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EXHIBIT 10.19
WHENEVER CONFIDENTIAL INFORMATION IS OMITTED HEREIN (SUCH OMISSIONS ARE DENOTED
BY AN ASTERISK*), SUCH CONFIDENTIAL INFORMATION HAS BEEN SUBMITTED SEPARATELY TO
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT.
LICENSE AGREEMENT
This Agreement is made and entered into this 1st day of October, 1999, (the
"Effective Date") by and between METABOLIX, Inc. a corporation duly organized
and existing under the laws of the State of Delaware and having its principal
office at 303 Third Street, Cambridge, Massachusetts 02142 (hereinafter referred
to as "METABOLIX"), and TEPHA, Inc., a corporation duly organized under the laws
of the State of Delaware and having its principal office at 303 Third Street,
Cambridge, Massachusetts 02142 (hereinafter referred to as "TEPHA").
WITNESSETH
WHEREAS, METABOLIX, is the owner of the METABOLIX PATENT RIGHTS (as later
defined herein), and related technology, and has the right to grant licenses
under said METABOLIX PATENT RIGHTS;
WHEREAS, METABOLIX is the licensee from the Massachusetts Institute of
Technology (hereinafter referred to as "MIT") of the MIT PATENT RIGHTS (as later
defined herein), and has the right to grant sublicenses under said MIT PATENT
RIGHTS;
WHEREAS, METABOLIX desires to have the PATENT RIGHTS commercialized in the
FIELD OF USE, and is willing to grant a license thereunder; and
WHEREAS, LICENSEE desires to obtain a license under the PATENT RIGHTS upon
the terms and conditions hereinafter set forth.
NOW THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto agree as follows:
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1. DEFINITIONS
For the purposes of this Agreement, the following words and phrases shall
have the following meanings:
1.1. "TEPHA" and "METABOLIX" shall include "AFFILIATES" defined as a
related company of TEPHA or METABOLIX, respectively, the voting
stock of which is directly or indirectly at least fifty percent
(50%) owned and controlled by TEPHA or METABOLIX, respectively,
an organization which directly or indirectly controls more than
fifty percent (50%) of the voting stock of TEPHA or METABOLIX,
respectively, and an organization the majority ownership of which
is directly or indirectly common to the ownership of TEPHA or
METABOLIX, respectively.
1.2. "PATENT RIGHTS" shall mean all of the following METABOLIX and MIT
intellectual property, respectively, the "METABOLIX PATENT
RIGHTS" and the MIT PATENT RIGHTS":
1.2.1. the United States patents listed in Appendix A;
1.2.2. the United States patent applications listed in
Appendix A and United States patent applications filed
after the EFFECTIVE DATE on IMPROVEMENTS, and
divisionals, continuations and claims of
continuation-in-part applications which shall be
directed to subject matter specifically described in
such patent applications, and the resulting patents;
1.2.3. any patents resulting from reissues or reexaminations
of the United States patents described in 1.2.1 and
1.2.2 above;
1.2.4. the Foreign patents listed in Appendix A;
1.2.5. the Foreign patent applications listed in Appendix A,
and divisionals, continuations and claims of
continuation-in-part applications which shall be
directed to subject matter specifically described in
such Foreign patent applications, and the resulting
patents;
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1.2.6. Foreign patent applications filed after the EFFECTIVE
DATE on any patent application in 1.2.2 and
divisionals, continuations and claims of
continuation-in-part applications which shall be
directed to subject matter specifically described in
such patent applications, and the resulting patents;
and
1.2.7. any Foreign patents, resulting from equivalent Foreign
procedures to United States reissues and
reexaminations, of the Foreign patents described in
1.2.4, 1.2.5 and 1.2.6 above.
1.3. A "LICENSED PRODUCT" shall mean any product or part thereof
which:
1.3.1. is covered in whole or in part by an issued, unexpired
valid claim or a pending claim contained in the PATENT
RIGHTS in the country in which any such product or part
thereof is made, used or sold; or
1.3.2. is manufactured by using a process or is employed to
practice a process which is covered in whole or in part
by an issued, unexpired valid claim or a pending claim
contained in the PATENT RIGHTS in the country in which
a LICENSED PROCESS is used or in which such product or
part thereof is used or sold.
1.4. A "LICENSED PROCESS" shall mean any process which:
1.4.1. is covered in whole or in part by an issued, unexpired
valid claim or a pending claim contained in the PATENT
RIGHTS in the country in which such process is used or
in which the LICENSED PRODUCT made thereby is used or
sold.
1.5. "NET SALES" shall mean TEPHA's and its sublicensees' billings for
LICENSED PRODUCTS and LICENSED PROCESSES produced hereunder less
the sum of the following:
1.5.1. discounts allowed in amounts customary in the trade;
1.5.2. sales, tariff duties and/or use taxes directly imposed
and with reference to particular sales;
1.5.3. outbound transportation prepaid or allowed; and
1.5.4. amounts allowed or credited on returns.
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No deduction shall be made for commissions paid to individuals whether they
be with independent sales agencies or regularly employed by TEPHA and on
its payroll, or for cost of collections. LICENSED PRODUCTS shall be
considered "sold" when invoiced. "NET SALES" shall not include LICENSED
PRODUCTS sold for clinical testing, research or development purposes. If a
LICENSED PRODUCT or LICENSED PROCESS shall be distributed or invoiced for a
discounted price substantially lower than customary in the trade or
distributed at no cost to AFFILIATES of TEPHA or otherwise, NET SALES shall
be based on the customary amount billed for such LICENSED PRODUCTS or
LICENSED PROCESSES.
Where the LICENSED PRODUCT is a combination product consisting of polymer
whose composition or manufacture is covered by the PATENT RIGHTS plus other
materials (such as a growth factor, but not, for example, filler materials)
that are not covered by the PATENT RIGHTS, then "NET SALES" shall mean the
NET SALES of the full product multiplied by the fully loaded manufacturing
cost of the polymer divided by the total fully loaded manufacturing cost of
the total combination material. When the LICENSED PRODUCT consists of a
combination product consisting of a component made from the polymer, plus
other components, then "NET SALES" shall mean NET SALES of the total
product multiplied by the fully loaded manufacturing cost of the polymer
component divided by the fully loaded manufacturing cost of the total
product. By "fully loaded" is meant the cost of goods sold plus overhead
allocated to production and sale thereof.
1.6. "FIELD OF USE" shall mean IN VIVO human and veterinary medical
use of polymers falling within the PATENT RIGHTS, including,
without limitation, tissue engineering, implantables, medical
devices, drug delivery and contrast agents, but excluding medical
disposables, surgical drapes and trays, nutritional and all other
diagnostic uses. and excluding transgenic plant crop production
of polymers. "IMPROVEMENT" shall mean an invention conceived
and/or reduced to practice during the two-year period after the
EFFECTIVE DATE and dominated by the claims of the PATENT RIGHTS
listed on Appendix A and owned or CONTROLLED by METABOLIX or
TEPHA (excluding any preexisting IMPROVEMENT owned or CONTROLLED
by any entity as of the
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date it becomes a successor or permitted assignee of METABOLIX
or TEPHA under Article 11).
1.7. "KNOW-HOW" shall mean technical, manufacturing, regulatory and
other information, methods, specifications, samples, processes,
procedures, formulations, test data, protocols, and trade secrets
owned or CONTROLLED by METABOLIX or TEPHA during the two-year
period after the EFFECTIVE DATE and relating to the PATENT RIGHTS
or to the development, manufacture or use of any LICENSED
PRODUCTS or LICENSED PROCESSES (excluding any preexisting
KNOW-HOW owned or CONTROLLED by any entity as of the date it
becomes a successor or permitted assignee of METABOLIX or TEPHA
under Article 11).
1.8. "CONTROL" shall mean with respect to any IMPROVEMENTS or
KNOW-HOW, the possession of the ability to grant a license or
sublicense with respect thereto as provided for herein.
1.9. "FDA" shall mean the United States Food and Drug Administration
or any successor agency thereof.
2. GRANT
2.1. Subject to the terms and conditions of this Agreement, METABOLIX
hereby grants to TEPHA the worldwide right and license in the
FIELD OF USE to make, have made, use, lease, sell, offer for sale
and import the LICENSED PRODUCTS and to practice the LICENSED
PROCESSES until the expiration of the last to expire of the
PATENT RIGHTS, unless this Agreement shall be sooner terminated
according to the terms hereof.
2.2 Under the terms of its license with MIT, METABOLIX has agreed
that any sublicenses granted by it shall provide that the
obligations to MIT of articles 2, 5, 7, 8, 9, 10, 12, 13 and 15
of its license with MIT shall be binding upon the sublicensee as
if it were a party to that license agreement. METABOLIX further
has agreed to attach copies of these articles to sublicense
agreements, and a copy thereof is attached hereto as Appendix C.
To the extent of any conflict between
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the terms of this Agreement and Appendix C, as to the MIT PATENT
RIGHTS only, the terms of Appendix C shall prevail.
2.3 In order to establish a period of exclusivity for TEPHA,
METABOLIX hereby agrees that it shall not grant any other license
to make, have made, use, lease, sell, offer for sale or import
LICENSED PRODUCTS or to utilize LICENSED PROCESSES in the FIELD
OF USE and shall not practice under the PATENT RIGHTS for its own
purposes in the FIELD OF USE during the term of this Agreement;
provided, however, MIT has reserved the right to practice under
the MIT PATENT RIGHTS for its own noncommercial research
purposes.
2.4 Within six (6) months after the EFFECTIVE DATE, METABOLIX shall
disclose to TEPHA in writing all METABOLIX-CONTROLLED KNOW-HOW
not previously disclosed. During the two-year period after the
EFFECTIVE DATE, each party shall also promptly disclose to the
other in writing on an ongoing basis all additional KNOW-HOW and
IMPROVEMENTS. Subject to Article 13 (Confidentiality), METABOLIX
grants TEPHA the exclusive right and license to use METABOLIX
KNOW-HOW and METABOLIX IMPROVEMENTS in connection with its
license hereunder to the PATENT RIGHTS in the FIELD OF USE until
termination or expiration of this Agreement; provided, however,
after expiration of this Agreement, TEPHA shall retain a
perpetual, royalty-free, non-exclusive license to the METABOLIX
KNOW-HOW. Subject to Article 13 (Confidentiality) and mutually
agreed upon royalty and other terms, TEPHA grants METABOLIX the
exclusive right and license to use TEPHA KNOW-HOW and TEPHA
IMPROVEMENTS in connection with the PATENT RIGHTS outside the
FIELD OF USE until the last to expire of any patent rights
covering the TEPHA IMPROVEMENTS; provided, however, after
expiration of this Agreement, METABOLIX shall retain a perpetual,
royalty-free, non-exclusive license to the METABOLIX KNOW-HOW.
2.5 TEPHA shall have the right to enter into sublicensing agreements
for the rights, privileges and licenses granted hereunder. Upon
any termination of this
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Agreement, sublicensees' rights shall also terminate, subject to
Paragraph 14.6 hereof.
2.6 TEPHA agrees to incorporate terms and conditions substantively
similar to Articles 1, 2, 5, 7.1, 8, 9, 10, 11, 12, 13, 14.5,
14.6, and 16 of this Agreement into its sublicense agreements,
that are sufficient to enable TEPHA to comply with this
Agreement.
2.7 TEPHA agrees to forward to METABOLIX a copy of any and all
sublicense agreements promptly upon execution by the parties.
2.8 TEPHA shall not receive from sublicensees anything of value in
lieu of cash payments in consideration for any sublicense under
this Agreement, without the express prior written permission of
METABOLIX.
2.9 Nothing in this Agreement shall be construed to confer any rights
upon TEPHA by implication, estoppel or otherwise as to any
technology or patent rights of METABOLIX, MIT or any other entity
other than the PATENT RIGHTS, regardless of whether such patent
rights shall be dominant or subordinate to any PATENT RIGHTS.
3. DUE DILIGENCE
3.1. TEPHA shall use diligent efforts to bring one or more LICENSED
PRODUCTS or LICENSED PROCESSES to market through a thorough,
vigorous and diligent program for exploitation of the PATENT
RIGHTS and shall continue active, diligent development and
marketing efforts for one or more LICENSED PRODUCTS or LICENSED
PROCESSES throughout the term of this Agreement.
3.2. In addition:
3.2.1. TEPHA shall raise in connection with the PATENT RIGHTS
and allocated for expenditure for efforts under
Paragraphs 3.1 and 3.2, a cumulative total of
investment capital and/or research and development
funds of: * from the Effective Date. Such cumulative
investment capital and/or research and development
funds shall include funds invested or
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expended by a joint venture in which TEPHA owns at
least a thirty-three percent (33%) interest provided
that such funds are used substantially for the
development and marketing of LICENSED PRODUCTS and
LICENSED PROCESSES.
3.2.2. TEPHA shall use commercially reasonable efforts to
promptly and diligently generate data and perform tests
and studies sufficient to file, and shall file, an
application for approval by the FDA of a first LICENSED
PRODUCT *.
3.2.3. TEPHA shall obtain FDA approval of such first LICENSED
PRODUCT *.
3.2.4. TEPHA shall keep METABOLIX informed of progress in its
efforts to develop and commercialize LICENSED PRODUCTS
and PROCESSES. METABOLIX shall have the right to
contact a representative of TEPHA periodically by
telephone to discuss TEPHA's progress with the
development of LICENSED PRODUCTS and PROCESSES and
sales of such LICENSED PRODUCTS and PROCESSES once
launched. In addition, on or before March 1 of each
year after the EFFECTIVE DATE until the first
commercial sale of a LICENSED PRODUCT, TEPHA shall make
a written annual summary report to METABOLIX covering
the preceding year ending December 31, regarding the
progress toward commercial use of LICENSED PRODUCTS and
PROCESSES. All information disclosed by TEPHA to
METABOLOX under this provision shall be deemed the
Confidential Information (as further discussed in
Paragraph 13.1) of TEPHA.
3.3. TEPHA's failure to perform in accordance with Paragraphs 3.1 and
3.2 above shall be grounds for METABOLIX to terminate this
Agreement pursuant to Paragraph 14.3 hereof; provided, however,
as to Paragraphs 3.2.2 and 3.2.3, if during the cure period
provided in Paragraph 14.3, TEPHA shall demonstrate to the
reasonable satisfaction of METABOLIX that TEPHA shall have
expended good faith and diligent efforts using reasonable
resources to meet the milestone(s)
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and that circumstances beyond TEPHA'S control precluded TEPHA
from performing in accordance with Paragraph 3.2.2 or 3.2.3, then
the time for performance of such milestone(s) shall be extended
for an additional period of six (6) months, or such other period
as may be mutually agreed.
4. ROYALTIES
4.1. For the rights, privileges and license granted hereunder, TEPHA
shall pay royalties to METABOLIX in the manner hereinafter
provided until the expiration of the last to expire of the PATENT
RIGHTS or until this Agreement shall earlier be terminated:
4.1.1. A License Issue Fee of * which said License Issue Fee
shall be deemed earned and due in three parts: * in
investment capital and/or research and development
funds in connection with the PATENT RIGHTS; * due upon
the raising by TEPHA of * (cumulatively) in investment
capital and/or research and development funds in
connection with the PATENT RIGHTS; and * due upon the
raising by TEPHA of * (cumulatively) in investment
capital and/or research and development funds in
connection with the PATENT RIGHTS; provided, however,
the full amount of the License Issue Fee shall be due
on the third anniversary of the Effective Date,
whether or not TEPHA shall have raised such investment
capital and/or research and development funds.
4.1.2. Milestone payments as follows: * due on filing for
approval of the first LICENSED PRODUCT; and * due on
FDA approval of the first LICENSED PRODUCT.
4.1.3. License Maintenance Fees of * per year payable on
January 1, 2003 and on each subsequent January 1 during
the term of this Agreement; provided, however, License
*.
4.1.4. Running Royalties of * of NET SALES of LICENSED
PRODUCTS and LICENSED PROCESSES by TEPHA and its
sublicensees.
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4.1.5. A * share of gross sublicensing revenue (including
sublicense issue fees, milestone payments, license
maintenance fees and similar consideration but
excluding sublicensing revenue from NET SALES covered
in Paragraph 4.1.4 above) received by LICENSEE.
4.2. All payments due hereunder shall be paid in full, without
deduction of taxes or other fees which may be imposed by any
government, except as otherwise provided in Paragraph 1.5.2.
4.3. No multiple royalties shall be payable because any LICENSED
PRODUCT, its manufacture, use, lease or sale are or shall be
covered by more than one PATENT RIGHTS patent application or
PATENT RIGHTS patent licensed under this Agreement.
4.4. Royalty payments shall be paid in the United States dollars in
Cambridge, Massachusetts, or at such other place as METABOLIX may
reasonably designate consistent with the laws and regulations
controlling in any foreign country. If any current conversion
shall be required in connection with the payment of royalties
hereunder, such conversion shall be made by using the exchange
rate prevailing at the Chase Manhattan Bank (N.A.) on the last
business day of the calendar quarterly reporting period to which
such royalty payments relate.
4.5. To the extent that TEPHA shall obtain subsequent to the EFFECTIVE
DATE licenses to third party patents or other intellectual
property that are necessary to manufacture or sell LICENSED
PRODUCTS or LICENSED PROCESSES in the FIELD OF USE, TEPHA may
deduct from the Running Royalty due to METABOLIX under Paragraph
4.1.4, * of the Running Royalties due on such third party patents
or intellectual property up to an amount equal to * of the
Running Royalties due hereunder.
5. REPORTS AND RECORDS
5.1. TEPHA shall keep full, true and accurate books of account
containing all particulars that may be necessary for the purpose
of showing the amounts payable
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to METABOLIX hereunder. Said books of account shall be kept at
TEPHA's principal place of business or the principal place of
business of the appropriate division of TEPHA to which this
Agreement relates. Said books and the supporting data shall be
open at all reasonable times for * following the end of the
calendar year to which they pertain, to the inspection of
METABOLIX or its agents for the purpose of verifying TEPHA's
royalty statement or compliance in other respect with this
Agreement. Should such inspection lead to the discovery of a
greater than * discrepancy in reporting to METABOLIX' detriment,
TEPHA agrees to pay the full cost of such inspection.
5.2. TEPHA shall deliver to METABOLIX true and accurate reports,
giving such particulars of the business conducted by TEPHA and
its sublicensees under this Agreement as shall be pertinent to
diligence under Article 3 and royalty accounting hereunder:
before the first commercial sale of a LICENSED PRODUCT or
LICENSED PROCESS, annually, on January 31 of each year; and after
the first commercial sale of a LICENSED PRODUCT or LICENSED
PROCESS, quarterly, within sixty (60) days after March 31, June
30, September 30 and December 31, of each year. These reports
shall include at least the following:
5.2.1. number and total billings of LICENSED PRODUCTS falling
solely within the METABOLIX PATENT RIGHTS manufactured,
used or sold by TEPHA and its sublicensees;
5.2.2. number and total billings for LICENSED PRODUCTS falling
solely within the MIT PATENT RIGHTS manufactured, used
or sold by TEPHA and its sublicensees;
5.2.3. number and total billings for LICENSED PRODUCTS falling
within both the METABOLIX PATENT RIGHTS and the MIT
PATENT RIGHTS manufactured, used or sold by TEPHA and
its sublicensees;
5.2.4. accounting for all LICENSED PROCESSES used or sold by
TEPHA and its sublicensees, along with a verification
as to each LICENSED PROCESS stating whether it shall
fall solely within the METABOLIX
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PATENT RIGHTS, solely within the MIT PATENT RIGHTS or
both within the METABOLIX PATENT RIGHTS and the MIT
PATENTS RIGHTS.;
5.2.5. deductions applicable as provided in Paragraph 1.5;
5.2.6. Running Royalties due under Paragraph 4.1.4.;
5.2.7. royalties due on payments from sublicensees under
paragraph 4.1.5.;
5.2.8. total royalties due; and
5.2.9. names and addresses of all sublicensees of TEPHA. TEPHA
shall endeavor to obtain similar information from its
sublicensees and shall provide such information which
is obtained to METABOLIX.
5.3. With each such report submitted, TEPHA shall pay to METABOLIX the
royalties due and payable under this Agreement. If no royalties
shall be due, TEPHA shall so report.
5.4. On or before the ninetieth (90th) day following the close of
TEPHA's fiscal year, TEPHA shall provide METABOLIX with TEPHA's
certified financial statements for the preceding fiscal year
including, at a minimum, a balance sheet and an operating
statement.
5.5. The amounts due under Articles 4 and 6 shall, if overdue, bear
interest until payment a per annum rate * in effect at the Chase
Manhattan Bank (N.A.) on the due date. The payment of such
interest shall not foreclose METABOLIX from exercising any other
rights it may have as a consequence of the lateness of any
payment.
6. PATENT PROSECUTION
6.1. Throughout the term of this Agreement, TEPHA, at its own expense,
shall file, prosecute and maintain those METABOLIX PATENT RIGHTS
listed on Appendix B in METABOLIX' name; provided, however,
METABOLIX shall be entitled to review and comment upon in a
timely manner all actions undertaken in the prosecution of all
patents and applications. TEPHA agrees to seek strong,
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broad claims in the best interest of METABOLIX and shall not
abandon the subject matter of any substantive claim without the
prior written permission of METABOLIX, such permission not to be
unreasonably withheld. If TEPHA shall elect not to file,
prosecute, or maintain any such METABOLIX PATENT RIGHT, TEPHA
shall so notify METABOLIX in writing with at least thirty (30)
days notice prior to any filing, action, payment or the like
being due, in which event METABOLIX shall have the right to file,
prosecute, or maintain such METABOLIX PATENT RIGHT, and TEPHA
shall have no further license rights as to such METABOLIX PATENT
RIGHT application or patent under this Agreement.
6.2. Payment of all out-of-pocket fees and costs relating to the
filing, prosecution, and maintenance of those METABOLIX PATENT
RIGHTS listed on Appendix B shall be the responsibility of TEPHA,
whether such fees and costs were incurred before or after the
Effective Date of this Agreement. Payment for out-of-pocket costs
incurred by METABOLIX prior to the Effective Date shall be made
in three parts:
6.2.1. Twenty-Five Percent (25%) on or before a date six (6)
months from the Effective Date of this Agreement;
6.2.2. Twenty-Five Percent (25%) on or before a date nine (9)
months from the Effective Date of this Agreement;
6.2.3. The remaining Fifty Percent (50%) on or before a date
fifteen (15) months from the Effective Date of this
Agreement.
7. INFRINGEMENT
7.1. Each party shall inform the other promptly in writing of any
alleged infringement of the PATENT RIGHTS by a third party and of
any available evidence thereof.
7.2. During the term of this Agreement, TEPHA shall have the right,
but shall not be obligated, to prosecute at its own expense all
infringements of the PATENT RIGHTS in the FIELD OF USE and, in
furtherance of such right, METABOLIX
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hereby agrees that TEPHA may join METABOLIX as a party plaintiff
in any such suit, without expense to METABOLIX. The total cost of
any such infringement action commenced solely by TEPHA shall be
borne by TEPHA. In the event that TEPHA shall have exercised its
right to bring an action, TEPHA shall be responsible for
defending against any counterclaims alleging invalidity or
unenforceability of a PATENT RIGHT and for prosecuting the action
through to settlement or other final disposition. *.
7.3. If within six (6) months after having been notified of any
alleged infringement, TEPHA 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 TEPHA shall notify METABOLIX at any time prior
thereto of its intention not to bring suit against any alleged
infringer, then, and in those events, only, METABOLIX shall have
the right, but shall not be obligated, to prosecute at its own
expense any infringement of the PATENTS RIGHTS in the FIELD of
USE. In furtherance of such right, TEPHA hereby agrees that
METABOLIX may include TEPHA as a party plaintiff in any such
suit, without expense to TEPHA. The total cost of any such
infringement action commenced or defended solely by METABOLIX
shall be borne by METABOLIX, and METABOLIX shall be responsible
for defending against any counterclaims alleging invalidity or
unenforceability of a PATENT RIGHT.
7.4. Any recovery of damages by the prosecuting party for any such
suit shall be applied first in satisfaction of any unreimbursed
expenses and legal fees of such party relating to the suit, and
next toward reimbursement of METABOLIX for any royalties past due
or withheld and applied pursuant to Paragraph 7.2, if applicable.
*.
7.5. In the event of the institution of any suit by a third party
against METABOLIX, TEPHA or its sublicensees for patent
infringment involving the PATENT RIGHTS in the FIELD OF USE, the
party sued shall promptly notify the other party in writing.
TEPHA shall have the right, but not the obligation, to defend
such suit at its own expense. If TEPHA shall elect not to defend,
TEPHA shall
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promptly notify METABOLIX. METABOLIX shall have the right, but
not the obligation, to defend such suit at its expense.
7.6. If TEPHA shall exercise its rights pursuant to Section 7.5 to
defend the PATENT RIGHTS, *:
7.6.1. If the enforceability of all material claims in such
PATENT RIGHT claiming the LICENSED PRODUCT or PROCESS
is upheld by a court or other legal or administrative
tribunal from which no appeal is or can be taken, *
or
7.6.2. If one or more claims in such PATENT RIGHT covering the
LICENSED PRODUCT or PROCESS shall be held to be invalid
or otherwise unenforceable by a court or other legal or
administrative tribunal in any country from which no
appeal is or can be taken or the scope thereof is
modified and, as a result such PATENT RIGHT no longer
offers substantial protection to a LICENSED PRODUCT or
PROCESS in such country, *.
7.7. In any suit as either party may institute to enforce or defend
the PATENT RIGHTS 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. The parties shall keep one another informed of the status
of and of their respective activities regarding any litigation or
settlement thereof concerning the PATENT RIGHTS in the FIELD of
USE or LICENSED PRODUCTS or PROCESSES ; provided, however, that
no settlement or consent judgement or other voluntary final
disposition of any suit defended or action brought by a party
pursuant to this Article 7 may be entered into without the
consent of the other party, such consent not to be unreasonably
withheld or delayed. As to the MIT PATENT RIGHTS, no settlement,
consent judgement or other voluntary final disposition of the
suit may be entered into without the consent of MIT which consent
shall not unreasonably be withheld. TEPHA shall indemnify MIT
against any order for
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costs that may be made against MIT in proceedings commenced and
defended solely by TEPHA.
7.8. TEPHA, during the period of this Agreement, shall have the sole
right in accordance with the terms and conditions herein to
sublicense any alleged infringer for future use of the PATENT
RIGHTS in the FIELD OF USE.
8. PRODUCT LIABILITY
8.1. TEPHA shall at all times during the term of this Agreement and
thereafter, indemnify, defend and hold METABOLIX and MIT, their
directors, trustees, officers, employees and affiliates, harmless
against all claims and expenses, arising out of *.
8.2. Prior to the first use of a LICENSED PRODUCT for humans, TEPHA
shall obtain and carry in full force and effect commercial,
general liability insurance, including product liability
insurance, which shall protect TEPHA, METABOLIX, and MIT with
respect to events covered by Paragraph 8.1 above. Such insurance
shall be written by a reputable insurance company authorized to
do business in the Commonwealth of Massachusetts, shall list
METABOLIX and MIT as additional named insureds thereunder, shall
be endorsed to include product liability coverage and shall
require thirty (30) days written notice to be given to METABOLIX
and MIT prior to any cancellation or material change thereof. The
limits of such insurance shall not be less than * per occurrence
with an aggregate of * for personal injury including death;
and * per occurrence with an aggregate of * for property
damage. TEPHA shall provide METABOLIX with Certificates of
Insurance evidencing the same.
8.3. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT,
NEITHER PARTY, NOR MIT, NOR THEIR RESPECTIVE DIRECTORS, TRUSTEES,
OFFICERS, EMPLOYEES, AND AFFILIATES MAKE ANY REPRESENTATIONS OR
EXTEND ANY WARRANTIES OF
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ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
VALIDITY OF PATENT RIGHTS CLAIMS, ISSUED OR PENDING, AND THE
ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE.
NOTHING IN THIS AGREEMENT SHALL BE CONSTRUED AS A REPRESENTATION
MADE OR WARRANTY GIVEN BY EITHER PARTY OR BY MIT THAT THE
PRACTICE OF THE LICENSES GRANTED HEREUNDER SHALL NOT INFRINGE THE
PATENT RIGHTS OR OTHER INTELLECTUAL OR PROPRIETARY RIGHTS OF ANY
THIRD PARTY. * TEPHA, MIT OR THEIR RESPECTIVE DIRECTORS,
TRUSTEES, OFFICERS, EMPLOYEES AND AFFILIATES BE LIABLE FOR
INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING
ECONOMIC DAMAGE OR INJURY TO PROPERTY AND LOST PROFITS,
REGARDLESS OF WHETHER SUCH PARTY SHALL OR M.I.T. BE ADVISED,
SHALL HAVE OTHER REASON TO KNOW, OR IN FACT SHALL KNOW OF THE
POSSIBILITY OF THE FOREGOING.
9. EXPORT CONTROLS
9.1. TEPHA acknowledges that it is subject to United States laws and
regulations controlling the export of technical data, computer
software, laboratory prototypes and other commodities (including
the Arms Export Control Act, as amended and the United States
Department of Commerce Export Administration Regulations). The
transfer of such items may require a license from the cognizant
agency of the United States Government and/or written assurances
by TEPHA that TEPHA shall not export data or commodities to
certain foreign countries without prior
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approval of such agency. METABOLIX neither represents that a
license shall not be required nor that, if required, it shall be
issued.
10. NON-USE OF NAMES
10.1. Except as required by law or in raising funding, neither party
shall use the names or trademarks of the other, nor of MIT, nor
any adaptation thereof, nor the names of any of the other party's
or MIT's employees, in any advertising, promotional or sales
literature without prior written consent obtained from such
party, or MIT, or said employee, in each case, such consent not
to be unreasonably withheld, except that TEPHA may state that it
is licensed by METABOLIX, or MIT, as applicable, under one or
more of the patents and/or applications comprising the METABOLIX
PATENT RIGHTS, or the MIT PATENT RIGHTS, respectively. TEPHA may,
however, use the name of any employee of METABOLIX who is a
consultant or member of an advisory board of TEPHA, with their
permission, and provided, also, that their affiliation with
METABOLIX is identified.
11. ASSIGNMENT
11.1. Except as expressly provided in Article 2, neither party shall
directly or indirectly sell, transfer, assign, or delegate in
whole or in part this Agreement, or any rights, duties,
obligations or liabilities under this Agreement (collectively
"assign"), by operation of law or otherwise without the prior
written consent of the other party, such consent not to be
unreasonably withheld or delayed; provided, however, so long as
the assignee shall not be a competitor of the other party, either
party shall have the right to assign all of its rights, duties,
obligations and liabilities under this Agreement to any AFFILIATE
or in connection with any sale, merger, consolidation,
recapitalization or reorganization involving in each case the
sale of all or substantially all of the capital stock of the
party or the assets of such party to which this Agreement
relates. This Agreement shall inure to the benefit of and be
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binding upon the permitted successors and assigns of METABOLIX
and TEPHA.
12. DISPUTE RESOLUTION
12.1. Except for the right of either party to apply to a court of
competent jurisdiction for a temporary restraining order, a
preliminary injunction or other equitable relief to preserve the
status quo or to prevent irreparable harm, and except for any
dispute relating to patent validity or infringement, any and all
claims, disputes or controversies arising under, out of or in
connection with the Agreement, shall be mediated in good faith.
The party raising such dispute shall promptly advise the other
party of such claim, dispute or controversy in a writing which
describes in reasonable detail the nature of such dispute. If the
parties by their senior management representatives shall be
unable to resolve the dispute within thirty ( 30 ) days, then by
no later than forty ( 40 ) business days after the recipient has
received such notice of dispute, each party shall have selected
for itself a representative who shall have the authority to bind
such party, and shall additionally have advised the other party
in writing of the name and title of such representative. By no
later than sixty (60 ) business days after the date of such
notice of dispute, such representatives shall schedule a date for
a mediation hearing with the Cambridge Dispute Settlement Center
or Endispute Inc. in Cambridge, Massachusetts. The parties shall
enter into good faith mediation and shall share the costs
equally. If the representatives of the parties have not been able
to resolve the dispute within thirty (30) business days after
such mediation hearing, the parties shall have the right to
pursue any other remedies legally available to resolve such
dispute in either the Courts of the Commonwealth of
Massachusetts, or in the United States District Court for the
District of Massachusetts, to whose jurisdiction for such
purposes METABOLIX and TEPHA each hereby irrevocably consents and
submits.
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12.2. Notwithstanding the foregoing, nothing in this Article shall be
construed to waive any rights or timely performance of any
oblations under this Agreement.
13. CONFIDENTIALTIY
13.1. Both METABOLIX and TEPHA agree that all information disclosed to
the other party shall be deemed "Confidential Information" of the
disclosing party. In particular, "Confidential Information" shall
be deemed to include, but not be limited to, KNOW-HOW, trade
secrets, information, ideas, inventions, materials, samples,
processes, procedures, methods, formulations, protocols,
packaging designs and materials, test data, future development
plans, "Product" launch date, technological know-how and
engineering, manufacturing, regulatory, marketing, servicing,
sales, or financial matters relating to the disclosing party and
its business.
13.2. During the term of this Agreement and thereafter each party shall
maintain all Confidential Information in confidence and shall not
disclose any Confidential Information to any third party or use
any such information for any unauthorized purpose. Each party may
use such Confidential Information only to the extent required to
accomplish the purposes of this Agreement. Both parties shall
take precautions as each normally takes with its own confidential
and proprietary information to prevent disclosure to third
parties, but no less than reasonable precautions.
13.3. Both parties agree that, notwithstanding the above, the
obligations of confidentiality and nonuse shall not apply to:
13.3.1. Information that at the time of disclosure is, or
thereafter becomes, generally known or available to the
public, through no wrongful act or failure to act on
the part of the receiving party;
13.3.2. Information that was known by or in the possession of
the receiving party at the time of receiving such
information from the disclosing party, as evidenced by
written records;
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13.3.3. Information obtained by the receiving party from a
third-party source who is not breaching a commitment of
confidentiality to the disclosing party by revealing
such information to the receiving party;
13.3.4. Information that is developed independently by the
receiving party without use of confidential information
of the other party, as evidenced by written records;
13.3.5. Information that is the subject of a granted written
permission to disclose that is issued by the disclosing
party to the other party;
13.3.6. Information that is required to be disclosed pursuant
to the law, by request of the FDA or other government
authority or for medical or safety reasons, but only to
the extent required to be disclosed by the FDA or other
government authority; or
13.3.7. Information provided to consultants, subcontractors or
agents for purposes consistent with this Agreement
pursuant to a non-disclosure agreement with said
parties.
13.4. Both Parties shall make diligent efforts to ensure that all
employees, consultants, agents and subcontractors who may have
access to Confidential Information of the other party, and any
other third parties who might have access to Confidential
Information, shall sign nondisclosure agreements consistent with
the terms set forth in this Section. No Confidential Information
shall be disclosed to any employees, subcontractors, agents,
consultants or third parties who do not have a need to receive
such information for the purposes of this Agreement.
14. TERMINATION
14.1. If TEPHA shall cease to carry on its business, this Agreement
shall terminate upon notice by METABOLIX, except as provided in
Article 11 (Assignment).
14.2. Should TEPHA fail to make any payment whatsoever due and payable
to METABOLIX hereunder, METABOLIX shall have the right to
terminate this Agreement effective on sixty (60) days' notice,
unless TEPHA shall make all such
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payments to METABOLIX, within said sixty (60) day period. Upon
the expiration of the sixty (60) day period, if TEPHA shall not
have made all such payments to METABOLIX, the rights, privileges
and license granted hereunder shall automatically terminate.
14.3. Upon any material breach or default of this Agreement by TEPHA,
other than those occurrences set out in Paragraphs 14.1 and 14.2
hereinabove, which shall always take precedence in that order
over any material breach or default referred to in this Paragraph
14.3, METABOLIX shall have the right to terminate this Agreement
and the rights, privileges and license granted hereunder
effective on one hundred and twenty (120) days' notice to TEPHA.
Such termination shall become automatically effective unless
TEPHA shall have cured any such material breach or default prior
to the expiration of the one hundred and twenty (120) day period.
Upon any material breach or default of this Agreement by
METABOLIX, TEPHA shall have the right to terminate this Agreement
and the rights, privileges and license granted hereunder
effective on one hundred and twenty (120) days' notice to
METABOLIX. Such termination shall become automatically effective
unless METABOLIX shall have cured any such material breach or
default prior to the expiration of the one hundred and twenty
(120) day period.
14.4. TEPHA shall have the right to terminate this Agreement at any
time on six (6) months' notice to METABOLIX, and upon payment of
all amounts due METABOLIX through the effective date of the
termination.
14.5. Upon termination of this Agreement for any reason, nothing herein
shall be construed to release either party from any obligation
that matured prior to the effective date of such termination; and
Articles 1, 8, 9, 10, 12, 13, 14.5, 14.6, and 16 shall survive
any such termination. TEPHA and any sublicensee thereof may,
however, after the effective date of such termination, sell all
LICENSED PRODUCTS in inventory, and complete LICENSED PRODUCTS in
the process of manufacture at the time of such termination and
sell the same, provided that TEPHA shall pay to METABOLIX the
Running Royalties thereon as required by
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Article 4 of this Agreement and shall submit the reports required
by Article 5 hereof on the sales of LICENSED PRODUCTS.
14.6. Upon termination of this Agreement for any reason, any sublicense
not then in default shall continue in full force and effect
except that METABOLIX shall be substituted in place of the TEPHA,
and METABOLIX shall have no obligations under such sublicense
beyond their obligations herein.
14.7. Upon termination of this AGREEMENT for any reason *, to all
information then in TEPHA's possession relevant to the
commercialization of LICENSED PRODUCTS and/or LICENSED PROCESSES,
including, but not limited to, KNOW-HOW and IMPROVEMENTS owned or
controlled by TEPHA as of the effective date of termination
(whether such know-how and improvements shall be owned or
CONTROLLED by TEPHA during the two-year period after the
EFFECTIVE DATE or at any time during the term of this Agreement),
research results, toxicology data, assays, preclinical data,
prototypes, manufacturing processes including cell lines and
unused, unexpired amounts of LICENSED PRODUCTS, clinical results,
regulatory submissions, suppliers and customer lists. *.
15. PAYMENTS, NOTICES AND OTHER COMMUNICATIONS
15.1. Any payment, notice or other communication pursuant to this
Agreement shall be sufficiently made or given on the date of
mailing if sent to such party by certified first class mail,
postage prepaid, return receipt requested addressed to it at its
address below or as it shall designate by written notice given to
the other party:
In the case of METABOLIX:
President
METABOLIX, Inc.
303 Third Street
Cambridge, Massachusetts 02142
In the case of TEPHA:
President
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TEPHA, Inc.
303 Third Street
Cambridge, Massachusetts 02142
16. MISCELLANEOUS PROVISIONS
16.1. This Agreement shall be construed, governed, interpreted and
applied in accordance with the laws of the Commonwealth of
Massachusetts, U.S.A., except that questions affecting the
construction and effect of any patent shall be determined by the
law of the country in which the patent was granted.
16.2. The parties hereto acknowledge that this Agreement sets forth the
entire Agreement and understanding of the parties hereto as to
the subject matter hereof, and shall not be subject to any change
or modification except by the execution of a written instrument
subscribed to by the parties hereto.
16.3. The provisions of this Agreement are severable, and in the event
that any provisions of this Agreement shall be determined to be
invalid or unenforceable under any controlling body of the law,
such invalidity or unenforceability shall not in any way affect
the validity or enforceability of the remaining provisions
hereof.
16.4. The failure of either party to assert a right hereunder or to
insist upon compliance with any term or condition of this
Agreement shall not constitute a waiver of that right or excuse a
similar subsequent failure to perform any such term or condition
by the other party.
16.5. TEPHA agrees to mark the LICENSED PRODUCTS sold in the United
States with all applicable United States patent numbers. All
LICENSED PRODUCTS shipped to or sold in other countries shall be
marked in such a manner as to conform with the patent laws and
practice of the country of manufacture or sale.
IN WITNESS WHEREOF, the parties have duly executed this Agreement the day
and year set forth below.
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METABOLIX, INC.
By: /s/ Edward M. Muller
---------------------------
Name: Edward M. Muller
---------------------------
Title: President
---------------------------
Date: 10/1/99
---------------------------
TEPHA, INC.
By: /s/ Simon F. Williams
---------------------------
Name: Simon F. Williams
---------------------------
Title: President
---------------------------
Date: October 1, 1999
---------------------------
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