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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 9th day of September, 2003
(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 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 "Tepha").
WHEREAS, Metabolix is the assignee from Monsanto Company ("Monsanto") of
all right, title and interest in the Patent Rights, Biological Materials and
Know-How (all as defined herein);
WHEREAS, Metabolix wishes to grant, and Tepha wishes to receive, license
rights to the Patent Rights, Biological Materials and Know-How; and
WHEREAS, the grant of such license rights is subject to the prior written
approval of Monsanto, which has been obtained, and a copy of which is attached
as Appendix D for reference only.
NOW THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto agree as follows:
1. DEFINITIONS.
1.1. "Patent Rights" shall mean: (i) the U.S. and foreign patent
applications and patents set forth in Appendix A, and the inventions
described and/or claimed therein, and all other patent rights
assigned to Metabolix by Monsanto not relating to plant crop
production of PHAs shall be added to Appendix A by amendment; (ii)
any divisionals, continuations and continuation-in-part applications
which shall be directed to subject matter specifically described in
such patent applications; (iii) the resulting U.S. and foreign
patents; (iv) any reissues, reexaminations or extensions of such
patents; and (v) all foreign counterparts of the above patent
applications and patents. For the avoidance of doubt, the Patent
Rights do not include any of the Zeneca Limited patent rights
licensed to Metabolix by Monsanto in the Patent Sub-License Agreement
dated May 14, 2001.
1.2. "Biological Materials" shall mean the biological materials set forth
in Appendix B, and all Progeny and Unmodified Derivatives of those
materials, but excluding Modifications. "Progeny" shall mean an
unmodified descendant from the Biological Materials, such as virus
from virus, cell from cell, or organism from organism. "Unmodified
Derivatives" shall mean substances created by Tepha which constitute
an unmodified functional subunit or product expressed by the
Biological Material(s), (some examples include: subclones of
unmodified cell
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lines, purified or fractionated subsets of the Biological
Material(s), proteins expressed by DNA/RNA supplied by Metabolix, or
monoclonal antibodies secreted by a hybridoma cell line).
1.3. "Modifications" shall mean substances created by Tepha that
contain/incorporate Biological Material(s).
1.4. "Know-How" shall mean the know-how set forth in Appendix C.
1.5. "Field" shall mean IN VIVO human and veterinary medical use of
polymers falling within the Patent Rights, including, without
limitation, tissue engineering, cell therapy, implantables, medical
devices, wound sealants, prescription and non-prescription drug
delivery, and contrast agents, but excluding (i) medical disposables,
surgical drapes and trays, sanitary products, barrier contraceptives,
nutritional and all other diagnostic uses and (ii) transgenic plant
crop production of polymers. For the purpose of clarity, it is agreed
and understood that, notwithstanding anything in the prior sentence
to the contrary, diagnostic systems and/or devices used to monitor
the IN VIVO use of a Licensed Product shall be included within the
Field. For the purpose of determining whether a use falls within the
Field, the parties shall apply the following guidelines: (x)
regulation of a use by the U.S. Food and Drug Administration or other
regulatory body shall be indicative but not presumptive that a use is
an IN VIVO use, and (y) uses marketed only to physicians shall
primarily fall within the Field, and (z) uses marketed directly only
to consumers shall primarily fall outside the Field.
1.6. "Net Sales shall mean Tepha's billings for the use, sale, lease or
other disposition of Licensed Products and Licensed Processes, and
the fair market value of noncash consideration, less:
1.6.1 discounts allowed in amounts customary in the trade;
1.6.2 sales, tariff duties and/or use taxes directly imposed and
with reference to particular sales;
1.6.3 outbound transportation prepaid or allowed; and
1.6.4 amounts allowed or credited on returns.
No deduction shall be made for commissions paid to individuals whether they
be with independent sales agencies or regularly employed by Licensee 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. If a Licensed
Product or Licensed Process shall otherwise be distributed or invoiced for
a discounted price substantially lower than customary in the trade or
distributed at no cost to Tepha Affiliates 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 material
whose composition or manufacture is covered by the Patent Rights ("Patented
Material") plus other materials (such as a growth factor, but not, for
example, filler materials) that are not
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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
Patented Material divided by the total fully loaded manufacturing cost of
the total combination product. When the Licensed Product consists of a
combination product consisting of a component made from the Patented
Material plus other components, then "Net Sales" shall mean Net Sales of
the total product multiplied by the fully loaded manufacturing cost of the
Patented Material 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.
1.7. "Tepha" and "Metabolix" shall include "Affiliates." "Affiliates"
shall mean 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, an
organization which directly or indirectly controls more than fifty
percent (50%) of the voting stock of Tepha or Metabolix, and an
organization the majority ownership of which is directly or
indirectly common to the ownership of Tepha or Metabolix.
1.8. "Licensed Process" means any 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 such process is used or
in which the Licensed Product made thereby is used or sold.
1.9. "Licensed Product" means any product or part thereof which: (i) 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 (ii) 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.
2. LICENSE GRANT AND OWNERSHIP
2.1. NONEXCLUSIVE LICENSE. Subject to the terms and conditions of this
Agreement, Metabolix hereby grants to Tepha the worldwide,
nonexclusive right and license, with the right to sublicense, in the
Field: (i) under the Patent Rights 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; (ii) to make, have made, use, lease,
sell, offer for sale, import and create Modifications of the
Biological Materials; and (iii) to use Know-How.
2.2. EXCLUSIVE LICENSE. Subject to the terms and conditions of this
Agreement, Metabolix hereby grants to Tepha the worldwide,
royalty-free, exclusive right and license, with the right to
sublicense, in the Field to make, have made, use, lease, sell, offer
for sale and import Modifications.
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2.3. DELIVERY. Tepha shall have thirty (30) days after the Effective Date
to review and make copies of the Know-How and Biological Materials.
Metabolix makes no representations regarding the viability of any of
the Biological Materials. After thirty (30) days from the Effective
Date, any request to review or make copies of the Know-How or
Biological Materials shall be at Metabolix's discretion.
2.4. OWNERSHIP OF MODIFICATIONS. Tepha hereby assigns to Metabolix all of
its right, title and interest in and to the Modifications, including
any and all intellectual property rights therein. Tepha also agrees
to promptly execute all assignments and patent applications, and
similar documents as reasonably requested by Metabolix. If Metabolix
shall be unable to obtain Tepha's execution of such documents for any
reason, Tepha hereby irrevocably appoints Metabolix and its agents as
Tepha's agents and attorneys-in-fact to execute such documents with
the same legal effect as if Tepha shall have executed them.
2.5. RIGHT TO SUBLICENSE. Tepha's right to sublicense in Paragraphs 2.1
and 2.2 is subject to Metabolix' prior written approval during the
period that Metabolix requires Monsanto's approval to sublicense.
Tepha agrees to insert a provision in each sublicense that Metabolix
is a third party beneficiary of the sublicense as to the sublicensed
Patent Rights, with the right to enforce the applicable terms thereof
in the event Tepha does not enforce its rights.
2.6. NO OTHER RIGHTS. Nothing in this Agreement shall be construed to
confer any rights upon Tepha by implication, estoppel or otherwise
beyond the express licenses granted by Metabolix or as to any
technology or patent rights of Metabolix or any other entity other
than the Patent Rights, Biological Materials and Know-How.
2.7. MONSANTO RIGHTS. Monsanto retains certain rights to Patent Rights as
collateral in the event of default by Metabolix under a Security
Agreement between Monsanto and Metabolix dated May 12, 2001, and this
Agreement is subject to Monsanto's rights therein. Monsanto has
granted its approval of this Agreement in the letter attached as
Appendix D; however, Monsanto retains all of its rights during the
remaining term of the Security Agreement, including without
limitation its rights to Patent Rights as collateral, and in the
event Tepha exercises its right to sublicense third parties, such
sublicenses shall also be subject to such Monsanto's rights.
3. ROYALTIES
3.1. LICENSE ISSUE FEE. In partial consideration for the license rights
granted herein, Tepha shall pay Metabolix a License Issue Fee of *
which shall be deemed earned and due as follows: * on the Effective
Date, and * on each of the six-month, twelve-month and
eighteenth-month anniversaries of the Effective Date; provided,
however, the balance of the full amount of such License Issue Fee
shall be due upon the raising by Tepha of * (cumulatively) after the
Effective Date in investment capital and/or research and development
funds in connection with the
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Patent Rights, Biological Materials and Know-How, and payment shall
be made within thirty (30) days thereafter.
3.2 RUNNING ROYALTIES. In partial consideration for the license rights
granted herein, Tepha shall pay Metabolix running royalties of * of
Net Sales by Tepha ("Running Royalty"); provided, however, the
maximum cumulative Running Royalties due on particular Net Sales of
any Licensed Product or Licensed Process payable by Tepha to
Metabolix for any quarter under (i) this Agreement, and (ii) the
sublicense from Metabolix to Tepha to certain Massachusetts Institute
of Technology patent rights dated October 1, 1999, as amended, shall
be * of such Net Sales, subject to any deductions permitted under
Paragraph 3.7.
3.3 SUBLICENSE REVENUE. Tepha shall pay Metabolix a * share of gross
sublicensing revenue, including sublicense issue fees, milestone
payments, license maintenance fees, royalties on net sales, and
similar consideration, and including, for the avoidance of doubt, the
fair market value of any sublicense rights granted in a multi-part
transaction, but excluding research and development funding received
by Tepha; provided, however, the maximum cumulative share of gross
sublicensing revenue in regard to a particular sublicense payable by
Tepha to Metabolix for any quarter under (i) this Agreement, and (ii)
the sublicense from Metabolix to Tepha to certain Massachusetts
Institute of Technology patent rights dated October 1, 1999, as
amended, shall be * of such gross sublicensing revenue. For purposes
herein, sublicensees' net sales shall have a parallel meaning to the
definition of Tepha's Net Sales in Paragraph 1.6.
3.4 PAYMENTS IN FULL. 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 1.6.2.
3.5 NO MULTIPLE ROYALTIES. No multiple Running Royalties shall be payable
because any Licensed Product or Licensed Process, its manufacture,
use, sale or importation are or shall be covered by more than one
patent application or patent licensed under this Agreement.
3.6 PAYMENT. 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 currency conversion shall
be required in connection with the payment of royalties hereunder,
such conversion shall be made by using the exchange rate published in
the Wall Street Journal on the last business day of the calendar
quarterly reporting period to which such royalty payments relate.
3.7 THIRD PARTY LICENSES. To the extent that Tepha has executed or 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, Tepha may deduct from the Running Royalty due to Metabolix
under Paragraph 3.2, * of the running royalties due on such third
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party patents or intellectual property up to an amount equal to * of
the Running Royalties due hereunder.
3.8 APPLICATION OF CREDITS. Any credits against Running Royalties
permitted under this Agreement may be applied by Tepha, cumulatively,
up to * the Running Royalties otherwise due in the respective
quarterly accounting period; provided, Tepha may carry over unused
credits to subsequent quarterly accounting periods. Notwithstanding
the applicability of credits under one or more Paragraphs of this
Agreement, the minimum Running Royalties due from Tepha shall be * of
the Running Royalties otherwise payable, subject to the maximum set
forth in Paragraph 3.2.
4. PATENT PROSECUTION
4.1. PATENT PROSECUTION. Throughout the term of this Agreement, Metabolix,
at its own expense, shall file, prosecute and maintain the Patent
Rights. If Metabolix shall elect not to file, prosecute or maintain
any Patent Right, Metabolix shall notify Tepha in writing with at
least thirty (30) days notice prior to any filing, action, payment or
the like being due, in which event Tepha shall have the right to
file, prosecute or maintain such Patent Right, at Tepha's expense in
Metabolix' name. Metabolix agrees to execute, and agrees to use
reasonable efforts to ensure that its employees shall execute, all
documents necessary to perfect filing, advance prosecution and/or
effect issue of any patents upon any such applications. After notice
of such election by Metabolix, Tepha shall have no further royalty
obligations under Paragraphs 3.2 and 3.3 with respect to such patents
or applications.
5. RECORDS AND PAYMENTS
5.1. RECORDS AND AUDIT. Tepha shall keep true and accurate books of
account containing all particulars that may be necessary for the
purpose of showing the amounts payable to Metabolix hereunder. Said
books of account shall be kept at Tepha's principal place of business
and shall be open at all reasonable times for three (3) years
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 statements or compliance in other respect with this
Agreement. Should such inspection lead to the discovery of a greater
than Ten Percent (10%) discrepancy in reporting to Metabolix's
detriment, Tepha agrees to pay the cost of such inspection.
5.2. REPORTS AND PAYMENTS. Within thirty (30) days after the end of each
calendar quarter during the term of this Agreement, Tepha shall send
to Metabolix a report showing the Net Sales of the Licensed Products
and Licensed Processes, including calculation of deductions, and
sublicensing gross revenue for such quarter and shall pay the
appropriate royalties to Metabolix.
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5.3. INTEREST. The amounts due under Articles 3 shall, if overdue, bear
interest until payment at a per annum rate * above * in effect at
Fleet Bank, or its successors, 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. DUE DILIGENCE
6.1. DILIGENT EFFORTS. 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
6.2. GOVERNMENTAL APPROVALS AND MARKETING OF LICENSED PRODUCTS. Tepha or
its designees shall be responsible for obtaining all necessary
governmental approvals for the development, production, distribution,
sale and use of any Licensed Product, at Tepha's, or its designees',
expense, including, without limitation, any safety studies. Tepha or
its designees shall have sole responsibility for any warning labels,
packaging and instructions as to the use of Licensed Products and for
the quality control for any Licensed Product.
7. INFRINGEMENT
7.1. NOTICE. Tepha and Metabolix shall each inform the other promptly in
writing of any alleged or threatened infringement of the Patent
Rights by a third party and of any available evidence thereof.
7.2. PURSUIT OF INFRINGERS. 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 by a third party in
the Field by litigation or settlement discussions and, in furtherance
of such right, Metabolix 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. In the event that
Tepha shall undertake the enforcement of the Patent Rights in the
Field by litigation, Tepha may withhold up to * of the Running
Royalties otherwise thereafter due to Metabolix under Paragraph 3.2
and apply the same toward reimbursement of up to * of Tepha's
expenses, including reasonable attorneys' fees, in connection
therewith.
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
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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 Patent Rights in the Field. 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. The balance
remaining from any such recovery shall be divided with * to the
non-prosecuting party and any remaining balance to the prosecuting
party.
7.5. In the event of the institution of any suit by a third party against
Metabolix, Tepha or its sublicensees for patent infringement
involving the Patent Rights in the Field, 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 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, then * of Tepha's Running Royalty obligation in
Paragraph 3.2 during the pendency of defense in the proceeding shall
be held in an interest-bearing escrow account by Tepha until a final
decision shall be rendered by a court or administrative tribunal of
competent jurisdiction from which no appeal can be or is taken
provided that:
7.6.1 If the enforceability of all material claims in such Patent
Right claiming the Licensed Product or Licensed Process is
upheld by a court of other legal or administrative tribunal
from which no appeal is or can be taken, then the amount of
Running Royalties withheld during the period of escrow, plus
all accrued interest, shall be promptly paid to Metabolix; or
7.6.2 If one or more claims in such Patent Right covering the
Licensed Product or Licensed 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 Licensed Process in such
country, then the amount of Running Royalties withheld during
the period of escrow shall not be owed to Metabolix; Tepha
shall be entitled to all payments and accrued interest in the
escrow account; and the Running Royalties otherwise payable
shall
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be abated in their entirety with respect to Net Sales of
Licensed Products or Licensed Processes covered only by such
Patent Right in the country in which such claims were so held
invalid or unenforceable or so modified.
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 or Licensed Products or
Licensed 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.
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.
8. PRODUCT LIABILITY
8.1. INDEMNIFICATION. Tepha shall at all times during the term of this
Agreement and thereafter, indemnify, defend and hold Metabolix and
Monsanto, their directors, officers, employees and Affiliates,
harmless against all claims and expenses, arising out of the death of
or injury to any person or persons or out of any damage to property
and against any other claim, proceeding, demand, expense and
liability of any kind whatsoever resulting from or relating to the
production, manufacture, sale, use, lease, consumption or
advertisement of the Licensed Products and/or Licensed Process(es) *.
8.2. INSURANCE. 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 Monsanto 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 Monsanto
as additional named insured thereunder, shall be endorsed to include
product liability coverage and shall require thirty (30) days written
notice to be given to Metabolix 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. Tepha shall maintain such commercial general
liability insurance during the period that any Licensed Product or
Licensed Process is being used, distributed or sold and for six (6)
years thereafter.
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9. WARRANTIES AND DISCLAIMER
9.1. Metabolix warranty. Metabolix represents and warrants to Tepha that
Metabolix *.
9.2. DISCLAIMER. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT: NEITHER
PARTY, NOR THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES AND
AFFILIATES MAKE ANY REPRESENTATIONS OR EXTEND ANY WARRANTIES OF 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 MONSANTO THAT THE PRACTICE OF
THE LICENSES GRANTED HEREUNDER SHALL NOT INFRINGE THE PATENT RIGHTS
OR OTHER INTELLECTUAL OR PROPRIETARY RIGHTS OF ANY THIRD PARTY.
10. LIMITATION OF LIABILITY
10.1. NO CONSEQUENTIAL DAMAGES. *, IN NO EVENT SHALL METABOLIX, TEPHA, OR
THEIR RESPECTIVE DIRECTORS, 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 BE ADVISED, SHALL HAVE OTHER REASON TO KNOW,
OR IN FACT SHALL KNOW OF THE POSSIBILITY OF THE FOREGOING.
11. EXPORT CONTROLS
11.1. 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 approval of such agency. Metabolix neither represents that a
license shall not be required nor that, if required, it shall be
issued.
12. NON-USE OF NAMES
12.1. Except as required by law or in raising funding, neither party shall
use the names or trademarks of the other, nor any adaptation thereof,
nor the names of any of the
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other party's employees, in any advertising, promotional or sales
literature without prior written consent obtained from such party, or
said employee, in each case, such consent not to be unreasonably
withheld, except that Tepha may state that it is licensed by
Metabolix, under one or more of the patents and/or applications
comprising the Patent Rights. 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.
13. DISPUTE RESOLUTION
13.1. 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 or another mutually agreeable
mediator. 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.
13.2. Notwithstanding the foregoing, nothing in this Article shall be
construed to waive any rights or timely performance of any
obligations under this Agreement.
14. CONFIDENTIALITY
14.1. CONFIDENTIAL INFORMATION. Both Metabolix and TEPHA agree that all
confidential 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, Biological Materials, trade secrets,
information, ideas, inventions, materials, samples, processes,
procedures, methods, formulations, protocols, packaging designs and
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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.
14.2. NONDISCLOSURE AND NONUSE. During the term and thereafter each
receiving party: (i) shall maintain all Confidential Information in
confidence; (ii) shall not disclose any Confidential Information to
any third party without prior written consent of the disclosing party
except that the receiving party may disclose in connection with
consultants, subcontractors or agents or raising funding and
technical development activities for purposes consistent with this
Agreement pursuant to a written non-disclosure agreement with said
parties, having terms of nondisclosure and nonuse at least as
restrictive as those set forth herein; and (iii) shall use such
Confidential Information only to the extent required to accomplish
the purposes of this Agreement. A receiving party may disclose
Confidential 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. 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.
14.3. EXCEPTIONS. Both parties agree that, notwithstanding the above, the
obligations of confidentiality and nonuse shall not apply to:
14.3.1 Information that at the time of disclosure is, or thereafter
becomes, generally known to the public, through no wrongful
act or failure to act on the part of the receiving party;
14.3.2 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;
14.3.3 Information obtained by the receiving party from a third party
who is not breaching a commitment of confidentiality to the
disclosing party by revealing such information to the
receiving party, as evidenced by written records; or
14.3.4 Information that is developed independently by the receiving
party without use of confidential information of the other
party, as evidenced by written records.
14.4. 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
Paragraph. 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.
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15. TERMINATION
15.1. TERMINATION BY METABOLIX. If Tepha shall cease to carry on its
business, this Agreement shall terminate effective upon notice by
Metabolix.
15.2. TERMINATION FOR NONPAYMENT. 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 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.
15.3. TERMINATION FOR MATERIAL BREACH. Upon any material breach or default
of this Agreement by Tepha, other than those occurrences set out in
Paragraphs 15.1 and 15.2 hereinabove, which shall always take
precedence in that order over any material breach or default referred
to in this Paragraph 15.3, 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.
15.4. TERMINATION BY TEPHA. 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 termination.
15.5. DEFINITION OF EXPIRATION. For purposes of this Agreement, the term
"expiration" shall mean expiration of the last to expire of the
Patent Rights, and the co-terminus expiration of this Agreement,
subject to the surviving licenses and provisions. The term
"termination" shall mean termination of this Agreement prior to
expiration in accordance with this Article 15.
15.6. EFFECTS OF TERMINATION. Upon expiration or termination of this
Agreement for any reason: (i) nothing herein shall be construed to
release either party from any obligation that matured prior to
expiration or the effective date of termination; (ii) Articles 1,
2.4, 5.1 (for three (3) years), 7.1 (as to any infringement action
instituted prior to termination), 8, 10, 13, 14, 16.4, 16.5, 16.6 and
17 shall survive expiration or any termination; (iii) for a period of
six (6) months after the effective date of termination, Tepha and its
sublicensees may sell Licensed Products in inventory, and complete
Licensed Products in the process of
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manufacture at the time of such termination and sell the same,
provided that Tepha shall pay the Running Royalties thereon as
required by Article 3 of this Agreement and shall submit the reports
required by Article 5 hereof on the sales of Licensed Products; (iv)
if requested, each party shall immediately return all Confidential
Information to the disclosing party and shall cease and refrain from
any further use of such Confidential Information; (v) 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; (vi) upon termination (as defined in Paragraph
15.5), if requested by Metabolix, Tepha shall return all Biological
Materials and Know-How; and (vii) after expiration of this Agreement
(as defined in Paragraph15.5), Tepha shall retain a perpetual,
irrevocable, royalty-free, non-exclusive, transferable, worldwide
license in the Field, with the right to sublicense, to use the
Know-How.
15.7. LICENSE TO METABOLIX. Upon termination of this Agreement for any
reason (except expiration or termination by Tepha for breach by
Metabolix under Paragraph 15.3), Tepha shall, grant and hereby grants
Metabolix a nonexclusive license, with the right to sublicense, to
all information then in Tepha's possession relevant to the
commercialization of Licensed Products and/or Licensed Processes,
including, but not limited to, 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. In such event Tepha shall receive a royalty equal to
* of the gross amount of consideration, if any, subsequently received
by Metabolix with respect to the Licensed Products and Licensed
Processes.
16. GENERAL
16.1. INTEGRATED AGREEMENT. This Agreement (including its Appendices, which
are incorporated herein by reference) constitutes the complete and
exclusive statement of the agreement between the parties, and
supersedes all prior agreements, proposals, negotiations and
communications between the parties, both oral and written, regarding
the subject matter hereof.
16.2. WAIVER OR AMENDMENT. No waiver, alteration or amendment of any of the
provisions of this Agreement shall be binding unless made in writing
and signed by each of the parties hereto.
16.3. NOTICES. 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.
If to Metabolix:
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Metabolix, Inc.
303 Third Street
Cambridge, MA 02142
Attn: President
Fax: 617-492-1996
If to Tepha:
Tepha, Inc.
303 Third Street
Cambridge, MA 02142
Attn: President
Fax: 617-492-1996
All such notices, if properly addressed, shall be effective when received.
16.4. GOVERNING LAW. This Agreement shall be construed, governed,
interpreted and applied in accordance with the laws of the
Commonwealth of Massachusetts, without regard to conflict of laws
principles, and as necessary the laws of the United States of
America, 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. Each party agrees that venue for any dispute
arising under this Agreement shall be Boston, Massachusetts, and
waives any objection it has or may have in the future with respect to
such venue.
16.5. FAILURE TO EXERCISE REMEDY. If either party fails to enforce any term
of this Agreement or fails to exercise any remedy, such failure to
enforce or exercise on that occasion shall not prevent enforcement or
exercise on any other occasion.
16.6. NON-EXCLUSIVE RIGHTS. The rights and remedies of the parties provided
in this Agreement shall not be exclusive and are in addition to any
other rights and remedies available at law or in equity.
16.7. ASSIGNMENT. 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 without consent 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 the capital
stock of the party or all or substantially all of the assets of such
party to which this Agreement relates. Subject to the foregoing, this
Agreement shall inure to the benefit of and be binding upon the
permitted successors and assigns of Metabolix and Tepha.
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16.8. INDEPENDENT CONTRACTORS. The parties agree that in the performance of
this Agreement they are and shall be independent contractors. Nothing
herein shall be construed to constitute either party as the agent of
the other party for any purpose whatsoever, and neither party shall
bind or attempt to bind the other party to any contract or the
performance of any obligation or represent to any third party that it
has any right to enter into any binding obligation on the other
party's behalf.
16.9. SEVERABILITY. 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.
16.10. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which when executed shall be deemed to be an
original but all of which taken together shall constitute one and the
same agreement.
16.11. PATENT MARKING. Tepha shall apply the patent marking notices
required by the law of any country where Licensed Products are made,
used, sold or imported.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement the day
and year set forth below.
Metabolix, Inc. Tepha, Inc.
By: /s/ Oliver P. Peoples By: /s/ Simon F. Williams
--------------------------------- ------------------------------------
Name: Oliver P. Peoples Name: Simon F. Williams
Title: Vice President R & D Title: President
Date: September 9, 2003 Date: September 9, 2003
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