MASSACHUSETTS INSTITUTE OF TECHNOLOGY
and
ORASOMAL TECHNOLOGIES, INC.
PATENT LICENSE AGREEMENT
(EXCLUSIVE)
TLO: LP
12/6/96
TABLE OF CONTENTS
WITNESSETH 1
1 DEFINITIONS 2
2 GRANT 3
3 DILIGENCE 4
4 ROYALTIES AND OTHER PAYMENTS 5
5 REPORTS AND RECORDS 6
6 PATENT PROSECUTION 8
7 INFRINGEMENT 8
8 PRODUCT LIABILITY 10
9 EXPORT CONTROLS 11
10 NON-USE OF NAMES 12
11 ASSIGNMENT 12
12 DISPUTE RESOLUTION 12
13 TERMINATION 13
14 PAYMENTS, NOTICES AND OTHER COMMUNICATIONS 14
15 MISCELLANEOUS PROVISIONS 14
APPENDIX A 16
APPENDIX B 17
MASSACHUSETTS INSTITUTE OF TECHNOLOGY
AND
ORASOMAL TECHNOLOGIES, INC.
PATENT LICENSE AGREEMENT
This Agreement is made and entered into this _____ day of December, 1996 (the
"Effective Date") by and between the Massachusetts Institute of Technology, a
corporation duly organized and existing under the laws of the Commonwealth of
Massachusetts and having its principal office at 00 Xxxxxxxxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxxxxxx 00000, X.X.X. (hereinafter referred to as "M.I.T."),
and Orasomal Technologies, Inc., a corporation duly organized under the laws
of the State of Delaware and a subsidiary of Endorex Corp. and having its
principal office at 000 Xxxxx Xxxxx Xxxxx, Xxxx Xxxxx, Xxxxxxxx 00000
(hereinafter referred to as "Licensee").
WITNESSETH
WHEREAS, M.I.T. is the owner of certain Patent Rights (as later defined
herein) relating to M.I.T. Case No. 6388, "Polymerized Liposomes with
Enhanced Stability," by Xxxxxxx Xxxxx, Xxxxxx Xxxxx and Xxxxxx X. Xxxxxx,
and has the right to grant licenses under said Patent Rights;
WHEREAS, M.I.T. desires to have the Patent Rights developed and commercialized
to benefit the public and is willing to grant a license thereunder;
WHEREAS, Licensee has represented to M.I.T., to induce M.I.T. to enter into
this Agreement, that Licensee is experienced in the development, production,
manufacture, marketing and sale of products similar to the Licensed Products
(as later defined herein) and/or the use of the Licensed Processes (as later
defined here) and that it shall commit itself to a thorough, vigorous and
diligent program of exploiting the Patent Rights so that public utilization
shall result therefrom; 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:
1 - DEFINITIONS
For the purposes of this Agreement, the following words and phrases shall have
the following meanings:
1.1 Licensee shall mean Orasomal Technologies, Inc., a Delaware corporation.
1.2 Patent Rights shall mean all of the following M.I.T. intellectual
property:
(a) the United States 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 patent applications, and the resulting patents;
(b) any patents resulting from reissues or reexaminations of the United
States patents described in (a) above;
(c) the Foreign patents, if any, listed in Appendix A;
(d) the Foreign patent applications, if any, 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;
(e) Foreign patent applications filed after the Effective Date in the
countries listed in Appendix B 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
(f) any Foreign patents, resulting from equivalent Foreign procedures to
United States reissues and reexaminations, of the Foreign patents
described in (c), (d) and (e) above.
1.3 A Licensed Product shall mean any product or part thereof which:
(a) is covered in whole or in part by an issued, unexpired claim in the
Patent Rights in the country in which any such product or part
thereof is made, used or sold; or
(b) 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
claim in the Patent Rights in the country in which any 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 is covered in whole or in
part by an issued, unexpired claim or a pending claim contained in the
Patent Rights.
1.5 Net Sales shall mean Licensee's and its sublicensees' xxxxxxxx for
Licensed Products and Licensed Processes less the sum of the following:
(a) discounts, rebates, and other price adjustments or price reduction
programs allowed in amounts customary in the trade for quantity
purchases, cash payments, prompt payments, to wholesalers and
distributors;
(b) sales, use, value-added and other direct taxes, tariff duties and/or
other governmental charges directly imposed and with reference to
particular sales;
(c) outbound transportation prepaid or allowed;
(d) amounts allowed or credited on returns; and
(e) bad debts, as written off in accordance with Licensee's (or
sublicensee's) customary accounting practices (which practices shall
be based on generally accepted accounting principles consistently
applied), provided that such bad debts do not exceed five percent
(5%) of total Net Sales per calendar year.
No deductions 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. Net Sales shall occur
when a Licensed Product or Licensed Process shall be invoiced. 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 or otherwise, Net Sales shall be
based on the customary amount billed for such Licensed Products or
Licensed Processes.
Net Sales shall be determined at the point of sale from Licensee (or
from its sublicensees) to an entity other than Licensee. Sales by
Licensee or a sublicensee to an entity other than Licensee shall
constitute a sale for purposes of this definition if the entity or
sublicensee is the end user of the Licensed Product or Licensed Process.
Notwithstanding the foregoing, any Licensed Product or Licensed Process
used (but not sold for consideration) for promotional or advertising
purposes or used for clinical or other research purposes shall not be
considered Net Sales hereunder.
1.6 Territory shall mean any country in which patent rights exist
1.7 Major Country shall mean the United States of America, Great Britain,
France, Germany, or Japan.
1.8 Running Royalties shall mean a royalty paid on Net Sales of Licensed
Product or Licensed Process.
2 - GRANT
2.1 M.I.T. hereby grants to Licensee the exclusive right and license in the
Territory to practice under the Patent Rights and to make, have made,
use, lease, sell and import 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 Licensee agrees that Licensed Products leased or sold in the United
States shall be manufactured substantially in the United States.
2.3 M.I.T. reserves the right to practice under the Patent Rights for non-
commercial research purposes.
2.4 Licensee shall have the right to enter into sublicensing agreements for
the rights, privileges and licenses granted hereunder. Upon any
termination of this Agreement, sublicensees' rights shall also terminate,
subject to Paragraph 13.6 hereof.
2.5 Licensee agrees to incorporate terms and conditions substantively similar
to Articles 2, 5.1, 7.1, 7.2, 73, 7.5, 7.6, 8, 9, 10, 12 and 15 of this
Agreement into its sublicense agreements, that are sufficient to enable
Licensee to comply with this Agreement.
2.6 Licensee agrees to forward to M.I.T. a copy of any and all sublicense
agreements promptly upon execution by the parties.
2.7 Licensee 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 M.I.T.
2.8 Nothing in this Agreement shall be construed to confer any rights upon
Licensee by implication, estoppel or otherwise as to any technology or
patent rights of M.I.T. 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 - DILIGENCE
3.1 Licensee shall use its best 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 to continue
active, diligent marketing efforts for one or more Licensed Products or
Licensed Processes throughout the life of this Agreement.
3.2 Licensee shall deliver to M.I.T. on or before June 30, 1997, a business
plan showing the amount of money, number and kind of personnel and time
budgeted and planned for each phase of development of the Licensed
Products and Licensed Processes and shall provide similar reports to
M.I.T. on or before sixty (60) days of the close of each fiscal year of
Licensee thereafter.
3.3 On or before January 1, 1998 Licensee will start animal studies to
further evaluate and develop the technology described in the Patent
Rights as:
a) a potential carrier or delivery system for a vaccine and/or
b) a potential carrier system for a therapeutic agent, compound or drug.
3.4 On or before January 1, 2000 Licensee will enter Phase I clinical trials
or equivalent in the U.S. or other Major Country for at least one
application of the technology described in the Patent Rights.
3.5 Within 12 months of receiving approval for marketing the Licensed
Product by the F.D.A. or equivalent agency of a Major Country, Licensee
will have the product available for sale.
3.6 Licensee's failure to perform in accordance with either paragraph 3.1,
3.2, 3.3, 3.4. or 3.5 above shall be grounds to terminate this Agreement
pursuant to Paragraph 13.3 hereof.
4 - ROYALTIES AND OTHER PAYMENTS
4.1 For the rights, privileges and license granted hereunder, Licensee shall
pay royalties and other payments to M.I.T. in the manner hereinafter
provided to the end of the term of the Patent Rights or until this
Agreement shall be terminated:
(a) License Issue Fee of Twenty-Five Thousand Dollars ($25,000), which
said License Issue Fee shall be deemed earned and due immediately
upon the Effective Date.
(b) License Maintenance Fee of Ten Thousand Dollars ($10,000) per year
payable on January 1, 1998, January 1, 1999, and January 1, 2000,
provided, however, that such License Maintenance Fees may be fully
credited to Running Royalties subsequently due on Net Sales for
each said year. Furthermore, Licensee may submit evidence of money
spent the previous calendar year prosecuting the Patent Rights,
which money shall be fully creditable against the License
Maintenance Fees due in this paragraph. For example, money spent
between January 1, 1997 and December 31, 1997 shall be creditable
against the January 1, 1998 License Maintenance Fee.
(c) License Maintenance Fee of Ten Thousand Dollars ($10,000) per year
payable on January 1, 2001, January 1, 2002, and January 1, 2003,
provided, however, that such License Maintenance Fees may be fully
credited to Running Royalties subsequently due on Net Sales for each
said year. Furthermore, Licensee may submit evidence of money spent
the previous calendar year prosecuting the Patent Rights, which
money shall be fully creditable against up to one half of the
License Maintenance Fees due in this paragraph.
(d) License Maintenance Fee of Ten Thousand Dollars ($10,000) per year
payable on January 1, 2004 and each subsequent year, provided,
however, that such License Maintenance Fees may be fully credited
to Running Royalties subsequently due on Net Sales for each said
year.
(e) Licensee shall pay to M.I.T. a milestone payment of Twenty Thousand
Dollars ($20,000) upon the first Investigational New Drug
application incorporating the Patent Rights that is accepted and
approved by the U.S. Food and Drug Administration or equivalent
agency in a Major Country.
(f) Licensee shall pay to M.I.T. an additional milestone payment of Two
Hundred Fifty Thousand Dollars ($250,000) upon the first New Drug
Application or Product License Application or Establishment License
Application incorporating the Patent Rights that is approved by the
U.S. Food and Drug Administration or equivalent agency in a Major
Country.
(g) Licensee shall pay Running Royalties to M.I.T. equal to Three
Percent (3%) of Net Sales of Licensed Products.
(h) Licensee shall pay M.I.T. the greater of (i) one and one-half
percent (1.5%) of its sublicensee's Net Sales of Licensed Products,
or (ii) fifteen percent (15%) of earned royalties received from
sublicensee(s) of the Patent Rights.
(i) The Licensee shall pay M.I.T. fifteen percent (15%) of any lump sum
type payments, such as sublicense issue fees, received from
sublicensees for rights to the Patent Rights.
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(b).
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 United States dollars in Cambridge,
Massachusetts, or at such other place as M.I.T. 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 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 In the event that Licensee believes it necessary or appropriate to pay a
royalty to a third party in order to avoid infringement of such third
party's patent or other intellectual property rights arising from the
manufacture, use or sale of a Licensed Product or Licensed Process in a
country, Licensee will notify M.I.T. of such intention and discuss same
with M.I.T. In the event that Licensee pays a royalty or other payment
to such third party in order to avoid infringement of such third party's
patent or other intellectual property rights arising from the
manufacture, use or sale of a Licensed Product or Licensed Process in a
country, Licensee shall be entitled to offset fifty percent (50%) of
the royalty or other sums paid to such third party against the royalties
payable to M.I.T. on Net Sales of such Licensed Product or Licensed
Process in such country hereunder, provided, that the foregoing shall
not reduce the royalties payable for an accounting period with respect
to such country below fifty percent (50%) of the amount that would
otherwise have been paid. Amounts that Licensee is not able to apply or
offset against royalties in an accounting period shall be carried over
to succeeding accounting periods until fully applied.
5 - REPORTS AND RECORDS
5.1 Licensee shall keep full, true and accurate books of account containing
all particulars that may be necessary for the purpose of showing the
amounts payable to M.I.T. hereunder. Said books of account shall be
kept at Licensee's principal place of business or the principal place
of business of the appropriate division of Licensee to which this
Agreement relates. Said books and the supporting data shall be open
at all reasonable times for five (5) years following the end of the
calendar year to which they pertain, to the inspection of M.I.T. or its
agents for the purpose of verifying Licensee's royalty statement or
compliance in other respects with this Agreement. Should such
inspection lead to the discovery of a greater than ten percent (10%)
discrepancy in reporting to M.I.T.'s detriment, Licensee agrees to pay
the full cost of such inspection.
5.2 Licensee shall deliver to M.I.T. true and accurate reports, giving such
particulars of the business conducted by Licensee and its sublicensees
under this Agreement as shall be pertinent to diligence under Article 3
and royalty accounting hereunder:
(a) before the first commercial sale of a Licensed Product or Licensed
Process, annually, on April 30 of each year;
(i) amount spent toward the commercial development of Licensed
Products and Licensed Processes;
(ii) amount spent prosecuting the Patent Rights';
(iii) whether or not an Investigational New Drug application
incorporating the Patent Rights has been accepted by the U.S.
Food and Drug Administration or equivalent agency in a Major
Country;
(iv) whether or not a New Drug Application or Product License
Application or Establishment License Application incorporating
the Patent Rights has been approved by the U.S. Food and Drug
Administration or equivalent agency in a Major Country.
(b) after the first commercial sale of a Licensed Product or Licensed
Process, quarterly, within ninety (90) days after January 31,
April 30, July 31 and October 31, of each year.
These reports shall include at least the following:
(i) amount spent prosecuting the Patent Rights, only to the extent
such an accounting may be pertinent to a calculation of the
License Maintenance Fees below;
(ii) License Maintenance Fees due under Paragraphs 4.1(b), (c),
and (d);
(iii) number of Licensed Products manufactured, leased and sold by
and/or for Licensee and all sublicensees;
(iv) accounting for all Licensed Processes used or sold by and/or
for Licensee and all sublicensees;
(v) accounting for Net Sales, noting the deductions applicable as
provided in Paragraph 1.5;
(vi) Royalties due under Paragraph 4.1(g)
(vii) royalties due on other payments from sublicensees under
Paragraphs 4.1(h) and 4.1(i);
(viii) total royalties due; and
(ix) names and addresses of all sublicensees of License.
5.3 With each such report submitted, Licensee shall pay to M.I.T. the
royalties due and payable under this Agreement as Net Sales are
collected by Licensee and its sublicensees. If no royalties shall be
due, Licensee shall so report.
5.4 On or before the ninetieth (90th) day following the close of Licensee's
fiscal year, Licensee shall provide M.I.T. with Licensee's certified
financial statements for the preceding fiscal year including, at a
minimum, a balance sheet and an income statement.
5.5 The amounts due under Articles 4 and 6 shall, if overdue, bear interest
until payment at a per annum rate two percent (2%) above the prime rate
in effect at the Chase Manhattan Bank (N.A.) on the due date. The pay-
ment of such interest shall not foreclose M.I.T. from exercising any
other rights it may have as a consequence of the lateness of any
payment.
6 - PATENT PROSECUTION
6.1 M.I.T. shall apply for, seek prompt issuance of, and maintain the Patent
Rights during the term of this Agreement. Appendix B is a list of the
foreign countries in which patent applications corresponding to the
United States Patent applications listed in Appendix A shall be filed.
Appendix B may be amended by mutual agreement of both parties. The
filing, prosecution and maintenance of all Patent Rights applications
and patents shall be the primary responsibility of M.I.T.; provided,
however, Licensee shall have reasonable opportunities to advise M.I.T.
and shall cooperate with M.I.T. in such filing, prosecution and
maintenance. With the prior written consent of M.I.T., Licensee may
assume the responsibility in M.I.T.'s name and M.I.T.'s best interest
for the filing and prosecution of patent applications and the issuance
and maintenance of Patent Rights and in connection therewith Licensee
may retain the firm of Xxxxxx & Xxxxxxx as patent counsel, the fees and
expenses of which firm shall be borne by Licensee.
6.2 Payment of all fees and costs relating to the filing, prosecution and
maintenance of the Patent Rights incurred after the Effective Date
shall be the responsibility of Licensee. Licensee shall pay such fees
and costs to M.I.T. within thirty (30) days of invoicing; late payments
shall accrue interest and shall be subject to Paragraph 5.5.
7 - INFRINGEMENT
7.1 Licensee and M.I.T. shall promptly notify the other in writing of any
alleged or threatened infringement of any Patent Rights of which either
becomes aware. Both parties shall use all reasonable efforts in
cooperating with each other to terminate such infringement without
litigation. Licensee shall have the first right to bring and control
any action or proceeding with respect to such infringement at its own
expense and by counsel of its own choice as to any such Patent Rights,
and M.I.T. shall have the right, at its own expense, to be represented
in any action involving any such Patent Rights using counsel of its
own choice.
7.2 If Licensee fails to bring an action or proceeding within (i) 120 days
following receipt of written notice from M.I.T. with respect to such
alleged infringement, or (ii) 10 days before the time limit, if any, set
forth in the appropriate laws and regulations for the filing of such
actions, whichever comes first, with respect to those Patent Rights as
to which Licensee has the first right to bring and control an action
under Section 7.1 above, M.I.T. shall have the right to bring and
control any such action at its own expense and by counsel of its own
choice, and Licensee shall have the right, at its own expense, to be
represented in any such action by counsel of its own choice.
7.3 In the event a party hereto brings an infringement action under this
Section 7, the other party shall cooperate fully, including if required
to bring such action, the furnishing of a power of attorney. Licensee
will consult with M.I.T. as to any significant actions that Licensee
proposes to take with respect to same. The non-controlling party shall
give to the controlling party all authority (including the right to
exclusive control of the defense of any such suit, action or proceeding
and the exclusive right to compromise, litigate, settle or otherwise
dispose of any such suit, action or proceeding), information and
assistance necessary to defend or settle any such suit, action or
proceeding, and the controlling party shall have sole discretion to
determine actions to be taken or not taken in connection therewith and
the terms of any settlement; provided, however, that the controlling
party shall not have the right to settle any patent infringement
litigation under this Section 7 without the prior written consent of the
other party (not to be unreasonably withheld or delayed) in a manner
that diminishes the scope or duration of the Patent Rights, which would
constitute an amendment of this Agreement, which would adversely affect
the compensation or revenues to be derived by a party pursuant to this
Agreement, or which would require a payment by the other party
hereunder, or would require an admission of wrongdoing by the other
party. Except as otherwise agreed to by the parties as part of a cost
sharing arrangement, any recovery realized as a result of such
litigation, shall be applied first toward reimbursement of any
litigation expenses of Licensee and M.I.T., and then Licensee shall pay
M.I.T. Five Percent (5%) of the remainder.
7.4 M.I.T. will cooperate with Licensee, at Licensee's expense, in the
defense of any suit, action or proceeding against M.I.T. or Licensee, or
any sublicensee of Licensee, alleging the infringement of the
intellectual property rights of a third party by reason of the
manufacture, use or sale of a Licensed Product or Licensed Process.
Licensee will consult with M.I.T. as to any significant actions that
Licensee proposes to take with respect to same. M.I.T. shall give to
Licensee all authority (including the right to exclusive control of the
defense of any such suit, action, or proceeding), information and
assistance necessary to defend or settle any such suit, action or
proceeding, and Licensee shall have sole discretion to determine actions
to be taken or not taken in connection therewith and the terms of any
settlement; provided, however, Licensee shall obtain M.I.T.'s prior
written consent (not to be unreasonably withheld or delayed) to all or
such part of any settlement which would require a payment by M.I.T. (or
any of its affiliates) to such third party, would constitute an amend-
ment of this Agreement, would require an admission of wrongdoing in any
way by M.I.T. or its affiliates, or which may have an adverse effect on
the scope or duration of the Patent Rights licenses hereunder by M.I.T.;
and provided further, that if Licensee should require that M.I.T. (or
any of its affiliates or licensees) should institute or join in any such
suit, action or proceeding, pursuant to this Section 7.4, Licensee shall
hold M.I.T. (and any such affiliate or licensee, as applicable) free,
clear and harmless from any and all costs and expenses of such
litigation, including reasonable attorneys' fees, and M.I.T. shall
execute all documents, provide pertinent records, and take all other
actions, including using reasonable efforts to require persons within
its control to give testimony, which may be reasonably required in
connection with such litigation. Subject to the foregoing, M.I.T. (and
such affiliates and licensees) may participate in any such litigation or
other proceeding using attorneys of their choice and at their expense.
7.5 Licensee shall have the sole right, in accordance with the terms and
conditions herein, to sublicense any alleged infringer in the Territory
future use of the Patent Rights. Any upfront fees as part of such a
sublicense shall be treated in accordance with Article 4.
8 - PRODUCT LIABILITY
8.1 Licensee shall at all times during the term of this Agreement and
thereafter, indemnify, defend and hold M.I.T., its trustees, directors,
officers, employees and affiliates, harmless against all claims,
proceedings, demands and liabilities of any kind whatsoever, including
legal expenses and reasonable attorneys' fees, arising out of the death
of or injury to any person or persons or out of any damage to property,
resulting from the production, manufacture, sale, use, lease, consump-
tion or advertisement of the Licensed Product(s) and/or Licensed
Process(es) or arising from any obligation of Licensee hereunder.
8.2 Licensee shall obtain and carry in full force and effect commercial,
general liability insurance, including product liability and errors and
omissions insurance, which shall protect Licensee and M.I.T. 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 M.I.T. as an additional
named insured thereunder, shall be endorsed to include product liability
coverage and shall require thirty (30) days written notice to be given
to M.I.T. prior to any cancellation or material change thereof. The
limits of such insurance shall not be less than One Million Dollars
($1,000,000.00) per occurrence with an aggregate of Three Million
Dollars ($3,000,000.00) for personal injury including death; One Million
Dollars ($1,000,000.00) per occurrence with an aggregate of Three
Million Dollars ($3,000,000.00) for property damage; and One Million
Dollars ($1,000,000.00) per occurrence with an aggregate of Three
Million Dollars ($3,000,000.00) for errors and omissions. Licensee
shall provide M.I.T. with Certificates of Insurance evidencing the same.
8.3 EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, M.I.T., ITS
TRUSTEES, DIRECTORS, OFFICERS, EMPLOYEES, AND AFFILIATES MAKE NO
REPRESENTATIONS AND EXTEND NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR
IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY,
FITNESS FOR 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 M.I.T. THAT THE PRACTICE BY
LICENSEE OF THE LICENSE GRANTED HEREUNDER SHALL NOT INFRINGE THE PATENT
RIGHTS OF ANY THIRD PARTY.
8.4 IN NO EVENT SHALL M.I.T., ITS TRUSTEES, 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 M.I.T. SHALL BE ADVISED, SHALL HAVE OTHER REASON
TO KNOW, OR IN FACT SHALL KNOW OF THE POSSIBILITY OF THE FOREGOING.
9 - EXPORT CONTROLS
Licensee 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 Licensee that Licensee shall not
export data or commodities to certain foreign countries without prior
approval of such agency. M.I.T. neither represents that a license shall
not be required nor that, if required, it shall be issued.
10 - NON-USE OF NAMES
Licensee shall not use the names or trademarks of the Massachusetts
Institute of Technology or Lincoln Laboratory, nor any adaptation
thereof, nor the names of any of their employees, in any advertising,
promotional or sales literature without prior written consent obtained
from M.I.T., or said employee, in each case, except that Licensee may
state that it is licensed by M.I.T. under one or more of the patents
and/or applications comprising the Patent Rights.
11 - ASSIGNMENT
11.1 Before either: a) the start of Phase I clinical trials of a Licensed
Product or b) January 1, 2000, provided that Licensee has invested a
minimum of Three Hundred Thousand Dollars ($300,000) toward the
development of Licensed Products and Licensed Processes, this License is
assignable with M.I.T.'s written consent, which consent shall not
unreasonably be withheld, providing that such assignment or transfer is
in conjunction with the sale of all or substantially all of Licensee's
assets pertaining to the commercialization of Licensed Products, and
providing that such assignee or transferee agrees in writing to be bound
by all the terms and conditions of this Agreement.
11.2 After either: a) the start of Phase I clinical trials of a Licensed
Product or b) January 1, 2000, provided that Licensee has invested a
minimum of Three Hundred Thousand Dollars ($300,000) toward the
development of Licensed Products and Licensed Processes, this License
may be assigned, with notice to M.I.T., providing that such assignment
or transfer is in conjunction with the sale of all or substantially all
of Licensee's assets pertaining to the commercialization of Licensed
Products, and providing that such assignee or transferee agrees in
writing to be bound by all the terms and conditions of this Agreement.
11.3 This Agreement shall survive any merger of Licensee with or into another
party and no consent for a merger or similar reorganization shall be
required hereunder.
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
prevent irreparable harm, any and all claims, disputes or controversies
arising under, out of, or in connection with the Agreement, including
any dispute relating to patent validity or infringement, which the
parties shall be unable to resolve within one hundred twenty (120) days
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. By not later than five (5) 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 not later than ten (10)
business days after the date of such notice of dispute, the party
against whom the dispute shall be raised shall select a mediation firm
in the Boston area and such representatives shall schedule a date with
such firm for a mediation hearing. 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 fifteen (15) business days after such mediation hearing, then any
and all claims, disputes or controversies arising under, out of, or in
connection with this Agreement, including any dispute relating to patent
validity or infringement, shall be resolved by final and binding
arbitration in Boston, Massachusetts under the rules of the American
Arbitration Association, or the Patent Arbitration Rules if applicable,
then obtaining. The arbitrators shall have no power to add to, subtract
from or modify any of the terms or conditions of this Agreement, nor to
award punitive damages. Any award rendered in such arbitration may be
enforced by either party 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 M.I.T. and
Licensee each hereby irrevocably consents and submits.
12.2 Notwithstanding the foregoing, nothing in this Article shall be
construed to waive any rights or timely performance of any obligations
existing under this Agreement.
13 - TERMINATION
13.1 If Licensee shall cease to carry on its business, this Agreement shall
terminate upon notice by M.I.T.
13.2 Should Licensee fail to make any payment whatsoever due and payable to
M.I.T. hereunder, M.I.T. shall have the right to terminate this
Agreement effective on sixty (60) days' notice, unless Licensee shall
make all such payments to M.I.T. within said sixty (60) day period.
Upon the expiration of the sixty (60) day period, if Licensee shall not
have made all such payments to M.I.T., the rights, privileges and
license granted hereunder shall automatically terminate.
13.3 Upon any material breach or default of this Agreement by Licensee
(including, but not limited to, breach or default under Paragraph 3.3),
other than those occurrences set out in Paragraphs 13.1 and 13.2
hereinabove, which shall always take precedence in that order over any
material breach or default referred to in this Paragraph 13.3, M.I.T.
shall have the right to terminate this Agreement and the rights,
privileges and license granted hereunder effective on ninety (90) days'
notice to Licensee. Such termination shall become automatically
effective unless Licensee shall have cured any such material breach or
default prior to the expiration of the ninety (90) day period.
13.4 Licensee shall have the right to terminate this Agreement at any time
on six (6) months' notice to M.I.T., and upon payment of all amounts due
M.I.T. through the effective date of the termination.
13.5 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, 13.5, 13.6 and 15 shall survive any such termination. Licensee
and any sublicensee thereof may, however, after the effective date of
such termination, sell all Licensed Products, and complete Licensed
Products in the process of manufacture at the time of such termination
and sell the same, provided that Licensee shall make the payments to
M.I.T. as required by Article 4 of this Agreement and shall submit the
reports required by Article 5 hereof.
13.6 Upon termination of this Agreement for any reason, any sublicensee not
then in default shall have the right to seek a license from M.I.T.
M.I.T. agrees to negotiate such licenses in good faith under reasonable
terms and conditions.
14 - PAYMENTS, NOTICES AND OTHER COMMUNICATIONS
Any payments, 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, return receipt requested,
postage prepaid, addressed to it at its address below, or as it shall
designate by written notice given to the other party:
In the case of M.I.T.:
Director, Technology Licensing Office
Massachusetts Institute of Technology
Five Cambridge Center, Xxxxxxx Square
Room NE2-230
Cambridge, Massachusetts 02142-1493
In the case of Licensee:
Xxxxxxx Xxxxx, President/CEO
Orasomal Technologies, Inc.
000 Xxxxx Xxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxxx 00000
15 - MISCELLANEOUS PROVISIONS
15.1 All disputes arising out of or related to this Agreement, or the
performance, enforcement, breach or termination hereof, and any remedies
relating thereto, 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 shall have been granted.
15.2 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 signed by
the parties.
15.3 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.
15.4 Licensee agrees to xxxx 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 manner as
to conform with the patent laws and practice of the country of
manufacture or sale.
15.5 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.
IN WITNESS WHEREOF, the parties have duly executed this Agreement the day and
year set forth below.
MASSACHUSETTS INSTITUTE OF TECHNOLOGY
By Xxxx Xxxxxx
Name Xxxx Xxxxxx
Title Director
Date December 16, 1996
ORASOMAL TECHNOLOGIES, INC.
By Xxxxxxx X. Xxxxx
Name Xxxxxxx X. Xxxxx
Title President/CEO
Date December 10, 1996
APPENDIX A
PATENT RIGHTS on the EFFECTIVE DATE
UNITED STATES PATENT RIGHTS
X.X.X. Xxxx Xx. 0000
X.X.X.X. 000,000, Filed 7/23/93
"Polymerized Liposomes with Enhanced Stability"
by Xxxxxxx Xxxxx, Xxxxxx Xxxxx and Xxxxxx Xxxxxx
FOREIGN PATENT RIGHTS
None.
APPENDIX B
DESIGNATED FOREIGN COUNTRIES
Foreign countries in which PATENT RIGHTS shall be filed, prosecuted and
maintained in accordance with Article 6:
For M.I.T. Case No. _________:
