Exhibit 10.44
Confidential Material omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Agreement
Effective as of September 26, 1996 ("Effective Date"), The Xxxxx Xxxxxxx
University, a body having corporate powers under the laws of the State of
Maryland ("XXXXX XXXXXXX"), the University of Washington (the "UNIVERSITY OF
WASHINGTON"), a body having corporate powers under the laws of the State of
Washington, and Ontogeny Inc., a Delaware corporation having a principal place
of business at 00 Xxxxxxx Xxxxxx, Xxxxxxxxx, XX 00000 ("ONTOGENY"), agree as
follows:
Article 1
Background
1.1 XXXXX XXXXXXX represents and warrants that it is Owner by assignment from
Xxxxxx X. Xxxxxx and Xxxxxxx Xxxxxx (both investigators employed by Xxxxxx
Xxxxxx Medical Institute ("HHMI")) and HHMI, and that the UNIVERSITY OF
WASHINGTON represents and warrants that it is the Owner by assignment from
Xxxxxxx X. Xxxx (also an investigator employed by HHMI) and HHMI of the
entire right, title and interest in the United States and Foreign Patent
Applications ("Hedgehog Patent Applications") set forth in Appendix A, and
in the inventions described and claimed therein ("Invention"), and any
Licensed Patent, defined in Article 2, which may issue to the Invention,
and that XXXXX XXXXXXX and the UNIVERSITY OF WASHINGTON have the sole
authority to grant the licenses granted hereunder.
1.2 XXXXX XXXXXXX and the UNIVERSITY OF WASHINGTON have certain technical data
and information ("Technology") pertaining to Invention.
1.3 XXXXX XXXXXXX and the UNIVERSITY OF WASHINGTON want the Technology and
Invention perfected and marketed in a reasonable period of time in order
that resulting products will be available for public use and benefit.
1.4 ONTOGENY would like to practice the Invention and related Technology, and
is therefore desirous of obtaining a license under Licensed Patent to
develop, manufacture, use, and sell Licensed Product in the area of
therapeutics, diagnostics and research reagents.
- 1 -
1.5 The Technology and Invention were developed in the course of research
supported by the HHMI in affiliation with each of XXXXX XXXXXXX and the
UNIVERSITY OF WASHINGTON.
1.6 XXXXX XXXXXXX and the UNIVERSITY OF WASHINGTON agree that all
notifications and payments by ONTOGENY pursuant to this Agreement will be
made to, and accepted by, XXXXX XXXXXXX for the benefit of both XXXXX
XXXXXXX and the UNIVERSITY OF WASHINGTON.
Article 2
Definitions
2.1 "Licensed Patent(s)" means any U.S. Letters Patent issued upon the
Hedgehog Patent Applications, or upon any divisions, continuations,
reissues, reexamines, extensions, and any claims in continuations-in-part
(CIPs) applications; and any and all foreign patents, extensions and
supplemental protection certificates or patent applications corresponding
thereto. All such divisions, continuations, reissues, reexaminations, CIPs
and foreign applications and patents issuing thereon will be automatically
incorporated in and added to this Agreement. CIP applications shall only
be filed for new matter which supports claims to inventions described in
the Hedgehog Patent Applications and could not be filed in a stand alone,
original patent application.
2.2 "Licensed Materials" means those proprietary materials which are
enumerated in Appendix B, and transferred from XXXXX XXXXXXX through
Xxxxxx X. Xxxxxx to ONTOGENY pursuant to the terms of this Agreement.
2.3 "Licensed Product" means any product or process in the Licensed Field of
Use, the importation, manufacture, use, offer for sale, or sale of which:
(a) is covered by a valid claim of an issued, unexpired Licensed Patent;
a claim of an issued, unexpired Licensed Patent will be presumed to
be valid unless it has been held to be invalid by a final judgment
of a court of competent jurisdiction where no appeal can be or is
taken; or
- 2 -
(b) is covered by any claim being prosecuted in a pending application in
Licensed Patents, provided the claim has not been pending for more
than 7 years; or
(c) clauses (a) and (b) notwithstanding, is covered by any pending or
issued claim to bioactive Hedgehog polypeptides issuing from Harvard
University Patents/Applications or Columbia University
Patents/Applications (defined infra); or
(d) incorporates, uses or could not have been manufactured or discovered
but for the use of Licensed Materials or materials covered by
Licensed Patents (including expression products thereof and
antibodies to such polypeptides).
2.4 "Net Sales" means the gross revenue derived by ONTOGENY or affiliate from
sale(s) of Licensed Product to unrelated third parties, less the following
items but only as they actually pertain to the disposition of the Licensed
Product by ONTOGENY or affiliate, are included in the gross revenue, and
are separately billed:
(a) Taxes levied on and/or other governmental charges made as to
production, sales, transportation, delivery or use and paid by or on
behalf of ONTOGENY;
(b) Costs of insurance, packing, and transportation, where separately
invoiced and not paid by the customer, from the place of manufacture
to the customer's premises or point of installation;
(c) Credit for returns, allowances, or trades; and
(d) Trade, quantity or cash discounts and non-affiliated brokers' or
agents' commissions allowed and actually taken.
2.5 "Licensed Field of Use" means (i) human therapeutics for cancer, (ii)
human therapeutics for neurobiology, (iii) human therapeutics for
skeletal, (iv) human therapeutics for all other areas, (v) veterinary
therapeutics, (vi) drug discovery, (vii) in vivo diagnostics, (viii) in
vitro diagnostics, and (ix) research reagents.
- 3 -
2.6 "Exclusive" means that, subject to Article 3.3 and Article 4, neither
XXXXX XXXXXXX nor the UNIVERSITY OF WASHINGTON will grant additional
licenses to Licensed Patents in the Licensed Field of Use.
2.7 "Sublicense" means any grant of rights under Licensed Patents, Harvard
University Patents/Applications, Columbia University Patents/Applications,
or Licensed Materials
2.8 "Sublicensee" means any party (excluding any corporation, partnership,
joint venture or entity in which Ontogeny directly or indirectly owns or
controls greater than fifty percent (50%) of the shares entitled to vote
for election of directors) to which ONTOGENY has granted Sublicenses
pursuant to this Agreement.
2.9 "Harvard University Patents/Applications" means U.S. Patent applications
08/356,060 and 08/176,427, any divisions, continuations, reissues,
reexamines, extensions, and CIPs thereof, and patents issuing therefrom
and any and all foreign patents or patent applications or supplemental
protection certificates corresponding thereto.
2.10 "Columbia University Patents/Applications" means U.S. Patent application
08/202,040, any divisions, continuations, reissues, reexamines,
extensions, and CIPs thereof, and patents issuing therefrom and any and
all foreign patents or patent applications or supplemental protection
certificates corresponding thereto.
Article 3
License Grant to Ontogeny
3.1 XXXXX XXXXXXX and the UNIVERSITY OF WASHINGTON grant to ONTOGENY, upon and
subject to the terms and conditions in this Agreement,
(i) a worldwide Exclusive license to Licensed Patents, in the
Licensed Field of Use, to import, make, use, offer for sale,
sell, have made, and have sold Licensed Products described
and/or claimed therein; and
(ii) a worldwide non-exclusive license to Licensed Materials.
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3.2 The period of the Exclusive license granted in Article 3.1, including the
right to Sublicense pursuant to Article 14, in the Licensed Field of Use
begins on the Effective Date and ends on the last to occur of:
(a) 17 years from the Effective Date if no valid claims are issued in
Licensed Patents or canceled pursuant to Article 7.5; or
(b) the expiration of the last patent under the Licensed Patents.
3.3 XXXXX XXXXXXX, XXXXX XXXXXXX HEALTH SYSTEMS, HHMI and the UNIVERSITY OF
WASHINGTON have the right to practice the Invention for their own
non-profit research purposes or in non-profit research collaborations with
third party academic or not-for-profit research institutions. XXXXX
XXXXXXX, HHMI and the UNIVERSITY OF WASHINGTON also have the right to
publish any information included in the Licensed Patent. In order that
ONTOGENY may properly evaluate filing of CIP applications, XXXXX XXXXXXX
and the UNIVERSITY OF WASHINGTON agree to provide copies of manuscripts
disclosing information that would be appropriate for filing a CIP
application directly related to the Licensed Patents at least thirty (30)
days in advance of any publication thereof (including any electronic
publication), and copies of abstracts or oral disclosures disclosing
information directly related to the Licensed Patents at least ten (10)
days before public disclosure or publication. All manuscripts or abstracts
provided to ONTOGENY shall only be shared on a confidential basis with
employees of ONTOGENY except that ONTOGENY may share such information with
its legal counsel prior to public disclosure or publication.
Article 4
Rights of United States in Licensed Patents
This Agreement is subject to all of the terms and conditions of Title 35 United
States Code Sections 200 through 204. This includes the obligation that ONTOGENY
agrees that it shall manufacture and shall cause its Sublicensees (if any) to
manufacture, substantially in the United States all Licensed Product sold or
produced in the United States, and to take all reasonable action necessary to
enable XXXXX XXXXXXX and the UNIVERSITY OF WASHINGTON to satisfy their
obligations to the United States Federal Government, relating to Licensed
Products.
- 5 -
Article 5
Diligence by Ontogeny
5.1 As an inducement to XXXXX XXXXXXX and the UNIVERSITY OF WASHINGTON to
enter into this Agreement, ONTOGENY or its Sublicensees (if any) will use
reasonable effort and diligence to proceed with the development,
manufacture, and sale or lease of Licensed Product and to diligently
develop markets for the Licensed Product. Specific milestones or other
measures of diligence are set forth in Appendix C. If ONTOGENY or its
Sublicensees (if any) fails to meet any such milestone as enumerated in
Appendix C, XXXXX XXXXXXX may institute proceedings to terminate
Ontogeny's rights to certain areas in the Licensed Field of Use. Such
termination proceedings will involve reasonable written notice to ONTOGENY
specifically detailing the basis for XXXXX XXXXXXX' termination, and a
reasonable opportunity, including a further ninety (90) day cure period,
for ONTOGENY to refute or cure the basis for XXXXX XXXXXXX' concern.
Should unexpected impediments occur during development, these milestones
may be renegotiated by the parties upon written request by ONTOGENY
detailing its diligent efforts, or those of its Sublicensees (if any), and
reasons requesting modification of the milestones. In making their
decision to terminate certain of ONTOGENY's rights, XXXXX XXXXXXX shall
take into consideration the normal course of such programs conducted with
sound and reasonable business practices and judgment and shall take into
account the reports provided under this Agreement by ONTOGENY.
5.2 In the event XXXXX XXXXXXX becomes aware of third parties that wish to
license the Licensed Patents in the Licensed Field of Use pursuant to
Articles 2.5(viii) or 2.5(ix) and such license to a third party would not
result in competition to ONTOGENY, XXXXX XXXXXXX shall so notify ONTOGENY,
and ONTOGENY shall exercise one of the following options within sixty (60)
days of notification to ONTOGENY by XXXXX XXXXXXX:
(a) commence active research and development of Licensed Patents in the
Licensed Field of Use pursuant to Articles 2.5(viii) or 2.5(ix);
(b) grant a sublicense to said third parties to make, use and sell
Licensed Products in the Licensed Field of Use pursuant to Articles
2.5(viii) or 2.5(ix); or
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
(c) grant the right to XXXXX XXXXXXX to directly license said third
parties to make, use and sell Licensed Products in the Licensed
Field of Use pursuant to Articles 2.5(viii) or 2.5(ix).
In the event ONTOGENY selects the option outlined in Article 5.2(a),
ONTOGENY or its Sublicensees (if any) will use reasonable effort and
diligence to proceed with the development, manufacture, and sale or lease
of Licensed Products in the Licensed Field of Use pursuant to Articles
2.5(viii) or 2.5(ix) and to diligently develop markets for the Licensed
Product in the Licensed Field of Use pursuant to Articles 2.5(viii) or
2.5(ix). The diligence provisions of Article 5.2 above apply to the
specific milestones or other measures of diligence that are set forth in
paragraphs 8 and 9 of Appendix C.
5.3 Progress Report - On or before September 30 of each year until ONTOGENY or
its Sublicensees (if any) markets a Licensed Product, ONTOGENY shall
submit an annual report covering the preceding year ending June 30,
regarding the progress of ONTOGENY or its Sublicensees (if any) toward
commercial use of Licensed Product. Additionally, ONTOGENY will provide,
upon written request from XXXXX XXXXXXX, one additional interim report per
year covering the time period subsequent the last previous annual report.
The annual and interim reports will include, as a minimum, information
sufficient to enable XXXXX XXXXXXX to satisfy reporting requirements of
the U.S. Government and for XXXXX XXXXXXX to ascertain progress by
ONTOGENY or its Sublicensees (if any) toward meeting the diligence
requirements of Article 5.
Article 6
Payments due to Xxxxx Xxxxxxx
6.1 In consideration for the rights granted in this Agreement, ONTOGENY will
pay to XXXXX XXXXXXX a noncreditable, nonrefundable license issue royalty
of $[**] upon signing this Agreement ($[**] of which is considered a
license processing fee paid to XXXXX XXXXXXX), and issue to XXXXX XXXXXXX
[**] shares of ONTOGENY Common stock. At XXXXX XXXXXXX' request, it may
subsequently transfer and assign up to [**] of said ONTOGENY Common stock
to the UNIVERSITY OF WASHINGTON, which transfer is herein consented to by
ONTOGENY.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
6.2 In the first three years of this Agreement, provided this Agreement is not
terminated sooner, ONTOGENY will pay to XXXXX XXXXXXX a yearly royalty of
$[**], with the first payment due in 1997. Beginning in the year 2000 and
until the end of the period of the Exclusive license as set forth in
Article 3.2, ONTOGENY will pay to XXXXX XXXXXXX a yearly royalty of $[**].
Said yearly royalties will be paid to XXXXX XXXXXXX by ONTOGENY by
November 30th of each year. Yearly royalty payments made in the year 2003
and after will be fully creditable against the earned royalties payments
provided by Articles 6.3.
6.3 In addition, ONTOGENY will pay to XXXXX XXXXXXX earned royalties on Net
Sales as follows:
(a) For sale of Licensed Product covered by 2.3(a), (b) or (c) as a
human and/or veterinary therapeutic and/or in vivo diagnostic and/or
research reagents:
(i) [**]% of Net Sales of such Licensed Product by ONTOGENY, which
royalty will be reduced by [**]% of other royalty payments
made upon the sale of Licensed Product, but which royalty
shall be no less than [**]% of Net Sales of Licensed Product;
and
(ii) [**]% of revenues received by ONTOGENY on sales of such
Licensed Product by a Sublicensee.
(b) For sale of Licensed Product covered by 2.3(a), (b) or (c) as in
vitro diagnostic reagents:
(i) [**]% of Net Sales of such Licensed Product by ONTOGENY
wherein Licensed Product is the sole active ingredient of kit
or reagent sold;
(ii) The product of [**]% and (A/B) on Net Sales of Combination
Products. Combination Products are those products in which
Licensed Product is one of two or more Active Ingredients. In
this sense, Active Ingredient shall mean those ingredients
essential to the Combination Product and on which ONTOGENY has
either, (i) an obligation to pay royalties to a third party,
or (ii) owns issued and/or
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
pending patent rights. If stand alone values are available for
all Active Ingredients in the Combination Product, then "A"
shall mean the stand alone value of the Licensed Product
incorporated into the Combination Product, and "B" shall mean
the aggregate of the stand alone values of all Active
Ingredients, including Licensed Product, in the Combination
Product. In the event that stand alone values are not
available for all Active Ingredients incorporated into the
Combination Product, then A shall mean the royalty of [**]%
owed XXXXX XXXXXXX by ONTOGENY under this Agreement, and B
shall mean the aggregate of all royalties on Active
Ingredients incorporated into the Combination Product owed by
ONTOGENY to third parties. To the extent that B in this latter
case includes Active Ingredients covered by issued/pending
patents solely owned by ONTOGENY and on which ONTOGENY owes no
third party royalties, ONTOGENY and XXXXX XXXXXXX will enter
into good faith negotiations to ascribe royalty values to the
Active Ingredients covered by such issued/pending patents; and
(iii) [**]% of revenues received by ONTOGENY on sales of Licensed
Product by Sublicensee.
(c) For sale of Licensed Product covered by 2.3(d):
(i) [**]% of Net Sales of such Licensed Product by ONTOGENY; and
(ii) [**]% of revenues received by ONTOGENY on sales of such
Licensed Product by a Sublicensee.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
(d) For sale of therapeutic cell preparations ("Cell Preparations")
which could not have been made but for the Licensed Product:
(i) [**]% of Net Sales of Cell Preparations by ONTOGENY wherein
Licensed Product is the sole active ingredient used in cell
processing to generate the Cell Preparation;
(ii) The product of [**]% and (A/B) on Net Sales of Cell
Preparations of Combination Products. Combination Products are
those products in which Licensed Product is one of two or more
Active Ingredients. In this sense, Active Ingredient shall
mean those ingredients essential to the Combination Product
and on which ONTOGENY has either, (i) an obligation to pay
royalties to a third party, or (ii) owns issued and/or pending
patent rights. If stand alone values are available for all
Active Ingredients in the Combination Product, then "A" shall
mean the stand alone value of the Licensed Product
incorporated into the Combination Product, and "B" shall mean
the aggregate of the stand alone values of all Active
Ingredients, including Licensed Product, in the Combination
Product. In the event that stand alone values are not
available for all Active Ingredients incorporated into the
Combination Product, then A shall mean the royalty of [**]%
owed XXXXX XXXXXXX by ONTOGENY under this Agreement, and B
shall mean the aggregate of all royalties on Active
Ingredients incorporated into the Combination Product owed by
ONTOGENY to third parties. To the extent that B in this latter
case includes Active Ingredients covered by issued/pending
patents solely owned by ONTOGENY and on which ONTOGENY owes no
third party royalties, ONTOGENY and XXXXX XXXXXXX will enter
into good faith negotiations to ascribe royalty values to the
Active Ingredients covered by such issued/pending patents; and
(iii) [**]% of revenues received by ONTOGENY on sales of Cell
Preparation by Sublicensee.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
6.4 In addition, ONTOGENY will pay XXXXX XXXXXXX non-creditable,
non-refundable Milestone payments as follows:
(a) a one-time payment of $[**] to be made upon the first to occur of
(i) issuance, in Licensed Patents, of patent claims in the United
States, or (ii) allowance of a claim in Licensed Patents but
cancelled pursuant to Article 7.5;
(b) for each Licensed Product to be marketed as a therapeutic, a
one-time payment of $[**] to be made upon a filing of an
investigational new drug application (IND) by ONTOGENY or its
Sublicensees (if any);
(c) for each Licensed Product to be marketed as a therapeutic, a
one-time payment of $[**] to be paid upon completion of Phase II
clinical trials by ONTOGENY or its Sublicensees (if any);
(d) for each Licensed Product to be marketed as a therapeutic, a
one-time payment of $[**] to be paid upon completion of Phase III
clinical trials by ONTOGENY or its Sublicensees (if any);
(e) a one-time payment of $[**] to be made upon the first sale of a
Licensed Product as an in vitro diagnostic reagent by ONTOGENY or
its Sublicensees (if any); and
(f) Pursuant to ONTOGENY entering into a Sublicense, corporate
partnership agreement or other similar strategic partnership
agreement for development of Licensed Products to be marketed within
the Licensed Field of Use, ONTOGENY will pay XXXXX XXXXXXX, within
sixty (60) days of execution of such partnership agreement, as
follows:
(1) If agreement involves non-cash consideration received by
ONTOGENY and the value of such non-cash consideration,
at the time the Sublicense is executed, represents
greater than [**]% of the total consideration received
by ONTOGENY, then ONTOGENY will pay XXXXX XXXXXXX (i)
[**]%) of the value
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
of such non-cash consideration received by ONTOGENY and
(ii) any other amounts due XXXX XXXXXXX pursuant to
Article 6.3, Article 6.4(f)(2), or Article 6.4(f)(3).
The value of any non-cash consideration will be
determined by ONTOGENY and represent a commercially
reasonable value (the "Ontogeny Non-Cash Value"). Within
90 days of receipt of (i) a copy of a newly executed
Sublicense agreement provided to XXXXX XXXXXXX by
ONTOGENY under Article 14.4 and (ii) a notice from
ONTOGENY stating the amount of the Ontogeny Non-Cash
Value, XXXXX XXXXXXX must notify ONTOGENY in writing
that XXXXX XXXXXXX wishes to hire a mutually agreed upon
third party to determine the accuracy of the Ontogeny
Non-Cash Value (the "Third Party Non-Cash Value"). If
XXXXX XXXXXXX does not notify ONTOGENY in writing within
such 90 day period of Xxxxx Xxxxxxx' intent to hire a
third party to determine the Third Party Non-Cash Value,
then XXXXX XXXXXXX waives its right to hire such third
party in the future for such specific newly executed
Sublicence agreement. If the Third Party Non-Cash Value
is less than [**] of the Ontogeny Non-Cash Value, then
(i) ONTOGENY will pay XXXXX XXXXXXX [**] of whichever is
lower of the Ontogeny Non-Cash Value or the Third Party
Non-Cash Value, and (ii) XXXXX XXXXXXX will pay all
costs in connection with obtaining the Third Party
Non-Cash Value. If the Third Party Non-Cash Value is
greater than [**] of the Ontogeny Non-Cash Value, then
(i) ONTOGENY will pay XXXXX XXXXXXX [**] of the Third
Party Non-Cash Value, and (ii) ONTOGENY will pay all
costs in connection with obtaining the Third Party
Non-Cash Value.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
(2) If agreement constitutes Committed Funds to ONTOGENY of
less than $[* * ], but greater than $[**], then XXXXX
XXXXXXX will receive $[**].
(3) If agreement constitutes Committed Funds to ONTOGENY of
greater than or equal to $[**], then XXXXX XXXXXXX will
receive $[**].
(4) Committed Funds shall include the sum of (i) half the
value of guaranteed equity payments, (ii) up-front
payments or other fees, and (iii) the total of
guaranteed research sponsorship payments. In calculating
Committed Funds, ONTOGENY shall keep a running total of
funds included within the definition of Committed Funds
and received from or guaranteed by each particular
Sublicensee. When the running total from any particular
Sublicensee is greater than $[**], but less than $[**],
ONTOGENY shall make a payment to XXXXX XXXXXXX of $[**]
for that particular Sublicense, as under article
6.4(f)(2) herein. When the running total from any
particular Sublicensee exceeds $[**], then ONTOGENY
shall make a payment under Article 6.4(f)(3) to XXXXX
XXXXXXX of an additional $[* * ] for that particular
Sublicense. Payments by Ontogeny under Article 6.4(f)(2)
and Article 6.4(f)(3) shall each only be made once with
respect to each particular Sublicensee.
(g) Pursuant to ONTOGENY entering into a Sublicense, corporate
partnership agreement or other similar strategic partnership
agreement for a Licensed Products approved for sale by FDA (or its
equivalent regulatory authority) within the Licensed Field of Use,
ONTOGENY will, within sixty (60) days of execution of such
agreement, pay XXXXX XXXXXXX [**] of all consideration received by
ONTOGENY from the Sublicensee. The value of any consideration
received by ONTOGENY from the Sublicensee will be determined by
ONTOGENY and represent a commercially reasonable value (the
"Ontogeny Consideration Value"). At XXXXX XXXXXXX' option and such
option to only be exercisable for the 90 day period after XXXX
XXXXXXX has been notified of such a Sublicense agreement, XXXX
XXXXXXX may hire a mutually agreed upon third
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
party to determine the revised ONTOGENY Consideration Value (the
"Third Party Consideration Value"). If the Third Party Consideration
Value is less than [**] of the Ontogeny Consideration Value, then
(i) ONTOGENY will pay XXXXX XXXXXXX [**] of whichever is lower of
the Ontogeny Consideration Value or the Third Party Consideration
Value, and (ii) XXXXX XXXXXXX will pay all costs in connection with
obtaining the Third Party Consideration Value. If the Third Party
Consideration Value is greater than [**] of the Ontogeny
Consideration Value, then (i) ONTOGENY will pay XXXXX XXXXXXX [**]
of the Third Party Consideration Value, and (ii) ONTOGENY will pay
all costs in connection with obtaining the Third Party Consideration
Value.
(h) In consideration for the license granted in this Agreement, and in
recognition of ONTOGENY recently entering into a Sublicense
agreement with Biogen, Inc., ONTOGENY will pay to XXXXX XXXXXXX an
additional noncreditable, nonrefundable milestone payment of $[**]
upon signing this Agreement.
(i) In consideration for the license granted in this Agreement and in
recognition of ONTOGENY anticipating to enter into a Sublicense
agreement with Boehringer Mannheim GmbH, ONTOGENY will pay to XXXXX
XXXXXXX an additional noncreditable, nonrefundable milestone payment
of zero dollars ($0) upon the later of (i) signing this Agreement or
(ii) closing the Sublicense agreement with Boehringer Mannheim.
(j) ONTOGENY represents that as of the Effective Date, ONTOGENY has not
Sublicensed the Licensed Patents other than as disclosed in Article
6.4(h) and 6.4(i).
6.5 If this Agreement is not terminated earlier in accordance with other
provisions, ONTOGENY'S obligation to pay royalties under Article 6 will
continue until the last to occur of:
(a) [**] from even date herewith, if no Licensed Patent issues covering
sale of Licensed Product; or
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(b) the expiration of the last patent under the Licensed Patents or
Harvard University Patents/Applications or Columbia University
Patents/Applications of which ONTOGENY would infringe a valid claim
thereof by sale of Licensed Product.
6.6 ONTOGENY will calculate royalties on sales in currencies other than U.S.
Dollars using the appropriate foreign exchange rate quoted by the
BankBoston (Boston) foreign exchange desk, on the close of business on the
last banking day of each calendar quarter. Royalty payments to XXXXX
XXXXXXX must be in U.S. Dollars.
Article 7
Prosecution of Licensed Patents
7.1 XXXXX XXXXXXX and ONTOGENY will share responsibility for patent
prosecution as follows:
XXXXX XXXXXXX will lead the management of prosecution of the
Licensed Patent using patent counsel reasonably acceptable to ONTOGENY,
which counsel will use diligent efforts to prosecute the Licensed Patents
in the best interest of ONTOGENY, XXXXX XXXXXXX, HHMI and the UNIVERSITY
OF WASHINGTON. XXXXX XXXXXXX agrees to use reasonable efforts to keep such
patent costs reasonable for the benefit of ONTOGENY, provided however,
that the quality and scope of the Licensed Patent will not be jeopardized
by such minimization. XXXXX XXXXXXX will require its patent counsel to
provide an annual patent prosecution and maintenance budget to ONTOGENY
with reasonable period for review. If in any year ONTOGENY disputes such
annual patent prosecution and maintenance budget proposed by XXXXX
XXXXXXX, then ONTOGENY will be responsible for all legal bills, up to the
annual budget limit proposed by XXXXX XXXXXXX, until both parties resolve
their dispute over such patent prosecution and maintenance budget for the
year. XXXXX XXXXXXX' patent counsel will directly notify ONTOGENY and
ONTOGENY's patent counsel, and provide ONTOGENY and ONTOGENY's patent
counsel copies of any official communications from United States and
foreign patent offices relating to said prosecution, as well as copies of
relevant communications to the various patent offices so that ONTOGENY may
be informed and appraised of the continuing prosecution of Licensed
Patent. In addition,
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XXXXX XXXXXXX shall cause ONTOGENY to be directly copied on all
correspondence between XXXXX XXXXXXX and XXXXX XXXXXXX' patent counsel
with regard to the status of any and all patents and patent applications
comprising Licensed Patents. ONTOGENY will have reasonable opportunities
to participate in decision making on key decisions affecting filing,
prosecution and maintenance of the Licensed Patent, including, without
limitation reasonable opportunity to review the abandonment of any
Licensed Patent or claims thereof, and XXXXX XXXXXXX will use reasonable
efforts to incorporate ONTOGENY's reasonable suggestions regarding said
prosecution. XXXXX XXXXXXX will use reasonable efforts to amend any patent
application to include claims reasonably requested by ONTOGENY to protect
Licensed Product. No case will be abandoned without giving ONTOGENY at
least thirty (30) days notice and opportunity to pursue the application.
7.2 Except as by mutual agreement between the parties, patent applications
comprising the Licensed Patent are to be filed in the major world markets,
which filing will be satisfied by filing in the following patent offices:
United States, Canada, Japan, Australia and Europe.
7.3 If ONTOGENY demonstrates that it is not being adequately informed or
apprised of the continuing prosecution of Licensed Patent or that ONTOGENY
is not being provided with reasonable opportunities to participate in
decision making as indicated in the above paragraph, ONTOGENY will assume
lead management of the prosecution of the Licensed Patent, using patent
counsel reasonably acceptable to XXXXX XXXXXXX (such patent counsel to
understand that both XXXXX XXXXXXX and ONTOGENY are its clients), and
ONTOGENY will thereafter provide XXXXX XXXXXXX with the same safeguards
which ONTOGENY was due under Article 7.1 (except patents shall be
prosecuted in the best interests of the patent owners). Any such
demonstration will involve reasonable written notice to XXXXX XXXXXXX
specifically detailing ONTOGENY'S concern, and a reasonable opportunity,
including a 90 day cure period, for XXXXX XXXXXXX to refute or cure the
basis for ONTOGENY'S concern. ONTOGENY agrees to diligently prosecute or
assist in prosecuting Licensed Patent. If after the cure period XXXXX
XXXXXXX and ONTOGENY still cannot agree on a cure for ONTOGENY'S concern,
both parties agree to submit the dispute to mediation as set forth in
Article 17 below.
- 16 -
7.4 Within 45 days after receipt of a statement from XXXXX XXXXXXX, ONTOGENY
will reimburse XXXXX XXXXXXX for all costs incurred by XXXXX XXXXXXX,
including those costs incurred prior to the Effective Date, in connection
with the preparation, filing and prosecution of all patent applications
and maintenance of patents corresponding to the Invention. Such fees and
costs shall not include costs incurred by Xxxxx Xxxxxxx in the use of its
own resources, such as employee time, and shall not extend to patenting
fees and costs incurred by Xxxxx Xxxxxxx after termination of this
Agreement. ONTOGENY will provide payment authorization to XXXXX XXXXXXX at
least one (1) month before an action is due, provided that ONTOGENY has
received timely notice of such action from XXXXX XXXXXXX. For the purposes
of this Article 7.4, notice will be considered given to ONTOGENY when
ONTOGENY and ONTOGENY's patent counsel is copied and is in receipt of
material sent by XXXXX XXXXXXX' patent counsel. ONTOGENY will provide
written authorization to XXXXX XXXXXXX and its patent attorney in response
to all notices sent by XXXXX XXXXXXX' patent counsel. Failure to provide
written authorization, if adequate notice was given to ONTOGENY, shall
constitute an ONTOGENY decision not to authorize an action. In any country
where ONTOGENY elects not to authorize an action, have a patent
application filed or to pay expenses associated with filing, prosecuting
or maintaining a patent application or patent, XXXXX XXXXXXX may file,
prosecute and/or maintain a patent application or patent at its own
expense and for its own exclusive benefit and ONTOGENY thereafter shall
not be licensed under such patent or patent application.
7.5 In the event that one or more of the Licensed Patents are the subject of a
Declaration of Interference by the U.S. Patent and Trademark Office as
interfering with claims in a Harvard University or Columbia University
patent(s) or patent application(s) which is also exclusively licensed by
ONTOGENY, XXXXX XXXXXXX and the UNIVERSITY OF WASHINGTON agree to
negotiate, in good faith, a reasonable settlement agreement simplifying
issues involved in determining priority and/or to resolve respective
rights with regard to any such patent applications which may ultimately be
the subject of interference proceedings, such that a mechanism for
terminating the interference is developed which awards priority to the
appropriate party.
- 17 -
Article 8
Royalty Reports, Payments, And Accounting
8.1 ONTOGENY will make quarterly written reports and earned royalty payments
to XXXXX XXXXXXX beginning with the first sale of a Licensed Product by
ONTOGENY or Sublicensee. These reports and payments will be due within 45
days after the end of each of ONTOGENY'S fiscal quarters, except for the
last quarter of each fiscal year, the reports and payments being instead
due 90 days after the end of ONTOGENY'S fiscal year. The report will
include the number, description and aggregate Net Sales of Licensed
Product as well as the calculation of royalty payments due XXXXX XXXXXXX
under Article 6.3 and 6.4 for the completed calendar year. ONTOGENY will
also include the payment of royalties for the calendar year covered by the
report.
8.2 ONTOGENY must keep and maintain records and cause its Sublicensees to keep
and maintain records for a period of 3 years showing the manufacture,
sale, use, and other disposition of products sold or otherwise disposed of
under this Agreement. These records will include general ledger records
showing cash receipts and expenses, and records that include production
records, customers, serial numbers and related information in sufficient
detail to be able to determine the royalties owed to XXXXX XXXXXXX.
ONTOGENY shall also permit and shall use reasonable efforts to cause its
Sublicensee to permit, XXXXX XXXXXXX to examine books and records when
necessary to verify reports described in Article 8.1. XXXXX XXXXXXX or its
designee will make the examination at XXXXX XXXXXXX' expense. If the audit
reveals 5% or more under reporting of royalties due XXXXX XXXXXXX,
ONTOGENY will pay the audit costs
Article 9
Negation Of Warranties
9.1 Nothing in this Agreement can be construed as:
(a) A warranty or representation by XXXXX XXXXXXX, HHMI or the
UNIVERSITY OF WASHINGTON as to the validity or scope of any Licensed
Patent;
- 18 -
(b) A warranty or representation that anything made, used, sold, or
otherwise disposed of under any license granted in this Agreement is
or will be free from infringement of other patents, copyrights, or
any other rights not included in Licensed Patents;
(c) An obligation to bring or prosecute actions or suits against third
parties for infringement, except as described in Article 13; or
(d) Granting by implication, estoppel, or otherwise any licenses or
rights under existing patents or other rights of XXXXX XXXXXXX,
HHMI, the UNIVERSITY OF WASHINGTON or other persons other than
Licensed Patent, regardless of whether the patents or other rights
are dominant or subordinate to any Licensed Patent.
9.2 EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, XXXXX XXXXXXX, HHMI AND
THE UNIVERSITY OF WASHINGTON MAKE NO REPRESENTATIONS AND EXTEND NO
WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED. THERE ARE NO EXPRESS OR
IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE,
OR THAT THE MANUFACTURE, USE OR SALE OF THE LICENSED PRODUCT WILL NOT
INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK, OR OTHER RIGHTS OR ANY OTHER
EXPRESS OR IMPLIED WARRANTIES.
Article 10
Indemnification
10.1 ONTOGENY will indemnify, hold harmless, and defend XXXXX XXXXXXX, HHMI and
the UNIVERSITY OF WASHINGTON and their respective trustees, officers,
employees, students, and agents against any and all claims, liability,
costs, loss or obligations (including without limitation, reasonable
attorney fees and costs), based upon, arising out of, or in connection
with this Agreement.
10.2 XXXXX XXXXXXX, HHMI and the UNIVERSITY OF WASHINGTON will not be liable
for any indirect, special, consequential, or other damages whatsoever,
whether grounded in tort, strict liability, contract or otherwise, with
respect to the manufacture, use or sale of a Licensed Product
- 19 -
by ONTOGENY or Sublicensee. XXXXX XXXXXXX, HHMI and the UNIVERSITY OF
WASHINGTON will not have any responsibilities or liabilities whatsoever
with respect to Licensed Product.
10.3 ONTOGENY must at all times comply, through insurance or self-insurance,
with all statutory workers' compensation and employers' liability
requirements covering any and all employees with respect to activities
performed under this Agreement.
10.4 In addition to the foregoing, ONTOGENY must maintain, during the term of
this Agreement, Comprehensive General Liability Insurance, including
Products Liability Insurance, with reputable and financially secure
insurance carrier to cover the activities of ONTOGENY and its Sublicensee.
This insurance must provide, by the date of first clinical testing,
minimum units of liability of $2,000,000 and must include XXXXX XXXXXXX,
HHMI and the UNIVERSITY OF WASHINGTON, their trustees, directors,
officers, employees, students, and agents as additional insureds. This
insurance will be written to cover claims incurred, discovered,
manifested, or made during or after the expiration of this Agreement. At
XXXXX XXXXXXX' request, ONTOGENY will furnish a Certificate of Insurance
evidencing primary coverage and requiring 30 days prior written notice of
cancellation or material change to XXXXX XXXXXXX. ONTOGENY will advise
XXXXX XXXXXXX, in writing, that it maintains excess liability coverage
(following form) over primary insurance for at least the minimum limits
set forth above. All insurance of ONTOGENY must be primary coverage;
insurance of XXXXX XXXXXXX, HHMI and the UNIVERSITY OF WASHINGTON will be
excess and noncontributory.
Article 11
Product Marking
ONTOGENY will xxxx Licensed Product (or their containers or labels) made, sold,
or otherwise disposed of by it under the license granted in this Agreement with
the words "Patent Pending," if no patent on the Invention has issued and with
the numbers of the Licensed Patent when a patent has issued.
- 20 -
Article 12
Use of Names And Marks
Except as otherwise required by law, ONTOGENY or its Sublicensees (if any) will
not identify XXXXX XXXXXXX, HHMI or the UNIVERSITY OF WASHINGTON in any
promotional advertising or other promotional materials to be disseminated to the
public or to use the name of any faculty member, employee, or student or any
trademark, service xxxx, trade name, or symbol of XXXXX XXXXXXX, HHMI or the
UNIVERSITY OF WASHINGTON without prior written consent from the institution
whose name is proposed to be used, which institution shall be provided with at
least five (5) business days for review or consent for such public disclosure,
which consent shall not be unreasonably withheld; provided, however, that
ONTOGENY shall have the right, without obtaining consent, to confirm the
existence and general content of this Agreement.
Article 13
Infringement By Others: Protection Of Patents
13.1 ONTOGENY will promptly inform XXXXX XXXXXXX of any suspected infringement
of a Licensed Patent. During the Exclusive period of this Agreement, XXXXX
XXXXXXX and ONTOGENY each have the right to institute an action for
infringement of the Licensed Patent against a third party as follows:
(a) If ONTOGENY and XXXXX XXXXXXX agree to institute suit jointly, the
suit will be brought in both their names, the out-of-pocket costs
and any recovery or settlement will be divided equally. ONTOGENY and
XXXXX XXXXXXX will agree to the manner in which they exercise
control over the action. XXXXX XXXXXXX may, if it so desires, also
be represented by and pay for separate counsel;
(b) If there is no agreement to institute a suit jointly, ONTOGENY may
institute suit, and, at its option, join XXXXX XXXXXXX and/or the
UNIVERSITY OF WASHINGTON as co-plaintiff(s). If ONTOGENY decides to
institute suit, then it will notify XXXXX XXXXXXX in writing.
ONTOGENY will pay the entire cost of litigation and be entitled to
retain the entire amount of any recovery or settlement. However any
recovery in excess of litigation costs, and the basis for such
awarded recovery, will be used to
- 21 -
calculate lost Net Sales, and ONTOGENY will pay XXXXX XXXXXXX
royalties as indicated in Article 6.3(a)(i), 6.3(b)(i) or (ii),
6.3(c)(i) and 6.3(d)(i) or (ii).
13.2 Should ONTOGENY commence a suit under Article 13.1 but then decide to
abandon the suit, it will give timely notice to XXXXX XXXXXXX. The other
party may continue prosecution of the suit if such party (not ONTOGENY)
will pay all future expenses.
13.3 In the event that any judgment action alleging invalidity or
noninfringement of any of the Licensed Patents shall be brought against
ONTOGENY, XXXXX XXXXXXX, at its option, shall have the right, within
thirty (30) days after commencement of such action, to intervene and take
over the sole defense of the action at its own expense, provided, however,
should ONTOGENY bring an invalidity action against Licensed Patents, XXXXX
XXXXXXX may immediately defend such suit.
Article 14
Right to further Sublicense
14.1 ONTOGENY may grant Sublicenses to Licensed Patents and Licensed Materials
during the exclusive period of this Agreement.
14.2 Any Sublicense granted by ONTOGENY under this Agreement must be subject
and subordinate to terms and conditions of this Agreement, except:
(a) The Sublicensee may further Sublicense any rights under Licensed
Patents or Licensed Materials only as not specifically rejected in
writing by XXXXX XXXXXXX within fifteen (15) days of written
notification of sub-Sublicense by ONTOGENY, any such rejection not
being unreasonably made by XXXXX XXXXXXX; and
(b) The earned royalty rate specified in the Sublicense may be at higher
rates than the rates in this Agreement and must be commercially
reasonable.
Any Sublicense also will expressly include the provisions of Articles 8,
9, 10, and 12 for the benefit of XXXXX XXXXXXX, HHMI and the UNIVERSITY OF
WASHINGTON. In the event that this Agreement is terminated, ONTOGENY,
subject to XXXXX XXXXXXX approval, will
- 22 -
provide for the transfer of all obligations, including the payment of
royalties, to XXXXX XXXXXXX or its designee.
14.3 ONTOGENY will provide XXXXX XXXXXXX a copy of any Sublicense granted under
this Agreement within thirty (30) days of the effective date of the
Sublicense.
Article 15
Termination of Agreement
15.1 ONTOGENY may terminate this Agreement by giving XXXXX XXXXXXX a 90 day
notice in writing.
15.2 Surviving any termination by ONTOGENY are:
(a) ONTOGENY'S obligation to pay royalties, milestones and any other
material obligations accrued;
(b) In the event that claims in any Licensed Patent or Hedgehog Patent
Application, or in any divisions, continuations, reissues,
reexamines, extensions, or CIPs thereof, have been canceled pursuant
to Article 7.5 prior to termination of this Agreement, ONTOGENY
shall nevertheless continue to pay royalties and milestones pursuant
to Article 2.3(c) and Article 6.
(c) Any cause of action or claim of ONTOGENY, XXXXX XXXXXXX or the
UNIVERSITY OF WASHINGTON, accrued or to accrue, because of any
breach or default by the other party; and
(d) The provisions of Articles 8, 9, 10, and 12.
15.3 XXXXX XXXXXXX may terminate this Agreement if ONTOGENY:
(a) Is in default in payment of any material obligation or providing of
reports;
(b) Is in breach of any provision of this Agreement; or
(c) Provides any false report;
- 23 -
and ONTOGENY fails to remedy the default, breach, or false report within
90 days after written notice by XXXXX XXXXXXX.
15.4 Surviving any termination by XXXXX XXXXXXX are:
(a) ONTOGENY'S obligation to pay royalties milestones and other payments
accrued;
(b) Any cause of action or claim of ONTOGENY, XXXXX XXXXXXX or the
UNIVERSITY OF WASHINGTON, accrued or to accrue, because of any
breach or default by the other party; and
(c) The provisions of Articles 8, 9, 10, and 12.
Article 16
Assignment of Agreement
This Agreement may be assigned to Affiliates of ONTOGENY upon written approval
by XXXXX XXXXXXX and UNIVERSITY OF WASHINGTON. XXXXX XXXXXXX and UNIVERSITY OF
WASHINGTON will not unreasonably withhold approval. For purposes of this
Agreement, "Affiliate" shall mean any corporation or other business entity which
directly or indirectly controls, is controlled by, or is under common control
with ONTOGENY. Control means ownership or other beneficial interest in 50% or
more of the voting stock or other voting interest of a corporation or other
business entity.
Article 17
Mediation of Disputes
17.1 In the event of any controversy or any disputed claim arising from this
Agreement, excluding any dispute relating to patent validity or
infringement, the Parties shall first attempt in good faith to resolve the
dispute by discussions and/or negotiations directly involving appropriate
representatives of such of the Parties having authority to resolve the
dispute.
17.2 In the event direct negotiations fail, the Parties shall attempt in good
faith to resolve the dispute by mediation. Either party may initiate a
mediation proceeding by request in writing to the other party. Thereupon,
both Parties will be obligated to engage in a mediation. The proceeding
will
- 24 -
be conducted in accordance with the presently effective American
Arbitration Association (the "AAA") Commercial Mediation Rules, a copy of
which is attached as Appendix D. If the Parties have not agreed within
thirty (30) days of the request for mediation on the selection of a
mediator willing to serve, the AAA, upon the request of either party,
shall appoint a qualified mediator. Efforts to reach a settlement will
continue until the conclusion of the proceeding, which is deemed to occur
when (a) a written settlement is reached, or (b) the mediator concludes
and informs the Parties that further efforts would not be useful, or (c)
the Parties agree in good faith that an impasse has been reached, or (d)
ninety (90) days after the selection of a mediator in the case of
termination proceedings initiated pursuant to Article 5.1 or longer as
reasonably required by the mediator.
17.3 In the event the dispute should fail to be resolved by mediation, either
party may seek any available remedies under law.
Article 18
Notices
Notices are to be written and:
(i) deposited in the United States mail, registered or certified,
or
(ii) sent via reputable overnight courier service,
and addressed as follows:
TO XXXXX XXXXXXX: Office of Technology Licensing
Xxxxx Xxxxxxx University
0000 X. Xxxxxxxx Xxxxxx, Xxx 0-000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Director
TO UNIVERSITY OF WASHINGTON: Office of Technology Transfer
University of Washington
0000 Xxxxxxxxx 00xx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
- 25 -
TO HHMI: Xxxxxx Xxxxxx Medical Institute
(for purposes of 0000 Xxxxx Xxxxxx Xxxx
Article 12 Only) Chevy Xxxxx, Xxxxxxxx 00000
Attention: Office of General Counsel
TO ONTOGENY: Ontogeny, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: CEO
TO ONTOGENY: with a copy to Lahive & Xxxxxxxxx
Sixty Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, Ph.D.
Either party may change its address upon written notice to the other
party.
Article 19
No Waiver absent writing
None of the terms of this Agreement can be waived except by written
consent.
Article 20
Applicable Law
This Agreement is governed by the laws of the State of Massachusetts
applicable to agreements negotiated, executed and performed within
Massachusetts.
Article 21
Amendments
- 26 -
The parties hereto acknowledge that this Agreement sets forth the entire
Agreement and understanding of the parties hereto as to the subject matter
hereof, and shall not be subject to any change or modification except by the
execution of a written instrument subscribed to by the parties hereto.
- 27 -
IN WITNESS WHEREOF, the parties have executed this Agreement by their duly
authorized officers or representatives. This Agreement may be signed in
triplicate counterparts, each of which is deemed an original.
Accepted by:
ONTOGENY, INC. THE XXXXX XXXXXXX UNIVERSITY
/s/ /s/
------------------------------ ----------------------------------
Signature Signature
------------------------------ ----------------------------------
Print Name Print Name
------------------------------ ----------------------------------
Title Title
THE UNIVERSITY OF WASHINGTON
/s/ Xxxxxx X. Xxxxxx
------------------------------
Signature
Xxxxxx X. Xxxxxx
Director, Office of Technology Transfer
- 28 -
I have read and agree to abide by the terms of this Agreement
Inventors:
Xxxxxx X. Xxxxxx Xxxxxxx Xxxxxx
/s/ Xxxxxx Xxxxxx /s/ Xxxxxxx Xxxxxx
------------------------------ ----------------------------------
Signature Signature
------------------------------ ----------------------------------
Date Date
Xxxxxxx X. Xxxx
/s/ Xxxxxxx Xxxx
------------------------------
Signature
------------------------------
Date
- 29 -
Appendix A
Hedgehog Patent Applications
o U.S. patent application serial no. 08/349,498 filed on December 2, 1994.
o U.S patent application serial no. 08/567,357 filed on December 4, 1995.
o PCT application serial no. PCT/US95/15923 filed on December 4, 1995.
o U.S. patent application serial no. ____________ [to be assigned] filed on
October 7, 1996 with the title "Novel Hedgehog-Derived Polypeptides" and
written by Xxxxxx X. Xxxxxx, Xxxxxxx X. Xxxx, and Xxxxxxx X. Xxxxxx.
- 30 -
Appendix B
1. Hedgehog genes and proteins encoded by the genes, including:
Drosophila hedgehog
Sonic hedgehog from mouse, frog, fish
Xenopus Cephalic hedgehog
Xenopus banded hedgehog
Xenopus Hedgehog 4
Twhh (Tiggiewinkle Hedgehog)
2. Fragments and/or truncated forms of the above genes, including:
Truncated forms of Banded Hedgehog, including delta N-C & N
Truncated forms of mouse sonic hedgehog
COOH terminal fragments of Drosophila hedgehog
SHH-C terminal fragment
Hh Delta 89-254
- 31 -
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Appendix C
Performance Milestones for Determination of
Diligence in the Development of Licensed Products
1. Human Therapeutics for Cancer. XXXXX XXXXXXX has the authority to
terminate ONTOGENY's rights to Article 2.5(i) if ONTOGENY does not meet
the following objectives: (a) the identification of a lead compound within
[**] of the Effective Date, (b) the submission of an IND (or equivalent)
study within [**] of the Effective Date, (c) the commencement of Phase II
(or equivalent) study within [**] of the Effective Date, and (d) the
commencement of Phase III (or equivalent) study within [**] of the
Effective Date.
2. Human Therapeutics for Neurobiology. XXXXX XXXXXXX has the authority to
terminate ONTOGENY's rights to Article 2.5(ii) if ONTOGENY not does meet
the following objectives: (a) the identification of a lead compound within
[**] of the Effective Date, (b) the submission of an IND (or equivalent)
study within [**] of the Effective Date, (c) the commencement of Phase II
(or equivalent) study within [**] of the Effective Date, and (d) the
commencement of Phase III (or equivalent) study within [**] of the
Effective Date.
3. Human Therapeutics for Skeletal. XXXXX XXXXXXX has the authority to
terminate ONTOGENY's rights to Article 2.5(iii) if ONTOGENY does not meet
the following objectives: (a) the identification of a lead compound within
[**] of the Effective Date, (b) the submission of an IND (or equivalent)
study within [**] of the Effective Date, (c) the commencement of Phase II
(or equivalent) study within [**] of the Effective Date, and (d) the
commencement of Phase III (or equivalent) study within [**] of the
Effective Date.
4. Human Therapeutics for Other Areas. XXXXX XXXXXXX has the authority to
terminate ONTOGENY's rights to Article 2.5(iv) if ONTOGENY does not meet
the following objectives: (a) the identification of a lead compound within
[**] of the Effective Date, (b) the submission of an IND (or equivalent)
study within [**] of the Effective Date, (c) the commencement of Phase
- 32 -
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
II (or equivalent) study within [**] of the Effective Date, and (d) the
commencement of Phase III (or equivalent) study within [**] of the
Effective Date.
5. Veterinary Therapeutics. XXXXX XXXXXXX has the authority to terminate
ONTOGENY's rights to Article 2.5(v) if ONTOGENY does not meet the
following objectives: (a) the identification of a lead compound within
[**] of the Effective Date, (b) the submission of an IND (or equivalent)
study within [**] of the Effective Date, (c) the commencement of Phase II
(or equivalent) study within [**] of the Effective Date, and (d) the
commencement of Phase III (or equivalent) study within [**] of the
Effective Date.
6. Drug Discovery. XXXXX XXXXXXX has the authority to terminate ONTOGENY's
rights to Article 2.5(vi) if ONTOGENY does not meet the following
objectives: (a) the identification of a lead compound within [**] of the
Effective Date, (b) the submission of an IND (or equivalent) study within
[**] of the Effective Date, (c) the commencement of Phase 11 (or
equivalent) study within [**] of the Effective Date, and (d) the
commencement of Phase III (or equivalent) study within [**] of the
Effective Date.
7. In Vivo Diagnostics. XXXXX XXXXXXX has the authority to terminate
ONTOGENY's rights to Article 2.5(vii) if ONTOGENY does not meet the
following objectives: (a) the identification of a lead compound within
[**] of the Effective Date, (b) the submission of an IND (or equivalent)
study within [**] of the Effective Date, (c) the commencement of Phase 11
(or equivalent) study within [**] of the Effective Date, and (d) the
commencement of Phase III (or equivalent) study within [**] of the
Effective Date.
8. In Vitro Diagnostics. XXXXX XXXXXXX has the authority to terminate
ONTOGENY's rights to Article 2.5(viii) if ONTOGENY does not meet the
following objectives: (a) the identification of a lead compound within
[**] of the Effective Date, (b) the submission of an IND (or equivalent)
study within [**] of the Effective Date, (c) the commencement of Phase 11
(or equivalent) study within [**] of the Effective Date, and (d) the
commencement of Phase III (or equivalent) study within [**] of the
Effective Date
- 33 -
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Appendix C
Performance Milestones for Determination of
Diligence in the Development of Licensed Products
(continued)
9. Research Reagents. XXXXX XXXXXXX has the authority to terminate ONTOGENY's
rights to Article 2.5(ix) if ONTOGENY does not initiate the sale of
research reagents within [**] of the Effective Date.
- 34 -
Appendix D
Copy of
American Arbitration Association (AAA)
Commercial Mediation Rules
begins on the Following Page
- 35 -
Commercial
53D Mediation Rules(1)
1. Agreement of Parties
Whenever, by stipulation or in their contract, the parties have provided for
mediation or conciliation of existing or future disputes under the auspices of
the American Arbitration Association (AAA) or under these rules, they shall be
deemed to have made these rules, as amended and in effect as of the date of the
submission of the dispute, a part of their agreement.
2. Initiation of Mediation
Any party or parties to a dispute may initiate mediation by filing with the AAA
a submission to mediation or a written request for mediation pursuant to these
rules, together with the appropriate administrative fee contained in the Fee
Schedule. Where there is no submission to mediation or contract providing for
mediation, a party may request the AAA to invite another party to join in a
submission to mediation. Upon receipt of such a request, the AAA will contact
the other parties involved in the dispute and attempt to obtain a submission to
mediation.
3. Request for Mediation
A request for mediation shall contain a brief statement of the nature of the
dispute and the names, addresses, and telephone numbers of all parties to the
dispute and those who will represent them, if any, in the mediation. The
initiating party shall simultaneously file two copies of the request with the
AAA and one copy with every other party to the dispute.
--------
(1) Reprinted with the permission of the American Arbitration Association.
App. 53D-1
(Xxxxxxx Xxxxxx & Co., Inc.) (Rel. 8-1/93 Pub. 331)
ALT. DISPUTE RESOLUTION App. 53D-2
4. Appointment of Mediator
Upon receipt of a request for mediation, the AAA will appoint a qualified
mediator to serve. Normally, a single mediator will be appointed unless the
parties agree otherwise or the AAA determines otherwise. If the agreement of the
parties names a mediator or specifies a method of appointing a mediator, that
designation or method shall be followed.
5. Qualifications of Mediator
No person shall serve as a mediator in any dispute in which that person has any
financial or personal interest in the result of the mediation, except by the
written consent of all parties. Prior to accepting an appointment, the
prospective mediator shall disclose any circumstance likely to create a
presumption of bias or prevent a prompt meeting with the parties. Upon receipt
of such information, the AAA shall either replace the mediator or immediately
communicate the information to the parties for their comments. In the event that
the parties disagree as to whether the mediator shall serve, the AAA will
appoint another mediator. The AAA is authorized to appoint another mediator if
the appointed mediator is unable to serve promptly.
6. Vacancies
If any mediator shall become unwilling or unable to serve, the AAA will appoint
another mediator, unless the parties agree otherwise.
7. Representation
Any party may be represented by persons of the party's choice. The names and
addresses of such persons shall be communicated in writing to all parties and to
the AAA.
(Xxxxxxx Xxxxxx & Co., Inc.) (Rel. 8-1/93 Pub. 331)
ALT. DISPUTE RESOLUTION App. 53D-3
8. Date, Time, and Place of Mediation
The mediator shall fix the date and the time of each mediation session. The
mediation shall be held at the appropriate regional office of the AAA, or at any
other convenient location agreeable to the mediator and the parties, as the
mediator shall determine.
9. Identification of Matters in Dispute
At least ten days prior to the first scheduled mediation session, each party
shall provide the mediator with a brief memorandum setting forth its position
with regard to the issues that need to bc resolved. At the discretion of the
mediator, such memoranda may be mutually exchanged by the parties.
At the first session, the parties will be expected to produce all information
reasonably required for the mediator to understand the issues presented.
The mediator may require any party to supplement such information
10. Authority of Mediator
The mediator does not have the authority to impose a settlement on the parties
but will attempt to help them reach a satisfactory resolution of their dispute.
The mediator is authorized to conduct joint and separate meetings with the
parties and to make oral and written recommendations for settlement. Whenever
necessary, the mediator may also obtain expert advice concerning technical
aspects of the dispute, provided that the parties agree and assume the expenses
of obtaining such advice. Arrangements for obtaining such advice shall be made
by the mediator or the parties, as the mediator shall determine.
The mediator is authorized to end the mediation whenever, in the judgment of the
mediator, further efforts at mediation would not contribute to a resolution of
the dispute between the parties.
(Xxxxxxx Xxxxxx & Co., Inc.) (Rel. 8-1/93 Pub. 331)
ALT. DISPUTE RESOLUTION App. 53D-4
11. Privacy
Mediation sessions are private. The parties and their representatives may attend
mediation sessions. Other persons may attend only with the permission of the
parties and with the consent of the mediator.
12. Confidentiality
Confidential information disclosed to a mediator by the parties or by witnesses
in the course of the mediation shall not be divulged by the mediator. All
records, reports, or other documents received by a mediator while serving in
that capacity shall be confidential. The mediator shall not be compelled to
divulge such records or to testify in regard to the mediation in any adversary
proceeding or judicial forum.
The parties shall maintain the confidentiality of the mediation and shall not
rely on, or introduce as evidence in any arbitral, judicial, or other
proceeding:
(a) views expressed or suggestions made by another party with respect to
a possible settlement of the dispute;
(b) admissions made by another party in the course of the mediation
proceedings;
(c) proposals made or views expressed by the mediator, or
(d) the fact that another party had or had not indicated willingness to
accept a proposal for settlement made by the mediator.
13. No Stenographic Record
There shall be no stenographic record of the mediation process.
(Xxxxxxx Xxxxxx & Co., Inc.) (Rel. 8-1/93 Pub. 331)
ALT. DISPUTE RESOLUTION App. 53D-5
14. Termination of Mediation
The mediation shall be terminated:
(a) by the execution of a settlement agreement by the parties;
(b) by a written declaration of the mediator to the effect that further
efforts at mediation are no longer worthwhile; or
(c) by a written declaration of a party or parties to the effect that
the mediation proceedings are terminated.
15. Exclusion of Liability
Neither the AAA nor any mediator is a necessary party in judicial proceedings
relating to the mediation.
Neither the AAA nor any mediator shall be liable to any party for any act or
omission in connection with any mediation conducted under these rules.
16. Interpretation and Application of Rules
The mediator shall interpret and apply these rules insofar as they relate to the
mediator's duties and responsibilities. All other rules shall be interpreted and
applied by the AAA.
17. Expenses
The expenses of witnesses for either side shall be paid by the party producing
such witnesses. All other expenses of the mediation, including required
traveling and other expenses of the mediator and representatives of the AAA, and
the expenses of any witness and the cost of any proofs or expert advice produced
at the direct request of the mediator, shall be borne equally by the parties
unless they agree otherwise.
(Xxxxxxx Xxxxxx & Co., Inc.) (Rel. 8-1/93 Pub. 331)
ALT. DISPUTE RESOLUTION App. 53D-6
Administrative Fees
The case filing or set-up fee is $300. This fee is to be borne equally or as
otherwise agreed by the parties.
Additionally, the parties are charged a fee based on the number of hours of
mediator time. The hourly fee is for the compensation of both the mediator and
the AAA and varies according to region. Check with your local office for
specific availability and rates.
There is no charge to the filing party where the AAA is requested to invite
other parties to join in a submission to mediation. However, if a case settles
after AAA involvement but prior to dispute resolution, the filing party will be
charged a $150 filing fee.
The expenses of the AAA and the mediator, if any, are generally borne equally by
the parties. The parties may vary this arrangement by agreement.
Where the parties have attempted mediation under these rules but have failed to
reach a settlement, the AAA will apply the administrative fee on the mediation
toward subsequent AAA arbitration, which is filed with the AAA within ninety
days of the termination of the mediation.
Deposits
Before the commencement of mediation, the parties shall each deposit such
portion of the fee covering the cost of mediation as the AAA shall direct and
all appropriate additional sums that the AAA deems necessary to defray the
expenses of the proceeding. When the mediation has terminated, the AAA shall
render an accounting and return any unexpended balance to the parties.
Refunds
Once the parties agree to mediate, no refund of the administrative fee will be
made.
(Xxxxxxx Xxxxxx & Co., Inc.) (Rel. 8-1/93 Pub. 331)
Attachment A
Subscription Agreement
This Subscription Agreement (the "Subscription Agreement"), effective
September 26, 1996, is entered into by and between Ontogeny, Inc., a Delaware
corporation (the "Company") and the Xxxxx Xxxxxxx University (the "Investor").
WHEREAS, the Investor desires to purchase from the Company 50,000 shares
(the "Shares") of the Company's Common Stock, par value $0.01 par value per
share;
INTENDING TO BE LEGALLY BOUND, and in consideration of the mutual
representation, warranties, covenants and agreements contained herein and in the
License Agreement, Company and Investor hereby agree as follows:
Article 1
Issuance of Shares
1.1 The Company agrees to sell and issue to the Investor. and the Investor
agrees to purchase from the Company, fifty thousand (50,000) shares of
common stock, par value $0.01 per share.
1.2 At the time of entering into this Subscription Agreement, the Company and
the Investor shall enter into a License Agreement upon mutually agreeable
terms in consideration of the issuance of the Shares to the Investor.
Article 2
Representations and Warranties of the Investor
2.1 The Investor hereby represents and warrants to the Company as of the date
of this Agreement as follows:
(a) The Investor (i) is an Accredited Investor as that term is defined
in 17 CFR ss.230.501(a); (ii) has been furnished with all
information deemed necessary by the Investor to evaluate the merits
and risks of the Shares; (iii) has had the opportunity to ask
questions and receive answers concerning the Company and the Shares;
and (iv) has been given the
1
opportunity to obtain any additional information necessary to verify
the accuracy of any information obtained concerning the Company.
(b) Ability to Bear Risk. The Investor is in a financial position to
hold the Shares and is able to bear the economic risk and withstand
a complete loss of the investment in the Shares.
(c) Risk Factors. The Investors recognizes that the Shares as an
investment involve an extremely high degree of risk. There can be no
assurance that the Company will be able to meets its projected goals
and the Company may need significant additional capital to be
successful, which capital may not be readily available or available
only upon terms that are substantially dilutive to the Investor.
(d) Sophistication. The Investor is a sophisticated investor, is able to
fend for itself in the transactions contemplated by this Agreement,
and has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of the
prospective investment in the Shares.
(e) Suitability. The investment in the Shares is suitable for the
Investor based upon its investment objective and financial needs,
and the Investor has adequate net worth and means for providing for
it current financial needs and contingencies and has no need for
liquidity of investment with respect to the Shares.
(f) Overall Commitment to Illiquid Investments. The Investor's overall
commitment to investments which are illiquid or not readily
marketable is not disproportionate to its net worth, and investment
in the Shares will not cause such overall commitment to become
excessive.
(g) Restricted Securities. The Investor realizes that (i) none of the
Shares have been registered under the Securities Act of 1933, as
amended (the "Act"), (ii) the Shares are characterized under the Act
as "restricted securities" and, therefore, cannot be sold or
transferred unless they are subsequently registered under the Act or
an exemption from such registration is available and (iii) there is
presently no public market for the Shares
2
and the Investor may not be able to liquidate his investment in the
event of an emergency or pledge the Shares as collateral security
for loans. In this connection, the Investor represents that it is
familiar with Rule 144 promulgated under the Act, and understands
the resale limitations imposed thereby and by the Act. Each
certificate representing the Shares shall bear a legend
substantially in the following form:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and
may not be offered, sold or otherwise transferred, pledged or
hypothecated unless and until (i) such shares are registered
under such Act, (ii) such shares are sold pursuant to Rule
144, or (iii) an opinion of counsel satisfactory to the
Company is obtained to the effect that such registration is
not required."
The forgoing legend shall be removed from the certificates
representing any Shares, at the request of the holder thereof, at
such time as they become eligible for resale pursuant to Rule 144(k)
under the Securities Act.
(h) Exemption Reliance. The Investor has been advised that the Shares
are not being registered under the Act or the applicable state
securities laws but are being offered and sold pursuant to
exemptions from such laws. The Investor understands that the
Company's reliance on such exemptions is predicated in part upon the
truth and accuracy of the Investor's representations in this
Agreement.
(i) Investment Intent. The Investor represents and warrants that the
Shares are being purchased for its own account, for investment and
without the intention of reselling, redistribution or transferring
the same, that it has made no agreement with others regarding any of
such Shares and that its financial condition is such that it is not
likely that it will be necessary to dispose of any such Shares in
the foreseeable future. The above notwithstanding, Ontogeny consents
to the transfer of up to 25,000 Shares to the University of
Washington pursuant to Article 6.1 of the License Agreement.
3
Article 3
Covenants
3.1 The Investor agrees that:
(a) Transfer Restriction. The Investor will not transfer or assign this
subscription or any of its interest herein. The Shares for which the
Investor hereby subscribes shall be assigned or transferred only in
accordance with all applicable laws and the provisions of Section
3(b) below.
(b) Disposition of Shares. The Investor shall in no event make any
disposition of all or any portion of the Shares which it is
purchasing unless:
(i) There is then in effect a registration statement under the Act
covering such proposed disposition and such disposition is
made in accordance with said registration statement; or
(ii) (a) It shall have furnished the Company with an opinion of its
own counsel to the effect that such disposition will not
require registration of such shares under the Act, and (b)
such opinion of its counsel shall have been concurred in by
counsel for the Company, such concurrence not to be
unreasonably withheld or delayed, and the Company shall have
advised the Investor of such concurrence; or
(iii) The above notwithstanding, Ontogeny consents to the transfer
of 25,000 Shares to the University of Washington pursuant to
Article 6.1 of the License Agreement.
(iv) No transfer of the Shares shall be effective unless and until
the proposed transferee makes the representations and
warranties to the Company contained in Article 2 above.
Article 4
Governing Law
4.1 The Investor agrees that this Subscription Agreement shall be enforced,
governed and construed in all respects in accordance with the laws of the
Commonwealth of Massachusetts.
4
Article 5
Notices
5.1 Notices are to be written and:
(a) deposited in the United States mail, registered or certified, or
(b) sent via reputable overnight courier service, and addressed as
follows:
TO XXXXX XXXXXXX: Office of Technology Licensing
Xxxxx Xxxxxxx University
0000 X. Xxxxxxxx Xxxxxx, Xxx 0-000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Director
TO ONTOGENY: Ontogeny, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: CEO
Either party may change its address upon written notice to the other party.
Article 6
Miscellaneous
6.1 Survival of Representations and Warranties. This Agreement, and the rights
and obligations of the Investor hereunder may be assigned by the Investor
to any person or entity to which Shares are transferred by the Investor in
accordance with the terms of this Agreement, and such transferee shall be
deemed a "Purchaser" for purposes of this Agreement; provided that the
transferee provides written notice of such assignment to the Company and
agrees in writing to be bound by the obligations of the Purchaser
contained herein and provided further that the transferee is not a
competitor of the Company.
6.2 Entire Agreement. This Agreement embodies the entire agreement and
understanding between the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements and understandings
relating to such subject matter.
5
6.3 Amendments and Waivers. No term or provision of this Agreement shall be
altered or amended except by a writing duly executed by the Company and
the Investor. No waivers of or exceptions to any term, condition or
provision of this Agreement, in any one or more instances, shall be deemed
to be, or construed as, a further or continuing waiver of any such term,
condition or provision.
6.4 Counterparts. This Agreement my be executed in one or more counterparts,
each of which shall be deemed to be an original, but all of which shall be
one and the same document.
6.5 Section Headings. This section headings of this Agreement are for the
convenience of the parties and in no way alter, modify, amend, limit, or
restrict the contractual obligations of the parties.
IN WITNESS WHEREOF, the Investor has completed this Agreement by its duly
authorized officers or representatives and understands that this subscription is
subject to acceptance by the Company.
ONTOGENY, INC.
/s/ Xxxxxx X. Xxxxxxxx
-----------------------------------
Signature
Xxxxxx X. Xxxxxxxx
Vice President
THE XXXXX XXXXXXX UNIVERSITY
/s/
-----------------------------------
Signature
-----------------------------------
Print Name
-----------------------------------
Title
6
By signing below, the undersigned transferee makes the representations and
warranties to the Company contained in Article 2:
UNIVERSITY OF WASHINGTON
/s/
-----------------------------------
Signature
-----------------------------------
Print Name
-----------------------------------
Title
7
AMENDMENT NO. 1 TO LICENSE AGREEMENT
This AMENDMENT No. 1 is made as of this 15th day of January, 1997, by and
between THE XXXXX XXXXXXX UNIVERSITY, a body having corporate powers under the
laws of the State of Maryland ("XXXXX XXXXXXX"), the University of Washington, a
body having corporate powers under the laws of the State of Washington
("UNIVERSITY OF WASHINGTON"), and ONTOGENY, INC., a Delaware corporation
("ONTOGENY").
WHEREAS, XXXXX XXXXXXX, UNIVERSITY OF WASHINGTON, and ONTOGENY are parties
to a License Agreement, dated as of September 26, 1996 (the "License
Agreement"); and
WHEREAS XXXXX XXXXXXX, UNIVERSITY OF WASHINGTON, and ONTOGENY wish to
amend the License Agreement as hereafter, provided.
NOW, THEREFORE, in consideration of the mutual covenants of XXXXX XXXXXXX,
UNIVERSITY OF WASHINGTON, and ONTOGENY and further good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
XXXXX XXXXXXX, UNIVERSITY OF WASHINGTON, and ONTOGENY, intending to be legally
bound, hereby agree as follows:
1. Appendix A of the License Agreement is hereby amended to read in full
as follows:
Appendix A
2. The written notices to Ontogeny, as provided for in Article 18, are
hereby amended to read as follows:
TO ONTOGENY: Ontogeny, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: CEO
Page 1 of 2
TO ONTOGENY: with a copy to Xxxxx, Xxxx & Xxxxx
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, Ph.D.
3. Except as expressly amended by this Amendment No. 1, the License
Agreement shall remain in full force and effect as the same was in effect
immediately prior to the effectiveness of this Amendment No. 1.
4. This Amendment No. 1 shall be governed by and construed on the same
basis as the License Agreement, as set forth therein.
IN WITNESS WHEREOF, each of the parties hereto has fully executed this
Amendment No. 1 all as of the day and year first above written.
ONTOGENY, INC.
By: /s/ Xxxxxx X. Ignolia
-------------------------------
Xxxxxx X. Xxxxxxx, Ph.D.
Senior Vice President
THE XXXXX XXXXXXX UNIVERSITY THE UNIVERSITY OF WASHINGTON
By: /s/ N. Xxxxxxxx Xxxxxxxx, Xx. By: /s/ Xxxxxx X. Xxxxxx
--------------------------------- -------------------------------
N. Xxxxxxxx Xxxxxxxx, Xx., M.D. Xxxxxx X. Xxxxxx
Interim Vice Xxxx for Research Director, Office of Technology
Transfer
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