Exhibit 10.15
AMENDED AND RESTATED LICENSE AGREEMENT
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This Amended and Restated License Agreement ("Agreement"), effective this
30th day of December, 2004 is between the University of Chicago, an Illinois
not-for-profit corporation ("UNIVERSITY"), having its principal office at ▇▇▇▇
▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ and PharmaFrontiers Corp., a Texas
corporation ("PF") having its principal office at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇-▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇. Each hereunder may be referred to separately as
the ("Party"), or together as the ("Parties"). The Parties agree:
1. Recitals.
A. To the best of the UNIVERSITY's knowledge at the date of execution of
this Agreement, the inventions identified in Schedule A were conceived
or first reduced to practice by the UNIVERSITY as Operator of Argonne
National Laboratory (ANL) in the performance of work under its U.S.
Department of Energy (DOE) Prime Contract No. W-31-109-ENG-38.
Pursuant to the terms of the DOE Contract and 35 USC 200 et seq.,
UNIVERSITY has acquired certain rights in and to said inventions.
B. PF, a small business entity specializing in the development of
therapeutic products, is interested in acquiring certain rights to
said inventions.
C. UNIVERSITY is willing to grant such rights so that said inventions may
be developed and used to the fullest extent for the benefit of the
U.S. economy and the general public.
D. The Parties agree that this Agreement is the entire understanding
between the Parties and supersedes all previous understandings and
agreements, including the license agreement executed on February 20,
2004 (the "Original License Agreement") between the Parties. The
License Agreement previously entered into by UNIVERSITY and PF on
February 20, 2004 is hereby terminated upon the date of execution of
this Agreement.
2. Definitions. The following capitalized terms used in this Agreement shall
mean:
A. "Affiliate" means, as to any person or entity, any other person or
entity, which directly or indirectly controls, is controlled by or is
under common control with the Party. Control shall mean the right to
control, or actual control of, management of such other entity,
whether by ownership of voting securities, by agreement, or otherwise,
or the direct or indirect ownership of the maximum percentage of such
stock permitted under local laws or regulations in those countries
where 50% ownership by a foreign entity is not permitted.
B. "Calendar Quarter "means each of the four, three-month periods ending
on March 31st, June 30th, September 30th, and December 31st.
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C. "Effective Date" means the date appearing in line 1 of this Agreement.
D. "Field" means all fields of use within diagnosis of, production of
therapeutics for, or treatment of diseases and/or disorders in humans
and the use in animals only for the development of such products or
applications in humans. The Field includes making stem cells and
banking of stem cells for such purpose and diagnostics, drug testing,
therapeutics and screening of small molecules, proteins, and/or
peptides which may cause differentiation of stem cells in vitro and/or
in vivo and the stem cells themselves.
E. "First Financing" means any financing received by PF where total
cumulative proceeds received by PF equal or exceed ten million
($10,000,000.00) US dollars as recorded by PF's SEC filing records,
excluding the 15% Exchangeable Convertible Subordinated Promissory
Notes (the first tranch of which were issued September 30, 2004) up to
ten million ($10,000,000.00) US dollars.
F. "Licensed Patents," means the patents and patent applications listed
on Schedule A and attached hereto, including all continuations,
divisionals, and corresponding foreign patent applications and any
patents which may issue therefrom and any reissues, renewals,
reexaminations, substitutions, or extensions of or to any such patents
or patent applications.
G. "Licensed Product(s)" means any product covered by the scope of any
Valid Claim contained in any Licensed Patent or a product made by a
process, method or technique covered by the scope of any Valid Claim
in any Licensed Patent or methods of using any product covered by the
scope of any Valid Claim contained in any Licensed Patent.
H. "Licensed Method(s)" means any method, procedure or process whose use
or practice is within the scope of any Valid Claim of any Licensed
Patents including but not limited to any service or part of selling a
service, licensing a method of use or other means of deriving
commercial benefit from Licensed Products.
I. "Net Sales" means the gross sales of Licensed Products and Licensed
Methods sold or otherwise distributed in the Territory, less the
following amounts directly chargeable to such sales as indicated on
individual invoices:
1) customary trade, quantity or cash discounts and rebates actually
allowed and taken;
2) amounts repaid or credited to customers on account of rejections
or returns; and
3) freight and other transportation costs, including insurance
charges, and duties, tariffs, sales and excise taxes and other
governmental charges based directly on Sales, turnover or
delivery of such Licensed Products and actually paid or allowed
by PF and its Affiliates.
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Net Sales shall be determined in accordance with generally accepted
accounting principles consistently applied.
J. "Outstanding Number of Shares" means all shares of PF's stock
outstanding on the relevant date, assuming the exercise of all options
granted under any stock option plan of PF, the conversion of all other
convertible securities then outstanding into Common Stock and the
exercise, and conversion into Common Stock, of all other options and
warrants of the Company that are then outstanding.
K. "Research and Development Expenses" means all expenditures, in US
Dollars, by PF, its Sublicensees and any of their Affiliates on the
following items dedicated to the research and development of Licensed
Products(s) and/or Licensed Method(s): 1) materials, 2) the
depreciation of equipment and facilities, 3) wages and benefits of
employees, and 4) payments to third parties for conducting research
and development of Licensed Product(s) and/or Licensed Method(s) on
behalf of PF.
L. "Royalties" means all amounts payable under Article 4 of this
Agreement.
M. "Sale" means any transaction in which a Licensed Product(s) and/or
Licensed Method(s) is placed with a third party or used for the
benefit of PF or a third party; provided "Sale" shall not include any
placement or use of a Licensed Product(s) and/or Licensed Method(s)
with or by a third party which is for testing or experimental
purposes, including any animal or clinical trials so long as such
placements are reported to the UNIVERSITY and for which no
Compensation is received.
N. "Sublicensee" shall mean any person, company or other entity granted a
Sublicense by PF, including Affiliates of the Sublicensee.
O. "Sublicense" shall mean any agreement entered into by PF with any
person, company or other entity pursuant to which any of the rights
granted to PF to the Licensed Patents are exercised.
P. "Territory" means worldwide.
Q. "Valid Claim" means an issued claim of any unexpired patent or a claim
of any pending patent application which has not been held
unenforceable, unpatentable or invalid by a decision of a court or
governmental body of competent jurisdiction, in a ruling that is
unappealable or unappealed within the time allowed for appeal; which
has not been rendered unenforceable through disclaimer or otherwise;
and which has not been lost through an interference proceeding or
irrecoverable failure to pay a maintenance fee.
3. Grant.
A. Exclusive Patent Grant. Subject to paragraphs 3.D and 3.E., UNIVERSITY
hereby grants to PF and its Affiliates, an exclusive, non-transferable
license, to make, have made, use, have used, import, offer to sell,
sell and/or have sold Licensed Products and/or Licensed Method(s)
within the Field and within the Territory during the term of this
Agreement.
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B. Sublicense. PF shall have the exclusive right to grant Sublicenses to
and under the Licensed Patents to third parties limited to and
consistent with the rights granted PF under Paragraph 3.A within the
Field and within the Territory.
C. Sublicense to Former Affiliates. For any Affiliates who have been
granted rights by UNIVERSITY under Paragraph 3.A and who subsequently
do not qualify as an Affiliate under the definition in 2.A, the
UNIVERSITY shall, upon PF's request, offer to such former Affiliates a
license under substantially the same terms and conditions as is
contained in this Agreement and shall agree to negotiate in good faith
to execute such an agreement. If no agreement is reached within six
months of the UNIVERSITY's offer to said former Affiliate, the
UNIVERSITY shall not be obligated to continue negotiation with such
former Affiliate and will have no further obligation to execute any
license with such former Affiliate.
D. No Other Rights. No rights in and to the Licensed Patents other than
those provided in Paragraphs 3.A. and 3.B., above, express or implied,
are conveyed by UNIVERSITY.
E. Reservation of Rights. UNIVERSITY reserves for itself, the worldwide
right to use the Licensed Patents and to practice the inventions
claimed in the Licensed Patents for any educational and/or
non-commercial research purpose it may choose at its own discretion
and without any payment therefore. UNIVERSITY shall have the right to
grant non-exclusive licenses to third parties to practice the
inventions claimed in the Licensed Patents for non-commercial research
purposes only. If tangible property is provided by UNIVERSITY to PF,
UNIVERSITY reserves the right to make, use and provide tangible
property and to grant non-exclusive licenses to make and use such
tangible property to third parties for non-commercial research
purposes only. In addition, the inventions claimed in the Licensed
Patents were made with the use of funds from the United States
government. Therefore, the U.S. Government has a paid-up,
royalty-free, non-transferable, worldwide, irrevocable license for
government use to practice or have practiced by or on behalf of the
U.S. Government the Licensed Patents. The U.S. Government has certain
other rights under 35 USC 200 et seq. and applicable regulations.
4. License Fees, Royalties and Other Payments.
A. License Fee. As partial consideration for the license granted in
Article 3 of this Agreement, PF shall pay UNIVERSITY the sum of one
hundred and seventy-five thousand U.S. dollars ($175,000) due and
payable immediately upon execution of this Agreement. The sums due and
payable under this Paragraph are nonrefundable and noncreditable
against Royalties.
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B. Equity. As partial consideration for the license granted in Article 3
of this Agreement, PF shall issue to the UNIVERSITY two hundred
forty-two thousand six hundred and eighty-eight shares (242,688) (the
"Shares") of capital stock representing one hundred eighty-seven
thousand six hundred eighty-eight shares of capital stock already
owned by the UNIVERSITY and an addition fifty-five thousand shares of
capital stock. Such Shares shall be issued to University immediately
upon execution of this Agreement. The consideration due and payable
under this Paragraph is nonrefundable and non-creditable against
Royalties. If certificate(s) representing such Shares are not received
by UNIVERSITY within seven (7) days of the Effective Date, this
Agreement shall be deemed in default and this Agreement shall
automatically terminate effective immediately.
C. Milestones.
i. PF shall pay to University one and one half million
($1,500,000.00) US dollars upon the occurrence of the First
Financing or October 30, 2005 which ever occurs first. As of the
date of execution of this Agreement, the First Financing is
projected to take the form of a PIPE executed on or about March
31, 2005 with expected total revenue of thirty to forty million
$30-40,000,000.00) US dollars and shall be executed by ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇. Should any other First Financing become the
preferred method of financing PF shall notify UNIVERSITY of its
intent and the proposed timing of such alternative First
Financing. If the required payment is not received within seven
(7) days of the closing date of First Financing or on or before
October 30, 2005 which ever occurs first, UNIVERSITY shall have
the right, at its sole discretion, to terminate this Agreement
effective immediately upon notice to PF or to accept equity
through the issuance of Common Stock with piggyback registration
rights valued at the Conversion Price, and all accrued interest,
at 15% per annum, from the date of execution of this Agreement
until October 30, 2005 computed on the basis of a three hundred
and sixty (360) day year of twelve (12) thirty (30) day months,
and paid within ten (10) days of notice to PF that UNIVERSITY
elects to exercise its right to accept equity under this
paragraph.
ii. Upon the occurrence of the later of First Financing or November
30, 2005, PF shall issue to UNIVERSITY shares of Common Stock
such that the aggregate number of shares issued to UNIVERSITY,
including the Shares issued pursuant to Paragraph 4.B, shall
represent two and six-tenths of a percent (2.6%) of the total
Outstanding Number of Shares after conversion of the 15%
Exchangeable Convertible Subordinated Promissory Notes, the first
tranch of which was issued September 30, 2004, and after issuance
of any and all equity in the form of stock at the close of the
First Financing (the "Additional Shares").
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iii. Registration Rights. PF agrees to grant and grants to UNIVERSITY
the registration rights, with respect to the Shares and
Additional Shares, set forth in Schedule B, and agrees to execute
contemporaneously with the execution of this Agreement the
Registration Rights Agreement included as Schedule B.
D. Capitalization. PF represents and warrants to UNIVERSITY that the
capitalization table set forth in Schedule C attached hereto
represents all of the issued and outstanding shares of stock, options,
warrants and other securities of PF as of the date hereof, and no
other warrants, options, stock rights or other securities of PF have
been issued or are authorized to be issued by its Board of Directors.
PF further represents and warrants that all Shares issued to
UNIVERSITY pursuant to this Agreement shall be duly authorized,
validly issued, deemed fully paid and non-assessable and not issued in
violation of, and are not subject to, any preemptive rights.
Non-payment or misrepresentation of information provided to UNIVERSITY
by PF under this Agreement, is considered a material breach and
UNIVERSITY may terminate the License pursuant to Paragraph 11.B. PF
hereby agrees to promptly notify UNIVERSITY upon the close of each
financing.
E. Royalties. As partial consideration for the license granted in Article
3 of this Agreement, PF shall pay UNIVERSITY a Royalty of of Net Sales
of Licensed Product(s) and/or Licensed Method(s) by PF, its
Sublicensees and Affiliates of either. The Royalty obligation under
this paragraph shall apply to the first Sale of a Licensed Product(s)
and/or Licensed Method(s) whether by PF or a Sublicensee. Royalty
payments shall be due quarterly and payable within thirty (30) days of
the end of each Calendar Quarter beginning in the period in which the
first Sale occurs.
F. Royalty Offset. In the event that, with respect to Net Sales of
Licensed Products and/or Licensed Methods, PF is paying royalties to
unaffiliated third parties for patent rights and the unaffiliated
third party patent rights dominate the Licensed Patents such that the
Licensed Patents cannot be practiced without infringing such third
party rights in the absence of a license, the Royalties due and
payable to UNIVERSITY hereunder shall be proportionally reduced by of
the royalty rate due such third party, but in no event shall the
Royalty payable to UNIVERSITY be less than of Net Sales. By example,
if the royalty due other third parties equals of Net Sales, the
Royalty due UNIVERSITY shall be ; if the royalties due other third
parties equals or more, of Net Sales, the Royalty due UNIVERSITY shall
be . A Sublicensee shall not be entitled to any Royalty Offset under
this Paragraph 4.F for any third party license it requires. However,
PF will be entitled to the Royalty Offset if it is required to take a
third party license as described above and subsequently sublicenses
the Licensed Patents and the third party patents to a Sublicensee.
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G. No Multiple Royalties. One royalty shall be payable for Licensed
Product(s) and/or Licensed Method(s) regardless of the number of
Licensed Patents which cover such licensed Product(s) and/or Licensed
Method(s).
H. Minimum Royalties. Beginning in the calendar year that includes the
third anniversary of the Effective Date of this Agreement Minimum
Royalties shall be due and payable according to the following
schedule;
1) If the total Royalties for the calendar year that includes the
third anniversary of the Effective Date of this Agreement are
less than , PF shall pay UNIVERSITY the difference between such
amount and the actual Royalties due. Such payment shall be made
at the same time payment for Royalties for the fourth quarter for
such year is due.
2) If the total Royalties for the calendar year that includes the
fourth anniversary of the Effective Date of this Agreement are
less than , PF shall pay UNIVERSITY the difference between such
amount and the actual Royalties due. Such payment shall be made
at the same time payment for Royalties for the fourth quarter for
such year is due.
3) If the total Royalties for the calendar year that includes the
fifth anniversary of the Effective Date of this Agreement are
less than , PF shall pay UNIVERSITY the difference between such
amount and the actual Royalties due. Such payment shall be made
at the same time payment for Royalties for the fourth quarter for
such year is due.
4) If the total Royalties for the calendar year that includes the
sixth anniversary of the Effective Date of this Agreement are
less than , PF shall pay UNIVERSITY the difference between such
amount and the actual Royalties due. Such payment shall be made
at the same time payment for Royalties for the fourth quarter for
such year is due.
5) If the total Royalties for the calendar year that includes the
seventh anniversary of the Effective Date of this Agreement are
less than , PF shall pay UNIVERSITY the difference between such
amount and the actual Royalties due. Such payment shall be made
at the same time payment for Royalties for the fourth quarter for
such year is due.
6) If the total Royalties for the calendar year that includes the
eighth anniversary of the Effective Date of this Agreement, and
for every year thereafter are less than , PF shall pay UNIVERSITY
the difference between such amount and the actual Royalties due.
Such payment shall be made at the same time payment for Royalties
for the fourth quarter for such year is due.
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I. Calculation of Royalties. Royalties shall be payable in U.S. currency
within thirty days (30) days after the end of each Calendar Quarter
for the Term of the Agreement, beginning with the Calendar Quarter in
which the first Sale of a Licensed Product(s) and/or Licensed
Method(s) occurs. A royalty statement showing Net Sales for each
country and a calculation of the Royalties due shall accompany each
payment. Any necessary conversion of currency into United States
dollars shall be at the applicable rate of exchange of Citibank, N.A.,
in New York, New York, on the last day of the Calendar Quarter in
which such transaction occurred.
J. Sublicense flow through.
i. For each Sublicense granted by PF the following shall apply. PF
shall notify UNIVERSITY prior to the execution of any Sublicense.
PF will disclose the identity of the potential Sublicensee to
UNIVERSITY and shall provide UNIVERSITY with a copy of all
executed Sublicenses. All Sublicenses shall provide that the
Sublicensee may not grant further Sublicenses to third parties.
If the aggregate of Average Annual Payments arising from any
sublicense is not at least , then within sixty (60) days of the
fifth anniversary of the execution of the Sublicense PF shall
either terminate such Sublicense or pay UNIVERSITY times the
difference between the Average Annual Payments and . "Average
Annual Payments" shall mean the aggregate of all Royalties and
flow through payments made in respect of a Sublicense over each
of the five year periods ending on each of the fifth, tenth,
fifteenth and twentieth anniversary of the date hereof divided by
five.
ii. For each Sublicense granted by PF, PF shall pay UNIVERSITY of all
Compensation. For this Section 4.J., "Compensation" means all
fees, minimum royalties, milestone payments and other cash
payments of any kind and in kind payments or equity amounts paid
in lieu of cash, paid by a Sublicensee in consideration of the
Sublicense. "Compensation" does not include (i) payments that
constitute Net Sales that are subject to Royalties pursuant to
Paragraph 4.E.; or (ii) payments or contributions of materials or
services from a Sublicensee which PF is obligated to use in
research and development and which qualify as Research and
Development Expenses.
iii. If royalties paid by any Sublicensee to PF are not subject to the
obligations under Paragraph 4.E because PF Sold Licensed
Product(s) and/or Licensed Method(s) to such Sublicensee and
therefore paid a Royalty to the UNIVERSITY under Paragraph 4.E,
any such royalties paid to PF for Sublicensee's sales of Licensed
Product(s) and/or Licensed Method(s) shall be subject to the
sublicense flow through obligations of this paragraph.
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iv. In the event that, with respect to the Sublicense of Licensed
Patents, PF is required to additionally sublicense other
intellectual property which has been licensed from a third party
and to which third party sublicense flow through is owed, and
that third party licensed intellectual property dominates the
Licensed Patent such that Licensed Patents cannot be practiced
without infringing the third party licensed intellectual property
in the absence of a license, the amount due and payable to
UNIVERSITY hereunder shall be proportionally reduced by of the
sublicense flow through obligation due such third party, but in
no event shall the sublicense flow through payable to UNIVERSITY
be less than of all compensation received by PF from Sublicensee.
Payments shall be made (or assigned as relevant) to UNIVERSITY
within thirty (30) days of receipt by PF. For this purpose
compensation includes all fees, minimum royalties, milestone
payments and other cash payments of any kind and any in kind
payments or equity amounts taken in lieu of cash. It is the
intent and agreement of the parties that UNIVERSITY will be paid
of any kind of Compensation paid by a Sublicensee for rights
granted to such Sublicensee under this Agreement without regard
to how the Compensation is structured, denominated or paid.
K. Sublicense after R&D expenditure of US dollars. At such time when PF
expends US dollars in Research and Development Expenses other than
with Licensor, the sublicense flow through subject to 4.J.ii above,
for all Sublicenses will be reduced from of Compensation from the date
on which such expenditure is confirmed by UNIVERSITY. In the event
that, with respect to the Sublicense of Licensed Patents after
expenditure of US dollars as described above, PF is required to
additionally sublicense other intellectual property which has been
licensed from a third party and to which sublicense flow through is
owed, and that third party licensed intellectual property dominates
the Licensed Patents such that the Licensed Patents cannot be
practiced without infringing the third party licensed intellectual
property in the absence of a license, the amount due and payable to
UNIVERSITY hereunder shall be proportionally reduced by of the
sublicense flow through obligation due such third party, but in no
event shall the sublicense flow through payable to UNIVERSITY be less
than of all compensation received by PF from Sublicensee. All other
Sublicense conditions remain as described in Paragraph J., above.
L. Overdue Payment. PF shall be responsible for obtaining the full
compliance of its Affiliates with the terms and conditions of this
Agreement. For purposes of payments, PF shall be fully responsible for
any payments not made by its Affiliates according to the terms and
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conditions of this Agreement. Payments due to UNIVERSITY under this
Agreement shall, if not paid when due under the terms of this
Agreement, bear simple interest at the prime rate of interest (as
published by Citibank, N.A. on the date such payment is due) plus
percent ( %), calculated on the basis of a 360 day year for the number
of days actually elapsed, beginning on the due date and ending on the
day prior to the day on which payment is made in full. Interest
accruing under this Paragraph shall be due to UNIVERSITY on demand or
upon payment of past due amounts, whichever is sooner. The accrual or
receipt by UNIVERSITY of interest under this Paragraph shall not
constitute a waiver by UNIVERSITY of any right it may otherwise have
to declare a default under this Agreement or to terminate this
Agreement.
M. Records. UNIVERSITY may from time to time and at any reasonable time,
not exceeding once every twelve (12) months, through such firm of
certified public accountant (auditor) as UNIVERSITY may select,
inspect the books and records of PF and its Affiliates in order to
verify the accuracy of reported statement by PF of sums paid or
payable. PF shall, and shall cause its Affiliates, to keep full and
accurate books and records in sufficient detail so that sums due
UNIVERSITY hereunder can be properly calculated. Such books and
records shall be maintained for at least five (5) years after the
Royalty reporting period(s) to which they relate. Books and records
shall include but not be limited to:
i. Accounting General Ledgers
ii. Invoice/Sales Registers
iii. Original Invoice and Shipping Documents
iv. Federal and State Business Tax Returns
v. Company Financial Statements
vi. Sales Analysis Reports
vii. Inventory and or Manufacturing Records
viii. Sub-License and Distributor Agreements
ix. Price Lists, Product Catalogs and Other Marketing Materials
After completion of any such examination, UNIVERSITY shall promptly
notify PF in writing of any proposed modification to PF statement of
sums due and payable. If PF accepts such modification, or if the
Parties agree on other modifications, one Party shall promptly pay or
credit the other in accordance with such resolution. Such examination
shall be made at the expense of UNIVERSITY, unless such examination
discloses a discrepancy of five percent (5%) or more in the amount of
Royalties and other payments due UNIVERSITY. In such case PF shall be
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responsible for reimbursing UNIVERSITY for the examination fee and
expenses charged by the auditor. Any underpayment as determined by the
auditor will bear interest at five percent (5%) per month from the
date the royalty payment was due. PF agrees to pay past due royalties
for any royalty deficiency error as determined by the auditor, which
affects periods within the period under audit. In addition, PF agrees
to pay past due royalties for any royalty deficiency error as
determined by the auditor, which affects periods prior to the period
under audit. UNIVERSITY and the auditor shall maintain in confidence
such inspection and its resulting report. The auditor may from time to
time consult the UNIVERSITY and any of its' employees or third party
counsel on questions as they relate to the licensed technology. The
auditor may not disclose financial or proprietary information except
as required by the license agreement or if it already exists in the
public domain. No other confidentiality agreement shall be required to
conduct the audit of the PF's books and records.
5. Diligence.
A. FDA Approval. PF agrees to use its best efforts to file and receive
Food and Drug Administration (FDA) approval for either a Licensed
Product(s) and/or Licensed Method(s) on or before February 20, 2011.
B. Development Plan. Upon execution of this Agreement and on each
anniversary of the Effective Date of the Agreement until first
commercial Sale, PF shall provide the UNIVERSITY with a commercial
development plan for Licensed Product(s). Such summary shall include
statements regarding research and development plans and expenditures,
product milestones and related timetable schedules, government or
regulatory timetables, market entry timetables, and sales and
marketing plans and related financial data. Until PF and its
Sublicensees and Affiliates of either have spent an aggregate of US
dollars on Research and Development Expenses as required in Paragraphs
5.E and 5.F below, PF shall provide an annual report of the itemized
expenditures toward research and development of Licensed Product(s)
and/or Licensed Method(s). Such report shall be itemized in
conjunction with the definition of Research and Development Expenses
and will include an explanation regarding the percent commitment of
employees, materials, equipment, facilities and contracts toward the
development of Licensed Product(s) and/or Licensed Method(s).
C. Sale Deadline. If PF fails to make a Sale of Licensed Product(s) or
Licensed Method(s) by February 20, 2011, UNIVERSITY shall have the
right to unilaterally terminate this Agreement. Such termination shall
be effective thirty days (30) after notice to PF.
D. Notification of First Sale. PF agrees to immediately notify UNIVERSITY
in writing when Sales of Licensed Product(s) and/or Licensed Method(s)
first occur and when PF's obligation to begin making Royalty payments
begins.
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E. Research Expenditures. PF shall demonstrate direct expenditure of at
least US dollars on Research and Development Expenses before February
2006. Such expenditure may be made solely by PF or by PF and its
Sublicensees, but in no event shall the total expenditure by
Sublicensees account for greater than fifty (50%) percent of the US
dollars required to satisfy the diligence obligations of this
Paragraph. If PF fails to comply with the diligence obligation in this
Paragraph, the Agreement shall be amended to restrict the grant as
follows: 1) an exclusive license in two cell therapy areas chosen from
the list of maladies in the Licensed Patents, ie: ▇▇▇▇▇▇▇▇▇'▇ disease,
cardiac revascularization, liver disease, etc. (such areas to be
determined by PF) and 2) a non-exclusive in the remainder of the
Field. Such two exclusive areas will be identified in an amendment to
this Agreement to be executed within thirty (30) days of notification
to PF from UNIVERSITY that the diligence obligation under this
Paragraph was not met. Failure to execute an amendment within the
thirty (30) days gives the UNIVERSITY the right to unilaterally
terminate this Agreement effective thirty (30) days after notice of
termination is given to PF.
F. Research Expenditures. PF shall demonstrate direct expenditure of an
aggregate of at least US dollars (including amounts spent pursuant to
Paragraph 5.E) on Research and Development Expenses before February
20, 2008. Such expenditure may be made solely by PF or by PF and its
Sublicensees, but in no event shall the total expenditure by
Sublicensees account for greater than fifty (50%) percent of the US
dollars required to satisfy the diligence obligations of this
Paragraph. If PF fails to comply with the diligence obligation in this
Paragraph but has met the diligence obligation in Paragraph 5.E., the
Agreement shall be amended as follows: 1) an exclusive license in two
cell therapy areas chosen from the list of maladies in the Licensed
Patents, ie: ▇▇▇▇▇▇▇▇▇'▇ disease, cardiac revascularization, liver
disease, etc. (such areas to be determined by PF) and 2) a
non-exclusive in the remainder of the Field. Such two exclusive areas
will be identified in an amendment to this Agreement to be executed
within thirty (30) days of notification to PF from UNIVERSITY that the
diligence under this Paragraph was not met. Failure to execute an
amendment within the thirty (30) days gives the UNIVERSITY the right
to unilaterally terminate this Agreement effective thirty (30) days
after notice of termination is given to PF. If PF fails to comply with
the diligence obligation in this Paragraph and has failed to meet the
diligence obligation in Paragraph 5.E., the Agreement shall be amended
as follows; the exclusive license shall be amended to a non-exclusive
license in the Field. Such an amendment to this Agreement to be
executed within thirty (30) days of notification to PF from UNIVERSITY
that the diligence under Paragraphs 5.E. and 5.F. were not met.
Failure to execute an amendment within the thirty (30) days gives the
UNIVERSITY the right to unilaterally terminate this Agreement
effective thirty (30) days after notice of termination is given to PF.
12
6. Patent Prosecution and Maintenance.
A. Prosecution and Maintenance. UNIVERSITY shall be solely responsible
for the preparation, filing, prosecution and maintenance of the
Licensed Patents. UNIVERSITY shall cause its patent counsel to provide
PF with a list of the countries in which it has filed and/or intends
to file applications. UNIVERSITY agrees to file applications in the
additional countries requested by PF unless it otherwise notifies PF
under Paragraph 6.D. PF and UNIVERSITY agree to make any amendments
necessitated by such decisions to Schedule A in a timely manner. PF
agrees to cooperate, and agrees to cause its Sublicensees and
Affiliates of either to cooperate, with UNIVERSITY in the preparation,
filing, prosecution and maintenance of the Licensed Patents by
disclosing such information as may be necessary for the same and by
promptly executing such documents as UNIVERSITY may reasonably request
in connection therewith. PF and its Sublicensees and Affiliates of
either shall bear their own costs in connection with their cooperation
with UNIVERSITY under this Paragraph. UNIVERSITY will provide PF
copies of all material documents received or prepared by UNIVERSITY in
the prosecution and maintenance of the Licensed Patents. UNIVERSITY
shall provide copies in a timely manner to allow PF an opportunity to
comment and request changes. UNIVERSITY shall reasonably include
comments of PF in the prosecution of Licensed Patents.
B. Patent Costs. PF agrees to pay all necessary and reasonable third
party fees and expenses incurred by UNIVERSITY in obtaining and
maintaining the Licensed Patents, including those incurred by
UNIVERSITY prior to the Effective date of this Agreement. PF shall
pay, concurrent with the execution of this Agreement, all historical
patent costs incurred by UNIVERSITY prior to the Effective date of
this Agreement. Payment for fees and expenses incurred after the
Effective Date shall be invoiced to PF on a monthly basis and PF
agrees to pay such invoices within thirty (30) days of receipt. PF
also agrees upon request by UNIVERSITY to make timely estimated
advanced payments for the filing of national applications.
Documentation received from third party vendors to support the amounts
invoiced shall be included with each invoice. PF shall raise any
objections to such amounts invoiced within the thirty (30) day time
period for payment. Invoices for advanced payments shall be reconciled
with the advance payments made by PF every six (6) months. Any excess
payment by PF shall be credited to future patent costs specified
herein. PF will be responsible for the reimbursement until such time
as UNIVERSITY licenses Licensed Patents to additional third parties
for each respective patent should the rights granted in Article 3. be
redefined subject to PF lack of diligence under Article 5. At such
time when additional licenses are executed, the percent responsibility
will be adjusted to reflect an equally shared reimbursement
responsibility among all licensees including previous payments. PF
will be reimbursed by UNIVERSITY for past payment above the equally
shared reimbursement responsibility upon UNIVERSITY's receipt of
historical patent cost payment by any additional licensee. Ongoing
patent costs will be separately billed to each licensee representing
an equal patent cost reimbursement responsibility.
13
C. Election not to pay patent costs. If PF decides to no longer support
patent costs for a specific Licensed Patent listed in Schedule A, or a
particular jurisdiction for a specific Licensed Patent listed in
Schedule A, or a particular issued or pending patent application
claiming priority to a Licensed Patent listed in Schedule A, PF shall
notify UNIVERSITY in writing. Upon receipt of such notice, the patent
rights at issue will thereafter be excluded from the license granted
hereunder, and UNIVERSITY shall be free to license such rights to
third parties, without any further obligation to PF. PF shall continue
to reimburse UNIVERSITY for all costs incurred up to the date ninety
(90) days after the date of receipt of such notice.
D. Failure to Pay Patent costs. If PF declines or fails to make advance
payments or pay or reimburse UNIVERSITY for all or any portion of the
patent fees and expenses (including maintenance fees) as required by
Paragraph 6.B. for any Licensed Patent, PF's rights with respect to
all such applications and patents for which PF fails to make advance
payments or does not reimburse UNIVERSITY shall terminate effective
thirty (30) days after written notice from UNIVERSITY requesting such
payment, unless payment in full is made within such time. Not
withstanding the foregoing, failure to pay patent costs hereunder is a
material breach of this Agreement and the UNIVERSITY has the right to
terminate the Agreement as defined in Article 11.
7. Warranties; Indemnification, Assumption of Risk; Insurance.
A. The UNIVERSITY represents the following:
1) the execution, delivery, and performance of this Agreement by
UNIVERSITY has been duly authorized by all necessary corporate
action;
2) it has the full power and authority to enter into and carry out
its obligations under this Agreement;
3) UNIVERSITY is acquiring the Shares and Additional Shares for its
own account, for investment and not with a view to, or for resale
in connection with, any distribution, or public offering thereof
within the meaning of the Securities Act of 1933, as amended (the
"Act") and applicable state securities laws;
4) UNIVERSITY understands that (A) the Shares and Additional Shares
(i) have not been registered under the Act or any state
securities laws, (ii) will be issued in reliance upon an
exemption from the registration and prospectus delivery
requirements of the Act pursuant to Section 4(2) and/or
Regulation D thereof, (iii) will be issued in reliance upon
exemptions from the registration and prospectus delivery
requirements of state securities laws which relate to private
offerings and (iv) must be held by the undersigned indefinitely,
and (B) UNIVERSITY must therefore bear the economic risk of such
investment indefinitely unless a subsequent disposition thereof
14
is registered under the Act and applicable state securities laws
or is exempt therefrom. UNIVERSITY further understands that such
exemptions depend upon, among other things, the bona fide nature
of the investment intent of the undersigned expressed herein.
Pursuant to the foregoing, UNIVERSITY acknowledges that the
certificate representing the Shares and Additional Shares
acquired by UNIVERSITY shall bear a restrictive legend
substantially as follows:
"The Securities represented by this certificate are subject
to restrictions on transfer under the Securities Act of 1933
(the "Act"), as amended, and state securities laws, and may
not be offered for sale, sold, assigned, transferred,
pledged or otherwise disposed of unless (i) registered under
the applicable securities laws or (ii) an exemption from
registration is available."
5) UNIVERSITY is an "accredited investor" within the meaning of Rule
501 of Regulation D under the Securities Act, as presently in
effect; and
6) UNIVERSITY is relying solely on investigations made by UNIVERSITY
and its representatives in the acquisition of the Shares and the
Additional Shares. UNIVERSITY has had an opportunity to discuss
PF's business, management, financial affairs and prospects with
its management and the opportunity to review PF's facilities,
financial statements, public filings and business plan.
UNIVERSITY has also had an opportunity to ask questions of
management, which questions were answered to UNIVERSITY's
satisfaction.
B. Disclaimer of Warranties. Other than the representations under Section
7.A, UNIVERSITY, Argonne National Laboratory, The DOE, and the U.S.
Government, and/or persons acting on behalf of said, make no
representations or warranties of any kind, express or implied, with
respect to the invention(s) claimed in the Licensed Patents or with
respect to the Licensed Patents themselves, including but not limited
to, any representations or warranties about (i) the validity, scope or
enforceability of any of the Licensed Patents; (ii) the invention(s)
claimed in the Licensed Patents or with respect to the Licensed
Patents themselves; (iii) whether the practice of any claim contained
in any of the Licensed Patents will or might infringe a patent or
other intellectual property right owned or licensed by a third party;
(iv) the patentability of any invention claimed in the Licensed
Patents; or (v) the accuracy, safety, or usefulness for any purpose of
any process made or carried out in accordance with or through the use
of the Licensed Patents.
C. Indemnification. PF agrees to, and will cause any Sublicensee and
Affiliates of either to, indemnify, defend and hold harmless
UNIVERSITY, the U.S. Government, and Affiliates of either and all
trustees, directors, officers, employees, fellows and agents of any of
the foregoing (each an "Indemnified Person") from and against any and
15
all claims, demands, loss, damage, penalty, cost or expense (including
attorneys' and witnesses' fees and costs) of any kind or nature,
arising from the development, production, use, sale, license or other
disposition of Licensed Product(s) and/or Licensed Method(s) by PF,
its Sublicensees and Affiliates of either, or use of Licensed Patents
and all activities associated therewith, including clinical trials, or
any use of information provided by UNIVERSITY to PF. PF agrees, and
will cause any Sublicensee and Affiliates of either to agree not to
▇▇▇ any Indemnified Person in connection with the use and/or
examination of the Licensed Patents and all activities associated
therewith. UNIVERSITY shall be entitled to participate at their option
and expense through counsel of their own selection, and may join in
any legal actions related to any such claims, demands, losses,
damages, costs, expenses and penalties. PF shall not and will cause
its Sublicensees and Affiliates of either, not to enter into any
settlement affecting any rights or obligations of any Indemnified
Person or which includes an express or implied admission of liability,
negligence or wrongdoing by any Indemnified Person, without the prior
written consent of such Indemnified Person.
D. Assumption of Risk. PF assumes the entire risk as to the performance
safety and efficacy of Licensed Products or any invention claimed in
the Licensed Patents. Indemnified Persons shall not be responsible or
liable for any injury, loss, or damage of any kind, including but not
limited to direct, indirect, special, incidental or consequential
damages or lost profits to PF or any of the foregoing, or for any such
injury, loss or damage to any other individual or entity, regardless
of legal theory based on the use of Licensed Patents and all
activities associated therewith. The above limitations on liability
apply even though the Indemnified Person may have been advised of the
possibility of such injury, loss or damage. PF shall not and will
cause its Sublicensee's and Affiliates of either not to make any
agreements, statements, representations or warranties or accept any
liabilities or responsibilities whatsoever with regard to any person
or entity, which are inconsistent with this Paragraph.
E. Insurance.
i. Insurance for Research Application Use. PF shall, and shall cause
its Sublicensees and Affiliates of either to, for so long as such
entity manufactures, uses or sells any Licensed Product(s) and/or
Licensed Method(s) for research applications, maintain in full
force and effect policies of (a) worker's compensation insurance
within statutory limits, (b) employers' liability insurance with
limits of not less than one million dollars ($1,000,000) per
occurrence and (c) general liability insurance with limits of not
less than one million dollars ($1,000,000) per occurrence with an
annual aggregate of two million dollars ($2,000,000). and (d)
prior to the sale of any products, products liability insurance,
with limits of not less than one million dollars ($1,000,000))
per occurrence with an annual aggregate of three million dollars
($3,000,000).
16
ii. Insurance for Clinical Applications. If any of PF, its
Sublicensee or any Affiliates of either manufactures, uses or
sells any Licensed Product(s) and/or Licensed Method(s) for
clinical applications, PF shall immediately notify UNIVERSITY in
writing, and such entity shall maintain in full force and effect
policies of (a) worker's compensation insurance within statutory
limits, (b) employers' liability insurance with limits of not
less than one million dollars ($1,000,000) per occurrence, (c)
general liability insurance (with Broad Form General Liability
endorsement) with limits of not less than five million dollars
($5,000,000) per occurrence with an annual aggregate of ten
million dollars ($10,000,000) and (d) products liability
insurance, with limits of not less than five million dollars
($5,000,000) per occurrence with an annual aggregate of twenty
million dollars ($20,000000). PF's insurance for clinical
applications shall be reviewed by UNIVERSITY upon the fifth and
tenth anniversary of the Effective Date of this Agreement. At
such times the UNIVERSITY may require PF to purchase a tail or
extended reporting coverage plan and may also require an increase
in coverage amounts proportional to inflation and the inflation
of medical liability standards.
iii. Insurance Policy Requirements. Such coverage(s) shall be
purchased from a carrier or carriers having an A. M. Best rating
of at least A- (A minus) and shall name UNIVERSITY as an
additional insured. PF shall provide to UNIVERSITY copies of
certificates of insurance within thirty (30) days after execution
of this Agreement. Such insurance shall be primary and
noncontributory to any insurance UNIVERSITY and its Affiliates
may have. At UNIVERSITY's request, PF will supply UNIVERSITY from
time to time with copies of each such policy, and will notify
UNIVERSITY in writing at least thirty (30) days prior to any
termination of or change in coverage under any such policies.
8. Confidential Information and Publication.
A. All information submitted by one Party to the other concerning the
Licensed Product(s) and/or Licensed Method(s), the invention(s)
claimed in the Licensed Patents shall be considered as confidential
("Confidential Information") and shall be utilized by the receiving
Party only pursuant to the licenses granted hereunder. During the term
of this Agreement and for a period of five (5) years thereafter,
neither Party shall disclose to any third party any Confidential
Information received from the other Party without the specific written
consent of such Party. The foregoing shall not apply where
Confidential Information a) was or becomes public through no fault of
the receiving Party, b) was, at the time of receipt, already in the
possession of the receiving Party as evidenced by its written records,
c) was obtained from a third party legally entitled to use and
disclose the same, or d) is required by law to be disclosed to a
governmental agency.
B. UNIVERSITY agrees to preserve as confidential any and all trade
secrets, privileged records or other proprietary information belonging
to PF, marked as Confidential and disclosed to UNIVERSITY. For
disclosure of proprietary information belonging to PF by oral
communication, such disclosure will be reduced to writing, marked as
Confidential, and sent to UNIVERSITY within two weeks of disclosure to
UNIVERSITY.
17
C. PF acknowledges the UNIVERSITY's strong institutional policy favoring
the retention of publication rights and dependence upon publication as
an essential means of intellectual exchange. UNIVERSITY shall have the
right to publish the results of and disseminate information to the
extent that proprietary trade secrets or confidential information
provided by PF to UNIVERSITY are not disclosed.
9. Marketing and Advertising.
A. The Parties agree not to use the name of the other aforementioned, in
any commercial activity, press releases, marketing, advertising or
sales brochures except with the prior written consent of the other
Party, which consent may be granted or withheld in such Party's sole
discretion. PF further agrees not to use and shall prohibit its
Sublicensees and Affiliates of either from using the name of the
University of Chicago, Argonne National Labs, The DOE, and/or the U.S.
Government in any commercial activity with out the prior written
consent of the UNIVERSITY. PF may, upon receiving approval from
UNIVERSITY, apply such approval to subsequent iterations of the same
activity provided that the content and presentation of the approved
material is not changed in terms of scope, scale or purpose. For
additional clarification by example, it is intended that for approved
material used in presenting to potential investors of PF the approved
material may be presented to several investors at different times with
out need for approval of each presentation.
10. Infringement.
A. Notice of Infringement. In the event of an infringement of a Licensed
Patent, each Party shall give the other written notice if one of them
becomes aware of any infringement by a third party of any Licensed
Patent. Upon notice of any such infringement, the parties shall
promptly consult with one another with a view toward reaching
agreement on a course of action to be pursued.
B. PF's Right to Bring Infringement Action. If a third party infringes
any patent included in the Licensed Patents within the Field, PF shall
have the right to institute and prosecute an action or proceeding to
▇▇▇▇▇ such infringement and to resolve such matter by settlement or
otherwise with the permission of UNIVERSITY. PF agrees to notify
UNIVERSITY of its intention to bring an action or proceeding prior to
filing the same and in sufficient time to allow UNIVERSITY the
opportunity to discuss with PF the choice of counsel for such matter.
PF agrees to hire counsel reasonably acceptable to UNIVERSITY. PF
shall keep UNIVERSITY timely informed of material developments in the
prosecution or settlement of such action or proceeding. PF shall be
responsible for all costs and expenses of any action or proceeding
against infringers which PF initiates. UNIVERSITY may be represented
18
by counsel in any such legal proceedings acting in an advisory but not
controlling capacity, the expense of which shall be subject to
reimbursement by PF. UNIVERSITY shall cooperate fully by joining as a
party plaintiff if required to do so by law to maintain such action or
proceeding and by executing and making available such documents as PF
may reasonably request. PF agrees to promptly reimburse UNIVERSITY for
its reasonable third party out-of-pocket fees and expenses incurred in
joining an action or proceeding or cooperating with PF. All amounts of
every kind and nature recovered from an action or proceeding of
infringement by PF shall belong to PF. After deduction of the fees and
expenses of both parties to this Agreement, any remaining amounts
recovered shall be considered Net Sales under this Agreement and
subject to Royalty payments in accordance with Article 4.
C. PF Discretion. The prosecution, settlement, or abandonment of any
action or proceeding under Paragraph 10.B. shall be at PF's reasonable
discretion provided that PF has timely informed UNIVERSITY of material
developments of such action. PF shall not have any right to surrender
any of UNIVERSITY's rights to the Licensed Patents or to grant any
infringer any of UNIVERSITY's rights to the Licensed Patents without
UNIVERSITY's written consent.
D. UNIVERSITY's Right to Bring Infringement Action. If a third party
infringes any patent included in the Licensed Patents within the
Exclusive Field which UNIVERSITY wishes to prosecute, UNIVERSITY shall
first notify PF in writing and request that PF bring an action or
proceeding against the infringing third party. If PF declines or fails
to bring such an action or proceeding within thirty (30) days of
receipt of the notice, UNIVERSITY shall have the right, at its sole
discretion, to institute and prosecute an action or proceeding to
▇▇▇▇▇ such infringement and to resolve such matter by settlement or
otherwise. PF shall cooperate fully by joining as a party plaintiff if
required to do so by law to maintain such action and by executing and
making available such documents as UNIVERSITY may reasonably request.
If the amounts recovered by UNIVERSITY exceed its reasonable third
party fees and expenses, UNIVERSITY agrees to pay PF for its
reasonable third party expenses incurred by it in cooperating in the
action or proceeding. Except as specifically provided in this
Paragraph, UNIVERSITY shall have the right to retain all amounts
recovered of every kind and nature. Amounts recovered by UNIVERSITY
shall not be considered Net Sales under this Agreement and shall not
give rise to Royalty payments. Nothing in this Paragraph shall be
construed to affect PF's rights under this Agreement to sublicense the
Licensed Patents provided, however, that once the UNIVERSITY has
instituted legal proceedings against, or settlement discussions with,
an alleged infringer under this Paragraph, PF shall not grant a
sublicense to such alleged infringer without the prior written consent
of UNIVERSITY.
19
11. Termination.
A. Unless terminated earlier pursuant to Paragraphs 11.B or 11.C, this
Agreement shall terminate on the date of expiration of the last to
expire of the Licensed Patents.
B. UNIVERSITY's Right to Terminate. UNIVERSITY shall have the right to
terminate this Agreement as follows, in addition to all other
available remedies:
1) If PF fails to pay any Royalties, patent costs or other payment
when due, this Agreement shall terminate effective ninety (90)
days after UNIVERSITY's written notice to PF to such effect,
unless PF makes such payment within the ninety (90) days or has
cured such failure to the satisfaction of the UNIVERSITY.
2) If PF fails to comply with any material obligation other than
Diligence provisions in Paragraph 5E and 5F of this Agreement,
the UNIVERSITY may at its sole discretion terminate the Agreement
effective ninety (90) days after UNIVERSITY's written notice to
PF describing such failure, unless PF cures such failure to the
satisfaction of UNIVERSITY within the ninety (90) days.
3) If PF shall have filed by or against it a petition under any
bankruptcy or insolvency law and such petition is not dismissed
within ninety (90) days of its filing, or if PF makes an
assignment of all or substantially all of its assets for the
benefit of its creditors UNIVERSITY may terminate this Agreement
by written notice effective as of the (i) date of filing by PF of
any such petition, (ii) date of any such assignment to creditors,
or (iii) end of the ninety (90) days if a petition is filed
against it and not dismissed by such time, whichever is
applicable.
4) If PF shall be dissolved, liquidated or otherwise ceases to
exist, other than for reasons specified in this Article 11, this
Agreement shall automatically terminate as of (i) the date
articles of dissolution or a similar document is filed on behalf
of PF with the appropriate government authority or (ii) the date
of establishment of a liquidating trust or other arrangement for
the winding up of the affairs of PF.
5) Any previous waiver by the UNIVERSITY, of the UNIVERSITY's right
to terminate this Agreement, shall not constitute a waiver on any
subsequent right of the UNIVERSITY to terminate under this
Article 11.
C. PF's Right to Terminate. PF may terminate this Agreement at any time
by giving UNIVERSITY ninety (90) days prior written notice.
D. Rights Upon Termination. Other than as provided in Paragraph 11.E.
below, upon Termination of this Agreement, for any reason, PF shall
have no further rights to the Licensed Patents. PF agrees to
immediately cease distribution of any unused Licensed Product(s) and
shall provide UNIVERSITY with a complete list of all such unused
Licensed Product(s), ("Inventory) within ten (10) days of termination
and all such Inventory shall be destroyed within six (6) months after
termination. PF shall provide UNIVERSITY with written documentation of
such destruction.
20
E. Survival. (i) All causes of action accruing to either party under this
Agreement shall survive termination for any reason, as well as (1) PF
obligation to pay Royalties, fees and other payments accrued prior to
the date of termination and which were not paid or payable before
termination, and (2) PF obligation to report Net Sales and to keep
records as set forth in this Agreement. The milestone obligation of
Article 4.C.ii and all provisions inclusive from Article 7 to Article
10 survive termination or expiration of the Agreement. (ii) During the
six (6) month period following termination of this Agreement, PF may
sell Inventory by requesting permission, from UNIVERSITY, on a case by
case basis to sell such Inventory. Such request will be made in
writing to the address listed in this Agreement. If the UNVERSITY
grants permission to sell any Inventory, such Sales shall be subject
to the Royalty obligations under Paragraph 4.E.
12. Export Regulations.
A. To the extent that the United States Export Control Regulations are
applicable, neither PF nor UNIVERSITY shall, without having first
fully complied with such regulations, (i) knowingly transfer, directly
or indirectly, any unpublished technical data obtained or to be
obtained from the other party hereto to any destination, or (ii)
knowingly ship, directly or indirectly, any product produced using
such unpublished technical data to any destination. PF acknowledges
that the export of any products and/or technical data from the United
States may require some form of export control license from the U.S.
Government. Failure to obtain any required export licenses by PF may
result in PF subjecting itself to criminal liability under U.S. laws.
B. U.S. Competitiveness. PF agrees that any Licensed Product(s) and/or
Licensed Method(s) for use or sale in the United States shall be
manufactured substantially in the United States.
13. Entire Agreement, Amendment, Waiver.
A. The Agreement together with the Schedules attached hereto constitute
the entire agreement between the Parties regarding the subject matter
hereof, and supersedes all prior written or oral agreements or
understandings (express or implied) between them concerning the same
subject matter. The Agreement may not be amended or modified except in
a writing signed by duly authorized representatives of each Party. No
waiver of any default hereunder by either Party or any failure to
enforce any rights hereunder shall be deemed to constitute a waiver of
any subsequent default with respect to the same or any other provision
hereof.
21
14. Notice.
Any notice required or otherwise made pursuant to this Agreement shall
be in writing, sent by registered or certified mail properly
addressed, or by facsimile with confirmed answer-back, to the other
Party at the address set forth below or at such other address as may
be designated by written notice to the other Party. Notice shall be
deemed effective three (3) business days following the date of sending
such notice if by mail, on the day following deposit with an overnight
courier, if sent by overnight courier, or upon confirmed answer-back
if by facsimile.
If to UNIVERSITY: If to PharmaFrontiers Corp.:
Office of Technology & ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, President
Intellectual Property ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇
Attention: Director
15. Assignment. This Agreement shall be binding on the Parties hereto and upon
their respective successors and assigns. Notwithstanding Section 3.A.,
either Party may at any time, upon written notice to the other party,
assign or delegate to a successor to all or substantially all of its
business any of its rights and obligations hereunder, provided that any
such assignment or delegation shall in no event relieve either Party of its
primary responsibility for the same. Except as provided in the preceding
sentence, and except as provided in Paragraph 11.B.3, PF may not assign
this Agreement without the prior written consent of UNIVERSITY, which
consent shall not be unreasonably withheld, and any attempted assignment in
violation thereof shall be void. UNIVERSITY may assign this Agreement at
any time to any third party on written notice to PF. In such event, the
assignee shall be substituted for UNIVERSITY as a party hereto, and
UNIVERSITY shall no longer be bound hereby.
16. Governing Law. To the extent there is no applicable federal law, the
interpretation and performance of this Agreement shall be governed by the
laws of the State of Illinois applicable to contracts made and to be fully
performed in that state.
17. Force Majeure. Except for the obligation to pay, the parties shall not be
liable for any failure to perform or observe any term of this Agreement if
performance or observance has been delayed, hindered, restricted or
prevented by any circumstance not within the direct control of the parties,
including without limitation, Acts of God, strikes, lock-outs, war,
hostilities or the threat thereof, or compliance with any valid order of
any governmental or public authority, and the time or times for
performances of the obligations on the respective parties parts to be
performed herein shall be extended by a period equal to each such period of
delay provided that such party shall immediately give notice to the other
party in accordance with the provisions of this Agreement and shall
endeavor to remove or remedy the cause thereof with all due diligence and
expedition. "Force Majeure" shall not include financial hardship or a lack
of funds to make payment.
22
18. Counterparts. This Agreement may be executed in several counterparts, each
of which shall be deemed an original and all of which together shall
constitute one and the same document.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed by their respective duly authorized officers or representatives and
signed below,
University of Chicago PharmaFrontiers Corp.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------------ -----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Director of Technology Transfer Title: Chief Executive Officer
Date: 12/30/04 Date: 12/30/04
---------------------------------- ---------------------------
23
Schedule A
UCTech Case # ANL-IN-02-021
US Patent application - 10/704,110, title "Human stem cell materials and
methods"
PCT application - ▇▇▇▇/▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ # ▇▇▇-▇▇-▇▇-▇▇▇
▇▇ Patent application - title "Human Stem Cell Materials and Methods."
24
Schedule B
25
Schedule C
PharmaFrontiers Corp. Capitalization Table
26
