to Choice of Law.
13.2 HEADINGS. The captions or headings in this Agreement do not form part of
the Agreement, but are included solely for convenience.
13.3 WAIVER, AMENDMENT. No waiver, amendment or modification of this Agreement
shall be effective unless in writing and signed by both parties.
13.4 BINDING EFFECT. This Agreement shall be binding on any successors or
permitted assigns of either party.
13.5 ENTIRE AGREEMENT. This Agreement embodies the entire agreement of the
parties. It supersedes all prior written and verbal agreements between the
parties with respect to the subject matter.
13.6 ILLEGALITY. If any term or conditions of this Agreement is contrary to
applicable law, that term or condition shall not apply and shall not invalidate
any other part of this Agreement. However, if its deletion materially and
adversely changes the position of either of the parties, the affected party may
terminate the Agreement by giving thirty (30) days written notice.
ARTICLE XIV: EXPORT CONTROLS
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It is understood that University is subject to United States laws and
regulations controlling the export of technical data, computer software,
laboratory prototypes an other commodities, and that its obligations hereunder
are contingent on compliance with applicable United States export laws and
regulations. The transfer of certain technical data and commodities may require
a license from the cognizant agency of the United States Government and/or
written assurances by Company that Company shall not transfer data or
commodities to certain foreign countries without prior approval of such agency.
University neither represents that a license shall not be required nor that, if
required, it shall be issued.
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ARTICLE XV: U.S. GOVERNMENT RIGHTS
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The Technology is subject to the rights and limitations of Public Laws (PL)
96-517 and 98-620 and implementing regulations including 35 USC 200-211.
University and/or Company agree to include a statement in any patent application
fully identifying such government right; and Company acknowledges that the
United States Government has the right to a worldwide, non-exclusive,
royalty-free license to practice any patent notwithstanding anything in this
Agreement to the contrary.
IN WITNESS WHEREOF, the parties have executed this Agreement on the dates
indicated below.
FOR CASE WESTERN RESERVE FOR ATHERSYS, INC.:
UNIVERSITY:
Name: /s/ Norman L. Caruso Name /s/ Gil Van Bokkelen
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Title: Treasurer Title President
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Date: 10/31/95 Date: 10/31/95
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