EXHIBIT 10.35
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE PORTIONS OF THE
AGREEMENT INDICATED WITH BRACKETS AND ASTERISKS [***]. A COMPLETE COPY OF THIS
AGREEMENT, INCLUDING THE REDACTED PORTIONS, HAS BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION.
LICENSE AGREEMENT
MICHIGAN FILE 1855 TECHNOLOGY
This Agreement is effective as of the 18th day of September, 2001 (the
"Effective Date"), between Esperion Therapeutics, Inc., a corporation
incorporated in the State of Delaware, with offices located at 0000 Xxxxx Xxxxx
Xxxxxx, 000 XXX Xxxxx, Xxx Xxxxx, Xxxxxxxx 00000 ("LICENSEE"), and the Regents
of the University of Michigan, a constitutional corporation of the State of
Michigan ("MICHIGAN"). LICENSEE and MICHIGAN agree as follows:
1. BACKGROUND.
1.1 MICHIGAN has represented that it has developed rights, including
potential patent rights, in the "TECHNOLOGY" as defined in Article
30.
1.2 LICENSEE desires to obtain, and MICHIGAN, consistent with its
missions of research, education and service, desires to grant a
license of the Licensed Patents and TECHNOLOGY on the terms and
conditions listed below.
2. CAPITALIZED TERMS.
The capitalized terms used in this Agreement are specifically
defined in Article 30 of this Agreement.
3. GRANT OF LICENSE.
3.1 MICHIGAN hereby grants to LICENSEE the exclusive license under the
Licensed Patents, and non-exclusive license under the TECHNOLOGY,
to make, have made, import, use, market, offer for sale and sell,
in the Territory, Products designed, manufactured, used and/or
marketed solely for use in the Field of Use subject to any rights
of third parties; with the right to grant sublicenses to
Affiliates and Sublicensees subject to the terms and provisions of
Article 8 below.
3.2 MICHIGAN reserves the right to practice the Licensed Patents
solely for research and education purposes within the Field of Use
and the Territory.
4. CONSIDERATION.
4.1 LICENSEE shall pay to MICHIGAN a one-time license issue fee of
US$[***] dollars upon execution by the parties of this Agreement.
LICENSEE may credit this issue fee in full against all royalties
otherwise due MICHIGAN, subject to Paragraph 4.8.
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4.2 LICENSEE shall also pay MICHIGAN, with respect to each Royalty
Period, a royalty on Net Sales by LICENSEE and Affiliates as
follows:
to the extent the sum total Net Sales for Products (A) is less
than US$[***] million, royalty equal to [***] percent ([***]%) of
Net Sales in such Royalty Period; (B) is at least US$[***] million
but less than US$[***] million, [***] percent ([***]%) of Net
Sales in such Royalty Period; and (C) is US$[***] million or more,
[***] percent ([***]%) of Net Sales in such Royalty Period.
4.3 LICENSEE shall also pay to MICHIGAN, with respect to each Royalty
Period, a royalty equal to [***] percent ([***]%) of Gross
Sublicensing Revenues. For the avoidance of doubt, Gross
Sublicensing Revenues does not include amounts received by
LICENSEE from Affiliates.
4.4 LICENSEE must pay MICHIGAN a royalty under this Article 4 only
once with respect to the same unit of Product regardless of the
number of Valid Claims or Licensed Patents covering the same;
however, for purposes of determining payments due hereunder,
whenever the term "Product" may apply to a property during various
stages of manufacture, use or sale, then Net Sales equals the
amount derived from the sale, distribution or use of such Product
by LICENSEE or Affiliates at the stage of its highest invoiced
value to unrelated third parties. If a Product sold by LICENSEE
includes at least one active ingredient other than a Product (a
"Combination Product"), LICENSEE shall only pay royalties or
sublicensing royalties on a portion of Net Sales for the
Combination Product based on the relative contribution of the
product to the scientific and commercial performance of the
Combination Product, as negotiated by the Parties in good faith,
but in no event on less than [***]% of the amount of Net Sales for
the Combination Product.
4.5 LICENSEE shall pay to MICHIGAN an annual license maintenance fee.
This annual fee accrues in the Royalty Period ending in June of
the years specified below, and is due and payable concurrently
with the report for that Period. LICENSEE may credit each annual
fee in full against all royalties otherwise due MICHIGAN. In
determining annual license maintenance fees due, LICENSEE may
credit patent expenses paid to MICHIGAN under Paragraph 10.6
against the annual license maintenance fee amounts listed below,
as provided in Paragraph 10.6.
The annual license maintenance fees are:
(1) In 2001: US $[***] (payable within 30 days of the
Effective Date);
(2) In 2002 and 2003: US$[***] each year;
(3) In 2004: US$[***];
(4) In 2005: US$[***]; and
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(5) In 2006 and in each year thereafter during the term
of this Agreement: US$[***].
4.6 If LICENSEE is legally obligated or reasonably deems it necessary
to pay consideration to any third party that holds a patent that
would, in the reasonable judgment of LICENSEE, be infringed by the
manufacture, use, or sale of a Product, then LICENSEE shall be
entitled to deduct [***] percent ([***]%) of such consideration
paid to such third party from the royalties otherwise payable to
MICHIGAN under Paragraph 4.2 hereof or from the milestone payment
obligation provided in Paragraph 7.3(6), subject to Paragraph 4.8
herein.
4.7 LICENSEE may credit all amounts actually paid to MICHIGAN under
Paragraphs 4.1, 4.5, and 7.3 hereof in full against royalties
otherwise payable to MICHIGAN under Paragraph 4.2 hereof, subject
to the limitations of Paragraph 4.8 herein.
4.8 In no event shall the royalty payable to MICHIGAN under Paragraph
4.2 for any Royalty Period or the amount payable to MICHIGAN under
Paragraph 7.3(6) be reduced pursuant to Paragraph 4.6 or 4.7 below
an amount that is less than [***] percent ([***]%) of the amount
otherwise payable under Paragraph 4.2 hereof for such Royalty
Period or under Paragraph 7.3(6) for such milestone obligation.
Any portion of payment made pursuant to Paragraphs 4.1, 4.5, 4.6,
or 7.3 that is not creditable against royalties payable to
MICHIGAN under Paragraph 4.2 hereof due to this [***] percent
reduction cap shall be carried forward and creditable against
royalties payable to MICHIGAN under Paragraph 4.2 hereof with
respect to subsequent Royalty Periods until credited in full.
5. REPORTS.
5.1 Within forty-five (45) days after each Royalty Period closes
(including the close of any Royalty Period immediately following
any termination of this Agreement), LICENSEE shall report to
MICHIGAN for that Royalty Period:
(1) all royalties accruing to MICHIGAN;
(2) the Net Sales of Products by LICENSEE and Affiliates;
(3) the source (name of sublicensee) and amount of all
Gross Sublicensing Revenues, and
(4) any other revenues for which payments are due.
LICENSEE shall include the amount of all payments due pursuant to
(1-4) herein, and the quantity, identification and country of sale
of Products. If no payment is due for a Royalty Period, LICENSEE
shall so report.
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5.2 LICENSEE shall establish and consistently employ a system of
nomenclature and/or type designations for Products to permit
identification and segregation of various types where necessary;
LICENSEE, Affiliates and Sublicensees shall consistently employ
the system when rendering invoices thereon and shall inform
MICHIGAN, or its auditors, upon reasonable request, as to the
details concerning the description of Products and of any changes
thereto.
5.3 LICENSEE shall keep, and shall require its Affiliates and
Sublicensees to keep, true and accurate records and books of
account containing data reasonably required for the computation
and verification of payments due as provided by this Agreement.
LICENSEE shall:
(1) open such books and records for inspection [***] per
year upon reasonable notice during business hours by
either MICHIGAN auditor(s) or an independent
certified accountant selected by MICHIGAN, for the
purpose of verifying the amount of payments
previously due and payable;
(2) retain such books and records for ([***]) years
from date of origination.
These rights of inspection survive any termination of this
Agreement. MICHIGAN is responsible for all expenses of such
inspection, except that if any inspection reveals an underpayment
greater than ten percent (10%) of royalties due MICHIGAN, then, if
not refuted, LICENSEE shall pay all expenses of that inspection
and the amount of the underpayment immediately to MICHIGAN.
5.4 LICENSEE shall direct its authorized representative to certify
that reports required hereunder are correct to his or her
knowledge and information.
6. TIMES AND CURRENCIES OF PAYMENTS.
6.1 All payments hereunder shall be made in United States dollars.
Payments accrued during each Royalty Period are due and payable in
Ann Arbor, Michigan on the date each report is due (as provided in
Paragraph 5.1). LICENSEE agrees to make all payments due hereunder
to MICHIGAN (i) by check made payable to "The Regents of The
University of Michigan," and sent to MICHIGAN according to the
provisions for notices set forth in Article 21 herein, or (ii) by
wire transfer to the following account: [***].
6.2 On all amounts overdue and payable to MICHIGAN, interest accrues
from the date the amount is due at a rate per annum equal to [***]
percentage points above the prime lending rate as established by
the Chase Manhattan Bank, N.A., in New York City, New York, or at
a lower rate if required by law.
6.3 For each Royalty Period, LICENSEE and Affiliates shall convert any
Net Sales or Gross Sublicensing Revenues they receive in foreign
currency into its equivalent in
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United States dollars at the exchange rate LICENSEE ordinarily
employs in making reports to relevant regulatory and taxing
authorities, consistent with fair business practices and generally
accepted accounting principles.
7. COMMERCIALIZATION.
7.1 LICENSEE agrees to use commercially reasonable efforts to
commercialize one Product.
7.2 Within thirty (30) days of the First Commercial Sale, LICENSEE
shall report by written letter to MICHIGAN the date and general
terms of that sale.
7.3 Milestones: LICENSEE will substantially meet, or shall cause its
Affiliates or Sublicensees to meet, the requirements of the
following milestones, with date requirements for each milestone
after the first milestone to be determined in writing in good
faith by the Parties using reasonable business judgment, upon
satisfaction of the immediately previous milestone or maturation
of the payment obligation therefor:
(1) either (a) selection of recombinant PON (recPON) for
development by September 1, 2003 or (b) pay MICHIGAN
a milestone payment of US$ [***] by October 1, 2003.
(2) IND submission in the U.S. or Europe or payment to
MICHIGAN of a milestone payment of US$ [***] within
30 days of the date mutually determined by the
parties.
(3) Enrollment of first patient in a Phase II clinical
trial and payment to MICHIGAN of a milestone payment
of US$ [***].
(4) Enrollment of first patient in a Phase III clinical
trial and payment to MICHIGAN of a milestone payment
of US$ [***].
(5) Submission of first NDA in U.S. or Europe and payment
to MICHIGAN of a milestone payment of US$ [***].
(6) Approval of first NDA in U.S. or Europe and payment
to MICHIGAN of a milestone payment of US$ [***].
Each of the aforementioned milestone payments shall be creditable
against royalties due under Paragraph 4.2 hereof, subject to
Paragraphs 4.7 and 4.8.
8. SUBLICENSING.
8.1 LICENSEE has the exclusive right to grant sublicenses of its
rights under Article 3 above to Affiliates and Sublicensees, to
make, have made, import, use, market, offer for sale and sell, in
the Territory, Products designed and marketed solely for use in
the Field of Use.
8.2 LICENSEE shall, provide MICHIGAN with a copy of each sublicense
agreement and each amendment thereto within ninety (90) days after
execution thereof.
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8.3 LICENSEE shall include in any sublicense granted under this
Article 8 a provision that the sublicense terminates upon any
termination of this Agreement subject to the protections of this
Article 8. Upon termination of this Agreement, MICHIGAN may, in
its sole discretion, ratify and maintain in full force and effect
any sublicense(s) of the rights granted to Affiliates or
Sublicensees under this Agreement.
8.4 LICENSEE shall require that all sublicenses:
(1) be consistent with the terms and conditions of this
Agreement;
(2) contain the Sublicensee's or Affiliate's
acknowledgments of MICHIGAN's rights in the
TECHNOLOGY and Licensed Patents, and the disclaimer
of warranty and limitation on MICHIGAN's liability,
as provided by Article 12 below.
(3) contain provisions under which the Sublicensee or
Affiliate accepts duties at least equivalent to those
accepted by the LICENSEE or expressly required of
Sublicensees/Affiliates in the following paragraphs
and articles:
5.3 duty to keep records
12.4 duty to avoid improper representations
or responsibilities
13.1 duty to defend, hold harmless, and
indemnify MICHIGAN
13.3 duty to maintain insurance
17 duty to control exports
19 duty to restrict the use of MICHIGAN's
name
20 duty to properly xxxx product with
Patent notices
8.5 LICENSEE shall cause every sublicense agreement to provide
LICENSEE the right to assign its rights under the sublicense to
MICHIGAN. Any such assignment is subject to the limitations of
Article 15 herein and, to be effective, MICHIGAN must first accept
such assignment in writing.
8.6 Treatment of Sublicenses in the Event of Termination of License
Agreement
8.6.1 Upon termination of this Agreement or any relevant license
granted in Paragraph 3.1, any sublicense agreement between
LICENSEE and a Sublicensee or an Affiliate shall continue
in force in accordance with its terms if all of the
following conditions are met: (1) every sublicense
agreement with a Sublicensee or Affiliate is consistent
with the terms of this Agreement; (2) each sublicense
agreement incorporates with full force and effect therein
the
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document attached hereto as Exhibit A (or the substance of
the provisions thereof; any changes must be approved in
writing by MICHIGAN); (3) said Sublicensee or said
Affiliate is not then in default of its material
obligations under its sublicense agreement; and (4) said
termination of this Agreement occurs more than one year
after the Effective Date. Any sublicense agreement that
does not meet each of these conditions shall terminate
concurrently with the termination of this Agreement or any
relevant license granted under Paragraph 3.1 herein.
8.6.2 Alternatively to the procedure of Paragraph 8.6.1, any
sublicense agreement between LICENSEE and a Sublicensee or
Affiliate shall continue in force in accordance with its
terms if said sublicense agreement has been approved by
MICHIGAN before its execution, which approval shall not be
unreasonably withheld. MICHIGAN shall provide, within
thirty (30) business days, a written response to
LICENSEE's request for such approval, which response may
include requested changes to the sublicense agreement.
LICENSEE shall make any such request in writing, which
writing shall also state that MICHIGAN's response is
required under this Agreement within thirty days of
receipt by MICHIGAN. If MICHIGAN fails to respond to
LICENSEE within said thirty (30) day period, then the
sublicense agreement shall be deemed to have been approved
by MICHIGAN. Any subsequent request for approval after
changes have been made to address MICHIGAN's response
shall be provided within ten (10) business days, and if
none is given within said ten-day period, then the
sublicense agreement shall be deemed to have been approved
by MICHIGAN.
9. CONFIDENTIALITY; OWNERSHIP OF INTELLECTUAL PROPERTY.
9.1 The parties each recognize that the confidential and/or
proprietary information of the other party and its affiliates,
subsidiaries and third party contractees constitutes valuable
information. Accordingly, each party agrees that it shall, during
the term of this Agreement and for a period of five (5) years
after the termination hereof for any reason, hold in confidence
all confidential information of the other party (including this
Agreement and the terms hereof and information included in
Reports) and not disclose the same to any other person or entity
except to the extent that it is necessary for such party to
enforce its rights under this Agreement or if required by law or
any governmental authority (including without limitation the FDA
or SEC); provided, however, if any party shall be required by law
to disclose any such confidential information to any other person,
such party shall give reasonable written notice thereof to the
other party and shall minimize such disclosure to the amount
required. Notwithstanding the foregoing, either party may disclose
confidential information of the other (a) to such party's
attorneys, accountants and other professional advisors under
obligation of confidentiality, (b) to such party's banks or other
financial institutions for the purpose of raising capital or
borrowing money or maintaining compliance with agreements,
arrangements and understandings relating thereto, (c) to
Affiliates and Sublicensees, (d) to prospective Sublicensees,
prospective strategic
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partners or prospective collaborators, if such person or entity
agrees in writing to maintain the confidentiality of such
confidential information, (e) to any person who proposes to
purchase or otherwise succeed, by merger, operation of law, or
otherwise, to all of such party's right, title and interest in, to
and under the Agreement, if such person agrees in writing to
maintain the confidentiality of such confidential information, (f)
to the extent it is or becomes publicly available through no fault
of the receiving party, (g) to the extent it can be demonstrated
that it was independently developed by the receiving party without
use of or reliance upon the confidential information of the
disclosing party, or (h) to the extent it was provided to the
receiving party by a third party who receiving party reasonably
believes is not subject to confidentiality obligations with
respect to such information. The standard of care required to be
observed hereunder shall be not less than the degree of care that
each party uses to protect its own information of a confidential
nature.
All confidential information that is disclosed in writing shall be
identified as confidential. MICHIGAN shall be entitled to
aggregate financial data from this Agreement, including revenue
information, with financial data from other MICHIGAN licenses for
public reporting purposes as long as MICHIGAN does not explicitly
or implicitly identify LICENSEE, the Licensed Patents or Products
in connection with such reporting, unless required to be disclosed
by law; if required to be disclosed by law, MICHIGAN shall give
reasonable written notice thereof to LICENSEE and shall minimize
such disclosure to the amount required.
9.2 LICENSEE acknowledges MICHIGAN's representation of ownership
interest in all Licensed Patents.
9.3 LICENSEE or Affiliates might engage MICHIGAN staff as employees or
consultants to LICENSEE or Affiliates during the time of their
employment with MICHIGAN. Where any material invention (whether or
not patentable), discovery or computer software is conceived or
reduced to practice in whole or in part by inventors acting as
employees of or consultants to LICENSEE or Affiliates, who are or
were employees at MICHIGAN at the time of such creation, then
provided that MICHIGAN or such employee of MICHIGAN had informed
LICENSEE in writing of such employment status with MICHIGAN,
LICENSEE shall disclose to MICHIGAN the nature of the invention,
discovery or computer software, the circumstances of its
conception and reduction to practice, and the persons constituting
the group of inventors, so that each Party may make a good faith
determination of ownership of the invention. The current
obligations of such MICHIGAN employees to MICHIGAN relating to
intellectual property may be found at the following web page:
xxx.xxxxxxxxxxxx.xxxxx.xxx/xxxxxx/xxxxxx.xxxx. This Agreement does
not supercede obligations of such MICHIGAN employees to MICHIGAN
relating to intellectual property.
10. PATENT APPLICATIONS AND MAINTENANCE.
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10.1 During the term of this Agreement, LICENSEE shall be responsible
for all aspects of filing, prosecuting, and maintaining Licensed
Patents, including foreign filings and Patent Cooperation Treaty
filings, except to the extent discussed below. The Parties agree
to jointly select patent counsel in good faith within sixty (60)
days of the Effective Date, and any change in patent counsel is
subject to prior approval by both Parties in good faith. Patent
counsel shall be instructed to treat MICHIGAN and Esperion as
clients, and shall be instructed to notify both Parties
immediately if it receives any conflicting instructions from the
Parties. In the event of any conflict between LICENSEE and
MICHIGAN as to the subject matter of this agreement, any patent
counsel that has at any time been retained by the Parties under
this Article shall not represent or counsel either Party with
respect to such conflict only. Counsel selected under this Article
shall provide the same scope of representation to each Party with
respect to the subject matter of this Agreement.
10.2 Each Party shall promptly notify the other Party of all material
information sent by or received by it relating to the filing,
prosecution and maintenance of Licensed Patents, including any
lapse, revocation, surrender, invalidation or abandonment of any
of the Licensed Patents. Patent counsel shall be instructed to
promptly provide the same information and documents (including
attorney billing information) to each Party relating to the
prosecution of the Licensed Patents. If a Party is designated by
selected counsel or any other party on correspondence as an
addressee or as being carbon copied, the other Party can rely on
that as satisfying the notice provisions in this Article. MICHIGAN
and LICENSEE shall perform all actions and execute or cause to be
executed all documents necessary to support such filing,
prosecution, or maintenance under this Article, including without
limitation providing copies of all documents necessary to
establish or corroborate inventorship, conception, or reduction to
practice of inventions.
10.3 LICENSEE shall inform MICHIGAN in advance of all significant
actions that it intends to undertake concerning the prosecution
and maintenance of the Licensed Patents. In addition, LICENSEE
shall not alter the scope of patent coverage, or take any action
reasonably construed as affecting the validity or enforceability,
of such patents without notice to, and express approval by,
MICHIGAN of each action (such approval being either written or
oral with written confirmation). MICHIGAN shall respond to such
notices from LICENSEE as soon as reasonably possible, but in any
event if MICHIGAN does not disapprove of any proposed action
within thirty (30) days after notice from LICENSEE, such proposed
action shall be considered to be approved by MICHIGAN. If exigent
circumstances exist so as to reasonably require a more immediate
response from MICHIGAN, LICENSEE shall notify the designee of
Paragraph 10.4 below by both telephone and in writing (which
writing may be a short summary of the issue), and the Parties
shall work in good faith to resolve the issue.
Each Party shall use reasonable efforts to allow a reasonable time
for the other Party to review and comment upon the information
noted in this Article, and each Party shall promptly respond to
requests for input. Both Parties shall have access to the selected
patent counsel to discuss patent prosecution strategy for the
Licensed Patents, but MICHIGAN shall not unreasonably contact the
selected patent counsel so as to
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create excessive patent costs. In this regard, the Parties shall
make all reasonable efforts to coordinate their discussions with
selected patent counsel so that each Party participates in the
discussions that are requested by MICHIGAN.
Any patent fees or costs resulting from or arising out of
MICHIGAN's delay beyond the time periods specified herein in
responding to LICENSEE's notices or requests shall be paid by
MICHIGAN.
10.4 Documentary materials will be provided to the Parties at the
addresses noted in Article 21 unless designated otherwise in
writing. For purposes of Article 10, email communications to a
designated contact person will satisfy the written or documentary
notice/copying/request requirements, except to the extent hard
copies of attachments are necessary. Each Party hereby initially
designates for itself the following contact person for patent
matters: (1) for LICENSEE: General Counsel, telephone
000-000-0000, [***]; (2) for MICHIGAN: [***] with a copy to [***].
Any change in the contact person information for patent matters
may be effected by written notice to the other party in accordance
with Article 21.
10.5 LICENSEE may in its sole discretion decide to refrain from or to
cease prosecuting or maintaining any of the Licensed Patents,
including any foreign filing or any Patent Cooperation Treaty
filing. If LICENSEE makes any such decision, LICENSEE shall notify
MICHIGAN in a writing that also notes any applicable deadline, in
reasonably sufficient time to permit MICHIGAN at its sole
discretion to continue such prosecution or maintenance at
MICHIGAN's expense. If MICHIGAN elects to continue such
prosecution or maintenance, LICENSEE shall execute such documents
and perform such acts at MICHIGAN's expense as may be reasonably
necessary for MICHIGAN to so continue such prosecution or
maintenance. Any such patents, patent applications, or patents
issuing from such applications shall be excluded from the
definition of Licensed Patents herein.
10.6 Beginning on the Effective Date, LICENSEE shall be responsible for
and timely pay all reasonable costs of prosecuting and maintaining
the Licensed Patents during the term of and in accordance with
this Agreement, except to the extent disputed in good faith (in
which case LICENSEE shall resolve the dispute with patent counsel)
or as otherwise expressly provided in this Agreement. Without
LICENSEE's approval and except as caused to be incurred by
LICENSEE, LICENSEE shall not be required to pay for any other
patent expenses for work performed by counsel other than the
patent counsel (or its designee, including foreign patent counsel)
selected in accordance with Paragraph 10.1.
Upon execution of this Agreement, LICENSEE shall reimburse
MICHIGAN $[***] for patent prosecution costs MICHIGAN has incurred
prior to Effective Date. LICENSEE will not reimburse MICHIGAN for
any further patent costs incurred prior to the Effective Date.
Any failure by LICENSEE to timely pay for reasonable costs of
patent prosecution, except to the extent such costs are disputed
in good faith or as otherwise expressly
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provided in this Agreement, shall be subject to the notice and
cure provisions of Paragraph 14.3. LICENSEE may credit patent
expenses paid directly to patent counsel or reimbursed to MICHIGAN
against annual license maintenance fees.
10.7 The Parties agree to negotiate in good faith as to any further
terms necessary for carrying out patent prosecution and
maintenance. If there is any dispute as to patent prosecution
issues, the Parties agree to use their best efforts to resolve
such disputes on an expedited basis through good faith business
negotiations. The parties shall meet in person as soon as possible
in an attempt to resolve the dispute. Efforts at resolution shall
be in good faith but neither party shall be obligated to resolve
the dispute. The parties shall ensure that its representatives at
the meetings are knowledgeable about this Agreement and the facts
underlying the dispute, and have corporate authority to resolve
the dispute at the meeting (s).
11. INFRINGEMENT.
11.1 During the term of this Agreement, LICENSEE has the first option
to police the Licensed Patents and Products against infringement
by other parties within the Territory and the Field of Use. This
right to police includes defending any action for declaratory
judgment of noninfringement or invalidity; and prosecuting,
defending or settling all infringement and declaratory judgment
actions at its expense and through counsel of its selection,
except that LICENSEE shall make any such settlement only with the
advice and consent of MICHIGAN. MICHIGAN shall provide reasonable
assistance to LICENSEE with respect to such actions, but only if
LICENSEE reimburses MICHIGAN for reasonable out-of-pocket expenses
incurred in connection with any such assistance rendered at
LICENSEE's request. If LICENSEE elects to institute any such
action or suit, MICHIGAN agrees to be named as a nominal party
therein. MICHIGAN retains the right to participate, with counsel
of its own choosing and at its own expense, in any action under
this Paragraph 11.1. LICENSEE has full authority to settle on such
terms as LICENSEE determines.
11.2 If LICENSEE institutes an action for infringement of a Licensed
Patent or defends a declaratory judgment or other action with
respect to a Licensed Patent and receives settlement payments or
damages awarded, LICENSEE may first recover actual outside
attorney fees and other direct, out-of-pocket litigation expenses
(not to include any compensation paid to employees of LICENSEE or
Affiliates) paid and unrecovered by LICENSEE and shall pay to
MICHIGAN [***]% of any remaining such receipts.
If LICENSEE has paid or pays an annual fee to MICHIGAN under
Paragraph 4.5 in the same year LICENSEE receives a payment or
award as set out above, then LICENSEE may credit that annual fee
against the share of the payment or award otherwise due to
MICHIGAN, exactly as if that share represented additional
royalties due from LICENSEE.
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11.3 If LICENSEE fails to take action to xxxxx any alleged infringement
of a Licensed Patent within sixty (60) days of a request by
MICHIGAN to do so (or within a shorter period if required to
preserve the legal rights of MICHIGAN under the laws of any
relevant government or political subdivision thereof), then
MICHIGAN has the right to take such action (including prosecution
of a suit) at its expense and LICENSEE shall use reasonable
efforts to cooperate in such action, at MICHIGAN's expense. If
MICHIGAN elects to institute any such action or suit, LICENSEE
agrees to be named as a nominal party therein. LICENSEE retains
the right to participate, with counsel of its own choosing and at
its own expense, in any action under this Paragraph 11.3. MICHIGAN
has full authority to settle on such terms as MICHIGAN determines,
except that MICHIGAN shall not reach any settlement whereby it
licenses a third party under any Licensed Patents in the Territory
and the Field of Use without the consent of LICENSEE, which
consent LICENSEE can withhold for any reason. If MICHIGAN
institutes an action for infringement of a Licensed Patent or
defends a declaratory judgment or other action with respect to a
Licensed Patent and receives settlement payments or damages
awarded, MICHIGAN may first recover actual outside attorneys fees
and other direct, out-of-pocket litigation expenses (not to
include any compensation paid to students, faculty or employees of
MICHIGAN) paid and unrecovered by MICHIGAN and shall pay to
LICENSEE [***]% of any remaining such receipts.
11.4 LICENSEE and MICHIGAN shall promptly notify the other party in
writing in detail of the discovery of any allegation by a third
party of infringement resulting from the practice of Licensed
Patents in the Field of Use, and of the initiation of any legal
action by LICENSEE or by any third party with regard to any
alleged infringement or noninfringement. LICENSEE and MICHIGAN
shall in a timely manner keep the other party informed and provide
copies to the other party of all documents regarding all such
proceedings or actions instituted by LICENSEE or MICHIGAN.
12. REPRESENTATIONS AND WARRANTIES; LIMITATION ON MICHIGAN'S
LIABILITY.
12.1 MICHIGAN, including its Regents, fellows, officers, employees and
agents, makes no representations or warranties that any Licensed
Patent is or will be held valid, or that the manufacture,
importation, use, offer for sale, sale or other distribution of
any Products will not infringe upon any patent or other rights not
included in the Licensed Patents. If substantial coverage of one
or more issued Licensed Patent(s) is subsequently determined to be
invalid, MICHIGAN shall refund to LICENSEE at least a portion of
any annual maintenance fees actually paid by LICENSEE, such
amounts to be determined in good faith jointly by the Parties
taking into consideration at least the territory of such Licensed
Patent and the scope of coverage lost.
12.2 MICHIGAN, INCLUDING ITS REGENTS, FELLOWS, OFFICERS, EMPLOYEES AND
AGENTS, MAKES NO REPRESENTATIONS, EXTENDS NO WARRANTIES OF ANY
KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE
IMPLIED WARRANTIES OF
12
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND ASSUMES
NO RESPONSIBILITIES WHATEVER WITH RESPECT TO DESIGN, DEVELOPMENT,
MANUFACTURE, USE, SALE OR OTHER DISPOSITION BY LICENSEE,
AFFILIATES OR SUBLICENSEES OF PRODUCTS.
LICENSEE, INCLUDING ITS AFFILIATES AND SUBLICENSEES, MAKES NO
REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND TO MICHIGAN,
EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE
IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE WITH RESPECT TO DESIGN, DEVELOPMENT, MANUFACTURE, USE,
SALE OR OTHER DISPOSITION OF PRODUCTS.
12.3 MICHIGAN DOES NOT ASSUME ANY RISK AS TO PERFORMANCE OF PRODUCTS.
Except in the event of fraud, recklessness or willful misconduct,
in no event shall MICHIGAN, including its Regents, fellows,
officers, directors, subsidiaries, employees and agents, be
responsible or liable for any direct, indirect, special,
incidental, or consequential damages or lost profits or other
economic loss or damage with respect to Products only, to
LICENSEE, Affiliates, or Sublicensees regardless of legal theory.
The above limitations on liability apply even though MICHIGAN, its
Regents, fellows, officers, directors, subsidiaries, employees or
agents may have been advised of the possibility of such damage.
Except as provided in Paragraph 13.1, or in the event of fraud,
recklessness or willful misconduct, in no event shall LICENSEE,
including its officers, directors, subsidiaries, employees and
agents, be responsible for any direct, indirect, special,
incidental, or consequential damages or lost profits or other
economic loss or damages with respect to Products only, to
MICHIGAN, regardless of legal theory. The above limitations on
liability apply even though LICENSEE, its officers, directors,
subsidiaries, employees or agents may have been advised of the
possibility of such damage.
The Parties understand and agree that the preceding two
subparagraphs do not apply to causes of action arising from any
alleged breach of this Agreement.
12.4 LICENSEE shall not, and shall require that its Affiliates and
Sublicensees do not, make any statements, representations or
warranties whatsoever to any person or entity, or accept any
liabilities or responsibilities whatsoever from any person or
entity that are inconsistent with any disclaimer or limitation
included in this Article 12.
12.5 MICHIGAN represents that (1) it has all right, power, and
authority to grant the rights herein; (2) it has not granted, and
will not during the term of this Agreement grant, an option,
license or other right to any other party to the Licensed Patents
or TECHNOLOGY or otherwise in conflict with this Agreement; (3) it
has obtained all consents and approvals necessary to enter into
this Agreement, and no other action by or with respect to, or
filing with, any governmental authority or any other entity is
required in connection with the execution, delivery, and
performance by MICHIGAN of
13
this Agreement; (4) this Agreement constitutes a valid and binding
agreement of MICHIGAN, enforceable against MICHIGAN, in accordance
with its terms; (5) to its knowledge, its staff and employees have
assigned their entire right, title, and interest in the Licensed
Patents that exist as of the Effective Date to MICHIGAN and
MICHIGAN will obtain or assist LICENSEE in obtaining any remaining
assignments of Licensed Patents that exist as of the Effective
Date and all assignments of Licensed Patents that arise after the
Effective Date; and (6) MICHIGAN has caused to be made available
to LICENSEE copies of its files as of the Effective Date relating
to the prosecution of the Licensed Patents.
13. INDEMNITY; INSURANCE.
13.1 LICENSEE shall defend, indemnify and hold harmless and shall
require its Affiliates and Sublicensees to defend, indemnify and
hold harmless MICHIGAN, its Regents, fellows, officers, employees
and agents (collectively, the "MICHIGAN Parties"), for and against
any and all claims, demands, damages, losses, and expenses of any
nature (including reasonable attorneys' fees and other litigation
expenses), resulting from death, personal injury, illness,
property damage, economic loss or products liability to the extent
resulting from arising from, or in connection with, any of the
following, except to the extent of negligence or willful
misconduct proved on the part of any of the MICHIGAN Parties:
(1) Any manufacture, use, sale or other disposition by LICENSEE,
Affiliates, Sublicensees of Products; and
(2) The use by any person of Products made, used, sold or otherwise
distributed by LICENSEE, Affiliates or Sublicensees.
13.2 MICHIGAN is entitled to participate at its option and expense
through counsel of its own selection and at its own expense, and
may join in any legal actions related to any such claims, demands,
damages, losses and expenses under Paragraph 13.1 above.
13.3 Prior to the First Commercial Sale of any Product by LICENSEE or
an Affiliate, LICENSEE shall purchase and maintain in effect a
policy of product liability insurance. Prior to the commercial
sale of any Product by a Sublicensee, LICENSEE shall require that
the Sublicensee purchase and maintain in effect a policy of
product liability insurance. Each such insurance policy must
provide reasonable coverage for all claims with respect to any
Products manufactured, used, sold, licensed or otherwise
distributed by LICENSEE and Affiliates -- or, in the case of a
Sublicensee's policy, by said Sublicensee -- and must specify the
MICHIGAN Parties as an additional insured. LICENSEE shall furnish
certificate(s) of such insurance to MICHIGAN, upon request.
14. TERM AND TERMINATION.
14
14.1 This Agreement will become effective on its Effective Date and,
unless terminated under another, specific provision of this
Agreement, will remain in effect until and terminate upon the last
to expire of Licensed Patents.
14.2 Upon any termination of this Agreement, and except as provided
herein to the contrary, all rights and obligations of the Parties
hereunder shall cease, except as follows:
(1) Obligations to pay royalties and other sums accruing
hereunder up to the day of such termination;
(2) MICHIGAN's rights to inspect books and records as
described in Article 5, and LICENSEE's obligations to
keep such records for the required time;
(3) Obligations to hold harmless, defend and indemnify
MICHIGAN and its Regents, fellows, officers,
employees and agents under Article 13;
(4) Any cause of action or claim of LICENSEE or MICHIGAN
accrued or to accrue because of any breach or default
by the other Party hereunder;
(5) The general rights, obligations, and understandings
of Articles 12, 17, 19, 28, 29 and 30; and
(6) All other terms, provisions, representations, rights
and obligations contained in this Agreement that by
their sense and context are intended to survive until
performance thereof by either or both Parties.
14.3 If LICENSEE at any time defaults in the payment of any royalty or
the making of any report hereunder, or intentionally makes any
materially false report, or if either Party commits any material
breach of any covenant or promise herein contained, and fails to
remedy any such default, breach or report within sixty (60) days
after written notice thereof by the other Party specifying such
default, then that other Party may, at its option, terminate this
Agreement and the license rights granted herein by notice in
writing to such effect. The cure period shall be extended for a
reasonable period to be agreed upon by the Parties if the
breaching Party has made good faith efforts to remedy the breach,
but has not completed the remediation. Any such termination is
without prejudice to either Party's other legal rights for breach
of this Agreement.
14.4 LICENSEE may terminate this Agreement without cause by giving
MICHIGAN a notice of termination, which shall include a statement
of the reasons, whatever they may be, for such termination and the
termination date established by LICENSEE, which date must not be
sooner than sixty (60) days after the date of the notice. The
Parties acknowledge that such notice is final and, immediately
upon receipt of such notice of termination, MICHIGAN no longer has
any restrictions that would have existed pursuant to this
agreement on its rights to enter into agreements with others for
the manufacture, import, sale, offer for sale, and/or use of
Products.
15
14.5 MICHIGAN may immediately terminate this Agreement upon (a) the
adjudication by a court of competent jurisdiction of the
bankruptcy or insolvency of LICENSEE or the entry of an order or
decree for the liquidation or dissolution of LICENSEE; (b) the
filing of any voluntary petition for bankruptcy, dissolution,
liquidation or winding-up of the affairs of LICENSEE; or (c) the
filing of any involuntary petition for bankruptcy, dissolution,
liquidation or winding-up of the affairs of LICENSEE which is not
dismissed within one hundred twenty (120) days of the date on
which it is filed or commenced.
15. ASSIGNMENT.
Except as permitted in this paragraph, any attempt to assign this
Agreement without the consent of the other party, which consent
shall not be unreasonably withheld, is void from the beginning.
LICENSEE may assign this Agreement pursuant to a merger, to a
purchaser of all or substantially all of LICENSEE's
business/assets or a purchaser of all the assets relating to the
Licensed Patents. No assignment is effective until the intended
assignee agrees in writing to accept all of the terms and
conditions of this Agreement. LICENSEE shall notify MICHIGAN in
writing within ninety (90) days of pledging any of the license
rights granted in this Agreement as security for any creditor.
16. REGISTRATION AND RECORDATION.
16.1 If the terms of this Agreement, or any assignment or license under
this Agreement are or become such as to require that the Agreement
or license or any part thereof be registered with or reported to a
national or supranational agency of any area in which LICENSEE,
Affiliates or Sublicensees would do business, LICENSEE will, at
its expense, undertake such registration or report. Prompt notice
and appropriate verification of the act of registration or report
or any agency ruling resulting from it will be supplied by
LICENSEE to MICHIGAN.
16.2 LICENSEE shall also carry out, at its expense, any formal
recordation of this Agreement or any license herein granted that
the law of any country requires as a prerequisite to
enforceability of the Agreement or license in the courts of any
such country or for other reasons, and shall promptly furnish to
MICHIGAN appropriately verified proof of recordation.
17. LAWS AND REGULATIONS OF THE UNITED STATES; EXPORT.
17.1 This Agreement is subject to all United States laws and
regulations now or hereafter applicable to the subject matter of
this Agreement.
17.2 LICENSEE shall comply, and shall require its Affiliates and
Sublicensees to comply, with all provisions of any applicable
laws, regulations, rules and orders relating to the license herein
granted and to the testing, production, importation,
transportation, export, packaging, labeling, sale or use of
Products, or otherwise applicable to LICENSEE's or its Affiliates'
or Sublicensees' activities hereunder. LICENSEE shall
16
obtain, and shall require its Affiliates and Sublicensees to
obtain, such written assurances regarding export and re-export of
technical data (including Products made by use of technical data)
as the Office of Export Administration Regulations may require,
and LICENSEE hereby gives such written assurances as those
Regulations may require to MICHIGAN.
18. BANKRUPTCY.
If during the term of this Agreement, LICENSEE makes an assignment
for the benefit of creditors, or if proceedings in voluntary or
involuntary bankruptcy are instituted on behalf of or against
LICENSEE, or if a receiver or trustee is appointed for the
property of LICENSEE, MICHIGAN may, at its option, terminate this
Agreement and revoke the license herein granted by written notice
to LICENSEE.
19. USE OF MICHIGAN'S NAME.
LICENSEE agrees to refrain from using and to require Affiliates
and Sublicensees to refrain from using the name of MICHIGAN (or
any adaptation thereof, including, but not limited to, the
"University of Michigan," "UM," "U of M," and "Michigan") in
publicity or advertising without the prior written approval of
MICHIGAN, which shall be rendered as soon as reasonably possible,
and shall not be unreasonably withheld. Reports in scientific
literature, presentations of joint research and development work
and disclosures required by applicable law or regulation are not
publicity. Requests for approval shall be sent by facsimile to
MICHIGAN at the fax number indicated below.
20. PRODUCT MARKING.
LICENSEE agrees to xxxx, and to require Affiliates and
Sublicensees to xxxx Products with legally sufficient patent
notices to the extent feasible for the Product.
21. NOTICES.
Any notice, request, report or payment required or permitted to be
given or made under this Agreement by either Party must be given
by sending such notice by hand delivery, recognized courier, fax
(if confirmed by regular mail) or certified or registered mail,
return receipt requested, to the address set forth below or such
other address as such Party specifies by written notice given in
conformity herewith. Any notice not so given is not valid until
actually received, and any notice given in accordance with the
provisions of this Paragraph is effective when mailed.
17
To MICHIGAN: The University of Michigan
Technology Management Office
Wolverine Tower, Room 2071
0000 X. Xxxxx Xxxxxx
Xxx Xxxxx, XX 00000-0000
Fax: [***]
Attn: File No. 1855
To LICENSEE: Esperion Therapeutics, Inc.
0000 Xxxxx Xxxxx Xxxxxx
000 XXX Xxxxx
Xxx Xxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Ph.D.
Fax: [***]
With copy to the LICENSEE's General Counsel, at the same address,
fax no. [***].
22. INVALIDITY.
If a court of competent jurisdiction finds any term, provision, or
covenant of this Agreement invalid, illegal or unenforceable, that
term will be curtailed, limited or deleted, but only to the extent
necessary to remove the invalidity, illegality or
unenforceability, and without in any way affecting or impairing
the remaining terms, provisions and covenants.
23. ENTIRE AGREEMENT AND AMENDMENTS.
This Agreement contains the entire understanding of the Parties
with respect to the matter contained herein and supersedes in full
all prior written and oral agreements, understandings, proposals,
promises and representations of the parties concerning the
Agreement and the terms applicable hereto. The Parties may, from
time to time during the continuance of this Agreement, modify,
vary or alter any of the provisions of this Agreement, but only by
an instrument duly executed by authorized officials of both
Parties hereto.
24. WAIVER.
No waiver by either Party of any breach of this Agreement, no
matter how long continuing or how often repeated, is a waiver of
any subsequent breach thereof, nor is any delay or omission on the
part of either Party to exercise any right, power, or privilege
hereunder a waiver of such right, power or privilege.
18
25. ARTICLE HEADINGS.
The Article headings herein are for purposes of convenient
reference only and do not define or modify the terms written in
the text of this Agreement.
26. NO AGENCY RELATIONSHIP.
The relationship between the Parties is that of independent
contractor and contractee. Neither Party is an agent of the other
in connection with the exercise of any rights hereunder, and
neither has any right or authority to assume or create any
obligation or responsibility on behalf of the other.
27. FORCE MAJEURE.
Neither Party hereto is in default of any provision of this
Agreement for any failure in performance resulting from acts or
events beyond the reasonable control of such Party, such as Acts
of God, acts of civil or military authority, civil disturbance,
war, strikes, fires, power failures, natural catastrophes or other
"force majeure" events.
28. GOVERNING LAW.
The law of the State of Michigan governs this Agreement and the
relationships between the Parties in all respects (notwithstanding
any provisions governing conflict of laws under such Michigan law
to the contrary), except that, for patents, the law of the country
that grants the patent determines questions affecting the
construction and effect of such patent.
29. JURISDICTION AND FORUM.
The Parties hereby consent to the jurisdiction of the courts of
the State of Michigan over any dispute concerning this Agreement
or the relationship between the Parties. Should LICENSEE bring any
claim, demand or other action against MICHIGAN, its Regents,
fellows, officers, employees or agents, arising out of this
Agreement or the relationship between the Parties, LICENSEE agrees
to bring said action only in the Michigan Court of Claims.
30. DEFINITIONS.
30.1 "Affiliate(s)" means any individual, corporation, partnership,
proprietorship or other entity controlled by, controlling, or
under common control with LICENSEE through equity ownership,
ability to elect directors, or by virtue of a majority of
overlapping directors, and includes any individual, corporation,
partnership, proprietorship or other entity directly or indirectly
owning, owned by or under common ownership with LICENSEE to the
extent of fifty percent (50%) or more of the voting shares,
including shares owned beneficially by such party.
30.2 "Field of Use" means all uses of Products and the TECHNOLOGY.
19
30.3 "First Commercial Sale" means the first sale of any Product by
LICENSEE or an Affiliate or Sublicensee, other than sale of a
Product for use in trials, such as field trials or clinical
trials, being conducted to obtain FDA or other governmental
approvals to market Products.
30.4 "Gross Sublicensing Revenues" means all consideration received by
LICENSEE and its Affiliates pursuant to any sublicense to a
Sublicensee. Gross Sublicensing Revenues shall not include amounts
received by LICENSEE and its Affiliates for the fair market value
of research support or product development performed for a
sublicensee, or for the fair market value of equity investments.
30.5 "Licensed Patent(s)" means (a) all U.S. and foreign patents and
patent applications, including those patents listed in Exhibit B
attached hereto, in which MICHIGAN has or acquires a property
interest, which cover an invention disclosed in the TECHNOLOGY;
and/or (b) all foreign equivalent patent applications and Patent
Cooperation Treaty filings based upon and supported by any
application filed pursuant to (a); and/or (c) all patents/patent
claims issuing from the applications in (a) or (b).
30.6 "Net Sales" shall mean the United States dollar equivalent of the
proceeds received by LICENSEE from the sale of Products, less (A)
amounts repaid or credited by reason of defects, returns,
rejections or allowances; (B) sales taxes, excise taxes, value
added taxes and customs duties paid, absorbed or allowed; (C)
customary commissions and other amounts paid or allowed to
independent sales representatives, distributors, brokers or
agents; (D) shipping charges; (E) trade and quantity discounts
actually allowed (and taken) as customary in the trade; and (F)
other deductions made in accordance with GAAP. Net Annual Sales
shall not include (A) any transfer between LICENSEE and any of its
Affiliates or Sublicensees, or (B) any transfer of any Products
used in testing, preclinical or clinical trials or as marketing
samples to develop or promote the Products. Net Sales does not
include amounts received by Sublicensees.
30.7 "Parties", in singular or plural usage as required by the context,
means LICENSEE and/or MICHIGAN.
30.8 "Product(s)" means any product(s), including compositions and
methods, whose manufacture, use, importation, offer for sale or
sale in any country would, but for this Agreement, comprise an
infringement, including contributory infringement, of one or more
Valid Claims in the country in which it is manufactured, used,
imported, offered for sale, or sold.
30.9 "Royalty Period(s)" means the six-month periods ending on the last
day of June and December of each year.
20
30.10 "Sublicensee(s)" means any person or entity, except an Affiliate,
sublicensed by LICENSEE under this Agreement to make, have made,
use, import, offer for sale or sell, in the Territory, Products
designed and marketed for use in the Field of Use.
30.11 "TECHNOLOGY" means all invention disclosure forms and supporting
documentation (including information, manufacturing techniques,
data, designs or concepts) incorporated into MICHIGAN's Technology
Management Office File No. 1855 [***].
30.12 "Territory" means worldwide.
30.13 "Valid Claim(s)" means any claim(s) in an unexpired patent
included within the Licensed Patents excepting only claims that:
(1) a court or other governmental agency of competent
jurisdiction has decided are unenforceable,
unpatentable, or invalid, unappealable or unappealed
within the time allowed for appeal; or
(2) a reissue or disclaimer has rendered invalid or
unenforceable.
If in any country two or more such decisions conflict with respect
to the validity of the same claim, the decision of the higher or
highest tribunal controls; however, if the tribunals are of equal
rank, then the decision or decisions upholding the claim prevails
when the conflicting decisions are equal in number, and the
majority of decisions prevails when the conflicting decisions are
unequal in number.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement in duplicate
originals by their duly authorized officers or representatives.
FOR ESPERION THERAPEUTICS, INC. FOR THE REGENTS OF THE
UNIVERSITY OF MICHIGAN
By /s/ Xxxxx X. Xxxxxx By /s/ Xxxxxxx X. Xxxxxx
-------------------------------- -----------------------------------
(authorized representative) Xxxxxxx X. Xxxxxx
Director, UM Technology Transfer
Typed Name Xxxxx X. Xxxxxx
------------------------
Title President and CEO Date 9/20/01
----------------------------- ----------------------------
Date 9/20/01
------------------------------
21
EXHIBIT A
[Note: "Licensee" in this Exhibit A refers to Sublicensee of Esperion
Therapeutics, Inc. Other capitalized terms have the same definition as provided
in the License Agreement between Esperion Therapeutics, Inc. and the Regents of
the University of Michigan (the "License Agreement".]
(a) MICHIGAN, INCLUDING ITS REGENTS, FELLOWS, OFFICERS, EMPLOYEES AND AGENTS,
MAKES NO REPRESENTATIONS, EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR
IMPLIED, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE, AND ASSUMES NO RESPONSIBILITIES WHATEVER
WITH RESPECT TO DESIGN, DEVELOPMENT, MANUFACTURE, USE, PERFORMANCE, SALE OR
OTHER DISPOSITION BY LICENSEE, AFFILIATES OR SUBLICENSEES OF PRODUCTS.
(b) MICHIGAN DOES NOT ASSUME ANY RISK AS TO PERFORMANCE OF PRODUCTS. Except in
the event of fraud, recklessness or willful misconduct, in no event shall
MICHIGAN, including its Regents, fellows, officers, directors, subsidiaries,
employees and agents, be responsible or liable for any direct, indirect,
special, incidental, or consequential damages or lost profits or other economic
loss or damage with respect to Products, to Licensee, Affiliates, or
Sublicensees regardless of legal theory. The above limitations on liability
apply even though MICHIGAN, its Regents, fellows, its officers, directors,
subsidiaries, employees or agents may have been advised of the possibility of
such damage. This paragraph does not apply to causes of action arising from any
alleged breach of this license agreement.
(c) MICHIGAN, including its Regents, fellows, officers, employees and agents,
make no representations or warranties that any Licensed Patent is or will be
held valid or enforceable, or that the manufacture, importation, use, offer for
sale, sale or other distribution of any Products will not infringe upon any
patent or other rights not included in the Licensed Patents.
(d) Licensee shall not, and shall require that its Affiliates and Sublicensees
do not, make any statements, representations or warranties whatsoever to any
person or entity, or accept any liabilities or responsibilities whatsoever from
any person or entity that are inconsistent with any disclaimer or limitation
included in this license.
(e) Licensee shall defend, indemnify and hold harmless and shall require its
Affiliates and Sublicensees to defend, indemnify and hold harmless MICHIGAN, its
Regents, fellows, officers, employees and agents (collectively, the "MICHIGAN
Parties"), for and against any and all claims, demands, damages, losses, and
expenses of any nature (including attorneys' fees and other litigation
expenses), resulting from death, personal injury, illness, property damage,
economic loss or products liability arising from or in connection with, any of
the following, except to the extent of negligence or willful misconduct proved
on the part of any of the MICHIGAN Parties: (1) any manufacture, use, sale or
other disposition by Licensee, Affiliates, Sublicensees of Products; and (2) the
use by any person of Products made, used, sold, practiced, or otherwise
distributed by Licensee, its Affiliates or its Sublicensees.
22
(f) As provided in Paragraph 8.6.1 of the License Agreement, in the event of
termination of the License Agreement: Licensee shall pay MICHIGAN a royalty
based upon Net Sales of Licensee and Affiliates of Licensee, according to
Licensee's sublicense agreement with Esperion Therapeutics, Inc., but in any
event no less than a royalty based upon the percent of Net Sales as specified in
Paragraph 4.2 of the License Agreement, subject to the same terms as provided in
Paragraphs 4.4, 4.6, 4.7, and 4.8 thereof.
(g) As provided in Paragraph 8.6.1 of the License Agreement between MICHIGAN and
Esperion Therapeutics, Inc., in the event of termination of said License
Agreement: if Licensee, pursuant to its sublicense agreement with Esperion
Therapeutics, Inc. has been granted the right to grant sublicenses under the
Licensed Patents, then Licensee shall pay MICHIGAN a royalty based on
sublicenses according to its sublicense agreement with Esperion Therapeutics,
Inc., but in any event no less than a royalty of [***] percent ([***]%) of Gross
Sublicensing Revenues of Licensee.
(h) As provided in Paragraph 8.6.1 of the License Agreement between MICHIGAN and
Esperion Therapeutics, Inc., in the event of termination of said License
Agreement: Licensee shall pay MICHIGAN an annual license maintenance fee
according to Licensee's sublicense agreement with Esperion Therapeutics, Inc.,
but in any event no less than the annual maintenance fees required by Paragraph
4.5 of the agreement between Esperion Therapeutics, Inc. and MICHIGAN,
creditable as provided in said Paragraph 4.5. Licensee shall be further
obligated to pay patent costs for the Licensed Patents in amounts equal to any
payments that Esperion Therapeutics, Inc. would have made in accordance with
Paragraph 10.6 of its agreement with MICHIGAN.
With regard to the amounts due to MICHIGAN under this Paragraph (h), Licensee
shall only be responsible for a pro rata share of such patent costs based on the
total amounts payable by all licensees (former Sublicensees to Esperion
Therapeutics, Inc.) under this same or similar provision.
(i) As provided in Paragraph 8.6.1 of the License Agreement, in the event of
termination of the License Agreement: To the extent that Licensee has been
granted relevant rights from Esperion Therapeutics, Inc., Licensee will use
commercially reasonable efforts to develop and commercialize at least one
Product, and will substantially meet the requirements of the following
milestones (to the extent the same have not already been met, or caused to have
been met, by Esperion Therapeutics, Inc. or other licensees), with date
requirements for each milestone after the first milestone to be determined in
writing in good faith by the MICHIGAN and Licensee, using reasonable business
judgment, upon satisfaction of the immediately previous milestone or maturation
of the payment obligation therefor:
(1) either (a) selection of recombinant PON (recPON) for development by
September 1, 2003 or (b) pay MICHIGAN a milestone payment of US$ [***] by
October 1, 2003.
(2) IND submission in the U.S. or Europe or payment to MICHIGAN of a milestone
payment of US$ [***] within 30 days of the date mutually determined by the
parties.
(3) Enrollment of first patient in a Phase II clinical trial and payment to
MICHIGAN of a milestone payment of US$ [***].
23
(4) Enrollment of first patient in a Phase III clinical trial and payment to
MICHIGAN of a milestone payment of US$ [***].
(5) Submission of first NDA in U.S. or Europe and payment to MICHIGAN of a
milestone payment of US$140,000.
(6) Approval of first NDA in U.S. or Europe and payment to MICHIGAN of a
milestone payment of US$ [***].
(j) With respect to payments under Paragraphs (f) through (i) herein, MICHIGAN
shall provide the same credits to Licensee as it would have been required to
provide to Esperion Therapeutics, Inc. under the License Agreement.
(k) Licensee and any sublicensees shall obtain and maintain product liability
insurance for the Technology, and shall name MICHIGAN as an additional insured.
(l) MICHIGAN shall assume the obligations of Esperion Therapeutics, Inc. to
Licensee under the Sublicense agreement, but MICHIGAN's obligations to Licensee
shall not be interpreted by Licensee or Esperion Therapeutics, Inc. to extend
beyond any obligation MICHIGAN had to Esperion Therapeutics, Inc. under the
License Agreement.
24
EXHIBIT B
[* * *]
EXHIBIT C
[* * *]
