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EXHIBIT 10.8
CIRCE BIOMEDICAL, INC. HAS OMITTED FROM THIS EXHIBIT 10.8 PORTIONS OF THE
AGREEMENT FOR WHICH CIRCE BIOMEDICAL, INC. HAS REQUESTED CONFIDENTIAL
TREATMENT FROM THE SECURITIES AND EXCHANGE COMMISSION. THE PORTIONS OF THE
AGREEMENT FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED ARE MARKED WITH AN
ASTERISK AND SUCH CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMSSION.
RESEARCH, TECHNOLOGY DEVELOPMENT AND LICENSE AGREEMENT
BETWEEN
X. X. XXXXX & CO.-XXXX.
AND
CEDARS-SINAI MEDICAL CENTER
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TABLE OF CONTENTS
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ARTICLE PAGE NO.
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I DEFINITIONS................................................. 2
II GRACE LAD TECHNOLOGY........................................ 6
III CEDARS-SINAI LAD TECHNOLOGY.................................. 7
IV RESEARCH & TECHNOLOGY DEVELOPMENT PROGRAM.................... 8
V GRACE CONTRIBUTIONS.......................................... 9
VI CEDARS-SINAI CONTRIBUTIONS.................................. 12
VII OWNERSHIP OF TECHNOLOGY..................................... 13
VIII LICENSE GRANT............................................... 14
IX LICENSE ROYALTIES........................................... 15
X PAYMENT PROCEDURES.......................................... 16
XI CONFIDENTIALITY............................................. 19
XII PATENT PROTECTION........................................... 22
XIII PATENT ENFORCEMENT AND THIRD PARTY PATENTS.................. 23
XIV REPRESENTATIONS, WARRANTIES, AND INDEMNIFICATION............ 24
XV NOTICES..................................................... 26
XVI TERM AND TERMINATION........................................ 26
XVII ASSIGNABILITY............................................... 30
XVIII MISCELLANEOUS............................................... 30
APPENDIX A - MILESTONES/RESEARCH & TECHNOLOGY
DEVELOPMENT PLAN....................................
APPENDIX B - RESEARCH & TECHNOLOGY DEVELOPMENT BUDGET.................
APPENDIX C - INVESTIGATORS AGREEMENT..................................
APPENDIX D - CEDARS-SINAI PATENTS/PATENT APPLICATIONS.................
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RESEARCH, TECHNOLOGY DEVELOPMENT AND LICENSE AGREEMENT
------------------------------------------------------
THIS AGREEMENT, made as of the 1st day of August, 1994, by and between X. X.
Xxxxx & Co.-Xxxx., a company organized and existing under the laws of the State
of Connecticut, U.S.A. and having its principal place of business at Xxx Xxxx
Xxxxxx Xxxx, Xxxx Xxxxx, Xxxxxxx 00000, X.X.X. ("Grace") and Cedars-Sinai
Medical Center ("Cedars-Sinai") a nonprofit public benefit corporation organized
and existing under the laws of California, U.S.A and having its principal place
of business at 0000 Xxxxxxx Xxxxxxxxx, Xxx Xxxxxxx, XX 00000-0000, U.S.A.
("Cedars-Sinai").
WHEREAS, Grace has developed certain expertise and proprietary
technology relating to artificial liver assist devices ("LADs"), including, for
example, membrane technology, hepatocyte isolation and handling technology,
device design technology, cryopreservation technology and the like; and
WHEREAS, Cedars-Sinai has developed certain expertise and
proprietary technology relating to artificial LADs, including, for example,
hepatocyte isolation and handling technology, and the development of a first
generation LAD; and
WHEREAS, Grace and Cedars-Sinai wish to combine their expertise
and their respective LAD technologies in order to make LADs available for human
medical applications worldwide; and
WHEREAS, Cedars-Sinai wishes to continue development of existing
Cedars-Sinai LAD technology, and wishes to continue research aimed at the
development of second and third generation LADs; and
WHEREAS, Grace wishes to fund such research and technology
development at Cedars-Sinai; and
WHEREAS, Grace desires to license the Cedars-Sinai proprietary
technology, and Cedars-Sinai desires to grant such a license to Grace; and
WHEREAS, Cedars-Sinai wishes to participate in the clinical
testing of the first generation Cedars-Sinai LAD and Grace desires that
Cedars-Sinai serve as an initial site for such testing; and
WHEREAS, Grace is willing to undertake product development,
coordinate clinical trials, obtain regulatory approval(s), and conduct marketing
activities for LADs utilizing the Grace and/or Cedars-Sinai proprietary
technology; and
WHEREAS, Grace and Cedars-Sinai have determined that a research,
clinical testing and license program as defined by this Agreement is of mutual
interest and benefit;
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NOW, THEREFORE, the parties agree as follows:
ARTICLE I - DEFINITIONS
-----------------------
As used herein, the following terms shall be defined as
specified:
1.01 "Affiliate" means any corporation or other business entity
which directly or indirectly controls, is controlled by, or is under common
control with one of the parties to this Agreement. "Controls" (including
"controlled by" and "under common control with") means the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of a corporation or other business entity, whether through the
ownership of voting securities, by contract or otherwise.
1.02 "Agreement" means this Research, Technology Development and
License Agreement.
1.03 "Annual Net Sales" means the total of the Net Sales Prices
for all LADs based in whole or in part on Cedars-Sinai LAD Technology which are
sold during an Annual Royalty Period by Grace and Grace sublicensees, less any
credits generally acceptable in the industry actually given for the LADs.
1.04 "Annual Royalty Period" means each successive twelve (12)
month period beginning on January 1 and ending on December 31 of a calendar
year; provided, however, that the first Annual Royalty Period shall begin on the
date of the first sale of a LAD embodying Cedars-Sinai LAD Technology and end on
December 31 of the same calendar year.
1.05 "Cedars-Sinai" means Cedars-Sinai Medical Center, a
California nonprofit public benefit corporation.
1.06 "Cedars-Sinai LAD Technology" means all Cedars-Sinai
technology in the Field which Cedars-Sinai has the right to disclose and to
grant licenses thereto, including that related to hepatocyte collection,
handling and preparation, including all information and know-how whether or not
patented. Cedars-Sinai LAD Technology would include all LAD-related information
and know-how developed either prior to or during the term of the Agreement which
Cedars-Sinai has the right to use and to grant license rights thereto; patents
and/or patent applications, if any, within the Cedars-Sinai LAD Technology are
listed in Appendix D.[*]
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1.07 "Designated Milestone" means a Milestone which has been
designated by the parties, in advance and by mutual agreement, as being
particularly significant to demonstrate the good faith effort of the party
charged with meeting that Milestone. Grace Designated Milestones are intended to
assure Grace's good faith effort to secure regulatory approval and to proceed
with commercialization of an LAD based in whole or in part on the Cedars-Sinai
LAD Technology. Cedars-Sinai Designated Milestones are intended to assure
Cedars-Sinai's good faith effort to engage in the Technology Development Program
and the Research Program.
1.08 "Effective Date" means August 1, 1994.
1.09 "Field" means the field of artificial liver assist devices
(LADs), including but not limited to all research, technology development,
testing, clinical trials, application(s) for regulatory approval, and the
manufacture, use and sale of LADs. It is understood and agreed by the parties
that the definition of "Field" refers, with respect to activities at
Cedars-Sinai, to the research, technology development, and testing which is
performed by one or more Investigators.
1.10 "First Generation LAD" means the Cedars-Sinai LAD Technology
used to treat human subjects at Cedars-Sinai prior to July 8, 1994 (the date of
Grace's submission of that technology to the FDA in its IND).
1.11 "Grace" means X. X. Xxxxx & Co.-Xxxx., a corporation
incorporated under the laws of the State of Connecticut, United States of
America, and any Affiliate of Grace.
1.12 "Grace LAD Technology" means all Grace technology in the
Field which Grace has the right to disclose, including that related to
hepatocyte collection, handling and preparation, cryopreservation, device design
and preparation, and membrane technology, including all information and
know-how, whether or not patented, and including any rights licensed to Grace
from Rhode Island Hospital ("RIH") pursuant to a Sponsored Research Agreement,
originally dated February 3, 1985, between Grace and RIH (the "RIH Agreement").
Grace LAD Technology includes all LAD-related information and know-how developed
by Grace or on its behalf either prior to or during the term of the Agreement.
1.13 "Investigators" means the Principal Investigator, any
individual or position specifically identified in the budget (Appendix B to this
Agreement), and any other Cedars-Sinai employee who performs any part of the
work and procedures in furtherance of the Project
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contemplated by this Agreement. All Investigators are to sign the confidential
disclosure agreement appended hereto as Appendix C.
1.14 "LAD" or "Liver Assist Device" means a device which
simulates, supplements or substitutes for functions performed by the liver and
which is composed of a cartridge having a combination of living hepatocytes with
a membrane. "LAD" shall not be considered to include such peripheral or
accessory circuitry components as tubing, oxygenators, charcoal columns,
plasmapheresis equipment, and the like.
1.15 "Licensed Field" means the use of Cedars-Sinai LAD
Technology in human medical care and/or the use of Cedars-Sinai LAD Technology
to make (or have made), use and sell LADs for human medical care pursuant to the
license grant of Article VIII.
1.16 "Licensed Patent Rights" means Project Patent Rights and/or
patents and patent applications, if any, in all countries, which patents and/or
patent applications pre-date this Agreement, to the extent they or the claims
thereof describe one or more features of the Cedars-Sinai LAD Technology.
1.17 "Milestone" means one of the research, technology
development, or product development milestones of Appendix A, or such other
milestones which may be agreed upon by the parties.
1.18 "Net Sales Price" means, with respect to LADs manufactured
and sold by Grace or a Grace sublicensee, the sales price for each LAD sold to
third party customers less: (i) sales, excise, or use taxes separately stated on
the face of the invoice, (ii) separately stated and itemized transportation
charges, (iii) separately stated and itemized packaging costs, (iv) custom
duties, and (v) all trade and discount allowances generally acceptable in the
industry and actually given with respect to the LAD.
1.19 "Principal Investigator" means Dr. Achilles X. Xxxxxxxxx,
M.D. (or any other person nominated by Cedars-Sinai and acceptable to Grace),
who shall have the duties and responsibilities set forth in Article IV of this
Agreement.
1.20 "Project" means the research and technology development to
be undertaken by Cedars-Sinai in the Field pursuant to the Research Program and
the Technology Development Program (as described in the Research & Technology
Development Plan), including any modifications, extensions or additions thereto.
It is intended by the parties that the term "Project" will include all aspects
of such research and technology development, whether supported financially by
Grace or by Cedars-Sinai.
1.21 "Project Information" means all scientific or technical
information and
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data, regardless of form or characteristics, including descriptions of and
information regarding all unpatented inventions relating to LADs which have been
developed, produced or generated in the course of, in connection with or as a
result of the work performed at Cedars-Sinai pursuant to the Research &
Technology Development Plan. "In the course of, in connection with or as a
result of" as used in this definition shall mean during the period in which the
research portion of this Agreement is funded by Grace. Project Information as
used herein shall not include financial information incidental to administration
of this Agreement.
1.22 "Project Invention" means any invention, improvement or
discovery relating to LADs which is conceived (or conceived and actually reduced
to practice) in the course of, in connection with or as a result of the research
funded pursuant to the Research & Technology Development Plan and includes any
method, process, device, machine, manufacture, design or composition of matter,
or any new or useful improvement thereof, whether or not patentable under the
patent laws of the United States or any foreign country. "In the course of, in
connection with or as a result of" as used in this definition shall mean the
period during which the research portion of this Agreement is funded by Grace.
1.23 "Project Patent Rights" means patents and patent
applications in all countries to the extent that they or the claims thereof
describe one or more features of a Project Invention.
1.24 "Publication" means (a) any document, book, scientific
paper, thesis, report, article, or commentary whether written or in any other
medium, or (b) a verbal or written presentation to any person or persons not
bound by this Agreement, which discloses any Project Information or Project
Invention. Publication as used herein shall not include any patent application
or patent within the Project Patent Rights.
1.25 "Research & Technology Development Plan" means the plan
attached hereto as Appendix A for the conduct of the Research Program and the
Technology Development Program at Cedars-Sinai. An amended Research & Technology
Development Plan, mutually agreed upon by the parties, shall be attached to this
Agreement each year during the research & technology development portion of the
Agreement. If the parties fail to agree on a mutually acceptable amended
Research & Technology Development Plan (Appendix A) and corresponding budget
(Appendix B) for any year, the research and technology development portion of
the Agreement shall terminate as provided in Paragraph 16.02(a).
1.26 "Research Program" means the conduct of research for second
and third generation LADs utilizing Cedars-Sinai LAD Technology.
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1.27 "Technology Development Program" means the development of
supplemental Cedars-Sinai LAD Technology as necessary to support the preparation
of regulatory applications, responses to regulatory agency requests, and the
conduct of clinical trials with respect to the Cedars-Sinai First Generation
LAD.
1.28 "Technology Transfer Report" means the report specified in
Paragraph 3.02 which shall summarize Cedars-Sinai's research findings, results,
data, and shall provide all relevant procedures and protocols for practicing the
Cedars-Sinai LAD Technology, as of the Effective Date.
ARTICLE II - GRACE LAD TECHNOLOGY
---------------------------------
2.01 Grace shall disclose and make available to Cedars-Sinai the
Grace LAD Technology. Cedars-Sinai is hereby authorized to use the Grace LAD
Technology solely for conduct of the Research Program and the Technology
Development Program pursuant to this Agreement.
2.02 Cedars-Sinai recognizes that part of the Grace LAD
Technology has been developed by RIH (Principal Investigator, Xx. Xxxx Xxxxxxxx)
pursuant to the RIH Agreement, and that Grace anticipates continuing to work
with RIH with respect to the LAD research.
(a) Cedars-Sinai hereby agrees to treat any RIH information or
technology with respect to the LAD which may be disclosed to Cedars-Sinai by
Grace or RIH pursuant to this Agreement in the same manner and with the same
protections as any other Grace LAD Technology.
(b) Grace hereby authorizes Cedars-Sinai in its sole discretion
to disclose to RIH any Grace LAD Technology and/or Cedars-Sinai LAD Technology
which may be necessary to carry out the purposes of this Agreement. RIH has
undertaken to treat Cedars-Sinai LAD Technology in the same manner as Grace LAD
Technology, maintaining its confidentiality and using it only for purposes of
the Grace LAD project.
(c) Cedars-Sinai confirms that it will use RIH information and
technology only for purposes of the Project.
2.03 Grace's obligations to Cedars-Sinai to conduct further
research and/or technology development with respect to the LAD are defined in
the Research & Technology Development Plan, which may from time-to-time be
amended in writing by mutual agreement of the parties. Grace shall not be
obligated to conduct any additional research and/or technology
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development with respect to the LAD, beyond that specified in the Research &
Technology Development Plan.
ARTICLE III - CEDARS-SINAI LAD TECHNOLOGY
-----------------------------------------
3.01 Cedars-Sinai shall disclose and make available to Grace all
Cedars-Sinai LAD Technology. Grace is hereby authorized to use the Cedars-Sinai
LAD Technology solely for conducting technology development, regulatory approval
of, conducting clinical trials of, and commercializing the Cedars-Sinai First
Generation LAD pursuant to the license granted in Article VIII, and to engage in
the same activities for future generation LADs, as they are developed, pursuant
to that license.
3.02 In order to provide sufficient transfer of the Cedars-Sinai
LAD Technology to allow Grace to conduct the activities of Paragraph 3.01 with
respect to the Cedars-Sinai First Generation LAD, the Principal Investigator, on
behalf of Cedars-Sinai, has prepared a Technology Transfer Report and has
delivered it to Grace. Grace has found the general scope and detail of the
information already provided to be acceptable. The Technology Transfer Report is
intended to be of sufficient scope and detail to assist Grace scientists
reasonably skilled in the technology to practice the Cedars-Sinai LAD Technology
existing as of the Effective Date. The Technology Transfer Report therefore may
be supplemented by the consultation and discussion described in Paragraph 3.04,
in order to enable the Grace scientists to practice the Cedars-Sinai LAD
Technology with the same capacity to produce an LAD as when that technology is
practiced at Cedars-Sinai. In the event additional Cedars-Sinai LAD Technology
needs to be transferred, the Principal Investigator agrees to supplement the
Technology Transfer Report as may be reasonably necessary.
3.03 Cedars-Sinai shall provide Grace with copies of all
Cedars-Sinai patents and patent applications, if any, covering Cedars-Sinai LAD
Technology. A list of current patents and patent applications is attached hereto
as Appendix D. Future patent application drafts which may be prepared with
respect to Cedars-Sinai LAD Technology shall be provided to Grace for
consultation pursuant to Article XII.
3.04 (a) Cedars-Sinai shall make one or more Investigators
available to Grace for further consultation and discussion of the Technology
Transfer Report and the details of the Cedars-Sinai LAD Technology at mutually
agreeable times and places. It is preferred that such consultation, which may
take place by telephone conference, would be conducted quarterly. The parties
agree that the discussions would be in sufficient detail to enable Grace to
update the
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Technology Transfer Report after each such discussion.
(b) If Grace requests that extraordinary consultation take place
at a Grace facility, or at any other location requiring travel from the
Cedars-Sinai representative's normal place of employment (that is, consultation
requiring travel beyond that provided for in the budget of Appendix B), Grace
shall arrange for and shall pay for all reasonable travel and living expenses
associated with such extraordinary consultation.
ARTICLE IV - RESEARCH & TECHNOLOGY DEVELOPMENT PROGRAM
------------------------------------------------------
4.01 The parties shall engage in development of the existing
Cedars-Sinai LAD Technology and Grace LAD Technology, and shall proceed through
clinical studies and commercialization of the Cedars-Sinai First Generation LAD,
via conduct of the Technology Development Program under this Agreement. In
addition, Cedars-Sinai shall conduct additional research and development with
respect to second and third generation LADs, via conduct of the Research Program
under this Agreement. Cedars-Sinai and Grace shall collaborate on the Technology
Development Program and the Research Program, collectively referred to as the
Project, as set forth in further detail in Articles V and VI of this Agreement.
4.02 It is understood that Cedars-Sinai and Grace each shall make
contributions in support of the Project, and that the Grace contribution shall
be used solely for support of the Project. Cedars-Sinai contributions shall be
sufficient to supplement the Grace contributions as needed to conduct the
Project. It is anticipated that the Grace support initially will be allocated to
the hiring of additional Investigators and the acquisition of additional
equipment in support of the Project as set forth in the budget, and later also
will be allocated to support for clinical trials.
4.03 The activities of Cedars-Sinai and the Principal
Investigator pursuant to this Agreement shall be governed by the Research &
Technology Development Plan. Any significant deviations from the Research &
Technology Development Plan shall first be discussed with and approved by Grace.
4.04 Cedars-Sinai has designated Dr. Achilles X. Xxxxxxxxx, M.D.
as Principal Investigator. Cedars-Sinai will provide the services of those
additional Cedars-Sinai Investigators needed to assist the Principal
Investigator as noted in the Research & Technology Development Plan. The
Principal Investigator shall be responsible for the conduct and direction of the
Project and shall supervise all work performed by the Investigators pursuant to
this Agreement.
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4.05 In the event the Principal Investigator leaves Cedars-Sinai
or substantially changes his field of interest, or is unavailable for any reason
to carry out his duties as the Principal Investigator, Cedars-Sinai may propose
by written notice to Grace a nominee to serve as Principal Investigator and,
upon written approval thereof by Grace, which approval shall not be withheld
unreasonably, the nominee shall become and serve as Principal Investigator for
all purposes hereunder and this Agreement shall continue with full force and
effect. However, in the event the candidate is unacceptable to Grace, the
research and technology development portion of this Agreement shall terminate
pursuant to the provisions of Paragraph 16.02(b), at the end of the thirty (30)
day period following Grace notice to Cedars-Sinai that the proposed candidate is
not acceptable.
ARTICLE V - GRACE CONTRIBUTIONS
-------------------------------
5.01 (a) Grace shall provide, at no cost to Cedars-Sinai,
Grace-manufactured hollow fibers and/or hollow fiber devices for use in the
Technology Development Program and/or the Research Program.
(b) Grace LAD Technology, as disclosed to Cedars-Sinai pursuant
to Paragraph 2.01 or as may be developed or acquired by Grace, may be utilized
in the commercialization of the Cedars-Sinai First Generation LAD (and,
potentially, future generation LADs) by Grace pursuant to this Agreement.
Subject to regulatory requirements, such use of Grace LAD Technology shall be at
Grace's discretion.
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5.02 Grace shall fund research and technology development to be
conducted at Cedars-Sinai under the direction of the Principal Investigator
according to the Research & Technology Development Plan.
5.03 Grace shall be responsible for seeking regulatory approval
for the Cedars-Sinai First Generation LAD, and, potentially, for future
generation LADs, including:
(a) preparing an IDE (Investigational Device Exemption), in
consultation with Cedars-Sinai, for joint submission to the
FDA (Food and Drug Administration), and following up on IDE
procedural requirements, attending meetings with FDA,
preparing and filing a PMA (Pre-Market Approval) with the
FDA, and the like; and
(b) coordinating multicenter clinical trials for the First
Generation LAD, which shall include Cedars-Sinai as one of
the centers.
5.04 Grace shall be responsible for commercialization of the
Cedars-Sinai First Generation LAD, and, potentially, future generation LADs,
including:
(a) producing or procuring hepatocytes in sufficient quality and
quantities for clinical trials, in accordance with
Cedars-Sinai and/or Grace LAD Technology;
(b) producing or procuring devices for housing hepatocytes in an
LAD, in quantities sufficient for clinical trials;
(c) engineering and making available prototype facilities for
the production of First Generation LADs, including
facilities for device and hepatocyte processing and, if
necessary, production of devices; and
(d) undertaking all associated marketing, sales, and
distribution activities.
5.05 Grace shall make a good faith effort to market the
Cedars-Sinai LAD Technology in the Licensed Field, but makes no representation
or warranty that regulatory approval can be obtained or that the Cedars-Sinai
First Generation LAD can be successfully marketed. Evidence of a good faith
effort includes but is not limited to the following activities, if undertaken by
Grace or a Grace sublicensee:
(a) completing Milestones in a timely manner;
(b) conducting clinical trials as may be necessary to secure
regulatory approval;
(c) applying for and providing the necessary effort in support
of securing such regulatory approval; and
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(d) promptly marketing one or more LADs for which regulatory
approval has been obtained.
Certain Milestones may be identified by the parties, upon mutual agreement, as
Grace Designated Milestones, at which time the Research & Technology Development
Plan will be amended to indicate such Grace Designated Milestone(s). However,
neither party shall be obligated to agree to any Designated Milestone(s) in
addition to those attached to this Agreement on the Effective Date. Completion
of such Grace Designated Milestones in a timely fashion is required for a
showing of good faith effort by Grace; provided, however, that Grace shall have
the opportunity to offer evidence of a good faith effort despite failure to meet
one or more Designated Milestones and Cedars-Sinai may accept such evidence in
its reasonable discretion, rather than taking action pursuant to Paragraphs 8.02
and 16.04(b).
5.06 Grace shall prepare an annual report of its progress toward
achieving the Milestones, to be forwarded to Cedars-Sinai within ninety (90)
days after the end of each calendar year. In addition to the annual report, upon
achieving any Designated Milestone, Grace agrees to notify Cedars-Sinai of such
achievement, as provided in Paragraph 15.01.
5.07 It is anticipated that Grace ultimately would design, build
and operate a facility for commercial production of LADs, provided that
financial objectives are met to Grace's satisfaction. In the event that Grace
decides not to pursue the commercial production or marketing of LADs the parties
agree to enter into good faith negotiations to effect the return of rights to
the Cedars-Sinai LAD Technology to Cedars-Sinai to enable Cedars-Sinai to pursue
other potential marketing or production relationships based on the Cedars-Sinai
LAD Technology; provided, however:
(a) the return of such rights shall be contingent upon the
execution of a mutually agreeable contract providing
therefor,
(b) such contract shall provide a reasonable recovery on Grace's
expenditures, from the October 13, 1993 date of the
Memorandum of Understanding between the parties, in the
incorporation, development and commercialization of the
Cedars-Sinai LAD Technology into the Grace LAD program,
including those expenses related to activities undertaken to
secure regulatory approval; the parties anticipate that such
recovery would be provided by means of one or more of the
following forms of payment: upfront fee, deferred payments,
and/or earned or minimum royalties; the parties agree that
no payments would be due to
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Grace under this provision unless Cedars-Sinai actually
enters into an agreement with a third party with respect to
the Cedars-Sinai LAD Technology; and
(c) unless otherwise agreed by the parties, all rights to the
Grace LAD Technology which have been granted to Cedars-Sinai
pursuant to this Agreement shall automatically revert to
Grace.
ARTICLE VI - CEDARS-SINAI CONTRIBUTIONS
---------------------------------------
6.01 So long as the research and technology development portion
of this Agreement is in effect, Cedars-Sinai shall conduct research and
technology development according to the Research & Technology Development Plan
in the further refinement of the Cedars-Sinai First Generation LAD and in the
development of second and third generation LADs.
6.02 Cedars-Sinai shall make a good faith effort to conduct the
research and development of Paragraph 6.01, but makes no representation or
warranty that particular technical goals will be successfully achieved. Evidence
of a good faith effort includes but is not limited to the following Cedars-Sinai
activities:
(a) staffing the Research Program and Technology Development
Program with Investigators as set forth in the Research &
Technology Development Plan, or as otherwise agreed by Grace
and Cedars-Sinai;
(b) conducting the Research Program and the Technology
Development Program according to the guidelines of the
Research & Technology Plan; and
(c) completing Milestones in a timely manner.
Certain Milestones may be identified by the parties, upon mutual agreement, as
Cedars-Sinai Designated Milestones, at which time the Research & Technology
Development Plan will be amended to indicate such Cedars-Sinai Designated
Milestone(s). However, neither party shall be obligated to agree to any
Designated Milestone(s) in addition to those attached to this Agreement on the
Effective Date. Completion of such Designated Milestones in a timely fashion is
required for a showing of good faith effort by Cedars-Sinai; provided, however,
that Cedars-Sinai shall have the opportunity to offer evidence of a good faith
effort despite failure to meet one or more Cedars-Sinai Designated Milestones
and Grace may accept such evidence in its reasonable discretion, rather than
taking action pursuant to Paragraph 16.04(a).
6.03 The Principal Investigator, on behalf of Cedars-Sinai, shall
prepare an
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annual report of its progress toward achieving the Milestones, to be forwarded
to Grace within ninety (90) days after the end of each calendar year. In
addition to the annual report, upon achieving any Designated Milestone,
Cedars-Sinai agrees to notify Grace of such achievement, as provided in
Paragraph 15.01.
6.04 The Principal Investigator, on behalf of Cedars-Sinai, shall
consult with and assist Grace in Grace's efforts under Paragraph 5.03 to obtain
regulatory approval for the LAD, according to the Research & Technology
Development Plan.
6.05 Cedars-Sinai shall serve as a site for a portion of the
clinical trials for the First Generation LAD and would be responsible for
conducting those trials, subject to the receipt of all internal institutional
approvals and in accordance with a separately negotiated workplan between the
parties with respect to clinical trials (to be attached to this Agreement as
part of Appendix A). Cedars-Sinai's participation in the clinical trials shall
be in consultation with Grace in Grace's role as multicenter clinical trial
coordinator.
6.06 As partial consideration for this Agreement, the Principal
Investigator, on Cedars-Sinai's behalf, shall provide consultation and training
for surgeons participating in the multicenter clinical trials. It is anticipated
that one or more separately negotiated agreements between the parties
participating in the clinical trials will set forth the terms and conditions for
such consultation and training.
ARTICLE VII - OWNERSHIP OF TECHNOLOGY
-------------------------------------
7.01 All rights contained within the Grace LAD Technology would
continue to be owned by Grace and/or RIH, and would not be changed or affected
by the provisions of the Agreement.
7.02 All rights to Grace hollow fibers and hollow fiber devices
would continue to be owned by Grace, and would not be changed or affected by the
provisions of the Agreement.
7.03 All rights contained within the Cedars-Sinai LAD Technology
would continue to be owned by Cedars-Sinai, and would not be changed or affected
by the provisions of the Agreement.
7.04 In the case of any joint Grace/Cedars-Sinai invention in the
Field, rights would be owned jointly by Grace and Cedars-Sinai. In the event
such invention is deemed by the parties to be patentable, decisions regarding
the filing and prosecution of a patent application would be made jointly, with
the filing and prosecution to be handled by Cedars-Sinai in
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consultation with Grace, as set forth in Paragraph 12.01. Grace would be
responsible for patent expenses for such inventions as set forth in Paragraph
12.01.
ARTICLE VIII- LICENSE GRANT
---------------------------
8.01 Cedars-Sinai hereby grants to Grace an exclusive, worldwide,
royalty-bearing license as follows:
(a) to practice the Cedars-Sinai LAD Technology in the Licensed
Field, including know-how and Licensed Patents within the
Cedars-Sinai LAD Technology, and
(b) to engage in activities associated therewith, such as
seeking government regulatory approvals, conducting clinical
trials, and the like.
As used herein, the term "worldwide" is intended to mean all countries of the
world, subject to U.S. government trade restrictions.
8.02 Cedars-Sinai shall have the right, but not the obligation,
to terminate Grace's exclusive license if Designated Milestones are not met;
provided, however, that Cedars-Sinai may not terminate Grace's license under
this Paragraph if failure to meet Designated Milestones is due to regulatory
delays not subject to Grace's control. Notwithstanding the foregoing, Grace
shall have sixty (60) days in which to cure any breach due to missing a
Designated Milestone, and also shall have the opportunity to provide
Cedars-Sinai with evidence excusing the failure to meet a Designated Milestone,
pursuant to Paragraph 5.05.
8.03 Grace's license shall include the right to sublicense any
third party to practice the Cedars-Sinai LAD Technology in the Licensed Field;
provided that Grace promptly notify Cedars-Sinai of any sublicense. Practice of
Cedars-Sinai LAD Technology by any Grace sublicensee shall be subject to royalty
payments as if practiced by Grace, and Grace shall include in any sublicense
agreement the right for Grace to audit with respect to the sublicensee royalty
obligation, or for Cedars-Sinai to audit if Grace chooses not to. Grace shall
make royalty payments to Cedars-Sinai on behalf of its sublicensee, unless Grace
and Cedars-Sinai mutually agree to allow the sublicensee to make royalty
payments directly to Cedars-Sinai.
8.04 The license granted to Grace pursuant to Paragraph 8.01
shall continue in effect in each country as specified in Paragraph 16.06, unless
earlier terminated according to Article XVI. Following expiration (but not
termination) of Grace's license in any country, Grace shall have a fully
paid-up, irrevocable license to practice the Cedars-Sinai LAD Technology in that
country.
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ARTICLE IX - LICENSE ROYALTIES
------------------------------
9.01 The license granted in Paragraph 8.01 shall be
royalty-bearing, based on the following two-tier royalty structure, with the
exact royalties to be negotiated for each generation of LAD commercialized by or
on behalf of Grace at the time the relevant Cedars-Sinai LAD Technology is
available for use. A lower royalty shall be paid for the use of Cedars-Sinai
know-how only (that is, if no patents are included in the licensed Cedars-Sinai
LAD Technology). A higher royalty would be paid in the event the commercial LAD
is covered by one or more Licensed Patents. No double royalty would be paid. It
is acknowledged by the parties that the presence or absence of patent coverage
for the relevant Cedars-Sinai LAD Technology may vary by country and that the
appropriate royalty from the two-tier structure will be determined on a
country-by-country basis.
9.02 The Cedars-Sinai LAD Technology is available for use insofar
as it covers the Cedars-Sinai First Generation LAD, which has been
patient-tested and which is now ready for use in conducting clinical trials and
proceeding to obtain regulatory approvals for the First Generation LAD. The
Cedars-Sinai First Generation LAD comprises [*]. The royalty rate for the
Cedars-Sinai First Generation LAD shall be [*] of the Net Sales Price for each
LAD sold by Grace or a Grace sublicensee into the chain of distribution.
9.03 Subject to the royalty credit of Paragraph 9.06, the
earned royalty of Paragraph 9.01 shall be payable by Grace to Cedars-Sinai based
on the cumulative Annual Net Sales of LADs for each Annual Royalty Period. All
royalties due Cedars-Sinai by Grace under this Agreement shall be payable in
U.S. dollars, with the rate of exchange for any non-U.S. currencies received for
any sales being the exchange rate specified in the American edition of the Wall
Street Journal. U.S.-dollar equivalence shall be calculated on a quarterly
basis, using the average of the exchange rate on the first and last business day
of the quarter for each of the currencies in which sales of LAD(s) were made
during the quarter.
9.04 The earned royalties of Paragraph 9.01 shall be payable only
once for any LAD.
9.05 All patent expenses paid by Grace pursuant to Article XII
would serve as a credit against future royalties owed to Cedars-Sinai under the
license granted in Article VIII.
9.06 (a) An accounting of the calculation of the earned royalties
by Grace shall accompany each royalty payment, and such an accounting shall be
delivered to Cedars-Sinai even if no earned royalties are payable for that
period. Grace shall keep books of record in
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accordance with generally accepted accounting practices and sufficient to verify
the accuracy and completeness of the accounting under this Article, and shall
cause all its sublicensees to do the same. Such books of record shall be
preserved for a period not less than six years after their creation. Grace also
agrees to permit independent auditors (chosen by Cedars-Sinai and to whom Grace
has no reasonable objection) to inspect, copy and abstract such books, records
and accounts and all or any part of Grace's operations and activities hereunder
as may be necessary to determine the completeness or accuracy of reports made
under this Agreement, upon reasonable notice and at a single location and during
normal business hours. Cedars-Sinai shall be solely responsible for the costs of
an independent audit conducted at Cedars-Sinai's request.
(b) Any royalties due to Cedars-Sinai shall be paid by Grace
immediately and any overpayment shall be credited against the payment due in the
succeeding Annual Royalty Period.
ARTICLE X - PAYMENT PROCEDURES
------------------------------
10.01 Subject to the payment mechanism set forth herein, in
consideration for the performance by Cedars-Sinai of its obligations under this
Agreement, Grace will pay Cedars-Sinai those amounts set forth in the budget
(Appendix B to this Agreement). It is anticipated by the parties that the
research and technology development portion of the Agreement will be for a three
year period, as provided in Paragraph 16.01, with an annual budget of about [*].
As attached hereto at the time of execution of this Agreement, Appendix B sets
forth the total estimated cost and all estimated expenditures for the first year
of the research and technology development portion of this Agreement. An amended
Appendix B, to be agreed upon by the parties, shall be attached hereto for the
total estimated cost and all estimated expenditures for the second year of the
research and technology development portion of the Agreement (no later than
ninety (90) days prior to the end of the first year) and for the third year (no
later than ninety (90) days prior to the end of the second year). Cedars-Sinai
shall use such payments solely for the conduct of activities pursuant to the
Research and the Technology Development Programs. Grace is under no obligation,
express or implied, to authorize additional expenditures beyond the amounts
budgeted for the individual categories. However, Cedars-Sinai shall be permitted
to exceed the individual category budgets by up to twenty percent (20%),
provided that the total annual budget is not exceeded, and further provided that
no budget for any clinical support category (identified in the budget by an
asterisk) may be reduced in order to increase the budget of another category
without Grace's prior written approval.
10.02 Payment of all sums to Cedars-Sinai for the Project shall
be by check
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made payable to: Cedars-Sinai Medical Center. Within ten (10) days following
execution of this Agreement, Grace shall make an initial payment to Cedars-Sinai
of an amount equal to one quarter of the total annual budget (i.e., [*] for Year
1) and shall thereafter make three (3) additional quarterly payments of the same
amount. Subsequent quarterly payments would be due November 10, February 10, and
May 10.
10.03 Cedars-Sinai shall deliver to Grace within sixty (60) days
after the end of each quarter, a quarterly invoice prepared according to its
customary accounting practices, which reflects costs incurred by Cedars-Sinai
pursuant to this Agreement. These costs shall include: (i) salaries, wages and
established employee benefits; (ii) costs of purchased equipment, animals,
materials and supplies; (iii) travel and related expenses; (iv) other costs and
expenses for the Project; and (v) indirect costs (i.e., overhead).
10.04 The quarterly invoices of Paragraph 10.03 are considered to be necessary
prerequisites for the payment of quarterly payments pursuant to Paragraph 10.02,
beginning with the third quarterly payment. In no event will the third quarterly
payment be made by Grace until after receipt and acceptance of the quarterly
invoice for the first quarter, nor will the fourth quarterly payment be made by
Grace until after receipt and acceptance of the quarterly invoice for the second
quarter, etc. Following receipt of each quarterly invoice, Grace shall have
thirty (30) days to review and confirm the data contained therein, prior to
making any subsequent quarterly payment, which shall be made as follows:
First quarter, Year 1: Per Para. 10.02;
Second quarter, Year 1: 3 mos. after initial payment;
Third quarter, Year 1: After acceptance of first quarter invoice;
Fourth quarter, Year 1: After acceptance of second quarter invoice;
First quarter, Year 2: After acceptance of third quarter invoice; etc.
Acceptance of each invoice by Grace shall represent a final accounting for the
quarter represented by that invoice.
10.05 In the event that the invoicing procedure of Paragraph
10.04 demonstrates a budget underrun, an appropriate adjustment shall be made at
year-end, provided that the underrun amount remains unspent at year-end.
10.06 Within ninety (90) days after expiration or termination of
the research and technology development portion of this Agreement, Cedars-Sinai
shall furnish to Grace a final reporting of all costs and expenses incurred in
performing its obligations under this Agreement. Such reporting shall be
prepared according to Cedars-Sinai's customary accounting practices, and shall
be in itemized format. Following expiration or termination of the research and
technology development portion of the Agreement, Cedars-Sinai shall refund to
Grace all remaining unexpended amounts (i.e., remaining budget underrun
amounts).
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10.07 Any piece of equipment purchased at a cost in excess of
twenty-five hundred dollars ($2,500) shall be specifically identified in the
budget and shall be identified by Cedars-Sinai in an attachment to its quarterly
report. Following expiration or termination of the research and technology
development portion of this Agreement, Cedars-Sinai shall own all right, title
and interest in and to such equipment.
10.08 Cedars-Sinai shall exercise its best effort to ensure that
all invoices, financial statements, xxxxxxxx and financial reports to Grace
accurately reflect all activities and transactions handled for the account of
Grace and that such data may be relied upon in any further recording and
reporting by Grace for whatever purpose. In the event that any error is found,
Cedars-Sinai agrees to promptly correct such error.
10.09 During the life of this Agreement and for two (2) years
thereafter, Cedars-Sinai shall keep or cause to be kept, in accordance with
generally accepted accounting practices, books, records and accounts covering
all information necessary for the accurate accounting of funds transferred by
Grace pursuant to Paragraph 5.02 and this Article X, and amounts considered to
be Cedars-Sinai contributions as described in Paragraph 4.02.
(a) Cedars-Sinai agrees to provide Grace with a quarterly report
generally outlining the Cedars-Sinai resources applied during the preceding
quarter to activities in the Research and Technology Development Programs.
(b) With respect solely to spending of Grace funding pursuant to
Paragraph 5.02, Cedars-Sinai agrees to permit Grace or independent auditors
(chosen by Grace and to whom Cedars-Sinai has no reasonable objection) to
inspect, copy and abstract such books, records and accounts and all or any part
of Cedars-Sinai's operations and activities hereunder as may be necessary to
determine the completeness or accuracy of reports made under Paragraphs 10.03
through 10.07 of this Agreement, upon reasonable notice and at a single location
and during normal business hours. Grace shall be solely responsible for the
costs of an independent audit conducted at Grace's request.
ARTICLE XI - CONFIDENTIALITY
----------------------------
11.01 All technical and/or commercial information provided to
Cedars-Sinai by or on behalf of Grace with respect to the Grace LAD Technology
is considered by Grace to be proprietary and confidential. Cedars-Sinai agrees
to treat it as such, according the Grace information the same protections as
Cedars-Sinai's own proprietary and confidential information. Subject to the
provisions of Paragraphs 11.05, 11.08 and 11.09, Cedars-Sinai agrees not to
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publish or otherwise reveal or disclose the Grace information, or portions
thereof, to any third party without prior written authorization from Grace.
Cedars-Sinai understands that any information contained within the Grace LAD
Technology which has been obtained or licensed from RIH may also require prior
written authorization from RIH before it may be disclosed to any third party.
11.02 All Cedars-Sinai technical information provided to Grace
with respect to the Cedars-Sinai LAD Technology is considered by Cedars-Sinai to
be proprietary and confidential. Grace agrees to treat it as such, according the
Cedars-Sinai information the same protections as Grace's own proprietary and
confidential information. Subject to the provisions of Paragraphs 11.06, 11.08,
11.09 and 11.10, Grace agrees not to publish or otherwise reveal or disclose the
Cedars-Sinai information, or portions thereof, to any third party without prior
written authorization from Cedars-Sinai.
11.03 All physical samples (e.g., hepatocytes, beads, membranes,
devices, and the like) provided to Cedars-Sinai by Grace in relation to the
Grace LAD Technology, or provided to Grace by Cedars-Sinai in relation to the
Cedars-Sinai LAD Technology, shall be treated as confidential and proprietary
according to the provisions of this Article.
11.04 The confidentiality obligations of this Article XI shall
not extend to information which:
(a) was known to the receiving party prior to disclosure under
either this Agreement or the secrecy agreement previously
executed by the parties, as evidenced by written records
kept by the receiving party in the normal course of
business; or
(b) is or becomes known to the public through no fault or action
by the receiving party; or
(c) is disclosed to the receiving party by a third party not
under an obligation of secrecy to the disclosing party.
[*]
11.06 Publications by Grace disclosing the results of any
research, technology development and/or clinical trials conducted under the
Agreement shall be pre-reviewed by the Academic Affairs Department of
Cedars-Sinai. Grace agrees to limited delays (up to ninety (90) days) in
publication if necessary to file one or more patent applications, and agrees
that no
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Cedars-Sinai confidential information shall be disclosed without advance written
consent from Cedars-Sinai.
11.07 Neither party hereto shall, without obtaining the prior
written consent of the other party, do any of the following acts:
(a) make any announcements or create any publicity regarding
this Agreement; or
(b) release any advertising, promotional, or sales literature
which mentions the name of the other party hereto, other
than by reference to a bibliographic citation.
However, nothing in this Paragraph shall be construed to prohibit either party
from disclosing factual information or data relating to this Agreement which is
required by law to be disclosed.
11.08 Written consent pursuant to Paragraph 11.07 is hereby
mutually given for the release of the following information, in the form of a
press release or the like or, for example, in the course of discussions of Grace
collaborations (by Grace employees) or of Cedars-Sinai collaborations (by
Cedars-Sinai employees):
(a) the existence of the Cedars-Sinai-Grace Agreement,
(b) the Field of research covered by the Agreement,
approximately as defined herein,
(c) the identity of the Principal Investigator, and
(d) the general subject matter of project inventions, after all
United States patent applications covering said inventions
have been filed. However, any press release or disclosure which goes beyond the
specific facts of items (a) through (d) shall need the prior written consent of
Paragraph 11.07.
11.09 Nothing in this Article XI is intended to prohibit either
party from disclosing information to a government regulatory agency as required
for securing applicable regulatory approvals for the LAD.
11.10 Nothing in this Article XI shall be construed to prevent
Grace from:
(a) disclosing information and/or supplying physical samples to
a sublicensee, a toll manufacturer, or an outside testing
laboratory for the production and preparation of LADs (or
components thereof) for any purpose contemplated by this
Agreement, provided that the sublicensee, toll manufacturer,
or outside testing laboratory shall have signed a
confidentiality agreement containing provisions
substantially similar to
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those contained in this Article XI; or
(b) any commercial sale or use of any LAD based on the
Cedars-Sinai LAD Technology by Grace, a Grace sublicensee or
a customer of either in the Licensed Field.
11.11 The provisions of the secrecy agreement dated August 10,
1993 between Grace and Cedars-Sinai are superseded by the provisions of this
Article XI.
ARTICLE XII - PATENT PROTECTION
-------------------------------
12.01 The patents and patent applications included in the
Cedars-Sinai LAD Technology on the Effective Date of this Agreement are listed
in Appendix D. All Project Patent Rights are considered to be within the scope
of Cedars-Sinai LAD Technology under this Agreement. For those patents and
patent applications listed in Appendix D, together with all Project Patent
Rights, including any jointly owned patent applications within the Project
Patent Rights, Cedars-Sinai agrees:
(a) to use reasonable efforts in pursuing the pending patent
applications to grant, including appeal within the relevant
Patent Office(s) and/or re-filing the case (if appropriate
under local practice), as Cedars-Sinai sees fit; provided
that in the event Cedars-Sinai does not wish to prepare and
file a patent application within the Project Patent Rights
but Grace does, Cedars-Sinai will proceed nevertheless in
such preparation and filing according to the provisions of
this Paragraph 12.01, and will use the same reasonable
efforts as with other Project Patent Rights;
(b) to notify Grace promptly (that is, in sufficient time to
reasonably permit Grace to review and respond within the
time periods provided herein) and to consult with Grace on
all activities in subparagraph (a), obtaining Grace approval
on all significant patent drafting and prosecution
decisions, provided that Grace responds within thirty (30)
days, or sooner if a Patent Office deadline requires an
earlier response;
(c) to defend any patent within the Licensed Patent Rights in
any opposition proceeding which may be brought with respect
thereto, if such defense is recommended by patent counsel;
provided, however, that if the parties do not agree on
whether to proceed with such defense, the issue of whether
to proceed may be submitted to an independent patent
attorney
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to whom neither party has any reasonable objection,
for review and a binding recommendation whether to proceed
with such defense; in the event the recommendation is to not
defend the patent and Grace chooses to proceed nevertheless,
out-of-pocket costs associated with such defense shall not
serve as a credit against future royalties; and
(d) that no pending patent application will be intentionally
abandoned and no patent allowed to lapse unless Grace is
first consulted and agrees with that course of action;
provided that in the case of any disagreement on the
appropriate course of action, Cedars-Sinai agrees to
continue the prosecution as suggested by Grace.
All out-of-pocket costs associated with the listed activities are to be
reimbursed by Grace. All such costs paid by Grace shall serve as a credit
against future royalties owed to Cedars-Sinai pursuant to Article IX, except as
provided in subparagraph (c) above.
12.02 In the event that Grace's license is terminated pursuant to
Paragraph 16.05, responsibility for costs associated with all Licensed Patent
Rights (other than jointly owned Project Rights) would revert back to
Cedars-Sinai and Cedars-Sinai would no longer be obligated to consult with Grace
for those cases. With respect to jointly owned Project Patent Rights,
Cedars-Sinai would continue prosecution in consultation with Grace, and
associated out-of-pocket expenses would be shared equally by Grace and
Cedars-Sinai; provided, however, that if either party no longer wishes to bear
the costs of such shared expenses for any Project Patent Rights, it may choose
to notify the other party in writing of its decision and assign its ownership
rights to the other party; the assigning party shall thereafter have no further
obligation to share the out-of-pocket expenses for the assigned Project Patent
Rights.
ARTICLE XIII - PATENT ENFORCEMENT AND THIRD PARTY PATENTS
---------------------------------------------------------
13.01 In the event Grace believes there is substantial
infringement of any patent in the Licensed Patent Rights, which alleged
infringement is to the material detriment of Grace or a Grace sublicensee, Grace
shall have the initial opportunity for preventing and/or causing the
discontinuance of any such infringement, in Grace's sole discretion. However,
Cedars-Sinai agrees that it will, at Grace's request and expense, furnish such
reasonable assistance as may be required to assist in preventing or
discontinuing any such infringement. In such event, Grace may withhold up to
one-half (1/2) of the earned royalty payments which would otherwise fall due
under Article IX for the country(ies) in which the alleged infringement is
taking
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place, not to exceed Grace's actual out-of-pocket expenses for such suit.
Withheld earned royalty payments would be forgiven unless Grace received a
recovery, lump-sum settlement or royalty payment from the alleged infringer, in
which case they would be payable out of the amount(s) received from the alleged
infringer, as provided herein. From such time as the infringement ceases
(whether voluntarily, by settlement or by court order), Grace's full royalty
obligations would resume. Any recovery, lump-sum settlement or royalty payment
made to Grace by the alleged infringer shall be distributed according to the
following priority:
(a) Cedars-Sinai shall be reimbursed in the amount of any
royalties withheld by Grace pursuant to this Paragraph;
(b) Grace shall be reimbursed for any additional out-of-pocket
expenses not covered by the withheld royalties; and
(c) Any remaining amount shall be included in the Annual Net
Sales calculation of Paragraph 9.01, with Cedars-Sinai
receiving a royalty thereon and Grace retaining the balance.
13.02 If Grace elects not to bring or prosecute infringement
litigation pursuant to Paragraph 13.01, Cedars-Sinai may elect to bring suit
against the alleged infringer at its sole expense. However, Grace agrees that it
will, at Cedars-Sinai's request and expense, furnish such reasonable assistance
as may be required to assist in preventing or discontinuing any such
infringement. In such event, Cedars-Sinai would be under no obligation to
account to Grace in any way with respect to the conduct of any such suit or
recovery obtained thereby.
13.03 In the event that any activities licensed hereunder are
found to infringe the intellectual property rights of a third-party, and result
in the payment of royalties or other compensation by Grace (or a Grace
sublicensee) to such third-party, Grace may reduce its royalty payment to
Cedars-Sinai. Such reduction will be in the amount of the royalties or other
compensation paid to the third party, up to a maximum of one-half (1/2) the
royalties payable to Cedars-Sinai under Article IX with respect to the
country(ies) for which payments are being made to the third party.
ARTICLE XIV - REPRESENTATIONS, WARRANTIES, AND INDEMNIFICATION
--------------------------------------------------------------
14.01 Grace makes no representations or warranties with respect
to its ability to obtain regulatory approval(s) for any Cedars-Sinai LAD, or
with respect to the technical, economic or commercial feasibility of any
Cedars-Sinai LAD.
14.02 Cedars-Sinai warrants the accuracy and authenticity of any
and all
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information, data, test results, and the like, with respect to prior
investigations conducted by or at the direction of the Principal Investigator at
Cedars-Sinai which Cedars-Sinai provides to Grace for purposes of obtaining
regulatory approval for the Cedars-Sinai First Generation LAD, or for any
subsequent LAD.
14.03 Cedars-Sinai makes no representations or warranties that
any Cedars-Sinai patents or patent applications licensed hereunder are valid, or
that the manufacture, use, sale or other disposal of any LAD utilizing
Cedars-Sinai LAD Technology does not infringe upon any patent or other rights
other than rights in the Cedars-Sinai LAD Technology. Cedars-Sinai, however,
knows of no patent or other rights of any third party which would be so
infringed.
14.04 As between Grace and Cedars-Sinai, Grace shall have sole
control and responsibility for the manufacture, sale, and/or commercial use of
LADs hereunder. As between Grace and Cedars-Sinai, Grace shall bear the full
responsibility for any liability to any customers and others for any LAD made
and sold or distributed by Grace or any Grace sublicensee, and shall indemnify
and hold Cedars-Sinai, its officers, directors, employees and agents harmless
from any judgment, claim, expense or liability (including attorneys' fees)
arising out of the sale or distribution of LADs by Grace and/or any Grace
sublicensee; provided, however, that such indemnification shall not apply to the
extent that the judgment, claim, expense, or liability is based on any actual
direct conduct by any agent or employee of Cedars-Sinai (for example, in
conducting clinical trials of the LAD) or is based on any inaccurate data which
may have been supplied by Cedars-Sinai, its officers, directors, employees or
agents, for the purpose of obtaining regulatory approval for the LAD.
14.05 Cedars-Sinai hereby warrants that it carries sufficient
Worker's Compensation insurance to comply with the laws of the State of
California with respect to Cedars-Sinai personnel. Each party shall indemnify
and hold the other party harmless from any and all claims, costs or liability
for any loss, damage, injuries or loss of life incurred in the indemnifying
party's own performance of the research work or development that is conducted on
the indemnifying party's own premises; provided, however, that such
indemnification shall not apply for any loss, damage, injuries, or loss of life
attributable in whole or in part to the other party's gross negligence.
14.06 With respect to any clinical or other trials of the LAD
conducted by any agent or employee of Cedars-Sinai, Cedars-Sinai shall indemnify
and hold Grace harmless from any and all claims, costs or liability for any
loss, damage, injuries or loss of life incurred in connection with the
negligence, wilful actions or misconduct of such agent or employee of
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Cedars-Sinai, or in connection with any inaccurate data which may have been
supplied by Cedars-Sinai, or on its behalf, for the purpose of obtaining
regulatory approval for the LAD.
14.07 Cedars-Sinai and Grace each agree to comply with all
applicable government regulations and requirements for protecting health,
safety, and the environment. Cedars-Sinai and Grace each agree to cooperate with
any Government agency(ies) authorized to monitor compliance with such
regulations and requirements. With respect to any clinical or other trials of
the LAD conducted by any agent or employee of Cedars-Sinai, Cedars-Sinai agrees
that such agent or employee shall be obligated to notify Grace immediately upon
discovery of any data or other information suggesting any adverse effects in
connection with the LADs.
ARTICLE XV - NOTICES
--------------------
15.01 All notices required to be given under this Agreement, and
the payment of required royalties, shall be made by first class air mail or
express courier addressed to the respective party at the address below, or by
telefax to the numbers listed below (for notices), or to such changed address or
telefax number as a party may designate in writing to the other party. Such
notice, if received, shall be deemed to have been received, if by first class
mail, on the fifteen (15th) calendar day after posting; if by express courier,
on the date of delivery by the courier; and if by telefax, upon transmission
with confirmation of receipt.
If to Grace: X. X. Xxxxx & Co.-Xxxx.
Commercial Development Division
Xxx Xxxx Xxxxxx Xxxx
Xxxx Xxxxx, XX 00000-0000
Attn: President
Telefax No.: (000) 000-0000
If to Cedars-Sinai: Cedars-Sinai Medical Center
0000 Xxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, XX 00000-0000
Attn: Senior Vice President
for Academic Affairs
Telefax No.: (000) 000-0000
ARTICLE XVI - TERM AND TERMINATION
----------------------------------
A. Research and Technology Development Portion of Agreement
--------------------------------------------------------
16.01 The term of the research and technology development portion
of the Agreement shall be three (3) years from the Effective Date, unless
earlier terminated according
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to the provisions of this Article XVI. The research and technology development
portion of the Agreement may be renewed or extended by mutual written agreement
of the parties.
16.02 (a) In the event the parties fail to agree on a mutually
acceptable amended Research & Technology Development Plan and corresponding
budget for any year, the research and technology development portion of the
Agreement shall automatically terminate at the end of the year for which such a
mutually acceptable Plan and budget do exist, without any formal notice period
being required.
(b) Either party has the right to terminate the research and
technology development portion of the Agreement in the event of material breach
by the other party of any of the obligations of Articles V and VI, by providing
thirty (30) days notice in writing to the breaching party unless such breach is
cured in the thirty day notice period.
(c) Termination of the research and technology development
portion of the Agreement pursuant to this paragraph shall not itself affect
Grace's license, which shall be terminable only if one or more criteria of Part
B to this Article XVI are met.
16.03 Either party has the right to terminate the research and
technology development portion of the Agreement for any or no reason (i.e.,
arbitrarily) by providing ninety (90) days notice in writing to the other party.
Grace termination of the research and technology development portion of this
Agreement pursuant to this Paragraph at any time prior to the original three
year term of the research and technology development portion of the Agreement
would simultaneously terminate the license portion of the Agreement pursuant to
Paragraph 16.07(a), unless Cedars-Sinai agreed to waive such simultaneous
termination of the license. Grace termination of the research and technology
development portion pursuant to this Paragraph at any time after the original
three year term shall not itself affect Grace's license rights to Cedars-Sinai
LAD Technology (including Project Information and Project Inventions) existing
as of the date of such termination.
16.04 (a) In the event Cedars-Sinai fails to meet one or more
Designated Milestones, Grace shall have the right to terminate the research and
technology development portion of the Agreement effective upon sixty (60) days
written notice to Cedars-Sinai; provided, however, that if the Designated
Milestone(s) is(are) met during that period or if Cedars-Sinai makes a showing
of good faith pursuant to Paragraph 6.02, termination will not take place.
Termination pursuant to this Paragraph shall not affect Grace's license rights.
(b) In the event Grace fails to meet one or more Designated
Milestones, Cedars-Sinai shall have the right to terminate the Agreement
(including both the research and technology
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development portion and the license portion) effective upon sixty (60) days
written notice to Grace; provided, however, that if the Designated Milestone(s)
is(are) met during that period or if Grace makes a showing of good faith
pursuant to Paragraph 5.05, termination will not take place.
16.05 (a) If the research and technology development portion of
the Agreement is terminated for any reason whatsoever, Cedars-Sinai shall use
its best efforts to provide for an orderly, gradual phase-out of research
conducted under Grace-sponsorship during the interval between the date of the
termination notice and the termination date specified in such notice.
Cedars-Sinai shall cancel its outstanding commitments covering the procurement
of materials, supplies, equipment and miscellaneous items for such research.
(b) Cedars-Sinai shall exercise reasonable diligence to
accomplish where possible the cancellation or diversion of its outstanding
commitments extending beyond the termination date which cover the services of
Investigators supported by Grace-funding in the budget. However, Grace shall
remain responsible for any irrevocable personnel commitments made within the
scope of the budget for the Project prior to notice of termination for a Senior
Tissue Culture Investigator; provided, however, that Grace shall not be
responsible for any irrevocable personnel commitment to the extent that it
extends beyond 2 months after the effective date of termination.
B. License Portion of Agreement
-------------------------------
16.06 Unless earlier terminated, Grace's license shall remain in
full force and effect in each licensed country until:
(a) the last to expire of the Licensed Patent Rights in that
country, if any patents within the Licensed Patent Rights
are granted in that country; or
(b) ten (10) years from the first commercial sale of LAD in that
country, if no Cedars-Sinai LAD patents within the Licensed
Patent Rights have been granted in that country as of the
date ten (10) years after the first commercial sale of LAD
in that country.
16.07 (a) Grace termination of the research and technology
development portion of this Agreement pursuant to Paragraph 16.03 at any time
prior to the original three year term of the research and technology development
portion of the Agreement would simultaneously terminate the license portion of
the Agreement, unless Cedars-Sinai agreed to waive such simultaneous termination
of the license.
(b) Cedars-Sinai shall have the right to terminate Grace's
license, effective upon
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sixty (60) days written notice to Grace, only in the event of material breach or
default by Grace; provided, however, that Grace shall be given the opportunity
to cure such breach or default during the sixty day notice period, in which case
the license would not be terminated.
16.08 Grace shall have the right to terminate its license for any
or no reason (i.e., arbitrarily), effective upon ninety (90) days notice in
writing to Cedars-Sinai.
C. General
-------
16.09 (a) In the event that either party becomes bankrupt or
insolvent, petitions any judicial body under any bankruptcy or insolvency laws,
or has any proceeding commenced against it for insolvency, bankruptcy or
liquidation, the other party hereto may terminate this Agreement or the license
granted hereunder upon providing ten (10) days written notice to the bankrupt or
insolvent party.
(b) In the event that Cedars-Sinai becomes bankrupt, etc.:
(i) Pursuant to the Bankruptcy Code, Grace may elect to retain
its rights under the license portion of this Agreement if the trustee,
receiver, or other entity so authorized by a federal bankruptcy court,
seeks to reject Grace's license.
(ii) If Grace elects to retain its rights under the license
portion of this Agreement, the trustee or receiver or other entity so
authorized by a federal bankruptcy court, shall covenant not to
initiate any claim against Grace (or its sublicensees) or otherwise
seek to prevent Grace (or its sublicensees) from practicing under the
license portion of this Agreement, and shall further covenant not to
license or otherwise enable any party to make, use or sell any LAD or
practice any Cedars-Sinai LAD Technology in conflict with the rights
granted in the license portion of this Agreement.
(iii) If Grace elects to retain its rights, the rights and
remedies of the parties hereto shall continue to be governed by the
terms of the Agreement.
16.10 Termination pursuant to Paragraphs 16.06, 16.07, or 16.08
shall not affect any rights or obligations accrued prior to the effective date
of such termination.
16.11 Termination of this Agreement or any license granted
hereunder shall not relieve Grace of its obligations under Articles IX, XI, or
XII, and shall not relieve Cedars-Sinai of its obligations under Articles XI and
XII. Upon termination of Grace's license, Grace sublicensees of the Cedars-Sinai
LAD Technology shall be permitted to request a direct license from Cedars-Sinai.
Grace agrees to cooperate in the transition of sublicenses from Grace to
Cedars-Sinai, to the extent reasonable.
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16.12 For any LAD which Grace or a Grace sublicensee has
manufactured or is in the process of manufacturing at the time termination is
effective under Paragraph 16.06, 16.07, or 16.08, Grace may elect either to have
the LAD be subject to the terms of the license as if the license had not been
terminated, provided that sale of the LAD by Grace takes place within two (2)
years following termination, or Grace may elect to have the LAD destroyed or the
manufacture thereof cancelled. 16.13 In the event of termination of this
Agreement or any license granted hereunder, neither party shall be prohibited
from subsequently contracting with one or more third parties with respect to the
LAD, subject only to the specific obligations which are designated as surviving
termination.
ARTICLE XVII - ASSIGNABILITY
----------------------------
17.01 This Agreement, and any license granted hereunder, shall be
binding upon and inure to the benefit of the parties hereto and the successors
to the entire business of the respective parties hereto.
17.02 This Agreement, and any license granted hereunder, shall be
assignable by Grace to a Grace Affiliate and/or by Cedars-Sinai to a
Cedars-Sinai Affiliate. Otherwise, this Agreement shall not be assignable by
either party (or the Affiliates thereof) without the prior written consent of
the other party, except that either party may freely assign this Agreement to a
successor of the entire business to which this Agreement relates. For purposes
of this Agreement, such "business" shall be understood to refer to that
specifically concerned with the LAD.
ARTICLE XVIII - MISCELLANEOUS
-----------------------------
18.01 This document represents the full and entire understanding
of the parties with regard to the subject matter hereof and supersedes all prior
negotiations, understandings and representations.
18.02 The parties to this Agreement are independent contractors
and not joint venturers or partners, and no agency, partnership, or power to
obligate the other party is created by this Agreement.
18.03 This Agreement shall be interpreted in accordance with the
laws of the Commonwealth of Massachusetts, United States of America, with the
exclusion of its conflict laws.
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18.04 If any of the provisions of this Agreement are or become in
conflict with the laws or regulations of any jurisdiction or any governmental
entity having jurisdiction over the parties or the subject matter, those
provisions shall be deleted and the remaining terms and conditions of this
Agreement shall remain in full force and effect.
18.05 The parties agree to abide by any restrictions or
conditions respecting the export or re-export of Grace LAD Technology and/or
Cedars-Sinai LAD Technology disclosed hereunder, or any direct product embodying
the same, which is or may become subject to export control under the Export
Administration Regulations of the United States Department of Commerce (as
amended from time-to-time) or export control regulations of other United States
Government agencies including the Food & Drug Administration, Department of
State and Department of Treasury (as amended from time-to-time). The parties
agree not to export or re-export such information, or the direct product
thereof, directly or indirectly, to any countries to which such export is now or
hereafter becomes illegal under any such regulations. Cedars-Sinai understands
that such export control regulations (as amended from time to time) may prohibit
or restrict the performance by Grace of its obligations hereunder, and agrees
that Grace shall be excused from its performance hereunder to the extent that
such performance is prohibited or restricted by such regulations. Grace shall
require all Grace sublicensees to abide by the provisions of this Paragraph.
18.06 Any delay in or failure of performance by either party
under this Agreement shall not be considered a breach or default hereunder if
due to any cause beyond the reasonable control of the party affected including,
but not limited to, Acts of God, compliance with any foreign or domestic court
order, compliance with any governmental regulations, order, or request, fires,
riots, labor disputes, war, unusually severe weather, provided, however, that
the party affected promptly notifies the other of the existence thereof and its
expected duration. The foregoing shall not be considered a waiver of either
party's obligations under this Agreement and as soon as any such force majeure
circumstance shall cease the party affected thereby shall promptly fulfill its
obligations under this Agreement.
IN WITNESS WHEREOF, the parties confirm their agreement with the
foregoing terms by the signatures below of their duly authorized
representatives.
X. X. XXXXX & CO.-XXXX. CEDARS-SINAI MEDICAL CENTER
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By: X.X Xxxx By: Xxxxxx Xxxxxxxx
-------- ---------------
Title: Executive V.P. Title: Senior Vice President & CFO
--------------- ----------------------------
Date: August 11, 1994 Date: August 1, 1994
---------------- ---------------
By: Xxxxxx Xxxxxxxx
----------------
Title: President & CEO
----------------
Date: August 2, 1994
---------------
Acknowledged and agreed to:
By: /s/ Achilles X. Xxxxxxxxx
---------------------------
ACHILLES X. XXXXXXXXX, MD, Ph.D.
Principal Investigator
Date: August 1, 1994
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Appendix A: Milestones/Research Plan
------------------------------------
(attached hereto)
(Seven pages)
[*]
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APPENDIX B
----------
RESEARCH & TECHNOLOGY DEVELOPMENT BUDGET
----------------------------------------
BUDGET FOR 1ST YEAR OF PROJECT Page 1 of 2
------------------------------ -----------
[*]
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BUDGET FOR 1ST YEAR OF PROJECT (cont'd) Page 2 of 2
-------------------------------------- -----------
[*]
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Appendix C
----------
Investigator Agreement
----------------------
I, the undersigned employee of Cedars-Sinai Medical Center
("Cedars-Sinai"), hereby acknowledge that I have read and understand the
provisions of the Agreement to be made effective _______________, 1994 by and
between Cedars-Sinai and X. X. Xxxxx & Co.-Xxxx. ("Xxxxx"). I hereby agree as
follows:
1. To assign all my rights, title and interest in any invention,
whether or not patentable, forming part of the Project
Information (as defined in said Agreement) to Cedars-Sinai;
2. To cooperate fully with Cedars-Sinai and Grace in filing,
prosecuting and maintaining all U.S. and foreign patents and
patent applications;
3. To cooperate fully with Grace and Cedars-Sinai in any litigation
involving any Project Patent Rights (as defined in said
Agreement); and
4. To protect as confidential all technical information of
Cedars-Sinai (the Cedars-Sinai LAD Technology) and of Grace (the
Grace LAD Technology), and not to disclose either to any third
party except as permitted under the Agreement.
(Signature of employee)
______________________ ___________________________
(Date) (name of employee)
WITNESSED BY:
_________________ (Signature of witness)
___________________________
(Date) (name of witness)
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Appendix D: Cedars-Sinai Patents & Patent Applications
------------------------------------------------------
[*]
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