<PAGE>
As filed with the Securities and Exchange Commission on April 3, 2000
Registration No. 333-32446
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT
NO 1.
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CURIS, INC.
(Exact name of registrant as specified in its Charter)
---------------
<TABLE>
<S> <C>
Delaware 2836 04-35051136
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdiction of Classification Code Number Identification Number)
Incorporation or
Organization
</TABLE>
45 Moulton Street
Cambridge, Massachusetts 02138
(617) 876-0086
(Address, including Zip Code, and Telephone Number, including Area Code, of
Registrant's Principal Executive Offices)
Doros Platika
President and Chief Executive Officer
Curis, Inc.
45 Moulton Street
Cambridge, Massachusetts 02138
(617) 876-0086
(Name, Address, including Zip Code, and Telephone Number, including Area Code,
of Agent for Service)
Copies to:
<TABLE>
<S> <C> <C>
Cheryl K. Lawton, Esq. Jeffrey M. Wiesen, Esq. Bruce A. Leicher, Esq.
Creative BioMolecules, Inc. Lewis J. Geffen, Esq. Ontogeny, Inc.
101 Huntington Avenue, Suite 2400 Mintz, Levin, Cohn, Ferris, 45 Moulton Street
Boston, MA 02199 Glovsky and Popeo, P.C. Cambridge, MA 02138
(617) 912-2900 One Financial Center (617) 876-0086
Boston, MA 02111
(617) 542-6000
Jonathan H. Hulbert, Esq. Steven D. Singer, Esq. Walter J. Smith, Esq.
Foley, Hoag & Eliot LLP Philip Rossetti, Esq. Baker Botts L.L.P.
One Post Office Square Jorge L. Contreras, Esq. 910 Louisiana
Boston, MA 02109 Hale and Dorr LLP One Shell Plaza
(617) 832-7000 60 State Street Houston, TX 77002
Boston, MA 02109 (713) 229-1234
(617) 526-6000
</TABLE>
Approximate date of commencement of proposed sale of the securities to the
public: As soon as practicable after this Registration Statement becomes
effective and all other conditions to the proposed merger described herein have
been satisfied or waived.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers.
Article SIXTH of the registrant's Certificate of Incorporation provides, in
general, that no director shall be personally liable to the registrant or to
any of its stockholders for monetary damages arising out of such director's
breach of fiduciary duty as a director of the registrant, except to the extent
that the elimination or limitation of such liability is not permitted by the
General Corporation Law of the State of Delaware, as the same exists or may
hereafter be amended.
Article EIGHTH of the registrant's Certificate of Incorporation provides, in
general, that the registrant shall indemnify each person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the registrant), by
reason of the fact that such person is or was, or has agreed to become, a
director or officer of the registrant, or is or was serving or has agreed to
serve, at the request of the registrant, as a director, officer or trustee of,
or in a similar capacity with, another corporation (including any partially or
wholly owned subsidiary of the registrant), partnership, joint venture, trust
or other enterprise (including any employee benefit plan), against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred in connection with any such action, suit or
proceeding to the maximum extent permitted by the General Corporation Law of
Delaware and further provides that the foregoing right of indemnification shall
in no way be exclusive of any other rights of indemnification to which any such
director or officer may be entitled, under any by-law, agreement, vote of
directors or stockholders or otherwise.
Section 145(a) of the General Corporation Law of the State of Delaware
("Delaware Corporation Law") provides, in general, that a corporation shall
have the power to indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation), because the person is or
was a director or officer of the corporation. Such indemnity may be against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by the person in connection with
such action, suit or proceeding, if the person acted in good faith and in a
manner the person reasonably believed to be in or not opposed to the best
interests of the corporation and if, with respect to any criminal action or
proceeding, the person did not have reasonable cause to believe the person's
conduct was unlawful.
Section 145(b) of the Delaware Corporation Law provides, in general, that a
corporation shall have the power to indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the corporation to procure a judgment in
its favor because the person is or was a director or officer of the
corporation, against any expenses (including attorneys' fees) actually and
reasonably incurred by the person in connection with the defense or settlement
of such action or suit if the person acted in good faith and in a manner the
person reasonably believed to be in or not opposed to the best interests of the
corporation.
Section 145(g) of the Delaware Corporation Law provides, in general, that a
corporation shall have the power to purchase and maintain insurance on behalf
of any person who is or was a director or officer of the corporation against
any liability asserted against the person in any such capacity, or arising out
of the person's status as such, whether or not the corporation would have the
power to indemnify the person against such liability under the provisions of
the law.
II-1
<PAGE>
Item 21. Exhibits and Financial Statement Schedules.
(a) The following exhibits are filed herewith or incorporated herein by
reference:
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
2 Agreement and Plan of Merger, dated as of February 14, 2000 by and
among the Registrant, Creative BioMolecules, Inc., Ontogeny, Inc. and
Reprogenesis, Inc. (Filed as Exhibit 2.1 to Creative's Current Report
on Form 8-K filed February 18, 2000 (File No. 0-19910)).
3.1 Certificate of Incorporation of the Registrant.
3.2 By-laws of the Registrant.
*4 Form of Curis Common Stock Certificate.
*5 Opinion of Hale and Dorr LLP regarding legality of securities being
registered.
*8.1 Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
regarding certain U.S. income tax aspects of the merger.
*8.2 Opinion of Foley, Hoag & Eliot LLP regarding certain U.S. income tax
aspects of the merger.
*8.3 Opinion of Baker Botts L.L.P. regarding certain U.S. income tax
aspects of the merger.
++10.1 Master Restructuring Agreement, dated as of October 15, 1998, by and
between Creative and Stryker Corporation. (Filed as Exhibit 10.10 to
Creative's Annual Report on Form 10-K for the period ended December
31, 1998 (File No. 0-19910), and incorporated herein by reference.)
++10.2 Asset Purchase Agreement, dated as of October 15, 1998, by and between
Creative and Stryker Corporation. (Filed as Exhibit 10.11 to
Creative's Annual Report on Form 10-K for the period ended December
31, 1998 (File No. 0-19910), and incorporated herein by reference.)
10.3 Creative Irrevocable License Agreement dated November 20, 1998 by and
between Creative and Stryker Corporation. (Filed as Exhibit 10.7 to
Creative's Annual Report on Form 10-K for the period ended December
31, 1999 (File No. 0-19910), and incorporated herein by reference.)
10.4 Stryker Irrevocable License Agreement dated November 20, 1998 by and
between the Registrant and Stryker Corporation. (Filed as Exhibit 10.8
to Creative's Annual Report on Form 10-K for the period ended December
31, 1999 (File No. 0-19910), and incorporated herein by reference.)
10.5 Assignment from Creative to Stryker dated November 20, 1998. (Filed as
Exhibit 10.9 to Creative's Annual Report on Form 10-K for the period
ended December 31, 1999 (File No. 0-19910), and incorporated herein by
reference.)
10.6 Standard Form Industrial Lease, dated as of October 24, 1988, as
amended September 17, 1991, by and between WRC Properties, Inc. and
Creative. (Filed as Exhibit 10.26 to Creative's Form S-1 Registration
Statement (Registration No. 33-42159), or amendments thereto, and
incorporated herein by reference.)
10.7 Second Amendment, dated January 28, 1994, to Standard Form Industrial
Lease dated October 24, 1988, as amended September 17, 1991, by and
between Creative and WRC Properties, Inc. (Filed as Exhibit 10.15 to
Creative's Annual Report on Form 10-K for the period ended September
30, 1994 (File No. 0-19910), and incorporated herein by reference.)
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
10.8 Third Amendment, dated September 20, 1994, to Standard Form Industrial
Lease dated October 24, 1988, as amended September 17, 1991 and
January 28, 1994, by and between Creative and WRC Properties, Inc.
(Filed as Exhibit 10.16 to Creative's Annual Report on Form 10-K for
the period ended September 30, 1994 (File No. 0-19910), and
incorporated herein by reference.)
10.9 Fourth Amendment, dated April 10, 1997, to Standard Form Industrial
Lease dated October 24, 1988, as amended September 17, 1991, January
28, 1994 and September 20, 1994, by and between Creative and WRC
Properties, Inc. (Filed as Exhibit 10.53 to Creative's Quarterly
Report on Form 10-Q for the period ended June 30, 1997 (File No. 0-
19910), and incorporated herein by reference.)
10.10 Partial Lease Termination Agreement and Amendment to Lease, dated
February 28, 1999, by and between Creative and W9/TIB Real Estate
Limited Partnership (as successor in interest to WRC Properties,
Inc.). (Filed as Exhibit 10.16 to Creative's Annual Report on Form 10-
K for the period ended December 31, 1999 (File No. 0-19910), and
incorporated herein by reference.)
10.11 Standard Form Industrial Lease, dated February 25, 1992, by and
between Creative and WRC Properties, Inc. (Filed as Exhibit 10.52 to
Creative's Form S-1 Registration Statement
(Registration No. 33-46200), or amendments thereto, and incorporated
herein by reference.)
10.12 First Amendment, dated February 28, 1994, to Standard Form Industrial
Lease dated February 25, 1992 by and between Creative and WRC
Properties, Inc. (Filed as Exhibit 10.32 to Creative's Annual Report
on Form 10-K for the period ended September 30, 1995 (File
No. 0-19910), and incorporated herein by reference.)
10.13 Second Amendment, dated September 20, 1994, to Standard Form
Industrial Lease dated February 25, 1992, as amended February 28,
1994, by and between Creative and WRC Properties, Inc. (Filed as
Exhibit 10.33 to Creative's Annual Report on Form 10-K for the period
ended September 30, 1995 (File No. 0-19910), and incorporated herein
by reference.)
10.14 Third Amendment, dated April 10, 1997, to Standard Form Industrial
Lease dated February 25, 1992, as amended February 28, 1994 and
September 20, 1994, by and between Creative and WRC Properties, Inc.
(Filed as Exhibit 10.54 to Creative's Quarterly Report on Form 10-Q
for the period ended June 30, 1997 (File No. 0-19910), and
incorporated herein by reference.)
++10.15 CBM Cross-License Agreement, dated as of November 26, 1993, by and
between Enzon, Inc. and Creative. (Filed as Exhibit 10.42 to
Creative's Quarterly Report on Form 10-Q for the period ended
December 31, 1993 (File No. 0-19910), and incorporated herein by
reference.)
++10.16 Enzon Cross-License Agreement, dated as of November 26, 1993, by and
between Enzon, Inc. and Creative. (Filed as Exhibit 10.43 to
Creative's Quarterly Report on Form 10-Q for the period ended
December 31, 1993 (File No. 0-19910), and incorporated herein by
reference.)
++10.17 Cross-License Agreement, dated as of July 15, 1996, by and between
Creative, Genetics Institute, Inc. and Stryker Corporation. (Filed as
Exhibit 10.1 to the Quarterly Report on Form 10-Q for the period ended
September 30, 1996 of Genetics Institute, Inc. (File No. 0-14587),
filed with the Securities and Exchange Commission on November 6, 1996
and incorporated herein by reference.)
++10.18 Research Collaboration and License Agreement, dated December 9, 1996,
by and between Creative and Biogen, Inc. (Filed as Exhibit 10.37 to
Creative's Annual Report on Form 10-K for the period ended December
31, 1996 (File No. 0-19910), and incorporated herein by reference.)
++10.19 Amendment Agreement, dated December 30, 1998, by and between Creative
and Biogen, Inc. (Filed as Exhibit 10.38 to Creative's Annual Report
on Form 10-K for the period ended December 31, 1998 (File No. 0-
19910), and incorporated herein by reference.)
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
10.20 Restricted Stock Purchase Agreement, dated December 9, 1996, by and
between Creative and Biogen, Inc. (Filed as Exhibit 10.38 to
Creative's Annual Report on Form 10-K for the period ended
December 31, 1996 (File No. 0-19910), and incorporated herein by
reference.)
10.21 Lease, dated June 16, 1997, by and between Creative and The Prudential
Insurance Company of America. (Filed as Exhibit 10.55 to Creative's
Quarterly Report on Form 10-Q for the period ended June 30, 1997 (File
No. 0-19910), and incorporated herein by reference.)
10.22 First Amendment, dated August 10, 1998, to Lease dated April 10, 1997,
by and between Creative and The Prudential Insurance Company of
America. (Filed as Exhibit 10.56 to Creative's Quarterly Report on
Form 10-Q for the period ended September 30, 1998 (File No. 0-19910),
and incorporated herein by reference.)
10.23 Master Lease Agreement, dated October 6, 1997, by and between Creative
and FINOVA Technology Finance, Inc. (Filed as Exhibit 10.38 to
Creative's Annual Report on Form 10-K for the period ended December
31, 1997 (File No. 0-19910), and incorporated herein by reference.)
10.24 Employment Agreement, dated as of January 2, 1992, by and between
Charles Cohen, Ph.D. and Creative. (Filed as Exhibit 10.47 to
Creative's Form S-1 Registration Statement (Registration No. 33-
46200), or amendments thereto, and incorporated herein by reference.)
10.25 Employment Agreement, dated July 17, 1995, by and between Michael M.
Tarnow and Creative. (Filed as Exhibit 99.1 to Creative's Report on
Form 8-K for the August 31, 1995 Event (File No. 0-19910), and
incorporated herein by reference.)
10.26 Employment Agreement, dated January 13, 1997, by and between Cheryl K.
Lawton and Creative. (Filed as Exhibit 10.50 to Creative's Quarterly
Report on Form 10-Q for the period ended March 31, 1997 (File No. 0-
19910), and incorporated herein by reference.)
10.27 Employment Agreement, dated February 18, 1997, by and between Steven
L. Basta and Creative. (Filed as Exhibit 10.51 to Creative's Quarterly
Report on Form 10-Q for the period ended March 31, 1997 (File No. 0-
19910), and incorporated herein by reference.)
10.28 Employment Agreement, dated September 17, 1997, by and between Carl M.
Cohen, Ph.D., and Creative. (Filed as Exhibit 10.53 to Creative's
Annual Report on Form 10-K for the period ended December 31, 1997
(File No. 0-19910), and incorporated herein by reference.)
*10.29 Promissory Note dated February 8, 2000 by Mr. Michael Tarnow to
Creative.
*10.30 Promissory Note dated February 8, 2000 by Dr. Charles Cohen to
Creative.
10.31 Promissory Note dated March 13, 2000 by Dr. Daniel Omstead to
Reprogenesis.
+10.32 License Agreement, dated November 30, 1997, by and between
Reprogenesis and the Regents of the University of Michigan, as amended
by the Amendment to License Agreement dated August 1999.
+10.33 Amended and Restated License Agreement (Exclusive), dated July 1,
1996, by and between Reprogenesis and the Massachusetts Institute of
Technology, as amended by the First Amendment to Restated License
Agreement dated June 9, 1999.
+10.34 Patent License Agreement (Exclusive), dated 10/30/96, by and between
Reprogenesis and the Massachusetts Institute of Technology.
+10.35 Exclusive License Agreement, dated February 22, 2000, by and between
Reprogenesis and Children's Medical Center Corporation.
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
10.36 Lease, dated September 25, 1997, with respect to real property located
at 21 Erie Street, Cambridge, Massachusetts, as amended by the First
Amendment to Lease, dated October 1, 1998, by and between Reprogenesis
and 21 Erie Realty Trust.
+10.37 Termination and Release Agreement dated January 27, 1999, by and
between Reprogenesis and American Medical Systems, Inc.
10.38 Financial Assistance Award (Development of Perivascular Endothelial
Cell Implants), dated November 1, 1999, by and between Reprogenesis
and the National Institute of Standards and Technology, Advanced
Technology Program.
10.39 Stock Subscription Warrant dated July 2, 1998, by and between
Reprogenesis and TBCC Funding Trust II.
+10.40 Amended and Restated Research and Commercialization Agreement, dated
November 30, 1998, as amended by letter dated December 18, 1998, by
and between Ontogeny and Biogen, Inc.
10.41 Employment Agreement, dated as of June 17, 1996, by and between
Ontogeny and Doros Platika, M.D.
10.42 Lease, dated as of November 16, 1995 as amended, by and between
Ontogeny and Moulton Realty Corp.
+10.43 License Agreement, dated as of February 12, 1996, by and between
Ontogeny and Leland Stanford Junior University.
+10.44 License Agreement, dated as of September 26, 1996 and amended January
15, 1997, by and among Ontogeny, The Johns Hopkins University and
University of Washington School of Medicine.
+10.45 License Agreement, dated as of January 1, 1995, and as amended July
19, 1995 and August 30, 1996, by and between Ontogeny and The Trustees
of Columbia University in the City of New York.
+10.46 License Agreement, dated as of February 9, 1995 and as amended, by and
between Ontogeny and the President and Fellows of Harvard University.
10.47 Third Amended and Restated Registration Rights and Right of First
Refusal Agreement, dated as of October 31, 1998, by and among Ontogeny
and the holders of the Senior Preferred Stock.
10.48 Registration Rights Agreement, dated as of July 1, 1996, by and
between Ontogeny and Biogen, Inc. and First Amendment, dated as of
November 30, 1998.
10.49 Registration Rights Agreement, dated as of September 26, 1996, by and
between Ontogeny and Corange International Limited (now, Roche).
10.50 Scientific Advisor and Consulting Agreement by and between Ontogeny
and Douglas A. Melton, dated August 1, 1994 and amended November 12,
1997 and January 22, 2000.
10.51 Stock Restriction Agreement by and between Ontogeny and George A.
Eldridge, dated as of May 10, 1996.
10.52 Stock Restriction Agreement by and between Ontogeny and Doros Platika,
dated as of July 25, 1996.
10.53 Warrant Agreement, dated as of November 2, 1994, by and between
Ontogeny and Comdisco, Inc.
10.54 Warrant Agreement, dated as of January 29, 1996, by and between
Ontogeny and Lighthouse Capital Partners, L.P.
10.55 Warrant Agreement, dated as of December 8, 1997, by and between
Ontogeny and Comdisco, Inc.
10.56 Warrant Agreement, dated as of October 1, 1997, by and between
Ontogeny and Lighthouse Capital Partners, L.P.
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
10.57 Stock Subscription Warrant, dated as of November 21, 1997, by and
between Ontogeny and mmc Ventures to purchase 1,350 shares of Common
Stock.
10.58 Warrant Agreement, dated as of November 21, 1997, by and between
Ontogeny and TransAmerica Business Credit Corporation.
10.59 Warrant Agreement, dated as of September 1, 1999, by and between
Ontogeny and Comdisco, Inc.
10.60 Stock Subscription Warrant, dated as of November 15, 1999, by and
between Ontogeny and Transamerica Business Credit Corp.
10.61 Warrant Agreement, dated as of December 17, 1999, by and between
Ontogeny and Lighthouse Capital Partners, L.P.
+10.62 Research Collaboration and Option Agreement by and between Ontogeny
and Becton, Dickinson and Company, dated January 13, 1999.
*10.63 Secured Promissory Note dated June 17, 1996, by and between Ontogeny
and Dr. Platika in the original principal amount of $500,000.
10.64 Pledge Agreement dated June 17, 1999, by and between Ontogeny, Inc.
and Dr. Platika.
+10.65 Exclusive License Agreement, dated as of November 2, 1998, by and
among Ontogeny and the Board of Trustees of Leland Stanford Junior
University and Johns Hopkins University.
+10.66 License Agreement, dated as of November 20, 1997, by and between
Ontogeny and the Board of Trustees of Leland Stanford Junior
University.
+10.67 License Agreement, dated as of November 30, 1998, by and between
Ontogeny and the Board of Trustees of Leland Stanford Junior
University.
+10.68 License Agreement, dated as of June 13, 1996, by and between Ontogeny
and the President and Fellows of Harvard College.
+10.69 License Agreement, dated as of February 1, 1997, by and between
Ontogeny and the President and Fellows of Harvard College.
23.1 Consent of Hale and Dorr LLP (included as part of its opinion filed as
Exhibit 5 and incorporated herein by reference).
23.2 Consent of Arthur Andersen LLP.
23.3 Consent of Deloitte & Touche LLP.
23.4 Consent of PricewaterhouseCoopers LLP.
23.5 Consent of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
(included as part of its opinion filed as Exhibit 8.1 and incorporated
herein by reference).
23.6 Consent of Foley, Hoag & Eliot LLP (included as part of its opinion
filed as Exhibit 8.2 and incorporated herein by reference).
23.7 Consent of Baker Botts L.L.P. (included as part of its opinion filed
as Exhibit 8.3 and incorporated herein by reference).
23.8 Consent of Chase Securities Inc.
23.9 Consent of SG Cowen Securities Corporation.
24 Power of Attorney (included on the signature page of this Form S-4 and
incorporated herein by reference).
27.1 Reprogenesis, Inc. Financial Data Schedule.
</TABLE>
II-6
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
27.2 Creative BioMolecules, Inc., Financial Data Schedule.
27.3 Ontogeny, Inc. Financial Data Schedule.
*99.1 Form of Proxy of Creative BioMolecules, Inc.
*99.2 Form of Proxy of Ontogeny, Inc.
*99.3 Form of Proxy of Reprogenesis, Inc.
</TABLE>
- --------
* To be filed by amendment.
++ Confidential treatment has been granted as to certain portions of this
Exhibit.
+ Confidential treatment requested as to certain portions of this Exhibit.
Registrant hereby agrees to furnish supplementally any schedules that have been
omitted from this Exhibit to the Securities and Exchange Commission upon its
request.
(b) Financial Statement Schedules
All schedules have been omitted because they are not required or because the
required information is given in the financial statements or notes to those
statements for each of Creative, Ontogeny and Reprogenesis.
Item 22. Undertakings
The undersigned Registrant hereby undertakes:
(1) that, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in this registration statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof;
(2) that prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an underwriter within
the meaning of Rule 145(c), the issuer undertakes that such reoffering
prospectus will contain the information called for by the applicable
registration form with respect to reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other items
of the applicable form;
(3) that every prospectus (i) that is filed pursuant to paragraph (2)
immediately preceding, or (ii) that purports to meet the requirements of
Section 10(a)(3) of the Act and is used in connection with an offering of
securities subject to Rule 415, will be filed as a part of an amendment to
the registration statement and will not be used until such amendment is
effective, and that, for purposes of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof;
(4) to respond to requests for information that is incorporated by
reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of this
Form, within one business day of receipt of any such request, and to send
the incorporated documents by first class mail or other equally prompt
means, including information contained in documents filed after the
effective date of this registration statement through the date of
responding to such request; and
(5) to supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein,
that was not the subject of and included in this registration statement
when it became effective.
II-7
<PAGE>
Insofar as indemnification for liabilities under the Securities Act of 1933
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in Item 20 above, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is therefore unenforceable. If a claim of
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in a successful defense of any action, suit or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, we have duly
caused this Amendment No. 1 to the registration statement to be signed on our
behalf by the undersigned, thereunto duly authorized, in Boston, Massachusetts,
on this 3rd day of April, 2000.
CURIS, INC.
By: /s/ Doros Platika
----------------------------------
Name: Doros Platika
Title: President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature appears
below constitutes and appoints Doros Platika, his or her true and lawful
attorneys-in-fact and agents with full power of substitution and
resubstitution, for him or her and in his or her name, place and stead, in any
and all capacities, to sign any and all amendments (including post-effective
amendments) to this registration statement and to file the same with all
exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all that said attorney-in-fact and agents, or his substitute or substitutes,
may lawfully do or cause to be done by virtue hereof. This power of attorney
may be executed in counterparts.
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the registration statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Doros Platika Chief Executive Officer April 3, 2000
___________________________________________ (principal executive
Doros Platika officer) and Director
/s/ George A. Eldridge Vice President and Chief April 3, 2000
___________________________________________ Financial Officer
George A. Eldridge (principal financial and
accounting officer)
* Director April 3, 2000
___________________________________________
James R. McNab, Jr.
* Director April 3, 2000
___________________________________________
James R. Tobin
* Director April 3, 2000
___________________________________________
Douglas A. Melton
</TABLE>
II-9
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* Director April 3, 2000
___________________________________________
Michael Rosenblatt
* Director April 3, 2000
___________________________________________
Ruth B. Kunath
* Director April 3, 2000
___________________________________________
Martyn D. Greenacre
* /s/ Doros Platika
___________________________________________
</TABLE> Doros Platika as
Attorney-in-Fact
II-10
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
2 Agreement and Plan of Merger, dated as of February 14, 2000 by and
among the Registrant, Creative BioMolecules, Inc., Ontogeny, Inc. and
Reprogenesis, Inc. (Filed as Exhibit 2.1 to Creative's Current Report
on Form 8-K filed February 18, 2000 (File No. 0-19910)).
3.1 Certificate of Incorporation of the Registrant.
3.2 By-laws of the Registrant.
*4 Form of Curis Common Stock Certificate.
*5 Opinion of Hale and Dorr LLP regarding legality of securities being
registered.
*8.1 Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
regarding certain U.S. income tax aspects of the merger.
*8.2 Opinion of Foley, Hoag & Eliot LLP regarding certain U.S. income tax
aspects of the merger.
*8.3 Opinion of Baker Botts L.L.P. regarding certain U.S. income tax
aspects of the merger.
++10.1 Master Restructuring Agreement, dated as of October 15, 1998, by and
between Creative and Stryker Corporation. (Filed as Exhibit 10.10 to
Creative's Annual Report on Form 10-K for the period ended December
31, 1998 (File No. 0-19910), and incorporated herein by reference.)
++10.2 Asset Purchase Agreement, dated as of October 15, 1998, by and between
Creative and Stryker Corporation. (Filed as Exhibit 10.11 to
Creative's Annual Report on Form 10-K for the period ended December
31, 1998 (File No. 0-19910), and incorporated herein by reference.)
10.3 Creative Irrevocable License Agreement dated November 20, 1998 by and
between Creative and Stryker Corporation. (Filed as Exhibit 10.7 to
Creative's Annual Report on Form 10-K for the period ended December
31, 1999 (File No. 0-19910), and incorporated herein by reference.)
10.4 Stryker Irrevocable License Agreement dated November 20, 1998 by and
between the Registrant and Stryker Corporation. (Filed as Exhibit 10.8
to Creative's Annual Report on Form 10-K for the period ended December
31, 1999 (File No. 0-19910), and incorporated herein by reference.)
10.5 Assignment from Creative to Stryker dated November 20, 1998. (Filed as
Exhibit 10.9 to Creative's Annual Report on Form 10-K for the period
ended December 31, 1999 (File No. 0-19910), and incorporated herein by
reference.)
10.6 Standard Form Industrial Lease, dated as of October 24, 1988, as
amended September 17, 1991, by and between WRC Properties, Inc. and
Creative. (Filed as Exhibit 10.26 to Creative's Form S-1 Registration
Statement (Registration No. 33-42159), or amendments thereto, and
incorporated herein by reference.)
10.7 Second Amendment, dated January 28, 1994, to Standard Form Industrial
Lease dated October 24, 1988, as amended September 17, 1991, by and
between Creative and WRC Properties, Inc. (Filed as Exhibit 10.15 to
Creative's Annual Report on Form 10-K for the period ended September
30, 1994 (File No. 0-19910), and incorporated herein by reference.)
</TABLE>
<PAGE>
EXHIBIT INDEX continued
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
10.8 Third Amendment, dated September 20, 1994, to Standard Form Industrial
Lease dated October 24, 1988, as amended September 17, 1991 and
January 28, 1994, by and between Creative and WRC Properties, Inc.
(Filed as Exhibit 10.16 to Creative's Annual Report on Form 10-K for
the period ended September 30, 1994 (File No. 0-19910), and
incorporated herein by reference.)
10.9 Fourth Amendment, dated April 10, 1997, to Standard Form Industrial
Lease dated October 24, 1988, as amended September 17, 1991, January
28, 1994 and September 20, 1994, by and between Creative and WRC
Properties, Inc. (Filed as Exhibit 10.53 to Creative's Quarterly
Report on Form 10-Q for the period ended June 30, 1997 (File No. 0-
19910), and incorporated herein by reference.)
10.10 Partial Lease Termination Agreement and Amendment to Lease, dated
February 28, 1999, by and between Creative and W9/TIB Real Estate
Limited Partnership (as successor in interest to WRC Properties,
Inc.). (Filed as Exhibit 10.16 to Creative's Annual Report on Form 10-
K for the period ended December 31, 1999 (File No. 0-19910), and
incorporated herein by reference.)
10.11 Standard Form Industrial Lease, dated February 25, 1992, by and
between Creative and WRC Properties, Inc. (Filed as Exhibit 10.52 to
Creative's Form S-1 Registration Statement
(Registration No. 33-46200), or amendments thereto, and incorporated
herein by reference.)
10.12 First Amendment, dated February 28, 1994, to Standard Form Industrial
Lease dated February 25, 1992 by and between Creative and WRC
Properties, Inc. (Filed as Exhibit 10.32 to Creative's Annual Report
on Form 10-K for the period ended September 30, 1995 (File
No. 0-19910), and incorporated herein by reference.)
10.13 Second Amendment, dated September 20, 1994, to Standard Form
Industrial Lease dated February 25, 1992, as amended February 28,
1994, by and between Creative and WRC Properties, Inc. (Filed as
Exhibit 10.33 to Creative's Annual Report on Form 10-K for the period
ended September 30, 1995 (File No. 0-19910), and incorporated herein
by reference.)
10.14 Third Amendment, dated April 10, 1997, to Standard Form Industrial
Lease dated February 25, 1992, as amended February 28, 1994 and
September 20, 1994, by and between Creative and WRC Properties, Inc.
(Filed as Exhibit 10.54 to Creative's Quarterly Report on Form 10-Q
for the period ended June 30, 1997 (File No. 0-19910), and
incorporated herein by reference.)
++10.15 CBM Cross-License Agreement, dated as of November 26, 1993, by and
between Enzon, Inc. and Creative. (Filed as Exhibit 10.42 to
Creative's Quarterly Report on Form 10-Q for the period ended
December 31, 1993 (File No. 0-19910), and incorporated herein by
reference.)
++10.16 Enzon Cross-License Agreement, dated as of November 26, 1993, by and
between Enzon, Inc. and Creative. (Filed as Exhibit 10.43 to
Creative's Quarterly Report on Form 10-Q for the period ended
December 31, 1993 (File No. 0-19910), and incorporated herein by
reference.)
++10.17 Cross-License Agreement, dated as of July 15, 1996, by and between
Creative, Genetics Institute, Inc. and Stryker Corporation. (Filed as
Exhibit 10.1 to the Quarterly Report on Form 10-Q for the period ended
September 30, 1996 of Genetics Institute, Inc. (File No. 0-14587),
filed with the Securities and Exchange Commission on November 6, 1996
and incorporated herein by reference.)
++10.18 Research Collaboration and License Agreement, dated December 9, 1996,
by and between Creative and Biogen, Inc. (Filed as Exhibit 10.37 to
Creative's Annual Report on Form 10-K for the period ended December
31, 1996 (File No. 0-19910), and incorporated herein by reference.)
++10.19 Amendment Agreement, dated December 30, 1998, by and between Creative
and Biogen, Inc. (Filed as Exhibit 10.38 to Creative's Annual Report
on Form 10-K for the period ended December 31, 1998 (File No. 0-
19910), and incorporated herein by reference.)
</TABLE>
<PAGE>
EXHIBIT INDEX continued
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
10.20 Restricted Stock Purchase Agreement, dated December 9, 1996, by and
between Creative and Biogen, Inc. (Filed as Exhibit 10.38 to
Creative's Annual Report on Form 10-K for the period ended
December 31, 1996 (File No. 0-19910), and incorporated herein by
reference.)
10.21 Lease, dated June 16, 1997, by and between Creative and The Prudential
Insurance Company of America. (Filed as Exhibit 10.55 to Creative's
Quarterly Report on Form 10-Q for the period ended June 30, 1997 (File
No. 0-19910), and incorporated herein by reference.)
10.22 First Amendment, dated August 10, 1998, to Lease dated April 10, 1997,
by and between Creative and The Prudential Insurance Company of
America. (Filed as Exhibit 10.56 to Creative's Quarterly Report on
Form 10-Q for the period ended September 30, 1998 (File No. 0-19910),
and incorporated herein by reference.)
10.23 Master Lease Agreement, dated October 6, 1997, by and between Creative
and FINOVA Technology Finance, Inc. (Filed as Exhibit 10.38 to
Creative's Annual Report on Form 10-K for the period ended December
31, 1997 (File No. 0-19910), and incorporated herein by reference.)
10.24 Employment Agreement, dated as of January 2, 1992, by and between
Charles Cohen, Ph.D. and Creative. (Filed as Exhibit 10.47 to
Creative's Form S-1 Registration Statement (Registration No. 33-
46200), or amendments thereto, and incorporated herein by reference.)
10.25 Employment Agreement, dated July 17, 1995, by and between Michael M.
Tarnow and Creative. (Filed as Exhibit 99.1 to Creative's Report on
Form 8-K for the August 31, 1995 Event (File No. 0-19910), and
incorporated herein by reference.)
10.26 Employment Agreement, dated January 13, 1997, by and between Cheryl K.
Lawton and Creative. (Filed as Exhibit 10.50 to Creative's Quarterly
Report on Form 10-Q for the period ended March 31, 1997 (File No. 0-
19910), and incorporated herein by reference.)
10.27 Employment Agreement, dated February 18, 1997, by and between Steven
L. Basta and Creative. (Filed as Exhibit 10.51 to Creative's Quarterly
Report on Form 10-Q for the period ended March 31, 1997 (File No. 0-
19910), and incorporated herein by reference.)
10.28 Employment Agreement, dated September 17, 1997, by and between Carl M.
Cohen, Ph.D., and Creative. (Filed as Exhibit 10.53 to Creative's
Annual Report on Form 10-K for the period ended December 31, 1997
(File No. 0-19910), and incorporated herein by reference.)
*10.29 Promissory Note dated February 8, 2000 by Mr. Michael Tarnow to
Creative.
*10.30 Promissory Note dated February 8, 2000 by Dr. Charles Cohen to
Creative.
10.31 Promissory Note dated March 13, 2000 by Dr. Daniel Omstead to
Reprogenesis.
+10.32 License Agreement, dated November 30, 1997, by and between
Reprogenesis and the Regents of the University of Michigan, as amended
by the Amendment to License Agreement dated August 1999.
+10.33 Amended and Restated License Agreement (Exclusive), dated July 1,
1996, by and between Reprogenesis and the Massachusetts Institute of
Technology, as amended by the First Amendment to Restated License
Agreement dated June 9, 1999.
+10.34 Patent License Agreement (Exclusive), dated 10/30/96, by and between
Reprogenesis and the Massachusetts Institute of Technology.
+10.35 Exclusive License Agreement, dated February 22, 2000, by and between
Reprogenesis and Children's Medical Center Corporation.
</TABLE>
<PAGE>
EXHIBIT INDEX continued
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
10.36 Lease, dated September 25, 1997, with respect to real property located
at 21 Erie Street, Cambridge, Massachusetts, as amended by the First
Amendment to Lease, dated October 1, 1998, by and between Reprogenesis
and 21 Erie Realty Trust.
+10.37 Termination and Release Agreement dated January 27, 1999, by and
between Reprogenesis and American Medical Systems, Inc.
10.38 Financial Assistance Award (Development of Perivascular Endothelial
Cell Implants), dated November 1, 1999, by and between Reprogenesis
and the National Institute of Standards and Technology, Advanced
Technology Program.
10.39 Stock Subscription Warrant dated July 2, 1998, by and between
Reprogenesis and TBCC Funding Trust II.
+10.40 Amended and Restated Research and Commercialization Agreement, dated
November 30, 1998, as amended by letter dated December 18, 1998, by
and between Ontogeny and Biogen, Inc.
10.41 Employment Agreement, dated as of June 17, 1996, by and between
Ontogeny and Doros Platika, M.D.
10.42 Lease, dated as of November 16, 1995 as amended, by and between
Ontogeny and Moulton Realty Corp.
+10.43 License Agreement, dated as of February 12, 1996, by and between
Ontogeny and Leland Stanford Junior University.
+10.44 License Agreement, dated as of September 26, 1996 and amended January
15, 1997, by and among Ontogeny, The Johns Hopkins University and
University of Washington School of Medicine.
+10.45 License Agreement, dated as of January 1, 1995, and as amended July
19, 1995 and August 30, 1996, by and between Ontogeny and The Trustees
of Columbia University in the City of New York.
+10.46 License Agreement, dated as of February 9, 1995 and as amended, by and
between Ontogeny and the President and Fellows of Harvard University.
10.47 Third Amended and Restated Registration Rights and Right of First
Refusal Agreement, dated as of October 31, 1998, by and among Ontogeny
and the holders of the Senior Preferred Stock.
10.48 Registration Rights Agreement, dated as of July 1, 1996, by and
between Ontogeny and Biogen, Inc. and First Amendment, dated as of
November 30, 1998.
10.49 Registration Rights Agreement, dated as of September 26, 1996, by and
between Ontogeny and Corange International Limited (now, Roche).
10.50 Scientific Advisor and Consulting Agreement by and between Ontogeny
and Douglas A. Melton, dated August 1, 1994 and amended November 12,
1997 and January 22, 2000.
10.51 Stock Restriction Agreement by and between Ontogeny and George A.
Eldridge, dated as of May 10, 1996.
10.52 Stock Restriction Agreement by and between Ontogeny and Doros Platika,
dated as of July 25, 1996.
10.53 Warrant Agreement, dated as of November 2, 1994, by and between
Ontogeny and Comdisco, Inc.
10.54 Warrant Agreement, dated as of January 29, 1996, by and between
Ontogeny and Lighthouse Capital Partners, L.P.
10.55 Warrant Agreement, dated as of December 8, 1997, by and between
Ontogeny and Comdisco, Inc.
10.56 Warrant Agreement, dated as of October 1, 1997, by and between
Ontogeny and Lighthouse Capital Partners, L.P.
</TABLE>
<PAGE>
EXHIBIT INDEX continued
<TABLE>
<CAPTION>
Exhibit
No. Description
------- -----------
<C> <S>
10.57 Stock Subscription Warrant, dated as of November 21, 1997, by and
between Ontogeny and mmc Ventures to purchase 1,350 shares of Common
Stock.
10.58 Warrant Agreement, dated as of November 21, 1997, by and between
Ontogeny and TransAmerica Business Credit Corporation.
10.59 Warrant Agreement, dated as of September 1, 1999, by and between
Ontogeny and Comdisco, Inc.
10.60 Stock Subscription Warrant, dated as of November 15, 1999, by and
between Ontogeny and Transamerica Business Credit Corp.
10.61 Warrant Agreement, dated as of December 17, 1999, by and between
Ontogeny and Lighthouse Capital Partners, L.P.
+10.62 Research Collaboration and Option Agreement by and between Ontogeny
and Becton, Dickinson and Company, dated January 13, 1999.
*10.63 Secured Promissory Note dated June 17, 1996 by and between Ontogeny
and Dr. Platika in the original principal amount of $500,000.
10.64 Pledge Agreement dated June 17, 1999 by and between Ontogeny, Inc. and
Dr. Platika.
+10.65 Exclusive License Agreement, dated as of November 2, 1998, by and
among Ontogeny and the Board of Trustees of Leland Stanford Junior
University and Johns Hopkins University.
+10.66 License Agreement, dated as of November 20, 1997, by and between
Ontogeny and the Board of Trustees of Leland Stanford Junior
University.
+10.67 License Agreement, dated as of November 30, 1998, by and between
Ontogeny and the Board of Trustees of Leland Stanford Junior
University.
+10.68 License Agreement, dated as of June 13, 1996, by and between Ontogeny
and the President and Fellows of Harvard College.
+10.69 License Agreement, dated as of February 1, 1997, by and between
Ontogeny and the President and Fellows of Harvard College.
23.1 Consent of Hale and Dorr LLP (included as part of its opinion filed as
Exhibit 5 and incorporated herein by reference).
23.2 Consent of Arthur Andersen LLP.
23.3 Consent of Deloitte & Touche LLP.
23.4 Consent of PricewaterhouseCoopers LLP.
23.5 Consent of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
(included as part of its opinion filed as Exhibit 8.1 and incorporated
herein by reference).
23.6 Consent of Foley, Hoag & Eliot LLP (included as part of its opinion
filed as Exhibit 8.2 and incorporated herein by reference).
23.7 Consent of Baker Botts L.L.P. (included as part of its opinion filed
as Exhibit 8.3 and incorporated herein by reference).
23.8 Consent of Chase Securities Inc.
23.9 Consent of SG Cowen Securities Corporation.
24 Power of Attorney (included on the signature page of this Form S-4 and
incorporated herein by reference).
27.1 Reprogenesis, Inc. Financial Data Schedule.
</TABLE>
<PAGE>
EXHIBIT 10.31
-------------
PROMISSORY NOTE
---------------
$206,000.00 March 13, 2000
FOR VALUE RECEIVED, the undersigned, Daniel R. Omstead ("Maker"), hereby
promises to pay to the order of Reprogenesis, Inc., a Texas corporation
("Payee"), the principal sum of $206,000 upon the earlier of receipt of any
payment by Maker pursuant to the Daniel Omstead Severance Agreement dated
February 14, 2000 between Maker and Payee or December 31, 2000, without
interest.
Maker may from time to time prepay all or any portion of the outstanding
balance of this note on any Business Day without penalty or premium. As used
herein, a "Business Day" shall mean any day other than a Saturday, Sunday or
other day on which banks in Texas are permitted or required by law to be closed.
All payments and prepayments made in accordance with this note in respect of
principal on this note are to be made in lawful money of the United States of
America no later than 12 o'clock noon, central time, in same day funds, at 21
Erie Street, Suite 22, Cambridge, Massachusetts 02139, or such other place as
the holder hereof shall designate in writing to Maker. Maker shall have no
right to reborrow under this note any amounts paid or prepaid in respect of
principal on this note.
If any payment or prepayment of principal on this note shall become due on
a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day.
In addition to all principal on this note, Maker agrees to pay (a) all
reasonable costs and expenses incurred by all owners and holders of this note in
collecting this note through any probate, reorganization, bankruptcy or any
other proceeding and (b) reasonable attorneys' fees when and if this note is
placed in the hands of an attorney for collection after demand.
Maker and any and all endorsers, guarantors and sureties severally waive
grace, presentment for payment, notice of dishonor, notice of intent to
accelerate, notice of acceleration, protest and notice of protest and diligence
in collecting and bringing of suit against any party hereto, and agree to all
modifications, renewals, extensions, substitutions or replacements hereof or
partial payments hereon and to any release or substitution of security, if any,
hereof, in whole or in part, with or without notice, before or after maturity.
This note may be transferred by Payee, and the rights and privileges of Payee
under this note shall inure to the benefit of Payee's representatives,
successors and assigns.
Maker hereby expressly waives presentment, demand, protest or other notice
of any kind to Maker.
<PAGE>
THIS NOTE SHALL BE DEEMED TO BE A CONTRACT UNDER THE LAWS OF THE STATE OF
TEXAS AND FOR ALL PURPOSES SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH
THE LAWS OF SAID STATE AND APPLICABLE FEDERAL LAWS. Maker further agrees that
the consideration furnished to Maker is related solely to business, commercial,
investment or other similar purposes and not personal, family or agricultural
purposes.
THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.
-------------------------
Daniel R. Omstead
<PAGE>
Exhibit 10.32
Confidential materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
LICENSE AGREEMENT
MICHIGAN FILE [**], [**], [**] & [**] TECHNOLOGY
This Agreement is effective as of the 30th day of November, 1997 (the "Effective
Date"), between Reprogenesis, Inc., a Texas corporation with offices located at
10 Sylvan Drive, Suite 27, St. Simons Island, Georgia 31522 ("LICENSEE"), and
the Regents of the University of Michigan, a constitutional corporation of the
State of Michigan ("MICHIGAN"). LICENSEE and MICHIGAN agree as follows:
1. BACKGROUND.
1.1 MICHIGAN has developed rights, including potential patent rights, in
"TECHNOLOGY" as defined below.
1.2 MICHIGAN has granted to LICENSEE an option to enter into this Agreement
under an option agreement made effective on July 1, 1996.
1.3 LICENSEE has timely exercised its option under such option agreement and
MICHIGAN has extended the exercise period stated therein until and
including November 30, 1997.
1.4 LICENSEE desires to obtain, and MICHIGAN, consistent with its mission of
education and research, desires to grant, a license to the TECHNOLOGY on
the terms and conditions listed below.
2. DEFINITIONS.
2.1 "Affiliate(s)" means any individual, corporation, partnership,
proprietorship or other entity controlled by, controlling, or under common
control with LICENSEE through equity ownership, ability to elect
directors, or because a majority of directors overlap, and includes any
individual, corporation, partnership, proprietorship or other entity
directly or indirectly owning, owned by or under common ownership with
LICENSEE to the extent of twenty-five percent (25%) or more of the voting
shares, including shares owned beneficially by such party.
2.2 "Field(s) of Use" refers to the field or fields for which "Products" (as
defined in Paragraph 2.10 below) may be designed, manufactured, used
and/or marketed under this Agreement, and means all fields of use.
2.3 "Confidential Information" means any confidential or proprietary
information furnished by one Party (the "Disclosing Party") to the other
Party (the "Receiving Party") as required by this Agreement, provided that
such information is designated as confidential as set out in Paragraph
30.1 (Confidential Information includes, without limitation, royalty
reports furnished to MICHIGAN under Article 5, but specifically excludes
the totals of royalties paid to MICHIGAN, and the existence and terms of
this Agreement).
<PAGE>
2.4 "First Commercial Reagent Sale" means the first sale of any Product by
LICENSEE or an Affiliate or "Sublicensee" (as defined in Paragraph 2.12
below), if such Product is not sold as a drug, device or biologic for use
in the practice of veterinary or human medicine either alone or in
combination with other substances, and requires no governmental approval
or license to be marketed.
2.5 "First Commercial Sale" means the first sale not a First Commercial
Reagent Sale of any Product by LICENSEE or an Affiliate or Sublicensee,
other than sale of a Product for use in field trials or in clinical trials
being conducted to obtain FDA or other governmental approvals to market
Products. LICENSEE shall demonstrate to MICHIGAN's reasonable satisfaction
that such sale is an arm's length transaction entered into in good faith
between buyer and LICENSEE or an Affiliate or Sublicensee.
2.6 "Gross Sublicensing Revenues" means all amounts received and all other
consideration received (or, when in a form other than cash or its
equivalent, the fair market value thereof when received) by LICENSEE and
its Affiliates under any sublicense to a Sublicensee, and as a result of
any use, distribution, or sale of Products (as defined in Paragraph 2.10
below) where Net Sales does not include such amounts and other
consideration.
2.7 "Licensed Patent(s)" means all patents and patent applications, all
foreign equivalent patent applications and Patent Cooperation Treaty
filings, and all patents issuing therefrom, in which MICHIGAN has or
acquires a property interest, and
(1) which cover an invention included in the TECHNOLOGY (Appendix A lists
the patent applications currently filed on inventions included in the
TECHNOLOGY), or
(2) which this definition includes by operation of Paragraph 9.3 of this
Agreement.
2.8 "Net Sales" means the sum, over the term of this Agreement, of all amounts
received and all other consideration received (or, when in a form other
than cash or its equivalent, the fair market value thereof when received)
by LICENSEE and its Affiliates from persons or entities due to or by
reason of the sale, distribution or use of Products, less the following
deductions and offsets, but only to the extent such sums are otherwise
included in the computation of Net Sales, or are paid by LICENSEE and not
otherwise reimbursed: refunds, rebates, replacements or credits actually
allowed and taken by purchasers for return of Products; customary trade,
quantity and cash discounts actually allowed and taken; excise,
value-added, and sales taxes actually paid by LICENSEE for Products; and
shipping and handling and shipping insurance charges actually paid by
LICENSEE for Products. (Note that amounts not actually received, such as
bad debts left unpaid to LICENSEE, are not included in Net Sales.)
2.9 "Parties" in singular or plural usage as required by the context means
LICENSEE and/or MICHIGAN.
2.10 "Product(s)" means any product (s) (including any service or process to be
performed for customers) whose manufacture, use or sale (or performance)
in any country would, but
2
<PAGE>
Confidential materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
for this Agreement, comprise an infringement, including contributory
infringement, of one or more Valid Claims.
2.11 "Royalty Quarter(s)" means the three-month periods ending on the last day
of March, June, September and December of each year.
2.12 "Sublicensee(s)" means any person or entity, except an Affiliate,
sublicensed by LICENSEE under this Agreement to make, have made, use,
market, sell, lease, or offer for sale, in the Territory, Products
designed and marketed for use in a Field of Use.
2.13 "TECHNOLOGY" as used in this Agreement means all information,
manufacturing techniques, data, designs or concepts (whether or not
publicly known or available) covering:
(1) [**] developed by MICHIGAN's employees Wai Hung Wong, David J. Mooney,
Jon A. Rowley, and Kamal H. Bouhadir as described in MICHIGAN's
Technology Management office Files No. [**] and [**] entitled,
respectively, [**], encompassing Provisional U.S. Patent Applications
Serial No. [**] and Serial No. [**] entitled, respectively, [**] both
filed on, [**]; and
(2) [**] developed by MICHIGAN-s employees Kamal H. Bouhadir, Jon A.
Rowley and David J. Mooney, as described in MICHIGAN's Technology
management office File No. [**] entitled [**] and encompassing
Provisional U.S. Patent Application Serial No. [**] of same title
filed on [**]; and
(3) [**] developed by MICHIGAN's employees David J. Mooney, Leatrese D.
Harris, and Lonnie Shea as described in MICHIGAN's Technology
Management Office File No. [**] entitled [**] and encompassing
Provisional U.S. Patent Application Serial No. [**] entitled [**] and
filed on [**];
(4) the technologies specified in subparagraphs 2.13(l) and 2.13(2) as
described and claimed in a patent application filed pursuant to the
Patent Cooperation Treaty on [**], Serial No. PCT/US[**], entitled
[**].
(5) all inventions and discoveries in which MICHIGAN acquires ownership
pursuant to Article 9 below.
2.14 "Territory" means all countries of the world.
2.15 "Valid Claim(s)" means any claim(s) in an unexpired patent or pending in a
patent application included within the Licensed Patents excepting only
claims that:
(1) a court or other governmental agency of competent jurisdiction has
decided are unenforceable, unpatentable, or invalid, unappealable or
unappealed within the time allowed for appeal; or
(2) a reissue or disclaimer has rendered invalid or unenforceable. If in
any country two or more such decisions conflict with respect to the
validity of the same claim,
3
<PAGE>
Confidential materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
the decision of the higher or highest tribunal controls; however, if
the tribunals are of equal rank, then the decision or decisions
upholding the claim prevails when the conflicting decisions are equal
in number, and the majority of decisions prevails when the conflicting
decisions are unequal in number.
3. GRANT OF LICENSE.
3.1 MICHIGAN hereby grants to LICENSEE the exclusive license under the
Licensed Patents to make, have made, use, market, lease, offer for sale
and sell, in the Territory, Products designed and marketed solely for use
in any Field of Use; with the right to grant sublicenses to Affiliates and
Sublicensees subject to the terms and provisions of Article 8 below.
3.2 LICENSEE may maintain periodic communication with MICHIGAN to identify
intellectual property related to the TECHNOLOGY developed by or under the
direction of MICHIGAN's faculty member Dr. David Mooney, for possible
licensing in fields in which LICENSEE is making a current, significant
commitment. Upon request of LICENSEE (and provided no conflict with any
then-existing agreements or commitments regarding those technologies would
result), MICHIGAN will participate in good faith discussions with LICENSEE
regarding license rights to any such technologies (although LICENSEE
acknowledges that its right to good-faith discussions may not be exercised
to exclude other potential licensees from discussions with MICHIGAN).
3.3 MICHIGAN reserves the right to practice the Technology and the Licensed
Patents solely for research and education purposes.
3.4 MICHIGAN further reserves the right, as 37CFR401.14(b) requires, to grant
to the U.S. Government a non-exclusive, nontransferable, irrevocable,
paid-up license or licenses to practice or have practiced for or on behalf
of the United States all patent applications and resulting patents
included in the TECHNOLOGY and the Licensed Patents, if agreements between
MICHIGAN and the U.S. Government covering funded research relating to the
TECHNOLOGY or the Licensed Patents so require.
4. CONSIDERATION.
4.1 LICENSEE shall pay to MICHIGAN a one-time license issue fee of [**]
dollars ($[**]).
4.2 LICENSEE shall also pay to MICHIGAN, with respect to each Royalty Quarter,
a royalty equal to [**] percent ([**]%) of Net Sales of LICENSEE and
Affiliate(s) for all Products.
Reduction of royalties: The royalties payable under Paragraph 4.2 above
may be reduced by LICENSEE via the following methods:
Method A: In circumstances where LICENSEE or Affiliates generate Net Sales
due to the sale of combination products (being a Product sold in
combination with a discrete system, device, item of equipment or apparatus
which is not itself a Product), royalties may be calculated only on that
portion of the overall Net Sales which is left after
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Confidential materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
subtracting the fair market sales price of the discrete system, device,
item of equipment or apparatus which is not itself a Product (provided
that, where such Products are also sold separately, the resultant royalty
shall not be less than if the Product had been sold separately);
Method B: In circumstances where LICENSEE is required to make payments to
one or more third parties in consideration for license rights to patents
or technology necessary to make Products (excluding the discrete
components of combination products), LICENSEE may deduct [**] percent
([**]%) of such payments from the royalties otherwise payable to MICHIGAN.
Limitation: Where LICENSEE applies either Method A or Method B, the
royalties payable for the Products so affected shall not be reduced by
more than [**] ([**]%) of the royalty that would otherwise have been
payable. Where LICENSEE applies both Method A and Method B to the same
unit of Product, the royalties payable for the Products so affected shall
not be reduced by more than [**] ([**]%) of the royalty that would
otherwise have been payable.
Method C: In circumstances where LICENSEE or Affiliates expect to sell
Product(s), directly and in volume, to a horizontal market in which then
ongoing sales of non-infringing substitute products would materially limit
the profit margin on sales of Product(s), and LICENSEE or Affiliates
reasonably demonstrate to MICHIGAN that such market conditions prevail,
then the Parties agree to meet in advance of such sales and discuss an
appropriate royalty rate for such Products more accurately reflecting a
share of the expected profit margin. This negotiated rate shall be applied
in lieu of the application of Method A or B above to such Net Sales.
4.3 LICENSEE shall also pay MICHIGAN, with respect to each Royalty Quarter, a
royalty equal to (a) [**] percent ([**]%) of Gross Sublicensing Revenues
if only rights to Licensed Patents are sublicensed; or (b) [**] ([**]%) of
Gross Sublicensing Revenues if the Gross Sublicensing Revenues includes
revenue received for Licensed Patent rights sublicensed in conjunction
with final end use products developed by LICENSEE and/or substantial
technology developed by LICENSEE.
4.4 This Agreement imposes the obligation to pay MICHIGAN a royalty under this
Article 4 only once for the same unit of Product regardless of the number
of Valid Claims or Licensed Patents covering the same; however, to
determine payments due, whenever the term "Product" applies to a property
during various stages of manufacture,. use or sale (including interim
sales among LICENSEE and its Affiliates where final sales to customers are
made), then Net Sales equals the amount derived from the sale,
distribution or use of such Product by LICENSEE or Affiliates at the stage
of its highest invoiced value to unrelated third parties.
4.5 LICENSEE shall pay to MICHIGAN an annual license maintenance fee. This
annual fee accrues in the Royalty Quarter ending in March of the years
specified below. LICENSEE may credit in full each annual fee actually paid
to MICHIGAN against all royalties (as set forth in Paragraph 4.2 above)
otherwise due MICHIGAN for the calendar
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Confidential materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
year in which LICENSEE pays the specific annual fee. The year for which
LICENSEE may take credits against royalties includes the Royalty Quarter
in which the annual fee accrues and the next three Royalty Quarters.
The annual license maintenance fees are as follows:
(1) In 1997: $[**];
(2) In 1998: $[**];
(3) In 1999: $[**];
(4) In 2000: $[**];
(5) In 2001: $[**];
(6) In 2002: $[**];
(7) In 2003: $[**];
(8) In 2004: $[**];
(9) In 2005 and in each year thereafter during the term of this
Agreement: $[**].
Also, notwithstanding (1-9) above (and in place of the amounts therein
listed, when applicable):
(10) In the calendar year following the first year in which. LICENSEE
first obtains any required governmental approval or license in the
United States, Japan, or any European Union nation, to market any
product for any therapeutic purpose as a drug, device or biologic,
either alone or in combination with other substances: $[**];
(11) In the year next succeeding the year defined in (10); $[**];
(12) In the year next succeeding the year defined in (11).; $[**];
(13) In the year next succeeding the year defined in (12) and in each
succeeding calendar year thereafter during the term of this
Agreement; $[**].
Also, notwithstanding (1-13) above (and in place of the amounts therein
listed, when applicable):
(14) In each of the first and second years following the First Commercial
Sale: $[**].
(15) In the third year following the First Commercial Sale: $[**].
(16) In the fourth year following the First Commercial Sale, and in each
succeeding calendar year thereafter during the term of this
Agreement: $[**].
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Confidential materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
Also, notwithstanding (1-16) above (and in addition to any amounts therein
listed):
(17) In each of the first and second years following the First Commercial
Reagent Sale: $[**].
(18) In the third year following the First Commercial Reagent Sale: $[**].
(19) In the fourth year following the First Commercial Reagent Sale, and
in each year thereafter during the term of this Agreement: $[**].
4.6 Except as provided in the definition of Net Sales, all royalty payments to
MICHIGAN under this Agreement are without deduction for sales, use,
excise, personal property or other similar taxes or other duties imposed
on such payments by the government of any country or any political
subdivision thereof; and LICENSEE shall assume and pay any such taxes;
except that LICENSEE may deduct from royalty payments taxes levied upon
the export of royalties by a government other than the U.S., and required
to be withheld and paid on MICHIGAN's behalf by LICENSEE (LICENSEE shall
cooperate in establishing MICHIGAN's exemption from such taxes where
appropriate).
4.7 In the event that the patents that ultimately issue among the Licensed
Patents contain only claims that are substantially narrower than the
claims of the patent applications that are within the Licensed Patents as
of the Effective Date (that is, if prosecution of the Licensed Patents
finally results in unexpectedly severe restriction of the coverage of the
claims), to the competitive detriment of LICENSEE, then MICHIGAN agrees to
discuss the possibility of renegotiating the royalty rate and other
financial terms applicable to the affected Product. Any such financial
relief will be on a country-by-country basis and may be temporary or
permanent depending upon the circumstances. The Parties acknowledge and
agree that MICHIGAN is under no legal obligation to alter the financial
terms set forth in this Article 4, but MICHIGAN is under an obligation to
enter into discussions with LICENSEE for a reasonable period of time.
5. REPORTS.
5.1 Annually, until the first to occur of the First Commercial Sale or First
Commercial Reagent Sale, and thereafter within sixty (60) days after each
Royalty Quarter closes (including the close of any Royalty Quarter
immediately following any termination of this Agreement), LICENSEE shall
report to MICHIGAN for that Royalty Quarter:
(1) all royalties accruing to MICHIGAN; and
(2) the gross sales and Net Sales of Products by LICENSEE and Affiliates,
and
(3) the source and amount of all Gross Sublicensing Revenues (including,
where such information is provided to LICENSEE or Affiliates, the
gross sales and net sales of Products by Sublicensees), and
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<PAGE>
(4) any other revenues for which payments are due, and the amount of such
payments, and the various calculations used to arrive at those
amounts, including the quantity, description (nomenclature and type
designation), country of manufacture and country of sale of Products.
If no payment is due, LICENSEE shall so report.
5.2 LICENSEE covenants that it will promptly establish and consistently employ
a system of specific nomenclature and type designations for Products to
permit identification and segregation of various types where necessary;
LICENSEE, Affiliates and Sublicensees shall consistently employ the system
when rendering invoices thereon and shall inform MICHIGAN, or its
auditors, when requested, as to the details concerning such nomenclature
system as well as to all additions thereto and changes therein.
5.3 LICENSEE shall keep, and shall require its Affiliates and Sublicensees to
keep, true and accurate records and books of account containing data
reasonably required for the computation and verification of payments due
as provided by this Agreement. LICENSEE shall:
(1) open such books and records for inspection upon reasonable notice
during business hours by either MICHIGAN auditor(s) or an independent
certified accountant selected by MICHIGAN, for the purpose of
verifying the amount of payments due and payable;
(2) retain such books and records for six (6) years from date of
origination.
These rights of inspection survive any termination of this Agreement.
MICHIGAN is responsible for all expenses of such inspection, except that
if any inspection reveals an underpayment greater than ten percent (10%)
of royalties due MICHIGAN, then LICENSEE shall pay all expenses of that
inspection and the amount of the underpayment immediately to MICHIGAN.
MICHIGAN may exercise its rights of inspection under this Paragraph no
more frequently than once in any twelve (12) month period and shall
perform such rights of inspection in a manner to minimize unreasonable
interference with LICENSEE's business operations. The MICHIGAN auditor(s)
or the independent certified accountant selected by MICHIGAN shall not
disclose to MICHIGAN any information other than information relating to
(and information necessary for the proof of) accuracy of reports and
payments delivered under this Agreement. The confidentiality of such books
and records shall be protected in accordance with Article 30.
5.4 LICENSEE shall direct its authorized representative to certify that
reports required hereunder are correct to the best of LICENSEE's knowledge
and information.
6. TIMES AND CURRENCIES OF PAYMENTS.
6.1 Payments accrued during each Royalty Quarter are due and payable in Ann
Arbor, Michigan on the date each quarterly report is due (as provided in
Paragraph 5.1).
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Confidential materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
LICENSEE shall include such payments, in United States dollars, with the
report. LICENSEE agrees to make all payments due hereunder to MICHIGAN by
check made payable to "The Regents of The University of Michigan," and
sent to MICHIGAN according to the provisions for notices set forth in
Article 21 herein.
6.2 On all amounts outstanding and payable to MICHIGAN, interest accrues from
the date the amount is due at [**] above, the prime lending rate as
established by the Chase Manhattan Bank, N.A., in New York City, New York,
or at a lower rate if required by law.
6.3 For each Royalty Quarter, LICENSEE and Affiliates shall convert any Net
Sales or Gross Sublicensing Revenues they receive in foreign currency into
its equivalent in United States dollars at the exchange rate of the
currency as reported (or if erroneously reported, as subsequently
corrected) in the Wall Street Journal on the last business day of the
Royalty Quarter (or if not reported on that date, as quoted by the Chase
Manhattan Bank, N.A., in New York City, New York).
6.4 Except as provided in the definition of Net Sales, all royalty payments to
MICHIGAN under this Agreement are without deduction for sales, use,
excise, personal property or other similar taxes or other duties imposed
on such payments by the government of any country or any political
subdivision thereof; and LICENSEE shall assume and pay any such taxes.
7. COMMERCIALIZATION.
7.1 LICENSEE assumes full responsibility to do all that is necessary to:
(1) obtain any governmental approvals to manufacture or to sell Products;
(2) comply with all laws and regulations with respect to Products; and
(3) ensure the safe production, storage, handling, transport, packaging
and distribution of Products.
7.2 LICENSEE agrees to use its best efforts to develop Products, obtain any
government approvals necessary, and manufacture and sell Products at the
earliest possible date; and effectively to exploit, market and manufacture
in sufficient quantities to meet anticipated customer demand and to make
the benefits of the Products reasonably available to the public.
7.3 LICENSEE agrees to manufacture or have manufactured all Products
substantially in the United States. If U.S. manufacture is not practically
feasible, then MICHIGAN shall cooperate with LICENSEE in obtaining waivers
of this requirement from the U.S. Government.
7.4 LICENSEE shall use its best efforts to alert all potential customers and
distributees that Products are not intended for any therapeutic or
clinical diagnostic uses unless properly approved therefor pursuant to
7.1.
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7.5 Within fifteen (15) days of the First Commercial Reagent Sale, and also
within fifteen (15) of the First Commercial Sale, LICENSEE shall report by
written letter to MICHIGAN the date and general terms of such sale.
8. SUBLICENSING.
8.1 LICENSEE has the exclusive right to grant sublicenses to its rights under
Article 3 above to Affiliates and Sublicensees, to make, have made, use,
market, lease, offer for sale and sell, Products in the Territory.
8.2 LICENSEE shall notify MICHIGAN of every sublicense agreement and each
amendment thereto, within thirty (30) days after their execution, and
indicate the name of the Sublicensee or Affiliate, the territory of the
sublicense, the scope of the sublicense, and the nature, timing and
amounts of all fees and royalties to be paid thereunder.
8.3 LICENSEE shall include in any sublicense granted under this Article 8 a
provision that the sublicense terminates upon any termination of this
Agreement.
8.4 LICENSEE shall require that all sublicenses:
(1) be consistent with the terms and conditions of this Agreement;
(2) contain the Sublicensee's or Affiliate's acknowledgments of
MICHIGAN's rights in the TECHNOLOGY and Licensed Patents, and the
disclaimer of warranty and limitation on MICHIGAN's liability, as
provided by Article 12 below.
(3) contain provisions under which the Sublicensee or Affiliate accepts
duties at least equivalent to those accepted by the LICENSEE in the
following paragraphs:
5.3 duty to keep records
12.4 duty to avoid improper representations or responsibilities
13.1 duty to defend, hold harmless, and indemnify MICHIGAN
13.3 duty to maintain insurance
17 duty to control exports
19 duty to restrict the use of MICHIGAN's name
20 duty to properly mark product with Patent notices
8.5 LICENSEE shall require that all sublicenses contain a provision obligating
each Sublicensee or Affiliate to pay taxes due, if any, in the same manner
as set out in Paragraph 6.4 above or, should the sublicense be assigned to
MICHIGAN, to make the Sublicensee or Affiliate responsible for such taxes.
8.6 LICENSEE shall require that all sublicenses contain the right for LICENSEE
to assign its rights under the sublicense to MICHIGAN.
9. OWNERSHIP OF INTELLECTUAL PROPERTY.
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9.1 LICENSEE acknowledges MICHIGAN's ownership interest in all Licensed
Patents as defined in Paragraph 2.7(l) above.
9.2 LICENSEE might engage MICHIGAN employees as employees or consultants to
LICENSEE or Affiliates during the time of their employment with MICHIGAN.
LICENSEE and MICHIGAN hereby agree that the following provisions govern
the rights to any inventions, discoveries or computer software that
represent improvements upon the Licensed Patents or otherwise relate to
the TECHNOLOGY whether or not patentable, which any MICHIGAN employee
conceives, reduces to practice or develops while concurrently employed by
LICENSEE or Affiliates during the term of his or her employment with
MICHIGAN and the term of this Agreement:
(1) Where MICHIGAN employees concurrently employed by LICENSEE or
Affiliates, in combination with other LICENSEE or Affiliate employees
not concurrently employed by MICHIGAN, constitute the group of
inventors/developers, MICHIGAN and LICENSEE are joint owners of such
inventions, discoveries and/or computer software, and MICHIGAN and
LICENSEE shall require that any resulting patent rights and
copyrights be assigned jointly to MICHIGAN and LICENSEE;
(2) Where MICHIGAN employees concurrently employed by LICENSEE or
Affiliates constitute part or all of the group of
inventors/developers, and no LICENSEE or Affiliate employees not
concurrently employed by MICHIGAN constitute any part of the group of
inventors/developers, LICENSEE shall grant MICHIGAN sole ownership
(as between MICHIGAN and LICENSEE) of such inventions, discoveries
and/or computer software, and MICHIGAN and LICENSEE shall require
that any resulting patent rights and copyrights be assigned solely to
MICHIGAN.
9.3 Where not precluded by or otherwise conflicting with MICHIGAN's
then-existing agreements with any third parties, the definition of
TECHNOLOGY in Paragraph 2.13 above encompasses inventions, discoveries
and/or computer software included under Subparagraph 9.2(1) or (2) above
and conceived, reduced to practice or developed during the performance of
duties as employee or consultant to LICENSEE, and the definition of
Licensed Patents in Paragraph 2.7 above encompasses any resulting patent
rights.
10. PATENT APPLICATIONS AND MAINTENANCE.
10.1 MICHIGAN will control all aspects of filing, prosecuting, and maintaining
Licensed Patents, including foreign filings and Patent Cooperation Treaty
filings. LICENSEE shall, at its own expense, perform all actions and
execute or cause to be executed all documents necessary to support such
filing, prosecution, or maintenance.
10.2 MICHIGAN shall notify LICENSEE of all information received by MICHIGAN
relating to the filing, prosecution and maintenance of Licensed Patents,
including any lapse, revocation, surrender, invalidation or abandonment of
any of the Licensed Patents, in
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<PAGE>
sufficient time to allow, where possible, LICENSEE to review and comment
upon such information.
10.3 MICHIGAN may in its sole discretion decide to refrain from or to cease
prosecuting or maintaining any of the Licensed Patents, including any
foreign filing or any Patent Cooperation Treaty filing. If MICHIGAN makes
any such decision, MICHIGAN shall notify LICENSEE promptly and in
sufficient time to permit LICENSEE at its sole discretion to continue such
prosecution or maintenance at LICENSEE's expense. If LICENSEE elects to
continue such prosecution or maintenance, MICHIGAN shall execute such
documents and perform such acts at LICENSEE's expense as may be reasonably
necessary for LICENSEE so to continue such prosecution or maintenance.
10.4 LICENSEE shall reimburse patent expenses paid by MICHIGAN as follows:
MICHIGAN shall provide notice to LICENSEE of all reasonable and necessary
expenses paid by MICHIGAN in monitoring, drafting, filing, prosecuting and
maintaining the Licensed Patents, and in maintaining or asserting its
inventorship or ownership interest in Licensed Patent(s), including
without limitation fees paid to outside counsel or consultants; patent
office fees for filing, prosecution, reissue, reexamination and issue;
maintenance fees; fees for foreign filings and Patent Cooperation Treaty
filings; and reasonable travel expenses incurred by MICHIGAN employees for
the purpose of monitoring, prosecuting and maintaining the Licensed
Patents, but not including any part of any MICHIGAN employee's salary.
MICHIGAN will include in the first such notice of such expenses all
expenses that MICHIGAN has incurred to date with respect to all Licensed
Patents that LICENSEE has not otherwise already reimbursed. Within thirty
(30) days of the receipt of each such notice, LICENSEE shall reimburse
MICHIGAN for all such reasonable and necessary expenses, except that
MICHIGAN will not require LICENSEE to reimburse expenses incurred through
foreign filings or Patent Cooperation Treaty filings, unless LICENSEE has
requested such filings; however, in any case where LICENSEE fails to
reimburse MICHIGAN promptly for any above-described expenses (whether or
not related to filings requested by LICENSEE), the definitions of
"TECHNOLOGY" and "Licensed Patents" herein shall not include any patent
applications or resulting patents to which such unreimbursed expenses
relate.
11. INFRINGEMENT.
11.1 LICENSEE and MICHIGAN shall each inform the other promptly in writing of
any alleged infringement of the Licensed Patents in any Field of Use by a
third party and of any available evidence thereof.
11.2 During the term of this Agreement, LICENSEE has the first option to police
the Licensed Patents and Products against infringement by other parties
within the Territory and the Fields of Use. This right to police includes
defending any action for declaratory judgment of non-infringement or
invalidity; and prosecuting, defending or settling all infringement and
declaratory judgment actions at its expense and through counsel of its
selection, except that LICENSEE shall make any such settlement only with
the advice and consent of MICHIGAN, which consent shall not be
unreasonably withheld. MICHIGAN shall provide reasonable assistance to
LICENSEE with respect to such
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Confidential materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
actions, but only if LICENSEE reimburses MICHIGAN for out-of-pocket
expenses incurred in connection with any such assistance rendered at
LICENSEE's request or reasonably required by MICHIGAN. If LICENSEE elects
to institute any such action or suit, MICHIGAN agrees to be named as a
nominal party therein. MICHIGAN retains the right to participate, with
counsel of its own choosing and at its own expense, in any action under
this Paragraph 11.2.
11.3 If LICENSEE institutes an action for infringement of a Licensed Patent or
defends a declaratory judgment or other action with respect to a Licensed
Patent, then during the pendency of such litigation LICENSEE may withhold
up to [**] percent ([**]%) of the payments otherwise thereafter due
MICHIGAN under Paragraphs 4.2 and 4.3 above, applying that withholding
towards reimbursement of no more than [**] ([**]) of LICENSEE's actual
outside attorney fees and other direct, out-of-pocket litigation expenses
(not to include any compensation paid to employees of LICENSEE or
Affiliates). Any resulting settlement payments or damages awarded and
received by LICENSEE shall be applied equally toward reimbursement of
MICHIGAN's withheld royalties pursuant to this Paragraph and to LICENSEE's
out-of-pocket expenses which were not reimbursed; of the remainder, if
any, LICENSEE shall pay [**] percent ([**]%) to MICHIGAN.
If LICENSEE has paid or pays an annual fee to MICHIGAN under Paragraph 4.5
in the same year LICENSEE receives a payment or award as set out above,
then LICENSEE may credit that annual fee against the share of the payment
or award (after recovery of expenses and withheld royalties) otherwise due
to MICHIGAN, exactly as if that share represented additional royalties due
from LICENSEE.
11.4 If LICENSEE fails to take action to abate any alleged infringement of a
Licensed Patent within sixty (60) days of a request by MICHIGAN to do so
(or within a shorter period if required to preserve the legal rights of
MICHIGAN under the laws of any relevant government or political
subdivision thereof), then MICHIGAN has the right to take such action
(including prosecution of a suit) at its expense and LICENSEE shall use
reasonable efforts to cooperate in such action, at LICENSEE's expense. If
MICHIGAN elects to institute any such action or suit, LICENSEE agrees to
be named as a nominal party therein. MICHIGAN has full authority to settle
on such terms as MICHIGAN shall determine, except that MICHIGAN shall not
reach any settlement whereby it licenses a third party under any Licensed
Patents in the Territory and any Field of Use without the consent of
LICENSEE, which consent LICENSEE can withhold for any reason. After
recovery of all of MICHIGAN's out-of-pocket litigation expenses, and after
payment to LICENSEE (such payment not to exceed the recovery or settlement
amounts actually received by MICHIGAN) of any unrecovered expenses paid by
LICENSEE at MICHIGAN's request to third parties in furtherance of such
action, MICHIGAN shall pay [**] percent ([**]%) of any remainder of any
recovery or settlement to LICENSEE.
11.5 If LICENSEE initiates any legal action, or learns of a legal action
initiated by any third party concerning any alleged infringement or
non-infringement, or discovers any allegation by a third party of
infringement resulting from the practice of Licensed Patents, then
LICENSEE shall so notify MICHIGAN promptly in a detailed writing. LICENSEE
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<PAGE>
shall promptly keep MICHIGAN informed and provide copies to MICHIGAN of
all documents regarding all such proceedings or actions instituted by
LICENSEE.
12. NO WARRANTIES; LIMITATION ON MICHIGAN'S LIABILITY.
12.1 MICHIGAN, including its Regents, fellows, officers, employees and agents,
make no representations or warranties that any Licensed Patent is or will
be held valid, or that the manufacture, use, sale or other distribution of
any Products will not infringe upon any patent or other rights not vested
in MICHIGAN.
MICHIGAN represents that:
(1) to its knowledge it has the lawful right to enter into this Agreement
and grant the rights herein granted; and
(2) the claims included within the patent applications which comprise the
Licensed Patents have been included in good faith and without
fraudulent intent by MICHIGAN.
12.2 MICHIGAN, INCLUDING ITS REGENTS, FELLOWS, OFFICERS, EMPLOYEES AND AGENTS,
MAKES NO REPRESENTATIONS, EXTENDS NO WARRANTIES OF ANY KIND, EITHER
EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND ASSUMES NO
RESPONSIBILITIES WHATEVER WITH RESPECT TO DESIGN, DEVELOPMENT,
MANUFACTURE, USE, SALE OR OTHER DISPOSITION BY LICENSEE, AFFILIATES OR
SUBLICENSEES OF PRODUCTS.
12.3 THE ENTIRE RISK AS TO PERFORMANCE OF PRODUCTS IS ASSUMED BY LICENSEE,
AFFILIATES AND SUBLICENSEES. In no event will MICHIGAN, including its
Regents, fellows, officers, employees and agents, be responsible or liable
for any direct, indirect, special, incidental, or consequential damages or
lost profits or other economic loss or damage regarding Products, to
LICENSEE, Affiliates, Sublicensees or any other individual or entity
regardless of legal theory. The above limitations on liability apply even
though MICHIGAN, its Regents, fellows, officers, employees or agents may
have been advised of the possibility of such damage.
12.4 LICENSEE shall not, and shall require that its Affiliates and Sublicensees
do not, make any statements, representations or warranties whatsoever to
any person or entity, or accept any liabilities or responsibilities
whatsoever from any person or entity, that are inconsistent with any
disclaimer or limitation included in this Article 12.
13. INDEMNITY; INSURANCE.
13.1 LICENSEE shall defend, indemnify and hold harmless and shall require its
Affiliates and Sublicensees to defend, indemnify and hold harmless
MICHIGAN, its Regents, fellows, officers, employees and agents
("Indemnitees"), for and against any claims, demands, damages, losses, and
expenses of any nature (including reasonable attorneys, fees and
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other litigation expenses), resulting from, but not limited to, death,
personal injury, illness, property damage, economic loss or products
liability arising from any of the following:
(1) Any manufacture, use, sale or other disposition by LICENSEE,
Affiliates, Sublicensees or transferees of Products;
(2) The direct or indirect use by any person of Products made, used, sold
or otherwise distributed by LICENSEE, Affiliates or Sublicensees;
(3) The use by LICENSEE, Affiliates or Sublicensees of any invention or
computer software related to the TECHNOLOGY or the Licensed Patents.
The indemnification required above shall not apply to any liability,
damage, loss or expense to the extent that it is directly attributable to
(1) the grossly negligent or intentional misconduct of the Indemnitees, or
(2) damages incurred by patients of MICHIGAN due to the negligent
administration to them, by MICHIGAN, of Products supplied by LICENSEE.
13.2 MICHIGAN may participate at its option and expense through counsel of its
own selection, and may join in any legal actions related to any such
claims, demands, damages, losses and expenses under Paragraph 13.1 above.
13.3 Before any distribution of any Product by LICENSEE or an Affiliate,
LICENSEE shall purchase and maintain in effect a policy of product
liability insurance. Before any distribution of any Product by a
Sublicensee, LICENSEE shall require that the Sublicensee purchase and
maintain in effect a policy of product liability insurance. Each such
insurance policy will provide reasonable coverage for all claims with
respect to any Products manufactured, sold, licensed or otherwise
distributed by LICENSEE and Affiliates -- or, in the case of a
Sublicensee's policy, by the Sublicensee -- and will specify MICHIGAN,
including its Regents, fellows, officers and employees, as an additional
insured. LICENSEE shall furnish certificate(s) of such insurance to
MICHIGAN, upon request.
14. TERM AND TERMINATION.
14.1 Upon any termination of this Agreement, and except as provided herein to
the contrary, all rights and obligations of the Parties hereunder cease,
except as follows:
(1) Obligations to pay royalties and other sums accruing hereunder up to
the day of such termination;
(2) MICHIGAN's rights to inspect books and records as described in
Article 5, and LICENSEE's obligations to keep such records for the
required time;
(3) Obligations to hold harmless, defend and indemnify MICHIGAN under
Article 13;
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(4) Any cause of action or claim of LICENSEE or MICHIGAN accrued or to
accrue because of any breach or default by the other Party hereunder;
(5) The general rights, obligations, and understandings of Articles 2,
12, 17, 19, 20, 28 and 29; and
(6) All other terms, provisions, representations, rights and obligations
contained in this Agreement that by their sense and context are
intended to survive until performance thereof by either or both
Parties.
14.2 This Agreement will become effective on its Effective Date and, unless
terminated under another, specific provision of this Agreement, will
remain in effect until and terminate upon the last to expire of the
Licensed Patents.
14.3 If LICENSEE at any time defaults in the payment of any fee or royalty or
the making of any report hereunder, or makes any false report, or if
either Party commits any material breach of any covenant or promise herein
contained, and fails to remedy any such default, breach or report within
thirty (30) days after written notice thereof by the other Party
specifying such default, then that other Party may, at its option,
terminate this Agreement and the license rights granted herein by notice
in writing to such effect. Any such termination is without prejudice to
either Party's other legal rights for breach of this Agreement.
14.4 LICENSEE may terminate this Agreement by giving MICHIGAN a notice of
termination, which must include a statement of the reasons, whatever they
may be, for such termination and the termination date established by
LICENSEE, which date must not be sooner than ninety (90) days after the
date of the notice. The Parties shall deem such notice to be final and,
immediately upon receipt, of such notice of termination, MICHIGAN will
have the right to enter into agreements with others for the manufacture,
sale, and/or use of Products.
15. ASSIGNMENT.
Due to the unique relationship between the Parties, this Agreement is not
assignable by either Party without the prior written consent of the other
Party. Any attempt to assign this Agreement without such consent is void
from the beginning. MICHIGAN shall provide such consent in connection with
an assignment related to a change in the name or legal status of LICENSEE
that does not affect its assets and the nature of its business activities,
and MICHIGAN shal1 not unreasonably withhold consent for LICENSEE to
assign this Agreement to a purchaser of all or substantially all of
LICENSEE's business. No assignment is effective until the intended
assignee agrees in writing to accept all the terms and conditions of this
Agreement.
16. REGISTRATION AND RECORDATION.
16.1 If the terms of this Agreement, or the terms of any assignment or license
under this Agreement, are or become such as to require that the Agreement
or license or any part thereof be registered with or reported to a
national or supranational agency of any area in
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which LICENSEE, Affiliates or Sublicensees would do business, LICENSEE
shall, at its expense, undertake such registration or report, and promptly
supply to MICHIGAN notice and appropriate verification of the act of
registration or report or any agency ruling resulting from it.
16.2 LICENSEE shall also carry out, at its expense, any formal recordation of
this Agreement or any license herein granted that the law of any country
requires as a prerequisite to enforceability of the Agreement or license
in the courts of any such country or for other reasons, and shall promptly
furnish to MICHIGAN appropriately verified proof of recordation.
17. LAWS AND REGULATIONS OF THE UNITED STATES; EXPORT.
17.1 This Agreement is subject to all United States laws and regulations now or
hereafter applicable to the subject matter of this Agreement.
17.2 LICENSEE shall comply, and shall require its Affiliates and Sublicensees
to comply, with all provisions of any applicable laws, regulations, rules
and orders relating to the license herein granted and to the testing,
production, transportation, export, packaging, labeling, sale or use of
Products, or otherwise applicable to LICENSEE's or its Affiliates' or
Sublicensees' activities hereunder. LICENSEE shall obtain, and shall
require its Affiliates and Sublicensees to obtain, such written assurances
regarding export and re-export of technical data (including Products made
by use of technical data) as the Office of Export Administration
Regulations may require, and LICENSEE hereby gives such written assurances
as may be required under those Regulations to MICHIGAN.
18. BANKRUPTCY.
18.1 If during the term of this Agreement, LICENSEE makes an assignment for the
benefit of creditors, or if proceedings in voluntary or involuntary
bankruptcy are instituted on behalf of or against LICENSEE, or if a
receiver or trustee is appointed for the property of LICENSEE, MICHIGAN
may, at its option, terminate this Agreement and revoke the license herein
granted by written notice to LICENSEE.
19. USE OF MICHIGAN'S NAME.
LICENSEE agrees to refrain from using and to require Affiliates and
Sublicensees to refrain from using the name of MICHIGAN in publicity or
advertising without the prior written approval of MICHIGAN. Reports in
scientific literature and presentations of joint research and development
work are not considered publicity.
20. PRODUCT MARKING.
To the extent commercially feasible and consistent with prevailing
business practices, LICENSEE shall mark, and shall cause its Affiliates
and Sublicensees to mark, all Products that are manufactured or sold under
this Agreement with the number of each issued patent under the Licensed
Patents that applies to such Product.
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21. NOTICES.
Any notice, request, report or payment required or permitted to be given
or made under this Agreement by either Party will be given by sending such
notice by certified or registered mail, return receipt requested, to the
address set forth below or such other address as such Party specifies by
written notice given in conformity herewith. Any notice not so given is
not valid until received, and any notice given according to the provisions
of this Paragraph is effective when mailed.
To MICHIGAN: The University of Michigan
Technology Management Office
Wolverine Tower, Room 2071
3003 S. State Street
Ann Arbor, MI 48109-1280
Attn: File No. 1221
To LICENSEE: Reprogenesis, Inc.
10 Sylvan Drive, Suite 27
St. Simons Island, Georgia 31522
22. INVALIDITY.
If a court of competent jurisdiction finds any term, provision, or
covenant of this Agreement invalid, illegal or unenforceable, that term
will be curtailed, limited or deleted, but only to the extent necessary to
remove the invalidity, illegality or unenforceability, and without in any
way affecting or impairing the remaining terms, provisions and covenants.
23. ENTIRE AGREEMENT AND AMENDMENTS.
This Agreement contains the entire understanding of the Parties concerning
the matter contained herein. The Parties may modify, vary or alter any of
the provisions of this Agreement for so long as it continues in force, but
only by an instrument duly executed by authorized officials of both
Parties hereto.
24. WAIVER.
No waiver by either Party of any breach of this Agreement, no matter how
long continuing or how often repeated, is a waiver of any subsequent
breach thereof, nor is any delay or omission by either Party in the
exercise of any right, power, or privilege hereunder a waiver of such
right, power or privilege.
25. ARTICLE HEADINGS.
The Article headings herein are for purposes of convenient reference only
and do not define or modify the terms written in the text of this
Agreement.
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26. NO AGENCY RELATIONSHIP.
The relationship between the Parties is that of independent contractor and
contractee. Neither Party is an agent of the other regarding the exercise
of any rights hereunder, and neither has any right or authority to assume
or create any obligation or responsibility on behalf of the other.
27. FORCE MAJEURE.
Neither Party hereto is in default of any provision of this Agreement for
any failure in performance resulting from acts or events beyond the
reasonable control of such Party, such as Acts of God, acts of civil or
military authority, civil disturbance, war, strikes, fires, power
failures, natural catastrophes or other "force majeure" events.
28. GOVERNING LAW.
The law of the State of Michigan governs this Agreement and the
relationships between the Parties in all respects (notwithstanding any
provisions governing conflict of laws under such Michigan law to the
contrary), except that, for patents, the law of the country that grants
the patent determines questions affecting the construction and effect of
such patent.
29. JURISDICTION AND FORUM.
The Parties hereby consent to the jurisdiction of the courts of the State
of Michigan over any dispute concerning this Agreement or the relationship
between the Parties. Should LICENSEE bring any claim, demand or other
action against MICHIGAN, its Regents, fellows, officers, employees or
agents, arising out of this Agreement or the relationship between the
Parties, LICENSEE agrees to bring said action only in the Michigan Court
of Claims.
30. CONFIDENTIALITY.
30.1 Confidential Information that is disclosed in writing shall be marked with
a legend indicating its confidential status (such as "Confidential" or
"Proprietary"). Confidential Information that is disclosed orally or
visually shall be documented in a written notice prepared by the
Disclosing Party and delivered to the Receiving Party within thirty (30)
days of the date of disclosure; such notice shall summarize the
Confidential Information disclosed to the Receiving Party and reference
the time and place of disclosure.
30.2 For a period of five (5) years after disclosure of any portion of
Confidential Information, the Receiving Party shall (i) maintain such
Confidential Information in confidence, except that the Receiving Party
may disclose or permit the disclosure of any Confidential Information to
its Regents, fellows, directors, officers, employees, consultants and
advisors who are obligated to maintain the confidential nature of such
Confidential Information and who need to know such Confidential
Information for the purposes of this Agreement; (ii) use such Confidential
Information solely for the purposes of this Agreement (and for
administration of this Agreement and demonstration of compliance
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<PAGE>
or lack thereof with the terms herein); (iii) allow its Regents, fellows,
directors, officers, employees, consultants and advisors to reproduce the
Confidential Information only to the extent necessary for the
above-mentioned purposes, with all such reproductions being considered
Confidential Information.
30.3 The obligations of the Receiving Party under Paragraph 30.2 shall not
apply to the extent that the Receiving Party can demonstrate that certain
Confidential Information (i) was in the public domain prior to the time of
its disclosure under this Agreement; (ii) entered the public domain after
the time of its disclosure under this Agreement through means other than
an unauthorized disclosure resulting from an act or omission by the
Receiving Party; (iii) was independently developed or discovered by the
Receiving Party without use of the Confidential Information; (iv) is or
was disclosed to the Receiving Party at any time, whether prior to or
after the time of its disclosure under this Agreement, by a third party
having no fiduciary relationship with the Disclosing Party and having no
obligation of confidentiality with respect to such Confidential
Information; or (v) is required to be disclosed to comply with applicable
laws or regulations (including Michigan Freedom of Information Act
requirements), or with a court or administrative order, provided that the
Disclosing Party provides reasonable prior written notice of such
disclosure to the extent possible.
30.4 The Receiving Party acknowledges that the Disclosing Party (or any third
party entrusting its own information to the Disclosing Party) claims
ownership of its Confidential Information in the possession of the
Receiving Party. Upon the expiration or termination of this Agreement, and
at the request of the Disclosing Party, the Receiving Party shall return
to the Disclosing Party all originals, copies, and summaries of documents,
materials, and other tangible manifestations of Confidential Information
in the possession or control of the Receiving Party, except that the
Receiving Party may retain one copy of the Confidential Information in the
possession of its legal counsel solely for the purposes of monitoring all
of its and the other Party's obligations under this Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement in duplicate
originals by their duly authorized officers or representatives.
FOR THE REGENTS OF THE UNIVERSITY OF
FOR REPROGENESIS, INC. MICHIGAN
By /s/ By /s/
----------------------------------- ------------------------------------
(authorized representative) (authorized representative)
Typed Name____________________________ Typed Name____________________________
Title_________________________________ Title_________________________________
Date__________________________________ Date__________________________________
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Confidential materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
APPENDIX A
Licensed Patents Filed as of Effective Date
1. U.S. Provisional Patent Application Serial No. [**], filed [**], entitled
[**], David Mooney, Letrese Harris and Lonnie Shea, named inventors, and
assigned to the Regents of the University of Michigan.
2. Patent Cooperation Treaty Application Serial No. [**], filed [**],
designating all PCT member countries including the United States, entitled
[**], David Mooney and Jon Rowley, named inventors, the Regents of the
University of Michigan, applicant.
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Confidential materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
AMENDMENT TO LICENSE AGREEMENT
THIS AMENDMENT, effective as of the 1st day of August, 1999 (the EFFECTIVE
DATE), between Reprogenesis, Inc., a corporation incorporated in the State of
Texas, with offices located at 10 Sylvan Drive, Suite 27, St. Simons Island,
Georgia 31522 ("LICENSEE") and the Regents of the University of Michigan, a
constitutional corporation of the State of Michigan, with offices located at
3003 South State, Room 2071, Ann Arbor, Michigan 48109-1280 ("MICHIGAN").
LICENSEE and MICHIGAN agree as follows:
1. BACKGROUND
1.1 MICHIGAN and LICENSEE entered into a LICENSE AGREEMENT dated
November 30, 1997 covering certain TECHNOLOGY and LICENSED PATENTS
as therein defined.
1.2 MICHIGAN and LICENSEE entered into a ROUNDTABLE RESEARCH AGREEMENT
dated October 1, 1997. Pursuant to Article 8.1 therein, LICENSEE
timely exercised its option to negotiate for an exclusive,
royalty-bearing license to certain rights in University Intellectual
Property as defined in the ROUNDTABLE RESEARCH AGREEMENT.
1.3 MICHIGAN has developed ADDITIONAL TECHNOLOGY comprising methods and
means for delivering DNA from certain structural matrices developed
by MICHIGAN's staff members Drs. D. Mooney, L. Shea and J. Bonadio,
as described in Michigan's Technology Management Office File #[**]
entitled [**] (hereinafter defined as "ADDITIONAL TECHNOLOGY").
MICHIGAN acknowledges that ADDITIONAL TECHNOLOGY is within the
definition of University Intellectual Property. The ADDITIONAL
TECHNOLOGY is now the subject of an additional United States patent
application serial number [**] filed on [**] and a counterpart
Patent Cooperation Treaty application filed on even date
(hereinafter these and all other patent applications and patents
which cover an invention included in the ADDITIONAL TECHNOLOGY are
defined as "ADDITIONAL LICENSED PATENTS").
1.4 LICENSEE desires to obtain, and MICHIGAN, consistent with its
mission of education and research, desires to grant, a license to
the ADDITIONAL TECHNOLOGY and ADDITIONAL LICENSED PATENTS pursuant
to the aforementioned LICENSE AGREEMENT. To this end, and for the
benefit of both parties, MICHIGAN and LICENSEE agree to amend the
LICENSE AGREEMENT.
2. AMENDMENT
The term TECHNOLOGY includes the ADDITIONAL TECHNOLOGY, and the term
LICENSED PATENTS includes the ADDITIONAL LICENSED PATENTS. Solely with
respect to ADDITIONAL TECHNOLOGY and ADDITIONAL LICENSED PATENTS,
MICHIGAN's covenant under Paragraph 3.1 (LICENSE AGREEMENT) is limited as
follows:
<PAGE>
Confidential materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
LICENSEE acknowledges, and agrees that all sublicenses of LICENSEE to
Affiliates and Sublicensees must include an acknowledgement by such
Affiliate or Sublicensee; that the non-infringing practice of ADDITIONAL
TECHNOLOGY and ADDITIONAL LICENSED PATENTS may require a license to
certain background rights of MICHIGAN licensed by MICHIGAN to [**].
3. ENTIRE AGREEMENT
The terms and conditions of the LICENSE AGREEMENT shall remain in full
force and effect, except as amended herein.
IN WITNESS WHEREOF, the PARTIES hereto have executed this Amendment in duplicate
originals by their duly authorized officers or representatives.
FOR REPROGENESIS, INC.
FOR THE REGENTS OF THE UNIVERSITY
OF MICHIGAN
By: /s/ Daniel R. Omstead By: /s/ Michael A. Kope
--------------------------- -------------------------------
(authorized representative) (authorized representative)
Typed Name: Daniel R. Omstead Typed Name: Michael A. Kope
Title: President Title: Assistant to the Director
Date: ________________________ Date: Aug. 11, 1999
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Exhibit 10.33
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
MASSACHUSETTS INSTITUTE OF TECHNOLOGY
AMENDED AND RESTATED
LICENSE AGREEMENT
(EXCLUSIVE)
Date: July 1, 1996
<PAGE>
TABLE OF CONTENTS
PREAMBLE PAGE
ARTICLE 1 - DEFINITIONS......................................................2
ARTICLE 2 - GRANT............................................................5
ARTICLE 3 - DUE DILIGENCE....................................................8
ARTICLE 4 - ROYALTIES.......................................................10
ARTICLE 5 - REPORTS AND RECORDS.............................................14
ARTICLE 6 - PATENT PROSECUTION..............................................15
ARTICLE 7 - INFRINGEMENT....................................................17
ARTICLE 8 - PRODUCT LIABILITY AND REPRESENTATION............................19
ARTICLE 9 - EXPORT CONTROLS.................................................22
ARTICLE 10 - NON-USE OF NAMES...............................................22
ARTICLE 11 - ASSIGNMENT.....................................................23
ARTICLE 12 - DISPUTE RESOLUTION.............................................23
ARTICLE 13 - TERMINATION....................................................24
ARTICLE 14 - PAYMENTS, NOTICES AND OTHER COMMUNICATIONS.....................25
ARTICLE 15 - MISCELLANEOUS PROVISIONS.......................................26
APPENDIX A
APPENDIX B
<PAGE>
This Amended and Restated License Agreement (Exclusive) is made and
entered into this 1st day of July, 1996, by and between MASSACHUSETTS INSTITUTE
OF TECHNOLOGY, a corporation duty organized and existing under the laws of the
Commonwealth of Massachusetts and having its principal office at 77
Massachusetts Avenue, Cambridge, Massachusetts 02139, U.S.A. (hereinafter
referred to as "M.I.T."), and REPROGENESIS, INC., a corporation duly organized
and existing under the laws of the State of Texas and having its principal
office at 10 Sylvan Drive, Suite 27, St. Simons Island, Georgia 31522
(hereinafter referred to as "LICENSEE"), such LICENSEE the successor in interest
to Reprogenesis, L.P.
WITNESSETH
WHEREAS, pursuant to the terms and conditions of that certain License
Agreement (the "License Agreement"), dated December 23, 1993 (the "Effective
Date"), by and between M.I.T. and Tissue Technologies, L.P., M.I.T. on its own
behalf and on behalf of Children's Hospital of Boston ("Children's Hospital')
granted exclusive licenses under certain PATENT RIGHTS (as later defined herein)
in the FIELD OF USE (as later defined herein) to Tissue Technologies, L.P.
(whose name was subsequently changed to Reprogenesis, L.P.) and the granted
rights are subject only to a royalty free, non-exclusive license heretofore
granted to the United States Government; and
WHEREAS, subsequent to the Effective Date and prior to the date hereof,
M.I.T. and Reprogenesis, L.P. entered into seven separate amendments to the
License Agreement; and
WHEREAS, effective July 1, 1996, Reprogenesis, L.P. was merged with and
into LICENSEE, with LICENSEE succeeding to all of the rights and obligations of
Reprogenesis, L.P., including those under the License Agreement; and
WHEREAS, M.I.T. and LICENSEE desire to enter into this Amended and
Restated License Agreement to (1) restate the License Agreement to give effect
to the seven separate
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amendments heretofore executed; (2) evidence the consent of M.I.T. to the change
in legal status of Reprogenesis, L.P. and the succession of LICENSEE to the
rights and obligations of Reprogenesis, L.P. under the License Agreement as
permitted in Article II of the License Agreement; (3) reflect the payment of the
License Issue Fee and the issuance to M.I.T. of the Common Stock of LICENSEE in
compliance with the provisions of Article IV of the License Agreement; (4)
delete the provisions of the License Agreement providing for the obligation of
LICENSEE to raise "Investment Capital" pursuant to an agreed schedule and
providing "antidilution" rights to M.I.T. until such time as such Investment
Capital exceeded $5.0 million, M.I.T. having agreed that such schedule has been
met and Investment Capital in excess of $5.0 million has been raised; (5) amend
the provisions of the License Agreement with respect to the "pre-emptive rights"
of M.I.T. to clarify the extent of such rights, establish procedures for the
exercise thereof and provide that such rights do not extend to issuances of
securities by LICENSEE pursuant to employee benefit plans and in certain other
limited circumstances; and (6) to make certain other conforming changes, all as
agreed to by M.I.T. and LICENSEE;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto amend and restate the License Agreement and
agree as follows:
ARTICLE 1 - DEFINITIONS
For the purposes of this Agreement, the following words and phrases shall
have the following meanings:
1.1. "LICENSEE" shall include Carolina Tissue Development Partners, a
Texas general partnership, and any other related company of Reprogenesis, Inc.,
the voting stock of which is directly or indirectly at least Fifty Percent (50%)
owned or controlled by Reprogenesis, Inc., an organization which directly or
indirectly controls more than Fifty Percent (50%) of the
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voting stock of Reprogenesis, Inc., and an organization, the majority ownership
of which is directly or indirectly common to the ownership of Reprogenesis, Inc.
1.2 "PATENT RIGHTS" shall mean all of the following intellectual property
owned or controlled by M.I.T. and/or Children's Hospital:
(a) the United States and foreign patents and/or patent applications
listed in Appendix A and divisionals and continuations of these
applications;
(b) United States and foreign patents issued from the applications
listed in Appendix A and from divisionals and continuations of
these applications;
(c) claims of United States and foreign continuation-in-part
applications, and of the resulting patents, which are directed to
subject matter described in the United States and foreign
applications listed in Appendix A;
(d) claims of all foreign patent applications, and of the resulting
patents, which are directed to subject matter described in the
United States patents and/or patent applications described in (a),
(b) or (c) above; and
(e) any reissues, reexaminations or extensions of United States and
foreign patents described in (a), (b) or (c) above.
1.3 A "LICENSED PRODUCT" shall mean any product or part thereof which:
(a) is covered in whole or in part by a claim that has not expired or
been held invalid by a court of competent jurisdiction or by a
pending claim after January 1, 1997, contained in the PATENT
RIGHTS in the country in which any such product or part thereof is
made, used or sold; or
(b) is manufactured by using a process or is employed to practice a
process which is covered in whole or in part by a claim that has
not expired or been held invalid by a court of competent
jurisdiction or by a pending claim after January 1, 1997,
contained in the PATENT RIGHTS in the country in which any
LICENSED PROCESS is used or in which such product or part thereof
is used or sold.
1.4 "A LICENSED PROCESS" shall mean any process which is covered in whole
or in part by a claim that has not expired or been held invalid by a court of
competent jurisdiction or by a pending claim after January 1, 1997, contained in
the PATENT RIGHTS.
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1.5 A "LICENSED SERVICE" shall mean any fee-bearing service performed by
LICENSEE or any sublicensee which uses a LICENSED PRODUCT or practices a
LICENSED PROCESS.
1.6 "COMBINATION PRODUCTS(S)" or "SERVICES(S)" shall mean a product or
service that includes a LICENSED PRODUCT or LICENSED SERVICE sold in combination
with other component(s) whose manufacture, use or sale by an unlicensed party
would not constitute an infringement of the PATENT RIGHTS.
1.7 "NET SALES" shall mean LICENSEE'S (and its sublicensees') billings to
a third party for LICENSED PRODUCTS, LICENSED PROCESSES and LICENSED SERVICES
produced hereunder less the sum of the following:
(a) discounts allowed in amounts customary in the trade;
(b) sales, tariff duties and/or use taxes directly imposed and with
reference to particular sales;
(c) outbound transportation prepaid or allowed;
(d) insurance;
(e) amounts allowed or credited on returns; and
(f) bad debts.
Sales between LICENSEE and any of its affiliates or any of its sublicensees, or
between any of said affiliates or sublicensees, shall not be included in such
computation. If the LICENSED PRODUCT or SERVICE is sold together with one or
more other components in order to provide a COMBINATION PRODUCT or SERVICE, the
NET SALES, as defined above, shall be multiplied by a fraction, the numerator of
which shall be the cost of the LICENSED PRODUCT or SERVICE contained in such
COMBINATION PRODUCT or SERVICE, and the denominator of which shall be the total
cost of the COMBINATION PRODUCT or SERVICE, the cost in
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Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
each case to be determined in accordance with LICENSEE'S regular accounting
practice, consistently applied. No deductions shall be made for commissions paid
to individuals, whether they be with independent sales agencies or regularly
employed by LICENSEE and on its payroll, or for cost of collections. LICENSED
PRODUCTS shall be considered "sold" upon the earlier of receipt of payment or
six months after billed out or invoiced.
1.8 "FIELD OF USE" shall mean all applications in the [**] and [**]
fields, including repair, growth, replacement, augmentation and regeneration of
[**], [**] or [**] of the [**] and [**] or the creation, restoration,
augmentation, limitation or elimination of [**] of said [**], including
integrally associated [**] ([**] or [**]) such as [**], [**], [**], [**], and
[**] and [**] components, where the [**] includes the [**].
1.9 "[**] PATENT RIGHTS" shall mean PATENT RIGHTS related to M.I.T. Case
No. [**], "[**]" by Keith Paige, Linda Cima, Charles Vacanti and Anthony Atala
as listed in Appendix A, including all divisionals, continuations and
continuation-in-part applications directed to the subject matter claimed in the
parent applications.
ARTICLE 2 - GRANT
2.1 M.I.T. hereby grants to LICENSEE the exclusive worldwide right and
license under the PATENT RIGHTS to make, have made, use, lease and sell the
LICENSED PRODUCTS and LICENSED SERVICES and to practice the LICENSED PROCESSES
in the FIELD OF USE to the end of the term for which the PATENT RIGHTS are
granted.
2.2 M.I.T. also grants to LICENSEE a first option to add to the PATENT
RIGHTS of this Agreement any patents, patent applications and inventions owned
by M.I.T and/or Children's Hospital (including those jointly owned with third
parties) which are conceived or
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<PAGE>
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
reduced to practice either solely or jointly with others by researchers
associated with the laboratories of (a) Professor Robert S. Langer at M.I.T. or
Children's Hospital, (b) Dr. Joseph P. Vacanti at Children's Hospital and/or (c)
Dr. Anthony Atala at Children's Hospital within four (4) years of the Effective
Date which are dominated by any filed or issued claims of PATENT RIGHTS. This
option shall be restricted to the FIELDS OF USE. M.I.T. shall have the duty to
notify LICENSEE within three (3) months of receipt of a written disclosure of
any such invention. This option shall expire six (6) months from the date at
which M.I.T. notifies LICENSEE of the invention. LICENSEE shall pay to M.I.T. a
License Issue Fee to be negotiated, but not to exceed [**] Dollars ($[**] for
each invention under this Paragraph 2.2 on which a patent application is filed,
excluding additional payments for continuations, divisionals and
continuations-in-part applications which shall be directed to subject matter
specifically described in the original patent application as of the Effective
Date, and all continuations, divisionals and continuation-in-part applications
based on MIT Case [**]. This option shall be subject to the rights of any
sponsor of the research leading to the invention.
2.3 LICENSEE agrees that LICENSED PRODUCTS leased or sold in the United
States shall be, to the extent legally and practically feasible, manufactured
substantially in the United States.
2.4 M.I.T. and Children's Hospital reserves the right to practice under
the PATENT RIGHTS for its own noncommercial research purposes.
2.5 LICENSEE shall have the right to enter into sublicensing agreements
for the rights, privileges and licenses granted hereunder. Upon any termination
of this Agreement, sublicensees' rights shall also terminate, subject to
Paragraph 13.6 hereof
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Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
2.6 LICENSEE agrees that any sublicenses granted by it shall provide that
the obligations to M.I.T. of Articles 2, 5, 7, 8, 9, 10, 12, 13, and 15 of this
Agreement shall be binding upon the sublicensee as if it were a party to this
Agreement. LICENSEE further agrees to attach copies of these Articles to
sublicense agreements.
2.7 LICENSEE agrees to forward to M.I.T. a copy of any and all sublicense
agreements promptly upon execution by the parties.
2.8 The license granted hereunder shall not be construed to confer any
rights upon LICENSEE by implication, estoppel or otherwise as to any technology
not described in any patent or patent application in the PATENT RIGHTS or
addable to the PATENT RIGHTS pursuant to Paragraph 2.2 hereof
2.9 M.I.T. also grants to LICENSEE a nonexclusive worldwide right and
license to use any unpublished know-how and data owned or controlled by M.I.T.
and/or Children's Hospital as of the date of this Agreement required to practice
the rights granted in Paragraphs 2.1 and 2.2 hereof, and M.I.T. shall make such
know-how and data available to LICENSEE upon request to the extent practicable.
2.10 Special Provisions Relating to [**] PATENT RIGHTS. Pursuant to the
provisions of Paragraph 2.1 hereof M.I.T. has granted LICENSEE rights to the
[**] PATENT RIGHTS in the FIELD OF USE defined in Paragraph 1.8 hereof With
respect to the [**] PATENT RIGHTS only, M.I.T. and LICENSEE further agree as
follows:
(a) M.I.T. hereby grants to LICENSEE exclusive rights to the [**]
PATENT RIGHTS only, in all other fields of use, under the terms
and conditions of this Agreement.
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Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
(b) Should M.I.T. or LICENSEE receive a written request from a capable
third party for a license to use the [**] PATENT RIGHTS in a field
of use other than the FIELD OF USE defined in Paragraph 1.8
hereof, which does not compete with the LICENSED PRODUCTS or
LICENSED SERVICES already offered for sale by LICENSEE or in the
process of being developed so as to be available for sale within
[**] as demonstrated by LICENSEE to the reasonable satisfaction of
M.I.T., LICENSEE agrees to negotiate in good faith to grant a
sublicense to said third party. If such negotiation has not been
successfully completed within [**] from the date LICENSEE first
receives such request, M.I.T. shall have the right to grant a
license to said third party for said field of use under
substantially similar, or less favorable, terms to those contained
herein. If M.I.T. grants a license under this provision, M.I.T.
agrees to share [**] Percent ([**]%) of its Net Royalties (defined
as royalties and license fees after the deduction of (1) a [**]
Percent ([**]%) administrative fee, and (2) a [**] Percent ([**]%)
inventors payment) with LICENSEE.
ARTICLE 3 - DUE DILIGENCE
3.1 LICENSEE shall use its reasonable best efforts to bring LICENSED
PRODUCTS and/or LICENSED SERVICES to market through a diligent development
program for exploitation of the PATENT RIGHTS.
3.2 In addition:
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Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
(a) LICENSEE shall use its best efforts to introduce the first
LICENSED PRODUCT or LICENSED SERVICE to commercial sale by [**].
(b) LICENSEE shall use its best efforts to introduce to market
additional LICENSED PRODUCTS or LICENSED SERVICES within [**] of
demonstration of the scientific and technical feasibility of that
particular LICENSED PRODUCT or LICENSED SERVICE, the demonstration
of its clinical effectiveness, and the receipt of required
approvals (if any are required) of regulatory authorities, or,
within [**] of the demonstration of scientific, technical and
clinical feasibility to complete a sublicense agreement for the
marketing of the LICENSED PRODUCT or LICENSED SERVICE with a
competent third party that shall commit the third party to use its
best efforts to bring the LICENSED PRODUCT or LICENSED SERVICE to
market within [**] of the sublicense agreement.
3.3 LICENSEE acknowledges that the primary objective of M.I.T. and
Children's Hospital with respect to the technology of this License Agreement is
to promote development and marketing of LICENSED PRODUCTS and LICENSED SERVICES
for the public good. Toward this end, M.I.T. shall have the right to terminate
this Agreement pursuant to Paragraph 13.3 hereof if LICENSEE fails to perform in
accordance with Paragraph s 3.1 or 3.2(a) above or if LICENSEE suspends its
diligence in performance of any of the development obligations of this Agreement
for more than [**] because of business circumstances such as lack of funds,
merger, acquisition, or the like. Failure to perform in accordance with
Paragraph 3.3 (b) here of shall only give M.I.T. the right to take back rights
granted hereunder as to the particular LICENSED PRODUCT or LICENSED SERVICE, and
products or services which are directly
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Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
competitive to, or replacements of that LICENSED PRODUCT or LICENSED SERVICE,
not introduced or sublicensed, or at M.I.T.'s discretion the fight to bring a
willing sublicense prospect to LICENSEE. However, if LICENSEE can demonstrate to
the satisfaction of M.I.T., at M.I.T.'s sole discretion, that circumstances
beyond LICENSEE's control precluded LICENSEE from fulfilling its diligence
obligations, and that it is unlikely that any third party could overcome these
circumstances better than LICENSEE, then M.I.T. shall not exercise its
termination rights under this Paragraph for [**] from the date at which M.I.T.
gives notice of termination and if LICENSEE reestablishes diligence towards its
objectives during this [**] period, any prior lack of diligence will be deemed
cured.
ARTICLE 4 - ROYALTIES
4.1 For the rights, privileges and license granted hereunder, LICENSEE has
paid to M.I.T. a License Issue Fee of [**] Dollars ($[**]) and issued to M.I.T.
[**] shares of its Common Stock par value $0.01 per share, and shall pay
additional royalties to M.I.T. in the manner hereinafter provided to of the
PATENT RIGHTS or until this Agreement shall be terminated:
(a) Licensee Maintenance Fees of [**] Dollars ($[**]) per year payable
on June 1, 1996 and on June 1 of each year thereafter; provided,
however, that Running Royalties subsequently due on NET SALES for
said year, if any, shall be creditable against the Licensee
Maintenance Fee for said year. License Maintenance Fees paid in
excess of Running Royalties shall not be creditable to Running
Royalties for future years.
(b) Running Royalties in an amount equal to [**] Percent ([**]%) of
NET SALES of the LICENSED PRODUCTS and LICENSED SERVICES leased or
sold by and/or for LICENSEE.
(c) Royalties representing a share of sublicensing revenue received by
LICENSEE for LICENSED PRODUCTS or LICENSED SERVICES sold by the
sublicensee equal to:
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Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
(i) [**] Percent ([**]%) if only the PATENT RIGHTS are
sublicensed; or
(ii) [**] Percent ([**]%) if the sublicense revenue includes
revenue received for the PATENT RIGHTS sublicensed in
conjunction with products developed by LICENSEE and/or
substantial technology developed by LICENSEE;
but in no event shall royalties be less than [**] percent
([**]%) of the NET SALES of the LICENSED PRODUCTS or
LICENSED SERVICES sold by sublicensee;
provided further that an assignment pursuant to paragraph
11 of a this Agreement shall not obligate LICENSEE to make
payments to M.I.T. under this paragraph 4.1(c).
(d) (i) Except as set forth in Paragraph 4.1(d)(iii) hereof,
M.I.T. shall be [**] regarding (A) the [**] by LICENSEE of
[**] of [**] of its [**]; (B) the [**] of any [**],[**] of
[**] or other [**] of LICENSEE [**] or [**] for, or
carrying or accompanied by [**],[**] or [**] to, any [**]
of any [**] of its [**]; or (C) the [**] of any [**] of
[**] to or [**], or any [**] or [**] for the [**] of, any
of the foregoing [**] (the [**] set forth in (A), (B) and
(C) herein referred to as the "[**]").
(ii) Prior to any [**] described in Paragraph 4.1(d)(i) hereof,
LICENSEE shall give M.I.T. at least 30 days' notice, and
M.I.T. shall have the right by notifying LICENSEE within
15 days after receipt of the notice regarding the
[**],[**] or [**], to [**], on the [**] as those of the
[**], a [**] of such [**] equal to M.I.T.'s [**] of [**]
of LICENSEE on a record date not more than 30 days prior
to such [**],[**] or [**]. The price or prices for such
[**] shall not be less favorable to M.I.T. than the price
or prices at which such [**] are proposed to be [**] to
others, without deduction of the expenses of, and
compensation for, the [**],[**] of such [**] by [**] or
[**] as may be paid by LICENSEE.
(iii) Notwithstanding anything contained herein to the contrary,
the provisions of Paragraphs 4.1(d)(i) and (ii) hereof
shall not apply to the issuance, sale or grant by LICENSEE
of any Securities (A) to a bank or other financial
institution in connection with the incurrence of bona fide
indebtedness by LICENSEE or (B) as compensation to
persons, including employees, officers, directors, agents
and consultants of LICENSEE, pursuant to employment or
consulting contracts approved by the Board of Directors of
LICENSEE or specific resolutions or benefit plans adopted
by the Board of Directors of LICENSEE.
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Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
(iv) M.I.T. may transfer [**] Percent ([**]%) of its [**]
to purchase Securities as provided herein to Children's
Hospital.
(e) For the additional rights relating to [**] PATENT RIGHTS granted
pursuant to Paragraph 2.10 hereof, LICENSEE has paid to M.I.T. a
License Fee of [**] Dollars ($[**] and shall pay to M.I.T.:
(i) License Maintenance Fees of [**] Dollars ($[**]) per year,
due on June 1, 1997 and each June 1 thereafter, in
addition to the License Maintenance Fees due under
Paragraph 4.1(b) hereof Running Royalties for all fields
of use for all LICENSED PRODUCTS and LICENSED PROCESSES
under this Agreement shall be creditable against this
License Maintenance Fee as specified in Paragraph 4.1(b)
hereof
(ii) Running Royalties in all fields of use shall be the same
as specified in Paragraph 4.1(c) hereof.
4.2 All payments due hereunder shall be subject to deduction of taxes or
other fees which may be imposed by any government which are paid by LICENSEE.
4.3 No multiple royalties shall be payable because any LICENSED PRODUCT,
its manufacture, use, lease or sale are or shall be covered by more than one
PATENT RIGHTS patent application or PATENT RIGHTS patent licensed under this
Agreement.
4.4 Royalty payments shall be paid in United States dollars in Cambridge,
Massachusetts, or at such other place as M.I.T. may reasonably designate
consistent with the laws and regulations controlling in any foreign country. If
any currency conversion shall be required in connection with the payment of
royalties hereunder, such conversion shall be made by using the exchange rate
prevailing at the Chase Manhattan Bank (N.A.) on the last business day of the
calendar quarterly reporting period to which such royalty payments relate.
4.5 If no patent claims to M.I.T. Case [**] of the PATENT RIGHTS are
allowed in the United States by January 1, 1997, then no royalties or license
maintenance fees which mature after said date shall be due unless and until such
claims are allowed, except if the LICENSED PRODUCT or SERVICE falls under an
issued patent of another M.I.T. Case licensed in this
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Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
Agreement. If such claims to M.I.T. Case [**] are subsequently allowed after
such suspension of royalties, Running Royalties shall thereafter be due on NET
SALES of LICENSED PRODUCTS or SERVICES sold after said allowance of claims, and
License Maintenance Fees that mature after said allowance of claim shall also be
due.
4.6 If after January 1, 1997 claims have been allowed but said claims are
not as broad as the first claim of USSN [**] of Case [**] (as filed), then
M.I.T. and LICENSEE shall meet to renegotiate the Royalty Rates and License
Maintenance Fees in good faith based on the claims that have been allowed and
claims of other patent that have been added to the PATENT RIGHTS of this
Agreement. Similarly, if at any time prior to January 1, 1997 all U.S. patent
prosecution on Case [**] is completed or abandoned, such that no unallowed or
unissued claims are pending, and no claim has been allowed or issued that is as
broad as the first claim of USSN [**] of Case [**] (as filed), then M.I.T. and
LICENSEE shall meet at that time to renegotiate the Royalty Rates and License
Maintenance Fees based on the claims that have been allowed and claims of other
patents which have been added to the PATENT RIGHTS of this Agreement.
4.7 In the event LICENSEE is required to make payments (including without
limitation royalties, option fees or license fees) to one or more third parties,
other than M.I.T., its affiliates, successors or assigns, to obtain a license or
similar right necessary to make, use or sell LICENSED PRODUCTS or to practice or
otherwise make use of the LICENSED PROCESSES, LICENSEE may deduct [**] Percent
([**]%) of such payments from royalties thereafter payable to M.I.T., provided,
however, that in no event shall the royalties due M.I.T. be reduced by more than
[**] ([**]) nor reduced below [**] Percent ([**]%) of NET SALES of the LICENSED
PRODUCTS and LICENSED SERVICES.
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ARTICLE 5 - REPORTS AND RECORDS
5.1 LICENSEE shall keep full, true and accurate books of account
containing all particulars that may be necessary for the purpose of showing the
amounts payable to M.I.T. hereunder. Said books of account shall be kept at
LICENSEE's principal place of business or the principal place of business of the
appropriate division of LICENSEE to which this Agreement relates. Said books and
the supporting data shall be open at all reasonable times and upon reasonable
notice for three (3) years following the end of the calendar year to which they
pertain, to the inspection of a certified public accountant designated by M.I.T.
for the sole purpose of verifying LICENSEE's royalty statement or compliance in
other-respects with this Agreement.
5.2 Prior to the year in which LICENSEE makes the first commercial sale of
a LICENSED PRODUCT or LICENSED SERVICE, LICENSEE shall deliver yearly reports to
M.I.T. within sixty (60) days after the end of each year giving the particulars
of the business conducted by LICENSEE and its sublicensees during the preceding
year which are pertinent. After the first commercial sale of a LICENSED PRODUCT
or LICENSED SERVICE such reports shall be delivered quarterly within sixty (60)
days after the end of each calendar quarter for the preceding quarter. All such
reports shall give particulars of the business pertinent to a royalty accounting
under this Agreement, including at a minimum:
(a) number of LICENSED PRODUCTS and LICENSED SERVICES manufactured and
sold by LICENSEE and all sublicensees;
(b) total billings for LICENSED PRODUCTS and LICENSED SERVICES sold by
LICENSEE and all sublicensees;
(c) revenue received from sublicensees for LICENSED PRODUCTS and
LICENSED SERVICES;
(d) deductions applicable as provided in Paragraph 1.6 hereof,
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Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
(e) total royalties due; and
(f) names and addresses of all sublicensees of LICENSEE.
5.3 With each such report submitted, LICENSEE shall pay to M.I.T. the
royalties due and payable under this Agreement. If no royalties shall be due,
LICENSEE shall so report.
5.4 On or before the ninetieth (90th) day following the close of
LICENSEE's fiscal year, LICENSEE shall provide M.I.T. with LICENSEE's certified
financial statements for the preceding fiscal year including, at a minimum, a
Balance Sheet and an Operating Statement.
5.5 The royalty payments set forth in this Agreement and amounts due under
Article 6 shall, if overdue, bear interest until payment at a per annum rate
[**] percent ([**]%) above the prime rate in effect at the Chase Manhattan Bank
(N.A.) on the due date. The payment of such interest shall not foreclose M.I.T.
from exercising any other rights it may have as a consequence of the lateness of
any payment.
ARTICLE 6 - PATENT PROSECUTION
6.1 M.I.T. and Children's Hospital shall apply for, seek prompt issuance
of, and maintain during the term of this Agreement the PATENT RIGHTS in the
United States and in those foreign countries listed in Appendix B hereto and in
any other foreign country at LICENSEE's request. Appendix B may be amended by
verbal agreement of both parties, such agreement to be confirmed in writing
within ten (10) days. The prosecution, filing and maintenance of all PATENT
RIGHTS patents and applications shall be the primary responsibility of LICENSEE
to the extent that such primary responsibility has not been previously granted
by M.I.T. to Advanced Tissue Sciences, Inc. ("ATS") provided, however, that
MI.T. and Children's Hospital shall have reasonable opportunities to advise
LICENSEE and shall cooperate with LICENSEE in such prosecution, filing and
maintenance, and further provided that LICENSEE shall not abandon any
substantive claims in the PATENT RIGHTS
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Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
without prior permission of M.I.T. or Children's Hospital. In cases where ATS
has the primary responsibility for such prosecution, M.I.T. and Children's
Hospital agree to grant to LICENSEE their rights to advise ATS on prosecution
matters that in LICENSEE's view could affect LICENSEE's rights in the PATENT
RIGHTS in the FIELDS OF USE.
6.2 LICENSEE shall reimburse M.I.T. (or Children's Hospital as
appropriate) for filing, prosecution and maintenance of the following Patent
Rights:
(a) For M.I.T. Case Nos. [**],[**],[**],[**],[**],[**],[**] and
[**];[**] percent ([**]%) of all patent costs incurred for these
cases before the Effective Date of this Agreement and during any
period in which ATS is licensed. to these cases. If the ATS
license is terminated, LICENSEE shall reimburse M.I.T. for all
patenting expenses for these cases incurred thereafter if licensed
only to LICENSEE, and a reasonable share of patenting costs during
any period when there are other licenses to said Patent Rights. To
the best of M.I.T.'s knowledge, all such costs as have been
incurred prior to the Effective Date of this Agreement are set
forth in a letter from M.I.T. to LICENSEE dated the Effective
Date;
(b) For M.I.T. Case Nos. [**],[**],[**], and [**]:[**] Percent ([**]%)
of all patenting costs, whether incurred before or during the
period of this Agreement. To the best of M.I.T.'s knowledge, all
such costs as have been incurred prior to the Effective Date of
this Agreement are set forth in a letter from M.I.T. to LICENSEE
dated the Effective Date;
(c) For M.I.T. Case Nos. [**],[**],[**],[**] and [**], and any new
PATENT RIGHTS added pursuant to Paragraph 2.2 hereof or otherwise
by amendment: [**] Percent ([**]%) of all patenting costs
(including those prior to licensing) if licensed only to LICENSEE,
and a reasonable share of patenting costs during any period when
there are other licensees to said Patent Rights.
(d) For M.I.T. Case [**]: It is understood that MIT has another
licensee to this case, outside the field of use of medical
applications, who is responsible for patenting costs for this
case. Said licensee wishes its identity to remain confidential.
LICENSEE agrees that if this other license is terminated, LICENSEE
shall be responsible for all patenting costs incurred thereafter.
Licensee shall also be responsible for all patenting costs for any
future divisionals, continuations or other derivatives of the
Patent Rights of this case (if any) which are directed solely to
medical applications.
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6.3 If M.I.T. or a third party licensee decides to discontinue paying the
prosecution or maintenance costs of a case in the PATENT RIGHTS, LICENSEE shall
have the right but not the obligation to assume the patenting costs to prevent
abandonment of the rights to such case.
6.4 In the event that M.I.T. or a third party licensee does not elect to
file for patent protection on an invention covered by Paragraph 2.2 hereof,
LICENSEE shall have the right to prepare and file appropriate applications on
such inventions in the name of M.I.T, the costs to be borne by LICENSEE in
accordance with Paragraph 6.2(c) hereof
ARTICLE 7 - INFRINGEMENT
7.1 LICENSEE and M.IT. shall inform the other promptly in writing of any
alleged infringement of the PATENT RIGHTS in the FIELDS OF USE by a third party
and of any available evidence thereof.
7.2 During the term of this Agreement, LICENSEE shall have the right, but
shall not be obligated, to prosecute at its own expense all infringements of the
PATENT RIGHTS in the FIELDS OF USE and, in furtherance of such right, M.I.T.
hereby agrees that LICENSEE may include M.I.T. as a party plaintiff in any such
suit without expense to M.I.T. The total cost of any such infringement action
commenced or defended solely by LICENSEE shall be borne by LICENSEE. No
settlement, consent judgment or other voluntary final disposition of the suit
may be entered into without the consent of M.I.T., which consent shall not
unreasonably be withheld.
7.3 If within six (6) months after learning of any alleged infringement,
LICENSEE shall have been unsuccessful in persuading the alleged infringer to
desist and shall not have brought and shall not be diligently prosecuting an
infringement action, or if LICENSEE shall notify M.I.T. at anytime prior thereto
of its intention not to bring suit against any alleged infringer, then, and in
those events only, M.I.T. shall have the right, but shall not be obligated, to
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Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
prosecute at its own expense any infringement of the PATENT RIGHTS, and M.I.T.
may, for such purposes, use the name of LICENSEE as party plaintiff. M.I.T.
shall indemnify LICENSEE against any order for costs that may be made against
LICENSEE in such proceedings. In the event M.I.T. shall undertake the
enforcement and/or defense of the patent rights by litigation, M.I.T. shall keep
any recovery or damages for patent infringement derived therefrom.
7.4 In the event that LICENSEE shall undertake the enforcement and/or
defense of the PATENT RIGHTS by litigation, LICENSEE may withhold up to [**]
Percent ([**]%) of the payments otherwise thereafter due M.I.T. under Article 4
hereof and apply the same toward reimbursement of up to half of LICENSEE's
expenses, including reasonable attorneys' fees, in connection therewith. Any
recovery of damages by LICENSEE for each such suit shall be applied first in
satisfaction of any unreimbursed expenses and legal fees of LICENSEE relating to
such suit, and next toward reimbursement of M.I.T. for any payments under
Article 4 past due or withheld and applied pursuant to this Article 7. The
balance remaining from any such recovery shall be divided between LICENSEE and
M.I.T. in the proportion of [**]%.
7.5 In the event that M.I.T. (or any third party licensee) shall undertake
the enforcement and/or defense of the PATENT RIGHTS outside the FIELDS OF USE of
this License Agreement, then LICENSEE shall have the right, at its own expense,
to participate in such enforcement or defense, but shall have no rights to any
compensation derived therefrom, except to the extent LICENSEE's legal costs are
awarded.
7.6 In the event that a declaratory judgment action alleging invalidity or
noninfringement of any of the PATENT RIGHTS shall be brought against LICENSEE,
M.I.T., at
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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.
7.7 In any infringement suit that either party may institute to enforce
the PATENT RIGHTS pursuant to this Agreement, the other party hereto shall, at
the request and expense of the party initiating such suit, cooperate in all
respects and, to the extent possible, have its employees testify when requested
and make available relevant records, papers, information, samples, specimens,
and the like.
7.8 LICENSEE, during the exclusive period of this Agreement, shall have
the sole right in accordance with the terms and conditions herein to sublicense
any alleged infringer for future use of the PATENT RIGHTS.
ARTICLE 8 - PRODUCT LIABILITY AND REPRESENTATION
(a) LICENSEE shall indemnify, defend and hold harmless M.I.T. and
Children's Hospital, their trustees, officers, medical and
professional staff, employees, and agents and their respective
successors, heirs and assigns (the "Indemnities"), against any
liability, damage, loss or expense (including reasonable
attorney's fees and expenses of litigation) incurred by or imposed
upon the Indemnitees or any one of them in connection with any
claims, suits, actions, demands or judgments arising out of any
theory of product liability (including, but not limited to,
actions in the form of tort, warranty, or strict liability)
concerning any product, process or service made, used or sold
pursuant to any right or license granted under this Agreement.
(b) LICENSEE's indemnification under (a) above shall not apply to any
liability, damage, loss or expense to the extent that it is
directly attributable to the negligent activities, reckless
misconduct or intentional rnisconduct of the Indemnitees or if any
employee of M.I.T. or Children's Hospital shall use a LICENSED
PRODUCT or LICENSED PROCESS on humans without with the express
written permission of LICENSEE.
(c) LICENSEE agrees, at its own expense, to provide attorneys
reasonably acceptable to the Institution to defend against any
actions brought or filed against any party indemnified hereunder
with respect to the subject of indemnity contained herein, whether
or not such actions are rightfully brought.
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(d) This Section 8.1 shall survive expiration or termination of this
Agreement.
8.2 Insurance
(a) Beginning at the time as any such product, process or service is
being commercially distributed or sold (other than for the purpose
of obtaining regulatory approvals) by LICENSEE or by a
sublicensee, affiliate or agent of LICENSEE, LICENSEE shall, at
its sole cost and expense, procure and maintain comprehensive
general liability insurance in amounts not less than $2,000,000
per incident and $2,000,000 annual aggregate and naming the
Indemnitees as additional insureds. Such comprehensive general
liability insurance shall provide (i) product liability coverage
and (ii) broad form contractual liability coverage for LICENSEE's
indemnification under Section 8.1 of this Agreement. If LICENSEE
elects to self-insure all or part of the limits described above
(including deductibles or retentions which are in excess of
$250,000 annual aggregate), such self-insurance program must be
acceptable to M.I.T. and Children's Hospital and the Risk
Management Foundation of the Harvard Medical Institutions, Inc.
The minimum amount of insurance coverage required under this
Section 8.2 shall not be construed to create a limit of LICENSEE's
liability with respect to its indemnification under Section 8.1 of
this Agreement.
(b) LICENSEE shall provide M.I.T. with written evidence of such
insurance upon request of M.I.T. LICENSEE shall provide M.I.T.
with written notice at least fifteen (15) days prior to the
cancellation, non-renewal or material change in such insurance; if
LICENSEE does not obtain replacement insurance providing
comparable coverage within such fifteen (15) day period, M.I.T.
shall have the right to terminate this Agreement effective at the
end of such fifteen (15) day period without notice of any
additional waiting periods.
(c) LICENSEE shall maintain such comprehensive general liability
insurance during
(i) the period that any such product process or service is being
commercially distributed or sold (other than for the purpose
of obtaining regulatory approvals) by LICENSEE or by a
sublicensee, affiliate or agent of LICENSEE, and
(ii) a reasonable period after the period referred to in (c)(i)
above which in no event shall be less than fifteen (15)
years.
(d) This Section 8.2 shall survive expiration or termination of this
Agreement.
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Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
8.3 M.I.T. represents and warrants that it owns the United States and
corresponding foreign patents and applications included within the PATENT RIGHTS
of Appendix A, and that, to the best of its knowledge, the claims of the PATENT
RIGHTS of Appendix A are valid, patentable and enforceable. M.I.T. further
represents and warrants that it co-owns certain of the PATENT RIGHTS with
Children's Hospital, and that Children's Hospital has empowered M.I.T.
unilaterally to grant the licenses hereunder as evidenced by the agreement
attached hereto as Appendix C. M.I.T. represents and warrants that it is free of
any obligations preventing M.I.T. from providing to LICENSEE the rights and
licenses granted herein. M.I.T.'s and Children's Hospital's total liability for
such representations and those of Paragraph 8.4 hereof is limited to the extent
of patent costs, license fees, license maintenance fees, and royalties paid to
M.I.T. by LICENSEE under this Agreement.
8.4 M.I.T. hereby represents that, to the best of its knowledge as of the
Effective Date of this Agreement, there do not exist any M.I.T. or Children's
Hospital patents or pending patents, other than the PATENT RIGHTS of this
Agreement which would be infringed by the practice of the PATENT RIGHTS of this
Agreement as taught in the PATENT RIGHTS of M.I.T. Case [**] as originally filed
or which would otherwise prevent the practice of any of the claims described in
the patents and patent applications fisted in M.I.T. Case [**] as originally
filed. If, however, such M.I.T. or Children's Hospital patents or patent
applications are subsequently found to have existed prior to that date, or if
such M.I.T. or Children's Hospital patents or patent applications exist during
the term of the license of PATENT RIGHTS granted hereunder, M.I.T. shall grant
to LICENSEE, to the extent then-existing agreements with third parties allow, a
fully paid-up nonexclusive license to such patents and/or patent applications,
to the extent necessary for the practice of the PATENT RIGHTS of this Agreement.
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<PAGE>
8.5 EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, M.I.T.
MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS
OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE, AND VALIDITY OF PATENT RIGHTS CLAIMS, ISSUED OR
PENDING.
ARTICLE 9 - EXPORT CONTROLS
It is understood that M.I.T. is subject to United States laws and
regulations controlling the export of technical data, computer software,
laboratory prototypes and other commodities (including the Arms Export Control
Act, as amended, and the Export Administration Act of 1979), and that its,
obligations hereunder are contingent on compliance with applicable United States
export laws and regulations. The transfer of certain technical data and
commodities may require a license from the cognizant agency of the United States
Government and/or written assurances by LICENSEE that LICENSEE shall not export
data or commodities to certain foreign countries without prior approval of such
agency. M.I.T. neither represents that a license shall not be required nor that,
if required, it shall be issued.
ARTICLE 10 - NON-USE OF NAMES
LICENSEE shall not use the names or trademarks of the Massachusetts
Institute of Technology or Children's Hospital, nor any adaption thereof nor the
names of any of their employees; in any advertising, promotional or sales
literature without prior written consent obtained from M.I.T., Children's
Hospital, or said employee, in each case, except that LICENSEE may state that it
is licensed by M.I.T. under one or more of the patents and/or applications
comprising the PATENT RIGHTS.
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<PAGE>
ARTICLE 11 - ASSIGNMENT
This Agreement may be assigned only in connection with (a) a change in
name or legal status of LICENSEE that does not affect the nature of its business
activities or (b) the sale of substantially all the assets of the business to
which the PATENT RIGHTS relates or a separable business unit related to a
particular LICENSED PRODUCT or LICENSED SERVICE with the written permission of
M.I.T., which shall not be unreasonably withheld, or (c) otherwise with the
written permission of M.I.T., which shall not be unreasonably withheld.
ARTICLE 12 - DISPUTE RESOLUTION
12.1 Except for the right of either party to apply to a court of competent
jurisdiction for a temporary restraining order, a preliminary injunction, or
other equitable relief to preserve the status quo or prevent irreparable harm,
any and all claims, disputes or controversies arising under, out of, or in
connection with the Agreement including any dispute relating to patent validity
or infringement, which the parties shall be unable to resolve within sixty (60)
days shall be mediated in good faith. The party raising such dispute shall
promptly advise the other party of such claim, dispute or controversy in a
writing which describes in reasonable detail the nature of such dispute. By not
later than five (5) business days after the recipient has received such notice
of dispute, each party shall have selected for itself a representative who shall
have the authority to bind such party, and shall additionally have advised the
other party in writing of the name and title of such representative. By not
later than ten (10) business days after the date of such notice of dispute, such
representatives shall schedule a date for a mediation hearing with the Cambridge
Dispute Settlement Center or Endispute Inc. in Cambridge, Massachusetts. The
parties shall enter into good faith mediation and shall share the costs equally.
If the representatives of the parties have not been able to resolve the dispute
within fifteen (15) business days after such mediation hearing, the parties
shall have the right to pursue any other
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<PAGE>
remedies legally available to resolve such dispute in either the Courts of the
Commonwealth of Massachusetts or in the United States District Court for the
District of Massachusetts, to whose jurisdiction for such purposes M.I.T. and
LICENSEE each hereby irrevocably consents and submits.
12.2 Notwithstanding the foregoing, nothing in this Article shall be
construed to waive any rights or timely performance of any obligations existing
under this Agreement.
ARTICLE 13 - TERMINATION
13.1 Unless sooner terminated in a manner herewith provided, this
Agreement and the licenses herein granted shall continue in force until the
last-to-expire of the patents included in the PATENT RIGHTS.
13.2 Should LICENSEE fail to make any payment whatsoever due and payable
to M.I.T. hereunder, M.I.T. shall have the right to terminate this Agreement
effective on sixty (60) days' prior written notice, unless LICENSEE shall make
all such payments to M.I.T. within said sixty (60) day period. Upon the
expiration of the sixty (60) day period, if LICENSEE shall not have made all
such payments to M.I.T. or, in the case of a dispute as to royalties due,
commenced the dispute resolution procedures contemplated by Article 12 hereof,
the rights, privileges and license granted hereunder shall automatically
terminate.
13.3 Upon any material breach or default of this Agreement by LICENSEE,
other than those occurrences set out in Paragraph 13.1 and 13.2 hereof, which
shall always take precedence in that order over any material breach or default
referred to in this Paragraph 13.3, M.I.T. shall have the right to terminate
this Agreement and the rights, privileges and license granted hereunder
effective on ninety (90) days prior written notice to LICENSEE. Such termination
shall become automatically effective unless LICENSEE shall have cured any such
material breach or default prior to the expiration of the ninety (90) day
period.
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<PAGE>
13.4 LICENSEE shall have the right to terminate this Agreement at any time
on ninety (90) days' prior written notice to M.I.T., and upon payment of all
amounts due M.I.T. through the effective date of the termination.
13.5 Upon termination of this Agreement for any reason, nothing herein
shall be construed to release either party from any obligation that matured
prior to the effective date of such termination. LICENSEE and any sublicensee
thereof may, however, after the effective date of such termination, sell all
LICENSED PRODUCTS and LICENSED SERVICES, and complete LICENSED PRODUCTS in the
process of manufacture at the time of such termination and sell the same,
provided that LICENSEE shall pay to M.I.T. the Running Royalties thereon as
required by Article 4 hereof and shall submit the reports required by Article 5
hereof on the sales of LICENSED PRODUCTS and LICENSED SERVICES.
13.6 Upon termination of this Agreement for any reason, any sublicense not
then in default shall have the right to seek a license from M.I.T. M.I.T. agrees
to negotiate such licenses in good faith under reasonable terms and conditions.
ARTICLE 14 - PAYMENTS, NOTICES
AND OTHER COMMUNICATIONS
Any payment, notice or other communication pursuant to this Agreement
shall be sufficiently made or given on the date of mailing if sent to such party
by certified first class mail, postage prepared, addressed to it at its address
below or as it shall designate by written notice given to the other party:
In the case of M.I.T.:
Director
Technology Licensing Office
Massachusetts Institute of Technology
Room E32-300
Cambridge, Massachusetts 02139
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<PAGE>
In the case of LICENSEE:
Mr. Bruce Parker
President
Parker Medical Assoc.
2401 Distribution Street
Charlotte, N.C. 28203
ARTICLE 15 - MISCELLANEOUS PROVISIONS
15.1 This Agreement shall be construed, governed, interpreted and applied
in accordance with the laws of the Commonwealth of Massachusetts, U.S.A., except
that questions affecting the construction and effect of any patent shall be
determined by the law of the country in which the patent was granted.
15.2 The parties hereto acknowledge that this Agreement sets forth the
entire Agreement and understanding of the parties hereto as to the subject
matter hereof, and shall not be subject to any change or modification except by
the execution of a written instrument subscribed to by the parties hereto.
15.3 The provisions of this Agreement are severable, and in the event that
any provisions of this Agreement shall be determined to be invalid or
unenforceable under any controlling body of the law, such invalidity or
unenforceability shall not in any way affect the validity or enforceability of
the remaining provisions hereof.
15.4 LICENSEE agrees to mark the LICENSED PRODUCTS sold in the United
States with all applicable United States patent numbers. All LICENSED PRODUCTS
shipped to or sold in other countries shall be marked in such a manner as to
conform with the patent laws and practice of the country of manufacture or sale.
15.5 The failure of either party to assert a right hereunder or to insist
upon compliance with any term or condition for this Agreement shall not
constitute a waiver of that right or excuse a similar subsequent failure to
perform any such term or condition by the other party.
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<PAGE>
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
15.6 A party to this Agreement shall be excused from liability for delay
in the performance of any of its obligations hereunder if such delay is due to
causes beyond its reasonable control including, without limitation, acts of God,
fires, earthquakes, strikes and labor disputes, acts of war, or intervention of
any governmental authority, but any such delay or failure shall be remedied by
such party as soon as is reasonably possible.
15.7 Special Provisions Relating to AMS. M.I.T. has reviewed the Research
and Development Agreement (the "R&D Agreement") and the Supply and Marketing
Agreement (the "S&M Agreement") between LICE . NSEE and American Medical
Systems, Inc. ("AMS") (copies of which have been delivered to M.I.T.), and:
(a) M.I.T. hereby agrees that AMS is deemed to be a sublicensee under
this Agreement and that the licenses granted to AMS pursuant to
the R&D Agreement and the S&M Agreement meet the sublicense
requirements of the License Agreement.
(b) For purposes of transactions and other matters under or to the
extent affecting the rights and obligations of the parties under
the R&D Agreement and the S&M Agreement only, the provisions of
this Agreement are amended and supplemented as follows:
(i) "NET SALES" has the same definition as Net Sales under the
S&M Agreement.
(ii) With respect to distribution of LICENSED PRODUCTS and
LICENSED SERVICES (as such terms are defined in this
Agreement) under or pursuant to the S&M Agreement or
Section 9.4 of the R&D Agreement, Running Royalties will
be equal to the greater of [**] percent ([**]%) of Net
Sales, as defined in the S&M Agreement or [**] ([**]) of
royalties accrued to LICENSEE on such Net Sales, and no
royalties will be due on the Transfer Price, as defined in
the S&M Agreement paid to LICENSEE therefor. Annual and
quarterly reports under Paragraph 5.2 hereof will be due
ninety (90) days after the end of the applicable calendar
year or quarter. AMS financial statements will be
sufficient for purposes of this Agreement if certified by
the chief financial officer or controller of AMS as
prepared in accordance with generally accepted accounting
principles consistently applied by AMS and if limited to
transactions resulting in Running Royalties.
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<PAGE>
(iii) In the event M.I.T. issues any notice under Paragraph 2.2,
13.2 or 13.3 hereof, M.I.T. will simultaneously deliver a
copy thereof to AMS by certified first class mail, postage
prepaid, addressed as follows or as otherwise designated
by AMS by written notice to M.I.T.:
American Medical Systems, Inc.
10700 Bren Road West
Minneapolis, Minnesota 55343
Attn: David Booth, President
(iv) M.I.T. may terminate this Agreement pursuant to Paragraph
13.2 or 13.3 hereof with respect to the applications
within the FIELD OF USE (as defined in this Agreement)
other than tissue engineering applications in the human
urological field without terminating this Agreement with
respect to tissue engineering applications in the human
urological field within the FIELD OF USE. In the event of
any failure to make any payment under this Agreement or
other material breach or default of this Agreement that
does not relate to tissue engineering applications in the
human urological field within the FIELD OF USE, M.I.T.
will not terminate this Agreement with respect to tissue
engineering applications in the human urological field
within the FIELD OF USE.
(v) Any termination of this Agreement with respect to tissue
engineering applications in the human urological field
within the FIELD OF USE by LICENSEE pursuant to Paragraph
13.4 hereof requires the prior written consent of AMS to
be effective.
(vi) This Agreement will not be modified in any manner
adversely affecting tissue engineering applications in the
human urological field within the FIELD OF USE without the
prior written consent of AMS, which is an intended third
party beneficiary of the provisions of this Paragraph 15.7
as so amended and supplemented as a sublicensee hereunder.
Without limiting the generality of the foregoing, any
modification of this Agreement by addition of patent
rights under Paragraph 2.2 hereof will not require such
written consent.
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<PAGE>
IN WITNESS WHEREOF, the parties have duly executed this Amended and
Restated Agreement the day and year set forth below.
MASSACHUSETTS INSTITUTE OF TECHNOLOGY
By /s/ Lita Nelson
---------------
Name Lita L. Nelson
--------------
Title Director Technology Licensing Office
------------------------------------
Date: July 1, 1996
REPROGENESIS, INC.
By /s/ A. Bruce Parker
-------------------
Name: A. Bruce Parker
Title: President
Date: July 1, 1996
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<PAGE>
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
APPENDIX
UNITED STATES PATENT RIGHTS
M.I.T. Case [**]
"[**]"
By Joachim Kohn and Robert S. Langer
U.S. Patent[**] Issued [**]
M.I.T. Case [**]
"[**]"
By Joachim Kohn and Robert S. Langer
U.S. Patent [**] Issued [**]
M.I.T. Case [**]
"[**]"
By Joseph P. Vacanti and Robert S. Langer
U.S.S.N. [**] Filed [**]
U.S.S.N. [**] Filed [**]
U.S.S.N. [**] Filed [**]
PCT/US[**] Filed [**]
JAP S.N. [**] Filed [**]
EPC S.N. [**] Filed [**]
M.I.T. Case [**]
"[**]"
By Abraham J. Domb, Robert S. Langer, Ernest G. Cravalho, Gerson Gollomb, Edith
Mathiowitz and Cato T. Laurencin
U.S.S.N. [**] Filed [**]
U.S.S.N. [**] Filed [**]
JP S.N.___ Filed [**]
EPC [**] Filed [**]
CAN [**] Filed [**]
M.I.T. Case [**]
"[**]"
By Robert S. Langer, Charles A. Vacanti and Joseph P. Vacanti
U.S. Patent [**] Issued [**]
U.S.S.N. [**] Filed [**]
PCT S.N. PCT IUS[**] Filed [**]
M.I.T. Case [**]
"[**]"
By Lynt Johnson, Robert S. Langer and Joseph P. Vacanti
U.S.S.N. [**] Filed [**]
U.S.S.N. [**] Filed [**]
NO S.N. Filed [**]
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<PAGE>
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
KR S.N. Filed [**]
JP S.N. 1-[**] Filed [**]
F1 S.N. Filed [**]
EPC S.N. [**] Filed [**]
CAN S.N. [**] Filed [**]
AU S.N. [**] Filed [**]
M.I.T. Case [**]
"[**]"
By Robert S. Langer, Antonios G. Mikos and Georgios Sarakfnos
To be filed at M.I.T.'s discretion.
M.I.T. Case No. [**]
"[**]"
By Robert S. Langer, Jr. and Joseph P. Vacanti
U.S.S.N. [**] Filed [**]
PCT S.N. PCT/LJS/[**] Filed [**]
M.I.T. Case No. [**] (CMCC #[**])
"[Neomorphogenesis of Urological Structures In Vivo From Cell]"
By Anthony Atala, Michael R. Freeman, Robert S. Langer and Joseph Vacanti
U.S.S.N. [**] Filed [**]
U.S.S.N. [**] Filed [**]
PCT S.N. PCT/US[**] Filed [**]
M.I.T. Case No. [**] (CMCC [**])
"[**]"
By J. Vacanti and R. Langer
M.I.T. Case No. [**] (CMCC [**])
"[**]"
By J. Vacanti, J. Upton and R. Ortiz-Colberg
M.I.T. Case No. [**] (CMCC [**])
"[**]"
By K. Paige, L Cima, T. Atala and C. Vacanti
U.S.S.N. [**] Filed [**]
PCT S.N. PCT/US[**] Filed [**]
JAP S.N. [**] Filed [**]
EPC S.N. [**] Filed [**]
CAN S.N. [**] Filed [**]
AUS S.N. [**] Filed [**]
M.I.T. Case No. [**] (CMCC [**])
"[**]"
By A. Atala, A. Vacanti, L. Cima, and J. Vacanti
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<PAGE>
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
M.I.T Case No. [**] CMCC #[**]
"[**]"
By A. Atala, R. S. Langer and Joseph Vacanti
M.I.T. Case [**] CMCC #[**]
"[**]"
By A. Atala, R. S. Langer and Joseph Vacanti
MIT Case [**]
"[**]"
By R. Langer, A. Mikos, D. Ingber and J. Vacanti
U.S.S.N. [**] Filed [**]
PCT S.N. PCT/US[**] Filed [**]
MIT Case [**]
"[**]"
By A. Mikos, R. Langer
U.S.S.N. [**] Filed [**]
M.I.T. Case No. [**]
"[**]"
By A. Atala,
U.S.S.N. [**] Filed [**]
U.S.S.N. ________ Filed [**]
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<PAGE>
APPENDIX B
Foreign countries in which PATENT RIGHTS shall be filed, prosecuted and
maintained in accordance with Article 6:
Canada
Great Britain
France
Germany
Italy
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<PAGE>
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
FIRST AMENDMENT TO RESTATED LICENSE AGREEMENT
This Amendment is to the License Agreement dated July 1, 1996 between
M.I.T. and REPROGENESIS, INC. The parties thereto now further agree as follows:
1. M.I.T. acknowledges that Reprogenesis has used reasonable efforts to
meet the milestone of paragraph 3.2(a) of the License Agreement, and
although a LICENSED PRODUCT or LICENSED SERVICE will not be introduced
by [**], M.I.T. will not use this fact to attempt termination of the
License Agreement under paragraph 3.3.
2. Paragraph 3.2(a) of the License Agreement shall be amended to read:
3.2 (a) LICENSEE shall use best efforts to introduce the first
LICENSD PRODUCT or LICENSED SERVICE to commercial sale by
[**].
Agreed to for:
MASSACHUSETTS INSTITUTE OF TECHNOLOGY REPROGENESIS, INC.
By: /s/ Lita Nelson By: /s/ Daniel R. Omstead
--------------- ---------------------
Name: Lita Nelston Name: Daniel R. Omstead
Title: Director Technology Title: President
Licensing Office
Date: June 9, 1999 Date: 6/9/99
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<PAGE>
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
SECOND AMENDMENT
TO THE AMENDED AND RESTATED LICENSE AGREEMENT
This Second Amendment with the Effective Date of ________ is to the
Amended and Restated License Agreement dated July 1, 1996 between M.I.T. and
REPROGENESIS, INC. ("License Agreement").
Pursuant to Paragraph 2.2 of the License Agreement, the parties thereto
further agree as follows:
1. The inventions(s) disclosed and claimed in the following applications
shall be added to the PATENT RIGHTS as defined in Paragraph 1.2 of the
License Agreement:
M.I.T. Case No. [**] (CMCC [**])
"[**]"
by Anthony Atala
U.S. Provisional Application No. [**]
Filed October 31, 1997
PCT Application No. PCT/US[**]
Filed [**]
2. LICENSEE shall pay to M.I.T. a License Issue Fee of [**] ($[**]) for
the above-identified rights.
3. In addition to Paragraph 3.2 of the License Agreement, LICENSEE agrees
to the following Due Diligence Milestones specific to the development of
LICENSED PRODUCTS which fall under M.I.T. Case No. [**] (CMCC [**]):
(a) LICENSEE shall file an IDE, IND, or equivalent on a LICENSED
PRODUCT within [**] of the Effective Date of this Second
Amendment.
(b) LICENSEE shall maintain a clinical development program in
accordance with industry standards for comparable products until
market approval.
(c) LICENSEE shall introduce a LICENSED PRODUCT in the bladder field
to the market within [**] of the Effective Date of this Second
Amendment.
4. This Amendment is made as a part of the settlement of a disagreement
concerning the proper scope of Paragraph 2.2 of the License Agreement and
is not to be taken as either an admission of or denial by M.I.T. (for
itself or on behalf of the Children's Medical Center Corporation) that
CMCC Cases [**], and/or [**] are dominated by the claims of the M.I.T.
Case No. [**] as originally filed.
5. Any option rights LICENSEE may have under Paragraph 2.2 of the License
Agreement to CMCC Cases [**],[**],[**], and [**] and Children's Hospital's
right to license these cases shall be modified in accordance with the
Agreements dated February 22, 2000, attached to this Second Amendment for
reference purposes only.
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<PAGE>
Agreed to for:
MASSACHUSETTS INSTITUTE OF
TECHNOLOGY REPROGENESIS, INC.
By: /s/_______________________________ By: /s/______________________________
Name: ________________________________ Name:________________________________
Title:________________________________ Title:_______________________________
Date: ________________________________ Date:________________________________
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<PAGE>
Exhibit 10.34
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
CONFIDENTIAL
MASSACHUSETTS INSTITUTE OF TECHNOLOGY
and
REPROGENESIS, INC.
PATENT LICENSE AGREEMENT
(EXCLUSIVE)
<PAGE>
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
Patent Exclusive IA/ra: [**].Reprogenesis
Date: October 30, 1996
TABLE OF CONTENTS
WITNESSETH...................................................................1
1 - DEFINITIONS..............................................................2
2 - GRANT....................................................................4
3 - DILIGENCE................................................................6
4 - ROYALTIES................................................................7
5 - REPORTS AND RECORDS......................................................9
6 - PATENT PROSECUTION......................................................11
7 - INFRINGEMENT............................................................11
8 - PRODUCT LIABILITY.......................................................13
9 - EXPORT CONTROLS.........................................................15
10 - NON-USE OF NAMES.......................................................15
11 - ASSIGNMENT.............................................................16
12 - DISPUTE RESOLUTION.....................................................16
13 - TERMINATION............................................................17
14 - PAYMENTS, NOTICES AND OTHER COMMUNICATIONS.............................18
15 - MISCELLANEOUS PROVISIONS...............................................19
APPENDIX A..................................................................20
<PAGE>
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
MASSACHUSETTS INSTITUTE OF TECHNOLOGY
and
REPROGENESIS, INC.
PATENT LICENSE AGREEMENT
This Agreement is made and entered into this ______ day of ____________,
1996, (the "EFFECTIVE DATE") by and between the MASSACHUSETTS INSTITUTE OF
TECHNOLOGY, a corporation duly organized and existing under the laws of the
Commonwealth of Massachusetts and having its principal office at 77
Massachusetts Avenue, Cambridge, Massachusetts 02139, U.S.A. (hereinafter
referred to as "M.I.T."), and REPROGENESIS, INC., a corporation duly organized
under the laws of Texas and having its principal office at 10 Sylvan Drive,
Suite 27, St. Simons Island, Georgia 31522, U.S.A. (hereinafter referred to as
"LICENSEE").
WITNESSETH
WHEREAS, M.I.T. is the owner of certain PATENT RIGHTS (as later defined
herein) relating to M.I.T. Case No. [**], "[**]" by Elazer Edelman, Robert
Langer, Michael Klagsburn and Edith Mathiowitz, U.S. Patent No. [**], Issued
[**], and M.I.T. Case No. [**], "[**]" by Elazer Edelman, Aruna Natha and
Matthew Nugent and has the right to grant licenses under said PATENT RIGHTS,
subject only to a royalty-free, nonexclusive license heretofore granted to the
United States Government;
WHEREAS, M.I.T. desires to have the PATENT RIGHTS developed and
commercialized to benefit the public and is willing to grant a license
thereunder;
WHEREAS, LICENSEE has represented to M.I.T., to induce M.I.T. to enter
into this Agreement, that LICENSEE is experienced in the development,
production, manufacture, marketing and sale of products similar to the LICENSED
PRODUCT(s) (as later defined herein)
<PAGE>
and/or the use of the LICENSED PROCESS(es) (as later defined herein) and that it
shall commit itself to a thorough, vigorous and diligent program of exploiting
the PATENT RIGHTS so that public utilization shall result therefrom; and
WHEREAS, LICENSEE desires to obtain a license under the PATENT RIGHTS upon
the terms and conditions hereinafter set forth.
WHEREAS, LICENSEE and M.I.T. entered into a separate royalty bearing
License Agreement dated December 23, 1993.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto agree as follows:
1 - DEFINITIONS
For the purposes of this Agreement, the following words and phrases shall
have the following meanings:
1.1. "LICENSEE" shall include a related company of REPROGENESIS, INC., the
voting stock of which is directly or indirectly at least Fifty Percent (50%)
owned or controlled by REPROGENESIS, INC., an organization which directly or
indirectly controls more than Fifty Percent (50%) of the voting stock of
REPROGENESIS, INC. and an organization, the majority ownership of which is
directly or indirectly common to the ownership of REPROGENESIS, INC.
1.2. "PATENT RIGHTS" shall mean all of the following M.I.T. intellectual
property:
a. the United States patent applications listed in Appendix A, and
divisionals, continuations and claims of continuation-in-part
applications which shall be directed to subject matter supported
by such patent applications, and the resulting patents;
b. any patents resulting from reissues or reexaminations of the
United States patents described in a. above;
c. the Foreign patents listed in Appendix A;
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<PAGE>
d. the Foreign patent applications listed in Appendix A, and
divisionals, continuations and claims of continuation-in-part
applications which shall be directed to subject matter supported
by such Foreign patent applications, and the resulting patents;
e. Foreign patent applications filed after the EFFECTIVE DATE and
divisionals, continuations and claims of continuation-in-part
applications which shall be directed to subject matter
specifically supported by such patent applications, and the
resulting patents; and
f. any Foreign patents, resulting from equivalent Foreign procedures
to United States reissues and reexaminations, of the Foreign
patents described in c. above.
1.3 A "LICENSED PRODUCT" shall mean any product or part thereof which:
a. is covered in whole or in part by a claim that has not expired or
been held invalid by a court of competent Jurisdiction or by a
pending claim contained in the PATENT RIGHTS in the country in
which any such product or part thereof is made, used or sold; or
b. is manufactured by using a process or is employed to practice a
process which is covered in whole or in part by a claim that has
not expired or been held invalid by a court of competent
jurisdiction or by a pending claim contained in the PATENT RIGHTS
in the country in which any LICENSED PROCESS is used or in which
such product or part thereof is used or sold.
1.4 A "LICENSED PROCESS" shall mean any process which is covered in whole
or in part by a claim that has not expired or been held invalid by a court of
competent jurisdiction or by a pending claim contained in the PATENT RIGHTS.
1.5 A "LICENSED SERVICE" shall mean any fee-bearing service performed by
LICENSEE or any sublicensee which uses a LICENSED PRODUCT or practices a
LICENSED PROCESS.
1.6 "NET SALES" shall mean LICENSEE's (and its sublicensees') billings to
a third party for LICENSED PRODUCTS, LICENSED PROCESSES and LICENSED SERVICES
produced hereunder less the sum of the following:
a. discounts allowed in amounts customary in the trade;
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<PAGE>
b. sales, tariff duties and/or use taxes directly imposed and with
reference to particular sales;
c. outbound transportation prepaid or allowed;
d. insurance;
e. amounts allowed or credited on returns; and
f. bad debts.
Sales between LICENSEE and any of its affiliates or any of its
sublicensees, or between any of said affiliates or sublicensees, shall not be
included in such computation. No deductions shall be made for commissions paid
to individuals, whether they be with independent sales agencies or regularly
employed by LICENSEE and on its payroll, or for cost of collections. LICENSED
PRODUCTS shall be considered "sold" upon the earlier of receipt of payment or
six months after billed out or invoiced.
1.7 "TERRITORY" shall mean worldwide.
1.8 "FIELD OF USE" shall mean all.
2 - GRANT
2.1 M.I.T. hereby grants to LICENSEE the right and license in the
TERRITORY for the FIELD OF USE to practice under the PATENT RIGHTS and, to the
extent not prohibited by other patents, to make, have made, use, lease, offer
for sale, sell and import LICENSED PRODUCTS and LICENSED SERVICES, and to
practice the LICENSED PROCESSES, until the expiration of the last to expire of
the PATENT RIGHTS, unless this Agreement shall be sooner terminated according to
the terms hereof.
2.2 LICENSEE agrees that LICENSED PRODUCTS leased or sold in the United
States shall be manufactured substantially in the United States.
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2.3 In order to establish a period of exclusivity for LICENSEE, M.I.T.
hereby agrees that it shall not grant any other license to make, have made, use,
lease, offer for sale, sell and import LICENSED PRODUCTS or LICENSED SERVICES;
or to utilize LICENSED PROCESSES subject to the royalty-free, nonexclusive
license rights of the United States Government per FAR 52.227-11, in the
TERRITORY for the FIELD OF USE during the period of time commencing with the
EFFECTIVE DATE and terminating with the last to expire of the PATENT RIGHTS.
2.4 M.I.T. reserves the right to practice under the PATENT RIGHTS for
noncommercial research purposes.
2.5 LICENSEE shall have the right to enter into sublicensing agreements
for the rights, privileges and licenses granted hereunder. Upon any termination
of this Agreement, sublicensees' rights shall also terminate, subject to
Paragraph 13.6 hereof.
2.6 LICENSEE agrees to incorporate terms and conditions substantively
similar to Articles 2, 5.1, 7.1, 7.2, 7.3, 7.5, 7.6, 8, 9, 10, 12 and 15 of this
Agreement into its sublicense agreements, that are sufficient to enable LICENSEE
to comply with this Agreement.
2.7 LICENSEE agrees to forward to M.I.T. a copy of any and all sublicense
agreements promptly upon execution by the parties.
2.8 LICENSEE shall not receive from sublicensees anything of value in lieu
of cash payments in consideration for any sublicense under this Agreement,
without the express prior written permission of M.I.T.
2.9 Nothing in this Agreement shall be construed to confer any rights upon
LICENSEE by implication, estoppel or otherwise as to any technology or patent
rights of M.I.T.
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Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
or any other entity other than the PATENT RIGHTS, regardless of whether such
patent rights shall be dominant or subordinate to any PATENT RIGHTS.
3 - DILIGENCE
3.1 LICENSEE shall use its reasonable best efforts to bring LICENSED
PRODUCTS and/or LICENSED SERVICES to market through a diligent development
program for exploitation of the PATENT RIGHTS.
3.2 In addition:
a. LICENSEE shall use its best efforts to introduce the first
LICENSED PRODUCT or LICENSED SERVICE to commercial sale by [**].
b. LICENSEE shall use its best efforts to introduce to market
additional LICENSED PRODUCTS or LICENSED SERVICES within [**] of
demonstration of the scientific and technical feasibility of that
particular LICENSED PRODUCT or LICENSED SERVICE, the demonstration
of its clinical effectiveness, and the receipt of required
approvals (if any are required) of regulatory authorities, or,
within [**] of the demonstration of scientific, technical and
clinical feasibility to complete a sublicense agreement for the
marketing of the LICENSED PRODUCT or LICENSED SERVICE with a
competent third party that shall commit the third party to use its
best efforts to bring the LICENSED PRODUCT or LICENSED SERVICE to
market within [**] of the sublicense agreement.
3.3 LICENSEE acknowledges that the primary objective of M.I.T. with
respect to the technology of this License Agreement is to promote development
and marketing of LICENSED PRODUCTS and LICENSED SERVICES for the public good.
Toward this end, M.I.T. shall have the right to terminate this Agreement
pursuant to Paragraph 13.3 hereof if LICENSEE fails to perform in accordance
with Paragraphs 3.1 or 3.2(a) above or if LICENSEE suspends its diligence in
performance of any of the development obligations of this Agreement for more
than [**] because of business circumstances such as lack of funds, merger,
acquisition, or the like. Failure to perform in accordance with Paragraph 3.3(b)
hereof shall only give M.I.T. the right to take back rights granted hereunder as
to the particular LICENSED PRODUCT or LICENSED
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Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
SERVICE, and products or services which are directly competitive to, or
replacements of that LICENSED PRODUCT or LICENSED SERVICE, not introduced or
sublicensed, or at M.I.T.'s discretion the right to bring a willing sublicense
prospect to LICENSEE. However, if LICENSEE can demonstrate to the satisfaction
of M.I.T., at M.I.T.'s sole discretion, that circumstances beyond LICENSEE's
control precluded LICENSEE from fulfilling its diligence obligations, and that
it is unlikely that any third party could overcome these circumstances better
than LICENSEE, then M.I.T. shall not exercise its termination rights under this
Paragraph for [**] from the date at which M.I.T. gives notice of termination and
if LICENSEE reestablishes diligence towards its objectives during this [**]
period, any prior lack of diligence will be deemed cured.
4 - ROYALTIES
4.1 For the rights, privileges and license granted hereunder, LICENSEE
shall pay royalties to M.I.T. in the manner hereinafter provided to the end of
the term of the PATENT RIGHTS or until this Agreement shall be terminated:
a. License Issue Fee of [**], which said License Issue Fee shall be
deemed earned and due immediately upon the EFFECTIVE DATE.
b. Patent Issue Fee of [**], which shall be due upon issuance of the
first patent claims of M.I.T. Case No. 6584, "Inhibition of
Vascular Occlusion Following Vascular Intervention" by Elazer
Edelman, Aruna Natha and Matthew Nugent.
c. License Maintenance Fees of [**] per year payable on January 1,
1999 and on January I of each year thereafter until the issuance
of the first patent claims, and License Maintenance Fees of [**]
per year payable on each January 1 after the issuance of the first
patent claims, provided, however, License Maintenance Fees may be
credited to Running Royalties subsequently due on NET SALES for
each said year, if any. License Maintenance Fees paid in excess of
Running Royalties shall not be creditable to Running Royalties for
future years.
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Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
d. Running Royalties in an amount equal to [**] Percent ([**]%) of
NET SALES of the LICENSED PRODUCTS, LICENSED PROCESSES and
LICENSED SERVICES used, leased or sold by and/or for LICENSEE
and/or its sublicensees; provided however, if LICENSEE is also
obligated to pay royalties under the License Agreement dated
December 23, 1993 for the same LICENSED PRODUCT, LICENSED
PROCESSES and LICENSED SERVICES, the Running Royalties due under
this paragraph shall be reduced to [**] Percent ([**]%) of NET
SALES of the LICENSED PRODUCT, LICENSED PROCESSES and LICENSED
SERVICES used, Leased or sold by and/or for LICENSEE and/or its
sublicensees.
e. Royalties representing a share of sublicensing revenue including,
but not limited to, sublicense issue fees, received by LICENSEE
for LICENSED PRODUCTS, LICENSED PROCESSES or LICENSED SERVICES
sold by the sublicensee equal to:
(i) [**] Percent ([**]%) if only the PATENT RIGHTS are
sublicensed; or
(ii) [**] Percent ([**]%) if the sublicense revenue includes
revenue received for the PATENT RIGHTS sublicensed in
conjunction with products developed by LICENSEE and/or
substantial technology developed by LICENSEE; but in no
event shall royalties be less than [**] of the applicable
running royalty rate specified in 4.1d.
4.2 All payments due hereunder shall be paid in full, without deduction of
taxes or other fees which may be imposed by any government, except as otherwise
provided in Paragraph 1.5(b).
4.3 No multiple royalties shall be payable because any LICENSED PRODUCT,
its manufacture, use, lease or sale are or shall be covered by more than one
PATENT RIGHTS patent application or PATENT RIGHTS patent licensed under this
Agreement.
4.4 Royalty payments shall be paid in United States dollars in Cambridge,
Massachusetts, or at such other place as M.I.T. may reasonably designate
consistent with the laws and regulations controlling in any foreign country. If
any currency conversion shall be required in connection with the payment of
royalties hereunder, such conversion shall be made
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Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
by using the exchange rate prevailing at the Chase Manhattan Bank (N.A.) on the
last business day of the calendar quarterly reporting period to which such
royalty payments relate.
4.5 In the event LICENSEE is required to make payments (including without
limitation royalties, option fees or license fees) to one or more third parties,
other than M.I.T., its affiliates, successors or assigns, to obtain a license or
similar right necessary to make, use or sell LICENSED PRODUCTS or to practice or
otherwise make use of the LICENSED PROCESSES and LICENSED SERVICES, LICENSEE may
deduct [**] Percent ([**]%) of such payments from royalties thereafter payable
to M.I.T., provided, however, that in no event shall the royalties due M.I.T. be
reduced by more than [**] Percent ([**]%) of NET SALES of the LICENSED PRODUCTS,
LICENSED PROCESSES or LICENSED SERVICES.
5 - REPORTS AND RECORDS
5.1 LICENSEE shall keep full, true and accurate books of account
containing all particulars that may be necessary for the purpose of showing the
amounts payable to M.I.T. hereunder. Said books of account shall be kept at
LICENSEE's principal place of business or the principal place of business of the
appropriate division of LICENSEE to which this Agreement relates. Said books and
the supporting data shall be open at all reasonable times for five (5) years
following the end of the calendar year to which they pertain, to the inspection
of M.I.T. or its agents for the purpose of verifying LICENSEE's royalty
statement or compliance in other respects with this Agreement. Should such
inspection lead to the discovery of a greater than Ten Percent (10%) discrepancy
in reporting to M.I.T.'s detriment, LICENSEE agrees to pay the full cost of such
inspection.
5.2 LICENSEE shall deliver to M.I.T. true and accurate reports, giving
such particulars of the business conducted by LICENSEE and its sublicensees
under this Agreement as shall be pertinent to diligence under Article 3 and
royalty accounting hereunder:
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Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
a. before the first commercial sale of a LICENSED PRODUCT, LICENSED
PROCESS or LICENSED SERVICES, annually, on January 31 of each
year; and
b. after the first commercial sale of a LICENSED PRODUCT, LICENSED
PROCESS or LICENSED SERVICES, quarterly, within sixty (60) days
after March 31, June 30, September 30 and December 31, of each
year.
These reports shall include at least the following:
a. number of LICENSED PRODUCTS manufactured, leased and sold by
and/or for LICENSEE and all sublicensees;
b. accounting for all LICENSED PROCESSES and/or LICENSED SERVICES
used or sold by and/or for LICENSEE and all sublicensees;
c. accounting for NET SALES, noting the deductions applicable as
provided in Paragraph 1.5;
d. Running Royalties due under Paragraph 4.1(c);
e. royalties due on other payments from sublicensees under paragraph
4.1(d);
f. total royalties due; and
g. names and addresses of all sublicensees of LICENSEE.
5.3 With each such report submitted, LICENSEE shall pay to M.I.T. the
royalties due and payable under this Agreement. If no royalties shall be due,
LICENSEE shall so report.
5.4 On or before the ninetieth (90th) day following the close of
LICENSEE's fiscal year, LICENSEE shall provide M.I.T. with LICENSEE's certified
financial statements for the preceding fiscal year including, at a minimum, a
balance sheet and an income statement.
5.5 The amounts due under Articles 4 and 6 shall, if overdue, bear
interest until payment at a per annum rate [**] Percent ([**]%) above the prime
rate in effect at the Chase Manhattan Bank (N.A.) on the due date. The payment
of such interest shall not foreclose M.I.T. from exercising any other rights it
may have as a consequence of the lateness of any payment.
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Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
6 - PATENT PROSECUTION
6.1 After the EFFECTIVE DATE, LICENSEE shall have the primary
responsibility for applying for, seeking prompt issuance of, and maintaining the
PATENT RIGHTS in M.I.T.'s name. LICENSEE shall seek strong, broad claims in
M.I.T.'s best interest. LICENSEE shall not abandon any major claim of the PATENT
RIGHTS without prior permission from M.I.T., such permission not to be
unreasonably withheld. Appendix B is a list of the foreign countries in which
patent applications corresponding to the United States patent applications
listed in Appendix A shall be filed. Appendix B may be amended by mutual
agreement of both parties. LICENSEE may abandon any PATENT RIGHTS if LICENSEE
notifies M.I.T. in writing in sufficient time for M.I.T. to maintain the PATENT
RIGHTS, and in such case, LICENSEE's rights under these PATENT RIGHTS shall
cease with such notification.
6.2 Payment of all fees and costs relating to the filing, prosecution and
maintenance of the PATENT RIGHTS shall be the responsibility of LICENSEE,
whether such fees and costs were incurred before or after the EFFECTIVE DATE.
(As of May 21, 1996, such fees and costs for which M.I.T. has been billed equal
approximately [**] Dollars ($[**])). LICENSEE shall pay such fees and costs to
M.I.T. within thirty (30) days of invoicing; late payments shall accrue interest
and shall be subject to Paragraph 5.5.
7 - INFRINGEMENT
7.1 LICENSEE shall inform M.I.T. promptly in writing of any alleged
infringement of the PATENT RIGHTS by a third party and of any available evidence
thereof.
7.2 M.I.T. shall have the right, but shall not be obligated, to prosecute
at its own expense all infringements of the PATENT RIGHTS and, in furtherance of
such right, LICENSEE hereby agrees that M.I.T. may include LICENSEE as a party
plaintiff in any such suit, without expense to LICENSEE. The total cost of any
such infringement action commenced
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or defended solely by M.I..T. shall be borne by M.I.T., and M.I.T. shall keep
any recovery or damages for past infringement derived therefrom.
7.3 If within [**] after having been notified of an alleged infringement,
M.I.T. shall have been unsuccessful in persuading the alleged infringer to
desist and shall not have brought and shall not be diligently prosecuting an
infringement action, or if M.I.T. shall notify LICENSEE at any time prior
thereto of its intention not to bring suit against any alleged infringer in the
TERRITORY for the FIELD OF USE, then, and in those events only, LICENSEE shall
have the right, but shall not be obligated, to prosecute at its own expense any
infringement of the PATENT RIGHTS in the TERRITORY for the FIELD OF USE, and
LICENSEE may, for such purposes, use the name of M.I.T. as party plaintiff;
provided, however, that such right to bring such an infringement action shall
remain in effect only during the EXCLUSIVE PERIOD. No settlement, consent
judgment or other voluntary final disposition of the suit may be entered into
without the consent of M.I.T., which consent shall not unreasonably be withheld.
LICENSEE shall indemnify M.I.T. against any order for costs that may be made
against M.I.T. in such proceedings.
7.4 In the event that LICENSEE shall undertake litigation for the
enforcement of the PATENT RIGHTS, or the defense of the PATENT RIGHTS under
Paragraph 7.5, LICENSEE may withhold up to [**] Percent ([**]%) of the payments
otherwise thereafter due M.I.T. under Article 4 hereunder and apply the same
toward reimbursement of up to [**] of LICENSEE's expenses, including reasonable
attorneys' fees, in connection therewith. Any recovery of damages by LICENSEE
for each such suit shall be applied first in satisfaction of any unreimbursed
expenses and legal fees of LICENSEE relating to such suit, and next toward
reimbursement of M.I.T. for any payments under Article 4 past due or withheld
and applied
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Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
pursuant to this Article 7. The balance remaining from any such recovery shall
be [**] between LICENSEE and M.I.T.
7.5 In the event that a declaratory judgment action alleging invalidity or
noninfringement of any of the PATENT RIGHTS shall be brought against M.I.T. or
LICENSEE, M.I.T., at its option, shall have the right, within thirty (30) days
after commencement of such action, to take over the sole defense of the action
at its own expense. If M.I.T. shall not exercise this right, LICENSEE may take
over the sole defense at LICENSEE's sole expense, subject to Paragraph 7.4.
7.6 In any infringement suit as either party may institute to enforce the
PATENT RIGHTS pursuant to this Agreement, the other party hereto shall, at the
request and expense of the party initiating such suit, cooperate in all respects
and, to the extent possible, have its employees testify when requested and make
available relevant records, papers, information, samples, specimens, and the
like.
7.7 LICENSEE, during the EXCLUSIVE PERIOD, shall have the sole right in
accordance with the terms and conditions herein to sublicense any alleged
infringer in the TERRITORY for the FIELD OF USE for future use of the PATENT
RIGHTS. Any upfront fees as part of such a sublicense shall be [**] between
LICENSEE and M.I.T.; other revenues shall be treated per Article 4.
8 - PRODUCT LIABILITY
8.1 LICENSEE shall at all times during the term of this Agreement and
thereafter, indemnify, defend and hold M.I.T., its trustees, directors,
officers, employees and affiliates, harmless against all claims, proceedings,
demands and liabilities of any kind whatsoever, including legal expenses and
reasonable attorneys' fees, arising out of the death of or injury to any person
or persons or out of any damage to property, resulting from the production,
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Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
manufacture, sale, use, lease, consumption or advertisement of the LICENSED
PRODUCT(s) and/or LICENSED PROCESS(es) or arising from any obligation of
LICENSEE hereunder.
8.2 LICENSEE shall obtain and carry in full force and effect commercial,
general liability insurance, including product liability and errors and
omissions insurance, which shall protect LICENSEE and M.I.T. with respect to
events covered by Paragraph 8.1 above. Such insurance shall be written by a
reputable insurance company authorized to do business in the Commonwealth of
Massachusetts, shall list M.I.T. as an additional named insured thereunder,
shall be endorsed to include product liability coverage and shall require thirty
(30) days written notice to be given to M.I.T. prior to any cancellation or
material change thereof. The limits of such insurance shall not be less than
[**] Dollars ($[**]) per occurrence with an aggregate of [**] Dollars ($[**])
for personal injury including death; [**] Dollars ($[**]) per occurrence with an
aggregate of [**] Dollars ($[**]) for property damage; and [**] Dollars ($[**])
per occurrence with an aggregate of [**] Dollars ($[**]) for errors and
omissions. LICENSEE shall provide M.I.T. with Certificates of Insurance
evidencing the same.
8.3 EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, M.I.T., ITS
TRUSTEES, DIRECTORS, OFFICERS, EMPLOYEES, AND AFFILIATES MAKE NO REPRESENTATIONS
AND EXTEND NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT
NOT LIMITED TO WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
VALIDITY OF PATENT RIGHTS CLAIMS, ISSUED OR PENDING, AND THE ABSENCE OF LATENT
OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE. NOTHING IN THIS AGREEMENT SHALL
BE CONSTRUED AS A REPRESENTATION MADE OR WARRANTY GIVEN BY M.I.T. THAT THE
PRACTICE BY LICENSEE OF THE LICENSE
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GRANTED HEREUNDER SHALL NOT INFRINGE THE PATENT RIGHTS OF ANY THIRD PARTY. IN NO
EVENT SHALL M.I.T., ITS TRUSTEES, DIRECTORS, OFFICERS, EMPLOYEES AND AFFILIATES
BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING
ECONOMIC DAMAGE OR INJURY TO PROPERTY AND LOST PROFITS, REGARDLESS OF WHETHER
M.I.T. SHALL BE ADVISED, SHALL HAVE OTHER REASON TO KNOW, OR IN FACT SHALL KNOW
OF THE POSSIBILITY OF THE FOREGOING.
9 - EXPORT CONTROLS
LICENSEE acknowledges that it is subject to United States laws and
regulations controlling the export of technical data, computer software,
laboratory prototypes and other commodities (including the Arms Export Control
Act, as amended and the United States Department of Commerce Export
Administration Regulations). The transfer of such items may require a license
from the cognizant agency of the United States Government and/or written
assurances by LICENSEE that LICENSEE shall not export data or commodities to
certain foreign countries without prior approval of such agency. M.I.T. neither
represents that a license shall not be required nor that, if required, it shall
be issued.
10 - NON-USE OF NAMES
LICENSEE shall not use the names or trademarks of the Massachusetts
Institute of Technology or Lincoln Laboratory, nor any adaptation thereof, nor
the names of any of their employees, in any advertising, promotional or sales
literature without prior written consent obtained from M.I.T., or said employee,
in each case, except that LICENSEE may state that it is licensed by M.I.T. under
one or more of the patents and/or applications comprising the PATENT RIGHTS.
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11 - ASSIGNMENT
This Agreement may be assigned only in connection with:
a. a change in name or legal status of LICENSEE that does not affect
the nature of its business activities, or
b. the sale of substantially all the assets of the business to which
the PATENT RIGHTS relates or a separable business unit related to
a particular LICENSED PRODUCT or LICENSED SERVICE with the written
permission of M.I.T., which shall not be unreasonably withheld, or
c. otherwise with the written permission of M.I.T., which shall not
be unreasonably withheld.
12 - DISPUTE RESOLUTION
12.1 Except for the right of either party to apply to a court of competent
jurisdiction for a temporary restraining order, a preliminary injunction, or
other equitable relief to preserve the status quo or prevent irreparable harm,
any and all claims, disputes or controversies arising under, out of, or in
connection with the Agreement, including any dispute relating to patent validity
or infringement, which the parties shall be unable to resolve within sixty (60)
days shall be mediated in good faith. The party raising such dispute shall
promptly advise the other party of such claim, dispute or controversy in a
writing which describes in reasonable detail the nature of such dispute. By not
later than five (5) business days after the recipient has received such notice
of dispute, each party shall have selected for itself a representative who shall
have the authority to bind such party, and shall additionally have advised the
other party in writing of the name and title of such representative. By not
later than ten (10) business days after the date of such notice of dispute, the
party against whom the dispute shall be raised shall select a mediation firm in
the Boston area and such representatives shall schedule a date with such firm
for a mediation hearing. The parties shall enter into good faith mediation and
shall share the costs equally. If the representatives of the parties have not
been able to resolve the dispute within
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fifteen (15) business days after such mediation hearing, then any and all
claims, disputes or controversies arising under, out of, or in connection with
this Agreement, including any dispute relating to patent validity or
infringement, shall be resolved by final and binding arbitration in Boston,
Massachusetts under the rules of the American Arbitration Association, or the
Patent Arbitration Rules if applicable, then obtaining. The arbitrators shall
have no power to add to, subtract from or modify any of the terms or conditions
of this Agreement, nor to award punitive damages. Any award rendered in such
arbitration may be enforced by either party in either the courts of the
Commonwealth of Massachusetts or in the United States District Court for the
District of Massachusetts, to whose jurisdiction for such purposes M.I.T. and
LICENSEE each hereby irrevocably consents and submits.
12.2 Notwithstanding the foregoing, nothing in this Article shall be
construed to waive any rights or timely performance of any obligations existing
under this Agreement.
13 - TERMINATION
13.1 If LICENSEE shall cease to carry on its business, this Agreement
shall terminate upon notice by M.I.T.
13.2 Should LICENSEE fail to make any payment whatsoever due and payable
to M.I.T. hereunder, M.I.T. shall have the right to terminate this Agreement
effective on thirty (30) days' notice, unless LICENSEE shall make all such
payments to M.I.T. within said thirty (30) day period. Upon the expiration of
the thirty (30) day period, if LICENSEE shall not have made all such payments to
M.I.T., the rights, privileges and license granted hereunder shall automatically
terminate.
13.3 Upon any material breach or default of this Agreement by LICENSEE
(including, but not limited to, breach or default under Paragraph 3.3), other
than those occurrences set out in Paragraphs 13.1 and 13.2 hereinabove, which
shall always take precedence in that order over any
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material breach or default referred to in this Paragraph 13.3, M.I.T. shall have
the right to terminate this Agreement and the rights, privileges and license
granted hereunder effective on ninety (90) days' notice to LICENSEE. Such
termination shall become automatically effective unless LICENSEE shall have
cured any such material breach or default prior to the expiration of the ninety
(90) day period.
13.4 LICENSEE shall have the right to terminate this Agreement at any time
on six (6) months' notice to M.I.T., and upon payment of all amounts due M.I.T.
through the effective date of the termination.
13.5 Upon termination of this Agreement for any reason, nothing herein
shall be construed to release either party from any obligation that matured
prior to the effective date of such termination; and Articles 1, 8, 9, 10, 12,
13.5, 13.6, and 15 shall survive any such termination. LICENSEE and any
sublicensee thereof may, however, after the effective date of such termination,
sell all LICENSED PRODUCTS, and complete LICENSED PRODUCTS in the process of
manufacture at the time of such termination and sell the same, provided that
LICENSEE shall make the payments to M.I.T. as required by Article 4 of this
Agreement and shall submit the reports required by Article 5 hereof.
13.6 Upon termination of this Agreement for any reason, any sublicensee
not then in default shall have the right to seek a license from M.I.T. M.I.T.
agrees to negotiate such licenses in good faith under reasonable terms and
conditions.
14 - PAYMENTS, NOTICES AND OTHER COMMUNICATIONS
Any payments, notice or other communication pursuant to this Agreement
shall be sufficiently made or given on the date of mailing if sent to such party
by certified first class mail, return receipt requested, postage prepaid,
addressed to it at its address below or as it shall designate by written notice
given to the other party:
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In the case of M.I.T.:
Director
Technology Licensing Office
Massachusetts Institute of Technology
77 Massachusetts Avenue, Room E32-300
Cambridge, Massachusetts 02139
In the case of LICENSEE:
President
REPROGENESIS, INC.
10 Sylvan Drive
Suite 27
St. Simons Island, GA 31522
15 - MISCELLANEOUS PROVISIONS
15.1 All disputes arising out of or related to this Agreement, or the
performance, enforcement, breach or termination hereof, and any remedies
relating thereto, shall be construed, governed, interpreted and applied in
accordance with the laws of the Commonwealth of Massachusetts, U.S.A., except
that questions affecting the construction and effect of any patent shall be
determined by the law of the country in which the patent shall have been
granted.
15.2 The parties hereto acknowledge that this Agreement sets forth the
entire Agreement and understanding of the parties hereto as to the subject
matter hereof, and shall not be subject to any change or modification except by
the execution of a written instrument signed by the parties.
15.3 The provisions of this Agreement are severable, and in the event that
any provisions of this Agreement shall be determined to be invalid or
unenforceable under any controlling body of the law, such invalidity or
unenforceability shall not in any way affect the validity or enforceability of
the remaining provisions hereof.
15.4 LICENSEE agrees to mark the LICENSED PRODUCTS sold in the United
States with all applicable United States patent numbers. All LICENSED PRODUCTS
shipped to or
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sold in other countries shall be marked in such a manner as to conform with the
patent laws and practice of the country of manufacture or sale.
15.5 The failure of either party to assert a right hereunder or to insist
upon compliance with any term or condition of this Agreement shall not
constitute a waiver of that right or excuse a similar subsequent failure to
perform any such term or condition by the other party.
IN WITNESS WHEREOF, the parties have duly executed this Agreement the day
and year set forth below.
MASSACHUSETTS INSTITUTE OF
TECHNOLOGY REPROGENESIS, INC.
By /s/_______________________________ By /s/________________________________
Name_________________________________ Name__________________________________
Title________________________________ Title_________________________________
Date_________________________________ Date__________________________________
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APPENDIX A
PATENT RIGHTS on the EFFECTIVE DATE
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
UNITED STATES PATENT RIGHTS
M.I.T. Case No. [**]
"[**]"
By Elazer Edelman, Robert Langer, Michael Klagsburn and Edith Mathiowitz
U.S. Patent No. [**]
Issued [**]
M.I.T. Case No. [**]
Title: "[**]"
By Elazer Edelman, Aruna Natha and Matthew Nugent
U.S. Serial No. [**]
Filed on [**]
FOREIGN PATENT RIGHTS
M.I.T. Case No. [**]
PCT Serial No. [**] Filed on [**]
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Exhibit 10.35
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
EXCLUSIVE LICENSE AGREEMENT
BETWEEN
CHILDREN'S MEDICAL CENTER CORPORATION
AND
REPROGENESIS, Inc.
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TABLE OF CONTENTS
Articles Page
ARTICLE I. DEFINITIONS......................................................1
ARTICLE II. GRANT...........................................................3
ARTICLE III. DUE DILIGENCE..................................................5
ARTICLE IV. ROYALTIES AND OTHER PAYMENTS....................................6
ARTICLE V. REPORTS AND RECORDS..............................................8
ARTICLE VI. PATENT PROSECUTION..............................................9
ARTICLE VII. INFRINGEMENT...................................................9
ARTICLE VIII. UNIFORM INDEMNIFICATION AND INSURANCE PROVISIONS.............11
ARTICLE IX. EXPORT CONTROLS................................................12
ARTICLE X. NON-USE OF NAMES................................................12
ARTICLE XI. ASSIGNMENT.....................................................12
ARTICLE XII. DISPUTE RESOLUTION AND ARBITRATION............................13
ARTICLE XIII. TERM AND TERMINATION.........................................14
ARTICLE XIV. PAYMENTS, NOTICES, AND OTHER COMMUNICATIONS...................14
ARTICLE XV. GENERAL PROVISIONS.............................................15
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Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
EXCLUSIVE LICENSE AGREEMENT
This Agreement is made and entered into as of the date last written below
(the Effective Date), by and between CHILDREN'S MEDICAL CENTER CORPORATION, a
charitable corporation duly organized and existing under the laws of the
Commonwealth of Massachusetts and having its principal office at 300 Longwood
Avenue, Boston, Massachusetts, 02115, U.S.A. (hereinafter referred to as
"CMCC"), and Reprogenesis, Inc., a business corporation organized and existing
under the laws of the State of Texas and having its principal office at 21 Erie
Street, Cambridge, Massachusetts, 02139 (hereinafter referred to as "Licensee").
WHEREAS, CMCC is the owner of certain Patent Rights (as that term shall be
defined hereafter) and has the right to grant exclusive licenses under said
Patent Rights, subject only to a royalty-free, nonexclusive license heretofore
granted to the United States Government for those patents developed with U.S.
Government funding;
WHEREAS, CMCC desires to have the Patent Rights utilized in the public
interest and is willing to grant a license thereunder on the terms and
conditions described herein;
WHEREAS, Licensee has represented to CMCC that Licensee is ready, willing
and able to engage in the commercial development, production, manufacture,
marketing and sale of Licensed Products (as that term shall be defined
hereafter) and/or the use of Licensed Processes (as that term shall be defined
hereafter) and that it shall commit itself to a thorough, vigorous and diligent
program of exploiting the Patent Rights in accordance with the terms and
conditions described herein so that public utilization shall result therefrom;
and
WHEREAS, Licensee desires to obtain an exclusive license under the Patent
Rights on the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto agree as follows:
ARTICLE I. DEFINITIONS
For the purpose of this Agreement, the following words and phrases shall
have the meanings set forth below:
A. "Affiliate" shall mean any company or other legal entity controlling,
controlled by or under common control with Licensee. For purposes of the
definition of "Affiliate" the term "control" shall mean: (i) in the case of a
corporate entity, the direct or indirect ownership of at least a majority of the
stock or participating shares entitled to vote for the election of directors of
that entity; (ii) in the case of a partnership, the power customarily held by a
general partner to direct the management and policies of such partnership; or
(iii) in the case of a joint venture, whether in corporate, partnership or other
legal form, a more than nominal economic interest and managerial role.
B. "Combination Product(s) or Process(es)" shall mean a product or process
that includes a Licensed Product or Licensed Process sold in combination with
another component(s)
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Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
whose manufacture, use or sale by an unlicensed party would not constitute an
infringement of the Patent Rights.
C. "Field of Use" shall mean all [**], [**] and [**].
D. "First Commercial Sale" shall mean with respect to each country: (i)
the first sale of any Licensed Product or Licensed Process by Licensee,
following approval of such Licensed Product's or Licensed Process's marketing by
the appropriate governmental agency, if any such approval is necessary, for the
country in which the sale is to be made; or (ii) when governmental approval is
not required, the first sale in that country of the Licensed Product or Licensed
Process.
E. "Licensed Product" shall mean any product or part thereof:
1. The manufacture, use or sale of which would infringe any one of the
issued, unexpired claim(s) or any one of the pending claim(s) contained in
the Patent Rights in any country.
2. The manufacture of which uses a "Licensed Process" as that term
shall be defined hereafter.
F. "Licensed Process" shall mean any process that would infringe any one
of the issued, unexpired claim(s) or any one of the pending claim(s) contained
in the Patent Rights in any country.
G. "Licensee" shall mean Licensee and/or its successor(s) or assignee(s)
and/or its Affiliates.
H. "Net Sales" shall mean gross receipts received by Licensee, Licensee's
sublicensees or Licensee's Affiliates for Licensed Products and Licensed
Processes produced hereunder, less the sum of the following:
1. Discounts allowed in amounts customary in the trade.
2. Sales taxes, tariff duties and/or use taxes directly imposed and
with reference to particular sales.
3. Outbound transportation and delivery charges (including insurance
premiums related to transportation and delivery) prepaid or allowed.
4. Amounts allowed or credited on returns and bad debts.
No deductions shall be made for commissions paid to individuals whether
they are with independent sales agencies or regularly employed by Licensee and
on its payroll or for the cost of collections. Licensed Products and Licensed
Processes shall be considered "sold" when billed out or invoiced.
Notwithstanding anything herein to the contrary, the following shall not be
considered a sale of a Licensed Product or Licensed Process under this
Agreement: (i) the transfer of a Licensed Product or Licensed Process to an
Affiliate for sale by the Affiliate in a
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transaction that will be royalty bearing; (ii) the transfer of a Licensed
Product or Licensed Process to a third party without consideration to Licensee
in connection with the development or testing of a Licensed Product or Licensed
Process; or (iii) the transfer of a Licensed Product or Licensed Process to a
third party without consideration in connection with the marketing or promotion
of the Licensed Product or Licensed Process.
I. "Patent Rights" shall mean all of the following intellectual property
which CMCC owns or has rights to during the term of this Agreement:
1. The United States and foreign patents and/or patent applications
listed in Appendix 1 attached hereto and incorporated herein by reference
and divisionals and continuations thereof.
2. The United States and foreign patents issued from the applications
listed in Appendix 1 and from divisionals and continuations of those
applications.
3. Claims of United States and foreign continuation-in-part
applications, and of the resulting patents, which relate to subject matter
specifically described in the United States and foreign patent
applications described in Appendix 1.
4. Claims of all later filed foreign patent applications, and of the
resulting patents, which relate to subject matter specifically described
in the United States patent and/or patent applications described in
subparagraphs 1, 2 or 3 of this Article 1, Paragraph 1.
5. Any reissues, divisions, amendments or extensions of the United
States or foreign patents described in subparagraphs 1, 2, 3 or 4 of this
Article 1, Paragraph 1.
J. "Sublicensee" shall mean a person or entity unaffiliated with Licensee
to whom Licensee has granted an arm's length sublicense under this Agreement.
ARTICLE II. GRANT
A. CMCC hereby grants to Licensee the worldwide right and exclusive
license to develop, make, have made, use, lease, offer for sale and sell the
Licensed Products and to practice the Licensed Processes for the Field of Use to
the end of the term for which the Patent Rights are granted, unless sooner
terminated as provided in this Agreement.
B. Notwithstanding anything above to the contrary, CMCC shall retain a
royalty-free, nonexclusive, irrevocable license to practice, and to sublicense
other nonprofit research organizations to practice, the Patent Rights for
noncommercial research purposes only.
C. Notwithstanding anything above to the contrary, the license granted
hereunder shall be subject to the rights of the United States government, if
any, under Public Laws 96-517, 97-226, and 98-620, codified at 35 U.S.C. sec.
200-212 and any regulations promulgated thereunder.
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D. Licensee agrees that Licensed Products leased or sold in the United
States shall be manufactured substantially in the United States, subject to 37
CFR 401.14(i).
E. In order to establish exclusivity for Licensee, CMCC hereby agrees that
it shall not, without Licensee's prior written consent, grant to any other
commercial party a license to make, have made, use, lease and/or sell Licensed
Products or to use the Licensed Processes in the Field of Use during the period
of time in which this Agreement is in effect, except as otherwise specified in
this Agreement or as required by law to grant rights to the United States
Government.
F. Licensee shall have the right to enter into sublicensing agreements
with respect to any of the rights, privileges, and licenses granted hereunder,
subject to the terms and conditions hereof. Such sublicenses will terminate upon
the termination of Licensee's rights granted herein unless events of default are
cured by Licensee or Sublicensee within thirty (30) days of notification by CMCC
of default and/or as provided by the terms of this Agreement.
G. Licensee agrees that any sublicense granted by it shall provide that
the obligations to CMCC of Articles II (Grant), V (Reports and Records), VII
(Infringement), VIII (insurance and Indemnification), IX (Export Controls), X
(Non-Use of Names), XI (Assignment), XII (Dispute Resolution), XIII (Term and
Termination) and XV (Miscellaneous Provisions) of this Agreement shall be
binding upon the sublicensee as if it were a party to this Agreement. Licensee
further agrees to attach a copy of this Agreement to all sublicense agreements,
deleting economic terms when and as appropriate.
H. Licensee agrees to provide to CMCC notice of any sublicense granted
hereunder and to forward to CMCC a copy of any and all fully executed sublicense
agreements. Licensee further agrees to forward to CMCC annually a copy of such
reports received by Licensee from its sublicensees during the preceding twelve
(12) month period as shall be pertinent to a royalty accounting under the
applicable sublicense.
I. Licensee shall advise CMCC in writing of any consideration received
from sublicensees. Licensee shall not accept from any sublicensee anything of
value in lieu of cash payments to discharge sublicensee's payment obligations
under any sublicense granted under this Agreement, without the express written
permission of CMCC, which permission shall not be unreasonably withheld.
J. CMCC agrees that if Licensee has provided to CMCC notice that Licensee
has granted a sublicense to a sublicensee under this Agreement, then in the
event CMCC terminates this Agreement for any reason provided hereafter, CMCC
shall provide to such sublicensee no less than thirty (30) days prior to the
effective date of said termination, written notice of said termination at the
address specified by Licensee to CMCC in Licensee's notice to CMCC under
Paragraph H of this Article II. CMCC agrees that upon the sublicensee's notice
as described below and provided the sublicensee is not in breach of its
sublicense, CMCC shall grant to such sublicensee license rights and terms
equivalent to the sublicense rights and terms which the Licensee shall have
granted to said sublicensee; provided that the sublicensee shall remain a
sublicensee under this Agreement for a period of at least sixty (60) days
following receipt of notice from CMCC. Sublicensee shall during said sixty (60)
day period provide to CMCC notice
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Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
wherein the sublicensee: (i) reaffirms the terms and conditions of this
Agreement as it relates to the rights the sublicensee has been granted under the
sublicense; (ii) agrees to abide by all of the terms and conditions of this
Agreement applicable to sublicensees and to discharge directly all pertinent
obligations of Licensee which Licensee is obligated hereunder to discharge; and
(iii) acknowledges that CMCC shall have no obligations to the sublicensee other
than its obligations set forth in this Agreement with regard to Licensee.
K. The license granted hereunder shall not be construed to confer any
rights upon Licensee by implication, estoppel or otherwise as to any technology
not described in the Patent Rights.
ARTICLE III. DUE DILIGENCE
A. Licensee shall use its good faith and diligent efforts to bring one or
more Licensed Products and/or Licensed Processes to market as soon as reasonably
practicable, consistent with sound and reasonable business practices and
judgment, through a thorough, vigorous and diligent program for exploitation of
the Patent Rights. Thereafter, Licensee agrees that until expiration or
termination of this Agreement, Licensee shall continue active and diligent
efforts to keep Licensed Products and/or Licensed Processes reasonably available
to the public. In the event Licensee decides not to exploit a licensed Patent
Right, it shall promptly inform CMCC in writing and shall surrender to CMCC its
license to that Patent Right.
B. The parties acknowledge that Licensee has provided to CMCC prior to the
date of execution of this Agreement a written commercialization development plan
("Development Plan") setting forth the initial indications and markets for
Licensed Products and Licensed Processes, including to the extent practicable:
(i) time-delimited targets for pre-clinical development, clinical trials,
regulatory approval, manufacturing and marketing that represent reasonable
efforts, consistent with industry norms for similar technology and applications,
to bring Licensed Products and Licensed Processes to the marketplace; and (ii)
actual or projected financial resources and/or strategic alliances that will be
required to implement the Development Plan. The Development Plan is attached
hereto as Appendix 2 and is hereby incorporated herein by reference.
C. Licensee shall use good faith and diligent efforts to accomplish the
milestones set forth in the Development Plan and to manufacture and distribute
Licensed Products and Licensed Processes.
D. Notwithstanding anything above to the contrary, CMCC shall not
unreasonably withhold its assent to any revision of the objective(s) set forth
in the Development Plan when requested in writing by Licensee and supported by
evidence reasonably acceptable to CMCC: (i) of technical difficulties or delays
in the clinical studies or regulatory process that Licensee could not have
reasonably avoided; or (ii) that Licensee, its Affiliates and/or sublicensees
have expended good faith and diligent efforts and adequate resources to meet
said objective.
E. In the event Licensee fails to meet the objective(s) set forth in the
Development Plan in a timely manner, CMCC shall notify Licensee thereof in
writing, and Licensee shall have [**] days following such notification to
establish to the reasonable satisfaction of CMCC that (i)
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Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
it has met such objective(s); or (ii) a revision to the Development Plan is
necessary and appropriate as contemplated above. In the event Licensee fails to
establish the same to CMCC's reasonable satisfaction, CMCC shall have the right
in its discretion to terminate the license granted to Licensee under this
Agreement or to convert the license granted to Licensee hereunder to a
nonexclusive license on financial terms and conditions mutually agreed to by
CMCC and Licensee.
ARTICLE IV. ROYALTIES AND OTHER PAYMENTS
A. For the rights, privileges and exclusive licenses granted hereunder,
Licensee shall pay to CMCC the following amounts in the manner hereinafter
provided until the end of the term of the last to expire Patent Right, unless
this Agreement shall be sooner terminated as hereinafter provided:
1. A license issue fee of $[**], payable within ten (10) days of the
Effective Date.
2. Patent costs invoiced to date for the Patent Rights listed in
Appendix 1 of not more than [**] dollars ($[**]), payable within ten (10)
days of receiving an invoice from CMCC and ongoing patent costs for the
Patent Rights.
3. A License Maintenance Fee of $[**], which shall be payable on
January 1, 2001 and on January 1 of each subsequent year thereafter during
the exclusive license period of this Agreement. Notwithstanding anything
herein to the contrary, any Running Royalties (defined below) subsequently
due on Net Sales of Licensed Products and Licensed Processes, if any, for
each such year shall be creditable against the License Maintenance Fee for
said year. License Maintenance Fees paid in excess of Running Royalties
shall not be creditable against Running Royalties due in future years. No
License Maintenance Fee shall be due in any year in which Licensee is
funding sponsored research for development of the Patent Rights of at
least [**] dollars ($[**]) at CMCC.
4. Milestone payments as follows:
Upon obtaining first marketing approval by
the FDA or equivalent foreign agency of the
first Licensed Product/Processes $[**]
Upon achieving $[**] cumulative Net Sales
for Licensed Products/Processes $[**]
5. Running Royalties in an amount equal to [**] percent ([**]%) of Net
Sales of Licensed Products or Licensed Processes used, leased or sold by
and/or for Licensee and/or its Affiliates.
6. In the event Licensee has granted sublicenses under this Agreement
within [**] of the Effective Date, [**] percent ([**]%) of any and all
payments (excluding payments for research and development and equity
investments) received by Licensee from said sublicensees in consideration
of permitting the sublicensee to practice the
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Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
Patent Rights, including but not limited to sublicense issue fees, any
lump sum payments, milestone payments, technology transfer payments or
other similar fees, and royalties; provided that with respect to running
royalties in connection with a sublicensee's sales of Licensed Products or
Licensed Processes, Licensee shall pay to CMCC hereunder an amount equal
to the royalty CMCC would have received from Licensee if such sales had
been made by Licensee. If sublicenses are granted after [**] from the
Effective Date, Licensee will pay CMCC [**] percent ([**]%) of any and all
payments as stated above.
B. No multiple royalties shall be payable because any Licensed Product or
Licensed Process, its manufacture, use, lease or sale are or shall be covered by
more than one Patent Rights patent application or Patent Rights patent licensed
under this Agreement.
C. To the extent that Licensee obtains subsequent to the date of this
Agreement licenses to third party patents or other intellectual property that
are necessary to produce or sell Licensed Products or Licensed Processes,
Licensee may deduct from the royalty due to CMCC [**] percent ([**]%) of the
royalties due on such third party patents or intellectual property up to an
amount equal to [**] percent ([**]%) of royalties hereunder.
D. For purposes of calculating royalties, in the event that a Licensed
Product or Licensed Process includes both component(s) covered by a valid claim
of a Patent Right ("Patented Component") and a component which is
therapeutically active alone or in a combination which does not require the
Patented Component, and such component is not covered by a valid claim of a
Patent Right ("Unpatented Component"), then Net Sales of the Combination Product
or Combination Process shall be calculated using one of the following methods:
1. By multiplying the Net Sales of the Combination Product or
Combination Process during the applicable royalty accounting period
("accounting period") by a fraction, the numerator of which is the
aggregate gross selling price of the Patented Component(s) contained in
the Combination Product or Combination Process if sold separately, and the
denominator of which is the sum of the gross selling price of both the
Patented Component(s) and the Unpatented Component(s) contained in the
Combination Product or Combination Process if sold separately; or
2. In the event that no such separate sales are made of the Patented
Component(s) or the Unpatented Components during the applicable accounting
period, Net Sales for purposes of determining royalties payable hereunder
shall be calculated by multiplying the Net Sales of the Combination
Product or Combination Process by a fraction, the numerator of which is
the fully allocated production cost of the Patented Component(s) and the
denominator of which is the sum of the fully allocated production costs of
the Patented Component(s) and the Unpatented Component(s) contained in the
Combination Product or Combination Process. Such fully allocated costs
shall be determined by using Licensee's standard accounting procedures,
which procedures must conform to standard cost accounting procedures.
E. Royalty payments shall be paid in United States dollars in Boston,
Massachusetts, or at such other place as CMCC may reasonably designate
consistent with the laws and
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Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
regulations controlling in any foreign country. If the currency conversion shall
be required in connection with the payments of royalties or other amounts
hereunder, the conversion shall be made by using the exchange rate prevailing at
the Bank of Boston on the last business day of the calendar quarterly reporting
period to which such royalty payments relate.
F. The royalty payments set forth in this Agreement shall, if overdue,
bear interest until payment at a per annum rate of [**] percent ([**]%) above
the prime rate in effect at the Bank of Boston on the due date. The payment of
such interest shall not foreclose CMCC from exercising any other rights it may
have as a consequence of the lateness of any payment.
ARTICLE V. REPORTS AND RECORDS
A. Licensee shall keep, and shall require its Affiliates and sublicensees
to keep, full, true and accurate books of account in accordance with generally
accepted accounting principles and containing sufficient detail to enable CMCC
to determine the royalty and other amounts payable to CMCC under this Agreement.
Said books of account shall be kept at Licensee's principal place of business or
the principal place of business of the appropriate division of Licensee to which
this Agreement relates. Said books and the supporting data shall be retained for
at least five (5) years following the end of the calendar year to which they
pertain.
B. CMCC shall have the right to audit the books of account described above
from time to time to the extent necessary to verify the reports provided for
herein or compliance in other respects with this Agreement. CMCC or its agents
shall perform these audits at CMCC's expense during Licensee's regular business
hours.
C. Licensee shall deliver to CMCC true and accurate reports by March 31st,
for the period July 1 through December 31 of the previous year, and on September
30th, for the period January 1st through June 30th of the current year, giving
such particulars of the business conducted by Licensee, its Affiliates and its
sublicensees under this Agreement as shall be pertinent to a royalty accounting
hereunder and to verify Licensee's activities with respect to achieving the
objectives of the Development Plan described in Article III above. These reports
shall include at least the following:
1. Number of Licensed Products and Licensed Processes manufactured and
sold.
2. Aggregate billings for Licensed Products and Licensed Processes
sold.
3. Accounting for all Licensed Products and Licensed Processes sold.
4. Applicable deductions.
5. Total royalties due.
6. Names and addresses of all sublicensees of Licensee.
7. Payments received by Licensee from Affiliates and sublicensees.
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8. Licensed Products manufactured and sold to the U.S. Government. No
royalty obligations shall arise from sales or use by, for or on behalf of
the U.S. Government in view of a royalty-free, nonexclusive license that
may heretofore have been granted to the U.S. Government.
9. Royalties and Fees received from sublicensees.
D. Until the First Commercial Sale of a Licensed Product or Licensed
Process, Licensee shall provide to CMCC at least annually reasonable detail
regarding the activities of Licensee and Licensee's Affiliates and sublicensees
relative to achieving the objectives set forth in the Development Plan in a
timely manner, including but not limited to, reports of financial expenditures
to achieve said objectives, research and development activities, regulatory
approvals, strategic alliances and manufacturing, sublicensing and marketing
efforts.
E. With each such report submitted, Licensee shall pay to CMCC the
royalties due and payable under this Agreement. If no royalties shall be due,
Licensee shall so report.
F. On or before the ninetieth (90th) day following the close of Licensee's
fiscal year, Licensee shall provide CMCC with Licensee's certified financial
statements for the preceding fiscal year, including at a minimum a balance sheet
and an operating statement.
ARTICLE VI. PATENT PROSECUTION
A. CMCC shall have primary responsibility for the preparation, filing,
prosecution and maintenance of all patent applications and patents included
within the Patent Rights, using patent counsel reasonably acceptable to
Licensee. CMCC shall seek to obtain Patent Rights in any country designated by
Licensee. CMCC shall furnish to Licensee all documents (or draft thereof)
pertaining to the filing, prosecution or maintenance of the Patent Rights and
seek Licensee's input prior to making decisions concerning the Patent Rights.
B. Licensee shall reimburse to CMCC the amount of all fees and costs
relating to the filing, prosecution and maintenance of the Patent Rights whether
such fees and/or costs were incurred before or after the date of this Agreement.
CMCC shall provide to Licensee an itemized invoice of all such fees and Licensee
shall pay to CMCC all amounts due under said invoice within thirty (30) days of
the date of said invoice.
C. In the event CMCC elects not to pursue, maintain or retain a particular
Patent Right licensed to Licensee hereunder, CMCC shall so notify Licensee in
sufficient time for Licensee to assume the filing, prosecution and/or
maintenance of such application or patent at Licensee's expense. In such event,
CMCC shall provide to Licensee any authorization necessary to permit Licensee to
pursue and/or maintain such Patent Right. Licensee shall have no further royalty
obligations under this Agreement with respect to any such Patent Right.
ARTICLE VII. INFRINGEMENT
A. Licensee and CMCC shall each inform the other promptly in writing of
any alleged infringement by a third party of the Patent Rights in the Field of
Use and of any available evidence thereof.
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Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
B. During the term of this Agreement, CMCC shall have the right, but shall
not be obligated, to prosecute at its own expense any infringement of the Patent
Rights and, in furtherance of such right, Licensee hereby agrees that CMCC may
include Licensee as a party plaintiff in any such suit, without expense to
Licensee. The total cost of any such infringement action commenced or defended
solely by CMCC shall be borne by CMCC. CMCC shall keep any recovery or damages
for past infringement derived therefrom.
C. If within [**] after having been notified of any alleged infringement,
CMCC shall have been unsuccessful in persuading the alleged infringer to desist
and shall not have brought and shall not be diligently prosecuting an
infringement action, or if CMCC shall notify Licensee at any time prior thereto
of its intention not to bring suit against any alleged infringer then, and in
those events only, Licensee shall have the right, but shall not be obligated, to
prosecute at its own expense any infringement of the Patent Rights in the Field
of Use, and Licensee may, for such purposes, use the name of CMCC as party
plaintiff; provided, however, that such right to bring such an infringement
action shall remain in effect only for so long as the license granted hereunder
remains exclusive. No settlement, consent judgment or other voluntary final
disposition of the suit may be entered into without the consent of CMCC, which
consent shall not be unreasonably withheld. Licensee shall indemnify CMCC
against any order for costs that may be made against CMCC in such proceedings.
D. In the event Licensee shall undertake the enforcement and/or defense of
the Patent Rights in the Field of Use by litigation, Licensee may withhold up to
[**] percent ([**]%) of the payments otherwise thereafter due to CMCC under
Article IV above and apply the same toward reimbursement of up to [**] percent
([**]%) of Licensee's expenses, including reasonable attorney's fees, in
connection therewith. Any recovery of damages by Licensee for each such suit
shall be applied first in satisfaction of any unreimbursed expenses and legal
fees of Licensee relating to such suit and next toward reimbursement of CMCC for
any payments under Article IV past due or withheld and applied pursuant to this
Article VII. The balance remaining from any such recovery shall be treated as
sublicensing income.
E. In the event that a declaratory judgment action alleging invalidity or
noninfringement of any of the Patent Rights shall be brought against Licensee,
CMCC, at its option, shall have the right, within thirty (30) days after
commencement of such action, to intervene and participate in the defense of the
action at its own expense.
F. In any infringement suit which either party may institute to enforce
the Patent Rights pursuant to this Agreement, the other party hereto shall, at
the request and the expense of the party initiating such suit, cooperate in all
reasonable respects and, to the extent reasonably possible, have its employees
testify when requested and make available relevant records, papers, information,
samples, specimens, and the like.
G. Licensee shall during the exclusive period of this Agreement have the
sole right subject to the terms and conditions hereof to sublicense any alleged
infringer for future use of the Patent Rights. Any upfront fees paid to Licensee
as part of such a sublicense shall be shared equally between Licensee and CMCC.
Any other royalties shall be treated as set forth in Article IV, Paragraph A.5.
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Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
ARTICLE VIII. UNIFORM INDEMNIFICATION
AND INSURANCE PROVISIONS
A. Licensee shall indemnify, defend and hold harmless CMCC, its corporate
affiliates, current or future directors, trustees, officers, faculty, medical
and professional staff, employees, students and agents and their respective
successors, heirs and assigns (the "Indemnitees"), against any liability,
damage, loss or expense (including reasonable attorney's fees and expenses of
litigation) incurred by or imposed upon the Indemnitees or any one of them in
connection with any claims, suits, actions, demands or judgments arising out of
any theory of product liability (including, but not limited to, actions in the
form of tort, warranty, or strict liability) concerning any product, process or
service made, used or sold pursuant to any right or license granted under this
Agreement; provided, however, that Licensee's indemnification obligations
hereunder shall not apply to any liability, damage, loss or expense to the
extent that it is directly attributable to the negligent activities of the
Indemnitees.
B. Licensee agrees, at its own expense, to provide attorneys reasonably
acceptable to CMCC to defend against any actions brought or filed against any
party indemnified hereunder with respect to the subject of indemnity contained
herein, whether or not such actions are rightfully brought.
C. Beginning at the time as any such product, process or service is being
commercially distributed or sold (other than for the purpose of obtaining
regulatory approvals) by Licensee or by a sublicensee, Affiliate or agent of
Licensee, Licensee shall, at its sole cost and expense, procure and maintain
commercial general liability insurance in amounts not less than $[**] per
incident and $[**] annual aggregate and naming the Indemnitees as additional
insureds. Such commercial general liability insurance shall provide (i) product
liability coverage and (ii) contractual liability coverage for Licensee's
indemnification under Article VIII, Paragraphs A and B of this Agreement. If
Licensee elects to self-insure all or part of the limits described above
(including deductibles or retentions which are in excess of $[**] annual
aggregate), such self-insurance program must be acceptable to CMCC and the Risk
Management Foundation of the Harvard Medical Institutions, Inc. The minimum
amount of insurance coverage required under this Article VIII, Paragraph C.
shall not be construed to create a limit of Licensee's liability with respect to
its indemnification under Article VIII, Paragraphs A and B of this Agreement.
D. Licensee shall provide CMCC with written evidence of such insurance
upon request of CMCC. Licensee shall provide CMCC with written notice at least
fifteen (15) days prior to the cancellation, non-renewal or material change in
such insurance. If Licensee does not obtain replacement insurance providing
comparable coverage within such fifteen (15) day period, CMCC shall have the
right to terminate this Agreement effective at the end of such fifteen (15) day
period without notice of any additional waiting periods.
E. Licensee shall maintain such commercial general liability insurance
during (i) the period that any such product, process or service is being
commercially distributed or sold (other than for the purpose of obtaining
regulatory approvals) by Licensee or by a sublicensee, Affiliate or agent of
Licensee and (ii) a reasonable period after the period referred to above, which
in no event shall be less than fifteen (15) years.
-11-
<PAGE>
F. Article VIII, Paragraphs A through E shall survive expiration or
termination of this Agreement.
G. OTHER THAN WARRANTIES SET FORTH HEREIN, CMCC MAKES NO WARRANTY, EXPRESS
OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR ANY IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE WITH
RESPECT TO ANY PATENT, TRADEMARK, SOFTWARE, TRADE SECRET, TANGIBLE RESEARCH
PROPERTY, INFORMATION OR DATA LICENSED OR OTHERWISE PROVIDED TO LICENSEE
HEREUNDER AND HEREBY DISCLAIMS THE SAME.
ARTICLE IX. EXPORT CONTROLS
It is understood that CMCC is subject to United States laws and
regulations controlling the export of technical data, computer software,
laboratory prototypes and other commodities (including the Arms Export Control
Act, as amended and the Export Administration Act of 1979), and that its
obligations hereunder are contingent on compliance with applicable United States
export laws and regulations. The transfer of certain technical data and
commodities may require a license from the cognizant agency of the United States
Government and/or written assurances by Licensee that Licensee shall not export
data or commodities to certain foreign countries without prior approval of such
agency. CMCC neither represents that a license shall not be required, nor that
if required, it shall be issued.
ARTICLE X. NON-USE OF NAMES
Licensee shall not use the name of Children's Medical Center Corporation
nor the name of any of its corporate affiliates or employees, nor any adaptation
thereof, in any advertising, promotional or sales literature without prior
written consent obtained from CMCC in each case, except that Licensee may state
that it is licensed by CMCC under one or more of the patents and/or applications
comprising the Patent Rights, and Licensee may comply with disclosure
requirements of all applicable laws relating to its business, including United
States and state security laws.
ARTICLE XI. ASSIGNMENT
A. Except as otherwise provided herein, this Agreement is not assignable
in whole or in part, and any attempt to do so shall be void and of no effect.
B. CMCC may assign this Agreement at any time to any corporate affiliate
of CMCC without the prior consent of Licensee.
C. Except as provided in Article XI, Paragraph D below, Licensee may
assign this Agreement to another entity only with the prior written consent of
CMCC, which consent shall not be unreasonably withheld or delayed.
D. Notwithstanding anything herein to the contrary, in the event Licensee
merges with another entity, is acquired by another entity, or sells all or
substantially all of its assets to another entity, Licensee may assign its
rights and obligations hereunder to, in the event of a
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<PAGE>
merger or acquisition, the surviving entity, and in the event of a sale, the
acquiring entity, without CMCC's consent so long as: (i) Licensee is not then in
breach of this Agreement; (ii) the proposed assignee has a net worth at least
equivalent to the net worth Licensee had as of the date of this Agreement; (iii)
the proposed assignee has available resources and sufficient scientific,
business and other expertise comparable to Licensee in order to satisfy its
obligations hereunder; (iv) Licensee provides written notice of the assignment
to CMCC, together with documentation sufficient to demonstrate the requirements
set forth in subparagraphs (i) through (iii) above, at least fifteen (15) days
prior to the effective date of the assignment; and (v) CMCC receives from the
assignee, in writing, at least fifteen (15) days prior to the effective date of
the assignment: (a) reaffirmation of the terms of this Agreement; (b) an
agreement to be bound by the terms of this Agreement; and (c) an agreement to
perform the obligations of Licensee under this Agreement.
ARTICLE XII. DISPUTE RESOLUTION AND ARBITRATION
A. Except for the right of either party to apply to a court of competent
jurisdiction for a temporary restraining order, a preliminary injunction, or
other equitable relief to preserve the status quo or prevent irreparable harm,
any and all claims, disputes or controversies arising under, out of, or in
connection with the Agreement, including any dispute relating to patent validity
or infringement, which the parties shall be unable to resolve within sixty (60)
days shall be mediated in good faith. The party raising such dispute shall
promptly advise the other of such claim, dispute or controversy in writing,
describing the dispute in reasonable detail. By no later than five (5) business
says after the recipient has received such notice of dispute, each party shall
have selected a representative who shall have the authority to bind such party
and shall have advised the other party in writing of the name and title of such
representative.
B. Within fifteen (15) days of receipt of a request for mediation as
described above, the parties agree to commence mediation in the City of Boston,
Commonwealth of Massachusetts in accordance with the policies and procedures of
Endispute, Inc. ("Endispute"), or in the event that Endispute is no longer in
operation, in accordance with the policies and procedures of the American
Arbitration Association. The parties shall select a mediator acceptable to both
of them from a list provided by Endispute. The parties agree to cooperate in
good faith in said mediator's efforts to assist the parties to resolve the
dispute. Each party agrees to pay fifty percent (50%) of the costs of said
mediation. If the matter has not been resolved within thirty (30) days of the
commencement of mediation, either party may request in writing that the matter
be submitted to arbitration in accordance with the following subparagraph.
C. Any and all claims, disputes or controversies arising under, out of, or
in connection with this Agreement, which have not been resolved by good faith
negotiations between the parties or by mediation shall be resolved by final and
binding arbitration in Boston, Massachusetts, in accordance with the rules of
the American Arbitration Association ("AAA") then obtaining and all expenses, in
connection therewith, will be shared equally, except for the expense of the
parties' respective legal counsels. A single arbitrator shall be mutually agreed
upon and if the parties are unable to agree on a mutually acceptable arbitrator,
an arbitrator shall be chosen in accordance with AAA rules. Any award rendered
in such arbitration shall be final and may be enforced by either party.
-13-
<PAGE>
D. Notwithstanding the foregoing, nothing in this Article shall be
construed to waive any rights or timely performance of any obligations existing
under this Agreement.
ARTICLE XIII. TERM AND TERMINATION
A. The term of this Agreement shall commence on the Effective Date and
shall remain in effect, on a country-by-country basis, until the expiration of
all Patent Rights in such country.
B. CMCC may terminate this Agreement immediately upon the bankruptcy,
insolvency, liquidation, dissolution or cessation of operations of Licensee; or
the filing of any voluntary petition for bankruptcy, dissolution, liquidation or
winding-up of the affairs of Licensee; or any assignment by Licensee for the
benefit of creditors; or the filing of any involuntary petition for bankruptcy,
dissolution, liquidation or winding-up of the affairs of Licensee which is not
dismissed within ninety (90) days of the date on which it is filed or commenced.
C. CMCC may terminate this Agreement upon thirty (30) days prior written
notice in the event of Licensee's failure to pay to CMCC royalties due and
payable hereunder in a timely manner, unless Licensee shall make all such
payments to CMCC within said thirty (30) day period. Upon the expiration of the
thirty (30) day period, if Licensee shall not have made all such payments to
CMCC, the rights, privileges and licenses granted hereunder shall terminate.
D. Except as otherwise provided in Paragraph C above, CMCC may terminate
this Agreement upon sixty (60) days prior written notice in the event of
Licensee's breach or default of any material term or condition or warranty
contained in this Agreement, unless Licensee shall cure such breach to CMCC's
reasonable satisfaction within said sixty (60) day period. Upon the expiration
of the sixty (60) day period, if Licensee shall not have cured said breach to
the reasonable satisfaction of CMCC, the rights, privileges and license granted
hereunder shall terminate.
E. Licensee shall have the right to terminate this Agreement at any time
upon six (6) months' prior written notice to CMCC, and upon payment by Licensee
of all amounts due CMCC through the effective date of termination.
F. Upon termination of this Agreement for any reason, nothing herein shall
be construed to release either party from any obligation that matured prior to
the effective date of such termination. Licensee and any sublicensee thereof
may, however, after the effective date of such termination, sell all Licensed
Products and complete Licensed Products in the process of manufacture at the
time of such termination and sell the same, provided that Licensee shall pay to
CMCC the royalties thereon as required under this Agreement and shall submit the
reports required under this Agreement on the sales of Licensed Products.
ARTICLE XIV. PAYMENTS, NOTICES, AND OTHER COMMUNICATIONS
A. All payments, notices, reports and/or other communications made in
accordance with this Agreement, shall be sufficiently made or given on the date
of the mailing if delivered by hand, by facsimile or sent by first class mail
postage prepaid and addressed as follows:
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<PAGE>
In the case of CMCC:
Donald Lombardi
Director, Intellectual Property Office
Children's Hospital
300 Longwood Avenue
Boston, MA 02115
In the case of Licensee:
Daniel Ohmstead
CEO, Reprogenesis, Inc.
21 Erie Street
Cambridge, MA 02139
or such other address as either party shall notify the other in writing.
ARTICLE XV. GENERAL PROVISIONS
A. All rights and remedies hereunder will be cumulative and not
alternative, and this Agreement shall be construed and governed by the laws of
the Commonwealth of Massachusetts.
B. This Agreement may be amended only by written agreement signed by the
parties.
C. It is expressly agreed by the parties hereto that CMCC and Licensee are
independent contractors and nothing in this Agreement is intended to create an
employer relationship, joint venture, or partnership between the parties. No
party has the authority to bind the other.
D. This Agreement constitutes the entire agreement between the parties
with respect to the subject matter hereof and supersedes all proposals,
negotiations and other communications between the parties, whether written or
oral, with respect to the subject matter hereof.
E. If any provisions of this Agreement shall be held to be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions of this Agreement shall not be impaired thereby.
F. This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original as against the party whose signature appears
thereon, but all of which taken together shall constitute but one and the same
instrument.
G. The failure of either party to assert a right to which it is entitled
or to insist upon compliance with any term or condition of this Agreement shall
not constitute a waiver of that right or excuse a similar subsequent failure to
perform any such term or condition by the other party.
-15-
<PAGE>
H. Licensee agrees to mark any Licensed Products sold in the United States
with all applicable United States patent numbers. All Licensed Products shipped
to or sold in other countries shall be marked in such a manner as to conform
with the patent laws and practices of the country of manufacture or sale.
I. Each party hereto agrees to execute, acknowledge and deliver such
further instruments and do all such further acts as may be necessary or
appropriate to carry out the purposes and intent of this Agreement.
J. The paragraph headings contained in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date last written below.
CHILDREN'S MEDICAL CENTER
CORPORATION REPROGENESIS
By: /s/ William New By: /s/ Daniel R. Omstead
----------------------------- ---------------------------------
Name: William New Name: Daniel R. Omsted
--------------------------- -------------------------------
Title: Vice President, Research Title: President
-------------------------- ------------------------------
Administration
Date: 2/20/00 Date: 2/20/00
--------------------------- -------------------------------
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<PAGE>
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
APPENDIX 1
Patent Rights
U.S. [**] filed [**]
U.S. [**] filed [**]
PCT/US[**] filed[**] (limited to claims directed to the
inventions of U.S. [**])
Australia [**]
Canada [**]
Japan [**]
EPO [**]
-17-
<PAGE>
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
APPENDIX 2
Development Plan
A. Licensee will fund research at CMCC under the direction of Dr. James Yoo,
the Principal Investigator, for [**] years beginning on June 1, 2000 under
the terms of the Sponsored Research Agreement of even date. Some of the
research done under this program will involve research and preclinical
studies on the use of [**] for the applications in the Field(s) of Use
licensed hereunder.
B. Licensee will deliver a more detailed updated commercial Development Plan to
CMCC within [**] of the Effective Date containing all the information
described in Article III B. of this License Agreement.
C. Licensee will file an IDE on a Licensed Product or Licensed Process within
[**] of the Effective Date.
D. Licensee will maintain a clinical development program in accordance with
industry standards for conquerable products and the Development Plan.
E. Licensee will introduce a Licensed Product or Licensed Process to the market
within [**] of the Effective Date.
<PAGE>
Exhibit 10.37
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
TERMINATION AND RELEASE
AGREEMENT
THIS TERMINATION AND RELEASE AGREEMENT (this "Release") is entered into
this 27th day of January, 1999, by and between Reprogenesis, Inc., a Texas
corporation ("Reprogenesis"), and American Medical Systems, Inc., a Delaware
corporation ("AMS").
RECITALS
WHEREAS, American Medical Systems, Inc., a Minnesota corporation ("AMS
Minnesota") and Reprogenesis' predecessor, Reprogenesis, L.P., a Texas limited
partnership, entered into that certain Research and Development Agreement dated
September 7, 1995, as amended to the date hereof (as amended, the "Research and
Development Agreement") and that certain Supply and Marketing Agreement dated
September 7, 1995, as amended to the date hereof (as amended, the "Supply and
Marketing Agreement") (the Research and Development Agreement and the Supply and
Marketing Agreement are referred to, collectively, as the "AMS Agreements") to
enable Reprogenesis to conduct certain research and development with respect to
human tissue engineering processes and products; and
WHEREAS, AMS Minnesota has assigned its rights under the AMS Agreements to
AMS.
WHEREAS Reprogenesis and AMS desire to (i) terminate the AMS Agreements
pursuant to the provisions set forth herein and (ii) release certain claims
which they may have against one another.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
Section 1. Defined Terms. Capitalized terms used but not expressly defined
in this Release have the respective meanings given to them in the Research and
Development Agreement.
Section 2. Termination of AMS Agreements. Each of the Research and
Development Agreement and the Supply and Marketing Agreement is hereby
terminated effective January 26, 1999. Except as otherwise provided herein, no
party thereto shall have any further rights or obligations under either of such
agreements, whether arising prior to or after the date hereof. Notwithstanding
the foregoing, the provisions of clauses (b) and (c) of Section 6.1
(Indemnification) and Sections 7.1 (Ownership of Technology) and 7.5
(Confidential Information) of the Research and Development Agreement shall
continue to be in full force and effect. The foregoing sentence shall supersede
and replace Section 9.5 of the Research and Development Agreement and Section
12.4 of the Supply and Marketing Agreement, and neither of such sections shall
have any further effect.
<PAGE>
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
Section 3. AMS Reimbursement. AMS will reimburse Reprogenesis $1,149,869
pursuant to the 1998 fourth quarter Reprogenesis Invoice #1998004 dated January
11, 1999. With respect to the period from January 1, through January 26, 1999,
AMS will reimburse Reprogenesis for 80% of Actual Costs incurred during such
period, such reimbursement in no event exceeding 80% of the pro-rated Appendix A
Budget for such period attached to Amendment No. 1 to the Research and
Development Agreement dated April 16, 1998. Such reimbursements will be made
within 45 days of delivery of the applicable invoice. AMS will not have any
obligation to reimburse Reprogenesis for any Actual Costs incurred subsequent to
January 26, 1999.
Section 4. No Further Milestone Payment. Reprogenesis acknowledges that
AMS will not make any further milestone payments contemplated by Section 4.3 of
the Research and Development Agreement, including, but not limited to, a
milestone payment of $1,375,000 for the Feasibility Study relating to the
Urinary Incontinence Product.
Section 5. Reprogenesis Reimbursement to AMS. In lieu of any amounts that
would otherwise be owing from Reprogenesis to AMS pursuant to the terms of
Section 9.3(c) of the Research and Development Agreement, Reprogenesis will make
the following payments to AMS up to an aggregate of $[**]:
(a) If Reprogenesis proceeds with the development of either the
vesicoureteral reflux product ("VRP") or the urinary incontinence product
("UIP"), Reprogenesis will pay $[**] to AMS. "Proceeds with the development"
shall mean the biopsy of and/or injection of the bulking agent into any reflux
or incontinence patients by or on behalf of Reprogenesis in any existing or
future clinical trials of either the VRP or UIP.
(b) Reprogenesis will pay to AMS an additional $[**] on upon
the first to occur of (i) FDA regulatory approval in the United States for the
VRP or the UIP or (ii) regulatory approval or notification in any foreign
country for the VRP or the UIP.
(c) Reprogenesis will pay to AMS an additional $[**] upon the
commercialization of the VRP and an additional $[**] upon the commercialization
of the UIP (each, a "Commercialization Payment").
(d) Reprogenesis will notify AMS within five business days of
the achievement of any of the events set forth in this Section 5. Any payment
under Section 5(a) or (b) will be paid by Reprogenesis prior to the expiration
of 45 days after the event causing such payment to be due. Any Commercialization
Payment will be paid in equal monthly installments of $[**] over the
24-month-period beginning immediately after the commercialization of each such
product.
(e) Reprogenesis will not sell, license, transfer or otherwise
dispose of or grant any material commercialization rights to the VRP or the UIP
unless (i) AMS has consented to such transaction in advance or (ii) the other
party to such transaction has agreed in writing and for the benefit of AMS to be
obligated, in the event Reprogenesis
<PAGE>
fails to make such payments, to make the payments set forth in this Section 5
that relate to the product that is subject of such transaction. In any case,
Reprogenesis will remain obligated to make any such payments.
Section 6. Release by AMS. AMS expressly releases, fully and finally,
Reprogenesis and its directors, officers, shareholders, general partners,
limited partners, agents, employees, subsidiaries, parents, heirs, executors,
administrators, accountants, attorneys and other representatives, successors and
assigns, past, present or future from and against all manner of claims, causes
of action, suits, demands, debts, sums of money, accounts, covenants, contracts,
controversies, agreements, and promises on its part of any kind whatsoever,
known or unknown, suspected or unsuspected, direct, indirect or contingent, in
law or in equity (collectively, "Claims"), arising at any time from the
beginning of the world to the date hereof and in any manner, resulting from or
arising out of or in connection with (i) the Research and Development Agreement
or (ii) the Supply and Marketing Agreement; provided that no Claim resulting
from or arising out of or in connection with the continuing provisions of the
Research and Development Agreement set forth in Section 2 of this Agreement or
the provisions hereof shall be affected by this release.
Section 7. Release by Reprogenesis. Reprogenesis expressly releases, fully
and finally, AMS and its directors, officers, shareholders, general partners,
limited partners, agents, employees, subsidiaries, parents, heirs, executors,
administrators, accountants, attorneys and other representatives, successors and
assigns, past, present or future from and against all Claims arising at any time
from the beginning of the world to the date hereof and in any manner resulting
from or arising out of (i) the Research and Development Agreement or (ii) the
Supply and Marketing Agreement; provided that no Claim resulting from or arising
out of or in connection with the continuing provisions of the Research and
Development Agreement set forth in Section 2 of this Agreement or the provisions
hereof shall be affected by this release.
Section 8. Proprietary Technology. AMS represents that it does not have
any rights to proprietary technology or intellectual property arising out of the
Sponsored Research Agreement dated January 1, 1996 between AMS and Children's
Hospital ("Children's"). AMS agrees that Reprogenesis may negotiate directly
with Children's to acquire any such technology or intellectual property.
Reprogenesis and AMS acknowledge that after January 26, 1999, AMS will no longer
provide financial support for the patent prosecution of applications filed by
Children's relating to inventions made during the term of the Sponsored Research
Agreement.
Section 9. Publication. AMS will immediately refer all technical inquiries
regarding any Products to Reprogenesis. Each party agrees to (i) consult with
the other before issuing any press release or otherwise making any public
statements with respect to this Agreement, (ii) make a good faith effort to
reflect any comments received from the other party in such press release or
public statements, and (iii) state its reason for the termination of the AMS
Agreements in any such release or public statement as for "business reasons."
<PAGE>
Section 10. Forbearance. Each of the parties agrees to refrain and forbear
from in any manner initiating, instituting, encouraging or participating in any
lawsuit, action or other proceeding against any other party to this Release,
which is based upon a claim, cause of action, suit, demand, debt, sum of money,
account, covenant, contract, controversy, agreement or promise on his, her or
its part which has been released pursuant hereto.
Section 11. Validity of Release. Each of the parties represents and
warrants that this Release has been duty executed and delivered by it, is its
valid and binding obligation and is enforceable against it in accordance with
its terms.
Section 12. Entire Agreement The parties to this Release understand and
agree that the terms of this Release supersede any prior discussions,
understandings or agreements between and among them relative to the specific
subject matter hereof, and that the terms of this Release are intended to
constitute a binding contract between and among them for their express benefit.
Section 13. Representation by Counsel. Each of the parties represents and
acknowledges that it has been represented in the negotiations for, and in its
review of, this Release by counsel which it has voluntarily chosen, that such
party has fully read and understands the terms of this Release and that the
legal effect of this Release was fully explained to it by its counsel.
Section 14. No Assignment of Claims. Each of the parties represents and
warrants that it currently owns each and all of the Claims hereby released by
such party, and that such party has not heretofore assigned, hypothecated or
transferred, and will not hereafter in any manner assign, hypothecate or
transfer, to any person, any Claim on such party's part of any kind or nature
whatsoever, which is in any manner connected with, based upon or related to, or
which arises out of, the Claims released by this Release.
Section 15. Modification; Waiver. This Release may not be modified and its
provisions may not be waived except in writing executed by the party against
whom enforcement of such modification or waiver is sought.
Section 16. Governing Law. This Release shall be governed by and construed
in accordance with the internal laws of the State of Minnesota. The provisions
of Sections 11.8 and 11.9 of the Research Agreement shall be applicable to this
Release and are incorporated herein, as though fully set forth herein.
[Remainder of Page Intentionally Left Blank]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Release on the
date first above written.
REPROGENESIS, INC.
By: /s/ Daniel R. Omstead
-----------------------
Daniel R. Omstead
President and CEO
AMERICAN MEDICAL SYSTEMS, INC.
By: /s/ Larry W. Getlin
-----------------------
Larry W. Getlin
Vice President Regulatory/Medical Affairs
& Quality Systems
<PAGE>
Exhibit 10.40
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
AMENDED AND RESTATED
RESEARCH AND COMMERCIALIZATION AGREEMENT
by and between
Ontogeny, Inc.
and
Biogen, Inc.
November 30, 1998
<PAGE>
TABLE OF CONTENTS
Page
----
Introduction
Article 1. Definitions......................................................2
Article 2. The Collaboration...............................................10
2.1 Research Phase..................................................10
2.2 Commercialization Phase.........................................12
2.3 Accounting and Internal Controls................................14
2.4 Restrictions....................................................15
Article 3. Grant of Rights.................................................15
3.1 License Grants for Research Purpose.............................15
3.2 License Grants with Respect to Products that Comprise
Hedgehog-based Molecular Entities...............................16
3.3 Other License Grants............................................17
3.4 Restrictions on Licenses Granted by Ontogeny....................18
3.5 Sublicensing Obligations........................................18
3.6 Commercialization Option........................................18
3.7 Right of First Offer............................................19
Article 4. Payment Obligations.............................................20
4.1 Research License Fee and Stock Purchase.........................20
4.2 Development Program Fee and Stock Purchase......................20
4.3 Research Funding................................................20
4.4 Follow-on Research Support Fee..................................21
4.5 Breakup Fee.....................................................21
4.6 Milestone Payments..............................................21
4.7 Royalties.......................................................22
(i)
<PAGE>
4.8 Payment Currency and Interest on Payments Past Due..............24
4.9 Tax Withholding.................................................24
4.10 Records; Audits.................................................24
Article 5. Line of Credit..................................................25
5.1 Availability of Line of Credit..................................25
5.2 Repayment.......................................................25
Article 6. Commercialization Obligations...................................26
6.1 General.........................................................26
6.2 Product Objectives..............................................26
6.3 Consequences of Failure to Meet Commercialization Objectives....27
Article 7. Intellectual Property Rights....................................27
7.1 Ownership.......................................................27
7.2 Prosecution and Maintenance of Patent Right.....................28
7.3 Infringement by Third Parties...................................29
7.4 Infringement of Third Party Rights..............................30
Article 8. Representations, Warranties and Covenants.......................31
8.1 Representations, Warranties and Covenants of Ontogeny...........31
8.2 Representations, Warranties and Covenants of Biogen.............31
8.3 Disclaimers.....................................................31
Article 9. Confidential Information........................................32
9.1 Treatment of Confidential Information...........................32
9.2 Release from Restrictions.......................................32
Article 10. Term and Termination...........................................32
10.1 Term............................................................32
10.2 Termination by Biogen...........................................33
(ii)
<PAGE>
10.3 Termination for Breach..........................................33
10.4 Consequences of Termination.....................................33
10.5 Survival of Rights and Obligations..............................33
Article 11. Miscellaneous..................................................34
11.1 Product Liability Indemnification...............................34
11.2 Publicity.......................................................34
11.3 Governing Law...................................................35
11.4 Dispute Resolution..............................................35
11.5 Waiver..........................................................35
11.6 Notices.........................................................35
11.7 No Agency.......................................................36
11.8 Entire Agreement................................................36
11.9 Headings........................................................37
11.10 Severability....................................................37
11.11 Assignment......................................................37
11.12 Successors and Assigns..........................................37
11.13 Counterparts....................................................37
11.14 Force Majeure...................................................37
Schedule A - Ontogeny Hedgehog Proteins
Schedule B - Disease Indications Excepted from the Field
Schedule C - Research Workplan
Schedule D - Therapeutic Areas
Schedule E - Line of Credit Note
Exhibit A - Note Purchase Agreement
(iii)
<PAGE>
AMENDED AND RESTATED
RESEARCH AND COMMERCIALIZATION AGREEMENT
This Amended and Restated Research and Commercialization Agreement (the
"Agreement") dated as of November 30, 1998 is made by and between Ontogeny,
Inc., a Delaware corporation, having its principal place of business at 45
Moulton Street, Cambridge, Massachusetts 02138 ("Ontogeny") and Biogen, Inc., a
Massachusetts corporation, having its principal place of business at 14
Cambridge Center, Cambridge, Massachusetts 02142 ("Biogen").
INTRODUCTION
1. Ontogeny is in the business of conducting research in the field of
developmental biology, an objective of which is to discover therapeutic inducing
molecules that are specific for different types of cells.
2. Biogen has expertise in the discovery, development, manufacture and
commercialization of pharmaceutical products.
3. Biogen desires that Ontogeny, on behalf of and in collaboration with
Biogen. undertake a research project, the goal of which is to characterize
certain of Ontogeny's proprietary inducing molecules in order to determine their
therapeutic utility when administered systemically or into the central nervous
system. In addition, Biogen desires to obtain from Ontogeny an option to develop
and commercialize pharmaceutical products that are based upon molecules
characterized in the course of the research project.
4. In return for Ontogeny's commitment to undertake the research project
described herein and for the grant by Ontogeny of an option to develop and
commercialize pharmaceutical products based on molecules characterized in the
course of the research project, Biogen is willing to (i) fund and participate in
the research project and (ii) pay Ontogeny the research license fee provided for
herein. In the event that Biogen exercises its option to develop and
commercialize pharmaceutical products that are based upon molecules
characterized in the course of the research project, Biogen is willing to (i)
undertake the development and commercialization of such pharmaceutical products,
and (ii) pay Ontogeny the development program fee, milestone payments and
royalties provided for herein.
5. Ontogeny and Biogen entered into a Research and Commercialization
Agreement (the "Original Agreement") dated as of July 1, 1996, as amended by
that First Amendment to the Original Agreement (the "First Amendment") dated as
of June 22, 1998, that Second Amendment to the Original Agreement (the "Second
Amendment") dated as of July 31, 1998, that Third Amendment to the Original
Agreement (the "Third Amendment") dated as of September 30, 1998 and that Fourth
Amendment to the Original Agreement (the "Fourth Amendment") dated as of October
31, 1998.
6. Ontogeny and Biogen are desirous of amending and restating the terms of
the Original Agreement, as amended.
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In consideration of the mutual covenants and promises contained in this
Agreement and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Ontogeny and Biogen agree as follows:
Article 1. Definitions
As used in this Agreement, the following terms, whether used in the
singular or plural, shall have the following meanings:
1.1 "Affiliate" means any corporation, company, partnership, joint
venture, firm and/or entity which controls, is controlled by or is under common
control with a Party. For purposes of this Section 1.1, "control" shall mean (a)
in the case of corporate entities, direct or indirect ownership of at least
fifty percent (50%) of the stock or shares entitled to vote for the election of
directors and (b) in the case of non-corporate entities, direct or indirect
ownership of at least fifty percent (50%) of the equity interest with the power
to direct the management and policies of such non-corporate entities.
1.2 "Biogen Gene Therapy Intellectual Property Rights" means (a) the
Biogen Gene Therapy Patent Rights and (b) any other intellectual property rights
in and to the Biogen Gene Therapy Technology.
1.3 "Biogen Gene Therapy Patent Rights" means all patents and patent
applications (which for all purposes of this Agreement shall be deemed to
include certificates of invention and applications for certificates of
invention) throughout the world, covering or relating to the Biogen Gene Therapy
Technology, including any substitutions, extensions, reissues, reexaminations,
renewals, divisions, continuations, continuations-in-part or supplemental
protection certificates, which Biogen owns or otherwise has the right to grant
licenses under.
1.4 "Biogen Gene Therapy Technology" means all Technology which Biogen
solely owns (including Biogen Solely-Owned Collaboration Technology (as defined
in Section 7.1 (a))) or, with the exception of Collaboration Technology that is
jointly owned with Ontogeny, Ontogeny's Solely-Owned Collaboration Technology
and Ontogeny Technology, which Biogen otherwise has the right to grant licenses
under as of the Effective Date or during the term of the Collaboration which is
specific to Gene Therapy and which does not embody or is not an improvement of
Ontogeny Technology, including but not limited to vectors, other gene delivery
methods, control elements, gene regulation elements, promoters, and related
formulations; provided however that Biogen Gene Therapy Technology shall not
include Fundamental Hedgehog Gene Therapy Collaboration Technology or Hedgehog
Specific Gene Therapy Collaboration Technology.
1.5 "Biogen Intellectual Property Rights" means (a) the Biogen Patent
Rights and (b) any other intellectual property rights in and to the Biogen
Technology which Biogen owns or otherwise has the right to grant licenses under.
1.6 "Biogen Patent Rights" means all patents and patent applications
(which for all purposes of this Agreement shall be deemed to include
certificates of invention and applications for certificates of invention)
throughout the world, covering or relating to the Biogen Technology, including
any substitutions, extensions, reissues, reexaminations, renewals,
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divisions, continuations, continuations-in-part or supplemental protection
certificates, which Biogen owns or otherwise has the right to grant licenses
under.
1.7 "Biogen Technology" means all Technology, exclusive of the Biogen Gene
Therapy Technology and the Collaboration Technology, which Biogen owns or
otherwise has the right to grant licenses under as of the Original Effective
Date or during the term of the Collaboration, which is reasonably necessary to
either or both Parties in order to discover, research, develop, make, use, sell
or seek approval to market a therapeutic product that comprises a Hedgehog-based
Molecular Entity.
1.8 "Collaboration" means the Research Program and, if initiated, the
Commercialization Program.
1.9 "Collaboration Patent Rights" means all patents and patent
applications (which for all purposes of this Agreement shall be deemed to
include certificates of invention, applications for certificates of invention
and utility models) throughout the world, covering or relating to the
Collaboration Technology, including any substitutions, extensions, reissues,
reexaminations, renewals, divisions, continuations, continuations-in-part or
supplemental protection certificates.
1.10 "Collaboration Technology" means all Technology, as well as
improvements related thereto, conceived, reduced to practice or developed by a
Party or jointly by the Parties during, and in the conduct of, the
Collaboration.
1.11 "Columbia License Agreement" means the license agreement, dated
January 1, 1995, between Ontogeny and the Trustees of Columbia University in the
City of New York, pursuant to which Ontogeny is granted selected rights to
proprietary Technology relating to the Vertebrate Hedgehog Family.
1.12 "Commercialization Phase" means the phase of the Collaboration, as
more fully described in Section 2.2, that is initiated only upon the initiation,
if any, of the first Development Program.
1.13 "Commercialization Program" means the development, manufacturing and
commercialization activities, as more fully defined in Section 2.2, conducted by
the Parties during the Commercialization Phase.
1.14 "Comparable Proteins" means two or more Ontogeny Hedgehog Proteins
that show comparable activity in relevant animal models for the same disease
indications and no meaningful activity in relevant animal models for any other
disease indications.
1.15 "Confidential Information" means all materials, trade secrets or
other information, including, without limitation, proprietary information and
materials (whether or not patentable) regarding a Party's Technology, products,
business information or objectives.
1.16 "Contract Year" means the twelve (12) month period beginning on the
Original Effective Date, and each succeeding twelve (12) month period thereafter
until the termination of the Collaboration.
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1.17 "Desert Hedgehog" means (a) a protein that is a member of the
Vertebrate Hedgehog Family and whose amino acid sequence is substantially the
same, in whole or in part, as that set forth in Schedule A and (b) a protein
that is the human homologue of the protein described in (a).
1.18 "Development Program" means a development program, initiated upon the
exercise by Biogen of the option set forth in Section 3.6, that is undertaken by
the Parties with respect to an Ontogeny Hedgehog Protein to develop and
commercialize Hedgehog-based Molecular Entity(ies).
1.19 "Disease Indication" means (a) with respect to a Phase II or Phase
III clinical trial, a disease indication listed in the indication definition in
the clinical trial protocol and (b) with respect to an IND or an NDA. the
disease indication for which approval is being sought, as listed in the
application.
1.20 "Effective Date" means the date of this Agreement.
1.21 "FDA" means the United States Food and Drug Administration.
1.22 "Field" means all therapeutics and prophylactics, other than
therapeutics and prophylactics based on the administration of cells (except with
respect to autologous cells administered in connection with Hedgehog Gene
Therapy), that are administered by the Specified Delivery Methods for any
disease indication, other than the excepted disease indications set forth in
Schedule B.
1.23 "First Commercial Sale" means, with respect to each Licensed Product
or Ontogeny Product, as the case may be, the first commercial sale of such
product by a Party, its Affiliates, Sublicensees and/or distributors in a
country in the Territory, other than for clinical trial purposes or for
compassionate use.
1.24 "FTE" means a full time equivalent scientific person year (consisting
of a total of one thousand eight hundred eighty (1,880) hours per year of
scientific work on or directly related to the Collaboration), carried out by an
Ontogeny employee, having at least a Bachelor's Degree. Scientific work on or
directly related to the Collaboration to be performed by Ontogeny employees can
include, but is not limited to, experimental laboratory work, recording and
writing of results, reviewing literature and references, holding scientific
discussions, managing and leading scientific staff, managing external
collaborators, participating in regulatory and/or clinical work, writing and
reviewing patent applications, developing and applying computer programs related
to the Collaboration, and carrying out project management duties.
1.25 "Fundamental Hedgehog Gene Therapy Collaboration Technology" means
all Biogen's Solely-Owned Collaboration Technology (as defined in Section
7.1(a)) which is specific to Gene Therapy and which covers (i) any modifications
to any Hedgehog-based Molecular Entity or (ii) any expression, promoter or
enhancer elements that are required for the expression of any Hedgehog-based
Molecular Entity. For purposes of this definition, the addition of a promoter or
control or regulation element shall not be deemed to be a modification of the
Hedgehog-based Molecular Entity.
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1.26 "Gene Therapy" means the injection, application or other mode of
administration of a therapeutic product that comprises a nucleic acid or a
functional analog thereof, including, but not limited to, in combination with a
vector, which is intended, upon delivery into a patient (including, but not
limited to, through the administration of autologous cells), to provide a gene
product encoded therein that is expressed.
1.27 "Good Faith Intent to Develop" means the intent to develop a
Hedgehog-based Molecular Entity for a disease indication in the Field, where
such intent is evidenced by ongoing work in connection with a written workplan
that shall be approved by a majority of the JRMC on or prior to the termination
of the Research Phase (or, in the event Biogen initiates a Development Program
with respect to all three Ontogeny Hedgehog Proteins, a written workplan that
shall be approved by a majority of the JRMC on or prior to return, if any, of
the first Ontogeny Hedgehog Protein to Ontogeny pursuant to a Biogen Early
Termination Notification (as that term is defined in Section 2.2(b)) or
Mandatory Termination (as that term is defined in Section 6.3)), such approval
not to be unreasonably withheld, which workplan shall describe planned research
and development activities (including specific commercialization milestones and
a timeline) directed towards development and commercialization of such
Hedgehog-based Molecular Entity for such disease indication.
1.28 "Gross Sales" means the gross amount invoiced on sales to independent
third parties of (a) a Licensed Product by Biogen and/or its Affiliates and/or
Sublicensees or (b) an Ontogeny Product by Ontogeny and/or its Affiliates, as
applicable.
1.29 "Harvard License Agreement" means the license agreement, dated
February 9, 1995, between Ontogeny and the President and Fellows of Harvard
College, pursuant to which Ontogeny is granted selected rights to proprietary
Technology relating to the Vertebrate Hedgehog Family.
1.30 "Hedgehog-based Molecular Entity" means a molecular entity that is
(a) an Ontogeny Hedgehog Protein, (b) a peptide fragment of an Ontogeny Hedgehog
Protein where such peptide fragment consists of a sequence of amino acids that
is contained within such Ontogeny Hedgehog Protein, (c) an entity that is a
variant of (a) or (b) where such variant is (i) an entity whose structure has
been altered or (ii) an entity consisting of (a) or (b) conjugated with another
entity, where such alteration or conjugation has been done in order to confer
upon the variant a feature or property not possessed by (a) or (b) (such as
altered pharmacokinetic or pharmacodynamic properties, ease-of-manufacturing,
uniqueness, ease-of-manipulation for preclinical research and development,
etc.), or (d) a nucleic acid or a functional analog thereof encoding either (a),
(b) or ( c) above and excluding anti-sense molecular entities.
1.31 "Hedgehog Gene Therapy" means Gene Therapy where the therapeutic
product comprises a nucleic acid or functional analog thereof of the type
described in Section 1.29(d), provided that Hedgehog Gene Therapy shall be
limited to (a) oral or systemic injection or application, (b) other applications
for systemic effect, and (c) in the case of disorders of the central nervous
system, in addition to (a) and (b), delivery that is through the blood brain
barrier into the cerebrospinal fluid or directly into the central nervous
system.
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Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
1.32 "Hedgehog Specific Gene Therapy Collaboration Technology" means
Biogen's Solely-Owned Collaboration Technology (as defined in Section 7.1(a)),
exclusive of Fundamental Hedgehog Gene Therapy Collaboration Technology, which
(a) has specific applicability to Hedgehog Gene Therapy where the therapeutic
product comprises a Hedgehog-based Molecular Entity and (b) works selectively
better for a therapeutic product comprising a Hedgehog-based Molecular Entity
than it does for a therapeutic product comprising a gene other than a
Hedgehog-based Molecular Entity.
1.33 "IND" means an Investigational New Drug Application filed with the
FDA of an equivalent filing in any Major Market Country.
1.34 "Indian Hedgehog" means (a) a protein that is a member of the
Vertebrate Hedgehog Family and whose amino acid sequence is substantially the
same, in whole or in part, as that set forth in Schedule A, and (b) a protein
that is the human homologue of the protein described in (a).
1.35 "Lead Protein" means the one Ontogeny Hedgehog Protein which is the
subject of a Development Program that is designated as the "Lead Protein" by
Biogen on or prior to the termination of the Research Phase, subject to Section
3.6.
1.36 "Licensed Product" means a product that comprises a Hedgehog-based
Molecular Entity (a) (i) that is based on an Ontogeny Hedgehog Protein that was
the subject of a Development Program that was not terminated by Biogen pursuant
to a Biogen Early Termination Notification (as that term is defined in Section
2.2(b)) or terminated by Ontogeny pursuant to a Mandatory Termination (as that
term is defined in Section 6.3), and (ii) with respect to which the Biogen
Research License (as that term is defined in Section 3.1(a)) was not terminated
pursuant to a Requested Termination (as that term is defined in Section 3.1(a))
under the terms of Section 3.1(a), and (b) which, or the manufacture, use or
sale of which, (i) is covered by a Valid Claim of any Ontogeny Patent Rights
and/or any Collaboration Patent Rights in the country where such product is
manufactured, used or sold, and/or (ii) embodies any of the Ontogeny Technology
and/or the Collaboration Technology.
1.37 "Major Market Country" means the [**], [**], [**], [**], [**], [**],
[**], [**] or [**].
1.38 "NDA" means a New Drug Application filed with the FDA or an
equivalent filing in any Major Market Country.
1.39 "Net Sales" means the Gross Sales of a Licensed Product or an
Ontogeny Product, as the case may be, less the following items, provided that
such items are included in the amount invoiced and do not exceed reasonable and
customary amounts in the country in which such sale or other disposition
occurred: (a) trade, cash and quantity discounts actually allowed and taken; (b)
excises, sales taxes or other taxes imposed upon and paid with respect to such
sales (excluding national, state or local taxes based on income); (c) freight,
insurance and other transportation charges incurred in shipping a Licensed
Product or an Ontogeny Product, as the case may be, to third parties; (d)
amounts repaid or credited by reason of rejections, defects, recalls or returns
or because of retroactive price reductions; (e) import or export duties or their
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equivalent and (f) rebates paid pursuant to (government regulations. Such
amounts shall be determined from the books and records of a Party and/or its
Affiliates and/or Sublicensees, as applicable, maintained in accordance with
generally accepted accounting principles, consistently applied.
If a Licensed Product or an Ontogeny Product, as the case may be, is sold,
leased, used or otherwise commercially disposed of for value (including, without
limitation, disposition in connection with the delivery of other products or
services) in a transaction that is not an outright arm's length sale to an
independent third party, then the gross amount invoiced in such transaction
shall be deemed to be the gross amount that would have been paid had there been
such a sale at the average sale price of such Licensed Product or Ontogeny
Product, as the case may be, during the applicable royalty reporting period in
the country in which such disposition took place. The preceding sentence shall
not apply to the distribution at no cost of Licensed Products or Ontogeny
Products, as the case may be, to (i) physicians, hospitals or clinics for
promotional purposes or (ii) academic investigators for research or clinical
trial purposes. Net Sales shall also include any consideration received by a
Party and/or its Affiliates and/or Sublicensees, as applicable, in respect of
the sale, use or other disposition of a Licensed Product or an Ontogeny Product,
as the case may be, in a country prior to the receipt of all regulatory
approvals required to commence full commercial sales of such Licensed Product or
Ontogeny Product, as the case may be, in such country (e.g., sales under
"treatment INDs", "named patient sales", "compassionate use sales", or their
equivalents), other than the sale, use or other disposition of such Licensed
Product or Ontogeny Product, as the case may be, in the course of any clinical
trial conducted in order to obtain regulatory approval of such product or for
other research purposes.
In the event that a Licensed Product or an Ontogeny Product, as the case
may be, is sold as part of a Combination Product (as defined below), the Net
Sales from the Combination Product, for the purposes of determining royalty
payments, shall be determined by multiplying the Net Sales of the Combination
Product (as defined in the standard Net Sales definition), during the applicable
royalty reporting period, by the fraction, A/A+B where A is the average sale
price of the Licensed Product or the Ontogeny Product, as the case may be, when
sold separately in finished form and B is the average sale price of the other
product(s) included in the Combination Product when sold separately in finished
form, in each case during the applicable royalty reporting period in the country
in which the sale of the Combination Product was made or, if sales of both the
Licensed Product or the Ontogeny Product, as the case may be, and the other
product(s) did not occur in such period, then in the most recent royalty
reporting period in which sales of both occurred. In the event that such average
sale price cannot be determined for both the Licensed Product or the Ontogeny
Product, as the case may be, and all other product(s) included in the
Combination Product, Net Sales for the purposes of determining royalty payments
shall be calculated by multiplying the Net Sales of the Combination Product by
the fraction C/C+D where C is the fair market value of the Licensed Product or
the Ontogeny Product, as the case may be, and D is the fair market value of all
other pharmaceutical product(s) included in the Combination Product, in each
case as determined by mutual agreement of the Parties. As used above, the term
"Combination Product" means any pharmaceutical product which comprises a
Licensed Product or an Ontogeny Product, as the case may be, and other active
compounds and/or ingredients.
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Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
1.40 "Non-Lead Protein" means any Ontogeny Hedgehog Protein which is the
subject of a Development Program that is not designated the Lead Protein.
1.41 "Ontogeny Hedgehog Protein" means Desert Hedgehog and/or Indian
Hedgehog and/or Sonic Hedgehog.
1.42 "Ontogeny Intellectual Property Rights" means (a) the Ontogeny Patent
Rights and (b) any other intellectual property rights in and to the Ontogeny
Technology, which Ontogeny owns or otherwise has the right to grant licenses
under, including without limitation those rights obtained by Ontogeny under the
Columbia License Agreement and the Harvard License Agreement.
1.43 "Ontogeny Patent Rights" means all patents and patent applications
(which for all purposes of this Agreement shall be deemed to include
certificates of invention, applications for certificates of invention and
utility models) throughout the world, covering or relating to the Ontogeny
Technology, including any substitutions, extensions, reissues, reexaminations,
renewals, divisions, continuations, continuations-in-part or supplemental
protection certificates, which Ontogeny owns, or otherwise has the right to
grant licenses under.
1.44 "Ontogeny Product" means a product that comprises a Hedgehog-based
Molecular Entity (a)(i) that is based on an Ontogeny Hedgehog Protein that was
not the subject of a Development Program, (ii) that is based on an Ontogeny
Hedgehog Protein that was the subject of a Development Program that was
terminated by Biogen pursuant to a Biogen Early Termination Notification (as
that term is defined in Section 2.2(b)), (iii) with respect to which the Biogen
Research License (as that term is defined in Section 3.1(a)) was terminated by
Biogen pursuant to a Requested Termination (as that term is defined in Section
3.1(a)) under the terms of Section 3.1(a), or (iv) that is based on an Ontogeny
Hedgehog Protein that was the subject of a Development Program that was
terminated by Ontogeny pursuant to a Mandatory Termination (as that term is
defined in Section 6.3), but (b) which, or the manufacture, use or sale of
which, (i) is covered by a Valid Claim of any Biogen Patent Rights and/or any
Collaboration Patent Rights solely or Jointly owned by Biogen in the country
where such Hedgehog-based Molecular Entity is manufactured, used or sold, and/or
(ii) embodies any of the Biogen Technology and/or the Collaboration Technology
solely or jointly owned by Biogen.
1.45 "Ontogeny Technology" means all Technology, exclusive of the
Collaboration Technology, which Ontogeny owns or otherwise has the right to
grant licenses under as of the Original Effective Date or during the term of the
Collaboration, which is reasonably necessary to either or both Parties in order
to discover, research, develop, make, use, sell or seek approval to market a
therapeutic or prophylactic product that comprises a Hedgehog-based Molecular
Entity, including without limitation Technology to which Ontogeny has rights
under the Columbia License Agreement and the Harvard License Agreement.
1.46 "Original Effective Date" means July 1, 1996.
1.47 "Party" means Ontogeny or Biogen; "Parties" means Ontogeny and
Biogen.
1.48 "Protected Indications" means [**] disease indications in the Field
which shall be designated by Biogen in the manner set forth in Section 2.2(c).
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1.49 "Research Phase" means the phase of the Collaboration, as more fully
described in Section 2.1, during which the Parties shall cooperate in the
conduct of the Research Program.
1.50 "Research Program" means the research activities, as more fully
defined in the Research Workplan, conducted by the Parties during the Research
Phase and undertaken with the goal of determining the therapeutic or
prophylactic utility of products comprising a Hedgehog-based Molecular Entity
that are administered by the Specified Delivery Methods.
1.51 "Research Workplan" means the workplan, attached as Schedule C, as it
may be updated from time to time by mutual agreement of the parties, that
describes the research activities to be conducted by the Parties in the course
of the Research Program during the Research Phase.
1.52 "Restricted Protein" means a protein that is designated by Biogen
pursuant to Section 2.2(c) that is subject to certain restrictions on
development and commercialization in indications in the Field pursuant to
Section 2.4(c).
1.53 "Sonic Hedgehog" means a protein that is a member of the Vertebrate
Hedgehog Family and whose amino acid sequence is substantially the same, in
whole or in part, as that set forth in Schedule A.
1.54 "Specified Delivery Methods" means (a) delivery that is either oral
or through systemic in injection or application, (b) in the case of disorders of
the central nervous system, in addition to (a), delivery that is through the
blood brain barrier into the cerebrospinal fluid or directly into the central
nervous system and (c) Hedgehog Gene Therapy.
1.55 "Sublicensee" means any third party other than an Affiliate granted
the right, subject to the terms and conditions of Article 3, to make, use and
sell a Licensed Product or an Ontogeny Product, as the case may be, but not
including a third party that is not granted the right to make such Licensed
Product or Ontogeny Product, as the case may be, but merely purchases such
Licensed Product or Ontogeny Product, as the case may be, in finished form for
resale.
1.56 "Technology" means information (whether or not patentable and whether
or not copyrightable), including without limitation, ideas, concepts, formulas,
methods, procedures, designs, compositions, plans, applications, specifications,
drawings, techniques, processes, research, technical data, know-how,
apparatuses, equipment, samples, biological materials, vectors, inventions,
discoveries, and the like.
1.57 "Territory" means all countries of the world.
1.58 "Therapeutic Area" means a therapeutic area listed in Schedule D.
1.59 "Valid Claim" means a claim which (a) in the case of any unexpired
United States or foreign patent, shall not have been donated to the public,
disclaimed nor held invalid or unenforceable by a court of competent
jurisdiction in an unappealed or unappealable decision or (b) in the case of any
United States or foreign patent application, shall not have been cancelled,
withdrawn, abandoned, rejected by an administrative agency from which no appeal
can be taken nor been pending for more than seven (7) years.
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1.60 "Vertebrate Hedgehog Family" means a family of proteins that cause
tissue and organ induction, consisting of the Ontogeny Hedgehog Proteins and any
other protein whose amino acid sequence is at least fifty percent (50%)
homologous with the amino acid sequence of any Ontogeny Hedgehog Protein.
Article 2. The Collaboration
2.1 Research Phase.
(a) Scope and Conduct of the Research Program. The Parties hereby
agree to cooperate in the conduct of the Research Program during the Research
Phase. The Research Program shall be conducted in accordance with the provisions
of the Research Workplan. Within sixty (60) days of the Effective Date, the
Research Workplan shall be amended by the parties and attached hereto as
Schedule C, amending and replacing in its entirety any then-current Schedule C.
In conducting, the Research Program, the Parties shall have and maintain
sufficient flexibility to shift effort and emphasis within the overall scope of
the Research Workplan in a manner that will best result in the identification
and characterization of drug candidates comprising a Hedgehog-based Molecular
Entity with potential utility in the Field. During the course of the Research
Program, each Party shall (i) communicate regularly and work collaboratively
with the other Party and (ii) use commercially reasonable efforts to fulfill its
obligations under the Research Program as described in this Article 2 and, in
greater detail, in the Research Workplan and any amendments thereof.
(b) Management of the Research Program.
(i) The Project Team. The Research Program shall be managed by a
project team (the "Project Team"), consisting of an equal number, to be
determined by the Parties, of representatives from Ontogeny and from Biogen, and
led by a representative of Biogen and a representative of Ontogeny (the "Leaders
of the Project Team"). The Project Team shall be responsible for implementing,
coordinating, reviewing and exchanging information regarding the research
activities of the Parties, as set forth in the Research Workplan, and for all
tactical decisions related to the Research Program. In addition, each Party may
at its discretion invite nonvoting employees, consultants or scientific advisors
to attend the meetings of the Project Team as long as such parties are bound by
an obligation of confidentiality to the Party on whose behalf they attend. The
Project Team shall meet no less frequently than once each month and shall meet
at such other times as deemed appropriate by the Leaders of the Project Team.
Each Party may change any one or more of its representatives on the Project Team
at any time upon notice to the other Party. The location of the Project Team
meetings shall alternate between Ontogeny and Biogen, or as otherwise mutually
agreed.
(ii) The Joint Research Management Committee. The activities of the
Project Team shall be supervised by a joint research management committee (the
"JRMC"), consisting of three (3) representatives designated by Ontogeny and
three (3) representatives designated by Biogen. The representatives on the JRMC
shall select a chairperson from among themselves to serve for a period of twelve
(12) months, with the position of chairperson alternating annually between a
representative from Ontogeny and a representative from Biogen. The JRMC shall be
responsible for all strategic decisions related to the Research Program. In
addition to supervising
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Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
the activities of the Project Team and making strategic decisions, the JRMC
shall be responsible for reviewing the progress of the Research Program and, if
necessary, modifying the short-term goals of, and the resource allocations
within, the Research Program, provided, however, that no such modification shall
(i) alter the terms of this Agreement or (ii) materially increase the
responsibilities of, or the level of expenses to be incurred by, either Party
without the prior approval of such Party. Each Party shall cause its
representatives to attend the meetings of the JRMC. If a representative of a
Party is unable to attend a meeting, such Party may designate an alternate to
attend such meeting in place of the missing representative. In addition, each
Party may at its discretion invite nonvoting employees, consultants or
scientific advisors to attend the meetings of the JRMC as long as such parties
are bound by an obligation of confidentiality to the Party on whose behalf they
attend. The JRMC shall meet no less frequently than once each calendar quarter,
and shall meet at such other times as deemed appropriate by the JRMC. Formal
minutes of each meeting of the JRMC shall be kept and shall be provided, in a
timely fashion, to each representative on the JRMC. Each Party may change any
one or more of its representatives on the JRMC at any time upon notice to the
other Party. The location of the JRMC meetings shall alternate between Ontogeny
and Biogen, or as otherwise mutually agreed.
(iii) Management Team Decisions. The unanimous agreement of the
Leaders of the Project Team shall be required to take any action within the
purview of the Project Team. If the Project Team is unable to agree on any issue
within its purview, the issue shall be resolved by the JRMC. Except as otherwise
set forth in Section 1.26 of this Agreement, the unanimous agreement of the
members of the JRMC shall be required to take any action. Any member of the JRMC
who is not present at any meeting, either in person or by a designated
alternate, may appoint another representative or alternate as his/her proxy to
act on his/her behalf on all matters coming to a vote. The JRMC may conduct
meetings in person or by telephone or video conference. If the JRMC is unable to
reach a unanimous agreement on any issue within its purview, such issue shall be
referred to the Chief Executive Officer of Ontogeny and the Chief Executive
Officer of Biogen for resolution. If the Chief Executive Officer of Ontogeny and
the Chief Executive Officer of Biogen are unable to reach agreement on any issue
regarding the Research Program, then such issue shall be submitted to
arbitration pursuant to the provisions set forth in Section 11.4 and the
arbitrators shall have the authority to (i) direct the Parties as to the manner
in which the Parties shall resolve the issue, or (ii) render a final decision
with respect to such issue. The arbitrators shall have no authority to amend
this Agreement or the Research Workplan.
(c) Obligations of the Parties. Ontogeny shall provide, and Biogen
shall support (pursuant to Section 4.3(a)), the personnel required to supply
[**] FTEs per year for the term of the Research Program. In addition, Biogen
shall make a commitment, in the form of personnel and/or other resources to be
determined by Biogen, that is equivalent in direct financial value to the
personnel commitment made by Ontogeny, except that, for the purposes of this
Section 2.1(c), each FTE per year contributed by Biogen shall be regarded as
equivalent to a contribution of [**] of value per year toward Biogen's total
commitment. Subject to the direction of the JRMC, each Party shall have the
responsibility, during the Research Phase, to conduct those research activities
that are assigned to such Party in the Research Workplan.
(d) Term. The Research Phase commenced on the Original Effective Date
and shall continue until the earliest to occur of (i) the fifth anniversary of
the Original Effective
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Date, (ii) the fourth anniversary of the Original Effective Date in the event
that Biogen does not initiate at least one Development Program on or prior to
such date and the termination of this Agreement.
2.2 Commercialization Phase.
(a) Scope and Conduct of the Commercialization Program. The
Commercialization Phase shall commence if and only if Biogen elects to initiate
at least one Development Program pursuant to Section 3.6. The Commercialization
Program shall consist of the Development Program(s) undertaken by the Parties
during the Commercialization Phase. In the event that Biogen elects to initiate
the Commercialization Phase, the Parties shall cooperate in the conduct of the
Commercialization Program. During the course of the Commercialization Program,
each Party shall (i) communicate regularly and work collaboratively with the
other Party and (ii) use commercially reasonable efforts to fulfill its
obligations under the Commercialization Program as described in this Section
2.2.
(b) Development Program(s). Each Development Program initiated by
Biogen, if any, shall be based on the study of one of the three Ontogeny
Hedgehog Proteins and shall have as its goal the development and
commercialization of a product or products comprising one or more Hedgehog-based
Molecular Entities that derive from such Ontogeny Hedgehog Protein. Each Party
shall have the responsibility, during the term of the Development Program, to
conduct those development, manufacturing and commercialization activities that
are assigned to such Party in a development and commercialization plan prepared
by Biogen and approved by Ontogeny (the "Development and Commercialization
Plan") which such approval shall not be unreasonably withheld. It is anticipated
that the Development and Commercialization Plan shall provide that (i) the
Development Program shall be managed by development and commercialization
committees established and staffed by Biogen, provided, however, that non-voting
representatives of Ontogeny shall be permitted to attend (1) all meetings of
such committees that are devoted solely to the review of the Development Program
and all meetings of such committees that are devoted solely to a review of other
activities directly related to the development, manufacturing and
commercialization of any product(s) comprising a Hedgehog-based Molecular
Entity(ies) based on the Ontogeny Hedgehog Protein that is the subject of such
Development Program, and (2) only at Biogen's invitation, other Biogen meetings
covering the development and commercialization activities related to such
Development Program, (ii) Biogen shall have the major responsibility for the
development and commercialization of any product(s) comprising a Hedgehog-based
Molecular Entity(ies) based on the Ontogeny Hedgehog Protein that is the subject
of the Development Program, provided, however, that Ontogeny shall participate
with Biogen in (1) the preclinical development of such product(s) (with all data
provided to, and considered Confidential Information of, Biogen), (2) at
Biogen's option where appropriate, the clinical development of such product(s)
in the United States (with all data provided to, and considered Confidential
Information of, Biogen), and (3) subject to Biogen's reasonable discretion after
mutual good faith discussion between the Parties, the marketing of (not
including sales), and the professional education activities with respect to,
such product(s) in the Territory, and (iii) Biogen shall have the responsibility
for all aspects of the manufacture (either by itself or by one of its Affiliates
or using a contract manufacturer or otherwise) of any product(s) comprising a
Hedgehog-based Molecular Entity based on the Ontogeny Hedgehog Protein that is
the subject of the Development Program, provided, however,
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Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
that in the event that Biogen elects to have such product(s) bulk manufactured
by more than one manufacturing source in the United States, and Ontogeny is or
will be, in Biogen's reasonable opinion, capable of manufacturing bulk
commercial product to meet Biogen's commercially reasonable schedule, Biogen
shall grant to Ontogeny the right of first refusal to manufacture such product
as a second manufacturing source in the United States, under the terms of a
manufacturing agreement to be negotiated in good faith by the Parties. In the
event that a Development Program is initiated by Biogen, Biogen hereby agrees to
provide Ontogeny, at Ontogeny's reasonable request, with copies of or, at
Biogen's option, detailed summaries of, those substantive documents relating to
the preclinical and clinical development, regulatory affairs, manufacture and/or
marketing of any product(s) comprising a Hedgehog-based Molecular Entity(ies)
based on the Ontogeny Hedgehog Protein that is the subject of such Development
Program, as well as copies of or, at Biogen's option, detailed summaries of, any
other substantive documents relating to such product(s) that are reasonably
requested by Ontogeny, provided, however, that Biogen may delete information
from the above documents that it determines, in its sole commercially reasonable
discretion, is sensitive commercial of financial information of Biogen. In the
event that a Development Program is initiated by Biogen, Biogen also agrees to
hold two (2) strategy meetings per year. The purpose of these meetings will be
for Ontogeny and Biogen to discuss the overall strategy and direction of the
Development Program(s), including any significant changes since the last
strategy meeting. The meetings shall be attended by at least three people from
each Party, two of whom will be vice president level or above, and each Party
shall provide representation from its business and from its scientific
departments. A Development Program, if initiated, shall commence upon the date
on which Biogen exercises its option with respect to such Development Program,
pursuant to Section 3.6, and shall terminate upon the earliest of (i) the First
Commercial Sale in the first Major Market Country of the first Licensed Product
comprising a Hedgehog-based Molecular Entity based on the Ontogeny Hedgehog
Protein that was the subject of such Development Program, (ii) the receipt by
Ontogeny of written notification from Biogen of Biogen's decision to terminate
such Development Program (a "Biogen Early Termination Notification"), (iii) a
Mandatory Termination (as that term is defined in Section 6.3) with respect to
such Development Program and (iv) the termination of this Agreement.
(c) Protected Indications. In the event that Biogen has commenced a
Development Program, Biogen may, by providing written notice to Ontogeny on or
prior to the earliest to occur of (i) a Biogen Early Termination Notification
(as that term is defined in Section 2.2(b)), (ii) the occurrence of a Mandatory
Termination (as that term is defined in Section 6.3) and (iii) the termination
of the Research Phase, designate [**] disease indications as Protected
Indications. Notwithstanding the foregoing, if, at the end of the Research
Phase, Biogen has ongoing Development Programs with respect to all three
Ontogeny Hedgehog Proteins, Biogen shall be entitled to delay designation of the
Protected Indications until the occurrence of a Mandatory Termination or
delivery of a Biogen Early Termination Notification, if any, with respect to one
of the Development Programs. Along with designation of the Protected
Indications, Biogen shall designate which of the Ontogeny Hedgehog Proteins will
be Restricted Proteins with respect to the Protected Indications. Biogen shall
pay Ontogeny a fee of [**] Dollars ($[**]) (a "Restriction Fee") for each
Ontogeny Hedgehog Protein designated as a Restricted Protein (whether restricted
as to [**] or [**]), provided that any Ontogeny Hedgehog Protein that is the
subject of a Development Program shall automatically become a Restricted Protein
in the event of termination of the Development Program with respect to such
Ontogeny
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Hedgehog Protein whether pursuant to a Biogen Early Termination Notification or
a Mandatory Termination without the payment of any additional Restriction Fee.
In the event that all Development Programs are terminated either through Biogen
Early Termination Notifications, Mandatory Terminations or the termination of
this Agreement, such Protected Indications shall no longer be characterized as
"Protected Indications."
(d) Biogen Representation on Ontogeny Board of Directors. Upon the
initiation, if any, of the Commercialization Phase, Ontogeny shall grant to
Biogen the right to designate one individual to serve on the Ontogeny board of
directors (the "Ontogeny Board") subject to approval by Ontogeny, which approval
shall not be unreasonably withheld. In the event of any such designation
(including any designation to fill a vacancy created by the departure of a prior
Biogen designee), Ontogeny shall use its best efforts to cause the election of
such designee to the Ontogeny Board. If elected such Biogen designee (the
"Biogen Board Member") shall continue to serve on the Ontogeny Board until the
earliest of (i) the termination by Biogen of the Commercialization Phase, (ii)
the date on which Biogen has sold more than fifty percent (50%) of the shares of
capital stock purchased by it from Ontogeny (or shares of common stock issued
upon conversion thereof), (iii) the completion of the first Phase III clinical
trial for any Licensed Product, (iv) July 1, 2011 and (v) the termination of
this Agreement. In the event that Ontogeny shall become a public company while
Biogen has the right to designate a Biogen Board Member, Ontogeny shall continue
to nominate the Biogen Board Member to serve as a member of the Ontogeny Board,
but his/her annual election shall be subject to the approval of the shareholders
of Ontogeny.
(e) Term. The Commercialization Phase shall commence on the
initiation, if any, of the first Development Program and shall continue until
the earliest of (i) completion of each of the Development Programs initiated by
Biogen, (it) the early termination (pursuant to Biogen Early Termination
Notification or Mandatory Termination) of each of the Development Programs
initiated by Biogen or (iii) the termination of this Agreement. The term of the
Commercialization Phase, if any, shall overlap that of the Research Phase until
the termination of the Research Phase.
2.3 Accounting and Internal Controls. Biogen and Ontogeny shall each
conduct the Collaboration in accordance with high standards of business ethics
and maintain accounts in accordance with generally accepted accounting
principles consistently applied and, specifically, shall (a) maintain full and
accurate books, records and accounts (the "Collaboration Records") which shall,
in reasonable detail, accurately and fairly reflect all transactions relating to
the Collaboration and (b) devise and maintain a system of internal accounting
controls sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with general or specific authorizations, and (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and as
otherwise required to comply with all tax statutes, and to maintain
accountability for assets. During the term of, and for a twelve (12) month
period following the termination of, the Collaboration, each Party shall have
the right quarterly at such Party's expense to have an independent, certified
public accountant, reasonably acceptable to the other Party, review such other
Party's Collaboration Records in the location(s) where such Collaboration
Records are maintained by such other Party upon reasonable notice and during
regular business hours for the
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Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
sole purpose of verifying the expenditures by such other Party with respect to
the Collaboration. Results of such review shall be made available to both
Parties.
2.4 Restrictions.
(a) Biogen Restrictions. Biogen hereby agrees that, except as
otherwise provided in this Agreement, Biogen shall not, either alone or in
collaboration with others or through a Sublicensee, research, develop,
manufacture or commercialize any product that embodies, or is developed through
the use of, Technology related to the Vertebrate Hedgehog Family, for a period
commencing on the Original Effective Date and ending [**] following the
termination of the Research Phase.
(b) Ontogeny Restrictions Outside the Field. Ontogeny hereby agrees
that Ontogeny shall not, either alone or in collaboration with others or through
a Sublicensee, develop, manufacture or commercialize any therapeutic or
prophylactic product outside the Field that comprises the same Hedgehog-based
Molecular Entity in the same formulation for the same method of delivery as a
Hedgehog-based Molecular Entity being developed by Biogen under a Development
Program.
(c) Ontogeny Restrictions Within the Field. Ontogeny hereby agrees
that Ontogeny shall not during the term of this Agreement, either alone or in
collaboration with others or through a Sublicensee (and shall cause its
Sublicensees to agree in writing not to), develop (including but not limited to
the conduct of clinical trials) or market (including but not limited to any
promotion or labeling) Ontogeny Products in the Field based on any Restricted
Protein in any Protected Indication.
Article 3. Grant of Rights
3.1 License Grants for Research Purposes.
(a) License Grant by Ontogeny. Subject to the payment of the research
license fee provided in Section 4.1 and the fulfillment by Biogen of its
obligations under this Agreement, Ontogeny hereby grants to Biogen, and Biogen
hereby accepts, a fully paid-up, non-royalty bearing co-exclusive license (with
Ontogeny) (or sublicense, as the case may be, with respect to Ontogeny
Intellectual Property Rights obtained under license from a third party,
including a sublicense to rights granted under the Columbia License Agreement
and the Harvard License Agreement), without the right to grant sublicenses,
under the Ontogeny Intellectual Property Rights and Ontogeny's rights in and to
the Collaboration Technology, to practice the Ontogeny Technology and the
Collaboration Technology for the purpose of conducting research within the
Territory under the Research Program in order to identify drug candidates that
comprise Hedgehog-based Molecular Entities for use in the Field (the "Biogen
Research License"). The Biogen Research License shall terminate upon the
termination of the Research Phase. Notwithstanding the foregoing, Ontogeny shall
have the right to request, from time to time, that Biogen terminate the Biogen
Research License with respect to specific Hedgehog based Molecular Entities that
are of no further interest to Biogen, and Biogen agrees to consider such request
in good faith, but Ontogeny acknowledges that Biogen shall be under no
obligation to agree to any such request (a "Requested Termination"). In the
event that Biogen agrees to
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such request in writing, a Hedgehog-based Molecular Entity as to which the
Biogen Research License has been terminated shall not be available to Biogen for
development under a Development Program.
(b) License Grant by Biogen. Subject to the fulfillment by Ontogeny of
its obligations under this Agreement, Biogen hereby grants to Ontogeny, and
Ontogeny hereby accepts, a fully paid-up, non-royalty bearing co-exclusive
license (with Biogen), without the right to (grant sublicenses, under the Biogen
Intellectual Property Rights and Biogen's rights in and to the Collaboration
Technology (excluding Biogen Gene Therapy Technology), to practice the Biogen
Technology and the Collaboration Technology for the purpose of conducting
research within the Territory under the Research Program in order to identify
drug candidates that comprise Hedgehog-based Molecular Entities for use in the
Field (the "Ontogeny Research License"). The license granted to Ontogeny under
the preceding sentence shall be limited to the identified purpose, and, subject
to Section 2.4, shall not be deemed to limit Biogen's rights under the Biogen
Intellectual Property Rights or Biogen's rights in and to the Collaboration
Technology. The Ontogeny Research License shall terminate upon the termination
of the Research Phase.
3.2 License Grants with Respect to Products that Comprise Hedgehog-based
Molecular Entities.
(a) License Grant by Ontogeny. In the event that Biogen exercises the
option set forth in Section 3.6, Ontogeny shall grant to Biogen, and Biogen
shall accept, a royalty bearing (at the rates set forth in Section 4.7(a))
exclusive license (or sublicense, as the case may be, with respect to Ontogeny
Intellectual Property Rights obtained under a license from a third party,
including a sublicense to rights granted under the Columbia License Agreement
and the Harvard License Agreement), under the Ontogeny Intellectual Property
Rights and Ontogeny's rights in and to the Collaboration Technology, to develop,
make, have made, import, use, have used, offer to sell, sell, and have sold
Licensed Products in the Field within the Territory. Such license shall include
the right to grant sublicenses pursuant to Section 3.5. Ontogeny acknowledges
that the license granted hereunder shall be effective automatically on the terms
contained herein upon exercise of such option by Biogen, and no further
agreement or action by the Parties shall be necessary to effect such license.
(b) License Grant by Biogen for Ontogeny Products. Upon the earliest
to occur of (i) a Biogen Early Termination Notification, (ii) the occurrence of
a Mandatory Termination, and (iii) the termination of the Research Phase, Biogen
shall grant to Ontogeny, and Ontogeny shall accept, an exclusive license, under
the Biogen Intellectual Property Rights and Biogen's rights in and to the
Collaboration Technology (excluding Biogen's rights in Biogen Gene Therapy
Technology), to develop, make, have made, import, use, have used, offer to sell,
sell, and have sold Ontogeny Products in and outside the Field within the
Territory, subject to the limitations set forth in Sections 2.4(c); provided,
however, that such license to develop, make, have made, import, use, have used,
offer to sell, sell, and have sold Ontogeny Products outside the Field within
the Territory with respect to Hedgehog Specific Gene
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Therapy Collaboration Technology shall be granted only upon the termination of
the Research Phase and that such license to develop, make, have made, import,
use, have used, offer to sell, sell, and have sold Ontogeny Products in the
Field within the Territory with respect to Hedgehog Specific Gene Therapy
Collaboration Technology shall be granted only upon the termination of' this
Agreement. Such license shall include the right to grant sublicenses pursuant to
Section 3.5; provided that the right to grant sublicenses under the license
granted to Ontogeny under this Section 3.2(b) to the Biogen Intellectual
Property Rights and Biogen's rights in and to the Collaboration Technology shall
not extend to the development manufacture, import, marketing, use or sale of
Ontogeny Products based on an Ontogeny Hedgehog Protein in any disease
indications that Biogen has a Good Faith Intent to Develop. Biogen shall notify
Ontogeny if at any time Biogen no longer has a Good Faith Intent to Develop such
disease indications. The license granted to Ontogeny by Biogen under this
Section 3.2 (b) shall be royalty bearing solely with respect to an Ontogeny
Product that is covered by a Valid Claim of any Biogen Patent Rights or embodies
any of the Biogen Technology (a "Royalty Bearing Ontogeny Product"), and
otherwise such license shall be non-royalty bearing with respect to an Ontogeny
Product (a "Non-Royalty Bearing Ontogeny Product"). Royalties shall be
calculated in accordance with the rates set forth in Section 4.7(b) below. In
the event that Biogen owes a royalty to a third party on the sale of a
Non-Royalty Bearing Ontogeny Product, Ontogeny shall reimburse Biogen for the
royalty paid to the third party on account of such sales, up to the amount that
would be payable by Ontogeny to Biogen if such Ontogeny Products were Royalty
Bearing Ontogeny Products. Subject to Section 2.4 and Section 3.3(b), Biogen
retains all rights under the Biogen Intellectual Property Rights and all of
Biogen's rights in and to the Collaboration Technology, with respect to products
other than Ontogeny Products.
(c) License Grant by Biogen - Outside the Field. Commencing on the
Effective Date, Biogen shall grant to Ontogeny, and Ontogeny shall accept, a
non-royalty bearing, exclusive license in the Territory, with the right to grant
sublicenses consistent with Section 3.5, under Biogen's rights in and to the
Collaboration Technology, (excluding Biogen's rights in Biogen Gene Therapy
Technology) to develop, make, have made, import, use, have used, offer to sell,
sell and have sold outside the Field products that comprise a Hedgehog-based
Molecular Entity ("Outside the Field Products"); provided, however, that such
license to develop, make, have made, import, use, have used, offer to sell, sell
and have sold Outside the Field Products with respect to Hedgehog Specific Gene
Therapy Collaboration Technology shall be granted only upon the termination of
the Research Phase. In the event that Biogen owes a royalty to a third party on
the sale of Outside the Field Products, Ontogeny shall reimburse Biogen for the
royalty paid to the third party on account of such sales, up to the amount that
would be payable by Ontogeny to Biogen if such Outside the Field Products were
Royalty Bearing Ontogeny Products.
3.3 Other License Grants.
(a) License Grant by Ontogeny for Non-Hedgehog Products. Upon the
Effective Date, Ontogeny shall grant to Biogen, and Biogen shall accept, a
non-royalty bearing non-exclusive license, under Ontogeny's rights in and to the
Collaboration Technology, to (i) practice the Collaboration Technology for the
purpose of discovering and developing products that do not embody, or are not
developed through the use of, Technology related to the Vertebrate Hedgehog
Family (a "Biogen Non-Hedgehog Product"), and (ii) make, have made, import, use,
have used, offer to sell, sell and have sold Biogen Non-Hedgehog Products in and
outside the Field within the Territory. Such license shall include the right to
grant sublicenses pursuant to Section 3.5.
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(b) License Grant by Biogen for Non-Hedgehog Products. Upon the
Effective Date, Biogen shall grant to Ontogeny, and Ontogeny shall accept, a
non-royalty bearing, non-exclusive license, under Biogen's rights in and to the
Collaboration Technology, excluding Biogen Gene Therapy Technology, Fundamental
Hedgehog Gene Therapy Collaboration Technology and Hedgehog Specific Gene
Therapy Collaboration Technology, to (i) practice the Collaboration Technology
for the purpose of discovering and developing products that do not comprise a
Hedgehog-based Molecular Entity (an "Ontogeny Non-Hedgehog Product"), and (ii)
make, have made, import, use, have used, offer to sell, sell and have sold in
the Territory Ontogeny Non-Hedgehog Products in and outside the Field. Such
license shall include the right to grant sublicenses pursuant to Section 3.5.
3.4 Restrictions on Licenses Granted by Ontogeny. The licenses granted by
Ontogeny to Biogen under the Ontogeny Intellectual Property Rights, pursuant to
Section 3.1 (a) and Section 3.2(a), are subject to the relevant terms and
conditions of the Columbia License Agreement and the Harvard License Agreement
(the "In-License Agreements"). To the extent that the licenses granted to
Ontogeny under the In-License Agreements become non-exclusive or terminate, the
licenses granted to Biogen hereunder with respect to the technology subject to
the In-License Agreements shall similarly become non-exclusive or terminate, or,
pursuant to the terms of the Harvard License Agreement, shall be assigned to the
President and Fellows of Harvard College ("Harvard") at Harvard's option.
3.5 Sublicensing Obligations. Biogen shall have the right to grant
sublicenses pursuant to Section 3.2(a) and Section 3.3(a), and Ontogeny shall
have the right to grant sublicenses pursuant to Section 3.2(b), 3.2 (c) and
3.3(b), provided , however, that any sublicense granted by Biogen or Ontogeny,
as the case may be, shall be subject to, and consistent with, the terms and
conditions of this Agreement, and shall provide that the Sublicensee shall not
further sublicense except on terms consistent with this Section 3.5. Biogen or
Ontogeny, as the case may be, shall provide Ontogeny or Biogen, as the case may
be, with a copy of any sublicense granted pursuant to this Agreement within
thirty (30) days after the execution thereof. Such copy may be redacted to
exclude confidential scientific information and other information required by a
Sublicensee to be kept confidential, provided that all relevant financial terms
and information shall be retained therein. In the event of a material default by
any Sublicensee under a sublicense agreement, the Party granting the sublicense
shall inform the other Party and take such action, after consultation with such
other Party, which in the reasonable business judgment of the Party granting
such sublicense shall address such default.
3.6 Commercialization Option. Subject to the fulfillment by Biogen of its
obligations under this Agreement, Ontogeny hereby grants to Biogen an option to
initiate one or more Development Programs (the "Option"). Such Option is
exercisable by Biogen at any time prior to the termination of the Research Phase
upon prior written notice to Ontogeny; provided, however, that in the event that
Biogen terminates this Agreement on or prior to July 1, 2000 or does not
initiate at least one Development Program on or prior to July 1, 2000, (i) the
Option shall terminate and (ii) Biogen shall pay the Break Up Fee set forth in
Section 4.5 below. Such notice shall indicate the Ontogeny Hedgehog Protein that
is the subject of the Development Program that is to be initiated. In the event
that Biogen initiates more than one Development Program in the exercise of the
Option, Biogen shall provide Ontogeny with written notification of each Ontogeny
Hedgehog Protein that is to be the subject of a Development Program, and
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Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
shall, on or before the end of the Research Phase, designate a Lead Protein.
Biogen may change its Lead Protein at any time by providing written notification
to Ontogeny, provided that no such change shall occur after the first extension,
if any, requested under Section 6.2(l), and no such change shall affect the
timeframes set forth in Section 6.2 with respect to diligence obligations.
3.7 Right of First Offer. In the event that Biogen exercises the Option
pursuant to Section 3.6, Ontogeny shall grant to Biogen, a right of first offer
(the "Right of First Offer") to collaborate with Ontogeny on one (1) project
that Ontogeny desires to exploit in collaboration with a third party (a "New
Collaboration Project") in which the Parties shall practice Ontogeny Technology,
Collaboration Technology and/or any other Technology, whether or not related to
the Vertebrate Hedgehog Family, which (a) Ontogeny owns or otherwise has the
right to grant licenses under, (b) is not being practiced as part of a
Development Program, (c) is not being practiced as part of a collaboration
between Ontogeny and a third party and (d) is not a technology that Biogen
previously had an opportunity to pursue under this Agreement, (the "Uncommitted
Ontogeny Technology"), in order to discover and develop therapeutic or
prophylactic products for use in or outside the Field, other than products (i)
based on the administration of cells outside of Gene Therapy or (ii) that are to
be developed for any of the disease indications listed in Schedule B. Such right
shall (x) be exercisable only during a period of time in which there is any
borrowing outstanding under the Line of Credit, (y) terminate upon the earliest
of (1) the execution of a definitive agreement with respect to a New
Collaboration Project, if any, (2) the termination by Biogen of this Agreement
or the Commercialization Phase pursuant to Section 2.2(e)(ii), if any, and (3)
the end of the twenty-fourth (24th) month following the initiation of the
Commercialization Phase, and (z) operate as follows:
(1) Ontogeny shall promptly send to Biogen a reasonably detailed
notification of each research and development project contemplated
by Ontogeny involving the practice of any Uncommitted Ontogeny
Technology which Ontogeny desires to exploit in collaboration with a
third party (each, a "Proposed Project").
(2) (Biogen shall respond to Ontogeny within [**] of receipt of such
notification indicating its interest in collaborating with Ontogeny
with respect to the Proposed Project and in obtaining rights to any
intellectual property resulting therefrom.
(3) For a period of up to [**] after Ontogeny receives notice of
Biogen's intention to collaborate with Ontogeny with respect to the
Proposed Project, the Parties shall negotiate in good faith a
reasonable agreement based upon the anticipated contribution of the
Parties to such project and to the development and commercialization
of any products resulting therefrom.
(4) In the event that (i) Biogen fails to respond to Ontogeny [**] of
notification by Ontogeny of the Proposed Project, or (ii) Biogen
indicates that it is not interested in collaborating with Ontogeny
which respect to the Proposed Project, or (iii) the Parties fail to
reach a definitive agreement with respect to the Proposed Project
within [**] following the receipt by Ontogeny of notice of Biogen's
intention to collaborate with Ontogeny on such project (a "Loss of
Right Event"), Ontogeny shall be free to pursue the Proposed Project
that was the subject of the notification
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Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
and commercialize any products that result therefrom in
collaboration with one or more third parties.
(5) Ontogeny shall not discuss a Proposed Project with any third party
unless and until the occurrence of a Loss of Right Event with
respect to such Proposed Project, provided, however, that if
discussion of a Proposed Project is initiated by a third party, then
Ontogeny may inform such third party of Biogen's Right of First
Offer but must refrain from further discussions with such third
party with respect to such Proposed Project unless and until the
occurrence of a Loss of Right Event.
Article 4. Payment Obligations
4.1 Research License Fee and Stock Purchase. In consideration of the
rights granted to Biogen under this Agreement, Biogen (a) paid Ontogeny a
non-refundable, non-creditable research license fee of [**] on the Original
Effective Date, and (b) purchased from Ontogeny shares of Series C Convertible
Preferred Stock of Ontogeny pursuant to a Series C Convertible Preferred Stock
Purchase Agreement dated as of the Original Effective Date (the "Preferred Stock
Purchase Agreement").
4.2 Development Program Fee and Stock Purchase. In the event that Biogen
exercises the Option pursuant to Section 3.6 and initiates one or more
Development Programs, Biogen shall, for each Development Program initiated by
Biogen, on each date on which the Option with respect to such Development
Program is exercised, (a) pay to Ontogeny a nonrefundable, non-creditable
development program fee of [**], and (b) purchase from Ontogeny, for an
aggregate purchase price of [**], shares of preferred stock of Ontogeny,
pursuant to a stock purchase agreement substantially in the form of the
Preferred Stock Purchase Agreement, at a price per share equal to the fair
market value thereof as determined in good faith by the Parties or, absent such
determination within thirty (30) days after the Option with respect to such
Development Program is exercised, by an investment banking firm mutually agreed
upon by the Parties, provided, however, that if, during the six (6) months prior
to such time, Ontogeny has sold shares of preferred stock with substantially
similar rights in a transaction resulting in at least [**] Dollars ($[**]) of
proceeds, the price to be paid by Biogen shall not be lower than the price in
such transaction. The preferred stock shall have terms (other than the price)
equivalent to the terms of the Series C Convertible Preferred Stock of the
Company ( the "Corporate Partner Preferred Stock").
4.3 Research Funding.
(a) Research Phase. In support of the research to be conducted by
Ontogeny in the course of the Research Program, Biogen shall pay Ontogeny, at a
rate of [**] per FTE, an amount equal to (i) [**] for each Contract Year during
the Research Phase.
(b) Payment Timing. The research funding set forth in this Section
4.3(a) shall be paid to Ontogeny by Biogen on a quarterly basis, with the
payment for the first three (3) month period having been made within ten (10)
days following the Original Effective Date and
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Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
with the payment for each succeeding three (3) month period made within ten (10)
days of the first day of each such three (3) month period.
4.4 Follow-on Research Support Fee. Biogen shall (i) pay Ontogeny
follow-on research support fees of [**] per year for Contract Years three, four
and five of the Research Phase (the "Follow-on Research Support Fees"), with the
first Follow-on Research Support Fee payable on the Effective Date and the
subsequent Follow-on Research Support Fees payable upon commencement of the
fourth and fifth Contract Years, and (ii) on the Effective Date, enter into a
Note Purchase Agreement, substantially in the form attached hereto as Exhibit A.
4.5 Breakup Fee. In the event that Biogen does not exercise the Option to
initiate the Commercialization Phase pursuant to Section 3.6 on or prior to July
1, 2000 or Biogen terminates this Agreement and the Research Phase prior to July
1, 2000, Biogen shall pay Ontogeny a fee of [**] upon termination of the
Research Phase (the "Break Up Fee").
4.6 Milestone Payments. Within thirty (30) days following the occurrence
of the milestones specified below, Biogen shall make the following
nonrefundable, non-creditable payments to Ontogeny:
(1) With respect to each Ontogeny Hedgehog Protein that is the subject
matter of a Development Program, a sum of [**] upon the filing of
the [**] for the [**] comprising a [**] based on such [**] for the
[**].
(2) With respect to each Ontogeny Hedgehog Protein that is the subject
matter of a Development Program, a sum of [**] upon the initiation
of the first Phase I clinical trial in any country in the Territory
for the first Licensed Product comprising a Hedgehog based Molecular
Entity based on such Ontogeny Hedgehog Protein that uses a delivery
mode and formulation that is fully differentiated from the first
Licensed Product comprising a Hedgehog-based Molecular Entity based
on such Ontogeny Hedgehog Protein.
(3) With respect to each Ontogeny Hedgehog Protein that is the subject
matter of a Development Program, a sum of [**] upon the completion
of the first Phase II clinical trial in any country in the Territory
for the first Licensed Product comprising a Hedgehog-based Molecular
Entity based on such Ontogeny Hedgehog Protein for the first Disease
Indication within a Therapeutic Area.
(4) With respect to each Ontogeny Hedgehog Protein that is the subject
matter of a Development Program, a sum of [**] upon the completion
of the first Phase III clinical trial in which the primary endpoint
is reached at an acceptable level of toxicity in any country in the
Territory for the first Licensed Product comprising a Hedgehog-based
Molecular Entity based on such Ontogeny Hedgehog, Protein for each
new Disease Indication that represents a unique and different
disease and not a label expansion or other extension into a
different segment of the same disease.
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Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
(5) With respect to each Ontogeny Hedgehog Protein that is the subject
matter of a Development Program, a sum of [**] upon the approval of
the first NDA for the first Licensed Product comprising a
Hedgehog-based Molecular Entity based on such Ontogeny Hedgehog
Protein for each new Disease Indication that represents a unique and
different disease and not a label expansion or other extension into
a different segment of the same disease.
4.7 Royalties.
(a) Royalty Payments to Ontogeny on Licensed Products. Biogen shall
pay Ontogeny earned royalties on the Net Sales of each Licensed Product by
Biogen, its Affiliates and/or its Sublicensees at the following rates:
Net Sales of Licensed Royalty Rate
Product in the Territory on Net Sales of
in a Calendar Year Licensed Product
------------------ ----------------
less than $[**] [**]
[**] Million - $[**]
Million [**]
greater than $[**] Million [**]
The applicable royalty rate with respect to a Licensed Product for a given
calendar year shall be determined by the [**] of such Licensed Product [**] and
shall be [**] to the [**] in [**]. Royalties shall be paid to Ontogeny on a
country-by-country basis from the date of the First Commercial Sale of a
Licensed Product in a country until (i) [**] after such First Commercial Sale or
(ii) for as long as such Licensed Product, or its manufacture, use or sale, is
covered by a Valid Claim of any Ontogeny Patent Rights or any Collaboration
Patent Rights, whichever of (i) or (ii) is longer. In no event shall more than
one royalty be due Ontogeny for the sale of any Licensed Product.
Notwithstanding the foregoing, (y) the royalty rates set forth in the
above paragraph shall be reduced, on a country-by-country basis, by [**] on the
Net Sales of any Licensed Product which, or the manufacture, use or sale of
which, is not covered by a Valid Claim of any Ontogeny Patent Rights or any
Collaboration Patent Rights solely or jointly owned by Ontogeny in the country
where such Licensed Product is manufactured or sold, and (z) in the event that
Biogen, its Affiliates or its Sublicensees, in order to manufacture, use or sell
a Licensed Product in a country in the Territory, reasonably determines that it
must make a royalty payment to one or more third parties (a "Biogen Third Party
Payment") to obtain a license or similar right to manufacture, use or sell such
Licensed Product, Biogen may reduce the annual royalty payment due Ontogeny, on
a country-by-country basis, by the amount of such Biogen Third Party Payment,
provided, however, that such reductions set forth in (y) and (z) shall not
reduce the annual royalty payment otherwise due Ontogeny by more than [**].
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Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
(b) Royalty Payments to Biogen on Ontogeny Products.
(i) Sales by Ontogeny and/or Ontogeny Affiliates. Ontogeny shall pay
Biogen earned royalties on the Net Sales of each Royalty Bearing Ontogeny
Product by Ontogeny and/or its Affiliates at the following rates:
Net Sales of Royalty
Bearing
Ontogeny Product in the Royalty Rate
Territory on Net Sales of Royalty Bearing
in a Calendar Year Ontogeny Product
------------------ ----------------
less than $ [**] Million [**]
[**] Million - $[**]
Million [**]
greater than $[**] Million [**]
The applicable royalty rate with respect to a Royalty Bearing Ontogeny
Product for a given calendar year shall be determined by the total Net Sales of
such Royalty Bearing Ontogeny Product in such year and shall be applied
retroactively to the first dollar of such Net Sales in such year. Royalties
shall be paid to Biogen on a country-by-country basis from the date of the First
Commercial Sale of a Royalty Bearing Ontogeny Product in a country until (i)
[**] after such First Commercial Sale or (ii) for as long as such Royalty
Bearing Ontogeny Product, or its manufacture, use or sale, is covered by a Valid
Claim of any Biogen Patent Rights (and/or Collaboration Patent Rights solely or
jointly owned by Biogen in the case of Non-Royalty Bearing Ontogeny Products or
Outside the Field Products which are treated as Royalty Bearing Ontogeny
Products under Section 3.2(b) or 3.2(c)) whichever of (i) or (ii) is longer. In
no event shall more than one royalty be due Biogen for the sale of any Royalty
Bearing Ontogeny Product.
Notwithstanding the foregoing, (y) the royalty rates set forth in the
above paragraph shall be reduced, on a country-by-country basis, by [**] on the
Net Sales of any Royalty Bearing Ontogeny Product which, or the manufacture, use
or sale of which, is not covered by a Valid Claim of any Biogen Patent Rights
(and/or Collaboration Patent Rights solely or jointly owned by Biogen in the
case of Non-Royalty Bearing Ontogeny Products or Outside the Field Products
which are treated as Royalty Bearing Ontogeny Products under Section 3.2(b) or
3.2(c)) in the country where such Royalty Bearing Ontogeny Product is
manufactured or sold, and (z) in the event that Ontogeny or its Affiliates, in
order to manufacture, use or sell an Royalty Bearing Ontogeny Product in a
country in the Territory, reasonably determines that it must make a royalty
payment to one or more third parties, other than under the Columbia License
Agreement and the Harvard License Agreement (an "Ontogeny Third Party Payment")
to obtain a license or similar rights to manufacture, use or sell such Royalty
Bearing Ontogeny Product, Ontogeny may reduce the annual royalty payment due
Biogen, on a country-by-country basis, by the amount of such Ontogeny Third
Party Payment, provided, however, that such reductions set forth in (y) and (z)
shall not reduce the annual royalty payment otherwise due Biogen by more than
[**].
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Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
(ii) Sales by Ontogeny Sublicensees. In the event that Ontogeny grants
a sublicense to offer to sell and sell Royalty Bearing Ontogeny Product pursuant
to Section 3.5. Ontogeny shall pay Biogen [**] of any royalties and other income
that Ontogeny receives as a result of an Ontogeny Sublicensee's sale of any
Royalty Bearing Ontogeny Product ("Ontogeny Sublicense Income").
(c) Royalty Reports and Payments. During the term of this Agreement
and for so long thereafter as Biogen or Ontogeny, as the case may be, is
required to report royalties payable under this Section 4.7, Biogen or Ontogeny
as the case may be, shall deliver to Ontogeny or Biogen, as the case may be,
within thirty (30) days after March 31, June 30, September 30 and December 31 of
each year a report indicating (i) Gross Sales for each Licensed Product or
Royalty Bearing Ontogeny Product, as the case may be, on a country-by-country
basis, (ii) Net Sales for each Licensed Product or Royalty Bearing Ontogeny
Product, as the case may be, on a country-by-country basis, including an
accounting of the deductions from Net Sales permitted by the definition thereof,
(iii) in the case of a report from Ontogeny, the Ontogeny, the Ontogeny
Sublicense Income and (iv) total royalties owed, provided, however, that no such
report shall be required prior to the First Commercial Sale of such Licensed
Product or Royalty Bearing Ontogeny Product, as the case may be. Simultaneously
with the delivery of each such report, Biogen or Ontogeny, as the case may be,
shall pay Ontogeny or Biogen, as the case may be, the royalty payment due under
this Agreement for the period covered by such report. If no royalties are due,
it shall be so reported.
4.8 Payment Currency and Interest on Payments Past Due. All amounts due
under this Agreement shall be paid to the designated Party in United States
currency by wire transfer to an account in a United States bank specified by
such Party or in such other form and/or manner as such Party may reasonably
request. The payments due on sales in currencies other than United States
dollars shall be calculated using the appropriate exchange rate of such currency
quoted in the Wall Street Journal on the close of business on the last business
day of the calendar quarter for which such payment is made. Any amounts due
under this Agreement that are not paid when due shall bear interest at the
lesser of (i) an annualized rate of one and one-half percent (1.5%) over the
prime rate then in effect at BayBank and (ii) the highest rate permitted by
applicable law.
4.9 Tax Withholding. Biogen and Ontogeny shall use all reasonable and
legal efforts to reduce tax withholding on payments made to either Party
hereunder. Notwithstanding such efforts, if the Parties conclude that tax
withholdings under the laws of any country in the Territory are required with
respect to payments to either party under this Article 4, the Party required to
withhold taxes (the "Withholding Party") shall withhold the required amount and
pay it to the appropriate governmental authority. In such case, the Withholding
Party shall promptly provide the other Party with original receipts or other
evidence sufficient to allow such other Party to obtain the benefits of such tax
withholdings.
4.10 Records; Audits. For a period not less than three (3) years after the
relevant period, each Party shall keep full, true and accurate books of account
sufficient to determine the amounts payable pursuant to this Article 4. Each
Party shall have the right, not more than once during any calendar year, to have
the books and records of the other Party audited by a qualified independent
accounting firm of its choosing, under appropriate confidentiality provisions,
to
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Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
ascertain the accuracy of the reports and payments hereunder and compliance
by the other Party and its Affiliates and Sublicensees with their obligations
under this Agreement. Such audit shall be conducted upon at least thirty (30)
days' advance notice during normal business hours and in a manner that does not
interfere unreasonably with the business of the audited entity. If the audited
Party has underpaid or overbilled an amount due under this Agreement, the
audited Party shall promptly pay or refund the appropriate amount to the other
Party, and, if the amount is more than five percent (5%), the audited Party
shall also reimburse the other Party for the cost of such audit.
Article 5. Line of Credit
5.1 Availability of Line of Credit. If Biogen exercises its Option
pursuant to Section 3.6 to initiate one or more Development Programs, it shall
make available to Ontogeny a line of credit of [**] for each Development Program
initiated by Biogen (each such [**] line of credit being referred to herein
individually as "a Line of Credit" and collectively as the "the Line of
Credit"). Each Line of Credit shall be made available to Ontogeny until the
earlier to occur of (i) the third anniversary of the date on which such Line of
Credit first became available under this Section or (ii) the date of notice of
termination of the Development Program to which such Line of Credit relates;
provided, that Biogen may cease making borrowings available under the Line of
Credit if Ontogeny is in default under the Note (as that term is defined below)
evidencing borrowings under such Line of Credit. If and to the extent Ontogeny
elects from time to time to borrow funds from Biogen under the Line of Credit,
it shall provide at least three days' notice of each borrowing, and Biogen
shall, within such three-day period, make the requested funds available to
Ontogeny by wire transfer to an account designated by Ontogeny. All borrowings
must be in increments of at least Fifty Thousand Dollars ($50,000) and shall be
evidenced by a promissory note substantially in the form attached hereto as
Schedule E (the "Note"). Interest on each borrowing under the Line of Credit
will accrue at a rate equal to the one-month LIBOR Rate in effect at the close
of business on the day prior to the date of such borrowing, as quoted in The
Wall Street Journal plus one hundred (100) basis points, and shall be paid on
the twelve (12) month anniversary date of such borrowing.
5.2 Repayment. Ontogeny must repay all principal and accrued interest
under each Line of Credit no later than the earliest of (i) the third (3rd)
anniversary of the date on which such Line of Credit first became available
pursuant to Section 5.1, (ii) the second (2nd) anniversary of the termination of
the Development Program to which such Line of Credit relates, pursuant to
Section 2.2(b) and (iii) the second (2nd) anniversary of the termination of this
Agreement (the "Repayment Date"). Ontogeny may elect to repay the borrowings
under each Line of Credit in any one of the following three ways or in any
combination of the ways set forth in clauses (i) and (ii) below:
(i) Cash. Ontogeny may elect to repay in cash the principal amount of,
and accrued interest on, the borrowings, then outstanding.
(ii) Equity. Ontogeny may elect to issue to Biogen a number of shares
of its capital stock having a fair market value equal to the principal amount
of, and accrued interest on, the borrowings then outstanding. If Ontogeny is, at
the time of repayment, a public company whose Common Stock is registered under
Section 12 of the Securities Exchange Act of 1934,
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such capital stock shall be Common Stock and fair market value thereof shall be
equal to the average closing price of the Common Stock on the Nasdaq National
Market (or other principal securities exchange on which the Common Stock is then
traded) during the ten (10) trading days ending on the day prior to the
Repayment Date. If Ontogeny is not then such a public company, such capital
stock shall be Corporate Partner Preferred Stock conveyed pursuant to a stock
purchase agreement substantially in the form of the Preferred Stock Purchase
Agreement, and the fair market value of such preferred stock shall be determined
by agreement of the Parties or, if no such agreement is reached within thirty
(30) days after the Repayment Date, by a mutually agreed upon investment banking
firm, provided, however, that if Ontogeny has sold shares of its preferred stock
with substantially similar rights within six (6) months prior to the Repayment
Date in a transaction resulting, in at least Five Hundred Thousand Dollars
($500,000) of proceeds, the price per share attributed to the shares issued as
repayment for borrowings under the Line of Credit shall not be lower than the
price in such transaction.
(iii) Technology. Ontogeny may elect to license to Biogen specified
Technology owned by Ontogeny having a value equal to the principal amount of,
and accrued interest on, the borrowings being repaid. The value of such license
shall be determined by agreement of the Parties and the unpaid principal amount
of, and accrued interest on, borrowings under the Line of Credit shall be
credited against all or part of Biogen's payment obligation for such license. If
no agreement as to the value of such license specified by Ontogeny is reached
within thirty (30) days after the Repayment Date, and if Ontogeny does not, in
such event, elect to repay the outstanding borrowings then due under the Line of
Credit in cash or by issuance of shares under clauses (i) or (ii) above, Biogen
shall have the right solely to require that such borrowings be repaid in the
manner set forth in clause (ii) above.
Article 6. Commercialization Obligations
6.1 General. In that event that Biogen exercises the Option pursuant to
Section 3.6 and initiates a Development Program, Biogen agrees to use
commercially reasonable efforts to conduct the required clinical development
activities and seek regulatory approval in all the Major Market Countries of at
least one (1) Licensed Product that comprises a Hedgehog-based Molecular Entity
based on the Ontogeny Hedgehog Protein that is the subject matter of the
Development Program. Such efforts shall not be less than the efforts expended by
Biogen in connection with its other development projects that are at a
comparable stage in the development process and are of comparable commercial
promise. Upon receipt of regulatory approval in a Major Market Country, Biogen
agrees to use commercially reasonable efforts to market and sell such Licensed
Product in such Major Market Country. In the event that Biogen initiates more
than one Development Program, the obligations set forth in this Section 6.1
shall attach to at least one (1) Licensed Product that comprises a
Hedgehog-based Molecular Entity based on each Ontogeny Hedgehog Protein that is
the subject matter of a Development Program. Notwithstanding the foregoing and
the provisions of Section 6.2 below, if two or more Ontogeny Hedgehog Proteins
that are the subject matter of a Development Programs are Comparable Proteins,
the obligations set forth in this Article 6 shall only apply to one of the
Comparable Proteins.
6.2 Product Objectives. Without limiting the generality of the obligations
set forth in Section 6.1, Biogen agrees to use commercially reasonable efforts
to achieve each of the
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Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
following objectives for at least one Hedgehog-based Molecular Entity based on
each Ontogeny Hedgehog Protein that is the subject matter of a Development
Program:
(1) Within [**] of the date of the initiation of the Development
Program, commence animal toxicity studies for a candidate Licensed
Product that comprises such Hedgehog-based Molecular Entity (a
"Candidate Licensed Product"), provided that Biogen may elect to
extend such commencement of animal toxicity studies for any Non Lead
Protein for either [**] or [**] by (i) providing written notice of
such election to Ontogeny [**] of the initiation of the Development
Program for such Non-Lead Protein and (ii) paying Ontogeny an
extension fee of [**] per year of extension for each Non-Lead
Protein that the extension shall apply to.
(2) Within [**] of commencement of animal toxicity studies of a
Candidate Licensed Product, submit an IND based on a Candidate
Licensed Product.
(3) Within [**] of being legally permitted to do so, initiate and
diligently pursue clinical evaluation of a Candidate Licensed
Product.
(4) Within [**] after commencement of clinical evaluation, submit an NDA
based on a Candidate Licensed Product.
6.3 Consequences of Failure to Meet Commercialization Objectives. In the
event that Biogen shall fail to satisfy its commercialization obligations as set
forth in Section 6.1 and/or Section 6.2, as agreed between the Parties or
determined pursuant to the dispute resolution process set forth in Section 11.4,
Ontogeny shall notify Biogen. In the event that Biogen has not reached the
objectives set forth in Section 6.2, but has used commercially reasonable
efforts to try to achieve such objectives, the Parties shall agree on a revised
schedule for achieving such objectives. In the event that Biogen has not reached
the objectives set forth in Section 6.2 and has not used commercially reasonable
efforts to try to achieve such objectives, then Biogen's license with respect to
the commercialization of Licensed Products that comprise any Hedgehog-based
Molecular Entity based on the relevant Ontogeny Hedgehog Protein and any
Comparable Protein shall terminate (a "Mandatory Termination"), as Ontogeny's
sole and exclusive remedy.
Article 7. Intellectual Property Rights
7.1 Ownership.
(a) Technology. Except as otherwise provided in this Agreement (i)
Biogen shall retain its rights to the Biogen Technology, Biogen Gene Therapy
Technology, the Biogen Intellectual Property Rights and the Biogen Gene Therapy
Intellectual Property Rights and (ii) Ontogeny shall retain its rights to the
Ontogeny Technology and the Ontogeny Intellectual Property Rights. Each Party
shall solely own all Collaboration Technology that is conceived and reduced to
practice exclusively by such Party ("Ontogeny's Solely-Owned Collaboration
Technology" or "Biogen's Solely-Owned Collaboration Technology", as the case may
be) and all intellectual property rights therein. The Parties shall jointly own
all Collaboration Technology that is conceived or reduced to practice jointly by
the Parties (the "Jointly-Owned Collaboration Technology") and all intellectual
property rights therein.
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(b) Trademarks. Biogen shall own all trademarks that Biogen adopts and
uses with respect to any Licensed Product or Biogen Non-Hedgehog Product.
Ontogeny shall own all trademarks that Ontogeny adopts and uses with respect to
any Ontogeny Product or Ontogeny Non-Hedgehog Product.
7.2 Prosecution and Maintenance of Patent Right.
(a) Responsibility of Biogen. Biogen shall, in its sole discretion,
prepare, file, prosecute and maintain all patent applications and patents
covering Biogen Technology, Biogen Gene Therapy Technology, Biogen's
Solely-Owned Collaboration Technology and the Jointly-Owned Collaboration
Technology. Biogen shall bear all costs incurred by it in carrying out the
foregoing responsibilities. Should Biogen elect not to prepare, file, prosecute
or maintain any patent or patent application covering Biogen's Solely-Owned
Collaboration Technology (other than Biogen Gene Therapy Technology) or the
Jointly-Owned Collaboration Technology, then Biogen shall (i) provide Ontogeny
with written notice in sufficient time to permit Ontogeny to prepare, provide
file, prosecute and maintain such patent of patent application, (ii) give
Ontogeny the right, at its election and sole expense, to prepare, file,
prosecute or maintain, in Biogen's name, such patent or patent application and
(iii) offer reasonable assistance to Ontogeny in connection with such
preparation, filing, prosecution or maintenance at no charge to Ontogeny except
for reimbursement of reasonable out-of-pocket expenses incurred in rendering
such assistance.
(b) Responsibility of Ontogeny. Ontogeny shall, in its sole
discretion, prepare, file, prosecute and maintain all patent applications and
patents covering Ontogeny Technology and Ontogeny's Solely-Owned Collaboration
Technology. Ontogeny shall bear all costs incurred by it in carrying out the
foregoing responsibilities. Should Ontogeny elect not to prepare, file,
prosecute or maintain any patent or patent application covering Ontogeny's
Solely-Owned Collaboration Technology or Ontogeny Technology, then Ontogeny
shall (i) provide Biogen with written notice in sufficient time to permit Biogen
to prepare, file, prosecute and maintain such patent or patent application, (ii)
give Biogen the right, at its election and sole expense, to prepare, file,
prosecute or maintain, in Ontogeny's name, such patent or patent application and
(iii) offer reasonable assistance to Biogen in connection with such preparation,
filing, prosecution or maintenance at no charge to Biogen except for
reimbursement of reasonable out-of-pocket expenses incurred in rendering such
assistance.
(c) Cooperation. Copies of all substantive communications to and from
patent offices regarding applications or patents relating to the Collaboration
Technology (other than Biogen Gene Therapy Technology) or Ontogeny Technology
shall be provided to the other Party promptly after the receipt thereof; copies
of proposed substantive communications to such patent offices shall be provided
to the other Party in sufficient time before the due date in order to give the
other Party an opportunity to comment on the content thereof. In the event that
comments made by one Party (the "Non-prosecuting Party") to the other Party (the
"Prosecuting Party") with respect to any substantive communications to or from
any patent office regarding applications or patents relating to the
Collaboration Technology are not accepted by the Prosecuting Party or if the
Parties disagree on a particular approach to take with respect to the filing or
prosecution of any application or patent relating to the Collaboration
Technology, the Non-prosecuting Party shall have the right to request that the
Prosecuting Party allow the Non-
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prosecuting Party to take whatever action is possible to protect the interest(s)
of the Non-prosecuting Party, provided that the protection afforded the
Prosecuting Party is not diminished. By way of example, but not of limitation,
in the event that the Parties cannot agree on the scope of particular claims,
the Prosecuting Party, at the request of the Non Prosecuting Party, shall add
additional claims to the application as requested by the Non-prosecuting Party
to the extent that it is possible to add such additional claims. If it is not
possible to add such claims, the Prosecuting Party shall take whatever action is
reasonably necessary for the Non-prosecuting Party to prosecute such claims in a
continuation or divisional application. All expenses associated with the taking
of such additional actions requested by the Non-prosecuting Party shall be borne
by the Non-prosecuting Party.
7.3 Infringement by Third Parties.
(a) Reports of Infringement. Each Party shall promptly report in
writing to the other Party during the term of this Agreement any (i) known
infringement or suspected infringement in the Field of any Biogen Patent Rights,
Ontogeny Patent Rights or Collaboration Patents Rights or (ii) unauthorized use
or misappropriation in the Field of any Biogen Technology Ontogeny Technology or
Collaboration Technology by a third party of which it becomes aware, and shall
provide the other Party with all available evidence supporting said
infringement, suspected infringement or unauthorized use or misappropriation.
(b) Right to Institute Suit. Except as provided in Section 7.3(d), the
Party owning or controlling the relevant patents or Technology (the "Owning
Party") shall have the right to initiate an infringement or other appropriate
suit against any third party who at any time has infringed, or is suspected of
infringing, any Biogen Patent Rights, Ontogeny Patent Rights or Collaboration
Patent Rights, as the case may be, or is using without proper authorization or
misappropriating all or any portion of the Biogen Technology, Ontogeny
Technology or Collaboration Technology, as the case may be. For the purpose of
this Section 7.3, both Biogen and Ontogeny shall be considered an Owning Party
for Jointly-Owned Collaboration Technology.
(c) Conduct of Suit. An Owning Party who initiates an infringement or
other appropriate suit pursuant to Section 7.3(b) (the "Initiating Party") shall
have the sole and exclusive right to select counsel for any such suit. The
Initiating Party shall, except as provided below, pay all expenses of the suit,
including without limitation attorneys' fees and court costs, and keep all
damages, settlement fees or other consideration for past infringement received
as a result of such suit. In the case of any such suit, (i) the Initiating Party
shall keep the other Party (the "Non-Initiating Party") promptly informed of the
status of such suit and shall provide the Non-Initiating Party with copies of
all documents filed in, and all written communications relating to, such suit;
(ii) the Non-Initiating Party shall offer reasonable assistance to the
Initiating Party in connection with such suit at no charge to the Initiating
Party except for reimbursement of reasonable expenses incurred in rendering such
assistance; and (iii) if necessary, the Non-Initiating Party shall join as a
party to the suit but shall be under no obligation to participate except to the
extent that such participation is required as the result of its being a named
party to such suit. In the case of any suit, the Non-Initiating Party may, to
the extent such Party's sales of Licensed Product or Ontogeny Product, as the
case may be, are adversely affected by the infringing party's activities, within
sixty (60) days after its receipt of
29
<PAGE>
notice from the Initiating Party of the commencement of such suit, elect to
contribute up to an amount not to exceed fifty percent (50%) of the costs of
such suit, and any damages settlement fees or other consideration for past
infringement received as a result of such suit shall be shared by the Initiating
Party and the Non-Initiating Party pro rata based on their respective sharing of
the costs of such suit.
(d) Right of Non-Owning Party to Institute Suit. The Owning Party
shall promptly advise the Non-Owning Party of its intent not to initiate an
infringement or other appropriate suit pursuant to Section 7.3(b). In the event
that the Owning Party shall have advised the Non-Owning Party of its intent not
to initiate such suit or does not initiate such suit within sixty (60) days of
becoming aware of a known or suspected infringement or an unauthorized use or
misappropriation, then to the extent that the infringement or unauthorized use
or misappropriation affects the Non-Owning Party's development, marketing or
sale of a Hedgehog-based Molecular Entity, the Non-Owning Party, with the
consent of the Owning Party, which consent shall not unreasonably be withheld,
shall have the right to initiate an infringement or other appropriate suit. In
exercising its rights pursuant to this Section 7.3(d), the Non-Owning Party
shall have the sole and exclusive right to select counsel and shall pay all
costs of the suit including without limitation attorneys' fees and court costs,
provided, however, that the Owning Party, in its sole discretion, may elect,
within sixty (60) days after its receipt of notice from the Non-Owning Party of
the commencement of such suit, to contribute up to an amount not to exceed fifty
percent (50%) of such costs. Any damages, settlement fees or other consideration
for past infringement received as a result of such suit shall be shared by the
Non-Owning Party and the Owning Party pro rata based on their respective sharing
of the costs of such suit. If necessary, the Owning Party shall join as a party
to the suit and shall participate only to the extent that such participation is
required as a result of its being a named party to the suit or being the holder
of, or inventor under, any patent at issue or being the owner of any Technology
at issue. At the Non-Owning Party's request, the Owning Party shall offer
reasonable assistance to the Non-Owning Party in connection therewith at no
charge to the Non-Owning Party except for reimbursement of reasonable
out-of-pocket expenses incurred in rendering such assistance. The Owning Party
shall have the right to be represented in any such suit by its own counsel at
its own expense.
(e) Biogen Gene Therapy Technology. This Section 7.3 shall not apply
to any suit against any third party alleging infringement solely of Biogen Gene
Therapy Patent Rights or use or misappropriation solely of Biogen Gene Therapy
Technology.
7.4 Infringement of Third Party Rights. In the event that a third party at
any time provides written notice of a claim to, or brings an action, suit or
proceeding against, a Party or such Party's Affiliates or Sublicensees, claiming
infringement of its patent rights or copyrights or unauthorized use or
misappropriation of its Technology, based upon an assertion or claim arising out
of the development, manufacture, use or sale of a Licensed Product, Ontogeny
Product, Biogen Non-Hedgehog Product or Ontogeny Non-Hedgehog Product, such
Party shall promptly notify the other Party of the claim or the commencement of
such action, suit or proceeding, enclosing a copy of the claim and/or all papers
served.
30
<PAGE>
Article 8. Representations, Warranties and Covenants
8.1 Representations, Warranties and Covenants of Ontogeny. Ontogeny
represents and warrants to Biogen that it has full right and authority to enter
into this Agreement, and is not subject to any restriction that would prevent or
impair the grant to Biogen of the licenses and sublicenses to be granted
hereunder or the exercise by Biogen of such licenses. Ontogeny covenants that
(a) it will not take any action that would in any way prevent Ontogeny from
granting to Biogen the licenses and sublicenses contemplated under Article 3 or
that would conflict with or alter the scope of the rights granted to Biogen
under this Agreement, (b) it will take all actions required to maintain the
Columbia License Agreement and the Harvard License Agreement in effect and
exclusive to Ontogeny with the right to grant sublicenses to Biogen, (c) it
shall immediately send to Biogen a copy of any notice of default or breach
received by Ontogeny under the Columbia License Agreement or the Harvard License
Agreement and (d) all persons who perform work for Ontogeny in connection with
Ontogeny's obligations under this Agreement will have assigned their rights in
any intellectual property arising from such work to Ontogeny.
8.2 Representations, Warranties and Covenants of Biogen. Biogen represents
and warrants to Ontogeny that it has full right and authority to enter into this
Agreement, and is not subject to any restriction that would prevent or impair
the grant to Ontogeny of the licenses to be granted hereunder or the exercise by
Ontogeny of such licenses. Biogen covenants that (a) it will not take any action
that would in any way prevent Biogen from granting to Ontogeny the licenses
contemplated in Article 3 or that would conflict with the rights granted to
Ontogeny under this Agreement and (b) all persons who perform work for Biogen in
connection with obligations under this Agreement will have assigned their rights
in any intellectual property arising from such work to Biogen.
8.3 Disclaimers. THE FOREGOING REPRESENTATIONS, WARRANTIES AND COVENANTS
ARE IN LIEU OF ALL OTHER REPRESENTATIONS, WARRANTIES AND COVENANTS NOT EXPRESSLY
SET FORTH HEREIN. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING STATEMENT,
ONTOGENY AND BIOGEN DISCLAIM ALL WARRANTIES, WHETHER EXPRESS OR IMPLIED, WITH
RESPECT TO EACH OF THEIR RESEARCH, DEVELOPMENT AND COMMERCIALIZATION EFFORTS
HEREUNDER, INCLUDING, WITHOUT LIMITATION, WHETHER THE LICENSED PRODUCTS,
ONTOGENY PRODUCTS, BIOGEN NON-HEDGEHOG PRODUCTS OR ONTOGENY NON-HEDGEHOG
PRODUCTS CAN BE SUCCESSFULLY DEVELOPED OR MARKETED, THE ACCURACY, PERFORMANCE,
UTILITY, RELIABILITY, TECHNOLOGICAL OR COMMERCIAL VALUE, COMPREHENSIVENESS,
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE WHATSOEVER OF THE LICENSED
PRODUCTS, ONTOGENY PRODUCTS, BIOGEN NON-HEDGEHOG PRODUCTS OR ONTOGENY
NON-HEDGEHOG PRODUCTS. EXCEPT AS PROVIDED IN SECTION 11.1 (PRODUCT LIABILITY
INDEMNIFICATION), NEITHER ONTOGENY NOR BIOGEN SHALL BE LIABLE FOR SPECIAL,
INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS AGREEMENT
BASED ON CONTRACT, TORT OR ANY OTHER LEGAL THEORY.
31
<PAGE>
Article 9. Confidential Information
9.1 Treatment of Confidential Information. Each Party hereto shall
maintain the Confidential Information of the other Party in confidence, and
shall not disclose, divulge or otherwise communicate such Confidential
Information to others, or use it for any purpose, except pursuant to, and in
order to carry out, the terms and objectives of the Collaboration or to
effectuate any sublicenses permitted under this Agreement (provided that any
potential Sublicensee or Sublicensee shall be bound by an obligation to maintain
as confidential such Confidential Information). Each Party hereby agrees to
exercise reasonable precautions to prevent and restrain the unauthorized
disclosure of such Confidential Information by any of its directors, officers,
employees, consultants, subcontractors, licensees or agents. Neither Party shall
disclose, divulge or otherwise communicate the Collaboration Technology to
others, or use it for any purpose, except as permitted under the terms of this
Agreement or in order to carry out the terms and objectives of the
Collaboration.
9.2 Release from Restrictions. The provisions of Section 9.1 shall not
apply to any Confidential Information disclosed hereunder which:
(1) was known or used by the receiving Party prior to its date of
disclosure to the receiving Party; or
(2) either before or after the date of the disclosure to the receiving
Party is lawfully disclosed to the receiving Party by sources other
than the disclosing Party rightfully in possession of the
Confidential Information: or
(3) either before or after the date of the disclosure to the receiving
Party becomes published or generally known to the public through no
fault or omission on the part of the receiving Party, its Affiliates
or Sublicensees; or
(4) is independently developed by or for the receiving Party without
reference to or reliance upon the Confidential Information; or
(5) is required to be disclosed by the receiving Party to comply with
applicable laws, to defend or prosecute litigation or to comply with
governmental regulations, provided that the receiving Party provides
prior written notice of such disclosure to the other Party and takes
reasonable and lawful actions to avoid and/or minimize the degree of
such disclosure.
In any event, both Parties shall be released from any confidential
obligations under Section 9.1 after a period of ten (10) years from the date of
receipt of the said Confidential Information.
Article 10. Term and Termination
10.1 Term. This Agreement shall be effective as of the Effective Date.
Unless earlier terminated upon the mutual agreement of the Parties or in
accordance with the provisions of this Article 10, this Agreement shall continue
in force until the expiration of all royalty and other payment obligations under
Article 4 hereof.
32
<PAGE>
10.2 Termination by Biogen. Biogen may terminate this Agreement at any
time for any reason upon written notice to Ontogeny. This Agreement shall be
deemed to have been terminated by Biogen (i) in the event Biogen does not
initiate at least one Development Program on or prior to July 1, 2000 or (ii)
the termination by Biogen of the Commercialization Phase pursuant to Section
2.2(e)(ii).
10.3 Termination for Breach. Each Party (the "non-breaching Party") shall
be entitled to terminate this Agreement by written notice to the other Party
(the "Breaching Party") in the event that the breaching Party is in default of
any of its material obligations hereunder and fails to remedy such default
within sixty (60) days after written notice thereof by the non-breaching Party,
provided, however, that if such default is a failure by the breaching Party to
pay the non-breaching Party any amount due under this Agreement, then the
non-breaching Party shall be entitled to terminate this Agreement if the
breaching Party fails to remedy such default within thirty (30) days after
written notice thereof by the non-breaching Party. Any such notice shall
specifically state that the non-breaching Party intends to terminate this
Agreement in the event that the breaching Party shall fail to remedy such
default.
10.4 Consequences of Termination.
(a) Termination for Breach. If this Agreement terminates pursuant to
Section 10.3 following an unremedied breach, the licenses and option granted
under this Agreement shall terminate, provided, however, that (i) in the event
that the breaching Party is Ontogeny, Biogen shall retain any licenses granted
to Biogen by Ontogeny pursuant to Section 3.2 or Section 3.3 prior to such
termination, subject to payment of the applicable royalty or other
consideration, if any, set forth in this Agreement and (ii) in the event that
the breaching Party is Biogen, Ontogeny shall retain any licenses granted to
Ontogeny by Biogen pursuant to Section 3.2 or Section 3.3 prior to such
termination, subject to payment of the applicable royalty or other
consideration, if any, set forth in this Agreement.
(b) Termination by Biogen. If this Agreement is terminated by Biogen
pursuant to Section 10.2, the licenses and option granted under this Agreement
shall terminate, provided, however, that (i) Ontogeny shall retain any licenses
granted to Ontogeny by Biogen pursuant to Section 3.2 or Section 3.3, subject to
payment of the applicable royalty or other consideration, if any, set forth in
this Agreement and (ii) Biogen shall retain the license granted to Biogen by
Ontogeny pursuant to Section 3.3(a), subject to payment of the applicable
royalty or other consideration, if any, set forth in this Agreement.
10.5 Survival of Rights and Obligations. The licenses granted pursuant to
Section 3.2 and Section 3.3 shall survive any termination of this Agreement,
other than a termination pursuant to Section 10.2 or Section 10.3 (in which case
the rights with respect to such licenses shall be in accordance with the terms
set forth in Section 10.4) and such licenses shall be deemed fully paid-up and
perpetual upon the satisfaction of all royalty and other payment obligations
hereunder, if any, with respect to such licenses. Notwithstanding any
termination of this Agreement, including any termination under Section 10.2 or
10.3, (a) neither Party shall be relieved of any obligations incurred prior to
such termination, and (b) the provisions of Section 2.3 (Accounting and Internal
Controls), Section 2.4(a) (Biogen Restrictions), Section 4.5 (Break-up Fee),
Section 4.10 (Records; Audits), Section 5.2 (Repayment), Section 7.1
(Ownership),
33
<PAGE>
Section 8.3 (Disclaimers), Article 9 (Confidential Information), this Article 10
(Term and Termination) and Section 11.1 (Product Liability Indemnification)
shall survive and continue to be enforceable. Upon the earlier of (i) any
termination of this Agreement pursuant to Section 10.1, 10.2 or 10.3 and (ii)
the termination of the Collaboration, each Party shall promptly return to the
other Party all written Confidential Information, and all copies thereof, of
such other Party, provided, however, that to the extent that any license granted
hereunder survives any such termination, the licensee may retain such
Confidential Information as is reasonably necessary to practice such license,
and provided, further, that in the event that this Agreement is terminated by
Ontogeny as a result of an unremedied breach, Ontogeny is under no obligation to
return to Biogen copies of any documents, provided to Ontogeny pursuant to
Section 2.2(b), relating to the regulatory approval, manufacture and/or
marketing of product(s) comprising Hedgehog-based Molecular Entity(ies) that
were the subject of a Development Program.
Article 11. Miscellaneous
11.1 Product Liability Indemnification.
(a) Indemnification by Biogen. Biogen agrees to defend Ontogeny at
Biogen's cost and expense, and will indemnify and hold Ontogeny and its
directors, officers, employees and agents (the "Ontogeny Indemnified Parties")
harmless from and against any losses, costs, damages, fees or expenses arising
out of any claim by a third party relating to personal injury from the design,
manufacture, use, sale or other disposition of any Licensed Product or Biogen
Non-Hedgehog Product, except to the extent caused by the negligence or
intentional misconduct of any of the Ontogeny Indemnified Parties. In the event
of any such claim against the Ontogeny Indemnified Parties by any party,
Ontogeny shall promptly notify Biogen in writing of the claim and Biogen shall
manage and control, at its sole expense, the defense of the claim and its
settlement. The Ontogeny Indemnified Parties shall cooperate with Biogen and
may, at their option and expense, be represented in any such action or
proceeding. Biogen shall not be liable for any litigation costs or expenses
incurred by the Ontogeny Indemnified Parties without Biogen's written
authorization.
(b) Indemnification by Ontogeny. Ontogeny agrees to defend Biogen at
Ontogeny's cost and expense, and will indemnify and hold Biogen and its
directors, officers, employees and agents (the "Biogen Indemnified Parties")
harmless from and against any losses, costs, damages, fees and expenses arising
out of any claim by a third party relating to personal injury from the design,
manufacture, use, sale or other disposition of any Ontogeny Product, Outside the
Field Product or Ontogeny Non-Hedgehog Product, except to the extent caused by
the negligence or intentional misconduct of any of the Biogen Indemnified
Parties. In the event of any such claim against the Biogen Indemnified Parties
by any party, Biogen shall promptly notify Ontogeny in writing of the claim and
Ontogeny shall manage and control, at its sole expense, the defense of the claim
and its settlement. The Biogen Indemnified Parties shall cooperate with Ontogeny
and may, at their option and expense, be represented in any such action or
proceeding. Ontogeny shall not be liable for any litigation costs or expenses
incurred by the Biogen Indemnified Parties without Ontogeny's written
authorization.
11.2 Publicity. Except as otherwise required by law, neither Party shall
originate any publicity, news release or other public announcement, written or
oral, relating to this Agreement
34
<PAGE>
without the prior written approval of the other Party, which approval shall not
be unreasonably withheld; provided, however that each Party shall have the
right, without obtaining the approval of the other Party, to confirm the
existence of this Agreement and to disclose the general scope of the
Collaboration.
11.3 Governing Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the Commonwealth of Massachusetts.
11.4 Dispute Resolution. Except as otherwise provided in this Agreement,
any dispute arising out of or relating to this Agreement or to a breach thereof,
including its interpretation, performance or termination, may be submitted by a
Party to a mediator, mutually agreed to by the Parties, for nonbinding
mediation. The Parties shall cooperate with the mediator in an effort to resolve
such dispute. If the dispute is not resolved within sixty (60) days of its
submission to the mediator, either Party may submit the dispute for binding
arbitration. The arbitration shall be conducted by three (3) arbitrators, one to
be appointed by Ontogeny, one to be appointed by Biogen and a third being
nominated by the two arbitrators so selected or, if they cannot agree on a third
arbitrator, by the President of the American Arbitration Association. The
arbitration shall be conducted in accordance with the commercial rules of the
American Arbitration Association, which shall administer the arbitration. The
arbitration, including the rendering of the award, shall take place in Boston,
Massachusetts, and shall be the exclusive forum for resolving such dispute. The
decision of the arbitrators shall be final and binding upon the Parties hereto,
and the expense of the arbitration shall be paid as the arbitrators determine.
11.5 Waiver. The waiver by a Party of a breach or a default of any
provision of this Agreement by the other Party shall not be construed as a
waiver of any succeeding breach of the same or any other provision, nor shall
any delay or omission on the part of a Party to exercise or avail itself of any
right, power or privilege that it has or may have hereunder operate as a waiver
of any right, power or privilege by such Party.
11.6 Notices. All notices, instructions and other communications hereunder
or in connection herewith shall be in writing and shall be (a) delivered
personally, (b) sent by registered or certified mail, return receipt requested,
postage prepaid, (c) sent via a reputable nationwide overnight courier service
or (d) sent by facsimile transmission, in each case to an address set forth
below. Any such notice, instruction or communication shall be deemed to have
been delivered upon receipt if delivered by hand, three business days after it
is sent by registered or certified mail, return receipt requested, postage
prepaid, one business days after it is sent via a reputable nationwide overnight
courier service, or when transmitted with electronic confirmation of receipt, if
transmitted by facsimile (if such transmission is on a business day; otherwise,
on the next business day following such transmission).
35
<PAGE>
Notices to Ontogeny
shall be addressed to: Ontogeny, Inc.
45 Moulton Street
Cambridge, MA 02138
Attn: President and
Chief Executive Officer
with a copy to: Hale and Dorr LLP
60 State Street
Boston, MA 02109
Attn: Mark G. Borden, Esq.
Notices to Biogen
shall be addressed to: Biogen, Inc.
14 Cambridge Center
Cambridge, MA 02142
Attn: Vice President-Sales,
Marketing and Business Development
with a copy to: Vice President-General Counsel
Either Party may change its address by giving notice to the other Party in
the manner herein provided.
11.7 No Agency. Nothing herein shall be deemed to constitute Ontogeny, on
the one hand, or Biogen, on the other hand, as the agent or representative of
the other, or as joint venturers or partners for any purpose.
11.8 Entire Agreement. Ontogeny and Biogen acknowledge that (a) the
Research Phase shall be deemed to have continued uninterrupted since the date of
the Original Agreement, (b) the First Amendment, Second Amendment, Third
Amendment and Fourth Agreement operated as interim extensions of the Research
Phase, (c) Biogen has satisfied and is current in all funding obligations
embodied in the Original Agreement, First Amendment, Second Amendment, Third
Amendment and Fourth Amendment (except for the payment of the initial Follow-on
Research Support Fee), through November 30, 1998, (d) the terms contained in
this Agreement and the Schedules hereto (which Schedules are deemed to be a part
of this Agreement for all purposes) represent the full understanding of the
Parties with respect to the subject matter hereof and supersede all prior
understandings and writings relating thereto, including the terms of the
Original Agreement, as amended to date and (e) the provisions of the Original
Agreement are hereby terminated and of no further force and effect. No waiver,
alteration or modification of any of the provisions hereof shall be binding
unless made in writing and signed by the Parties.
36
<PAGE>
11.9 Headings. The headings contained in this Agreement are for
convenience of reference only and shall not be considered in construing this
Agreement.
11.10 Severability. In the event that any provision of this Agreement is
held by a court of competent jurisdiction to be unenforceable because it is
invalid or in conflict with any law of any relevant jurisdiction, the validity
of the remaining provisions shall not be affected, and the Parties shall
negotiate a substitute provision that, to the extent possible, accomplishes the
original business purpose.
11.11 Assignment. Neither this Agreement nor any of the rights or
obligations hereunder may be assigned by either Party without the prior written
consent of the other Party, except to an Affiliate of the assigning Party or to
any other party who acquires all or substantially all of the business of the
assigning Party by merger, sale of assets or otherwise, so long as such
Affiliate or other party agrees in writing to be bound by the terms of this
Agreement.
11.12 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Parties hereto and their successors and permitted
assigns.
11.13 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of such together
shall constitute one and the same instrument.
11.14 Force Majeure. Neither Party to this Agreement shall be responsible
to the other Party for nonperformance or delay in performance of the terms or
conditions of this Agreement due to acts of God, acts of governments, war,
riots, strikes, accidents in transportation, or other similar causes beyond the
reasonable control of such Party.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed in their names by their properly and duly authorized officers or
representatives as of the date first above written.
ONTOGENY, INC. BIOGEN, INC.
By: /s/ Doros Platika By: /s/ James R. Tobin
------------------ -------------------------------
Name: Doros Platika Name: James R. Tobin
Title: Title: Chief Executive Officer
37
<PAGE>
Schedule A
(Ontogeny Hedgehog Proteins)
<PAGE>
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
Schedule A
Ontogeny, Inc.
- --------------------------------------------------------------------------------
MOUSE DESERT HEDGEHOG
AMINO ACID SEQUENCE
[* * * * * * * * * * * *
* * * * * * * * * * * *
* * * * * * * * * * * *
* * * * * * * * * * * *
* * * * * * * * * * * *
* * * * * * * * * * * *
* * * * * * * * * * * *
* * * * * * * * * * * *
* * * * * * * * * * * *
* * * * * * * * * * * *
* * * * * * * * * * * *
* * * * * * * * * * * *
* * * * * * * * * * * *
* * * * * * * * * * * *]
One Kendall Square, Building 600, Cambridge, MA 02139 Phone (617) 225-0086
Fax (617) 225-0096
<PAGE>
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
Ontogeny, Inc.
- --------------------------------------------------------------------------------
MOUSE INDIAN HEDGEHOG
AMINO ACID SEQUENCE
[* * * * * * * * * * * *
* * * * * * * * * * * *
* * * * * * * * * * * *
* * * * * * * * * * * *
* * * * * * * * * * * *
* * * * * * * * * * * *
* * * * * * * * * * * *
* * * * * * * * * * * *
* * * * * * * * * * * *
* * * * * * * * * * * *
* * * * * * * * * * * *
* * * * * * * * * * * *
* * * * * * * * * * * *
* * * * * * * * * * * *]
One Kendall Square, Building 600, Cambridge, MA 02139 Phone (617) 225-0086
Fax (617) 225-0096
<PAGE>
Confidential materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
HUMAN SONIC HEDGEHOG
AMINO ACID SEQUENCE
[* * * * * * * * * *
* * * * * * * * * *
* * * * * * * * * *
* * * * * * * * * *
* * * * * * * * * *
* * * * * * * * * *
* * * * * * * * * *
* * * * * * * * * *
* * * * * * * * * *
* * * * * * * * * *
* * * * * * * * * *
* * * * * * * * * *
* * * * * * * * * *
* * * * * * * * * *
* * * * * * * * * *
* * * * * * * * * *
* * * * * * * * * *
* * * * * * * * * *
* * * * * * * * * *
* * * * * * * * * *]
<PAGE>
Schedule B
DISEASE INDICATIONS EXCEPTED FROM THE FIELD
Bone breaks or fractures
Bone degeneration (e.g., spinal problems)
Spinal disk problems
Spinal vertebral problems
Bone dislocation
Abnormal bone growth (e.g., bone spurs, inappropriate skeletal growth)
Cartilage degeneration
Implant fixation (e.g., osteoimplants, tooth implants, fixation devices,
artificial joints)
Bone neoplasms (e.g., osteosarcoma, chondrosarcoma, Ewing's sarcoma)
Spina bifida
Clubfoot
Bone crushing injuries
Tendon disorders (tenosynovitis, de Quervain's disease, ganglions,
tendonitis, synovitis)
Epicondylitis (tennis elbow)
Bursitis
Congenital musculoskeletal deformities
Osteoarthritis
Metabolic bone disease (e.g., osteoporosis, rickets, osteomalacia)
Paget's Disease
Hyperostosis (e.g., osteopetrosis, pyknodysostosis,
osteomyclosclerosis)
Fibrous dysplasia
<PAGE>
Schedule C
(Research Workplan)
<PAGE>
Schedule D
THERAPEUTIC AREAS
Nutrition
Viral infectious diseases
Fungal infectious diseases
Bacterial infectious diseases
Disorders of the cardiovascular system
Disorders of the kidney and urinary tract
Disorders of the alimentary tract
Liver and biliary tract disease
Disorders of the pancreas
Disorders of the immune system
Hematology
Oncology
Endocrinology
Disorders of intermediary metabolism
Disorders of the central nervous system
Disorders of the peripheral nervous system
Disorders of muscle
Psychiatry
Environmental and occupational hazards
<PAGE>
Schedule E
(Line of Credit Note)
<PAGE>
Exhibit 10.43
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
AGREEMENT
Effective as of February 12, 1996 ("Effective Date"), THE BOARD OF TRUSTEES OF
THE LELAND STANFORD JUNIOR UNIVERSITY, a body having corporate powers under the
laws of the State of California ("STANFORD"), and Ontogeny Incorporated, a
Delaware corporation having a principal place of business at One Kendall Square,
Bldg. 600, Cambridge, MA 02139 ("ONTOGENY"), agree as follows:
1. BACKGROUND
1.1 STANFORD represents and warrants that it is Owner by assignment from
Matthew Scott (an investigator employed by Howard Hughes Medical Institute
("HHMI")), Lisa Goodrich and Ronald Johnson of the entire right, title and
interest in the United States Patent Application Serial No. 08/319,745
filed October 7, 1994 and entitled "Vertebrate Genes Related to the
Drosophila Gene Patched" (STANFORD Docket S94-099) and in the inventions
described and claimed therein ("Invention"), and any Licensed Patent,
defined in Section 2, which may issue to the Invention, and that STANFORD
has the authority to grant the licenses granted hereunder.
1.2 STANFORD has certain technical data and information ("Technology")
pertaining to Invention.
1.3 STANFORD wants 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 wants a license under the Technology, Invention, and Licensed
Patent to develop, manufacture, use, and sell Licensed Product in the area
of human therapeutics and diagnostics.
1.5 The Technology and Invention were developed in the course of research
supported by the HHMI in affiliation with STANFORD.
2. DEFINITIONS
2.1 "Licensed Patent(s)" means any U.S. Letters Patent issued upon STANFORD's
U.S. Patent Application, Serial Number 08/319,745 filed October 7,1994, or
upon any divisions, continuations, reissues, reexamines, and any
continuations-in-part (CIPs), except those CIPs which do not embrace
subject matter disclosed in USSN 08/319,745 and which would not be
infringed by the practice of the Invention. "Licensed Patent(s)" also
includes any and all foreign patents or patent applications corresponding
to the above. All such divisions, continuations, reissues, CIPs and
foreign applications and patents issuing thereon will be automatically
incorporated in and added to this Agreement. This agreement specifically
contemplates that Licensed Patents shall include, but is not limited to,
1
<PAGE>
CIPs which are directed to other Patched homologs, e.g., mammalian
homologs, and bioactive fragments thereof, diagnostic methods involving
Patched gene(s) and/or gene product(s), and drug screening protocols
involving Patched gene(s) and/or gene product(s).
2.2 "Licensed Materials" means those proprietary materials which are
enumerated in Appendix A and transferred from STANFORD to ONTOGENY within
sixty (60) days of the Effective Date.
2.3 "Licensed Product" means any product or part in the Licensed Field of Use,
the manufacture, use, or sale of which:
(a) Is covered by a valid claim of an issued, unexpired Licensed
Patent directed to the Invention. 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
(b) Is covered by any claim being prosecuted in a pending
application directed to the Invention, provided the claim has
not been pending for more than 7 years.
2.4 "Milestone Product" means any product which is not a Licensed Product but
which is manufactured in material part through the use of a Licensed
Product.
2.5 "Derivative Product" means any product which is not a Licensed Product but
which is identified or discovered in material part through the use of a
Licensed Product.
2.6 "Source Product" means any product which is not a Licensed Product but
which incorporates in material part Licensed Materials.
2.7 "Cell Therapy Product" means any cell, tissue or organ which is engineered
ex vivo by a cell processing process which relies, in material part, on
the use of a Licensed Product.
2.8 "Derivative Cell Therapy Product" means any cell, tissue or organ which is
engineered ex vivo by a cell processing process which does not use of a
Licensed Product, but which process is identified or discovered in
material part through the use of a Licensed Product.
2.9 "Licensed Process" means any process in the Licensed Field of Use which
relies, in material part, on the use of a Licensed Product.
2.10 "Net Sales" means the gross revenue derived by ONTOGENY and sublicensee
from Licensed Product, whether or not assembled (and without excluding any
components or subassemblies and whether or not patent impacted), less the
following items but only as they actually pertain to the disposition of
the Licensed
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Product by ONTOGENY or sublicense, 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 or sublicensee;
(b) Costs of insurance, packing, and transportation from the place
of manufacture to the customer's premises or point of
installation;
(c) Costs of installation at the place of use;
(d) Credit for returns, allowances, or trades; and
(e) Customary trade, quantity or cash discounts and non-affiliated
brokers' or agents' commissions actually allowed or taken.
2.11 "Licensed Field of Use" means human and veterinary therapeutics, drug
discovery and diagnostics.
2.12 "Exclusive" means that, subject to Article 4, STANFORD will not grant
additional licenses in the Licensed Field of Use.
2.13 "Sublicensee" means third parties to whom ONTOGENY has granted sublicenses
pursuant to this agreement.
3. GRANT
3.1 STANFORD grants to ONTOGENY, upon and subject to the terms and conditions
of this agreement,
(i) a worldwide exclusive license to Licensed Patents, in
the Licensed Field of Use, to make, use, and sell
Licensed Products, Milestone Products, Derivative
Product, Licensed Process, Cell Therapy Products and
Derivative Cell Therapy Products; and
(ii) a worldwide non-exclusive license to Licensed Materials.
3.2 The exclusive license granted in paragraph 3.1, including the right to
sublicense pursuant to Article 13, in the Licensed Field of Use begins on
the Effective Date and ends on the first to occur of.
(a) [**] years from the Effective Date; or
(b) [**] years from the date of first commercial sale of a
Licensed Product by ONTOGENY or sublicensee; ONTOGENY agrees
to
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
promptly inform STANFORD in writing of the date of first commercial sale.
Then the exclusive license will be converted to nonexclusive license until
expiration of the last Licensed Patent.
3.3 STANFORD has the right to practice the Invention for its own
non-commercial research purposes or in non-commercial research
collaboration with third party academic or not-for-profit research
institutions. STANFORD also has the right to publish any information
included in the Licensed Patent.
4. SPONSORS'RIGHTS
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 will manufacture substantially in the United States all
Licensed Product sold or produced in the United States, as well as certain
obligations to HHMI, and to take all reasonable action necessary to enable
STANFORD to satisfy its obligation to the sponsor, relating to Invention.
5. DILIGENCE
5.1 As an inducement to STANFORD to enter into this Agreement, ONTOGENY will
use all 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 and to meet the specific
milestones, expenditure rates, and other measures of diligence are set
forth in Appendix B. Anytime after ten (10) years from the date of
license, STANFORD may terminate this Agreement if ONTOGENY or a
sublicensee has not sold a Licensed Product for a period of 1 year and is
not demonstrably engaged in research, development, manufacturing,
marketing or licensing program, as appropriate, directed toward the
development and commercialization of the licensed subject matter.
5.2 Progress Report - On or before September 30 of each year until ONTOGENY
markets a Licensed Product, STANFORD may request in writing that ONTOGENY
submit an annual report covering the preceding year ending June 30,
regarding the progress of ONTOGENY toward commercial use of Licensed
Product. This report will include, as a minimum, information sufficient to
enable STANFORD to satisfy reporting requirements of the U.S. Government
and for STANFORD to ascertain progress by ONTOGENY toward meeting the
diligence requirements of Article 5.
6. ROYALTIES
6.1 In consideration for the license granted in this agreement, ONTOGENY will
pay STANFORD a noncreditable, nonrefundable license issue royalty of $[**]
upon signing this Agreement.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
6.2 In addition, upon signing of this Agreement and upon approval by the
Provost, ONTOGENY will also issue to STANFORD 6000 shares of Ontogeny
Preferred stock.
6.3 Beginning [**] through [**], ONTOGENY will pay STANFORD a yearly royalty
of $[**]. Beginning [**] and thereafter, ONTOGENY will pay STANFORD a
yearly royalty of $[**]. These yearly royalty payments are nonrefundable
but they are creditable against earned royalties as described in Paragraph
6.5.
6.4 In addition, ONTOGENY will pay STANFORD earned royalties on Net Sales as
follows:
o Pharmaceutical Applications
o Net Sales of Licensed Product:...........................[**]%
o Net Sales of Licensed Product wherein Licensed Patent is
key, but not sole patent covering sale of Licensed
Product:.................................................[**]%
o Net Sales of Milestone Product:..........................[**]%
o Net Sales of Source Product:.............................[**]%
o Net Sales of Derivative Product:
a one-time payment of $[**] to be made upon first commercial
sale
o Cell Therapy Applications
o On Net Sales of Cell Therapy Product wherein Licensed
Product is a key cell differentiation factor used in
cell processing to generate the Cell Therapy Product ....[**]%
o On Net Sales of Cell Therapy Product wherein Licensed
product is used in cell processing, but is not a key
factor...................................................[**]%
where n is the number of proprietary factors on which Ontogeny
has to pay royalties or discovered itself
o Net Sales of Derivative Cell Therapy Product: a one-time
payment of $[**] to be made upon first commercial sale.
o Diagnostic Applications
o On Net Sales of Licensed Product as a diagnostic,
wherein Licensed Product is the sole proprietary component
of kit or reagent sold...................................[**]%
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
o On Net Sales of Licensed Product as a diagnostic, wherein
Licensed Product is one of several proprietary components
of kit or reagent sold...................................[**]%
where n is the number of proprietary components on which
Ontogeny has to pay royalties or discovered itself
If there is some dispute regarding what is considered a key patent or key
differentiation factor, ONTOGENY and STANFORD agree to discuss and if
necessary submit to a board of independent experts.
6.5 Creditable payments under this Agreement may be offset against 50% of each
earned royalty payment which ONTOGENY is required to pay under Paragraph
6.4 until the entire credit is exhausted.
6.6 If this Agreement is not terminated in accordance with other provisions,
ONTOGENY'S obligation to pay royalties will continue until the later of:
(a) [**] from even date herewith, if no Licensed Patent issues
covering product sales; or
(b) As long as ONTOGENY would infringe a valid claim of an
unexpired Licensed Patent of STANFORD.
6.7 At the time that any exclusive rights are converted to non-exclusive
rights under Article 3 or any other similar provision herein, the royalty
due under paragraph 6.4 above shall be halved for any Pharmaceutical, Cell
Therapy or Diagnostic product still covered by Licensed Patents but for
which exclusive rights are no longer accorded by the subject agreement.
6.8 ONTOGENY will calculate royalties on sales in currencies other than U.S.
Dollars using the appropriate foreign exchange rate quoted by the Bank of
America (San Francisco) foreign exchange desk, on the close of business on
the last banking day of each calendar quarter. Royalty payments to
STANFORD must be in U.S. Dollars. ONTOGENY will pay all non-U.S. taxes
related to royalty payments and will not deduct these taxes from the
payments due STANFORD.
7. PATENT PROSECUTION
7.1 STANFORD and ONTOGENY will share responsibility for patent prosecution as
follows:
ONTOGENY will lead the management of prosecution of the Licensed Patent
using patent counsel reasonably acceptable to STANFORD. Counsel will
directly notify STANFORD, and provide STANFORD 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
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offices so that STANFORD may be informed and apprised of the continuing
prosecution of Licensed Patent. STANFORD 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 ONTOGENY will use reasonable
efforts to incorporate STANFORD's reasonable suggestions regarding said
prosecution. ONTOGENY will use reasonable efforts to amend any patent
application to include claims reasonably requested by STANFORD to protect
Licensed Product. No case will be abandoned without giving STANFORD 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, Canadian, Japanese, Australia and European.
7.3 If STANFORD demonstrates that it is not being adequately informed or
apprised of the continuing prosecution of Licensed Patent or that STANFORD
is not being provided with reasonable opportunities to participate in
decision making as indicated in the above paragraph, STANFORD will assume
lead management of the prosecution of the Licensed Patent, using patent
counsel reasonably acceptable to ONTOGENY, and STANFORD will thereafter
provide ONTOGENY with the same safeguards which STANFORD was due under
paragraph 7.1. Any such demonstration will involve reasonable written
notice to ONTOGENY specifically detailing the STANFORD's concern, and a
reasonable opportunity, including a 60 day cure period, for ONTOGENY to
refute or cure the basis for STANFORD's concern. STANFORD agrees to
diligently prosecute or assist in prosecuting Licensed Patent. If after
the cure period STANFORD and ONTOGENY still cannot agree on a cure for
STANFORD's concerns, both parties agree to submit the dispute to
Arbitration as set forth in Article 18 below.
7.4 Within 45 days after receipt of a statement from STANFORD, ONTOGENY will
reimburse STANFORD for all costs incurred by STANFORD, 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.
7.5 In the event that STANFORD assumes lead management of the Licensed Patent
under Paragraph 7.3 above, ONTOGENY will reimburse STANFORD for all
reasonable costs incurred in the preparation, filing, prosecution and
maintenance of the Licensed Patent within 45 days after receipt of a
statement from STANFORD. STANFORD agrees to use reasonable efforts to
minimize such patent costs by whatever means necessary for the benefit of
ONTOGENY, provided however, that the quality and scope of the Licensed
Patent will not be jeopardized by such minimization. STANFORD agrees to
provide an annual patent prosecution and maintenance budget to ONTOGENY
with reasonable
7
<PAGE>
period for review. ONTOGENY will not be held liable for any fees or
services in excess of the agreed upon budget unless by consent in writing.
8. ROYALTY REPORTS, PAYMENTS, AND ACCOUNTING
8.1 ONTOGENY will make written reports and earned royalty payments to STANFORD
beginning with the first sale of a Licensed Product. These reports and
payments will be due within 45 days after the end of each calendar
quarter. The report will include the number, description and aggregate Net
Sales of Licensed Product as well as the calculation of earned royalty
payment due STANFORD under Paragraph 6.4 for the completed calendar
quarter. ONTOGENY will also include the payment of royalties for the
calendar quarter covered by the report.
8.2 ONTOGENY must 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 the license. 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 STANFORD. ONTOGENY will also permit STANFORD to examine books and
records when necessary to verify reports described in Paragraph 8.1.
STANFORD or its designee will make the examination at STANFORD's expense.
If the audit reveals 5% or more under reporting of royalties due STANFORD,
ONTOGENY will pay the audit costs.
9. NEGATION OF WARRANTIES
9.1 Nothing in this Agreement can be construed as:
(a) A warranty or representation by STANFORD as to the validity or
scope of any Licensed Patent;
(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 patents,
copyrights, and other rights of third parties;
(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 patents or other rights of STANFORD 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, STANFORD makes no
representations and extends no warranties of any kind, either express or
implied.
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There are no express or implied warranties of merchantability or fitness
for a particular purpose, or that the use of the Licensed Product will not
infringe any patent, copyright, trademark, or other rights or any other
express or implied warranties.
9.3 ONTOGENY agrees that nothing in this Agreement grants ONTOGENY any express
or implied license or right under or to:
(a) U.S. Patent No. 4,237,224, "Process for Producing Biologically
Functional Molecular Chimeras"; U.S. Patent No. 4,468,464 and
U.S. Patent No. 4,740,470, both entitled, "Biologically
Functional Molecular Chimeras" (collectively known as the
Cohen/Boyer patents), or reissues; or
(b) U.S. Patent 4,656,134 "Amplification of Eucaryotic Genes" or
any corresponding patent applications.
10. INDEMNITY
10.1 ONTOGENY will indemnify, hold harmless, and defend STANFORD, HHMI and
STANFORD Health Services and their respective trustees, officers,
employees, students, and agents against any and all claims for death,
illness, personal injury, property damage, and improper business practices
arising out of the manufacture, use, sale, or other disposition of
Invention Licensed Patent, Licensed Product, or Technology by ONTOGENY or
sublicensee, or their customers.
10.2 STANFORD and HHMI will not be liable for any indirect, special,
consequential, or other damages whatsoever, whether grounded in tort
(including negligence), strict liability, contract or otherwise. STANFORD
and HHMI 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 minimum units of liability of $5,000,000 and
must include STANFORD, HHMI and STANFORD Health Services, 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 STANFORD's request, ONTOGENY will furnish a Certificate of
Insurance evidencing primary coverage and requiring 30 days prior written
notice of cancellation or material change to STANFORD.
9
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ONTOGENY will advise STANFORD, 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 STANFORD, HHMI or STANFORD Health Services
will be excess and noncontributory.
11. MARKING
ONTOGENY will mark 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.
12. NAMES AND MARKS
ONTOGENY will not identify STANFORD or HHMI in any promotional advertising
or other promotional materials to be disseminated to the public or to use
the name of any STANFORD faculty member, employee, or student or any
trademark, service mark, trade name, or symbol of STANFORD, HHMI or the
STANFORD Health Services or both, without STANFORD's or HHMI's prior
written consent.
13. INFRINGEMENT BY OTHERS; PROTECTION OF PATENTS
13.1 ONTOGENY will promptly inform STANFORD of any suspected infringement of a
Licensed Patent. During the Exclusive period of this Agreement, STANFORD
and ONTOGENY each have the right to institute an action for infringement
of the Licensed Patent against a third party as follows:
(a) If STANFORD and ONTOGENY 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 STANFORD will agree to the manner in which they
exercise control over the action. STANFORD 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, STANFORD
may institute suit, and, at its option, join ONTOGENY as a
plaintiff. If STANFORD decides to institute suit, then it will
notify ONTOGENY in writing. Failure by ONTOGENY to notify
STANFORD in writing within 15 days of the written notice will
mean that ONTOGENY has assigned to STANFORD all rights, causes
of action, and damages resulting from any alleged
infringement;
(c) If neither (a) nor (b) above occurs, ONTOGENY may institute
suit and, at its option, join STANFORD as a plaintiff.
ONTOGENY will pay the entire cost of litigation and be
entitled to retain the
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entire amount of any recovery or settlement. However any
recovery in excess of litigation costs will be considered Net
Sales, and ONTOGENY will pay STANFORD royalties as indicated
in Section 6.
13.2 Should either STANFORD or ONTOGENY commence a suit under Paragraph 13.1
but then decide to abandon the suit, it will give timely notice to the
other part. The other party may continue prosecution of the suit only if
the two parties can agree on sharing of expenses and any recovery.
14. SUBLICENSE
14.1 ONTOGENY may grant sublicenses to Licensed Patents and Licensed Materials
during the exclusive period of this agreement.
14.2 If ONTOGENY is unable or unwilling to serve or develop a potential market
or market territory for which there is a willing sublicensee, ONTOGENY
will, at STANFORD's request, negotiate in good faith a sublicense under
this Agreement. Bona fide business concerns of ONTOGENY will be considered
in any good faith negotiation for a sublicense under this Agreement.
14.3 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:
(i) needed or implied in the course of distribution,
installation or performance of service as required for
the sale to an end-user of Licensed Products, Milestone
Products, Derivative Product, Cell Therapy Products,
Derivative Cell Therapy Products and Licensed Materials,
or
(ii) not specifically rejected in writing by STANFORD within
thirty (10) days of written notification of
sub-sublicense by ONTOGENY, any such rejection not being
unreasonably made by STANFORD; and
(b) The earned royalty rate specified in the sublicense may be at
higher rates than the rates in this Agreement. Any sublicense
also will expressly include the provisions of Articles 8, 9,
and 10 for the benefit of STANFORD and HHMI and, in the event
that this Agreement is terminated, provide for the transfer of
all obligations, including the payment of royalties, to
STANFORD or its designee.
14.4 ONTOGENY will provide STANFORD a copy of any sublicense granted under this
Agreement.
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Confidential Materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
15. STRATEGIC PARTNERSHIPS
Pursuant to ONTOGENY entering into a corporate partnership agreement or
other similar strategic partnership agreement for development of Licensed
Products, Milestone Products, Derivative Product, Cell Therapy Products
and Derivative Cell Therapy Products, ONTOGENY will pay STANFORD, with
sixty (60) days of execution of such partnership agreement, as follows:
If agreement constitutes committed funds to ONTOGENY (including half
the value of equity investments) of less than or equal to $2
Million, then STANFORD will receive $[**].
If agreement constitutes committed funds to ONTOGENY (including half
the value of equity investments of less than $10 Million, but
greater than $2 Million, then STANFORD will receive $[**].
If agreement constitutes committed funds to ONTOGENY (including half
the value of equity investments) of greater than or equal to $10
Million, then STANFORD will receive $[**].
16. TERMINATION
16.1 ONTOGENY may terminate this Agreement by giving STANFORD a 60 day notice
in writing.
16.2 STANFORD may terminate this Agreement if LICENSEE:
(a) Is in default in payment of royalty or providing of reports;
(b) Is in breach of any provision of this Agreement; or
(c) Provides any false report;
and ONTOGENY fails to remedy the default, breach, or false report within
30 days after written notice by STANFORD.
16.3 Surviving any termination are:
(a) LICENSEE's obligation to pay royalties accrued or accruable;
(b) Any cause of action or claim of ONTOGENY or STANFORD, accrued
or to accrue, because of any breach or default by the other
party; and
(c) The provisions of Articles 8, 9, and 10.
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17. ASSIGNMENT
This Agreement may be assigned to Affiliates of ONTOGENY upon written
approval by STANFORD. STANFORD 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,
18. ARBITRATIQN
18.1 Any controversy or any disputed claim arising from this Agreement,
excluding any dispute relating to patent validity or infringement, will be
settled by arbitration in accordance with the Licensing Agreement
Arbitration Rules of the American Arbitration Association.
18.2 Upon request by either party, arbitration will be by a third party
arbitrator mutually agreed upon in writing by ONTOGENY and STANFORD within
" )0 days of request. The arbitrator's judgement will be final and
nonappealable and may be entered in any court having jurisdiction.
18.3 Discovery will be as a civil suit in the California Superior Court. The
Arbitrator may limit the scope, time or issues involved in discovery.
18.4 Any arbitration will be held at STANFORD, California, unless the parties
mutually agree in writing to another place.
19. NOTICES
Notices are to be written and deposited in the United States mail,
registered or certified, and addressed as follows:
To STANFORD: Office of Technology Licensing
STANFORD University
900 Welch Road, Suite 350
Palo Alto, CA 94304-1850
Attention: Director
To LICENSEE: Ontogeny Incorporated
One Kendall Square
Building 600
Cambridge, MA 02139
Attention: President & CEO
Either party may change its address upon written notice to the other
party.
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20. WAIVER
None of the terms of this Agreement can be waived except by the written
consent.
21. APPLICABLE LAW
This Agreement shall be governed by the laws of the State of California
applicable to agreements negotiated, executed and performed wholly within
California.
22. MERGER
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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in duplicate
originals by their duly authorized officers or representatives.
THE BOARD OF TRUSTEES OF THE
LELAND STANFORD JUNIOR
UNIVERSITY
Signature: /s/ Katherine Ku
Name: Katherine Ku
Title: Director, Technology Licensing
Date: Feb. 8, 1996
ONTOGENY INCORPORATED
Signature: /s/ Heidi Wyle
Name: Heidi Wyle
Title: COO
Date: 2/12/96
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S94-099:MW
Stanford /Ontogeny Agreement
Appendix A
Patched-Associated Biological Materials
Derivatives of the patched cDNA clones
Genomic DNA clones containing the patched promoter, and derivatives, especially
fusions to reporter genes
Patched homologues from other species including human
Antibodies, including rat, rabbit and chicken, and other species antiserum
against vertebrate patched protein
Patched protein
PCR primer sequences
Cell culture assay material for patched
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
S94-009:MW
Stanford /Ontogeny Agreement
Appendix B
Diligence Milestones for Ontogeny Patched Program
1. Nov. 10, 1996
[**]
2. Dec. 15, 1997
[**] and [**] in [**] from [**] a [**] or [**]
3. end 4Q, 1998
[**]
4. end 4Q, 2000
[**]
5. end 4Q 2001
[**]
<PAGE>
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 Johns Hopkins
University, a body having corporate powers under the laws of the State of
Maryland ("JOHNS HOPKINS"), 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 45 Moulton Street, Cambridge, MA 02138 ("ONTOGENY"), agree as
follows:
Article 1
Background
1.1 JOHNS HOPKINS represents and warrants that it is Owner by assignment from
Philip A. Beachy and Jeffrey Porter (both investigators employed by Howard
Hughes Medical Institute ("HHMI")) and HHMI, and that the UNIVERSITY OF
WASHINGTON represents and warrants that it is the Owner by assignment from
Randall T. Moon (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 JOHNS HOPKINS and the UNIVERSITY OF WASHINGTON have the sole
authority to grant the licenses granted hereunder.
1.2 JOHNS HOPKINS and the UNIVERSITY OF WASHINGTON have certain technical data
and information ("Technology") pertaining to Invention.
1.3 JOHNS HOPKINS 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.
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1.5 The Technology and Invention were developed in the course of research
supported by the HHMI in affiliation with each of JOHNS HOPKINS and the
UNIVERSITY OF WASHINGTON.
1.6 JOHNS HOPKINS and the UNIVERSITY OF WASHINGTON agree that all
notifications and payments by ONTOGENY pursuant to this Agreement will be
made to, and accepted by, JOHNS HOPKINS for the benefit of both JOHNS
HOPKINS 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 JOHNS HOPKINS through
Philip A. Beachy 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
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(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.
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2.6 "Exclusive" means that, subject to Article 3.3 and Article 4, neither
JOHNS HOPKINS 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 JOHNS HOPKINS 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 JOHNS HOPKINS, JOHNS HOPKINS 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. JOHNS
HOPKINS, 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, JOHNS HOPKINS
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 JOHNS HOPKINS and the UNIVERSITY OF WASHINGTON to satisfy their
obligations to the United States Federal Government, relating to Licensed
Products.
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Article 5
Diligence by Ontogeny
5.1 As an inducement to JOHNS HOPKINS 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, JOHNS HOPKINS 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 JOHNS HOPKINS' termination, and a
reasonable opportunity, including a further ninety (90) day cure period,
for ONTOGENY to refute or cure the basis for JOHNS HOPKINS' 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, JOHNS HOPKINS 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 JOHNS HOPKINS 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, JOHNS HOPKINS shall so notify ONTOGENY,
and ONTOGENY shall exercise one of the following options within sixty (60)
days of notification to ONTOGENY by JOHNS HOPKINS:
(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 JOHNS HOPKINS 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 JOHNS HOPKINS, 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 JOHNS HOPKINS to satisfy reporting requirements of
the U.S. Government and for JOHNS HOPKINS to ascertain progress by
ONTOGENY or its Sublicensees (if any) toward meeting the diligence
requirements of Article 5.
Article 6
Payments due to Johns Hopkins
6.1 In consideration for the rights granted in this Agreement, ONTOGENY will
pay to JOHNS HOPKINS a noncreditable, nonrefundable license issue royalty
of $[**] upon signing this Agreement ($[**] of which is considered a
license processing fee paid to JOHNS HOPKINS), and issue to JOHNS HOPKINS
[**] shares of ONTOGENY Common stock. At JOHNS HOPKINS' 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 JOHNS HOPKINS 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 JOHNS HOPKINS a yearly royalty of $[**].
Said yearly royalties will be paid to JOHNS HOPKINS 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 JOHNS HOPKINS 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 JOHNS HOPKINS 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 JOHNS HOPKINS 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 JOHNS HOPKINS 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 JOHNS HOPKINS 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 JOHNS HOPKINS 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 JOHNS HOPKINS, 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 JOHNS HOPKINS (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 JOHN HOPKINS 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 JOHNS HOPKINS by
ONTOGENY under Article 14.4 and (ii) a notice from
ONTOGENY stating the amount of the Ontogeny Non-Cash
Value, JOHNS HOPKINS must notify ONTOGENY in writing
that JOHNS HOPKINS 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
JOHNS HOPKINS does not notify ONTOGENY in writing within
such 90 day period of Johns Hopkins' intent to hire a
third party to determine the Third Party Non-Cash Value,
then JOHNS HOPKINS 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 JOHNS HOPKINS [**] of whichever is
lower of the Ontogeny Non-Cash Value or the Third Party
Non-Cash Value, and (ii) JOHNS HOPKINS 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 JOHNS HOPKINS [**] 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 JOHNS
HOPKINS will receive $[**].
(3) If agreement constitutes Committed Funds to ONTOGENY of
greater than or equal to $[**], then JOHNS HOPKINS 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 JOHNS HOPKINS 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 JOHNS
HOPKINS 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 JOHNS HOPKINS [**] 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 JOHNS HOPKINS' option and such
option to only be exercisable for the 90 day period after JOHN
HOPKINS has been notified of such a Sublicense agreement, JOHN
HOPKINS 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 JOHNS HOPKINS [**] of whichever is lower of
the Ontogeny Consideration Value or the Third Party Consideration
Value, and (ii) JOHNS HOPKINS 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 JOHNS HOPKINS [**]
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 JOHNS HOPKINS 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 JOHNS
HOPKINS 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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<PAGE>
(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 JOHNS
HOPKINS must be in U.S. Dollars.
Article 7
Prosecution of Licensed Patents
7.1 JOHNS HOPKINS and ONTOGENY will share responsibility for patent
prosecution as follows:
JOHNS HOPKINS 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, JOHNS HOPKINS, HHMI and the UNIVERSITY
OF WASHINGTON. JOHNS HOPKINS 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. JOHNS HOPKINS 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 JOHNS
HOPKINS, then ONTOGENY will be responsible for all legal bills, up to the
annual budget limit proposed by JOHNS HOPKINS, until both parties resolve
their dispute over such patent prosecution and maintenance budget for the
year. JOHNS HOPKINS' 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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JOHNS HOPKINS shall cause ONTOGENY to be directly copied on all
correspondence between JOHNS HOPKINS and JOHNS HOPKINS' 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 JOHNS HOPKINS will use reasonable
efforts to incorporate ONTOGENY's reasonable suggestions regarding said
prosecution. JOHNS HOPKINS 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 JOHNS HOPKINS (such patent counsel to
understand that both JOHNS HOPKINS and ONTOGENY are its clients), and
ONTOGENY will thereafter provide JOHNS HOPKINS 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 JOHNS HOPKINS
specifically detailing ONTOGENY'S concern, and a reasonable opportunity,
including a 90 day cure period, for JOHNS HOPKINS 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 JOHNS
HOPKINS 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.
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<PAGE>
7.4 Within 45 days after receipt of a statement from JOHNS HOPKINS, ONTOGENY
will reimburse JOHNS HOPKINS for all costs incurred by JOHNS HOPKINS,
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 Johns Hopkins in the use of its
own resources, such as employee time, and shall not extend to patenting
fees and costs incurred by Johns Hopkins after termination of this
Agreement. ONTOGENY will provide payment authorization to JOHNS HOPKINS at
least one (1) month before an action is due, provided that ONTOGENY has
received timely notice of such action from JOHNS HOPKINS. 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 JOHNS HOPKINS' patent counsel. ONTOGENY will provide
written authorization to JOHNS HOPKINS and its patent attorney in response
to all notices sent by JOHNS HOPKINS' 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, JOHNS HOPKINS 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, JOHNS HOPKINS 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.
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Article 8
Royalty Reports, Payments, And Accounting
8.1 ONTOGENY will make quarterly written reports and earned royalty payments
to JOHNS HOPKINS 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 JOHNS HOPKINS
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 JOHNS HOPKINS.
ONTOGENY shall also permit and shall use reasonable efforts to cause its
Sublicensee to permit, JOHNS HOPKINS to examine books and records when
necessary to verify reports described in Article 8.1. JOHNS HOPKINS or its
designee will make the examination at JOHNS HOPKINS' expense. If the audit
reveals 5% or more under reporting of royalties due JOHNS HOPKINS,
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 JOHNS HOPKINS, HHMI or the
UNIVERSITY OF WASHINGTON as to the validity or scope of any Licensed
Patent;
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<PAGE>
(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 JOHNS HOPKINS,
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, JOHNS HOPKINS, 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 JOHNS HOPKINS, 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 JOHNS HOPKINS, 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
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<PAGE>
by ONTOGENY or Sublicensee. JOHNS HOPKINS, 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 JOHNS HOPKINS,
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
JOHNS HOPKINS' request, ONTOGENY will furnish a Certificate of Insurance
evidencing primary coverage and requiring 30 days prior written notice of
cancellation or material change to JOHNS HOPKINS. ONTOGENY will advise
JOHNS HOPKINS, 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 JOHNS HOPKINS, HHMI and the UNIVERSITY OF WASHINGTON will be
excess and noncontributory.
Article 11
Product Marking
ONTOGENY will mark 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.
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<PAGE>
Article 12
Use of Names And Marks
Except as otherwise required by law, ONTOGENY or its Sublicensees (if any) will
not identify JOHNS HOPKINS, 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 mark, trade name, or symbol of JOHNS HOPKINS, 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 JOHNS HOPKINS of any suspected infringement
of a Licensed Patent. During the Exclusive period of this Agreement, JOHNS
HOPKINS 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 JOHNS HOPKINS 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
JOHNS HOPKINS will agree to the manner in which they exercise
control over the action. JOHNS HOPKINS 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 JOHNS HOPKINS and/or the
UNIVERSITY OF WASHINGTON as co-plaintiff(s). If ONTOGENY decides to
institute suit, then it will notify JOHNS HOPKINS 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
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<PAGE>
calculate lost Net Sales, and ONTOGENY will pay JOHNS HOPKINS
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 JOHNS HOPKINS. 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, JOHNS HOPKINS, 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, JOHNS
HOPKINS 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 JOHNS HOPKINS within fifteen (15) days of written
notification of sub-Sublicense by ONTOGENY, any such rejection not
being unreasonably made by JOHNS HOPKINS; 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 JOHNS HOPKINS, HHMI and the UNIVERSITY OF
WASHINGTON. In the event that this Agreement is terminated, ONTOGENY,
subject to JOHNS HOPKINS approval, will
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<PAGE>
provide for the transfer of all obligations, including the payment of
royalties, to JOHNS HOPKINS or its designee.
14.3 ONTOGENY will provide JOHNS HOPKINS 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 JOHNS HOPKINS 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, JOHNS HOPKINS 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 JOHNS HOPKINS 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;
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<PAGE>
and ONTOGENY fails to remedy the default, breach, or false report within
90 days after written notice by JOHNS HOPKINS.
15.4 Surviving any termination by JOHNS HOPKINS are:
(a) ONTOGENY'S obligation to pay royalties milestones and other payments
accrued;
(b) Any cause of action or claim of ONTOGENY, JOHNS HOPKINS 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 JOHNS HOPKINS and UNIVERSITY OF WASHINGTON. JOHNS HOPKINS 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
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<PAGE>
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 JOHNS HOPKINS: Office of Technology Licensing
Johns Hopkins University
2024 E. Monument Street, Ste 2-100
Baltimore, Maryland 21205
Attention: Director
TO UNIVERSITY OF WASHINGTON: Office of Technology Transfer
University of Washington
1101 Northeast 45th, Suite 200
Seattle, Washington 98105
Attention: Karen L. Deyerle
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<PAGE>
TO HHMI: Howard Hughes Medical Institute
(for purposes of 4000 Jones Bridge Road
Article 12 Only) Chevy Chase, Maryland 20815
Attention: Office of General Counsel
TO ONTOGENY: Ontogeny, Inc.
45 Moulton Street
Cambridge, MA 02138
Attention: CEO
TO ONTOGENY: with a copy to Lahive & Cockfield
Sixty State Street
Boston, MA 02109
Attention: Matthew P. Vincent, 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
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<PAGE>
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.
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<PAGE>
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 JOHNS HOPKINS UNIVERSITY
/s/ /s/
- ------------------------------ ----------------------------------
Signature Signature
- ------------------------------ ----------------------------------
Print Name Print Name
- ------------------------------ ----------------------------------
Title Title
THE UNIVERSITY OF WASHINGTON
/s/ Robert C. Miller
- ------------------------------
Signature
Robert C. Miller
Director, Office of Technology Transfer
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<PAGE>
I have read and agree to abide by the terms of this Agreement
Inventors:
Philip A. Beachy Jeffrey Porter
/s/ Philip Beachy /s/ Jeffrey Porter
- ------------------------------ ----------------------------------
Signature Signature
- ------------------------------ ----------------------------------
Date Date
Randall T. Moon
/s/ Randall Moon
- ------------------------------
Signature
- ------------------------------
Date
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<PAGE>
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 Philip A. Beachy, Randall T. Moon, and Jeffrey A. Porter.
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<PAGE>
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
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<PAGE>
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. JOHNS HOPKINS 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. JOHNS HOPKINS 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. JOHNS HOPKINS 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. JOHNS HOPKINS 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
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<PAGE>
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. JOHNS HOPKINS 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. JOHNS HOPKINS 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. JOHNS HOPKINS 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. JOHNS HOPKINS 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
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<PAGE>
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. JOHNS HOPKINS 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.
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<PAGE>
Appendix D
Copy of
American Arbitration Association (AAA)
Commercial Mediation Rules
begins on the Following Page
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<PAGE>
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
(Matthew Bender & Co., Inc.) (Rel. 8-1/93 Pub. 331)
<PAGE>
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.
(Matthew Bender & Co., Inc.) (Rel. 8-1/93 Pub. 331)
<PAGE>
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.
(Matthew Bender & Co., Inc.) (Rel. 8-1/93 Pub. 331)
<PAGE>
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.
(Matthew Bender & Co., Inc.) (Rel. 8-1/93 Pub. 331)
<PAGE>
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.
(Matthew Bender & Co., Inc.) (Rel. 8-1/93 Pub. 331)
<PAGE>
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.
(Matthew Bender & Co., Inc.) (Rel. 8-1/93 Pub. 331)
<PAGE>
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 Johns Hopkins 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
<PAGE>
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
<PAGE>
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
<PAGE>
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.
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<PAGE>
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 JOHNS HOPKINS: Office of Technology Licensing
Johns Hopkins University
2024 E. Monument Street, Ste 2-100
Baltimore, Maryland 21205
Attention: Director
TO ONTOGENY: Ontogeny, Inc.
45 Moulton Street
Cambridge, MA 02138
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.
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<PAGE>
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/ George A. Eldridge
-----------------------------------
Signature
George A. Eldridge
Vice President
THE JOHNS HOPKINS UNIVERSITY
/s/
- -----------------------------------
Signature
- -----------------------------------
Print Name
- -----------------------------------
Title
6
<PAGE>
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
<PAGE>
AMENDMENT NO. 1 TO LICENSE AGREEMENT
This AMENDMENT No. 1 is made as of this 15th day of January, 1997, by and
between THE JOHNS HOPKINS UNIVERSITY, a body having corporate powers under the
laws of the State of Maryland ("JOHNS HOPKINS"), 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, JOHNS HOPKINS, UNIVERSITY OF WASHINGTON, and ONTOGENY are parties
to a License Agreement, dated as of September 26, 1996 (the "License
Agreement"); and
WHEREAS JOHNS HOPKINS, UNIVERSITY OF WASHINGTON, and ONTOGENY wish to
amend the License Agreement as hereafter, provided.
NOW, THEREFORE, in consideration of the mutual covenants of JOHNS HOPKINS,
UNIVERSITY OF WASHINGTON, and ONTOGENY and further good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
JOHNS HOPKINS, 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.
45 Moulton Street
Cambridge, MA 02138
Attention: CEO
Page 1 of 2
<PAGE>
TO ONTOGENY: with a copy to Foley, Hoag & Eliot
One Post Office Square
Boston, MA 02109
Attention: Matthew P. Vincent, 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/ Thomas D. Ignolia
-------------------------------
Thomas D. Ingolia, Ph.D.
Senior Vice President
THE JOHNS HOPKINS UNIVERSITY THE UNIVERSITY OF WASHINGTON
By: /s/ N. Franklin Adkinson, Jr. By: /s/ Robert C. Miller
--------------------------------- -------------------------------
N. Franklin Adkinson, Jr., M.D. Robert C. Miller
Interim Vice Dean for Research Director, Office of Technology
Transfer
Page 2 of 2
<PAGE>
Exhibit 10.45
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
LICENSE AGREEMENT
AGREEMENT, dated January 1, 1995, between THE TRUSTEES OF COLUMBIA
UNIVERSITY IN THE CITY OF NEW YORK, a New York corporation ("Columbia"), and
ONTOGENY, INC., a Massachusetts corporation ("Ontogeny").
1. Definitions.
a. "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.
b. "Licensed Patents" shall mean (i) the patent application United
States Serial No. 108/202,040 entitled "DNA Encoding A Vertebrate Homolog of
Hedgehog, Vhh-1, Expressed By the Notochord and Uses Thereof" filed February 25,
1994 and any corresponding foreign patent application or related foreign
document, including any division, continuation, continuation-in-part,
substitute, renewal, reissue, extension, confirmation, reexamination or
registration thereof and any patent issuing thereon including any substitute,
renewal, reissue, extension, confirmation, reexamination or registration
thereof; and (ii) any United States patent application or foreign patent
application or related foreign document, including any division, continuation,
continuation-in-part, substitute, renewal, reissue, extension, confirmation,
reexamination or registration thereof and any patent issuing thereon including
any substitute, renewal, reissue, extension, confirmation, reexamination or
registration thereof which is owned or controlled, in whole or in part, by
Columbia.
c. "Licensed Products" shall mean any product, which includes the
protein, its fragments, covalent derivatives or antibodies to the protein, the
manufacture, use, sale, rental or lease of which is covered by a claim of an
issued patent included in the Licensed Patents which has neither expired nor
been declared invalid by a court from which no appeal has or can be taken.
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<PAGE>
d. "Licensed Research Information" shall mean proprietary
information and materials (including any chemical compound or substances,
biological cell, or component thereof, whether derived from biological material
or synthesized) substantially relating to the invention covered by a Licensed
Patent but not covered by a claim of such Licensed Patent that is furnished to
Ontogeny and (i) was developed at Columbia under the direction of Dr. Jessell
prior to the effective date of this Agreement; or (ii) arises from, and is
developed by Dr. Jessell in the course of their research activities at Columbia.
Licensed Research Information shall be set forth as Appendix A, as amended from
time to time by agreement of the parties.
e. "Milestone Products" shall mean any therapeutic product that is
not a Licensed Product and that (a) is an agonist or antagonist to a protein
covered by the Licensed Patents or to any fragments, covalent derivatives or
antibodies of such protein, or (b) incorporates a material part of, or could not
have been developed without the use, of Licensed Research Information.
f. "Net Sales" shall mean all fees or other payments invoiced by
Ontogeny or an Affiliate for the use, sale, rental or lease of Licensed
Products, less returns and customary trade discounts actually taken, outbound
freight, value added, sales or use taxes and custom duties. In the case of sale,
rental, lease or use of Licensed Products by an Affiliate, Net Sales shall be
based upon the Net Sales of the Affiliate. In the case of a sale of Licensed
Products by Ontogeny to a sublicensee for resale by the sublicensee, Net Sales
shall be based solely on the Net Sales of the sublicensee and shall not include
the sale by Ontogeny to the sublicensee.
g. "Sublicensees" shall mean third parties to whom Ontogeny has
granted sublicenses pursuant to this Agreement.
2. License Grant.
a. Columbia grants to Ontogeny, upon and subject to all the terms
and conditions of this Agreement.
(i) a worldwide exclusive license under the Licensed Patents to
manufacture, use, sell, rent or lease Licensed Products for the term provided
under Section 14 hereof;
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<PAGE>
(ii) a worldwide exclusive license to any Licensed Research
Information until such time as it is published or otherwise publicly distributed
and thereafter a non-exclusive license thereto. Columbia shall notify Ontogeny a
sufficient period of time prior to any publication of the licensed Research
Information so that Ontogeny can, if it deems appropriate, request Columbia to
file a patent application with respect to such Licensed Research Information.
b. Columbia grants to Ontogeny the right to sublicense third
parties, provided that the terms and provisions of this Agreement are met where
applicable, that the Sublicense includes a provision that it is subject to the
terms of this Agreement, and that Ontogeny obtains Columbia's approval of any
proposed sublicensee prior to execution, which approval shall not be
unreasonably withheld by Columbia. Ontogeny may from time to time provide to
Columbia a written notice describing one or more potential sublicensees, and
Columbia shall be deemed to have approved for the purposes of this Subsection
2(b) each such sublicensee except to the extent that Columbia notifies Ontogeny,
within 30 days after its receipt of such notice, that it does not approve of any
specific sublicensee or sublicensees. Any notice provided by Ontogeny hereunder
must refer to this Subsection 2(b) and to the 30-day period referred to herein.
c. To the extent any invention covered by a Licensed Patent, or any
Licensed Research Information arises from foundation or federally funded
research, as specified by Columbia in Appendix B, all rights granted by Columbia
to Ontogeny under this Section 2 and under this Agreement are subject to the
requirements 35 U.S.C. ss.ss. 200 et seq. and implementing regulations. To the
extent required by applicable government regulations, Ontogeny agrees that any
Licensed Products embodying any invention arising from federally funded research
or produced through the use of any such invention that are used, sold, rented or
leased by the Ontogeny, an Affiliate or a Sublicensee in the United States will
be manufactured substantially in the United States.
3. Royalties and Payments.
a. In consideration of the license granted under Section 2(a) of
this Agreement, Ontogeny shall pay to Columbia:
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
(i) a license fee of [**] upon execution of the Agreement and an
additional [**] on the one-year anniversary of signing this Agreement.
(ii) a royalty of [**] of Net Sales of Licensed Products made by
Ontogeny or an Affiliate or a sublicensee anywhere in the world.
(iii) at the earlier of the marketing of the Licensed Product or
[**], a minimum annual royalty payment of [**]. [**] of such amount will be
credited against earned royalties. This minimum payment shall be required for
[**]; and
(iv) the patent expense incurred to date by Columbia and all
reasonable future patent expenses related to Licensed Patents incurred by
Columbia.
b. If Ontogeny, its Affiliates or Sublicenses, in order to make,
use, sell or otherwise exploit the Licensed Products in any jurisdiction,
reasonably determines that it must make royalty payments ("Third Party
Payments") to one or more independent third parties to obtain a license or
similar right to make, use, sell or otherwise exploit the Licensed Products,
excluding royalties payable to Harvard University, Ontogeny may reduce the
royalty due to Columbia by one-third of such Third Party Payments, but in no
event shall any such payment due to Columbia be reduced by more than [**] as a
result of such reduction.
c. With respect to Milestone Products, Ontogeny shall pay to
Columbia the amounts set forth below at the following milestones:
Phase 2 clinical
completion $[**]
NDA Filing $[**]
Product Sales Initiation $[**]
4. Reports and Payments.
a. Following market introduction of the first Licensed Product, on
or before the last business day of February, May, August and November of each
year of this Agreement, Ontogeny shall
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<PAGE>
submit to Columbia a written report with respect to the preceding calendar
quarter (the "Payment Report") stating:
(i) Net Sales made by Ontogeny and any Affiliate during such quarter
for Licensed Products;
(ii) Amounts accruing to Ontogeny from its Sublicensees during such
quarter;
(iii) Net Sales made by Sublicensees during such quarter; and
(iv) A calculation under Section 3 of the amounts due to Columbia,
making reference to each subsection. Simultaneously with the submission of each
Payment Report, Ontogeny shall make payments to Columbia of the amounts due for
the calendar quarter covered by the Payment Report.
b. Ontogeny shall maintain at its principal office usual books of
account and records showing its actions under this Agreement. Upon reasonable
notice, such books and records shall be open to inspection and copying, during
usual business hours, by an independent certified public accountant to whom
Ontogeny has no reasonable objection, for two years after the calendar quarter
to which they pertain, for purposes of verifying the accuracy of the amounts
paid by Ontogeny under this Agreement.
5. Use for Research Purposes of Licenses Granted. Columbia reserves the
right to use the Licensed Patents and Licensed Research Information for research
purposes and to permit other entities or individuals to use same for research
purposes. Columbia shall obtain from all such entities or individuals an
agreement in writing not to use the Licensed Patents or Licensed Research
Information for commercial purposes and shall inform Ontogeny of the identity of
such entities or individuals.
6. Reasonable Commercial Efforts.
a. Ontogeny shall use its reasonable commercial efforts to develop
and market Licensed Products for commercial sale and distribution throughout the
world, and shall provide Columbia with annual reports on its research and
development efforts.
b. If Ontogeny fails to devote reasonable commercial efforts toward
the development or commercialization of a Licensed Product, Columbia may convert
the license granted hereunder to a non-exclusive license or terminate the
license granted hereunder and all rights will be
5
<PAGE>
returned to Columbia. If Columbia elects to terminate the license or convert the
license to a non-exclusive license, Columbia shall provide written notice to
Ontogeny of its decision and Ontogeny shall have 90 days to cure its lack of
reasonable commercial efforts to Columbia's reasonable satisfaction.
7. Infringement.
a. Columbia will protect its Licensed Patents from infringement and
prosecute infringers at its own expense when in its sole judgment such action
may be reasonably necessary, proper and justified.
b. If Ontogeny shall have supplied Columbia with written evidence
demonstrating to Columbia's satisfaction prima facie infringement of a claim of
a Licensed Patent by a third party selling products in competition with Ontogeny
or any of its Affiliates or Sublicensees, Ontogeny may by notice request
Columbia to take steps to protect the Licensed Patent. Unless Columbia shall
within three months of the receipt of such notice either (i) cause such
infringement to terminate or (ii) initiate legal proceedings against the
infringer, Ontogeny, may upon notice to Columbia initiate legal proceedings
against the infringer at Ontogeny's expense. In such event Ontogeny may deduct
from payments due hereunder to Columbia reasonable costs and legal fees incurred
to conduct such proceedings, but in no event shall any such payments be reduced
by more than 50 percent of the amount otherwise due to Columbia hereunder. Any
recovery by Ontogeny in such proceedings shall first be used to reimburse
Ontogeny for reasonable costs and legal fees incurred to conduct such
proceedings and next to pay any amounts withheld from Columbia by Ontogeny under
this Section 7 during the pendency of the proceedings. The balance shall be
divided 90% to Ontogeny and 10% to Columbia.
c. In the event one party shall initiate or carry on legal
proceedings to enforce any Licensed Patent against an alleged infringer, the
other party shall use its best efforts to fully cooperate with and shall supply
all assistance reasonably requested by the party initiating or carrying on such
proceedings. The party which institutes any proceeding to protect or enforce a
Licensed Patent shall have sole control of that proceeding and shall bear the
reasonable expenses incurred by said other party in providing such assistance
and cooperation as is requested pursuant to this paragraph.
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<PAGE>
8. Warranty; Representations. Nothing in this Agreement shall be construed
as a warranty or representation by either party as to the validity of any
Licensed Patent. Nothing in this Agreement shall be construed as a warranty or
representation by either party that anything made, used, sold or otherwise
disposed of under any license granted under this Agreement is or will be free
from infringement of domestic or foreign patents of other parties.
Columbia Represents that it has the sole and full authority to grant
to Ontogeny the license to the Licensed Patents granted hereunder.
9. Prohibition Against Use of Name. Ontogeny will not use the name,
insignia or symbols of Columbia, its faculties or departments, or any variation
or combination thereof, or the name of any trustee, faculty member, other
employee or student of Columbia for any purpose whatsoever without Columbia's
prior written consent, provided that Ontogeny may state that it is a licensee of
Columbia and that Dr. Jessell is a member of its Scientific Advisory Board.
10. Compliance with Governmental Obligations.
a. Notwithstanding any provisions in this Agreement, Columbia
disclaims any obligations or liabilities to government authorities arising under
the license provisions of this Agreement if Ontogeny is charged in a
governmental action for not complying with or fails to comply with governmental
regulations in the course of taking effective steps to bring any Licensed
Product to a point of practical application.
b. Ontogeny shall comply upon reasonable notice from Columbia with
all governmental requests directed to either Columbia or Ontogeny and provide
all information and assistance necessary to comply with the governmental
requests.
c. Ontogeny shall insure that research, development, and marketing
under this Agreement will comply with all government regulations in force and
effect including, but not limited to, Federal, state and municipal legislation.
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11. Indemnity and Insurance.
a. Ontogeny will indemnify, defend and hold Columbia harmless
against any and all actions, suits, claims, demands, prosecutions, liabilities,
costs and expenses (including reasonable attorneys' fees) based on or arising
out of the development, manufacture, packaging, use, sale, rental or lease of
Licensed Products, even if altered for use for a purpose not intended, or use of
Licensed Patents or Licensed Research Information by Ontogeny, its Affiliates,
its Sublicensees or its (or their) customers and any representation made or
warranty given by Ontogeny, its Affiliates or Sublicensees with respect to
Licensed Products.
b. Ontogeny shall maintain, during the term of this Agreement,
comprehensive general liability insurance, including products liability
insurance, with reputable and financially secure insurance carriers acceptable
to Columbia to cover the activities of Ontogeny, its Affiliates and its
Sublicensees, for minimum limits of $2,000,000 combined single limit for bodily
injury and property damage per occurrence and in the aggregate. Such insurance
shall include Columbia, its trustees, directors, officers, employees, and agents
as additional insureds. Ontogeny shall furnish a certificate of insurance
evidencing such coverage, with thirty days' written notice to Columbia of
cancellation or material change.
The Ontogeny insurance shall be primary coverage; any insurance
Columbia may purchase shall be excess and noncontributory. Such insurance shall
be written to cover claims incurred, discovered, manifested, or made during or
after the expiration of this Agreement.
Ontogeny shall at all times comply with all statutory workers'
compensation and employers' liability requirements covering its employees with
respect to activities performed under this Agreement.
12. Marketing.
a. Prior to the issuance of patents, Ontogeny will mark Licensed
Products made, sold, or otherwise disposed of by it under the license granted in
this Agreement with the words "Patent Pending", and following the issuance of
one or more patents, with the numbers of such patents.
8
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b. Columbia's counsel will directly notify Ontogeny and provide
copies of any official communications from the United States and foreign patent
offices relating to said prosecution. Columbia's counsel shall also provide
Ontogeny with advance copies of all relevant communications to the various
patent offices, so that Ontogeny may be informed and apprised for the continuing
prosecution of patent applications in Licensed Patents. Ontogeny shall have
reasonable opportunities to participate in decision making on all key decisions
affecting filing, prosecution and maintenance of patents and patent applications
in Licensed Patents including, without limitation, the right to approve or
disapprove the abandonment of any patent or claims thereof and Columbia will use
reasonable efforts to incorporate Ontogeny's reasonable suggestions regarding
said prosecution. Columbia shall use all reasonable efforts to amend any patent
application to include claims reasonably requested by Ontogeny to protect
Licensed Products.
c. Columbia and Ontogeny agree to cooperate fully in the
preparation, filing, prosecution and maintenance of Licensed Patents and of all
patents and patent applications licensed to Columbia hereunder, executing all
papers and instruments or requiring members of Columbia or Ontogeny execute such
papers and instruments so as to enable Columbia to apply for, to prosecute and
to maintain patent applications and patents in Columbia's name in any country.
d. If Ontogeny elects no longer to pay the expenses of a patent
application or patent included within Licensed Patents, Ontogeny shall notify
Columbia not less than sixty (60) days prior to such action, such date being at
least thirty (30) days prior to any pending action or expenditure.
13. Breach and Cure.
a. In addition to applicable legal standards, Ontogeny, shall be
considered to be in material breach of this Agreement for (i) failure to pay
fully and promptly amounts due pursuant to Section 3 and payable pursuant to
Section 4; or (ii) failure to comply with governmental requests directed to
Columbia or Ontogeny pursuant to Section 10(b).
9
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b. Either party shall have the right to cure its material breach.
The cure shall be effected within a reasonable period of time but in no event
later than thirty days after notice of any other breach given by the
non-breaching party.
14. Term of Agreement.
a. This Agreement shall be effective as of the date first set forth
above and shall continue in full force and effect until its expiration or
termination in accordance with this Section 14.
b. Unless terminated earlier under any provision of this Agreement,
the term of the exclusive license granted under the Licensed Patents shall
extend until the expiration of the last to expire of the Licensed Patents or
fifteen years from the effective date hereof.
c. The license granted under this Agreement may be terminated by
Columbia (i) upon thirty days' written notice to Ontogeny if Columbia elects to
terminate in accordance with Section 6(b), (ii) upon sixty days' written notice
to Ontogeny for Ontogeny's material breach of the Agreement and Ontogeny's
failure to cure such material breach in accordance with Section 13(b), or (iii)
should Ontogeny commit any act of bankruptcy, become insolvent, file a petition
under any bankruptcy or insolvency act or have any such petition filed against
it.
d. After the payment by Ontogeny to Columbia of the total $100,000
license fee, this Agreement may be terminated by Ontogeny upon 60 days written
notice to Columbia.
e. Upon any termination of this Agreement pursuant to Section 14(c)
(i) or (ii) or Section 14(d), all sublicenses granted by Ontogeny under it shall
be assigned to Columbia.
15. Notices. Any notice required or permitted to be given under this
Agreement shall be sufficient if sent by certified mail (return receipt
requested), postage prepaid, if to Columbia, to:
Columbia Innovation Enterprise
363 Engineering Terrace
Columbia University
New York, New York 10027
copy to: General Counsel
Columbia University
110 Low Memorial Library
New York, New York 10027
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if to Ontogeny, to: William W. Helman
Ontogeny, Inc.
One Kendall Square
Building 600
Cambridge, MA 02139
copy to: Mark G. Borden, Esq.
Hale and Dorr LLP
60 State Street
Boston, MA 02109
or to such other address as a party may specify by notice hereunder.
16. Assignment. This Agreement may not be assigned without the written
consent of the other party.
17. Governing Law. This Agreement shall be governed by New York law
applicable to agreements made and to be performed in New York.
11
<PAGE>
IN WITNESS THEREOF, Columbia and have caused this Agreement to be executed
by their duly authorized representatives as of the day and year first written
above.
THE TRUSTEES OF COLUMBIA
UNIVERSITY IN THE CITY OF NEW YORK
By /s/
------------------------------------
ONTOGENY INC.
By /s/
------------------------------------
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Columbia/Ontogeny Hedgehog Agreement
APPENDIX A
LICENSED RESEARCH INFORMATION
1. Sequence of vhh-1 in rat, zebrafish (Roelink et al., 1994).
2. Expertise on floorplate, motor neuron and forebrain neuron induction
assays (see Roelink et al., 1994, Ericson et al., 1995).
3. Expertise on expression of functional forms of vhh-1 in mammalian cell
lines (Roelink et al., 1994; Ericson et al., 1995).
4. Information contained in the February 24, 1995 PCT of the
continuation-in-part of United States Patent Application Serial No.
08/202,040 filed February 25,1994.
13
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Columbia/Ontogeny Hedgehog Agreement
APPENDIX B
Foundations And Federal Agencies That Provided Funding For
Licensed Patent And Licensed Research Information
T. M. Jessell
Howard Hughes Medical Institute
J. Dodd
N. I. H. Grant NS-30532
T. Edlund
Swedish Medical Research Council
M. Placzek
Medical Research Council, U.K.
14
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CIE Columbia Innovation Enterprise
July 19, 1995
Mr. William W. Helman
Greylock Management Corporation
One Federal Street, 26th Floor
Boston, Massachusetts 02110-2065
Re: Ontogeny/Hedgehog Agreement
Dear Mr. Helman:
Reference is made to the License Agreement between The Trustees of
Columbia University in the City of New York (the "University") and Ontogeny,
Inc. ("Ontogeny"), dated as of January 1, 1995 (the "License Agreement").
The University and Ontogeny wish to execute this letter agreement (the
"Amendment") to amend the License Agreement to add the Howard Hughes Medical
Institute as an indemnitee under the indemnity granted by Ontogeny pursuant to
Paragraph 11 of the License Agreement.
NOW, THEREFORE, for good and valuable consideration, receipt of which is
hereby acknowledged, and intending to be legally bound hereby, the University
and Ontogeny agree as follows:
Subparagraph a. of Paragraph 11 of the License Agreement is hereby deleted
and the following substituted in its place:
a. Ontogeny will indemnify, defend and hold the University and the
Howard Hughes Medical Institute harmless against any and all
actions, suits, claims, demands, prosecutions, liabilities, costs
and expenses (including reasonable attorneys' fees) based on or
arising out of the development, manufacture, packaging, use, sale,
rental or lease of Licensed Products, even if altered for use for a
purpose not intended, or use of Licensed Patents or Licensed
Research Information by Ontogeny, its Affiliates, its Sublicensees
or its (or their) customers and any representation made or warranty
given by Ontogeny, its Affiliates or sublicensees with respect to
Licensed Products.
Except as expressly provided above, the License Agreement shall remain in
full force and effect, and, except as amended by this Amendment, the License
Agreement is ratified and confirmed in all respects.
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<PAGE>
If the foregoing accurately reflects our understanding, please execute
this Amendment in the space indicated below, whereupon this Amendment will
become a legally binding agreement between us, to be effective as of the date
first above written.
Very truly yours,
THE TRUSTEES OF COLUMBIA UNIVERSITY
By /s/ Jack M. Granowitz
------------------------------------
Jack M. Granowitz
Director,
Columbia University
ACCEPTED AND AGREED:
ONTOGENY, INC.
By /s/
- -------------------------------
16
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
AMENDMENT NO. 2 TO LICENSE AGREEMENT
This AMENDMENT No. 2 is made as of this 30th day of August, 1996, by and
between THE TRUSTEES OF COLUMBIA University in the City of New York, a New York
Corporation ("Columbia"), and ONTOGENY, INC., a Delaware corporation
("Ontogeny").
WHEREAS, Columbia and Ontogeny are parties to a License Agreement, dated
as of January 1, 1995 (the "License Agreement"); and
WHEREAS Columbia and Ontogeny wish to amend the License Agreement as
hereafter provided.
NOW, THEREFORE, in consideration of the mutual covenants of Columbia and
Ontogeny and further good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Columbia and Ontogeny, intending
to be legally bound, hereby agree as follows:
1. The definition of "Net Sales" contained in Section 1 of the License
Agreement is hereby amended to read in full as follows:
"f. 'Net Sales' shall mean all fees or other payments invoiced by
Ontogeny or an Affiliate for the use, sale, rental or lease of
Licensed Products, less returns and customary trade discounts
actually taken, outbound freight, value added, sales or use taxes
and custom duties. In the case of sale, rental, lease or use of
Licensed Products by an Affiliate, Net Sales shall be based upon the
Net Sales of the Affiliate.
2. Section 3.a. of the License Agreement is hereby amended to read in full as
follows:
"a. In consideration of the license granted under Section 2 (a)
of this Agreement, Ontogeny shall pay to Columbia:
(i) a license fee of [**] upon execution of the License Agreement
and an additional [**] on the one year anniversary of the signing
the License Agreement. Columbia hereby acknowledges receipt of both
[**] payments; and
(ii) a royalty of [**] of Net Sales of Licensed Products made by
Ontogeny or an Affiliate anywhere in the world; and
(iii) if Ontogeny grants a sublicense under the License Agreement to
a sublicensee (other than an Affiliate), Ontogeny shall pay to
Columbia [**] of any royalties, fees or other amounts received by
Ontogeny or its Affiliates as a result of the sublicensee's
development or sale of Licensed Products, excluding (x) amounts paid
in partial or fall consideration of equity of Ontogeny or its
Affiliates, (y) amounts paid to fund research and development
activities conducted by Ontogeny or its Affiliates, and (z)
non-monetary considerations, including, without limitation patent
expenses, equity securities, licenses, technical assistance,
marketing cooperation, intellectual property rights, noncompetition
covenants and the like; and
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
(iv) beginning at the earlier of the first commercial marketing of
any Licensed Product or [**], a minimum annual royalty payment of
[**]. [**] of such amount will be credited against earned
royalties. This minimum payment shall be required for [**] years;
and
(v) the patent expense incurred to date by Columbia and all
reasonable future patent expenses related to Licensed Patents
incurred by Columbia.
3. Section 3.b. of the License Agreement is hereby amended to read in full as
follows:
"If Ontogeny or its Affiliates, in order to make, use, sell or
otherwise exploit the Licensed Products in any jurisdiction,
reasonably determines that it must make royalty payments ("Third
Party Payments") to one or more independent third parties to obtain
a license or similar right to make, use, sell or otherwise exploit
the Licensed Product, excluding royalties payable to Harvard
University, Ontogeny may reduce the royalty due to Columbia by
one-third of such Third Party Payments, but in no event shall any
such payment due to Columbia be reduced by more than [**] as a
result of such reduction."
4. Section 3.c. of the License Agreement is hereby amended to read in full as
follows:
"With respect to Milestone Products, Ontogeny shall pay to Columbia
the following payments and shall not pay the amounts specified in
Section 3.a.(iii). Such amounts are set forth below at the following
milestones:
Phase 2 clinical completion $[**]
NDA Filing $[**]
Product Sales Initiation $[**]
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<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
5. The "Notice to Ontogeny" in Section 15 of the License Agreement is hereby
amended to read in full as follows:
if to Ontogeny, to: Chief Executive Officer
Ontogeny, Inc.
45 Moulton Street
Cambridge, MA 02138-1118
copy to: Mark G. Borden, Esq.
Hale and Dorr LLP
60 State Street
Boston, MA 02109
6. The "Notice to Columbia" in Section 15 of the License Agreement is hereby
amended to read in full as follows:
if to Columbia, to: Columbia Innovation Enterprise
500 West 120th Street
Columbia University
New York, NY 10027
copy to: General Counsel
Columbia University
110 Lowell Memorial Library
New York, NY 10027
7. If the terms of this Amendment are agreed to and executed by Columbia
Innovation Enterprise on or before August 31, 1996, Ontogeny shall pay
Columbia [**].
8. Except as expressly amended by this Amendment No. 2, 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. 2.
9. This Amendment No. 2 shall be governed by, and construed on the same basis
as the License Agreement, as set forth therein.
19
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has fully executed this
Amendment No. 2 all as of the day and year first above written.
THE TRUSTEES OF COLUMBIA UNIVERSITY IN THE CITY OF
NEW YORK
By /s/ Jack M. Granowitz
-----------------------------------------------
Jack M. Granowitz
Director,
ONTOGENY, INC.
By /s/ Thomas D. Ingolia
-----------------------------------------------
Thomas D. Ingolia, Ph.D
Senior Vice President
20
<PAGE>
Exhibit 10.46
Confidential Materials omitted and filed separately with
Securities and Exchange Commission. Asterisks denote omissions.
LICENSE AGREEMENT
This Agreement is made and entered into between the President and Fellows of
Harvard College (hereinafter HARVARD) having offices at the Office for
Technology and Trademark Licensing, 124 Mt. Auburn Street, Suite 410, Cambridge,
Massachusetts 02138 and Ontogeny, Inc. (hereinafter LICENSEE), a corporation of
Delaware having offices at One Kendall Square, Bldg. 600, Cambridge, MA 02139.
Whereas HARVARD is Owner by assignment from Drs. Douglas Melton and Ali
Hemmati-Brivanlou of their entire right, title and interest in United States
Patent Application Serial No. 08/136,748, filed on October 14, 1993 entitled
'Method of Inducing and Maintaining Neural Cells', in the foreign patent
applications corresponding thereto, and in the inventions described and claimed
therein (HU Case no. 956-93); and
Whereas HARVARD is Owner by assignment from Drs. Clifford Tabin and Andrew
McMahon of their entire right, title and interest; and THE IMPERIAL CANCER
RESEARCH FUND (ICRF) is Owner by assignment from Dr. Philip Ingram of his entire
right, title and interest in United States Patent Application Serial No.
08/176,427, filed on December 30, 1993 entitled 'Vertebrate Embryonic
Pattern-Inducing Proteins and Uses Related Thereto', in the foreign patent
applications corresponding thereto, and in the inventions described and claimed
therein (HU Case no. 963-93); and
Whereas HARVARD has entered into an agreement with ICRF granting HARVARD
authority to act on ICRF's behalf and to bind ICRF in licensing ICRF's rights to
United States Patent Application Serial No. 08/176,427, filed on December 30,
1993, and to the foreign patent applications corresponding thereto, and in the
inventions described and claimed therein; and
Whereas HARVARD is committed to a policy that ideas or creative works produced
at HARVARD should be used for the greatest possible public benefit; and
Whereas LICENSEE is prepared and intends to diligently develop the invention and
to bring products to market which are subject to this Agreement; and
Whereas HARVARD accordingly believes that every reasonable incentive should be
provided for the prompt introduction of such ideas into public use, all in a
manner consistent with the public interest; and
Whereas LICENSEE is desirous of obtaining an exclusive worldwide license in
order to practice the above referenced inventions covered by PATENT RIGHTS in
the United States and in certain foreign countries, and to manufacture, use and
sell in the commercial market the products made in accordance therewith; and
Whereas HARVARD is desirous of granting such a license to LICENSEE in accordance
with the terms of this Agreement.
Now therefore, in consideration of the foregoing premises, the parties agree as
follows:
<PAGE>
ARTICLE I
DEFINITIONS
1.1 PATENT RIGHTS shall mean United States patent application Serial No.
08/136,748 filed October 14, 1993 and United States patent application
Serial No. 08/176,427 filed December 30, 1993, the inventions described
and claimed therein, and any divisions, continuations,
continuations-in-part to the extent that their claims are dominated by
existing PATENT RIGHTS, patents issuing thereon or reissues thereof, and
any and all foreign patents and patent applications corresponding thereto,
to the extent these are owned by or controlled by HARVARD; which will be
automatically incorporated in and added to this Agreement and shall
periodically be added to Appendix A attached to this Agreement and made a
part thereof.
1.2 CLAIM shall mean (a) a valid and enforceable claim of an issued patent
included in the PATENT RIGHTS and (b) with respect to a patent application
of the PATENT RIGHTS, a claim of such patent application which has not
been abandoned or rejected by an administrative agency from which no
appeal can be taken.
1.3 BIOLOGICAL MATERIALS shall mean the proprietary materials developed in the
laboratories of Drs. A. McMahon, C. Tabin and D. Melton as a result of
research concerning the licensed subject matter, identified in Appendix B,
such Appendix to be periodically updated by mutual agreement, and supplied
to LICENSEE by HARVARD together with any progeny, mutants or derivatives,
to the extent that they contain a substantial portion of the original
BIOLOGICAL MATERIALS. Proprietary materials shall mean materials which are
not generally available from another source and which are under the
control of HARVARD.
1.4 ROYALTY PRODUCTS shall mean products, the manufacture, use or sale of
which would, absent the license granted hereunder, infringe a CLAIM.
1.5 MILESTONE PRODUCTS shall mean products which are not ROYALTY PRODUCTS and
(a) are identified or discovered in material part through the use of
processes or subject matter covered in a CLAIM or (b) agonize or
antagonize members of the hedgehog gene family or (c) agonize or
antagonize follistatin or (d) incorporate a substantial portion of a
BIOLOGICAL MATERIAL or which could not be made except by utilizing a
BIOLOGICAL MATERIAL.
1.6 NET SALES shall mean the amount billed or invoiced for sales of ROYALTY
PRODUCTS:
(a) Customary trade, quantity or cash discounts and non-affiliated
brokers' or agents' commissions actually allowed and taken;
(b) Amounts repaid or credited by reason of rejection or return; and/or
(c) To the extent separately stated on purchase orders, invoices or
other documents of sale, taxes levied on and/or other governmental
charges made as to production, sale, transportation, delivery or use
and paid by or on behalf of LICENSEE.
<PAGE>
(d) Amounts charged for shipping, packaging, insurance, storage or
handling to the extent these are individually itemized on invoices.
1.7 AFFILIATES shall mean any third party company, corporation, or business
controlling, controlled by or under common control with LICENSEE. Control
shall mean ownership or control of at least fifty percent (50%) of the
voting stock.
ARTICLE II
GRANT
2.1 HARVARD hereby grants to LICENSEE and LICENSEE accepts, subject to the
terms and conditions hereof, a worldwide license, under PATENT RIGHTS to
make and have made, to use and have used, to sell and have sold the
ROYALTY PRODUCTS for the life of PATENT RIGHTS, and a worldwide license to
use BIOLOGICAL MATERIALS to make and have made, to use and have used, to
sell and have sold or to identify the MILESTONE PRODUCTS. Such license
shall include the right to grant sublicenses. In order to provide LICENSEE
with a period of exclusivity, HARVARD agrees it will not grant licenses
under PATENT RIGHTS to others except as required by HARVARD's obligations
in paragraph 2.2(a) or as permitted in paragraph 2.2(b) and that it will
not provide BIOLOGICAL MATERIALS to others for any commercial purpose.
LICENSEE agrees during the period of exclusivity of this license in the
United States that any product subject to this Agreement to be sold in the
United States by LICENSEE or its AFFILIATES or sublicensees will be
manufactured substantially in the United States.
2.2 The granting and acceptance of this license is subject to the following
conditions:
(a) HARVARD's "Statement of Policy in Regard to Inventions, Patents and
Copyrights" dated March 17, 1986, Public Law 96-517, Public Law
98-620 and HARVARD's obligations under agreements with other
sponsors of research. Any right granted in this Agreement greater
than that permitted under Public Law 96-517 or Public Law 98-620
shall be subject to modification as may be required to conform to
the provisions of that statute.
(b) HARVARD shall have the right to make and to use and to grant
non-exclusive licenses to make and to use, for research purposes
only and not for any commercial purpose, the BIOLOGICAL MATERIALS
and the subject matter described and claimed in PATENT RIGHTS.
HARVARD, to the extent it is aware of any patent rights arising from
such research conducted during the term of this Agreement, shall
notify LICENSEE of said rights.
(c) LICENSEE shall use reasonable efforts to effect introduction of the
ROYALTY PRODUCTS into the commercial market as soon as practicable,
consistent with sound and reasonable business practices and
judgment; thereafter, until the expiration of this Agreement,
LICENSEE shall endeavor to keep such ROYALTY PRODUCTS reasonably
available to the public.
<PAGE>
Confidential Materials omitted and filed separately with
Securities and Exchange Commission. Asterisks denote omissions.
(d) HARVARD shall have the right to terminate or render this license
non-exclusive at any time after three (3) years from the date of
license if, in HARVARD's reasonable judgment, LICENSEE fails to
satisfy both of the following conditions, which such failure is not
cured within ninety (90) days after written notice of such failure
by HARVARD to LICENSEE:
(i) is not demonstrably engaged in research, development,
manufacturing, marketing or licensing program, as appropriate,
directed toward the development and commercialization of the
licensed subject matter, and
(ii) has not devoted at least the level of resources outlined below
to the development and commercialization of the licensed
subject matter:
Year Total Number of FTEs Annual Budget
---- -------------------- -------------
1 [**] $[**]
2 [**] $[**]
3 [**] $[**]
4 (and after) [**] $[**]
FTEs are defined as full-time equivalent scientists and/or
technicians and/or consultants. One half of the minimum number of
total FTEs will be allocated to the development of each of the
follistatin technology and the hedgehog technology. Of those FTEs
dedicated to the development of the licensed subject matter, [**]
([**]%) will possess an advanced scientific degree.
In making this determination, HARVARD shall take into account the
normal course of such programs conducted with sound and reasonable
business practices and judgment and shall take into account the
reports provided hereunder by LICENSEE.
(e) HARVARD shall have the right to terminate this Agreement if LICENSEE
does not adhere to the following performance milestones for at least
one potential ROYALTY PRODUCT or MILESTONE PRODUCT.
<PAGE>
Confidential Materials omitted and filed separately with
Securities and Exchange Commission. Asterisks denote omissions.
Years from Date of
Agreement Milestone
--------- ---------
[**] [**]
[**] through [**] [**]
[**] through [**] [**]
[**] through [**] [**]
(f) LICENSEE shall pay to HARVARD the following payments upon execution
of the first corporate partnership in a field primarily relating to
either the hedgehog or the follistatin technologies:
(1) [**] dollars ($[**]), if the partnership has a determined
value of between [**] and [**] dollars ($[**] and $[**]), or
(2) [**] dollars ($[**]), if the partnership has a determined
value of greater than [**] dollars ($[**]).
Determined value shall include the sum of any equity payments,
up-front payments or fees, and the total of committed research
sponsorship payments. Such payments shall be creditable against
royalty payments and/or milestone payments as defined in Section
3.3. Deductions from royalty payments or milestone payments based on
this credit may not exceed fifty percent (50%) of the royalty or
milestone payment due HARVARD in any one year.
(g) All sublicenses granted by LICENSEE hereunder shall include a
requirement that the sublicensee use reasonable commercial efforts
to bring the subject matter of the sublicense into commercial use as
quickly as is reasonably possible. Such sublicenses shall be subject
and subordinate to the terms and conditions of this Agreement.
Copies of all sublicense agreements shall be provided to HARVARD.
(h) If LICENSEE (or its sublicensees) do not devote resources equivalent
to the full time of at least two FTEs (one of which shall possess an
advanced scientific degree) for any calendar year (commencing in
1995) to the development and/or commercialization, as appropriate,
of any part of the subject matter of the PATENT RIGHTS for use in
any specific field and if HARVARD requests in writing that LICENSEE
grant a sublicense to a third party to develop and/or commercialize
such part of the subject matter for use in such field, LICENSEE
shall within ninety (90) days after receipt of such notice either
(i) commit at least two FTEs toward such development and/or
commercialization or (ii) grant such requested sublicense, unless
LICENSEE reasonably satisfies HARVARD that such sublicense would be
contrary to sound and reasonable business practice and
<PAGE>
Confidential Materials omitted and filed separately with
Securities and Exchange Commission. Asterisks denote omissions.
that the granting of such sublicense would not materially increase
the availability to the public of products manufactured under this
license.
2.3 HARVARD hereby grants to LICENSEE the right to assign the licenses granted
or to be granted in paragraph 2.1 to an AFFILIATE subject to the terms and
conditions hereof.
2.4 All rights reserved to the United States Government and others under
Public Law 96-517 and 98-620 shall in no way be affected by this
Agreement.
ARTICLE III
ROYALTIES
3.1 Upon execution of this Agreement, LICENSEE shall pay to HARVARD a
non-refundable, non-creditable fee of [**] ($[**]) dollars.
3.2 (a) Upon execution of this Agreement, LICENSEE, shall issue to HARVARD
[**] ([**]) shares (the "Shares") of LICENSEE'S Common Stock
("Common Stock"). Such shares shall be considered part of the
royalty consideration for the grant of this license. As of the date
hereof, LICENSEE has issued and outstanding 1,680,000 shares of
Common Stock and 4,737,778 shares of Series A Convertible Preferred
Stock. The Shares issuable to HARVARD hereunder shall represent, as
of the date hereof, at least [**]% of the total voting power of the
issued and outstanding capital stock of LICENSEE. The Common Stock
issued to HARVARD shall have the characteristics, rights,
preferences and privileges set forth in the Certificate of
Incorporation of the LICENSEE and set forth herein in Appendix C.
(b) In the event that LICENSEE shall issue additional shares of capital
stock, subsequent to the date hereof, LICENSEE shall notify HARVARD
as to the number of shares proposed to be issued (the "Offered
Shares") and the price per share of the Offered Shares. HARVARD
shall have the right to elect to purchase, by written notice
provided to LICENSEE within 30 days after the LICENSEE's notice, its
pro rata share of the Offered Shares. HARVARD's pro rata share shall
be a fraction, the numerator of which shall be the number of shares
of Common Stock then held by HARVARD and the denominator of which
shall be the total number of shares of Common Stock then outstanding
(including shares issuable upon conversion or exercise of then
outstanding convertible securities, options and warrants). "Offered
Shares" shall not include: (i) shares issued to employees, directors
or consultants of LICENSEE pursuant to authorization of the Board of
Directors, (ii) shares issued in connection with any acquisition of
the business or assets of a third party, (iii) shares issued in
connection with a stock dividend, stock split or similar event or
(iv) shares issued in connection with collaboration, licensing or
equipment lease financing arrangements with third parties. The
provisions of this Section 3.2(b) shall terminate upon, and not
apply to, the LICENSEE's initial public offering of Common Stock
pursuant to a registration statement under the Securities Act of
1933.
<PAGE>
Confidential Materials omitted and filed separately with
Securities and Exchange Commission. Asterisks denote omissions.
(c) HARVARD represents and warrants to LICENSEE as follows:
(i) HARVARD is acquiring the Shares for its own account for
investment and not with a view to, or for sale in connection
with any distribution thereof, nor with any present intention
of distributing or selling the same; and HARVARD has no
present or contemplated agreement, undertaking, arrangement,
obligation, indebtedness or commitment providing for the
disposition thereof.
(ii) HARVARD has full power and authority to enter into and to
perform this Agreement in accordance with its terms.
(iii) HARVARD has sufficient knowledge and experience in investing
in companies similar to LICENSEE so as to be able to evaluate
the risks and merits of its investment in LICENSEE and is able
financially to bear the risks thereof.
(d) 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 such shares are registered under
such Act or an opinion of counsel satisfactory to the Company
is obtained to the effect that such registration is not
required."
The foregoing 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 the
Securities Act of 1933, as amended.
(e) If at any time LICENSEE proposes to register any of its Common
Stock, under the Securities Act of 1933, LICENSEE shall offer
HARVARD the opportunity to have its Shares registered under the
registration statement to be filed at such time, in accordance with
the terms set forth in Appendix C.
3.3 (a) LICENSEE shall pay HARVARD during the term of this license a royalty
of [**] percent ([**]%) of the NET SALES of all ROYALTY PRODUCTS
sold by LICENSEE and its AFFILIATES; provided, however, that in the
case of ROYALTY PRODUCTS covered by a pending patent claim, such
royalty of [**] percent ([**]%) shall be due and payable as follows:
[**] ([**]%) percent shall be payable to HARVARD pursuant to Section
4.4(a), and the remainder shall accumulate and shall not be required
to be paid by LICENSEE to HARVARD unless and until such claim is
issued as part of a patent in the applicable jurisdiction. A ROYALTY
PRODUCT that is a ROYALTY PRODUCT solely as a result of any such
claim that has been abandoned, has been rejected by an
<PAGE>
Confidential Materials omitted and filed separately with
Securities and Exchange Commission. Asterisks denote omissions.
administrative agency from which no appeal can be taken or has been
pending for more than five years in any jurisdiction shall cease to
be a ROYALTY PRODUCT in such jurisdiction unless and until such
claim is issued as part of a patent.
(b) If LICENSEE grants a sublicense under this Agreement to a
sublicensee (other than an AFFILIATE) for development of a product
in a field as to which LICENSEE or an AFFILIATE has committed or
provides a written commitment to devote within the succeeding six
(6) month period the resources equivalent to the full time of at
least two of its own FTEs, one having an scientific advanced degree
(a "Joint Field"), LICENSEE shall pay to HARVARD [**] percent
([**]%) of any royalties, fees or other amounts received by LICENSEE
or its AFFILIATES as a result of the sublicensee's development
and/or sale of ROYALTY PRODUCTS or MILESTONE PRODUCTS, excluding (i)
amounts paid in partial or full consideration of equity of LICENSEE
or its AFFILIATES, (ii) amounts paid to fund research and
development activities conducted by LICENSEE or its AFFILIATES and
(iii) non-monetary considerations, including, without limitation
intellectual property rights, noncompetition covenants and the like.
If LICENSEE grants a sublicense under this Agreement to a
sublicensee (other than an AFFILIATE) for development of a product
in a field other than a Joint Field, LICENSEE shall pay to HARVARD
[**] percent ([**]%) of any royalties, fees or other amounts
received by the LICENSEE or its AFFILIATES as a result of the
sublicensee's development and/or sale of MILESTONE PRODUCTS or
ROYALTY PRODUCTS, excluding (i) amounts paid in partial or full
consideration of equity of LICENSEE or its AFFLIATES, (ii) amounts
paid to fund research and development activities conducted by
LICENSEE or its AFFILIATES and (iii) non-monetary consideration,
including, without limitation, intellectual property rights,
noncompetition covenants and the like.
LICENSEE shall not grant a sublicense hereunder (other than to an
AFFILIATE) pursuant to a transaction in which LICENSEE surrenders
substantially all of its legal rights and economic interest in the
PATENT RIGHTS and ROYALTY PRODUCTS from either the hedgehog
technology or the follistatin technology to a third party in
exchange for the transfer by such third party to LICENSEE of rights
to a different technology or products.
(c) If LICENSEE or its sublicensees, in order to make, use, sell or
otherwise exploit the ROYALTY PRODUCTS in any jurisdiction,
reasonably determine that they must make royalty payments ("Third
Party Payments") to one or more independent third parties to obtain
a license or similar right to make, use, sell or otherwise exploit
the ROYALTY PRODUCTS such that the total royalty burden for such
ROYALTY PRODUCT, excluding royalties payable to Columbia University
or the Salk Institute, equals or exceeds [**] ([**]%) percent,
LICENSEE may reduce the royalty due to HARVARD by [**] ([**]%) for
[**]
<PAGE>
Confidential Materials omitted and filed separately with
Securities and Exchange Commission. Asterisks denote omissions.
above [**] ([**]%) percent, but in no event shall any such payment
due to HARVARD be reduced by more than 50% as a result of such
reduction.
(d) If this license is converted to a non-exclusive one and if other
non-exclusive licenses are granted, the above royalties shall not
exceed and shall be reduced to the royalty being paid by other
licensees during the term of the non-exclusive license.
(e) In the case of MILESTONE PRODUCTS, LICENSEE shall pay the following
payments and shall not pay the royalties specified in Section 3.3a.
Such payments are in recognition of LICENSEE's early and exclusive
use of the licensed subject matter:
[**] MILESTONE PRODUCT $[**]
Cumulative Sales of
MILESTONE PRODUCT of [**] $[**]
Cumulative Sales of
MILESTONE PRODUCT of [**] $[**]
If this license is terminated by LICENSEE or its AFFILIATES, or is
converted to a non-exclusive one or terminated by HARVARD for a
financial default the above milestone payments shall still be due
with respect to all MILESTONE PRODUCTS identified by LICENSEE or its
AFFILIATES prior to such termination or conversion. If this license
is converted to a non-exclusive one or terminated by HARVARD for any
reason other than a financial default, the above milestone payments
will be due on only the first MILESTONE PRODUCT sold after such
termination or conversion and identified prior to such termination
and conversion.
(f) On sales between LICENSEE and its AFFILIATES or sublicensees for
resale, the royalty shall be paid only on the resale by the
AFFILIATE or sublicensee, and a single royalty shall be paid by
LICENSEE and its AFFILIATES with respect to amounts received by them
as a result of such resale.
(g) If any of the ROYALTY PRODUCTS include one or more material, active
components not covered by a CLAIM of PATENT RIGHTS (a "Combination
Product"), NET SALES for purposes of determining royalties for the
Combination Product shall be calculated by multiplying NET SALES for
the Combination Product by a fraction, A/A+B, where A is the total
invoice price of the component or components covered by a CLAIM of
PATENT RIGHTS if sold separately in the relevant market and B is the
total invoice price of any other material components in the
combination if sold separately in the relevant market. In the event
that the material component covered by a CLAIM of PATENT RIGHTS or
any other material component in the Combination Product is not sold
separately, NET SALES for purposes of determining royalties shall be
calculated by multiplying NET SALES of the Combination Product by a
fraction, n/C, where
<PAGE>
Confidential Materials omitted and filed separately with
Securities and Exchange Commission. Asterisks denote omissions.
n is the number of components covered by a CLAIM of PATENT RIGHTS
and C is the number of material, active components in the
Combination Product.
3.4 On January 1 of each calendar year after the effective date of this
Agreement, LICENSEE shall pay HARVARD a non-refundable license maintenance
royalty and/or advance on royalties of [**] dollars ($[**]); such payment
may be credited against running royalties due for that calendar year and
royalty reports should reflect the use of this credit. None of these
payments are creditable against milestone payments nor against royalties
due for any subsequent calendar year. HARVARD shall have the right to
terminate this license, subject to the cure period defined in Section 8.2,
in the event that LICENSEE does not pay the following license maintenance
fees and/or advance on royalties.
ARTICLE IV
REPORTING
4.1 Prior to signing this Agreement, LICENSEE has provided to HARVARD
LICENSEE's corporate overview and will provide, within nine (9) months of
the date of execution of this Agreement, a written business plan and a
reasonable written research and development plan under which LICENSEE
intends to bring the subject matter of the licenses granted hereunder into
commercial use upon execution of this Agreement. Such plan, which is
subject to change, shall include proposed marketing efforts.
4.2 LICENSEE shall provide written annual reports within sixty (60) days after
June 30 of each calendar year which shall include but not be limited to:
reports of progress on research and development, regulatory approvals,
manufacturing, sublicensing, marketing and sales during the preceding
twelve (12) months as well as plans for the coming year. If progress
differs from that anticipated in the plan provided under Section 4.1,
LICENSEE shall explain the reasons for the difference and submit a
modified plan for HARVARD's review. LICENSEE shall also provide any
reasonable additional data HARVARD requires to evaluate LICENSEE's
performance.
4.3 LICENSEE shall report to HARVARD the date of first sale of ROYALTY
PRODUCTS and MILESTONE PRODUCTS in each country within sixty (60) days of
occurrence.
4.4 (a) After the commencement of sales, LICENSEE agrees to submit to
HARVARD within sixty (60) days after the calendar half years ending
June 30 and December 31, reports setting forth for the preceding six
(6) month period at least the following information:
(i) the number of the ROYALTY PRODUCTS sold by LICENSEE, its
AFFILIATES and sublicensees in each country;
(ii) total billings for such ROYALTY PRODUCTS;
(iii) deductions applicable to determine the NET SALES thereof;
(iv) sublicense income subject to sharing with HARVARD
<PAGE>
Confidential Materials omitted and filed separately with
Securities and Exchange Commission. Asterisks denote omissions.
(v) such other information as shall be necessary to determine
royalty payments or other payments due to HARVARD
(vi) the amount of royalty due thereon;
and with each such royalty report to pay the amount of royalty due.
LICENSEE shall specify which PATENT RIGHTS are utilized for each
ROYALTY PRODUCT included in the report. Such report shall be
certified as correct by an officer of LICENSEE and shall include a
detailed listing of all deductions from royalties as specified
herein. If no royalties are due to HARVARD for any reporting period,
the written report shall so state.
(b) All payments due hereunder shall be payable in United States
dollars. Conversion of foreign currency to U.S. dollars shall be
made at the conversion rate existing in the United States (as
reported in the New York Times or, if not in the New York Times,
then in the Wall Street Journal) on the last working day of each
royalty period. Such payments shall be without deduction of
exchange, collection or other charges.
(c) All such reports shall be maintained in confidence by HARVARD,
except as required by law, including Public Law 96-517 and 98-620;
however, HARVARD may include annual amounts of royalties paid in its
usual financial reports.
(d) Late payments shall be subject to an interest charge of [**] percent
([**]%) per month.
ARTICLE V
RECORD KEEPING
5.1 LICENSEE shall keep, and shall require its AFFILIATES and sublicensees to
keep accurate and correct records of ROYALTY PRODUCTS and MILESTONE
PRODUCTS made, used or sold under this Agreement, appropriate to determine
the amount of royalties due hereunder to HARVARD. Such records shall be
retained for at least three (3) years following a given reporting period.
They shall be available during normal business hours for inspection at the
expense of HARVARD by HARVARD's Internal Audit Department or by a
Certified Public Accountant selected by HARVARD and approved by LICENSEE
for the sole purpose of verifying reports and payments hereunder. Such
accountant shall not disclose to HARVARD any information other than
information relating to accuracy of reports and payments made under this
Agreement. In the event that any such inspection shows an underreporting
and underpayment in excess of five percent (5%) for any twelve (12) month
period, then LICENSEE shall pay the cost of such examination as well as
any additional sum that would have been payable to HARVARD had the
LICENSEE reported correctly, plus interest.
ARTICLE VI
DOMESTIC AND FOREIGN PATENT FILING & MAINTENANCE
<PAGE>
6.1 Upon execution hereof, LICENSEE shall reimburse HARVARD for all reasonable
expenses HARVARD has incurred for the preparation, filing, prosecution and
maintenance of PATENT RIGHTS which amount HARVARD represents equals
$33,384.56 as of December 29, 1994. LICENSEE shall also reimburse HARVARD
for all such expenses it incurs prior to LICENSEE's assumption of these
costs per Section 6.2.
6.2 As soon as reasonably possible after execution of this Agreement, LICENSEE
shall assume primary responsibility for the filing, prosecution and
maintenance of any and all patents and patent applications included in
PATENT RIGHTS, using patent counsel reasonably acceptable to HARVARD, and
LICENSEE shall be responsible for all costs relating thereto. Counsel will
directly notify HARVARD and LICENSEE and provide them copies of any
official communications from the United States and foreign patent offices
relating to said prosecution. Counsel shall also provide HARVARD with
advance copies of all relevant communications to the various patent
offices, so that HARVARD may be informed and apprised of the continuing
prosecution of patent applications in PATENT RIGHTS. HARVARD shall have
reasonable opportunities to participate in decision making on all key
decisions affecting filing, prosecution and maintenance of patents and
patent applications in PATENT RIGHTS including, without limitation, the
right to approve or disapprove the abandonment of any patent or claims
thereof and LICENSEE will use reasonable efforts to incorporate HARVARD's
reasonable suggestions regarding said prosecution. LICENSEE shall use all
reasonable efforts to amend any patent application to include claims
reasonably requested by HARVARD to protect ROYALTY PRODUCTS.
6.3 HARVARD and LICENSEE agree to cooperate fully in the preparation, filing,
prosecution and maintenance of PATENT RIGHTS and of all patents and patent
applications licensed to LICENSEE hereunder, executing all papers and
instruments or requiring members of HARVARD to execute such papers and
instruments so as to enable LICENSEE to apply for, to prosecute and to
maintain patent applications and patents in HARVARD's name in any country.
6.4 If LICENSEE elects no longer to pay the expenses of a patent application
or patent included within PATENT RIGHTS, LICENSEE shall notify HARVARD not
less than sixty (60) days prior to such action, such date being at least
30 (thirty) days prior to any pending action or expenditure, and shall
thereby surrender its rights under such patent or patent application.
6.5 In the event that LICENSEE elects not to prosecute or maintain any of the
patents or patent applications relating to the PATENT RIGHTS or any
portion thereof in any jurisdiction, then HARVARD shall have the right, at
its own expense to prosecute or maintain the patents or patent
applications relating to the PATENT RIGHTS or portion thereof in such
jurisdiction, but LICENSEE shall have no further rights to such patents or
patent applications or portion thereof.
6.6 If HARVARD can demonstrate that it is not being adequately informed or
apprised of the continuing prosecution of patents or patent applications
in PATENT RIGHTS, or that it is
<PAGE>
not being provided with reasonable opportunities to participate in
decision making or that its interests are not being adequately protected,
HARVARD shall be entitled to engage, at LICENSEE's expense, independent
patent counsel to review and evaluate patent prosecution and filing of
patents and patent applications included in PATENT RIGHTS. Henceforth
HARVARD and LICENSEE shall share responsibility for patent prosecution,
with LICENSEE reimbursing HARVARD in full for any patent expenses incurred
by HARVARD.
ARTICLE VII
INFRINGEMENT
7.1 With respect to any PATENT RIGHTS under which LICENSEE is exclusively
licensed pursuant to this Agreement, LICENSEE or its sublicensee shall
have the right to prosecute in its own name and at its own expense any
suspected infringement of such patent, so long as such license is
exclusive at the time of the commencement of such action. HARVARD agrees
to notify LICENSEE promptly of each infringement of such patents of which
HARVARD is or becomes aware. Before LICENSEE or its sublicensees commences
an action with respect to any infringement of such patents, LICENSEE shall
give careful consideration to the views of HARVARD and to potential
effects on the public interest in making its decision whether or not to
sue and in the case of a LICENSEE sublicense, shall report such views to
the sublicensee.
7.2 If LICENSEE or its sublicensee elects to commence an action as described
above and HARVARD is a legally indispensable party to such action, HARVARD
shall have the right to assign to LICENSEE all of HARVARD's right, title
and interest in each patent which is a part of the PATENT RIGHTS and is
the subject of such action (subject to all HARVARD's obligations to the
government and others having rights in such patent). In the event that
HARVARD makes such an assignment, such assignment shall be irrevocable,
and such action by LICENSEE on that patent or patents shall thereafter be
brought or continued without HARVARD as a party, if HARVARD is no longer
an indispensable party. Notwithstanding any such assignment to LICENSEE by
HARVARD and regardless of whether HARVARD is or is not an indispensable
party, HARVARD shall cooperate fully with LICENSEE in connection with any
such action. In the event that any patent is assigned to LICENSEE by
HARVARD, pursuant to this paragraph, such assignment shall require
LICENSEE to continue to meet its obligations under this Agreement as if
the assigned patent or patent application were still licensed to LICENSEE.
7.3 If LICENSEE or its sublicensee elects to commence an action described
above and HARVARD is a legally indispensable party to such action, HARVARD
may join the action as a co-plaintiff. Upon doing so, HARVARD shall be
consulted on any actions LICENSEE or its sublicensees intend with respect
to the suspected infringement.
7.4 LICENSEE shall reimburse HARVARD for any reasonable costs it incurs as
part of an action brought by LICENSEE or its sublicensee, irrespective of
whether HARVARD shall become a co-plaintiff.
<PAGE>
7.5 If LICENSEE or its sublicensee elects to commence an action as described
above, LICENSEE may reduce, by up to fifty percent (50%), the royalty due
to HARVARD earned under the patent subject to suit by fifty percent (50%)
of the amount of the expenses and costs of such action, including attorney
fees. In the event that such fifty percent (50%) of such expenses and
costs exceed the amount of royalties withheld by LICENSEE for any calendar
year, LICENSEE may to that extent reduce the royalties due to HARVARD from
LICENSEE in succeeding calendar years, but never by more than fifty
percent (50%) of the royalty due in any one year.
7.6 No settlement, consent judgment or other voluntary final disposition of
the suit may be entered into without the consent of HARVARD, which consent
shall not be unreasonably withheld.
7.7 Recoveries or reimbursements from such action shall first be applied to
reimburse LICENSEE and HARVARD for litigation costs not paid from
royalties and then to reimburse HARVARD for royalties withheld. Any
remaining recoveries or reimbursements shall be shared 75% to LICENSEE and
25% to HARVARD.
7.8 In the event that LICENSEE and its sublicensee, if any, elect not to
exercise their right to prosecute an infringement of the PATENT RIGHTS
pursuant to the above paragraphs, HARVARD may do so at its own expense,
controlling such action and retaining all recoveries therefrom.
7.9 In the event that a declaratory judgment action alleging invalidity of any
of the PATENT RIGHTS shall be brought against LICENSEE, HARVARD, at its
sole option, shall have the right to intervene, in which event both
parties shall jointly control the defense of such action and share equally
its expenses and costs.
ARTICLE VIII
TERMINATION OF AGREEMENT
8.1 This Agreement, unless extended or terminated as provided herein, shall
remain in effect until the last patent or patent application in the PATENT
RIGHTS has expired or been abandoned.
8.2 In the event LICENSEE fails to make payments or stock transfers due
hereunder, HARVARD shall have the right to terminate this Agreement upon
forty-five (45) days written notice of such failure, unless LICENSEE makes
such payments plus interest within the forty-five (45) day notice period.
If payments are not so made, HARVARD may immediately terminate this
Agreement, unless such occurs as a result of a bona fide dispute as to the
amount due.
8.3 In the event that LICENSEE shall be in default in the performance of any
obligations under this Agreement (other than as provided in 8.2 above
which shall take precedence over any other default), and if the default
has not been remedied within ninety (90) days after the date of notice in
writing of such default, HARVARD may terminate this Agreement by written
notice.
<PAGE>
8.4 In the event that LICENSEE shall become insolvent, shall make an
assignment for the benefit of creditors, or shall have a petition in
bankruptcy filed for or against it, which petition is not dismissed within
90 days of filing, HARVARD shall have the right to terminate this entire
Agreement immediately upon giving LICENSEE written notice of such
termination.
8.5 Any sublicenses granted by LICENSEE under this Agreement shall provide for
termination or assignment to HARVARD, at the option of HARVARD, of
LICENSEE's interest therein upon termination of this Agreement.
8.6 LICENSEE shall have the right to terminate this Agreement by giving ninety
(90) days advance written notice to HARVARD to that effect. Upon
termination, a final report shall be submitted and any royalty payments
and unreimbursed patent expenses due to HARVARD become immediately
payable.
8.7 Sections 3.3(c), 8.6, 9.2, 9.3, 9.4 and 9.5 of this Agreement shall
survive termination.
ARTICLE IX
GENERAL
9.1 HARVARD represents and warrants that Drs. D. Melton, A. Hemmati-Brivanlou,
C. Tabin, A. McMahon and P. Ingham have assigned to HARVARD or ICRF their
entire right, title, and interest in the patent applications or patents
comprising the PATENT RIGHTS, and that ICRF has authorized HARVARD to
license its rights and interest in the patent applications or patents
comprising the PATENT RIGHTS, and that HARVARD has the authority to issue
the licenses granted to LICENSEE hereunder under said PATENT RIGHTS.
HARVARD does not warrant the validity of the PATENT RIGHTS licensed
hereunder and makes no representations whatsoever with regard to the scope
of the licensed PATENT RIGHTS or that such PATENT RIGHTS may be exploited
by LICENSEE, an AFFILIATE, or sublicensee without infringing other
patents.
9.2 HARVARD EXPRESSLY DISCLAIMS ANY AND ALL IMPLIED OR EXPRESS WARRANTIES AND
MAKES NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR
ANY PARTICULAR PURPOSE OF THE PATENT RIGHTS, BIOLOGICAL MATERIAL, OR
INFORMATION SUPPLIED BY HARVARD OR ROYALTY PRODUCTS OR MILESTONE PRODUCTS
CONTEMPLATED BY THIS AGREEMENT. Further HARVARD has made no investigation
and makes no representation that the BIOLOGICAL MATERIALS supplied by it
or the methods used in making or using such materials are free from
liability for patent infringement.
9.3 LICENSEE shall not distribute or release the BIOLOGICAL MATERIALS to
others except to further the purposes of this Agreement. LICENSEE shall
protect the BIOLOGICAL MATERIAL at least as well as it protects its own
valuable tangible personal property and shall take reasonable and legal
measures in any bankruptcy
<PAGE>
Confidential Materials omitted and filed separately with
Securities and Exchange Commission. Asterisks denote omissions.
proceeding to protect the BIOLOGICAL MATERIAL from any claims by third
parties including creditors and trustees in bankruptcy.
9.4 (a) LICENSEE shall indemnify, defend and hold harmless HARVARD and ICRF
and their directors, governing board members, trustees, officers,
faculty, medical and professional staff, employees, students, and
agents and their respective successors, heirs and assigns (the
"Indemnitees"), against any liability, damage, loss or expenses
(including reasonable attorneys' fees and expenses of litigation)
incurred by or imposed upon the Indemnitees or any one of them in
connection with any claims, suits, actions, demands or judgments
arising out of any theory of product liability (including, but not
limited to, actions in the form of tort, warranty, or strict
liability) concerning any product, process or service made, used or
sold pursuant to any right or license granted under this Agreement.
The above indemnification shall apply whether or not such liability,
damage, loss or expense is attributable to the negligent activities
of the Indemnitees.
(b) LICENSEE agrees, at its own expense, to provide attorneys reasonably
acceptable to HARVARD to defend against any actions brought or filed
against any party indemnified hereunder with respect to the subject
of the indemnity contained herein, whether or not such actions are
rightfully brought.
(c) Beginning at the time as any such product, process or service is
being commercially distributed or sold (other than for the purpose
of obtaining regulatory approvals) by LICENSEE or by a sublicensee,
AFFILIATE or agent of LICENSEE, LICENSEE shall, at its sole cost and
expense, procure and maintain comprehensive general liability
insurance in amounts not less than $[**] per incident and $[**]
annual aggregate and naming the Indemnitees as additional insureds.
During clinical trials of any such product, process or service,
LICENSEE shall, at its sole cost and expense, procure and maintain
comprehensive general liability insurance in such equal or lesser
amount as HARVARD shall require, naming the Indemnitees as
additional insureds. Such comprehensive general liability insurance
shall provide (i) product liability coverage and (ii) broad form
contractual liability coverage for LICENSEE's indemnification under
this Agreement. If LICENSEE elects to self-insure all or part of the
limits described above (including deductibles or retentions which
are in excess of $[**] annual aggregate) such self-insurance program
must be acceptable to HARVARD and the Risk Management Foundation of
the Harvard Medical Institutions, Inc. The minimum amounts of
insurance coverage required shall not be construed to create a limit
of LICENSEE's liability with respect to its indemnification under
this Agreement.
(d) LICENSEE shall provide HARVARD with written evidence of such
insurance upon request of HARVARD. LICENSEE shall provide HARVARD
with written notice at least fifteen (15) days prior to the
cancellation, non-renewal or material reduction in coverage in such
insurance; if LICENSEE does not obtain replacement insurance
providing comparable coverage within such fifteen (15) day period,
HARVARD shall have the right to terminate this Agreement effective
<PAGE>
at the end of such fifteen (15) day period without notice or any
additional waiting periods.
(e) LICENSEE shall maintain such comprehensive general liability
insurance beyond the expiration or termination of this Agreement
during (i) the period that any product, process, or service,
relating to, or developed pursuant to, this Agreement is being
commercially distributed or sold by LICENSEE or by a sublicensee,
AFFILIATE or agent of LICENSEE and (ii) a reasonable period after
the period referred to in (e) (i) above which in no event shall be
less than ten (10) years.
9.5 LICENSEE shall not use HARVARD's name or any adaptation of it or the name
or names of any of HARVARD's inventors in any advertising, promotional or
sales literature without the prior written assent of HARVARD.
9.6 Without the prior written approval of HARVARD, the license granted
pursuant to this Agreement shall not be transferred or assigned in whole
or in part by LICENSEE to any party other than to an AFFILIATE or
successor to the business interest of LICENSEE relating to the PATENT
RIGHTS. This Agreement shall be binding upon the successors, legal
representatives and assignees of HARVARD and LICENSEE.
9.7 The interpretation and application of the provisions of this Agreement
shall be governed by the laws of the Commonwealth of Massachusetts.
9.8 LICENSEE agrees to comply with all applicable laws and regulations. In
particular, it is understood and acknowledged that the transfer of certain
commodities and technical data is subject to United States laws and
regulations controlling the export of such commodities and technical data,
including all Export Administration Regulations of the United States
Department of Commerce. These laws and regulations, among other things,
prohibit or require a license for the export of certain types of technical
data to certain specified countries. LICENSEE hereby agrees and gives
written assurance that it will comply with all United States laws and
regulations controlling the export of commodities and technical data, that
it will be responsible for any violation of such by LICENSEE or its
AFFILIATES or sublicensees, unless its AFFILIATES and sublicensees so
agree in a separate and binding arrangement, and that it will defend and
hold HARVARD harmless in the event of any legal action of any nature
occasioned by such violation.
9.9 LICENSEE agrees to obtain all regulatory approvals required for the
manufacture and sale of ROYALTY PRODUCTS and MILESTONE PRODUCTS and to
utilize appropriate patent marking on such ROYALTY PRODUCTS. LICENSEE also
agrees to register or record this Agreement as is required by law or
regulation in any country where the license is in effect.
9.10 Written notices required to be given under this Agreement shall be
addressed as follows:
If to HARVARD: Office for Technology and Trademark Licensing
Harvard University
124 Mt. Auburn Street, Suite 410
<PAGE>
Cambridge, MA 02138-5701
With a copy to: Office of Technology Licensing and Industry
Sponsored Research
Harvard University
333 Longwood Avenue, Suite 640
Boston, MA 02115
If to LICENSEE: Ontogeny, Inc.
One Kendall Square; Bldg 600
Cambridge, MA 02139
Attn. President
With a copy to: Hale and Dorr
60 State Street
Boston, MA 02109
Attn. Mark G. Borden, Esq.
or such other address as either party may request in writing.
9.11 Should a court of competent jurisdiction later consider any provision of
this Agreement to be invalid, illegal, or unenforceable, it shall be
considered severed from this Agreement. All other provisions, rights and
obligations shall continue without regard to the severed provision,
provided that the remaining provisions of this Agreement are in accordance
with the intention of the parties.
9.12 In the event of any controversy or claim arising out of or relating to any
provision of this Agreement or the breach thereof, the parties shall try
to settle such conflicts amicably between themselves.
9.13 This Agreement constitutes the entire understanding between the parties
and neither party shall be obligated by any condition or representation
other than those expressly stated herein or as may be subsequently agreed
to by the parties hereto in writing.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized representatives.
The effective date of this Agreement is February 9,1995.
PRESIDENT AND FELLOWS
OF HARVARD COLLEGE ONTOGENY, INC.
/s/ Joyce Brinton /s/
----------------------------------------- --------------------------------
Joyce Brinton, Director Signature
Office for Technology and Trademark
Licensing --------------------------------
Name
--------------------------------
Title
<PAGE>
APPENDIX A
The following comprise PATENT RIGHTS:
USSN 08/136,748
PCT/US94/11745
USSN 08/176,427
USSN 08/227,371 (CIP of USSN 08/176,427)
PCT/US94/14992
<PAGE>
APPENDIX B
The following comprise BIOLOGICAL MATERIALS
From USSN 08/136,748/ Melton and Hemmati-Brivanlou
1XAR1
pSP64TXFS-319
XFS-319 (Seq. ID #1)
From USSN 08 /176,427/ McMahon, Tabin and Ingham
pCHA (Seq ID# 12)
pCHB (Seq ID #13)
pHH-2
W1-15.1
pWEXP2
[WRES4
WEXP2-CShh
pWEXP-CShh pHS-Shh
Sonic/RCAS-A1
Sonic/RCAS-A2
Sonic/RCAN-A1
Sonic/RCAN-A2
Sonic/RCAS-E1
Sonic/RCAS-E2
From USSN 08/227,371
Polypepetides
Gene Species Seq ID No
- ---- ------- ---------
Sonic hedgehog (shh) mammalian 11, 13
avian 8
fish 12
Indian hedgehog (Ihh) human 14
mouse 10
Desert hedgehog (Dhh) mouse 9
<PAGE>
APPENDIX C
Registration Rights for Ontogeny, Inc.
Appendix C
Registration Rights
1. Certain Definitions. For purposes of this Appendix C:
(a) "Registrable Shares" means (i) the Shares, excluding any
Unvested Shares, and (ii) any other shares of Common Stock issued in respect of
such shares (because of stock splits, stock dividends, reclassifications,
recapitalizations, or similar events); provided, however, that shares of Common
Stock which are Registrable Shares shall cease to be Registrable Shares upon any
sale pursuant to a Registration Statement or Rule 144 under the Securities Act.
(b) "Registration Statement" means a registration statement filed
with the United States Securities and Exchange Commission (the "Commission") for
a public offering and sale of Common Stock under the Securities Act of 1933, as
amended (the "Securities Act") (other than a registration statement on Form S-8
or Form S-4, or their successors, or any other form for a similar limited
purpose, or any registration statement covering only securities proposed to be
issued in exchange for securities or assets of another corporation).
(c) "Company" means Ontogeny, Inc.
(d) "Purchaser" means the President and Fellows of Harvard College.
2. Incidental Registration.
(a) Whenever the Company proposes to file a Registration Statement
for the registration of shares of Common Stock for its own account, it will,
prior to such filing, give written notice to the Purchaser of its intention to
do so and, upon the written request of the Purchaser given within 20 days after
the Company provides such notice (which request shall state the intended method
of disposition of such Registrable Shares), the Company shall use its best
efforts to cause all Registrable Shares which the Company has been requested by
the Purchaser to register to be registered under the Securities Act to the
extent necessary to permit their sale or other disposition in accordance with
the intended methods of distribution specified in the request of the Purchaser;
provided that the Company shall have the right to postpone or withdraw any
registration effected pursuant to this Section 2 without obligation to the
Purchaser.
(b) In connection with any registration under this Section 2
involving an underwriting, the Company shall not be required to include (i) any
Registrable Shares in such registration unless the Purchaser accepts the terms
of the underwriting as agreed upon between the Company and the underwriters
selected by it, or (ii) except in the Company's initial public offering of
Common Stock, any Registrable Shares then eligible for resale under Rule 144(k)
under the Securities Act. If in the opinion of the managing underwriter it is
appropriate because of marketing factors to limit the number of Registrable
Shares to be included in the offering, then
<PAGE>
the Company shall be required to include in the registration only that number of
Registrable Shares, if any, which the managing underwriter believes should be
included in the offering in accordance with the foregoing is less than the total
number of shares which the Purchaser has requested to be included, then the
Purchaser and other holders of securities entitled to include them in such
registration shall participate in the registration pro rata based upon their
total ownership of shares of Common Stock (giving effect to the conversion into
Common Stock of all securities convertible thereinto).
3. Allocation of Expenses. The Company will pay all expenses of all
registrations under this Agreement, other than expenses of the Purchaser's
counsel and underwriting discounts and commissions.
4. Information by Purchaser. The Purchaser shall furnish to the Company
such information regarding the Purchaser and the distribution proposed by the
Purchaser as the Company may reasonably request in writing and as shall be
required in connection with any registration, qualification or compliance
referred to in this Appendix C.
5. "Stand-Off" Agreement. The Purchaser, if requested by the Company and
the managing underwriter of the Company's initial public offering of Common
Stock or other securities of the Company pursuant to a Registration Statement,
shall agree not to sell or otherwise transfer or dispose of any Registrable
Shares or other securities of the Company held by the Purchaser for a period of
180 days following the effective date of such Registration Statement.
6. Termination. All of the Company's obligations to register Registrable
Shares under this Agreement shall terminate on the date three years after the
closing of the Company's initial public offering of Common Stock pursuant to a
Registration Statement.
<PAGE>
Confidential Materials omitted and filed separately with
Securities and Exchange Commission. Asterisks denote omissions.
Amendment to License Agreement
The President and Fellows of Harvard College and Ontogeny, Inc hereby amend the
License Agreement effective February 9, 1995 as follows:
1. To delete Section 2.2(d) and replace it with the following new Section 2.2(d)
If, in HARVARD's reasonable judgement, LICENSEE fails to satisfy both of the
following conditions for either the hedgehog technology or the follistatin
technology, which failure is not cured within ninety (90) days after written
notice of such failure by HARVARD to LICENSEE, HARVARD shall have the right to
terminate this license or render it non-exclusive with respect to the technology
which is not under development:
(i) is demonstrably engaged in research, development, manufacturing, marketing
or licensing program, as appropriate, directed toward the development and
commercialization of the licensed subject matter, and
(ii) has devoted at least the level of resources outlined below to the
development and commercialization of the licensed subject matter:
Year Total Number of FTFs Annual Budget
---- -------------------- -------------
1 [**] $[**]
2 [**] $[**]
3 [**] $[**]
4 (and after) [**] $[**]
FTEs are defined as full-time equivalent scientists and/or technicians
and/or consultants. One half of the minimum number of total FTEs will be
allocated to the development of each of the follistatin technology and the
hedgehog technology. Of those FTEs dedicated to the development of the
licensed subject matter, fifty percent (50%) will possess an advanced
scientific degree.
In making this determination, HARVARD shall take into account the normal
course of such programs conducted with sound and reasonable business
practices and judgment and shall take into account the reports provided
hereunder by LICENSEE.
2. To delete Section 8.6 and replace it with the following new Section 8.6:
LICENSEE shall have the right to terminate this Agreement with respect to
either the hedgehog or the follistatin technology by giving ninety (90)
days advance written notice to HARVARD to that effect. Upon termination, a
final report shall be submitted and any royalty payments and unreimbursed
patent expenses due to HARVARD shall become immediately payable.
The effective date of this amendment is February 25, 1998.
<PAGE>
IN WITNESS WHEREOF, THE PARTIES HERETO HAVE AUTHORIZED THIS AMENDMENT TO BE
EXECUTED BY THEIR DULY AUTHORIZED REPRESENTATIVES
PRESIDENT AND FELLOWS OF
HARVARD COLLEGE
By: /s/ Joyce Brinton
-------------------------
Joyce Brinton, Director, Officer of Technology
and Trademark Licensing
Date: 02/27/98
-----------------------
ONTOGENY, INC
by: /s/ George Eldridge
-------------------------
Title: Vice President
---------------------
Date: 3/6/98
-----------------------
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
AMENDMENT NO. 1
TO LICENSE AGREEMENT
This AMENDMENT No. 1 is made as of this first day of January, 1997, by and
between THE PRESIDENT AND FELLOWS OF HARVARD COLLEGE, a non-profit Massachusetts
educational corporation ("HARVARD"), and ONTOGENY, INC., a Delaware corporation
("LICENSEE").
WHEREAS, HARVARD and LICENSEE are parties to a License Agreement,
effective as of February 9, 1995 (the "License Agreement"); and
WHEREAS HARVARD and LICENSEE wish to amend the License Agreement as
hereafter provided.
NOW, THEREFORE, in consideration of the mutual covenants of HARVARD and
LICENSEE and further good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, HARVARD and LICENSEE, intending to
be legally bound, hereby agree as follows:
1. Section 3.1 of the License Agreement is hereby amended to read in full
as follows:
Upon execution of this Agreement, LICENSEE shall pay to HARVARD a
non-refundable, non-creditable fee of [**] dollars. HARVARD hereby
acknowledges receipt of [**] dollars of such fee.
2. The "If to LICENSEE:" in the notice provisions of Section 9.10 of the
License Agreement is hereby amended to read in full as follows:
If to LICENSEE: Chief Executive Officer
Ontogeny, Inc.
45 Moulton Street
Cambridge, MA 02138-1118
with a copy to: Mark G. Borden, Esq.
Hale and Dorr LLP
60 State Street
Boston, MA 02109
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.
<PAGE>
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.
THE PRESIDENT AND FELLOWS
OF HARVARD COLLEGE
By: /s/ Joyce Brinton
-----------------------------------
Joyce Brinton
Director
ONTOGENY, INC.
By: Thomas D. Ingolia
-----------------------------
Thomas D. Ingolia, Ph.D.
Senior Vice President
<PAGE>
Exhibit 10.47
Execution Copy
THIRD AMENDED AND RESTATED REGISTRATION RIGHTS AND
RIGHT OF FIRST REFUSAL AGREEMENT
This Agreement dated as of October 31, 1998 is entered into by and among
Ontogeny, Inc., a Delaware corporation (the "Company"), and the entities and
persons set forth on Schedule 1 (the "Purchasers").
WHEREAS, the Company and the Purchasers desire to provide for certain
arrangements with respect to the registration of shares of capital stock of the
Company under the Securities Act of 1933 and certain rights of first refusal
with respect to future issuances of stock;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement, the parties hereto agree as follows:
1. Registration Rights.
1.1 Certain Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:
"Commission" means the Securities and Exchange Commission, or any
other Federal agency at the time administering the Securities Act.
"Common Stock" means the common stock, $0.01 par value per share, of
the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any similar Federal statute, and the rules and regulations of the Commission
issued under such Act, as they each may, from time to time, be in effect.
"Registration Statement" means a registration statement filed by the
Company with the Commission for a public offering and sale of Common Stock
(other than a registration statement on Form S-8 or Form S-4, or their
successors, or any other form for a similar limited purpose, or any registration
statement covering only securities proposed to be issued in exchange for
securities or assets of another corporation).
"Registration Expenses" means the expenses described in Section 1.5.
"Registrable Shares" means (i) the shares of Common Stock issued or
issuable upon conversion of the Shares, (ii) any shares of Common Stock, and any
shares of Common Stock issued or issuable upon the conversion or exercise of any
other securities, acquired by the Purchasers pursuant to Section 2 of this
Agreement and (iii) any other shares of Common Stock issued in respect of such
shares (because of stock splits, stock dividends, reclassifications,
recapitalizations, or similar events); provided, however, that shares of Common
Stock which are Registrable Shares shall cease to be Registrable Shares (i) upon
any sale pursuant to a Registration Statement or Rule 144 under the Securities
Act or (ii) upon any sale in any manner to a person or entity which, by virtue
of Section 3 of this Agreement, is not entitled to the rights provided
<PAGE>
by this Agreement. Wherever reference is made in this Agreement to a request or
consent of holders of a certain percentage of Registrable Shares, the
determination of such percentage shall include shares of Common Stock issuable
upon conversion of the Shares even if such conversion has not yet been effected.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar Federal statute, and the rules and regulations of the Commission issued
under such Act, as they each may, from time to time, be in effect.
"Shares" means (1) the shares of Series A Convertible Preferred Stock
issued pursuant to the Series A Preferred Stock Purchase Agreement dated August
26, 1994 by and among the Company and the Purchasers named therein, (2) the
shares of Series B Convertible Preferred Stock issued pursuant to the Series B
Preferred Stock Purchase Agreement dated December 13, 1995 by and among the
Company and the Purchasers named therein, (3) the shares of the Company's Series
B Convertible Preferred Stock issued or issuable to Lighthouse Capital Partners
L.P. ("Lighthouse") upon the exercise of warrants held by Lighthouse, (4) the
shares of Series E Convertible Preferred Stock issued pursuant to the Series E
Preferred Stock Purchase Agreement dated March 12, 1997 by and among the Company
and the Purchasers named therein and (5) the shares of Series F Convertible
Preferred Stock issued pursuant to the Series F Preferred Stock Purchase
Agreement dated October 1998 by and among the Company and the Purchasers named
therein (the "Series F Purchase Agreement").
"Stockholders" means the Purchasers and any persons or entities to
whom the rights granted under this Agreement are transferred by any Purchasers,
their successors or assigns pursuant to Section 3 hereof.
1.2 Required Registrations.
(a) At any time after the earlier of December 1, 2001, or six months after
the closing of the Company's first underwritten public offering of shares of
Common Stock pursuant to a Registration Statement, a Stockholder or Stockholders
holding in the aggregate at least 35% of the Registrable Shares may request, in
writing, that the Company effect the registration on Form S-1 or Form S-2 (or
any successor form) of Registrable Shares owned by such Stockholder or
Stockholders having an aggregate offering price of at least $7,500,000 (based on
the then current market price or fair value). If the holders initiating the
registration intend to distribute the Registrable Shares by means of an
underwriting, they shall so advise the Company in their request. In the event
such registration is underwritten, the right of other Stockholders to
participate shall be conditioned on such Stockholders' participation in such
underwriting. Upon receipt of any such request, the Company shall promptly give
written notice of such proposed registration to an Stockholders. Such
Stockholders shall have the right, by giving written notice to the Company
within 30 days after the Company provides its notice, to elect to have included
in such registration such of their Registrable Shares as such Stockholders may
request in such notice of election; provided that if the underwriter (if any)
managing the offering determines that, because of marketing factors, all of the
Registrable Shares requested to be registered by all Stockholders may not be
included in the offering, then all Stockholders who have requested registration
shall participate in the registration pro rata based upon their total ownership
of shares of Common Stock (giving effect to the conversion into Common Stock of
2
<PAGE>
all securities convertible thereunto). For purposes of making any such
reduction, each Purchaser which is a partnership, together with the affiliates,
partners and retired partners of such Purchaser, the estates and family members
of any such partners and retired partners and of their spouses, and any trusts
for the benefit of any of the foregoing persons shall be deemed to be a single
"holder," and any pro-rata reduction with respect to such "holder" shall be
based upon the aggregate amount of Registrable Shares owned by all entities and
individuals included in such "holder," as defined in this sentence (and the
aggregate amount so allocated to such "holder" shall be allocated among the
entities and individuals included in such "holder" in such manner as such
Purchaser may reasonably determine). Thereupon, the Company shall, as
expeditiously as possible, use its best efforts to effect the registration on
Form S-1 or Form S-2 (or any successor form) of all Registrable Shares which the
Company has been requested to so register.
(b) At any time after the Company becomes eligible to file a
Registration Statement on Form S-3 (or any successor form relating to secondary
offerings), a Stockholder or Stockholders may request the Company, in writing,
to effect the registration on Form S-3 (or such successor form), of Registrable
Shares having an aggregate offering price of at least $500,000 (based on the
then current public market price). Upon receipt of any such request, the Company
shall promptly give written notice of such proposed registration to all
Stockholders. Such Stockholders shall have the right, by giving written notice
to the Company within 30 days after the Company provides its notice, to elect to
have included in such registration such of their Registrable Shares as such
Stockholders may request in such notice of election; provided that if the
underwriter (if any) managing the offering determines that, because of marketing
factors, an of the Registrable Shares requested to be registered by all
Stockholders may not be included in the offering, then all Stockholders who have
requested registration shall participate in the registration pro rata based upon
their total ownership of shares of Common Stock (giving effect to the conversion
into Common Stock of all securities convertible thereunto). For purposes of
making any such reduction, each Purchaser which is a partnership, together with
the affiliates, partners and retired partners of such Purchaser, the estates and
family members of any such partners and retired partners and of their spouses,
and any trusts for the benefit of any of the foregoing persons shall be deemed
to be a single "holder," and any pro-rata reduction with respect to such
"holder" shall be based upon the aggregate amount of Registrable Shares owned by
all entities and individuals included in such "holder," as defined in this
sentence (and the aggregate amount so allocated to such "holder" shall be
allocated among the entities and individuals included in such "holder" in such
manner as such Purchaser may reasonably determine). Thereupon, the Company
shall, as expeditiously as possible, use its best efforts to effect the
registration on Form S-3 (or such successor form) of all Registrable Shares
which the Company has been requested to so register. The Stockholders shall be
entitled to an unlimited number of registrations pursuant to this paragraph (b),
subject to the limitations described above.
(c) The Company shall not be required to effect more than two
registrations pursuant to paragraph (a) above.
(d) If at the time of any request to register Registrable Shares
pursuant to this Section 1.2, the Company is engaged or has fixed plans to
engage within 30 days of the time of the request in a registered public offering
as to which the Stockholders may include Registrable Shares pursuant to Section
1.3 or is engaged in any other activity which, in the good
3
<PAGE>
faith determination of the Company's Board of Directors, would be adversely
affected by the requested registration to the material detriment of the Company,
then the Company may at its option direct that such request be delayed for a
period not in excess of 120 days from the effective date of such offering or the
date of commencement of such other material activity, as the case may be, such
right to delay a request to be exercised by the Company not more than once in
any two-year period.
1.3 Incidental Registration.
(a) Whenever the Company proposes to file a Registration Statement
(other than pursuant to Section 1.2) at any time and from time to time, it will,
prior to such filing, give written notice to all Stockholders of its intention
to do so and, upon the written request of a Stockholder or Stockholders given
within 20 days after the Company provides such notice (which request shall state
the intended method of disposition of such Registrable Shares), the Company
shall use its best efforts to cause all Registrable Shares which the Company has
been requested by such Stockholder or Stockholders to register to be registered
under the Securities Act to the extent necessary to permit their sale or other
disposition in accordance with the intended methods of distribution specified in
the request of such Stockholder or Stockholders; provided that the Company shall
have the right to postpone or withdraw any registration effected pursuant to
this Section 1.3 without obligation to any Stockholder.
(b) In connection with any registration under this Section 1.3 involving
an underwriting, the Company shall not be required to include (i) any
Registrable Shares in such registration unless the holders thereof accept the
terms of the underwriting as agreed upon between the Company and the
underwriters selected by it (provided that such terms must be consistent with
this Agreement), or (ii) except in the Company's initial public offering of
Common Stock or any Registration Statement filed by the Company with the
Commission within 24 months after the closing of such initial public offering,
any Registrable Shares then eligible for resale under Rule 144(k) under the
Securities Act. If in the opinion of the managing underwriter it is appropriate
because of marketing factors to limit the number of Registrable Shares to be
included in the offering, then the Company shall be required to include in the
registration only that number of Registrable Shares, if any, which the managing
underwriter believes should be included therein; provided that no persons or
entities other than the Company, the Stockholders and persons or entities
holding registration rights granted in accordance with Section 1.10 hereof shall
be permitted to include securities in the offering and that, for any
registration effected during the one year period following the initial public
offering of the Company, the number of Registrable Shares to be included in such
offering pursuant to this Section 1.3 shall not be reduced by such managing
underwriter below twenty percent (20%) of the total number of shares of Common
Stock sold in such offering. If the number of Registrable Shares to be included
in the offering in accordance with the foregoing is less than the total number
of shares which the holders of Registrable Shares have requested to be included,
then the holders of Registrable Shares who have requested registration and other
holders of securities entitled to include them in such registration shall
participate in the registration pro rata based upon their total ownership of
shares of Common Stock (giving effect to the conversion into Common Stock of all
securities convertible thereunto). For purposes of making any such reduction,
each Purchaser which is a partnership, together with the affiliates, partners
and retired partners of such Purchaser, the estates and family members of any
such partners and retired
4
<PAGE>
partners and of their spouses, and any trusts for the benefit of any of the
foregoing persons shall be deemed to be a single "holder," and any pro-rata
reduction with respect to such "holder" shall be based upon the aggregate amount
of Registrable Shares owned by all entities and individuals included in such
"holder," as defined in this sentence (and the aggregate amount so allocated to
such "holder" shall be allocated among the entities and individuals included in
such "holder" in such manner as such Purchaser may reasonably determine). If any
holder would thus be entitled to include more securities than such holder
requested to be registered, the excess shall be allocated among other requesting
holders pro rata in the manner described in this paragraph.
(c) The registration rights contained in this Section 1.3 shall not
apply with respect to any registration statement filed by the Company solely to
register shares of Common Stock to be sold by Biogen, Inc. or Corange
International Limited.
1.4 Registration Procedures. If and whenever the Company is required by the
provisions of this Agreement to use its best efforts to effect the registration
of any of the Registrable Shares under the Securities Act, the Company shall:
(a) file with the Commission a Registration Statement with respect to
such Registrable Shares and use its best efforts to cause that Registration
Statement to become and remain effective;
(b) as expeditiously as possible prepare and file with the Commission
any amendments and supplements to the Registration Statement and the prospectus
included in the Registration Statement as may be necessary to keep the
Registration Statement effective, in the case of a firm commitment underwritten
public offering, until each underwriter has completed the distribution of all
securities purchased by it and, in the case of any other offering, until the
earlier of the sale of all Registrable Shares covered thereby or 120 days after
the effective date thereof;
(c) as expeditiously as possible furnish to each selling Stockholder
such reasonable numbers of copies of the prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and such
other documents as the selling Stockholder may reasonably request in order to
facilitate the public sale or other disposition of the Registrable Shares owned
by the selling Stockholder; and
(d) as expeditiously as possible use its best efforts to register or
qualify the Registrable Shares covered by the Registration Statement under the
securities or Blue Sky laws of such states as the selling Stockholders shall
reasonably request, and do any and all other acts and things that may be
necessary or desirable to enable the selling Stockholders to consummate the
public sale or other disposition in such states of the Registrable Shares owned
by the selling Stockholder; provided, however, that the Company shall not be
required in connection with this paragraph (d) to qualify as a foreign
corporation or execute a general consent to service of process in any
jurisdiction.
If the Company has delivered preliminary or final prospectuses to the
selling Stockholders and after having done so the prospectus is amended to
comply with the requirements of the Securities Act, the Company shall promptly
notify the selling Stockholders
5
<PAGE>
and, if requested, the selling Stockholders shall immediately cease making
offers of Registrable Shares and return all prospectuses to the Company. The
Company shall promptly provide the selling Stockholders with revised
prospectuses and, following receipt of the revised prospectuses, the selling
Stockholders shall be free to resume making offers of the Registrable Shares.
1.5 Allocation of Expenses. The Company will pay all Registration Expenses
of all registrations under this Agreement; provided, however, that if a
registration under Section 1.2 is withdrawn at the request of the Stockholders
requesting such registration (other than as a result of information concerning
the business or financial condition of the Company which is made known to the
Stockholders after the date on which such registration was requested) and if the
requesting Stockholders elect not to have such registration counted as a
registration requested under Section 1.2, the requesting Stockholders shall pay
the Registration Expenses of such registration pro rata in accordance with the
number of their Registrable Shares included in such registration. For purposes
of this Section 1.5, the term "Registration Expenses" shall mean all expenses
incurred by the Company in complying with this Agreement, including, without
limitation, all registration and filing fees, exchange listing fees, printing
expenses, fees and expenses of counsel for the Company and the fees and expenses
of one counsel selected by the selling Stockholders to represent the selling
Stockholders, state Blue Sky fees and expenses, and the expense of any special
audits incident to or required by any such registration, but excluding
underwriting discounts, selling commissions and the fees and expenses of selling
Stockholders' own counsel (other than the counsel selected to represent all
selling Stockholders).
1.6 Indemnification and Contribution.
(a) In the event of any registration of any of the Registrable Shares
under the Securities Act pursuant to this Agreement, the Company will indemnify
and hold harmless the seller of such Registrable Shares, each underwriter of
such Registrable Shares, and each other person, if any, who controls such seller
or underwriter within the meaning of the Securities Act or the Exchange Act
against any losses, claims, damages or liabilities, joint or several, to which
such seller, underwriter or controlling person may become subject under the
Securities Act, the Exchange Act, state securities or Blue Sky laws or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Registration Statement
under which such Registrable Shares were registered under the Securities Act,
any preliminary prospectus or final prospectus contained in the Registration
Statement, or any amendment or supplement to such Registration Statement, or
arise out of or are based upon the omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and the Company will reimburse such seller, underwriter
and each such controlling person for any legal or any other expenses reasonably
incurred by such seller, underwriter or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any untrue statement or omission made in such Registration Statement,
preliminary prospectus or final prospectus, or any such amendment or supplement,
in reliance upon and in conformity with information furnished to the Company, in
writing, by or on
6
<PAGE>
behalf of such seller, underwriter or controlling person specifically for use in
the preparation thereof.
(b) In the event of any registration of any of the Registrable Shares
under the Security Shares, severally and not jointly, will indemnify and hold
harmless the Company, each of its directors and officers and each underwriter
(if any) and each person, if any, who controls the Company or any such
underwriter within the meaning of the Securities Act or the Exchange Act,
against any losses, claims, damages or liabilities, joint or several, to which
the Company, such directors and officers, underwriter or controlling person may
become subject under the Securities Act, Exchange Act, state securities or Blue
Sky laws or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement under which such Registrable Shares were registered under
the Securities Act, any preliminary prospectus or final prospectus contained in
the Registration Statement, or any amendment or supplement to the Registration
Statement, or arise out of or are based upon any omission or alleged omission to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, if the statement or omission was made in
reliance upon and in conformity with information relating to such seller
furnished in writing to the Company by or on behalf of such seller specifically
for use in connection with the preparation of such Registration Statement,
prospectus, amendment or supplement; provided, however, that the obligations of
each Stockholder hereunder shall be limited to an amount equal to the net
proceeds received by such Stockholder from Registrable Shares sold in connection
with such registration.
(c) Each party entitled to indemnification under this Section 1.6 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided, that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld); and, provided further that the failure of any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Section 1.6. The Indemnified Party may participate in
such defense at such party's expense; provided, however, that the Indemnifying
Party shall pay such expense if representation of such Indemnified Party by the
counsel retained by the Indemnifying Party would be inappropriate due to actual
or potential differing interests between the Indemnified Party and any other
party represented by such counsel in such proceeding. No Indemnifying Party, in
the defense of any such claim or litigation shall, except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect of such claim or litigation, and no Indemnified Party shall
consent to entry of any judgment or settle such claim or litigation without the
prior written consent of the Indemnifying Party.
(d) In order to provide for just and equitable contribution to joint
liability under the Securities Act in any case in which either (i) any holder of
Registrable Shares
7
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exercising rights under this Agreement, or any controlling person of any such
holder, makes a claim for indemnification pursuant to this Section 1.6 but it is
judicially determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial of the
last right of appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that this Section 1.6 provides for indemnification in
such case, or (ii) contribution under the Securities Act may be required on the
part of any such selling Stockholder or any such controlling person in cir
cumstances for which indemnification is provided under this Section 1.6; then,
in each such case, the Company and such Stockholder will contribute to the
aggregate losses, claims, damages or liabilities to which they may be subject
(after contribution from others) in such proportions so that such holder is
responsible for the portion represented by the percentage that the public
offering price of its Registrable Shares offered by the Registration Statement
bears to the public offering price of all securities offered by such
Registration Statement, and the Company is responsible for the remaining
portion; provided, however, that, in any such case, (A) no such holder will be
required to contribute any amount in excess of the net proceeds to it of all
Registrable Shares sold by it pursuant to such Registration Statement and (B) no
person or entity guilty of fraudulent misrepresentation, within the meaning of
Section 11(f) of the Securities Act, shall be entitled to contribution from any
person or entity who is not guilty of such fraudulent misrepresentation.
1.7 Indemnification with Respect to Underwritten Offering. In the event that
Registrable Shares are sold pursuant to a Registration Statement in an
underwritten offering pursuant to Section 1.2, the Company agrees to enter into
an underwriting agreement containing customary representations and warranties
with respect to the business and operations of an issuer of the securities being
registered and customary covenants and agreements to be performed by such
issuer, including without limitation customary provisions with respect to
indemnification by the Company of the underwriters of such offering.
1.8 Information by Holder. Each Stockholder including Registrable Shares in
any registration shall furnish to the Company such information regarding such
Stockholder and the distribution proposed by such Stockholder as the Company may
reasonably request in writing and as shall be required in connection with any
registration, qualification or compliance referred to in this Agreement.
1.9 "Stand-Off" Agreement. Each Stockholder, if requested by the Company and
the managing underwriter of an offering by the Company of Common Stock or other
securities of the Company pursuant to a Registration Statement, shall agree not
to sell publicly or otherwise transfer or dispose of any Registrable Shares or
other securities of the Company held by such Stockholder for a period of 180
days following the effective date of such Registration Statement; provided,
that:
(a) such agreement shall only apply to the Registration Statement
covering the Company's initial public offering of Common Stock in an
underwritten offering; and
(b) all officers and directors of the Company shall enter into similar
agreements.
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1.10 Limitations on Subsequent Registration Rights. The Company shall not,
without the prior written consent of Stockholders holding at least 66 2/3% of
the Registrable Shares, enter into any agreement (other than this Agreement)
with any holder or prospective holder of any securities of the Company which
would allow such holder or prospective holder (a) to include securities of the
Company in any Registration Statement, unless under the terms of such agreement,
such holder or prospective holder may include such securities in any such
registration only on terms consistent with the terms set forth in Section 1.3,
or (b) to make a demand registration which could result in such registration
statement being declared effective prior to December 1, 2000.
1.11 Rule 144 Requirements. After the earliest of (i) the closing of the
sale of securities of the Company pursuant to a Registration Statement, (ii) the
registration by the Company of a class of securities under Section 12 of the
Exchange Act or (iii) the issuance by the Company of an offering circular
pursuant to Regulation A under the Securities Act, the Company agrees to:
(a) comply with the requirements of Rule 144(c) under the Securities Act
with respect to current public information about the Company;
(b) use its best efforts to file with the Commission in a timely manner
all reports and other documents required of the Company under the Securities Act
and the Exchange Act (at any time after it has become subject to such reporting
requirements); and
(c) furnish to any holder of Registrable Shares upon request (i) a
written statement by the Company as to its compliance with the requirements
of said Rule 144(c), and the reporting requirements of the Securities Act
and the Exchange Act (at. any time after it has become subject to such
reporting requirements), (ii) a copy of the most recent annual or quarterly
report of the Company and (iii) such other reports and documents of the
Company as such holder may reasonably request to avail itself of any
similar rule or regulation of the Commission allowing it to sell any such
securities without registration.
1.12 Termination. All of the Company's obligations to register Registrable
Shares under this Agreement shall terminate on the date seven years after the
closing of the Company's initial public offering of Common Stock pursuant to a
Registration Statement.
2. Right of First Refusal.
2.1 (a) The Company shall not issue, sell or exchange, agree to issue, sell
or exchange, or reserve or set aside for issuance, sale or exchange, (i) any
shares of its Common Stock, (ii) any other equity securities of the Company,
(iii) any option, warrant or other right to subscribe for, purchase or otherwise
acquire any equity securities of the Company or (iv) any debt securities
convertible into capital stock of the Company (collectively, the "Offered
Securities"), unless in each such case the Company shall have first complied
with this Section 2. The Company shall deliver to each Purchaser other than
Lighthouse (an "Eligible Purchaser") a written notice of any proposed or
intended issuance, sale or exchange of Offered Securities (the "Offer"), which
Offer shall (i) identify and describe the Offered Securities, (ii) describe the
price and other terms upon which they are to be issued, sold or exchanged, and
the number or amount
9
<PAGE>
of the Offered Securities to be issued, sold or exchanged and (iii) offer to
issue and sell to or exchange with such Eligible Purchaser (A) such portion of
the Offered Securities as the aggregate number of shares of Common Stock
issuable upon conversion of Shares then held by such Eligible Purchaser, plus
any shares of Common Stock issued upon conversion of Shares held by such
Eligible Purchaser, bears to the total number of shares of Common Stock then
outstanding (including shares issued upon conversion of then outstanding shares
of c onvertible preferred stock) (the "Basic Amount") and (B) any additional
portion of the Offered Securities offered to the Eligible Purchasers as such
Eligible Purchaser shall indicate he or it will purchase or acquire should the
other Eligible Purchasers subscribe for less than their Basic Amounts (the
"Undersubscription Amount"). Each Eligible Purchaser shall have the right, for a
period of 30 days following delivery of the Offer, to purchase or acquire, at a
price and upon the other terms specified in the Offer, the number or amount of
Offered Securities described above. The Offer by its term shall remain open and
irrevocable for such 30-day period.
(b) To accept an Offer, in whole or in part, an Eligible Purchaser must
deliver a written notice to the Company prior to the end of the 30-day period of
the Offer, setting forth the portion of the Eligible Purchaser's Basic Amount
that such Eligible Purchaser elects to purchase and, if such Eligible Purchaser
shall elect to purchase all of its Basic Amount, the Undersubscription Amount
(if any) that such Eligible Purchaser elects to purchase (the "Notice of
Acceptance"). If the Basic Amounts subscribed for by all Eligible Purchasers are
less than the aggregate of the Basic Amounts of all Eligible Purchasers (the
"Aggregate Basic Amount"), then each Eligible Purchaser who has set forth
Undersubscription Amounts in its Notice of Acceptance shall be entitled to
purchase, in addition to the Basic Amounts subscribed for, all Undersubscription
Amounts it has subscribed for; provided, however, that should the
Undersubscription Amounts subscribed for exceed the difference between the
Aggregate Basic Amount and the Basic Amounts subscribed for (the "Available
Undersubscription Amount"), each Eligible Purchaser who has subscribed for any
Undersubscription Amount shall be entitled to purchase only that portion of the
Available Undersubscription Amount as the Undersubscription Amount subscribed
for by such Eligible Purchaser bears to the total Undersubscription Amounts
subscribed for by all Eligible Purchasers, subject to rounding by the Board of
Directors to the extent it reasonably deems necessary.
(c) In the event that Notices of Acceptance are not given by the
Eligible Purchasers in respect of all the Offered Securities, the Company shall
have 90 days from the expiration of the period set forth in Section 2.1(a) above
to issue, sell or exchange all or any part of such Offered Securities as to
which a Notice of Acceptance has not been given by the Eligible Purchasers (the
"Refused Securities"), but only upon terms and conditions which are not more
favorable, in the aggregate, to the acquiring person or persons or less
favorable to the Company than those set forth in the Offer.
(d) In the event the Company shall propose to sell less than all the
Refused Securities (any such sale to be in the manner and on the terms specified
in Section 2.1(c) above), then each Eligible Purchaser may, at his or its sole
option and in his or its sole discretion, reduce the number or amount of the
Offered Securities specified in its Notice of Acceptance to an amount that shall
be not less than the number or amount of the Offered Securities that the
Eligible Purchaser elected to purchase pursuant to Section 2.1(b) above
multiplied by a fraction, (i) the numerator of which shall be the number or
amount of Offered Securities the Company
10
<PAGE>
actually proposes to issue, sell or exchange (including Offered Securities to be
issued or sold to Eligible Purchasers pursuant to Section 2.1(b) above prior to
such reduction) and (ii) the denominator of which shall be the amount of all
Offered Securities. In the event that any Eligible Purchaser so elects to reduce
the number or amount of Offered Securities specified in his or its Notice of
Acceptance, the Company may not issue, sell or exchange more than the reduced
number or amount of the Offered Securities unless and until such securities have
again been offered to the Eligible Purchasers in accordance with Section 2.1(a)
above.
(e) Upon the closing of the issuance, sale or exchange of all or less
than all the Refused Securities, the Eligible Purchasers shall acquire from the
Company, and the Company shall issue to the Eligible Purchasers, the number or
amount of Offered Securities specified in the Notices of Acceptance, as reduced
pursuant to Section 2.1(d) above if the Eligible Purchasers have so elected,
upon the terms and conditions specified in the Offer. The purchase by the
Eligible Purchasers of any Offered Securities is subject in all cases to the
preparation, execution and delivery by the Company and the Eligible Purchasers
of a purchase agreement relating to such Offered Securities reasonably
satisfactory in form and substance to the Eligible Purchasers and their
respective counsel.
(f) Any Offered Securities not acquired by the Eligible Purchasers or
other persons in accordance with Section 2.1(c) above may not be issued, sold or
exchanged until they are again offered to the Eligible Purchasers under the
procedures specified in this Agreement.
(g) The rights of the Eligible Purchasers under this Agreement shall not
apply to:
(1) Common Stock issued as a stock dividend to holders of Common
Stock or upon any subdivision or combination of shares of Common Stock,
(2) the issuance of shares of Common Stock upon conversion of
outstanding shares of Preferred Stock,
(3) shares of Common Stock, or options exercisable there for,
issuable to officers, directors, consultants and employees of the Company and
any subsidiary pursuant to any plan, agreement or arrangement approved by a vote
of not less than a majority of the Board of Directors of the Company,
(4) securities issued solely in consideration for the
acquisition (whether by merger or otherwise) by the Company or any of its
subsidiaries of all or substantially all of the stock or assets of any other
entity,
(5) shares of Common Stock sold by the Company in an
underwritten public offering pursuant to an effective registration statement
under the Securities Act of 1933, as amended,
(6) shares of Common Stock, or securities convertible into
Common Stock, issued in connection with any lease financing arrangement, license
agreement or
11
<PAGE>
strategic collaboration agreement, up to a maximum of 2,000,000 such shares
(following the date of this Agreement), as adjusted to take into account stock
splits, recapitalizations and the like, or
(7) shares of Common Stock, or securities convertible into
Common Stock, issued to Biogen, Inc. pursuant to the Research and
Commercialization Agreement dated July 1, 1996, as amended, or to Corange
International Limited pursuant to the Research and Commercialization Agreement
dated September 26, 1996, as amended, or their designees.
2.2 Termination of Section 2. The provisions of this Section 2 shall
terminate upon the earliest of the following events:
(a) The sale of all or substantially all of the assets or business of
the Company, by merger, sale of assets or otherwise; or
(b) The closing of the Company's initial public offering of shares of
Common Stock pursuant to an effective registration statement under the
Securities Act of 1933, as amended, resulting in at least $10,000,000 of gross
proceeds to the Company at a minimum price of $5.00 per share (subject to
appropriate adjustment for stock splits, stock dividends, recapitalizations and
other similar events).
2.3 Definition of Eligible Purchaser. For purposes of this Section 2, each
Eligible Purchaser which is a partnership shall be deemed to be the holder of
all Shares and shares of Common Stock issued upon conversion of Shares held by
the affiliates, partners and retired partners of such Eligible Purchaser, the
estates and family members of any such partners and retired partners and of
their spouses, and any trusts for the benefit of any of the foregoing persons.
3. Transfers of Rights. This Agreement, and the rights and obligations of each
Purchaser hereunder, may be assigned by such Purchaser to any person or entity
to which Shares are transferred by such Purchaser, 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
to be bound hereby.
4. General.
(a) Notices. All notices, requests, consents, and other communications
under this Agreement shall be in writing and shall be delivered by hand, by
reputable overnight courier (such as Federal Express) or mailed by first class
certified or registered mail, return receipt requested, postage prepaid:
If to the Company, at 45 Moulton St., Cambridge, Massachusetts 02138,
Attention: President, or at such other address or addresses as may have been
furnished in writing by the Company to the Purchasers, with a copy to Mark G.
Borden, Esq., Hale and Dorr LLP, 60 State Street, Boston, Massachusetts 02109;
or
If to a Purchaser, at his or its address set forth on Schedule 1.
12
<PAGE>
Notices provided in accordance with this Section 4(a) shall be deemed delivered
upon personal delivery, or one day after deposit with a reputable overnight
courier, or two business days after deposit in the mail.
(b) 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, including, but not limited to, that Amended and Restated
Registration Rights and Right of First Refusal Agreement dated March 12, 1997
(the "Prior Agreement").
(c) Amendments and Waivers. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), with the
written consent of the Company and the holders of at least 66 2/3% of the then
outstanding Registrable Shares (including shares issued upon conversion
thereof); provided, that this Agreement may be amended with the consent of the
holders of less than all Registrable Shares only in a manner which affects all
Registrable Shares in the same fashion; and further provided that no consent of
the Purchasers shall be required for an amendment pursuant to Section 4(g)
below. 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. The
Eligible Purchasers hereby waive any rights they may have under the Prior
Agreement (i) to purchase any shares of Series F Convertible Preferred Stock of
the Company ("Series F Stock") in connection with any sale of Series F Stock to
the purchasers thereof under the Series F Stock Purchase Agreement dated October
__, 1998.
(d) Counterparts. This Agreement may 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.
(e) Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(f) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts.
(g) Addition of Purchasers. Each Purchaser of Series F Stock of the
Company under the Series F Purchase Agreement shall become a party to this
Agreement upon the Closing of its purchase of Series F Stock thereunder and his
or its execution of a counterpart signature page to this Agreement. Promptly
after each such Closing, the Company shall update Schedule 1 hereto to reflect
the name and address of such Purchaser and the number of shares of Series F
Stock so purchased.
[Remainder of Page Intentionally Blank]
13
<PAGE>
IN WITNESS WHEREOF, the parties hereto -have set their hands as of the date
first written above.
COMPANY:
ONTOGENY, INC.
/s/
- --------------------------------
[Signature page to Third Amended and Restated
Registration Rights and Right of First Refusal Agreement]
14
<PAGE>
Schedule 1
Vulcan Ventures, Inc.
110 110th Avenue, N.E., Suite 550
Bellevue, WA 98004
Charles River Partnership VI
1000 Winter Street, Suite 3300
Waltham, MA 02154
Charles River Partnership VI-A
1000 Winter Street, Suite 3300
Waltham, MA 02154
Greylock Equity Limited Partnership
One Federal Street
Boston, MA 02110-2065
Highland Capital Partners 11 Limited Partnership
One International Place
Boston, MA 02110
J.H. Whitney & Co.
630 Fifth Avenue, Suite 3200
New York, NY 10011
One Liberty Fund III L.P.
One Liberty Square
Boston, MA 02109
Sutter Hill Ventures
A California Limited Partnership
755 Page Mill Road, Suite A-200
Palo Alto, CA 94304
Tow Partners
A California Limited Partnership
755 Page Mill Road, Suite A-200
Palo Alto, CA 94304
The Wythes Living Trust
755 Page Mill Road, Suite A-200
Palo Alto CA 94304
The Anderson Living Trust
755 Page Mill Road, Suite A-200
Palo Alto, CA 94304
15
<PAGE>
G. Leonard Baker, Jr.
755 Page Mill Road, Suite A-200
Palo Alto, CA 94304
The Younger Living Trust
755 Page Mill Road, Suite A-200
Palo Alto, CA 94304
James C. Gaither
755 Page Mill Road, Suite A-200
Palo Alto, CA 94304
Ronald L. Perkins
755 Page Mill Road, Suite A-200
Palo Alto, CA 94304
Gregory P. Sands
755 Page Mill Road, Suite A-200
Palo Alto, CA 94304
Ronald C. Agel
279 Marlborough Street
Boston, MA 02116
Moss Forest Venture
113 Eastpointe Circle
Madison, MS 39110
New York Life Insurance Company
51 Madison Avenue, Room 1104
Office of General Counsel
New York, NY 10010
Zaffaroni Revocable Trust 1/24/86
4005 Miranda Avenue, Suite 180
Palo Alto, California 94304
Jonathan C. Peabody
234 Congress Street
Boston, MA 02110
David I. Epstein
925 Moraga Court
Palo Alto, CA 94303
Dr. David Bradford
9 Cloud View Road
Sausalito, CA 94965
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<PAGE>
Genstar Investment Corporation
Metro Tower, Suite 1170
Foster City, CA 94404
Christopher Bogan
424 Lakeshore Lane
Chapel Hill, NC 27514
Fujigin Capital Company
Central Plaza Building, 4th Floor
1-1 Kaguragashi, Shinjuku-ku
Tokyo, JAPAN
Al-Midani Investment Company
P. O. Box 40761
Riyadh 11511
Saudi Arabia
Wells Fargo Bank, Trustee FBO SHV
M/P/T FBO Tench Coxe
Wells Fargo Employee Benefit Trust
420 Montgomery Street, 2nd Fl.
San Francisco, CA 94404
Attn: Vicki Bandel
David B. Musket
19 Fieldmont Road
Belmont, MA 02478
Gutrafin Ltd.
c/o Francis Lang
40, Egerton Crescent
London SW3 2EB
England
Ariane Health Limited, LDC
c/o Muzinich & Co., Inc.
450 Park Avenue, Suite 1804
New York, NY 10022
Attn: Kenneth A. Sorensen, Ph.D
New England Partners Capital, L.P.
1 Boston Place, Suite 2100
Boston, MA 02108
17
<PAGE>
NMT New Medical Technologies
c/o New Medical Tech. Management
Gewerbestrasse 18
CH-4123 Allschwill, SWITZERLAND
Attn: Jacques F. Rejeange, CEO
Saunders Holdings, L.P.
755 Page Mill Road, Suite A-200
Palo Alto, CA 94304
Att: Mr. Ronald Perkins
Mr. G. Leonard Baker, Jr.
Paul M. & Marsha R. Wythes, Trustees
of The Wythes Living Trust
755 Page Mill Road, Suite A-200
Palo Alto, CA 94304
Att: Mr. Ronald Perkins
David L. Anderson
755 Page Mill Road, Suite A-200
Palo Alto, CA 94304
Att: Mr. Ronald Perkins
Mr. G. Leonard Baker, Jr.
VENTURETECH, INC.
Peter Friedli
Friedli Corporate Finance
Freigutstrasse 5
8002 Zurich, Switzerland
David R. Golob
755 Page Mill Road, Suite A-200
Palo Alto, CA 94304
William H. Younger, Jr., Trustee
of the Younger Living Trust
755 Page Mill Road, Suite A-200
Palo Alto, CA 94304
Att: Mr. Ronald Perkins
Essex Special Growth Opportunities Fund
Essex Investment Management Co.
125 High Street, 39th Floor
Boston, MA 02110
Attn: Susan Stickells
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<PAGE>
Biocentiv Limited
c/o Mesco II Ltd.
409 Main Street
Ridgefield, CT 06877
Attn: Joel R. Mesznik
Westfield Performance Fund L.P.
Westfield Capital
One Financial Center
23rd Floor
Boston, MA 02111
SBSF Biotechnology Partners L.P.
Spears Benzak Solomon & Sarell
101 East Main Street
Suite "G", Attn: Lisa Tuckerman
Bozeman, MT 59715
SBSF BiotechnologyFund, L.P.
Spears Benzak Solomon & Sarell
101 East Main Street
Suite "G", Attn: Lisa Tuckerman
Bozeman, MT 59715
Aljandro Zaffaroni & Lida Zaffaroni,
c/o Technofyn Associates LLC
4005 Miranda Avenue, Suite 180
Palo Alto, California 94304
Attn: Gonzalo Silveira
The CIT Group/ Equity Investments, Inc.
c/o Bruce R. Schackman
The CIT Group/Venture Capital, Inc.
650 CIT Drive
Livingston, NJ 07039
Hare and Company
c/o OrbiMed Advisors LLC
767 Third Avenue, #64
New York, NY 10017
Attn: Samuel D. Isaley
Barry Kurokawa
200 Park Avenue
Suite 3900
New York, NY 10166
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<PAGE>
Comdisco, Inc.
611 North River Road
Rosemont, IL 60018
Mr. Frank Montgomery
113 Eastpointe Circle
Madison, MS 39110
Martin J.A. Dore
Finsbury Asset Management Limited
Alderman's House, Alderman's Walk
London EC2M 3XR
ENGLAND
Noram Trust
c/o James P. Conroy
c/o Windels, Marx, Davies & Ives
56 West 56th Street
New York, NY 10019
The Dr. M. Lee Pearce Foundation
11880 Bird Road, Suite 203
Miami, Florida 33175
Attn: Dr. Lee Pearce
The Dr. M. Lee Pearce Foundation
11880 Bird Road, Suite 203
Miami, Florida 33175
Attn: Dr. Lee Pearce
Bestin Worldwide, Ltd.
Faust, Rabbach, Stanger & Oppenheim
488 Madison Avenue
New York, NY 10022
Attn: David Faust
William H. Younger, Jr.
755 Page Mill Road, Suite A-200
Palo Alto, CA 94304
Eagle Constellation Fund Ltd.
c/o International Fund Administration
48 Par La Ville Road, Suite 464
Hamilton HM11, Bermuda
Att: Brian Mellow
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<PAGE>
UEMCO XI Limited Partnership
c/o Eagle Management Co.
10 Valley Drive, Greenwich Office Park
Greenwich, CT 06831
Att: William Fike
Gilde Investment Fund B.V.
c/o One Liberty Fund III, L.P.
One Liberty Square
Boston, MA 02109
Att: Mr. Ed Kania
Zaffaroni Family Partnership, LP
c/o Gonzalo Silveira
4005 Miranda Avenue, Suite 180
Palo Alto, CA 94304
SPRING TECHNOLOGY, INC.
Friedli Corporate Finance AG
Freigutstrasse 5
8002 Zurich SWITZERLAND
Attn: Christa Wagner
Dah Sing Medical Science Investments
Dah Sing Financial Holdings Ltd.
Friendship First Health & Happiness Dah
Sing Financial Holdings, Ltd.
36th Floor, Dah Sing Financial Centre
108 Gloucester Road
Hong Kong, Attn: David Hinde
Georges Muller
Avenue Montbenon 2
Lausanne
Switzerland 1003
John Simon
c/o UroMed Corporation
64 A Street
Needham, MA 02194
Daniel S. Gregory Family LTD Partnership
c/o Essex Street Associates
P. 0. Box 5600
Beverly Farms, MA 01915
Attention: Mark J. Gobeille
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<PAGE>
Lighthouse Capital Partners
100 Drake's Landing
Suite 260
Green Brae, CA 94904
Alimentaria International, Inc.
c/o Betainvest
Avenue Montbanon 2
Lausanne, 1003
SWITZERLAND
Andre LaMotte
Medical Science Partners
161 Worcester Road
Suite 301
Framingham, MA 01701
Medical Science Partners, L.P. II
c/o Joseph Lovett
161 Worcester Road, Suite 301
Framingham, MA 01701
Tench Coxe
755 Page Mill Road, Suite A-200
Palo Alto, CA 94304
ProMed Partners, L.P.
125 CambridePark Drive
Cambridge, MA 02140
22
<PAGE>
ONTOGENY, INC.
Third Amended and Restated Registration Rights
and Right of First Refusal Agreement
Counterpart Signature Page
--------------------------
October 31, 1998
Name of PURCHASER:_____________________________________________________
If an entity, jurisdiction of organization:____________________________
Address:_______________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
Signature:_____________________________________________________________
Name of Authorized Signature:__________________________________________
Title:_________________________________________________________________
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Exhibit 10.48
REGISTRATION RIGHTS AGREEMENT
This Agreement dated as of July 1, 1996 is entered into by and among
Biogen, Inc., a Massachusetts corporation (the "Purchaser") and Ontogeny, Inc.,
a Delaware corporation (the "Company").
WHEREAS, the Company and the Purchasers desire to provide for certain
arrangements with respect to the registration of shares of capital stock of the
Company under the Securities Act of 1933;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement, the parties hereto agree as follows:
1. Registration Rights.
1.1 Certain Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:
"Commission" means the Securities and Exchange Commission, or any
other Federal agency at the time administering the Securities Act.
"Common Stock" means the common stock, $.01 par value per share,
of the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any similar Federal statute, and the rules and regulations of the Commission
issued under such Act, as they each may, from time to time, be in effect.
"Registration Statement" means a registration statement filed by the
Company with the Commission for a public offering and sale of Common Stock
(other than a registration statement on Form S-8 or Form S-4, or their
successors, or any other form for a similar limited purpose, any registration
statement covering only securities proposed to be issued in exchange for
securities or assets of another corporation or any registration statement
covering only securities to be sold for the account of stockholders of the
Company).
"Registration Expenses" means the expenses described in Section 1.5.
"Registrable Shares" means (i) the shares of Common Stock issued or
issuable upon conversion of the Shares, (ii) any other shares of Common Stock
issued in respect of such shares (because of stock splits, stock dividends,
reclassifications, recapitalizations, or similar events); provided, however,
that shares of Common Stock which are Registrable Shares shall cease to be
Registrable Shares (i) upon any sale pursuant to a Registration Statement or
Rule 144 under the Securities Act or (ii) upon any sale in any manner to a
person or entity which, by virtue of Section 2 of this Agreement, is not
entitled to the rights provided by this Agreement. Wherever reference is made
in this Agreement to a request or consent of holders of a certain percentage of
Registrable Shares, the determination of such percentage shall include shares of
Common Stock issuable upon conversion of the Shares even if such conversion has
not yet been effected.
<PAGE>
"Securities Act" means the Securities Act of 1933, as amended, or any
similar Federal statute, and the rules and regulations of the Commission issued
under such Act, as they each may, from time to time, be in effect.
"Shares" means (1) the shares of Series C Convertible Preferred Stock
issued pursuant to the Series C Preferred Stock Purchase Agreement of even date
herewith by and between the Company and the Purchaser.
"Stockholders" means the Purchaser and any persons or entities to whom
the rights granted under this Agreement are transferred by Purchaser, pursuant
to Section 2 hereof.
1.2 Required Registrations.
(a) At any time after the Company becomes eligible to file a
Registration Statement on Form S-3 (or any successor form relating to
secondary offerings), a Stockholder or Stockholders may request the
Company, in writing, to effect the registration on Form S-3 (or such
successor form), of Registrable Shares having an aggregate offering price
of at least $1,000,000 (based on the then current public market price).
Upon receipt of any such request, the Company shall promptly give written
notice of such proposed registration to all Stockholders. Such Stockholders
shall have the right, by giving written notice to the Company within 30
days after the Company provides its notice, to elect to have included in
such registration such of their Registrable Shares as such Stockholders may
request in such notice of election; provided that if the underwriter (if
any) managing the offering determines that, because of marketing factors,
all of the Registrable Shares requested to be registered by all
Stockholders may not be included in the offering, then all Stockholders who
have requested registration shall participate in the registration pro rata
based upon their total ownership of shares of Common Stock (giving effect
to the conversion into Common Stock of all securities convertible
thereinto). Thereupon, the Company shall, as expeditiously as possible, use
its best efforts to effect the registration on Form S-3 (or such successor
form) of all Registrable Shares which the Company has been requested to so
register.
(b) The Company shall not be required to effect more than two
registrations pursuant to paragraph (a) above.
(c) If at the time of any request to register Registrable Shares
pursuant to this Section 1.2, the Company is engaged or has fixed plans to
engage within 30 days of the time of the request in a registered public
offering as to which the Stockholders may include Registrable Shares
pursuant to Section 1.3 or is engaged in any other activity which, in the
good faith determination of the Company's Board of Directors, would be
adversely affected by the requested registration to the material detriment
of the Company, then the Company may at its option direct that such request
be delayed for a period not in excess of six months from the effective date
of such offering or the date of commencement of such other material
activity, as the case may be, such right to delay a request to be exercised
by the Company not more than once in any two-year period.
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1.3 Incidental Registration.
(a) Whenever the Company proposes to file a Registration
Statement (other than pursuant to Section 1.2) at any time and from time to
time, it will, prior to such filing, give written notice to all Stockholders of
its intention to do so and, upon the written request of a Stockholder or
Stockholders given within 20 days after the Company provides such notice (which
request shall state the intended method of disposition of such Registrable
Shares), the Company shall use its best efforts to cause all Registrable Shares
which the Company has been requested by such Stockholder or Stockholders to
register to be registered under the Securities Act to the extent necessary to
permit their sale or other disposition in accordance with the intended methods
of distribution specified in the request of such Stockholder or Stockholders;
provided that the Company shall have the right to postpone or withdraw any
registration effected pursuant to this Section 1.3 without obligation to any
Stockholder.
(b) In connection with any registration under this Section 1.3
involving an underwriting, the Company shall not be required to include (i) any
Registrable Shares in such registration unless the holders thereof accept the
terms of the underwriting as agreed upon between the Company and the
underwriters selected by it (provided that such terms must be consistent with
this Agreement), or (ii) except in the Company's initial public offering of
Common Stock or any Registration Statement filed by the Company with the
Commission within 24 months after the closing of such initial public offering,
any Registrable Shares then eligible for resale under Rule 144(k) under the
Securities Act. If in the opinion of the managing underwriter it is appropriate
because of marketing factors to limit the number of Registrable Shares to be
included in the offering, then the Company shall be required to include in the
registration only that number of Registrable Shares, if any, which the managing
underwriter believes should be included therein. If the number of Registrable
Shares to be included in the offering in accordance with the foregoing is less
than the total number of shares which the holders of Registrable Shares have
requested to be included, then the holders of Registrable Shares who have
requested registration and other holders of securities entitled to include them
in such registration shall participate in the registration pro rata based upon
their total ownership of shares of Common Stock (giving effect to the conversion
into Common Stock of all securities convertible thereinto). For purposes of
making any such reduction, each stockholder which is a partnership, together
with the affiliates, partners and retired partners of such stockholder, the
estates and family members of any such partners and retired partners and of
their spouses, and any trusts for the benefit of any of the foregoing persons
shall be deemed to be a single "holder", and any pro-rata reduction with respect
to such "holder" shall be based upon the aggregate amount of Registrable Shares
owned by all entities and individuals included in such "holder", as defined in
this sentence (and the aggregate amount so allocated to such "holder" shall be
allocated among the entities and individuals included in such "holder" in such
manner as such stockholder may reasonably determine). If any holder would thus
be entitled to include more securities than such holder requested to be
registered, the excess shall be allocated among other requesting holders pro
rata in the manner described in this paragraph.
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1.4 Registration Procedures. If and whenever the company is required by
the provisions of this Agreement to use its best efforts to effect the
registration of any of the Registrable Shares under the Securities Act, the
Company shall:
(a) file with the Commission a Registration Statement with respect to
such Registrable Shares and use its best efforts to cause that Registration
Statement to become and remain effective;
(b) as expeditiously as possible prepare and file with the Commission
any amendments and supplements to the Registration Statement and the prospectus
included in the Registration Statement as may be necessary to keep the
Registration Statement effective, in the case of a firm commitment underwritten
public offering, until each underwriter has completed the distribution of all
securities purchased by it and, in the case of any other offering, until the
earlier of the sale of all Registrable Shares covered thereby or 120 days after
the effective date thereof;
(c) as expeditiously as possible furnish to each selling Stockholder
such reasonable numbers of copies of the prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and such
other documents as the selling Stockholder may reasonably request in order to
facilitate the public sale or other disposition of the Registrable Shares owned
by the selling Stockholder; and
(d) as expeditiously as possible use its best efforts to register or
qualify the Registrable Shares covered by the Registration Statement under the
securities or Blue Sky laws of such states as the selling Stockholders shall
reasonably request, and do any and all other acts and things that may be
necessary or desirable to enable the selling Stockholders to consummate the
public sale or other disposition in such states of the Registrable Shares owned
by the selling Stockholder; provided, however, that the Company shall not be
required in connection with this paragraph (d) to qualify as a foreign
corporation or execute a general consent to service of process in any
jurisdiction.
If the Company has delivered preliminary or final prospectuses to the
selling Stockholders and after having done so the prospectus is amended to
comply with the requirements of the Securities Act, the Company shall promptly
notify the selling Stockholders and, if requested, the selling Stockholders
shall immediately cease making offers of Registrable Shares and return all
prospectuses to the Company. The Company shall promptly provide the selling
Stockholders with revised prospectuses and, following receipt of the revised
prospectuses, the selling Stockholders shall be free to resume making offers of
the Registrable Shares.
1.5 Allocation of Expenses. The Company will pay all Registration
Expenses of all registrations under this Agreement; provided, however, that if a
registration under Section 1.2 is withdrawn at the request of the Stockholders
requesting such registration (other than as a result of information concerning
the business or financial condition of the Company which is made known to the
Stockholders after the date on which such registration was requested) and if the
requesting Stockholders elect not to have such registration counted as a
registration requested under Section 1.2, the requesting Stockholders shall pay
the Registration Expenses of such registration pro rata in accordance with the
number of their Registrable Shares included in such registration. For purposes
of this Section 1.5, the term "Registration Expenses" shall mean all expenses
incurred by the Company in complying with this Agreement, including, without
limitation, all registration and filing fees, exchange listing fees, printing
expenses, fees and expenses of counsel for the Company and the fees
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and expenses of one counsel selected by the selling Stockholders to represent
the selling Stockholders, state Blue Sky fees and expenses, and the expense of
any special audits incident to or required by any such registration, but
excluding underwriting discounts, selling commissions and the fees and expenses
of selling Stockholders' own counsel (other than the counsel selected to
represent all selling Stockholders).
1.6 Indemnification and Contribution.
(a) In the event of any registration of any of the Registrable Shares
under the Securities Act pursuant to this Agreement, the Company will indemnify
and hold harmless the seller of such Registrable Shares, each underwriter of
such Registrable Shares, and each other person, if any, who controls such seller
or underwriter within the meaning of the Securities Act or the Exchange Act
against any losses, claims, damages or liabilities, joint or several, to which
such seller, underwriter or controlling person may become subject under the
Securities Act, the Exchange Act, state securities or Blue Sky laws or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Registration Statement
under which such Registrable Shares were registered under the Securities Act,
any preliminary prospectus or final prospectus contained in the Registration
Statement, or any amendment or supplement to such Registration Statement, or
arise out of or are based upon the omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and the Company will reimburse such seller, underwriter
and each such controlling person for any legal or any other expenses reasonably
incurred by such seller, underwriter or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any untrue statement or omission made in such Registration Statement,
preliminary prospectus or final prospectus, or any such amendment or supplement,
in reliance upon and in conformity with information furnished to the Company, in
writing, by or on behalf of such seller, underwriter or controlling person
specifically for use in the preparation thereof.
(b) In the event of any registration of any of the Registrable Shares
under the Securities Act pursuant to this Agreement, each seller of Registrable
Shares, severally and not jointly, will indemnify and hold harmless the Company,
each of its directors and officers and each underwriter (if any) and each
person, if any, who controls the Company or any such underwriter within the
meaning of the Securities Act or the Exchange Act, against any losses, claims,
damages or liabilities, joint or several, to which the Company, such directors
and officers, underwriter or controlling person may become subject under the
Securities Act, Exchange Act, state securities or Blue Sky laws or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement under which
such Registrable Shares were registered under the Securities Act, any
preliminary prospectus or final prospectus contained in the Registration
Statement, or any amendment or supplement to the Registration Statement, or
arise out of or are based upon any omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, if the statement or omission was made in reliance upon
and in
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conformity with information relating to such seller furnished in writing to the
Company by or on behalf of such seller specifically for use in connection with
the preparation of such Registration Statement, prospectus, amendment or
supplement; provided, however, that the obligations of each Stockholder
hereunder shall be limited to an amount equal to the net proceeds received by
such Stockholder from Registrable Shares sold in connection with such
registration.
(c) Each party entitled to indemnification under this Section 1.6 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided, that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld); and, provided, further, that the failure of any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Section 1.6. The Indemnified Party may participate in
such defense at such party's expense; provided, however, that the Indemnifying
Party shall pay such expense if representation of such Indemnified Party by the
counsel retained by the Indemnifying Party would be inappropriate due to actual
or potential differing interests between the Indemnified Party and any other
party represented by such counsel in such proceeding. No Indemnifying Party, in
the defense of any such claim or litigation shall, except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect of such claim or litigation, and no Indemnified Party shall
consent to entry of any judgment or settle such claim or litigation without the
prior written consent of the Indemnifying Party.
(d) In order to provide for just and equitable contribution to joint
liability under the Securities Act in any case in which either (i) any holder of
Registrable Shares exercising rights under this Agreement, or any controlling
person of any such holder, makes a claim for indemnification pursuant to this
Section 1.6 but it is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to appeal
or the denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 1.6 provides
for indemnification in such case, or (ii) contribution under the Securities Act
may be required on the part of any such selling Stockholder or any such
controlling person in circumstances for which indemnification is provided under
this Section 1.6; then, in each such case, the Company and such Stockholder will
contribute to the aggregate losses, claims, damages or liabilities to which they
may be subject (after contribution from others) in such proportions so that such
holder is responsible for the portion represented by the percentage that the
public offering price of its Registrable Shares offered by the Registration
Statement bears to the public offering price of all securities offered by such
Registration Statement, and the Company is responsible for the remaining
portion; provided, however, that, in any such case, (A) no such holder will be
required to contribute any amount in excess of the net proceeds to it of all
Registrable Shares sold by it pursuant to such Registration Statement, and (B)
no person or entity guilty of fraudulent misrepresentation, within the meaning
of Section 11(f) of the Securities Act, shall be entitled to contribution from
any person or entity who is not guilty of such fraudulent misrepresentation.
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1.7 Indemnification with Respect to Underwritten Offering. In the event
that Registrable Shares are sold pursuant to a Registration Statement in an
underwritten offering pursuant to Section 1.2, the Company agrees to enter into
an underwriting agreement containing customary representations and warranties
with respect to the business and operations of an issuer of the securities being
registered and customary covenants and agreements to be performed by such
issuer, including without limitation customary provisions with respect to
indemnification by the Company of the underwriters of such offering.
1.8 Information by Holder. Each Stockholder including Registrable Shares
in any registration shall furnish to the Company such information regarding such
Stockholder and the distribution proposed by such Stockholder as the Company may
reasonably request in writing and as shall be required in connection with any
registration, qualification or compliance referred to in this Agreement.
1.9 "Stand-Off" Agreement. Each Stockholder, if requested by the Company
and the managing underwriter of an offering by the Company of Common Stock or
other securities of the Company pursuant to a Registration Statement, shall
agree not to sell publicly or otherwise transfer or dispose of any Registrable
Shares or other securities of the Company held by such Stockholder for a period
of 180 days following the effective date of such Registration Statement;
provided, that:
(a) such agreement shall only apply to the Registration Statement
covering the Company's initial public offering of Common Stock in an
underwritten offering; and
(b) all officers and directors of the Company shall enter into
similar agreements.
1.10 Rule 144 Requirements. After the earliest of (i) the closing of the
sale of securities of the Company pursuant to a Registration Statement, (ii) the
registration by the Company of a class of securities under Section 12 of the
Exchange Act, or (iii) the issuance by the Company of an offering circular
pursuant to Regulation A under the Securities Act, the Company agrees to:
(a) comply with the requirements of Rule 144(c) under the
Securities Act with respect to current public information about the Company;
(b) use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act (at any time after it has become subject to
such reporting requirements); and
(c) furnish to any holder of Registrable Shares upon request (i) a
written statement by the Company as to its compliance with the requirements of
said Rule 144(c), and the reporting requirements of the Securities Act and the
Exchange Act (at any time after it has become subject to such reporting
requirements), (ii) a copy of the most recent annual or quarterly report of the
Company, and (iii) such other reports and documents of the Company as such
holder may reasonably request to avail itself of any similar rule or regulation
of the Commission allowing it to sell any such securities without registration.
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1.11 Termination. All of the Company's obligations to register
Registrable Shares under this Agreement shall terminate on the date seven years
after the closing of the Company's initial public offering of Common Stock
pursuant to a Registration Statement.
2. Transfers of Rights. This Agreement, and the rights and obligations
of each Purchaser hereunder, may be assigned by such Purchaser to any person or
entity to which at least 100,000 Shares are transferred by such Purchaser, and
such transferee shall be deemed a "Purchase" for purposes of this Agreement;
provided that the transferee provides written notice of such assignment to the
Company and agrees to be bound hereby and provided further that the transferee
is not a competitor of the Company.
3. General.
(a) Notices. All notices, requests, consents, and other
communications under this Agreement shall be in writing and shall be delivered
by hand or mailed by first class certified or registered mail, return receipt
requested, postage prepaid:
If to the Company, at 45 Moulton Street, Cambridge, Massachusetts 02138,
Attention: President, or at such other address or addresses as may have been
furnished in writing by the Company to the Purchaser, with a copy to Mark G.
Borden, Esq., Hale and Dorr, 60 State Street, Boston, Massachusetts 02109; or
If to a Purchaser, at his or its address set forth in the Series C Purchase
Agreement, or at such other address or addresses as may have been furnished to
the Company in writing by such Purchaser.
(b) 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.
(c) Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), with the written consent of the Company and the holders of at
least 66 2/3% of the then outstanding Registrable Shares (including shares
issued upon conversion thereof). 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.
(d) Counterparts. This Agreement may 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.
(e) Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
(f) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts.
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IN WITNESS WHEREOF, the parties hereto have set their hands as of the date
first written above:
COMPANY:
ONTOGENY, INC.
/s/ William W. Helman
---------------------
William W. Helman, President
Dated:
PURCHASER:
BIOGEN, INC.
By:/s/ James R. Tobin
------------------
Dated:
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Exhibit 10.49
REGISTRATION RIGHTS AGREEMENT
This Agreement dated as of September 26, 1996 is entered into by and among
Corange International Limited, (the "Purchaser") and Ontogeny, Inc., a Delaware
corporation (the "Company").
WHEREAS, the Company and the Purchasers desire to provide for certain
arrangements with respect to the registration of shares of capital stock of the
Company under the Securities Act of 1933;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement, the parties hereto agree as follows:
1. Registration Rights.
1.1 Certain Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:
"Commission" means the Securities and Exchange Commission, or any
other Federal agency at the time administering the Securities Act.
"Common Stock" means the common stock, $.01 par value per share, of
the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any similar Federal statute, and the rules and regulations of the Commission
issued under such Act, as they each may, from time to time, be in effect.
"Registration Statement" means a registration statement filed by the
Company with the Commission for a public offering and sale of Common Stock
(other than a registration statement on Form S-8 or Form S-4, or their
successors, or any other form for a similar limited purpose, any registration
statement covering only securities proposed to be issued in exchange for
securities or assets of another corporation or any registration statement
covering only securities to be sold for the account of stockholders of the
Company).
"Registration Expenses" means the expenses described in Section 1.5.
"Registrable Shares" means (i) the shares of Common Stock issued or
issuable upon conversion of the Shares, (ii) any other shares of Common Stock
issued in respect of such shares (because of stock splits, stock dividends,
reclassifications, recapitalizations, or similar events); provided, however,
that shares of Common Stock which are Registrable Shares shall cease to be
Registrable Shares (i) upon any sale pursuant to a Registration Statement or
Rule 144 under the Securities Act or (ii) upon any sale in any manner to a
person or entity which, by virtue of Section 2 of this Agreement, is not
entitled to the rights provided by this Agreement. Wherever reference is made
in this Agreement to a request or consent of holders of a certain percentage of
Registrable Shares, the determination of such percentage shall include shares of
Common Stock issuable upon conversion of the Shares even if such conversion has
not yet been effected.
<PAGE>
"Securities Act" means the Securities Act of 1933, as amended, or any
similar Federal statute, and the rules and regulations of the Commission issued
under such Act, as they each may, from time to time, be in effect.
"Shares" means the shares of Series D Convertible Preferred Stock
issued pursuant to the Series D Preferred Stock Purchase Agreement of even date
herewith by and between the Company and the Purchaser and any shares of
preferred stock issued to Purchaser pursuant to Section 4.1 of the Research and
Commercialization Agreement of even date herewith between the Company and the
Purchaser.
"Stockholders" means the Purchaser and any persons or entities to whom
the rights granted under this Agreement are transferred by Purchaser, pursuant
to Section 2 hereof.
1.2 Required Registrations.
(a) At any time after the Company becomes eligible to file a
Registration Statement on Form S-3 (or any successor form relating to secondary
offerings), a Stockholder or Stockholders may request the Company, in writing,
to effect the registration on Form S-3 (or such successor form), of Registrable
Shares having an aggregate offering price of at least $1,000,000 (based on the
then current public market price). Upon receipt of any such request, the Company
shall promptly give written notice of such proposed registration to all
Stockholders. Such Stockholders shall have the right, by giving written notice
to the Company within 30 days after the Company provides its notice, to elect to
have included in such registration such of their Registrable Shares as such
Stockholders may request in such notice of election; provided that if the
underwriter (if any) managing the offering determines that, because of marketing
factors, all of the Registrable Shares requested to be registered by all
Stockholders may not be included in the offering, then all Stockholders who have
requested registration shall participate in the registration pro rata based upon
their total ownership of shares of Common Stock (giving effect to the conversion
into Common Stock of all securities convertible thereinto). Thereupon, the
Company shall, as expeditiously as possible, use its best efforts to effect the
registration on Form S-3 (or such successor form) of all Registrable Shares
which the Company has been requested to so register.
(b) The Company shall not be required to effect more than three
registrations pursuant to paragraph (a) above.
(c) If at the time of any request to register Registrable Shares
pursuant to this Section 1.2, the Company is engaged or has fixed plans to
engage within 30 days of the time of the request in a registered public offering
as to which the Stockholders may include Registrable Shares pursuant to Section
1.3 or is engaged in any other activity which, in the good faith determination
of the Company's Board of Directors, would be adversely affected by the
requested registration to the material detriment of the Company, then the
Company may at its option direct that such request be delayed for a period not
in excess of six months from the effective date of such offering or the date of
commencement of such other material activity, as the case may be, such right to
delay a request to be exercised by the Company not more than once in any two-
year period.
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(d) The Company shall not be required to register under this Section 1.2
any Registrable Shares then eligible for resale under Rule 144(k) under the
Securities Act.
1.3 Incidental Registration.
(a) Whenever the Company proposes to file a Registration Statement
(other than pursuant to Section 1.2) at any time and from time to time, it will,
prior to such filing, give written notice to all Stockholders of its intention
to do so and, upon the written request of a Stockholder or Stockholders given
within 20 days after the Company provides such notice (which request shall state
the intended method of disposition of such Registrable Shares), the Company
shall use its best efforts to cause all Registrable Shares which the Company has
been requested by such Stockholder or Stockholders to register to be registered
under the Securities Act to the extent necessary to permit their sale or other
disposition in accordance with the intended methods of distribution specified in
the request of such Stockholder or Stockholders; provided that the Company shall
have the right to postpone or withdraw any registration effected pursuant to
this Section 1.3 without obligation to any Stockholder.
(b) In connection with any registration under this Section 1.3 involving
an underwriting, the Company shall not be required to include (i) any
Registrable Shares in such registration unless the holders thereof accept the
terms of the underwriting as agreed upon between the Company and the
underwriters selected by it (provided that such terms must be consistent with
this Agreement), or (ii) except in the Company's initial public offering of
Common Stock or any Registration Statement filed by the Company with the
Commission within 24 months after the closing of such initial public offering,
any Registrable Shares then eligible for resale under Rule 144(k) under the
Securities Act. If in the opinion of the managing underwriter it is appropriate
because of marketing factors to limit the number of Registrable Shares to be
included in the offering, then the Company shall be required to include in the
registration only that number of Registrable Shares, if any, which the managing
underwriter believes should be included therein. If the number of Registrable
Shares to be included in the offering in accordance with the foregoing is less
than the total number of shares which the holders of Registrable Shares have
requested to be included, then the holders of Registrable Shares who have
requested registration and other holders of securities entitled to include them
in such registration shall participate in the registration pro rata based upon
their total ownership of shares of Common Stock (giving effect to the conversion
into Common Stock of all securities convertible thereinto). If any holder would
thus be entitled to include more securities than such holder requested to be
registered, the excess shall be allocated among other requesting holders pro
rata in the manner described in this paragraph.
1.4 Registration Procedures. If and whenever the Company is required by the
provisions of this Agreement to use its best efforts to effect the registration
of any of the Registrable Shares under the Securities Act, the Company shall:
(a) file with the Commission a Registration Statement with respect to
such Registrable Shares and use its best efforts to cause that Registration
Statement to become and remain effective;
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(b) as expeditiously as possible prepare and file with the Commission
any amendments and supplements to the Registration Statement and the prospectus
included in the Registration Statement as may be necessary to keep the
Registration Statement effective, in the case of a firm commitment underwritten
public offering, until each underwriter has completed the distribution of all
securities purchased by it and, in the case of any other offering, until the
earlier of the sale of all Registrable Shares covered thereby or 120 days after
the effective date thereof;
(c) as expeditiously as possible furnish to each selling Stockholder
such reasonable numbers of copies of the prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and such
other documents as the selling Stockholder may reasonably request in order to
facilitate the public sale or other disposition of the Registrable Shares owned
by the selling Stockholder; and
(d) as expeditiously as possible use its best efforts to register or
qualify the Registrable Shares covered by the Registration Statement under the
securities or Blue Sky laws of such states as the selling Stockholders shall
reasonably request, and do any and all other acts and things that may be
necessary or desirable to enable the selling Stockholders to consummate the
public sale or other disposition in such states of the Registrable Shares owned
by the selling Stockholder; provided, however, that the Company shall not be
required in connection with this paragraph (d) to qualify as a foreign
corporation or execute a general consent to service of process in any
jurisdiction.
If the Company has delivered preliminary or final prospectuses to the
selling Stockholders and after having done so the prospectus is amended to
comply with the requirements of the Securities Act, the Company shall promptly
notify the selling Stockholders and, if requested, the selling Stockholders
shall immediately cease making offers of Registrable Shares and return all
prospectuses to the Company. The Company shall promptly provide the selling
Stockholders with revised prospectuses and, following receipt of the revised
prospectuses, the selling Stockholders shall be free to resume making offers of
the Registrable Shares.
1.5 Allocation of Expenses. The Company will pay all Registration Expenses of
all registrations under this Agreement; provided, however, that if a
registration under Section 1.2 is withdrawn at the request of the Stockholders
requesting such registration (other than as a result of information concerning
the business or financial condition of the Company which is made known to the
Stockholders after the date on which such registration was requested) and if the
requesting Stockholders elect not to have such registration counted as a
registration requested under Section 1.2, the requesting Stockholders shall pay
the Registration Expenses of such registration pro rata in accordance with the
number of their Registrable Shares included in such registration. For purposes
of this Section 1.5, the term "Registration Expenses" shall mean all expenses
incurred by the Company in complying with this Agreement, including, without
limitation, all registration and filing fees, exchange listing fees, printing
expenses, fees and expenses of counsel for the Company and the fees and expenses
of one counsel selected by the selling Stockholders to represent the selling
Stockholders, state Blue Sky fees and expenses, and the expense of any special
audits incident to or required by any such registration, but
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excluding underwriting discounts, selling commissions and the fees and expenses
of selling Stockholders' own counsel (other than the counsel selected to
represent all selling Stockholders).
1.6 Indemnification and Contribution.
(a) In the event of any registration of any of the Registrable Shares
under the Securities Act pursuant to this Agreement, the Company will indemnify
and hold harmless the seller of such Registrable Shares, each underwriter of
such Registrable Shares, and each other person, if any, who controls such seller
or underwriter within the meaning of the Securities Act or the Exchange Act
against any losses, claims, damages or liabilities, joint or several, to which
such seller, underwriter or controlling person may become subject under the
Securities Act, the Exchange Act, state securities or Blue Sky laws or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Registration Statement
under which such Registrable Shares were registered under the Securities Act,
any preliminary prospectus or final prospectus contained in the Registration
Statement, or any amendment or supplement to such Registration Statement, or
arise out of or are based upon the omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and the Company will reimburse such seller, underwriter
and each such controlling person for any legal or any other expenses reasonably
incurred by such seller, underwriter or controlling person in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon any untrue statement or omission made in such Registration Statement,
preliminary prospectus or final prospectus, or any such amendment or supplement,
in reliance upon and in conformity with information furnished to the Company, in
writing, by or on behalf of such seller, underwriter or controlling person
specifically for use in the preparation thereof.
(b) In the event of any registration of any of the Registrable Shares
under the Securities Act pursuant to this Agreement, each seller of Registrable
Shares, severally and not jointly, will indemnify and hold harmless the Company,
each of its directors and officers and each underwriter (if any) and each
person, if any, who controls the Company or any such underwriter within the
meaning of the Securities Act or the Exchange Act, against any losses, claims,
damages or liabilities, joint or several, to which the Company, such directors
and officers, underwriter or controlling person may become subject under the
Securities Act, Exchange Act, state securities or Blue Sky laws or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement under which
such Registrable Shares were registered under the Securities Act, any
preliminary prospectus or final prospectus contained in the Registration
Statement, or any amendment or supplement to the Registration Statement, or
arise out of or are based upon any omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, if the statement or omission was made in reliance upon
and in conformity with information relating to such seller furnished in writing
to the Company by or on behalf of such seller specifically for use in connection
with the preparation of such Registration Statement, prospectus, amendment or
supplement; provided, however, that the obligations of
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<PAGE>
each Stockholder hereunder shall be limited to an amount equal to the net
proceeds received by such Stockholder from Registrable Shares sold in connection
with such registration.
(c) Each party entitled to indemnification under this Section 1.6 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided, that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be unreasonably
withheld); and, provided, further, that the failure of any Indemnified Party to
give notice as provided herein shall not relieve the Indemnifying Party of its
obligations under this Section 1.6. The Indemnified Party may participate in
such defense at such party's expense; provided, however, that the Indemnifying
Party shall pay such expense if representation of such Indemnified Party by the
counsel retained by the Indemnifying Party would be inappropriate due to actual
or potential differing interests between the Indemnified Party and any other
party represented by such counsel in such proceeding. No Indemnifying Party, in
the defense of any such claim or litigation shall, except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect of such claim or litigation, and no Indemnified Party shall
consent to entry of any judgment or settle such claim or litigation without the
prior written consent of the Indemnifying Party.
(d) In order to provide for just and equitable contribution to joint
liability under the Securities Act in any case in which either (i) any holder of
Registrable Shares exercising rights under this Agreement, or any controlling
person of any such holder, makes a claim for indemnification pursuant to this
Section 1.6 but it is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to appeal
or the denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 1.6 provides
for indemnification in such case, or (ii) contribution under the Securities Act
may be required on the part of any such selling Stockholder or any such
controlling person in circumstances for which indemnification is provided under
this Section 1.6; then, in each such case, the Company and such Stockholder will
contribute to the aggregate losses, claims, damages or liabilities to which they
may be subject (after contribution from others) in such proportions so that such
holder is responsible for the portion represented by the percentage that the
public offering price of its Registrable Shares offered by the Registration
Statement bears to the public offering price of all securities offered by such
Registration Statement, and the Company is responsible for the remaining
portion; provided, however, that, in any such case, (A) no such holder will be
required to contribute any amount in excess of the net proceeds to it of all
Registrable Shares sold by it pursuant to such Registration Statement, and (B)
no person or entity guilty of fraudulent misrepresentation, within the meaning
of Section 11(f) of the Securities Act, shall be entitled to contribution from
any person or entity who is not guilty of such fraudulent misrepresentation.
1.7 Indemnification with Respect to Underwritten Offering. In the event that
Registrable Shares are sold pursuant to a Registration Statement in an
underwritten offering
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<PAGE>
pursuant to Section 1.2, the Company agrees to enter into an underwriting
agreement containing customary representations and warranties with respect to
the business and operations of an issuer of the securities being registered and
customary covenants and agreements to be performed by such issuer, including
without limitation customary provisions with respect to indemnification by the
Company of the underwriters of such offering.
1.8 Information by Holder. Each Stockholder including Registrable Shares in
any registration shall furnish to the Company such information regarding such
Stockholder and the distribution proposed by such Stockholder as the Company may
reasonably request in writing and as shall be required in connection with any
registration, qualification or compliance referred to in this Agreement.
1.9 "Stand-Off" Agreement. Each Stockholder, if requested by the Company and
the managing underwriter of an offering by the Company of Common Stock or other
securities of the Company pursuant to a Registration Statement, shall agree not
to sell publicly or otherwise transfer or dispose of any Registrable Shares or
other securities of the Company held by such Stockholder for a period of 180
days following the effective date of such Registration Statement; provided,
that:
(a) such agreement shall only apply to the Registration Statement
covering the Company's initial public offering of Common Stock in an
underwritten offering; and
(b) all officers and directors of the Company shall enter into similar
agreements.
1.10 Rule 144 Requirements. After the earliest of (i) the closing of the sale
of securities of the Company pursuant to a Registration Statement, (ii) the
registration by the Company of a class of securities under Section 12 of the
Exchange Act, or (iii) the issuance by the Company of an offering circular
pursuant to Regulation A under the Securities Act, the Company agrees to:
(a) comply with the requirements of Rule 144(c) under the Securities Act
with respect to current public information about the Company;
(b) use its best efforts to file with the Commission in a timely manner
all reports and other documents required of the Company under the Securities Act
and the Exchange Act (at any time after it has become subject to such reporting
requirements); and
(c) furnish to any holder of Registrable Shares upon request (i) a
written statement by the Company as to its compliance with the requirements of
said Rule 144(c), and the reporting requirements of the Securities Act and the
Exchange Act (at any time after it has become subject to such reporting
requirements), (ii) a copy of the most recent annual or quarterly report of the
Company, and (iii) such other reports and documents of the Company as such
holder may reasonably request to avail itself of any similar rule or regulation
of the Commission allowing it to sell any such securities without registration.
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1.11 Termination. All of the Company's obligations to register Registrable
Shares under this Agreement shall terminate on the date seven years after the
closing of the Company's initial public offering of Common Stock pursuant to a
Registration Statement.
2. Transfers of Rights. This Agreement, and the rights and obligations of each
Purchaser hereunder, may be assigned by such Purchaser to any person or entity
to which at least 100,000 Shares are transferred by such Purchaser, 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 to be bound hereby and provided further that the transferee
is not a competitor of the Company.
3. General.
(a) Notices. All notices, requests, consents, and other communications
under this Agreement shall be in writing and shall be delivered by hand or
mailed by first class certified or registered mail, return receipt requested,
postage prepaid:
If to the Company, at 45 Moulton Street, Cambridge, Massachusetts 02138,
Attention: President, or at such other address or addresses as may have been
furnished in writing by the Company to the Purchaser, with a copy to Mark G.
Borden, Esq., Hale and Dorr, 60 State Street, Boston, Massachusetts 02109; or
If to a Purchaser, at his or its address set forth in the Series D Purchase
Agreement, or at such other address or addresses as may have been furnished to
the Company in writing by such Purchaser.
(b) 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.
(c) Amendments and Waivers. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively), with the
written consent of the Company and the holders of at least 66 2/3% of the then
outstanding Registrable Shares (including shares issued upon conversion
thereof). 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.
(d) Counterparts. This Agreement may 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.
(e) Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(f) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts.
8
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IN WITNESS WHEREOF, the parties hereto have set their hands as of the date
first written above:
COMPANY:
ONTOGENY, INC.
/s/
___________________________________
Dated: ____________________________
PURCHASER:
CORANGE INTERNATIONAL LIMITED
By: /s/
_______________________________
By: _______________________________
Dated: ____________________________
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Exhibit 10.50
-------------
SCIENTIFIC ADVISORY AND COSULTING AGREEMENT
-------------------------------------------
THIS AGREEMENT, effective as Of August 1, 1994, is by and between Douglas
A. Melton (the "Scientific Advisor"), and Ontogeny, Inc., a Delaware corporation
(the "Company").
The parties agree as follows:
1. Term. The term of the Scientific Advisor's consulting arrangement
hereunder (the "Term") shall commence on the date hereof, and, unless sooner
terminated as provided in this Agreement, shall continue through July 31, 1999,
provided that the Term may be extended by mutual written agreement of the
parties subject to the prior written approval of the Institute. The Term shall
automatically terminate upon the death or permanent disability of the Scientific
Advisor.
2. Service as Scientific Advisor and Consultant.
(a) The Company shall retain Scientific Advisor as a consultant and
Chairman of its Scientific Advisory Board, and Scientific Advisor shall
serve the Company as a consultant and Chairman of its Scientific Advisory
Board, upon the terms and conditions set forth in this Agreement.
(b) During the Term, Scientific Advisor shall render to the Company
such consulting services in his fields of expertise and knowledge related
to the business of the Company and at such times and places as the Company
may from time to time reasonably request, including the strategic direction
of the Company and future strategic decisions, recruitment and direction of
key technical personnel, creation of competitive technology assets (such as
patents and technology sharing agreements), and consultation with the
Company's technical personnel, research sponsors and collaborators. In
recognition to the Institution Rules (as defined below) the Company and the
Consultant agree that the provision of services hereunder may involve the
exchange of ideas but the consultant shall not direct or conduct research
for or on behalf of the Company. The parties agree and acknowledge that
such consulting services shall primarily be rendered at the Company's
offices in Massachusetts.
(c) The Scientific Advisor shall devote, at the Company's request, up
to 20 full days or full-day equivalents to the performance of services hereunder
in each 12 month period (August 1 to July 31) during the Term. A "full-day
equivalent" shall mean eight (8) business hours. The Scientific Advisor shall
not, during the Term, devote any available consulting time to any other
commercial organization, provided, however, that the Scientific Advisor may
devote up to four days per annum to consulting for Gilead Sciences, Inc.
3. Certain Other Obligations.
(a) The Company recognizes that the Scientific Advisor's primary
responsibility is to Harvard University and the Howard Hughes Medical
Institute (the "Institute") (collectively, the "Institutions") and that the
Scientific Advisor has entered into certain agreements with, and is subject
to certain policies of, the Institutions relating to the ownership of
intellectual property, conflicts of interest and similar matters (the
"Institution Rules"), copies of
<PAGE>
which has been provided to the Company. If any provisions of this Agreement
are in conflict with the Institution Rules, the Institution Rules will
govern and control to the extent of such conflict. The Scientific Advisor
shall not disclose to the Company any information that (i) the Scientific
Advisor is obligated to keep secret pursuant to a confidentiality agreement
with the Institutions or any other third party or (ii) constitutes
technology, inventions or other intellectual property of the Institutions
or any other third party.
(b) The consulting work performed hereunder will not be conducted on
time that is required to be devoted to the Institutions. The Scientific
Advisor shall not use the funding, resources and/or facilities of the
Institutions or any third party to perform consulting services hereunder
and shall not perform such consulting services in any manner that would
give the Institutions or any third party intellectual property rights or
any other rights to the product of such services.
(c) The Scientific Advisor has disclosed, and will disclosure during
the term of this Agreement, to the Chief Executive Officer of the Company
any potential conflicts between this Agreement and other contracts binding
the Scientific Advisor.
4. No Competition. Scientific Advisor agrees that, during the Term and
for one (1) year after the end of the Term, Scientific Advisor shall not,
directly or indirectly,
(a) as an individual proprietor, partner, stockholder, officer,
employee, consultant, director, investor, lender or in any other capacity
(other than as the holder of not more than one percent of the outstanding
stock of a publicly held company), develop or sell (or assist any other
person in developing or selling) products or services competitive with
those developed or sold or planned to be developed or sold, by the Company
during the Term; or
(b) directly or indirectly, solicit or induce any employee of the
Company to leave the employ of the Company.
However, the foregoing shall not affect Scientific Advisor's obligations
to, or research on behalf of, the Institute or the University, including,
without limitation, obligations or research of Scientific Advisor in connection
with a transfer by the Institute or the University of materials or intellectual
property developed in whole or in part by Scientific Advisor, or in connection
with research collaborations.
5. Compensation.
(a) In consideration for the services rendered by Scientific Advisor
to the Company, the Company shall pay Scientific Advisor, during the Term,
compensation as follows:
(1) a consulting fee of $30,000 per annum, payable in equal
quarterly installments within 30 days after the end of each three-
month period during the period from August 1 to July 31 of each year
(a "Contract Year").
(2) a fee of $1,000 for each full day or full-day equivalent of
consulting services performed hereunder.
<PAGE>
(b) In addition, the Scientific Advisor and the Company shall execute
and deliver a Stock Restriction Agreement, upon terms mutually agreed upon,
relating to the issuance of shares of Common Stock of the Company to the
Scientific Advisor. It is agreed that at no time will Scientific Advisor's
ownership interest in the Company (treating all options as exercised and
all shares as vested) exceed 5% of the Company's outstanding equity.
(c) Scientific Advisor shall not be entitled to any compensation for
his services or time devoted to the Company in his capacity as a member of
the Board of Directors of the Company.
6. Expenses. The Company shall reimburse Scientific Advisor for his
reasonable out-of-pocket expenses incurred in the performance of his duties
hereunder upon compliance with reasonable administrative policies established
from time to time by the Company.
7. Confidentiality. The Scientific Advisor recognizes and acknowledges
that all technology, know-how, inventions and business plans communicated to,
learned of, developed or otherwise acquired by the Scientific Advisor in the
course of his services hereunder and not in the course of his activities as an
institute employee or University faculty member ("Confidential Information") are
valuable assets of the Company to be kept confidential and not disclose or use,
except in connection with the fulfillment of his consulting services for the
company under this Agreement, any Confidential Information of the Company.
"Confidential Information" shall not include, however, information placed in the
public domain through no fault of the Scientific Advisor; information disclosed
to the Scientific Advisor by a third party entitled to disclose it; information
already known to the Scientific Advisor prior to receipt thereof from the
company; or information that is independently developed by the Scientific
Advisor without reference to information provided by the Company and not in the
course of the performance of his services hereunder.
8. Representations of the Scientific Advisor. The Scientific Advisor
hereby represents that his current principal employer has received full
disclosure as to the Scientific Advisor's acting as a scientific advisor to the
Company and of the duties required of the Scientific Advisor under this
Agreement, and that such employer, if necessary, has consented to the Scientific
Advisor's execution of the Agreement and position as a scientific advisor for
the Company. The Scientific Advisor further represents that there are no binding
agreements to which he is a party or by which he is bound forbidding or
restricting his activities hereunder, except as disclosed to the Company. In
addition, subject to Section 21 below, the Scientific Advisor consents to being
named as a Scientific Advisor in various reports, brochures or other documents
produced by or on behalf of the Company, including any and all documents filed
with the Securities and Exchange Commission.
9. Assignment of Inventions.
(a) Subject to Section 9(b) below, the Scientific Advisor hereby
assigns to the Company all his right, title and interest in and to all
inventions, discoveries, data, technologies and improvements, whether or
not patentable or copyrightable, relating to the business or planned
business of the Company that are made, conceived or reduced to practice,
alone or jointly with others, in the course of the performance of his
services hereunder and not in the
<PAGE>
course of his activities as an Institute employee or University faculty
member (collectively, "Inventions"), and all patents, copyrights and other
intellectual property rights relating thereto. The Scientific Advisor
agrees to cooperate fully in the prosecution of any patent application
relating to any such Invention, at the expense of the company, which
cooperation shall include executing any necessary documents in connection
therewith.
(b) The Company shall have no rights by reason of this Agreement in
any invention, discovery, data, technology or improvement, whether or not
patentable or copyrightable, which is developed as a result of a program of
research financed, in whole or in part, by funds provided by or under the
control of the Institute or the University.
(c) The Scientific Advisor shall promptly disclose to the Company all
Inventions and will maintain adequate and current written records (in the
form of notes, records, laboratory or research notebooks and as may be
reasonably specified in advance by the Company) to document the conception
and/or first actual reduction to practice of any Invention Such written
records shall be available to and remain the sole property of the Company
at all times.
10. Termination.
(a) This Agreement shall terminate upon (i) the death or permanent
disability of the Scientific Advisor, (ii) the bankruptcy or cessation of
operations of the Company, (iii) or upon termination for "Cause" (as
defined below), or (iv) 30 days written notice given by either party to the
other party. Upon such termination, the Company's obligations to the
Scientific Advisor hereunder shall terminate, except for the payment of any
consulting charges accrued and unpaid prior to the date of termination.
(b) The term "Cause,, means any of the following: (i) the Scientific
Advisor's intentional or willful failure to perform his obligations under
this Agreement in any material respect or the Scientific Advisor's material
breach of any provision of this Agreement if such failure or breach shall
continue for 30 days after notice in writing from the Chief Executive
Officer of the Company specifying such failure or breach; (ii) the
Scientific Advisor's conviction of a felony; or (iii) the Scientific
Advisor's conviction of any lesser crime or offense committed in connection
with the performance of his duties hereunder and involving moral turpitude.
If the Company notifies the Scientific Advisor in writing that he is to be
terminated for Cause, the Scientific Advisor shall have the right,
exercisable within 10 days of receipt of such notice to submit the matter
to the Board of Directors which will, within 20 day's after the Scientific
Advisor's written request, meet and make a good faith determination whether
Cause for termination exists, provided that in making such determination
the Board of Directors shall give the Scientific Advisor an opportunity to
appear at the Board meeting and be heard on the matter.
11. Survival of Provisions. The provisions of Sections 4.7, 9, 12 and 20
hereof shall survive the termination or expiration of this Agreement in
accordance with their terms.
12. Status. Scientific Advisor's relationship to the company shall be that
of an independent contractor and neither this Agreement nor the services to be
rendered hereunder shall for any purpose whatsoever or in any way or manner
create any employer-employee
<PAGE>
relationship between the parties. Scientific Advisor shall not be deemed an
agent for any purpose and shall have no authority to bind the Company in any
way, except as may be specifically authorized by the Company.
13. Assignability and Binding Effect. This Agreement shall inure to the
benefit of and shall be binding upon the Company and the Scientific Advisor and
their respective successors and permitted assigns, including any corporation or
entity with which, or into which, the Company may be merged or which may succeed
to its business or assets. The obligations of Scientific Advisor hereunder are
personal, and he may not assign or transfer any of his obligations or rights
hereunder.
14. Headings. The paragraph headings contained herein are included solely
for convenience of reference and shall not control or affect the meaning or
interpretation of any of the provisions of this Agreement.
15. Notices. Any notices or other communication hereunder by either party
shall be in writing and shall be deemed to have been duly given if delivered
personally to the other party or sent by registered or certified mail, return
receipt requested, to the other party at the following addresses:
If to the Company:
Ontogeny, Inc.
One Kendall Square
Building 600
Cambridge, MA 02139
If to the Scientific Advisor:
Douglas A. Melton
22 Slocum Road
Lexington, MA 02173
or at such other address as such other party may designate in conformity with
the foregoing.
16. Entire Agreement. This Agreement constitutes the entire agreement
between the parties and supersedes all prior agreements and understandings,
whether written or oral, relating to the subject matter of this Agreement.
17. Delays or Omissions. No delay or omission by the Company in exercising
any right under this Agreement shall operate as a waiver of that or any other
right. A waiver or consent given by the Company on any one occasion shall be
effective only in that instance and shall not be construed as a bar or waiver of
any right on any other occasion.
18. Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the Commonwealth of Massachusetts
applicable to contracts made and to be performed therein, without giving effect
to the principles thereof relating to the conflict of laws.
<PAGE>
19. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
20. Indemnity. The Company agrees, at its sole expense, to defend the
Institute and Scientific Advisor, and to indemnify and hold the Institute and
Scientific Advisor harmless from, any claims or suits by a third party against
the Institute or Scientific Advisor or any liabilities or judgments based
thereon, either arising from Scientific Advisor's performance of services for
the Company under this Agreement or arising from any Company products which
result from Scientific Advisor's performance of services under this Agreement,
provided that the Company shall have the right to control the defense and
settlement of such claims or suits.
21. Use of Names. The Company will not use Scientific Advisor's or the
Institute's or the University's name in any commercial advertisement or similar
material that is used to promote or sell products, unless the company obtains in
advance the written consent of the named party to such use, in addition, if the
Scientific Advisor's name is to be used for such purposes, the consent of the
Institute must also be obtained.
22. Consent. The Company and Scientific Advisor acknowledge that any
amendment of this Agreement (including, without limitation, any extension of
this Agreement or any change in the consideration to be provided to Scientific
Advisor with respect to services to be provided hereunder) or any departure from
the terms or conditions hereof with respect to Scientific Advisor's consulting
services for the Company is subject to the institute's prior written approval.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
ONTOGENY, INC.
By: /s/ William Helman
--------------------
President
SCIENTIFIC ADVISOR
/s/ Douglas A. Melton
---------------------
Douglas A. Melton
<PAGE>
ONTOGENY, INC.
- -------------------------------------------------------------------------------
November 12,1997
Dr. Douglas A. Melton
Dept. of Molecular & Cellular Biology
Harvard University
7 Divinity Avenue
Cambridge, MA 02138
Dear Doug,
Ontogeny would like to simplify your compensation (eliminating the need to bill
for the additional $1,000 per day of consulting services), by amending Section 5
as follows:
Subparagraphs (a) and (b)
---------------------------
Delete both subparagraphs, and insert "(a) pay to the Consultant an annual
fee of $50,000 during the term hereof, payable in equal quarterly
installments of $12,500 within thirty (30) days after the end of each
three-month period from August 1 to July 31 of each year, and (b)".
Subparagraph (c) becomes subparagraph (b).
----------------
All other terms of your Agreement with Ontogeny shall remain in full force and
effect.
If you are in agreement with the above, please sign the enclosed copy of this
letter and send us one copy for our files.
Very truly yours,
George A. Eldridge
Vice President, Finance Acknowledged and Agreed,
/s/ Douglas A. Melton
-----------------------------------
Douglas A. Melton
Date: /s/ 20 Nov. 97
-----------------------------
<PAGE>
ONTOGENY, INC.
- -------------------------------------------------------------------------------
January 11, 2000
Douglas Melton, Ph.D.
Dept. of Molecular and Cellular Biology
Harvard University
Howard Hughes Medical Institute
7 Divinity Avenue
Cambridge, MA 02138
Dear Doug:
As part of a legal audit, we recently found that your Scientific Advisory and
Consulting Agreement does not contain an automatic renewal like our other SAB
agreements, but instead contains a five year term ending July 31,1999, with an
option to extend by mutual written agreement. We have been operating under the
premise that you are still a current member of our Scientific Advisory Board and
would propose to amend your Agreement effective as of August 1, 1994 to add an
automatic renewal clause as follows:
In Section 1, lines 4 and 5, please delete, "provided that the Term may be
extended by mutual written agreement of the parties subject to the prior written
approval of the Institute". Please add the following at the end of Section 1:
"The Term will be automatically renewed for successive one-year periods, unless
either party gives written notice of no-renewal to the other at least 30 days
prior to the expiration of the initial, or then current renewal term."
All other terms of your Agreement with Ontogeny shall remain in full force and
effect.
If you are in agreement with the above, please sign the enclosed copy of this
letter and send us one copy for our files. Please call me if you have any
questions or concerns. We apologize for the oversight and for any
inconvenience.
Very truly yours,
Raul Rodriguez
Senior Vice President, Business Development and Operations
Acknowledged and Agreed,
/s/ Douglas Melton
- ---------------------------------------
Douglas Melton, Ph.D.
Date: /s/ 22 Jan. 00
--------------------------------
<PAGE>
Exhibit 10.51
STOCK RESTRICTION AGREEMENT
AGREEMENT made as of the 10th day of May, 1996, between Ontogeny, Inc., a
Delaware corporation, (the "Company") and George Eldridge (the "Stockholder").
WHEREAS, the Stockholder is an employee of the Company who commenced his or
her employment with the Company on April 22, 1996 (the "Employment Date"),
NOW THEREFORE, for valuable consideration, receipt of which is
acknowledged, the parties hereto agree as follows:
1. Purchase of Shares. The Stockholder hereby subscribes for and, upon
acceptance hereof, shall purchase, subject to the terms and conditions set forth
in this Agreement, 60,000 shares (the "Shares") of common stock, $.01 par value,
of the Company ("Common Stock"), at a purchase price of $.15 per share. The
aggregate purchase price for the Shares shall be paid by the Stockholder by
check payable to the order of the Company or such other method as may be
acceptable to the Company. Upon receipt of payment by the Company for the
Shares, the Company shall issue to the Stockholder one or more certificates in
the name of the Stockholder for that number of Shares purchased by the
Stockholder. The Stockholder agrees that the Shares shall be subject to the
Purchase Option set forth in Section 2 of this Agreement and the restrictions on
transfer set forth in Section 5 of this Agreement.
2. Purchase Option.
(a) In the event that the Stockholder ceases to be employed by the
Company, for any reason or for no reason, with or without cause, prior to the
fifth anniversary of the Employment Date, the Company shall have the right and
option (the "Purchase Option") to purchase from the Stockholder, for a sum of
$.15 per share (the "Option Price"), all Shares that are not then "Vested
Shares."
(b) Shares shall become "Vested Shares" at the rate of 20% of the Shares
on the first anniversary of the Employment Date, and 5% of the Shares at the end
of each three-month period beginning on the first anniversary of the Employment
Date or any multiple of three months thereafter during which the Stockholder is
employed by the Company (a "Contract Quarter"). All Shares that are not Vested
Shares at any particular time shall be referred to as "Unvested Shares."
3. Exercise of Purchase Option and Closing.
(a) The Company may exercise the Purchase option by delivering or
mailing to the Stockholder (or the Stockholder's estate), in accordance with
Section 15, written notice of exercise within 60 days after the termination of
the Stockholder's employment with the Company. Such notice shall specify the
number of Unvested Shares to be purchased. If and to the extent the Purchase
option is not so exercised within such 60-day period, the Purchase Option shall
automatically expire and terminate effective upon the expiration of such 60-day
period.
(b) Within 10 days after the Stockholder's receipt of the Company's
notice of the exercise of the Purchase Option pursuant to Section 3(a) above,
the Stockholder (or the
<PAGE>
Stockholder's estate) shall tender to the Company at its principal offices the
certificate or certificates representing the Unvested Shares which the Company
has elected to purchase, duly endorsed in blank by the Stockholder or with duly
endorsed stock powers attached thereto, all in form suitable for the transfer of
such Shares to the Company. Upon its receipt of such Shares, the Company shall
deliver or mail to the Stockholder (or the Stockholder's estate) a check in the
amount of the aggregate Option Price therefor.
(c) After the time at which any Shares are required to be delivered to
the Company for transfer to the Company pursuant to Section 3(b) above, the
Company shall not pay any dividend to the Stockholder on account of such Shares
or permit the Stockholder to exercise any of the privileges or rights of a
stockholder with respect to such Shares, but shall, in so far as permitted by
law, treat the Company as the owner of such Shares.
(d) The Company shall not purchase any fraction of a Share upon exercise
of the Purchase Option, and any fraction of a Share resulting from a computation
made pursuant to Section 2 of this Agreement shall be rounded to the nearest
whole Share (with any one-half Share being rounded upward).
4. Escrow. The Stockholder shall, upon the execution of this Agreement,
execute Joint Escrow Instructions in the form provided by the Company. The
Joint Escrow Instructions shall be delivered to the Secretary of the Company, as
Escrow Agent thereunder. The Stockholder shall deliver to such Escrow Agent a
stock assignment duly endorsed in blank and hereby instructs the Company to
deliver to such Escrow Agent, on behalf of the Stockholder, the certificate(s)
evidencing the Shares issued hereunder. Such materials shall be held by such
Escrow Agent pursuant to the terms of the Joint Escrow Instructions.
5. Restrictions on Transfer.
(a) Except as otherwise provided below, the Stockholder shall not sell,
assign, transfer, pledge, hypothecate or otherwise dispose of, by operation of
law or otherwise (collectively "transfer"), any of the Unvested Shares, or any
interest therein.
(b) Notwithstanding the foregoing, the Stockholder may transfer Unvested
Shares to or for the benefit of any parent, spouse or child, or to a trust or
custodial account for his, her or their benefit, provided that (i) such transfer
shall comply with all applicable state and federal securities laws, (ii) such
Unvested Shares shall remain subject to this Agreement, including the Purchase
Option, and (iii) such permitted transferee shall, as a condition to such
transfer, deliver to the Company a written instrument confirming that such
transferee shall be bound by all of the terms and conditions of this Agreement.
(c) In connection with the Company's initial public offering of Common
Stock, the Stockholder shall, if requested by the managing underwriter of such
offering, agree not to sell any Shares during the period of 180 days following
the effective date of such offering.
6. Effect of Prohibited Transfer. The Company shall not be required (a) to
transfer on its books any of the Shares which shall have been sold or
transferred in violation of any of the provisions set forth in this Agreement,
or (b) to treat as owner of such Shares or to pay dividends to any transferee to
whom any such Shares shall have been so sold or transferred.
2
<PAGE>
7. Restrictive Legends. All certificates representing Shares shall have
affixed thereto legends in substantially the following form, in addition to any
other legends that may be required under federal or state securities laws:
"The shares of stock represented by this certificate are subject to
restrictions on transfer and an option to purchase set forth in a
certain Stock Restriction Agreement between the corporation and the
registered owner of this certificate (or his or her predecessor in
interest), and such Agreement is available for inspection without
charge at the offices of the corporation.
"The shares of stock represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and may not
be sold, transferred or otherwise disposed of in the absence of an
effective registration statement under such Act or an opinion of
counsel satisfactory to the corporation to the effect that such
registration is not required."
8. Investment Representations. The Stockholder represents, warrants and
covenants as follows:
(a) The Stockholder is purchasing the Shares for the Stockholder's own
account for investment only, and not with a view to, or for sale in connection
with, any distribution of the Shares in violation of the Securities Act, or any
rule or regulation under the Securities Act.
(b) The Stockholder has had such opportunity as the Stockholder has
deemed adequate to obtain from representatives of the Company such information
as is necessary to permit the Stockholder to evaluate the merits and risks of
the Stockholder's investment in the Company.
(c) The Stockholder has sufficient experience in business, financial and
investment matters to be able to evaluate the risks involved in the purchase of
the Shares and to make an informed investment decision with respect to such
purchase.
(d) The Stockholder can afford a complete loss of the value of the
Shares and is able to bear the economic risk of holding such Shares for an
indefinite period.
(e) The Stockholder understands that (i) the Shares have not been
registered under the Securities Act and are "restricted securities" within the
meaning of Rule 144 under the Securities Act, (ii) the Shares cannot be sold,
transferred or otherwise disposed of unless they are subsequently registered
under the Securities Act or an exemption from registration is then available;
(iii) in any event, the exemption from registration under Rule 144 will not be
available for at least two years and even then will not be available unless a
public market then exists for the Common Stock, adequate information concerning
the Company is then available to the public, and other terms and conditions of
Rule 144 are complied with; and (iv) there is now no registration statement on
file with the Securities and Exchange Commission with respect to any stock
3
<PAGE>
of the Company and the Company has no obligation or current intention to
register the Shares under the Securities Act.
9. Adjustments for Stock Splits, Stock Dividends, etc.
(a) If from time to time during the term of the Purchase Option there is
any stock split-up, stock dividend, stock distribution or other reclassification
of the Common Stock of the Company, any and all new, substituted or additional
securities to which the Stockholder is entitled by reason of the Stockholder's
ownership of the Shares shall be immediately subject to the Purchase Option, the
restrictions on transfer and other provisions of this Agreement in the same
manner and to the same extent as the Shares, and the Option Price shall be
appropriately adjusted.
(b) If the Shares are converted into or exchanged for, or stockholders
of the Company receive by reason of any distribution in total or partial
liquidation, securities of another corporation (an "Acquiring Corporation"), or
other property (including cash), pursuant to any merger of the Company or
acquisition of its assets by an Acquiring Corporation, then the rights of the
Company under this Agreement shall inure to the benefit of the Acquiring
Corporation and this Agreement shall apply to the securities or other property
received from the Acquiring Corporation upon such conversion, exchange or
distribution in the same manner and to the same extent as the Shares.
10. Withholding Taxes.
(a) The Stockholder acknowledges and agrees that the Company has the
right to deduct from payments of any kind otherwise due to the Stockholder any
federal, state or local taxes of any kind required by law to be withheld with
respect to the purchase of the Shares by the Stockholder.
(b) If the Stockholder elects, in accordance with Section 83(b) of the
Internal Revenue Code of 1986, as amended, to recognize ordinary income in the
year of acquisition of the Shares, the Company will require at the time of such
election an additional payment for withholding tax purposes based on the
difference, if any, between the purchase price for such Shares and the fair
market value of such Shares as of the day immediately preceding the date of the
purchase of such Shares by the Stockholder.
11. Severability. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, and each other provision of this Agreement shall be severable
and enforceable to the extent permitted by law.
12. Waiver. Any provision contained in this Agreement may be waived, either
generally or in any particular instance, by the Board of Directors of the
Company on behalf of the Company.
13. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the Company and the Stockholder and their respective heirs,
executors, administrators, legal
4
<PAGE>
representatives, successors and assigns, subject to the restrictions on transfer
set forth in Section 5 of this Agreement.
14. No Rights Implied. Nothing contained in this Agreement shall be construed
as giving the Stockholder any right to be employed or retained, in any position,
by the Company.
15. Notice. All notices required or permitted hereunder shall be in writing
and deemed effectively given upon personal delivery or upon deposit in the
United States Post Office, by registered or certified mail, postage prepaid,
addressed to the other party hereto at the address shown beneath the
Stockholder's or the Company's respective signature to this Agreement, or at
such other address or addresses as either party shall designate to the other in
accordance with this Section 15.
16. Pronouns. Whenever the context may require, any pronouns used in this
Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns and pronouns shall include the plural, and vice
versa.
17. Entire Agreement. This Agreement constitutes the entire agreement between
the parties, and supersedes all prior agreements and understandings, relating to
the subject matter of this Agreement.
18. Amendment. This Agreement may be amended or modified only by a written
instrument executed by both the Company and the Stockholder.
19. Governing Law. This Agreement shall be construed, interpreted and enforced
in accordance with the laws of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
ONTOGENY, INC.
By: /s/ William W. Helman
--------------------------------
William W. Helman, President
Address: One Kendall Square
Building 600
Cambridge, MA 02139
STOCKHOLDER:
/s/ George Eldridge
-----------------------------------
George Eldridge
Address: 51 Kingsbury Street
Wellesley, MA 02181
5
<PAGE>
Exhibit 10.52
STOCK RESTRICTION AGREEMENT
AGREEMENT made as of the 25th day of July, 1996, between Ontogeny, Inc., a
Delaware corporation, (the "Company") and Doros Platika (the "Stockholder").
WHEREAS, the Stockholder is a Director and President and Chief Executive
Officer of the Company, and commenced providing services to the Company as a
Director and an employee on June 26, 1996 (the "Commencement Date"), and
WHEREAS, the Company desires, pursuant to its 1994 Restricted Stock Plan,
to grant to the Stockholder certain shares of its common stock,
NOW THEREFORE, for valuable consideration, receipt of which is
acknowledged, the parties hereto agree as follows:
1. Purchase of Shares. The Stockholder hereby subscribes for and, upon
acceptance hereof, shall purchase, subject to the terms and conditions set forth
in this Agreement, 133,335 shares (the "Shares") of common stock, $.01 par
value, of the Company ("Common Stock"), at a purchase price of $0.15 per share.
The aggregate purchase price for the Shares shall be paid by the Stockholder by
check payable to the order of the Company or such other method as may be
acceptable to the Company. Upon receipt of payment by the Company for the
Shares, the Company shall issue to the Stockholder one or more certificates in
the name of the Stockholder for that number of Shares purchased by the
Stockholder. The Stockholder agrees that the Shares shall be subject to the
Purchase Option set forth in Section 2 of this Agreement and the restrictions on
transfer set forth in Section 5 of this Agreement.
2. Purchase Option.
(a) In the event that the Stockholder ceases to be a Director or
employee of the Company, for any reason, prior to the fifth anniversary of the
Commencement Date, the Company shall have the right and option (the "Purchase
Option") to purchase from the Stockholder, for a sum of $0.15 per share (the
"Option Price"), all Shares that are not then "Vested Shares."
(b) Shares shall become "Vested Shares" at the rate of 6,667 Shares
at the end of each three-month period following the Commencement Date during the
term of the Stockholder's service as a Director and employee of the Company. All
Shares that are not Vested Shares at any particular time shall be referred to as
"Unvested Shares."
3. Exercise of Purchase Option and Closing.
(a) The Company may exercise the Purchase Option by delivering or
mailing to the Stockholder (or the Stockholder's estate), in accordance with
Section 14, written notice of exercise within 60 days after the termination of
the Stockholder's status as a Director or employee of the Company. Such notice
shall specify the number of Unvested Shares to be purchased. If and to the
extent the Purchase Option is not so exercised within such 60-day period, the
Purchase Option shall automatically expire and terminate effective upon the
expiration of such 60-day period.
<PAGE>
(b) Within 10 days after the Stockholder's receipt of the Company's
notice of the exercise of the Purchase Option pursuant to Section 3(a) above,
the Stockholder (or the Stockholder's estate) shall tender to the Company at its
principal offices the certificate or certificates representing the Unvested
Shares which the Company has elected to purchase, duly endorsed in blank by the
Stockholder or with duly endorsed stock powers attached thereto, all in form
suitable for the transfer of such Shares to the Company. Upon its receipt of
such Shares, the Company shall deliver or mail to the Stockholder (or the
Stockholder's estate) a check in the amount of the aggregate Option Price
therefor.
(c) After the time at which any Shares are required to be delivered
to the Company for transfer to the Company pursuant to Section 3(b) above, the
Company shall not pay any dividend to the Stockholder on account of such Shares
or permit the Stockholder to exercise any of the privileges or rights of a
stockholder with respect to such Shares, but shall, in so far as permitted by
law, treat the Company as the owner of such Shares.
(d) The Company shall not purchase any fraction of a Share upon
exercise of the Purchase Option, and any fraction of a Share resulting from a
computation made pursuant to Section 2 of this Agreement shall be rounded to the
nearest whole Share (with any one-half Share being rounded upward).
4. Escrow. The Stockholder shall, upon the execution of this Agreement,
execute Joint Escrow Instructions in the form provided by the Company. The Joint
Escrow Instructions shall be delivered to the Secretary of the Company, as
Escrow Agent thereunder. The Stockholder shall deliver to such Escrow Agent a
stock assignment duly endorsed in blank and hereby instructs the Company to
deliver to such Escrow Agent, on behalf of the Stockholder, the certificate(s)
evidencing the Shares issued hereunder. Such materials shall be held by such
Escrow Agent pursuant to the terms of the Joint Escrow Instructions.
5. Restrictions on Transfer.
(a) Except as otherwise provided below, the Stockholder shall not
sell, assign, transfer, pledge, hypothecate or otherwise dispose of, by
operation of law or otherwise (collectively "transfer"), any of the Unvested
Shares, or any interest therein.
(b) Notwithstanding the foregoing, the Stockholder may transfer
Unvested Shares to or for the benefit of any parent, spouse or child, or to a
trust or custodial account for his, her or their benefit, provided that (i) such
transfer shall comply with all applicable state and federal securities laws,
(ii) such Unvested Shares shall remain subject to this Agreement, including the
Purchase Option, and (iii) such permitted transferee shall, as a condition to
such transfer, deliver to the Company a written instrument confirming that such
transferee shall be bound by all of the terms and conditions of this Agreement.
(c) In connection with the Company's initial public offering of
Common Stock, the Stockholder shall, if requested by the managing underwriter of
such offering, agree not to sell any Shares during the period of 180 days
following the effective date of such offering.
6. Effect of Prohibited Transfer. The Company shall not be required (a)
to transfer on its books any of the Shares which shall have been sold or
transferred in violation of any of the
2
<PAGE>
provisions set forth in this Agreement, or (b) to treat as owner of such Shares
or to pay dividends to any transferee to whom any such Shares shall have been so
sold or transferred.
7. Restrictive Legends. All certificates representing Shares shall have
affixed thereto legends in substantially the following form, in addition to any
other legends that may be required under federal or state securities laws:
"The shares of stock represented by this certificate are subject to
restrictions on transfer and an option to purchase set forth in a
certain Stock Restriction Agreement between the corporation and the
registered owner of this certificate (or his or her predecessor in
interest), and such Agreement is available for inspection without
charge at the offices of the corporation.
"The shares of stock represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and may not
be sold, transferred or otherwise disposed of in the absence of an
effective registration statement under such Act or an opinion of
counsel satisfactory to the corporation to the effect that such
registration is not required."
8. Investment Representations. The Stockholder represents, warrants and
covenants as follows:
(a) The Stockholder is purchasing the Shares for the Stockholder's
own account for investment only, and not with a view to, or for sale in
connection with, any distribution of the Shares in violation of the Securities
Act, or any rule or regulation under the Securities Act.
(b) The Stockholder has had such opportunity as the Stockholder has
deemed adequate to obtain from representatives of the Company such information
as is necessary to permit the Stockholder to evaluate the merits and risks of
the Stockholder's investment in the Company.
(c) The Stockholder has sufficient experience in business, financial
and investment matters to be able to evaluate the risks involved in the purchase
of the Shares and to make an informed investment decision with respect to such
purchase.
(d) The Stockholder can afford a complete loss of the value of the
Shares and is able to bear the economic risk of holding such Shares for an
indefinite period.
(e) The Stockholder understands that (i) the Shares have not been
registered under the Securities Act and are "restricted securities" within the
meaning of Rule 144 under the Securities Act, (ii) the Shares cannot be sold,
transferred or otherwise disposed of unless they are subsequently registered
under the Securities Act or an exemption from registration is then available;
(iii) in any event, the exemption from registration under Rule 144 will not be
available for at least two years and even then will not be available unless a
public market then exists for the Common Stock, adequate information concerning
the Company is then available to the
3
<PAGE>
public, and other terms and conditions of Rule 144 are complied with; and (iv)
there is now no registration statement on file with the Securities and Exchange
Commission with respect to any stock of the Company and the Company has no
obligation or current intention to register the Shares under the Securities Act.
9. Adjustments for Stock Splits, Stock Dividends, etc.
(a) If from time to time during the term of the Purchase Option
there is any stock split-up, stock dividend, stock distribution or other
reclassification of the Common Stock of the Company, any and all new,
substituted or additional securities to which the Stockholder is entitled by
reason of the Stockholder's ownership of the Shares shall be immediately subject
to the Purchase Option, the restrictions on transfer and other provisions of
this Agreement in the same manner and to the same extent as the Shares, and the
Option Price shall be appropriately adjusted.
(b) If the Shares are converted into or exchanged for, or
stockholders of the Company receive by reason of any distribution in total or
partial liquidation, securities of another corporation (an "Acquiring
Corporation"), or other property (including cash), pursuant to any merger of the
Company or acquisition of its assets by an Acquiring Corporation, then the
rights of the Company under this Agreement shall inure to the benefit of the
Acquiring Corporation and this Agreement shall apply to the securities or other
property received from the Acquiring Corporation upon such conversion, exchange
or distribution in the same manner and to the same extent as the Shares.
10. Withholding Taxes.
(a) The Stockholder acknowledges and agrees that the Company has the
right to deduct from payments of any kind otherwise due to the Stockholder any
federal, state or local taxes of any kind required by law to be withheld with
respect to the purchase of the Shares by the Stockholder.
(b) If the Stockholder elects, in accordance with Section 83(b) of
the Internal Revenue Code of 1986, as amended, to recognize ordinary income in
the year of acquisition of the Shares, the Company will require at the time of
such election an additional payment for withholding tax purposes based on the
difference, if any, between the purchase price for such Shares and the fair
market value of such Shares as of the day immediately preceding the date of the
purchase of such Shares by the Stockholder.
11. Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, and each other provision of this Agreement shall be
severable and enforceable to the extent permitted by law.
12. Waiver. Any provision contained in this Agreement may be waived,
either generally or in any particular instance, by the Board of Directors of the
Company on behalf of the Company.
4
<PAGE>
13. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the Company and the Stockholder and their respective heirs,
executors, administrators, legal representatives, successors and assigns,
subject to the restrictions on transfer set forth in Section 5 of this
Agreement.
14. Notice. All notices required or permitted hereunder shall be in
writing and deemed effectively given upon personal delivery or upon deposit in
the United States Post Office, by registered or certified mail, postage prepaid,
addressed to the other party hereto at the address shown beneath the
Stockholder's or the Company's respective signature to this Agreement, or at
such other address or addresses as either party shall designate to the other in
accordance with this Section 14.
15. Pronouns. Whenever the context may require, any pronouns used in
this Agreement shall include the corresponding masculine, feminine or neuter
forms, and the singular form of nouns and pronouns shall include the plural, and
vice versa.
16. Entire Agreement. This Agreement constitutes the entire agreement
between the parties, and supersedes all prior agreements and understandings,
relating to the subject matter of this Agreement.
17. Amendment. This Agreement may be amended or modified only by a
written instrument executed by both the Company and the Stockholder.
18. Governing Law. This Agreement shall be construed, interpreted and
enforced in accordance with the laws of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
ONTOGENY, INC.
By: /s/ Thomas D. Ingolia
---------------------
Thomas D. Ingolia
Vice President
Address: 42 Moulton Street
Cambridge, MA 02139
STOCKHOLDER: Doros Platika
/s/ Doros Platika
-----------------------------
Signature
Address:
5
<PAGE>
Exhibit 10.58
-------------
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE
SOLD OR OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL (WHICH MAY BE
COUNSEL FOR THE COMPANY) REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT.
No.
STOCK SUBSCRIPTION WARRANT
To Purchase Common Stock of
ONTOGENY, INC. (the "Company")
DATE OF INITIAL ISSUANCE: November 21, 1997
THIS CERTIFIES THAT for value received, TRANSAMERICA BUSINESS CREDIT
CORPORATION or its registered assigns (hereinafter called the "Holder") is
entitled to purchase from the Company, at any time during the Term of this
Warrant, Seven Thousand Six Hundred Fifty (7,650) shares of common stock, $.01
par value, of the Company (the "Common Stock"), at the Warrant Price, payable as
provided herein. The exercise of this Warrant shall be subject to the
provisions, limitations and restrictions herein contained, and may be exercised
in whole or in part.
SECTION 1. DEFINITIONS.
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For all purposes of this Warrant, the following terms shall have the
meanings indicated:
COMMON STOCK - shall mean and include the Company's authorized Common
------------
Stock, $.01 par value, as constituted at the date hereof.
EXCHANGE ACT - shall mean the Securities Exchange Act of 1934, as amended
------------
from time to time.
SECURITIES ACT - the Securities Act of 1933, as amended.
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TERM OF THIS WARRANT - shall mean the period beginning on the date of
--------------------
initial issuance hereof and ending on November 21, 2002, subject to the
provisions of Section 2.3 below.
WARRANT PRICE - $2.50 per share, subject to adjustment in accordance with
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Section 5 hereof.
WARRANTS - this Warrant and any other Warrant or Warrants issued in
--------
connection with a Commitment Letter dated September 16, 1997 executed by the
Company and Transamerica Business Credit Corporation (the "Commitment Letter")
to the original holder of this Warrant, or any transferees from such original
holder or this Holder.
<PAGE>
WARRANT SHARES - shares of Common Stock purchased or purchasable by the
--------------
Holder of this Warrant upon the exercise hereof.
SECTION 2. EXERCISE OF WARRANT.
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2.1. PROCEDURE FOR EXERCISE OF WARRANT. This Warrant may be exercised in whole
---------------------------------
or in part by the Holder at any time, or from time to time, prior to the
expiration of the Term. To exercise this Warrant in whole or in part (but not
as to any fractional share of Common Stock), the Holder shall deliver to the
Company at its office referred to in Section 13 hereof at any time and from time
to time during the Term of this Warrant: (i) the Notice of Exercise in the form
attached hereto, (ii) cash, certified or official bank check payable to the
order of the Company or wire transfer of funds to the Company's account (or any
combination of any of the foregoing) in the amount of the Warrant Price for each
share being purchased, and (iii) this Warrant. Notwithstanding any provisions
herein to the contrary, if the Current Market Price (as defined in Section 5) is
greater than the Warrant Price (at the date of exercise, as set forth below), in
lieu of exercising this Warrant as hereinabove permitted, the Holder may elect
to receive shares of Common Stock equal to the value (as determined below) of
this Warrant (or the portion thereof being canceled) by surrender of this
Warrant at the office of the Company referred to in Section 13 hereof, together
with the Notice of Exercise, in which event the Company shall issue to the
Holder that number of shares of Common Stock computed using the following
formula:
CS = WCS x (CMP-WP)
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CMP
Where
CS equals the number of shares of Common Stock to be issued to the Holder
WCS equals the number of shares of Common Stock purchasable under the Warrant
or, if only a portion of the Warrant is being exercised, the portion of
the Warrant being exercised (at the date of exercise)
CMP equals the Current Market Price (at the date of exercise)
WP equals the Warrant Price (as adjusted to the date of exercise)
In the event of any exercise of the rights represented by this Warrant, a
certificate or certificates for the shares of Common Stock so purchased,
registered in the name of the Holder or such other name or names as may be
designated by the Holder, shall be delivered to the Holder hereof within a
reasonable time, not exceeding fifteen (15) days, after the rights represented
by this Warrant shall have been so exercised; and, unless this Warrant has
expired, a new Warrant representing the number of shares (except a remaining
fractional share), if any, with respect to which this Warrant shall not then
have been exercised shall also be issued to the Holder hereof within such time.
The person in whose name any certificate for shares of Common Stock is issued
upon exercise of this Warrant shall for all purposes be deemed to have become
the holder of record of such shares on the date on which the Notice of Exercise
and Warrant is delivered to the Company and payment of the Warrant Price and any
applicable taxes is made, irrespective of
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<PAGE>
the date of delivery of such certificate, except that, if the date of such
surrender and payment is a date when the stock transfer books of the Company are
closed, such person shall be deemed to have become the holder of such shares at
the close of business on the next succeeding date on which the stock transfer
books are open.
2.2. TRANSFER RESTRICTION LEGEND. Each certificate for Warrant Shares shall
---------------------------
bear the following legend (and any additional legend required by (i) any
applicable state securities laws and (ii) any securities exchange upon which
such Warrant Shares may, at the time of such exercise, be listed) on the face
thereof unless at the time of exercise such Warrant Shares shall be registered
under the Securities Act:
"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 such shares
are registered under such Act, or an opinion of counsel satisfactory to the
Company is obtained to the effect that such registration is not required."
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend (except a new certificate issued upon completion
of a public distribution under a registration statement of the securities
represented thereby) shall also bear such legend unless, in the opinion of
counsel for the holder thereof (which counsel shall be reasonably satisfactory
to counsel for the Company) the securities represented thereby are not, at such
time, required by law to bear such legend.
2.3. ACCELERATION OF TERM UPON INITIAL PUBLIC OFFERING. Notwithstanding any
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provision to the contrary contained in this Warrant, the Holder's right to
exercise this Warrant shall expire, if not previously exercised, immediately
upon the closing of the issuance and sale of shares of Common Stock in the
Company's first public offering of securities for its own account pursuant to an
effective registration statement under the Securities Act (the "Initial Public
Offering"), provided that the underwriters request that the Holder exercise this
Warrant and provide at least fifteen (15) business days' opportunity to
exercise.
The Company shall notify the Holder if the Initial Public Offering is proposed,
within a reasonable period of time prior to the filing of a registration
statement. Such notice shall contain such details of the proposed Initial
Public Offering as are reasonable in the circumstances and notice that this
Warrant is expected to expire upon closing thereof (provided such notice is
delivered at least fifteen (15) business days prior thereto). If such closing
does not take place, the Company shall promptly notify the Holder that such
proposed transaction has been terminated. Anything to the contrary in this
Warrant notwithstanding, the Holder may rescind any exercise promptly after such
notice of termination of the proposed transaction if the exercise occurred after
the Company notified the Holder that the Initial Public Offering was proposed or
if the exercise were otherwise precipitated by such proposed Initial Public
Offering. In the event of such rescission, this Warrant will continue to be
exerciseable on the same terms and conditions.
SECTION 3. COVENANTS AS TO COMMON STOCK. The Company covenants and agrees
----------------------------
that all shares of Common Stock that may be issued upon the exercise of the
rights represented by this
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<PAGE>
Warrant will, upon issuance, be validly issued, fully paid and nonassessable,
and free from all taxes, liens and charges with respect to the issue thereof.
The Company further covenants and agrees that it will pay when due and payable
any and all federal and state taxes (not including taxes on or measured by the
net income or capital gains of the Holder) which may be payable in respect of
the issue of this Warrant or any Common Stock or certificates therefor issuable
upon the exercise of this Warrant. The Company further covenants and agrees that
the Company will at all times have authorized and reserved, free from preemptive
rights, a sufficient number of shares of Common Stock to provide for the
exercise of the rights represented by this Warrant. The Company further
covenants and agrees that if any shares of capital stock to be reserved for the
purpose of the issuance of shares upon the exercise of this Warrant require
registration with or approval of any governmental authority under any federal or
state law before such shares may be validly issued or delivered upon exercise,
then the Company will in good faith and as expeditiously as possible endeavor to
secure such registration or approval, as the case may be. If and so long as the
Common Stock issuable upon the exercise of this Warrant is listed on any
national securities exchange, the Company will, if permitted by the rules of
such exchange, list and keep listed on such exchange, upon official notice of
issuance, all shares of such Common Stock issuable upon exercise of this
Warrant.
SECTION 4. ADJUSTMENT OF NUMBER OF SHARES. Upon each adjustment of the
------------------------------
Warrant Price as provided in Section 5, the Holder shall thereafter be entitled
to purchase, at the Warrant Price resulting from such adjustment, the number of
shares (calculated to the nearest tenth of a share) obtained by multiplying the
Warrant Price in effect immediately prior to such adjustment by the number of
shares purchasable pursuant hereto immediately prior to such adjustment and
dividing the product thereof by the Warrant Price resulting from such
adjustment.
SECTION 5. ADJUSTMENT OF WARRANT PRICE. The Warrant Price shall be subject
---------------------------
to adjustment from time to time as follows:
(i) If, at any time during the Term of this Warrant, the number of shares of
Common Stock outstanding is increased by a stock dividend payable in shares of
Common Stock or by a subdivision or split-up of shares of Common Stock, then,
following the record date fixed for the determination of holders of Common Stock
entitled to receive such stock dividend, subdivision or split-up, the Warrant
Price shall be appropriately decreased so that the number of shares of Common
Stock issuable upon the exercise hereof shall be increased in proportion to such
increase in outstanding shares.
(ii) If, at any time during the Term of this Warrant, the number of shares
of Common Stock outstanding is decreased by a combination of the outstanding
shares of Common Stock, then, following the record date for such combination,
the Warrant Price shall appropriately increase so that the number of shares of
Common Stock issuable upon the exercise hereof shall be decreased in proportion
to such decrease in outstanding shares.
(iii) All calculations under this Section 5 shall be made to the nearest
cent or to the nearest one-tenth (1/10) of a share, as the case may be.
(iv) The Current Market Price at any date of one share of Common Stock shall
be deemed to be the average of the daily closing prices for the 15 consecutive
business days ending
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<PAGE>
on the third business day before the day in question (as adjusted for any stock
dividend, split, combination or reclassification that took effect during such 15
business day period). The closing price for each day shall be the last reported
sales price or, in case no such reported sales took place on such day, the
average of the last reported bid and asked prices, in either case on the
principal national securities exchange on which the Common Stock is listed or
admitted to trading or as reported by Nasdaq (or if the Common Stock is not at
the time listed or admitted for trading on any such exchange or if prices of the
Common Stock are not reported by Nasdaq then such price shall be equal to the
average of the last reported bid and asked prices on such day as reported by The
National Quotation Bureau Incorporated or any similar reputable quotation and
reporting service, if such quotation is not reported by The National Quotation
Bureau Incorporated); provided, however, that if the Common Stock is not traded
in such manner that the quotations referred to in this clause (v) are available
for the period required hereunder, the Current Market Price shall be determined
in good faith by the Board of Directors of the Company or, if such determination
cannot be made, by a nationally recognized independent investment banking firm
selected by the Board of Directors of the Company (or if such selection cannot
be made, by a nationally recognized independent investment banking firm selected
by the American Arbitration Association in accordance with its rules).
(v) Whenever the Warrant Price shall be adjusted as provided in Section 5,
the Company shall prepare a statement showing the facts requiring such
adjustment and the Warrant Price that shall be in effect after such adjustment.
The Company shall cause a copy of such statement to be sent by mail, first class
postage prepaid, to each Holder of this Warrant at its, his or her address
appearing on the Company's records. Where appropriate, such copy may be given in
advance and may be included as part of the notice required to be mailed under
the provisions of subsection (viii) of this Section 5.
(vi) Adjustments made pursuant to clauses (i) and (ii) above shall be made
on the date such dividend, subdivision, split-up, combination or distribution,
as the case may be, is made, and shall become effective at the opening of
business on the business day next following the record date for the
determination of stockholders entitled to such dividend, subdivision, split-up,
combination or distribution.
(vii) In the event the Company shall propose to take any action of the types
described in clauses (i) or (ii) of this Section 5, the Company shall forward,
at the same time and in the same manner, to the Holder of this Warrant such
notice, if any, which the Company shall give to the holders of Common Stock of
the Company.
(viii) In any case in which the provisions of this Section 5 shall require
that an adjustment shall become effective immediately after a record date for an
event, the Company may defer until the occurrence of such event issuing to the
Holder of all or any part of this Warrant which is exercised after such record
date and before the occurrence of such event the additional shares of capital
stock issuable upon such exercise by reason of the adjustment required by such
event over and above the shares of capital stock issuable upon such exercise
before giving effect to such adjustment exercise; provided, however, that the
Company shall deliver to such Holder a due bill or other appropriate instrument
evidencing such Holder's right to receive such additional shares upon the
occurrence of the event requiring such adjustment.
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<PAGE>
SECTION 6. OWNERSHIP.
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6.1. OWNERSHIP OF THIS WARRANT. The Company may deem and treat the person in
-------------------------
whose name this Warrant is registered as the holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by anyone
other than the Company) for all purposes and shall not be affected by any notice
to the contrary until presentation of this Warrant for registration of transfer
as provided in this Section 6.
6.2. TRANSFER AND REPLACEMENT. This Warrant and all rights hereunder are
------------------------
transferable in whole or in part upon the books of the Company by the Holder
hereof in person or by duly authorized attorney, and a new Warrant or Warrants,
of the same tenor as this Warrant but registered in the name of the transferee
or transferees (and in the name of the Holder, if a partial transfer is
effected) shall be made and delivered by the Company upon surrender of this
Warrant duly endorsed, at the office of the Company referred to in Section 13
hereof. In the event of any purported transfer of this Warrant not in
accordance with the terms hereof, the Company shall not be required (i) to
transfer on its books any of the rights to acquire shares of Common Stock or
Common Stock issuable upon the exercise of such rights, or (ii) to treat as
owner of such rights to acquire shares of Common Stock or Common Stock issuable
upon the exercise of such rights. Upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft or destruction, and, in such
case, of indemnity or security reasonably satisfactory to it, and upon surrender
of this Warrant if mutilated, the Company will make and deliver a new Warrant of
like tenor, in lieu of this Warrant; provided that if the Holder hereof is an
instrumentality of a state or local government or an institutional holder or a
nominee for such an instrumentality or institutional holder an irrevocable
agreement of indemnity by such Holder shall be sufficient for all purposes of
this Section 6, and no evidence of loss or theft or destruction shall be
necessary. This Warrant shall be promptly cancelled by the Company upon the
surrender hereof in connection with any transfer or replacement. Except as
otherwise provided above, in the case of the loss, theft or destruction of a
Warrant, the Company shall pay all expenses, taxes (not including taxes on or
measured by the net income or capital gains of the Holder) and other charges
payable in connection with any transfer or replacement of this Warrant, other
than stock transfer taxes (if any) payable in connection with a transfer of this
Warrant, which shall be payable by the Holder. Notwithstanding anything to the
contrary herein, Holder will not transfer this Warrant and the rights hereunder
except in compliance with federal and state securities laws.
SECTION 7. MERGERS, CONSOLIDATION, SALES. In the case of any proposed
-----------------------------
consolidation or merger of the Company with another entity, or the proposed sale
of all or substantially all of its assets to another person or entity, or any
proposed reorganization or reclassification of the capital stock of the Company,
then, as a condition of such consolidation, merger, sale, reorganization or
reclassification, lawful and adequate provision shall be made whereby the Holder
of this Warrant shall thereafter have the right to receive upon the basis and
upon the terms and conditions specified herein, in lieu of the shares of the
Common Stock of the Company immediately theretofore purchasable hereunder, such
shares of stock, securities or assets as may (by virtue of such consolidation,
merger, sale, reorganization or reclassification) be issued or payable with
respect to or in exchange for the number of shares of such Common Stock
purchasable hereunder immediately before such consolidation, merger, sale,
reorganization or reclassification. In any such case appropriate provision
shall be made with respect to the rights and interests of the
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<PAGE>
Holder of this Warrant to the end that the provisions hereof shall thereafter be
applicable as nearly as may be, in relation to any shares of stock, securities
or assets thereafter deliverable upon the exercise of this Warrant.
SECTION 8. NOTICE OF DISSOLUTION OR LIQUIDATION. In case of any distribution
------------------------------------
of the assets of the Company in dissolution or liquidation (except under
circumstances when the foregoing Section 7 shall be applicable), the Company
shall give notice thereof to the Holder hereof and shall make no distribution to
shareholders until the expiration of twenty (20) days from the date of mailing
of the aforesaid notice and, in any case, the Holder hereof may exercise this
Warrant within twenty (20) days from the date of the giving of such notice, and
all rights herein granted not so exercised within such thirty-day period shall
thereafter become null and void.
SECTION 9. NOTICE OF EXTRAORDINARY DIVIDENDS. If the Board of Directors of
---------------------------------
the Company shall declare any dividend or other distribution on its Common Stock
except out of earned surplus or by way of a stock dividend payable in shares of
its Common Stock, the Company shall mail notice thereof to the Holder hereof not
less than twenty (20) days prior to the record date fixed for determining
shareholders entitled to participate in such dividend or other distribution, and
the Holder hereof shall not participate in such dividend or other distribution
unless this Warrant is exercised prior to such record date. The provisions of
this Section 9 shall not apply to distributions made in connection with
transactions covered by Section 7.
SECTION 10. FRACTIONAL SHARES. Fractional shares shall not be issued upon
-----------------
the exercise of this Warrant but in any case where the Holder would, except for
the provisions of this Section 10, be entitled under the terms hereof to receive
a fractional share upon the complete exercise of this Warrant, the Company
shall, upon the exercise of this Warrant for the largest number of whole shares
then called for, pay a sum in cash equal to the excess of the Current Market
Price over the Warrant Price for such fractional share.
SECTION 11. SPECIAL ARRANGEMENTS OF THE COMPANY. The Company covenants and
-----------------------------------
agrees that during the Term of this Warrant, unless otherwise approved by the
Holder of this Warrant:
11.1. WILL RESERVE SHARES. The Company will reserve and set apart and have
-------------------
available for issuance at all times, free from preemptive or other preferential
rights, the number of shares of authorized but unissued Common Stock deliverable
upon the exercise of this Warrant.
11.2. WILL NOT AMEND CERTIFICATE. The Company will not amend its Certificate
--------------------------
of Incorporation to eliminate as an authorized class of capital stock that class
denominated as "Common Stock" on the date hereof.
11.3. WILL BIND SUCCESSORS. This Warrant shall be binding upon any corporation
--------------------
or other person or entity succeeding to the Company by merger, consolidation or
acquisition of all or substantially all of the Company's assets.
SECTION 12. REPRESENTATIONS AND COVENANTS OF THE HOLDER. This Warrant has
-------------------------------------------
been entered into by the Company in reliance upon the following representations
and covenants of the Holder:
(a) Investment Purpose. The right to acquire Common Stock or the Common
Stock issuable upon exercise of the Holder's rights contained herein will be
acquired for investment
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<PAGE>
and not with a view to the sale or distribution of any part thereof, and the
Holder has no present intention of selling or engaging in any public
distribution of the same except pursuant to a registration or exemption.
(b) Private Issue. The Holder understands (i) that the Common Stock issuable
upon exercise of this Warrant is not registered under the Securities Act or
qualified under applicable state securities laws on the ground that the issuance
contemplated by this Warrant will be exempt from registration and qualifications
requirements, and (ii) that the Company's reliance on such exemption is
predicated on the representations set forth in this Section 12.
(c) Disposition of Holder's Rights. In no event will the Holder make a
disposition of any of its rights to acquire Common Stock or Common Stock
issuable upon exercise of such rights unless and until (i) it shall have
notified the Company of the proposed disposition, and (ii) if requested by the
Company, it shall have furnished the Company with an opinion of counsel (which
counsel may either be inside or outside counsel to the Warrantholder)
satisfactory to the Company and its counsel to the effect that (a) appropriate
action necessary for compliance with the Securities Act has been taken, or (B)
an exemption from the registration requirements of the Securities Act is
available. Notwithstanding the foregoing, the restrictions imposed upon the
transferability of any of its rights to acquire Common Stock or Common Stock
issuable on the exercise of such rights do not apply to transfers from the
beneficial owner of any of the aforementioned securities to its nominee or from
such nominee to its beneficial owner, and shall terminate as to any particular
share of Common Stock when (1) such security shall have been effectively
registered under the Securities Act and sold by the holder thereof in accordance
with such registration or (2) such security may be sold without registration in
compliance with Rule 144 under the Securities Act, or (3) a letter shall have
been issued to the Holder at the request by the staff of the Securities and
Exchange Commission or a ruling shall have been issued to the Holder at its
request by such Commission stating that no action shall be recommended by such
staff or taken by such commission, as the case may be, if such security is
transferred without registration under the Securities Act in accordance with the
conditions set forth in such letter or ruling and such letter or ruling
specifies that no subsequent restrictions on transfer are required. Whenever the
restrictions imposed hereunder shall terminate as hereinabove provided the
Holder or holder of a share of Common Stock then outstanding as to which such
restrictions have terminated shall be entitled to receive from the Company,
without expense to such holder, one or more new certificates for the Warrant or
for such shares of Common Stock not bearing any restrictive legend.
(d) Financial Risk. The Holder has such knowledge and experience in
financial and business matters and in investing in companies similar to the
Company as to be capable of evaluating the merits and risk of its investment,
and has the ability to bear the economic risks of its investment.
(e) Authority. The Holder has full power and authority to enter into and to
perform this Agreement in accordance with its terms. The Holder has not been
organized, reorganized or recapitalized specifically for the purpose of
investing in the Company.
(f) Risk of No Registration. The Holder understands that if the Company does
not register with the Securities and Exchange Commission pursuant to Section 12
of the Securities
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<PAGE>
Act, or file reports pursuant to Section 15(d) of the Securities Exchange Act of
1934, or if a registration statement covering the securities under the
Securities Act is not in effect when it desires to sell (i) the rights to
purchase Common Stock pursuant to this Warrant, or (ii) the Common Stock
issuable upon exercise of the right to purchase, it may be required to hold such
securities for an indefinite period. The Holder also understands that any sale
of its rights to purchase Common Stock or Common Stock which may be made by it
in reliance upon Rule 144 under the Securities Act may be made only in
accordance with the terms and conditions of that Rule.
SECTION 13. NOTICES. Any notice or other document required or permitted to
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be given or delivered to the Holder shall be delivered at, or sent by certified
or registered mail to, the Holder at Transamerica Technology Finance Division,
76 Batterson Park Road, Farmington, Connecticut 06032, Attention: Assistant
Vice President, Lease Administration, with a copy to the Lender at Riverway II,
West Office Tower, 9399 West Higgins Road, Rosemont, Illinois 60018, Attention:
Legal Department or to such other address as shall have been furnished to the
Company in writing by the Holder. Any notice or other document required or
permitted to be given or delivered to the Company shall be delivered at, or sent
by certified or registered mail to, the Company at 45 Moulton Street, Cambridge,
Massachusetts 02138, Attention: Vice President, Finance with a copy to Hale and
Dorr LLP, 60 State Street, Boston, Massachusetts 02109, Attention: Mark G.
Borden, Esq. or to such other address as shall have been furnished in writing to
the Holder by the Company. Any notice so addressed and mailed by registered or
certified mail shall be deemed to be given when so mailed. Any notice so
addressed and otherwise delivered shall be deemed to be given when actually
received by the addressee.
SECTION 14. NO RIGHTS AS STOCKHOLDER; LIMITATION OF LIABILITY. This Warrant
-------------------------------------------------
shall not entitle the Holder to any of the rights of a shareholder of the
Company except upon exercise in accordance with the terms hereof. No provision
hereof, in the absence of affirmative action by the Holder to purchase shares of
Common Stock, and no mere enumeration herein of the rights or privileges of the
Holder, shall give rise to any liability of the Holder for the Warrant Price
hereunder or as a shareholder of the Company, whether such liability is asserted
by the Company or by creditors of the Company.
SECTION 15. LAW GOVERNING. THE VALIDITY, INTERPRETATION, AND ENFORCEMENT OF
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THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF ILLINOIS WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES
THEREOF.
SECTION 16. MISCELLANEOUS. This Warrant and any provision hereof may be
-------------
changed, waived, discharged or terminated only by an instrument in writing
signed by the Company and the Holder (or any respective successor in interest
thereof). The headings in this Warrant are for purposes of reference only and
shall not affect the meaning or construction of any of the provisions hereof.
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<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by its
duly authorized officer this 21 day of November, 1997.
ONTOGENY, INC.
[CORPORATE SEAL]
By: /s/ George Eldridge
-------------------
Title: Vice President
-------------------
TRANSAMERICA BUSINESS
CREDIT CORPORATION
By: ____________________
Name:
Title:
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<PAGE>
FORM OF NOTICE OF EXERCISE
[TO BE SIGNED ONLY UPON EXERCISE OF THE WARRANT]
TO BE EXECUTED BY THE REGISTERED HOLDER
TO EXERCISE THE WITHIN WARRANT
The undersigned hereby exercises the right to purchase _________ shares of
Common Stock which the undersigned is entitled to purchase by the terms of the
within Warrant according to the conditions thereof, and herewith
[check one]
[_] makes payment of $________ therefor; or
[_] directs the Company to issue _____ shares, and to
withhold _____ shares in lieu of payment of the Warrant
Price, as described in Section 2.1 of the Warrant.
All shares to be issued pursuant hereto shall be issued in the name of and the
initial address of such person to be entered on the books of the Company shall
be:
The shares are to be issued in certificates of the following denominations:
The Holder confirms and acknowledges the investment representations made in
Section 12 of the Warrant.
___________________________________
[Type Name of Holder]
By: _______________________________
Title: ____________________________
Dated: _________________________
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<PAGE>
FORM OF ASSIGNMENT
(ENTIRE)
[TO BE SIGNED ONLY UPON TRANSFER OF ENTIRE WARRANT]
TO BE EXECUTED BY THE REGISTERED HOLDER
TO TRANSFER THE WITHIN WARRANT
FOR VALUE RECEIVED _________________________ hereby sells, assigns and
transfers unto _______________________ all rights of the undersigned under and
pursuant to the within Warrant, and the undersigned does hereby irrevocably
constitute and appoint _____________________ Attorney to transfer the said
Warrant on the books of the Company, with full power of substitution.
_________________________________
[Type Name of Holder]
By: _____________________________
Title: __________________________
Dated: ________________________
NOTICE
The signature to the foregoing Assignment must correspond to the name as
written upon the face of the within Warrant in every particular, without
alteration or enlargement or any change whatsoever.
Acknowledged and accepted:
______________________________
[Type name of assignee]
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<PAGE>
FORM OF ASSIGNMENT
(PARTIAL)
[TO BE SIGNED ONLY UPON PARTIAL TRANSFER OF WARRANT]
TO BE EXECUTED BY THE REGISTERED HOLDER
TO TRANSFER THE WITHIN WARRANT
FOR VALUE RECEIVED ________________________ hereby sells, assigns and
transfers unto ____________________ (i) the rights of the undersigned to
purchase _____ shares of Common Stock under and pursuant to the within Warrant,
and (ii) on a non-exclusive basis, all other rights of the undersigned under and
pursuant to the within Warrant, it being understood that the undersigned shall
retain, severally (and not jointly) with the transferee(s) named herein, all
rights assigned on such non-exclusive basis. The undersigned does hereby
irrevocably constitute and appoint __________________ Attorney to transfer the
said Warrant on the books of the Company, with full power of substitution.
_____________________________________
[Type Name of Holder]
By: _________________________________
Title: ______________________________
Dated: _________________________
NOTICE
The signature to the foregoing Assignment must correspond to the name as
written upon the face of the within Warrant in every particular, without
alteration or enlargement or any change whatsoever.
Acknowledged and accepted:
___________________________________
[Type name of assignee]
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<PAGE>
Exhibit 10.62
Confidential Materials omitted and filed separately with Securities and
Exchange Commission. Asterisks denote omissions.
1/13/99
RESEARCH COLLABORATION AND OPTION AGREEMENT
THIS AGREEMENT, effective as of the 13th day of January, 1999 (the
"Effective Date") between Ontogeny, Inc., a Delaware corporation having a place
of business at 45 Moulton Street, Cambridge, MA 02138 ("Ontogeny") and Becton,
Dickinson and Company, a New Jersey corporation having a place of business at
One Becton Drive, Franklin Lakes, NJ 07417 ("BD").
INTRODUCTION
WHEREAS, Ontogeny is in the business of conducting research in the field
of developmental biology;
WHEREAS, BD has expertise in the discovery, development, manufacture and
commercialization of products, services, and devices in the medical technology
industry for application in research, diagnostic and patient management;
WHEREAS, Ontogeny will undertake a research program, the goal of which is
to regenerate islet cells for purposes of delivery to an individual for the
treatment of diabetes. BD desires to obtain from Ontogeny an option to develop
and commercialize products that incorporate the ex vivo delivery of islet cells
that are the subject of such research program as well as a right of first offer
to develop and commercialize certain diagnostic and research products ;
WHEREAS, the parties have therefore agreed on a research program and
commercialization options under certain terms and conditions;
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained in this Agreement and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Ontogeny and BD agree
as follows:
Article 1. Definitions
As used in this Agreement, the following terms, whether used in the
singular or plural, shall have the following meanings:
1.1 "Affiliate" shall mean any corporation, company, partnership, joint
venture, firm and/or entity, which controls, is controlled by or is under common
control with a Party. For purposes of this Section 1.1, `control' shall mean (a)
in the case of corporate entities, direct or indirect ownership of at least
fifty (50%) of the stock or shares entitled to vote for the election of
directors, and (b) in the case of non-corporate entities, direct or indirect
ownership of at least fifty percent (50%) of the equity interest with the power
to direct the management and policies of such non-corporate entities.
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1.2 "BD Collaboration Technology" shall mean any data, substances,
processes, materials, formulas or information which are developed or created
solely by BD or its Affiliates or jointly by BD or its Affiliates and Ontogeny
or its Affiliates and (i) which incorporate or are based on or derived by use of
Ontogeny Technology, or (ii) which are conceived or reduced to practice during
the course of and in accordance with the Research Program provided that BD or an
Affiliate of BD has been requested to do so by the JRC or Ontogeny as part of
the Research Plan in writing to Noel Warner, Vice President Scientific Affairs,
BDIS, 2350 Qume Drive, San Jose, CA 95131 with a copy to Susan Capello,
Intellectual Property Counsel 1 Becton Drive, Franklin Lakes, NJ 07417 and BD
confirms this request in writing. BD shall respond to such request in writing
within 30 days.
1.3 "BD SPONSORED FTE" means a full time equivalent scientific person year
carried out by a BD employee or contractor, having a Ph.D. degree or equivalent
doctoral level research laboratory experience.
1.4 "Field" shall mean ex vivo delivery of ex vivo regenerated human beta
islet cells to an individual for the treatment of diabetes.
1.5 "Ontogeny Intellectual Property Rights" means (a) the Ontogeny Patent
Rights; and (b) any other intellectual property rights in and to the Ontogeny
Technology, which Ontogeny or an Affiliate of Ontogeny owns or otherwise has the
right to grant licenses under.
1.6 "Ontogeny Patent Rights" means any patent or patent application or
equivalent thereof, anywhere in the world, having one or more claims covering
Ontogeny Technology, which Ontogeny or an Affiliate of Ontogeny owns or
otherwise has the right to grant licenses under.
1.7 "Ontogeny Technology" means any data, substances, processes,
materials, formulas or information (unrelated to the hedgehog proteins), which
are useful in the Field and reasonably necessary for the development of Product
which Ontogeny or an Affiliate of Ontogeny owns or otherwise has the right to
grant licenses under as of the Effective Date or during the Research Term if
arising from research conducted under the Research Program.
1.8 "Party" means Ontogeny or BD; "Parties" means Ontogeny and BD.
1.9 "Product" means a product that comprises human beta islet cells for
use in the Field.
1.10 "Research Program" means research performed by or on behalf of
Ontogeny during the Research Term in accordance with the Research Workplan.
1.11 "Joint Research Committee" or "JRC" shall mean the research committee
composed of representatives of Ontogeny and BD described in Article 2 hereof.
1.12 "Research Term" shall mean, unless earlier terminated, the two-year
period beginning on the Effective Date and any extension thereof agreed to by
the parties.
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1.13 "Research Workplan" means the Workplan, attached as Schedule A, which
describes the research activities to be conducted in the Field in the course of
the Research Program during the Research Term.
1.14 "Working Committee" shall mean a committee of an equal number of
persons from Ontogeny and BD (maximum number of three (3) from each Party) who
are responsible for monitoring the day to day progress of the Research Program.
Article 2. The Collaboration
2.1 The Research Program shall be conducted by Ontogeny in accordance with
the provisions of the Research Workplan. Ontogeny shall work exclusively with BD
in the Field during the term of the Agreement with the exception of third party
contractors. In conducting the Research Program, Ontogeny shall have and
maintain sufficient flexibility to shift effort and emphasis within the overall
scope of the Research Workplan in a manner that will best result in the
development of Product, providing that any substantial shift in effort or
emphasis is agreed to by the Working Committee or the JRC.
2.2 Ontogeny and BD will form a Joint Research Committee (the "JRC") to be
in existence during the Research Term and to be responsible for overseeing the
progress of the Research Program. The JRC will have an equal number of members
(maximum eight (8) members in total) from Ontogeny and BD. Ontogeny and BD will
also form a Working Committee, which shall meet at mutually agreeable times or
via conference call every three weeks and then meet with the JRC during its
regular meetings to report the progress of the Research Program to the JRC. Each
Party shall make its initial designation of its representatives on the JRC and
the Working Committee not later than thirty (30) days after the Effective Date.
The Chairperson of the Joint Research Committee shall be chosen from the
Ontogeny representatives on the JRC and shall be reasonably acceptable to BD.
The objective of the JRC shall be to reach agreement on all matters by
consensus within the scope of the Research Workplan, including any substantial
changes thereto. However, decisions of the JRC shall be decided by majority vote
of the JRC provided that such majority is comprised of at least one vote cast by
a representative from Ontogeny and one cast by a representative from BD. The JRC
shall also be responsible, if necessary, for modifying the short-term goals of
the Research Program, provided, however, that no such modification shall (i)
alter the terms of this Agreement or (ii) materially increase the
responsibilities of, or the level of expense to be incurred by either Party
without the prior approval of such Party. If the JRC cannot reach agreement on
any matter within its purview, such matter shall be referred to the CEO of
Ontogeny or his designee and the CTO of BD or his designee for resolution. If
the CEO of Ontogeny or his designee and the CTO of BD or his designee are unable
to reach agreement on any issue regarding the Research Program; then the CEO of
Ontogeny shall have the final authority to decide upon such matter unless it
entails a substantial change to the Research Workplan. If the issue does entail
a substantial change to the Research Workplan and such issue has not been
resolved by the Working Committee, the JRC or the CTO of BD and the CEO of
Ontogeny, as described above, then either party shall have the right to
terminate this Agreement under Section 8.3 hereof.
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The JRC shall meet at a mutually agreeable place no less frequently than
once each calendar quarter and shall meet at such other times as deemed
appropriate by the JRC. Each Party may change any one or more of its
representatives on the JRC and/or the Working Committee at any time upon notice
to the other Party. Each Party shall use reasonable efforts to cause its
representatives to attend the meetings of the JRC and the Working Committee.
Ontogeny shall provide to the JRC quarterly written summaries of the research
activities conducted under the Research Program and the results thereof.
2.3 Ontogeny shall use diligent efforts to perform the activities set
forth in the Research Workplan.
2.4 BD shall provide one (1) BD SPONSORED FTE, acceptable to Ontogeny to
work on-site at Ontogeny during the Research Term. Such BD SPONSORED FTE shall
work under the direction of Ontogeny managers and shall sign an invention and
nondisclosure agreement set forth in Exhibit A whereby he/she shall agree to not
disclose to a third party or BD or use except for purposes of the Research
Program, confidential or proprietary information of Ontogeny and whereby he/she
assigns to Ontogeny all his/her rights to any data, substances, processes,
materials, formulas, information or ideas which are developed or created by such
BD SPONSORED FTE during or as a result of the BD SPONSORED FTE's tenure at
Ontogeny. Such BD SPONSORED FTE will have the right to practice the Ontogeny
Technology and the BD Collaboration Technology in the Field for the purpose of
conducting research under the Research Program during the Research Term. All of
BD's interest in BD Collaboration Technology shall be assigned to Ontogeny. BD
shall take all steps necessary to have all of its right, title and interest in
the BD Collaboration Technology assigned to Ontogeny and to have any patent
applications filed or patents issued thereon by BD assigned to Ontogeny.
2.5 BD shall have a right of first offer effective as of the Effective
Date, to enter into a license agreement with Ontogeny to obtain the right to
commercialize any jointly invented BD Collaboration Technology for research
reagents and diagnostic uses in the field of diabetes and BD solely invented BD
Collaboration Technology for research reagents and diagnostic uses in all fields
as follows: Ontogeny shall promptly notify BD in writing with respect to any
inventions or invention disclosures of which it becomes aware with respect to BD
Collaboration Technology. BD shall have 30 days from the receipt of such notice
to provide written confirmation to Ontogeny of BD's interest in entering into a
license agreement with respect to such inventions. If BD indicates in writing
that it does wish to enter into such an agreement during said 30 day period and
if the JRC agrees that the specific invention should be commercialized at the
current time, then the Parties will negotiate in good faith the terms of such a
license agreement for three months from the date that BD so indicated in writing
its desire to enter into such an agreement (the "First Offer Negotiation
Period"). If the Parties fail to enter into such an agreement during the First
Offer Negotiation Period, then Ontogeny shall be free to commercialize itself or
license BD Collaboration Technology to a third party for research reagents and
diagnostic uses and to pursue the development of such research reagents and
diagnostic uses by itself or with one or more third parties.
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Confidential Materials omitted and filed with the Securities and Exchange
Commission. Asterisks denote omissions.
Article 3. Option Rights
3.1 Subject to the fulfillment by BD of its obligations under this
Agreement, Ontogeny, hereby grants to BD an option to initiate a development
program with Ontogeny to develop and commercialize Product, including the right
to elect an exclusive, worldwide license to Ontogeny's and Ontogeny's
Affiliates's rights in Ontogeny Intellectual Property Rights for use in the
Field, (the "Option" in accordance with the following terms. Such Option is
exercisable by BD in writing on or before the earlier of the end of the Research
Term or within thirty (30) days after the successful completion of the Objective
2 ("Objective 2") set forth in the Research Workplan. If BD exercises such
option, the Parties will exclusively negotiate in good faith the terms of a
development/commercialization/license agreement for three months from the
exercise date of the Option (the "Negotiation Period"), unless extended by
mutual written agreement of the Parties. If the Parties fail to enter into such
an agreement during the Negotiation Period, then Ontogeny shall be free to
license Ontogeny Intellectual Property and BD Collaboration Technology and to
pursue the development of Product by itself or with one or more third parties;
provided, however, that for a period of [**] after the Negotiation Period,
Ontogeny shall not offer such development/commercialization/license agreements
to third parties with terms and conditions which are more favorable to the third
party, taken as a whole, than those terms and conditions last offered by BD or
by Ontogeny, without first offering, such terms and conditions to BD in writing.
Article 4. Payment Obligations
4.1 In consideration of the rights granted to BD under this Agreement, BD
shall lend to Ontogeny the amount of [**], which loan shall be evidenced by a
[**] convertible subordinated Note issued by Ontogeny in favor of BD (the
"Note") pursuant to a note purchase agreement dated as of the Effective Date
(the "Note Purchase Agreement"). The Note shall be convertible into [**] shares
of Series G Convertible Preferred Stock ("Series G Stock") of Ontogeny, in
accordance with the Note Purchase Agreement and the Note.
4.2 Within thirty (30) days following the earlier of the end of the
Research Term or the successful completion of the Objective 2, BD shall purchase
from Ontogeny [**] shares of convertible preferred stock of Ontogeny at a price
per share equal to [**] and having the same rights as the Series G Stock with
respect to voting rights, liquidation and dividends, pursuant to a stock
purchase agreement which incorporates the substantive terms of the Note Purchase
Agreement attached hereto as Schedule B with the exception that the
anti-dilution protection provided shall be similar to that which Ontogeny is
then providing to similar corporate research partners. If a BD accounting issue
arises in relation to this purchase, the parties shall use reasonable efforts to
execute an acceptable note and note purchase agreement to accomplish such
purchase.
4.3 Within thirty (30) days after the Effective Date, Ontogeny shall
purchase from BD a complete, new FACS system to facilitate the research in the
Research Program at a cost of at least [**] and shall not be higher than the
market price of such a system and subject to the following: Such FACS system
shall meet specifications, as will be specified in Schedule C to this Agreement
which shall be attached hereto and agreed to by the Parties in writing and there
will be a two year warranty provided by BD covering 100% of service and parts.
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Article 5. Negation of Warranties
5.1 NOTHING IN THIS AGREEMENT IS OR SHALL BE CONSTRUED AS
A) A WARRANTY OR REPRESENTATION BY ONTOGENY AS TO THE VALIDITY OR
SCOPE OF ANY ONTOGENY INTELLECTUAL PROPERTY RIGHTS;
B) A WARRANTY BY ONTOGENY AS TO THE OUTCOME OF RESULTS CONDUCTED
UNDER THIS AGREEMENT;
C) A WARRANTY, EXPRESS OR IMPLIED, AS TO ANY INVENTION OR PRODUCT
CONCEIVED, DISCOVERED OR DEVELOPED UNDER THIS AGREEMENT; OR THE MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE OF THE RESEARCH OR ANY SUCH INVENTION OR
PRODUCT.
Article 6. Patents
6.1 Ontogeny shall have the right to file, prosecute and maintain patent
applications worldwide for Ontogeny Intellectual Property and BD Collaboration
Technology at Ontogeny's expense in Ontogeny's sole name. During the Research
term, Ontogeny shall provide to BD copies of all substantive documents
associated with the prosecution of such patent applications. BD shall have the
right but not the obligation to review and provide comments and suggested
amendments to the claims to Ontogeny. Each Party shall sign or use its best
efforts to have signed all legal documents necessary to file and prosecute
patent application or to obtain or maintain patents.
Article 7. Confidentiality
7.1 (a) Disclosure or delivery of confidential and proprietary information
or material by any Party to the other Party may be made in writing, or orally.
Such confidential information or material provided by one Party to the other
Party will be safeguarded by the recipient and will not be disclosed to third
parties and will be made available only to the receiving Party's or its
Affiliate's employees or agents (including attorneys) who need to know such
information or have such material for purposes permitted under this Agreement
and who have obligations of confidentiality and non-use similar to those of this
Agreement. Each Party shall hold as confidential such confidential information
and material in the same manner and with the same protection as such party
maintains for its own confidential information and materials and agrees to use
such confidential information and materials only for the purpose of this
Agreement and as permitted by this Agreement.
(b) The mutual obligations of confidentiality under this Section
will not apply to any information to the extent that such information:
(i) is or hereafter becomes part of the public domain through
no action of recipient of the information which constitutes a default under this
Agreement;
(ii) was already known to the recipient as evidenced by prior
written documents in its possession which were not furnished by the other party;
(iii) is disclosed to the recipient by a third party who is
not in default of any confidentiality obligation to the disclosing Party
hereunder;
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(iv) is required by law or bona fide legal process to be
disclosed, provided that the disclosing Party takes all reasonable steps to
restrict and maintain confidentiality of such disclosure and provides reasonable
notice to the non-disclosing Party; or
(v) is developed by the recipient independent of the
confidential information received from the disclosing party, as evidenced by
written documentation.
(c) BD Collaboration Technology shall be considered to be
confidential information of Ontogeny under this Article 7 and shall not be
disclosed by BD to a third party, or used by BD except for the purposes of this
Agreement and as permitted by this Agreement.
7.2 BD and Ontogeny each agrees not to disclose any terms or conditions of
this Agreement to any third party without the prior consent of the other Party,
which shall not be unreasonably withheld, except as required by written
applicable law, rule or regulation; or in connection with a financing or
offering statement or memorandum, with the understanding that unless required by
law, the financial terms will be disclosed in confidence; or to a potential
assignee or transferee of the business of a party to which this Agreement
relates; or to a licensor of a Party for the purpose of granting a sublicense to
the other Party. In the event of a disclosure required under this Article, the
disclosing Party shall nonetheless provide the non-disclosing Party with notice
of such disclosure prior to disclosure, and will, to the extent reasonably
possible, provide the non-disclosing Party with an opportunity to correct same.
A Party shall not be required to provide the other Party with a disclosure,
which has been previously provided to a Party provided that it is disclosed in a
similar fashion and context as it was previously disclosed. Neither BD or
Ontogeny shall issue a press release without prior written approval of the other
party which shall not be unreasonably withheld and which shall be provided in a
timely fashion.
Article 8. Term and Termination
8.1 Except as otherwise specifically provided herein and unless sooner
terminated pursuant to Article 8 of this Agreement, this Agreement shall remain
in full force and effect until the end of the Negotiation Period or at such time
that the Option is not exercised and has expired.
8.2 This Agreement may be terminated due to insufficient progress and
unsatisfactory results in the Research Program upon majority vote of the JRC by
providing each Party three (3) months written notice.
8.3 Either Party may terminate this Agreement upon failure to reach
agreement in good faith under Section 2.2 with regard to a proposed substantial
change to the Research Workplan upon three (3) months written notice.
8.4 This Agreement shall terminate if all or substantially all of the
business of one Party to which this Agreement relates is acquired by another
entity through merger, sale of assets or otherwise and the other Party withholds
consent to an assignment of the Agreement under Section 9.9 below.
8.5 If either Party materially breaches this Agreement, the other Party
may terminate this Agreement by written notice to the breaching party specifying
the breach and this
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Agreement shall be terminated thirty (30) business days after such written
notice, unless prior to the expiration of such period such breach is cured.
8.6 Notwithstanding any termination of this Agreement, (a) neither Party
shall be released of any obligations incurred prior to such termination and (b)
the provisions of Sections 2.4, 4.3, 5.1, 6.1, 7.1 and 7.2 and any other
provision which by its nature is intended to survive, shall survive any
termination of this Agreement. Upon the termination of this Agreement unless BD
exercises its Option and executes an agreement with Ontogeny pursuant to the
provisions of Section 3.1, each Party shall promptly return to the other Party
all written Confidential Information and all copies thereof to such Party.
Article 9. Miscellaneous
9.1 This Agreement shall be governed by and interpreted in accordance with
the laws of the Commonwealth of Massachusetts.
9.2 Dispute Resolution.
(a) In the event there is a disagreement between the Parties
relating to this Agreement, the Parties shall attempt in good faith to resolve
any dispute arising out of or relating to this Agreement promptly by
negotiations between executives of both Parties who have authority to settle the
controversy. Either Party may give the other Party written notice of any dispute
hereunder not resolved in the normal course of business. Within twenty (20) days
after delivery of said notice, executives of each of the Parties shall discuss
by telephone or meet at a mutually acceptable time and place, and thereafter as
often as they reasonably deem necessary, to exchange relevant information and to
attempt to resolve the dispute. If the matter has not been resolved within sixty
(60) days of the disputing Party's notice, or if the Parties fail to discuss or
meet within twenty (20) days, either Party may initiate mediation of the
controversy or claim under the then current Center for Public Resources
Procedure for Mediation of Business Disputes, with the understanding that the
mediator shall have no authority to amend this Agreement or the Research
Workplan.
(b) If a negotiator intends to be accompanied at a telephone
conference or a meeting by an attorney, the other negotiators shall be given at
least three (3) working days' notice of such intention and may also be
accompanied by an attorney. All negotiations pursuant to this clause are
confidential and shall be treated as compromise and settlement negotiations for
purposes of the Federal Rules of Evidence and any state rules of evidence.
(c) If the dispute is not resolved within sixty (60) days of its
submission to a mediator in accordance with Section 9.2 (a), either Party may
submit the dispute to binding arbitration. The arbitration shall be conducted by
three (3) arbitrators, one to be appointed by Ontogeny, one to be appointed by
BD and a third being nominated by the two arbitrators so selected or, if they
cannot agree on a third arbitrator, by the President of the American Arbitration
Association. The arbitration shall be conducted in accordance with the
commercial rules of the American Arbitration Association, which shall administer
the arbitration. The arbitration, including the rendering of the award, shall
take place in Boston, Massachusetts, and shall be final and binding upon the
Parties hereto, with the understanding that the arbitrators shall
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have no authority to amend this Agreement or the Research Workplan and the
expenses of the arbitration shall be paid as the arbitrators determine.
9.3 The waiver by a Party of a breach or a default of any provision of
this Agreement by the other Party shall not be construed as a waiver of any
succeeding breach of the same or any other provision, nor shall any delay or
omission on the part of a Party to exercise or avail itself of any right, power
or privilege that it has or may have hereunder operate as a waiver of any right,
power or privilege by such Party.
9.4 All notices, instructions and other communications hereunder or in
connection herewith shall be in writing and shall be (a) delivered personally,
(b) sent by registered or certified mail, return receipt requested, postage
prepaid, (c) sent via a reputable nationwide overnight courier service, or (d)
sent by facsimile transmission, in each case to an address set forth below. Any
such notice, instruction or communication shall be deemed to have been delivered
upon receipt if delivered by hand, three business days after it is sent by
registered or certified mail, return receipt requested, postage prepaid, one
business day after it is sent via a reputable nationwide overnight courier
service, or when transmitted with electronic confirmation of receipt, if
transmitted by facsimile (if such transmission is on a business day; otherwise,
on the next business day following such transmission).
Notices to Ontogeny Ontogeny, Inc.
shall be addressed to: 45 Moulton Street
Cambridge, MA 02138
Attention: President and
Chief Executive Officer
Notices to Becton Dickinson Becton, Dickinson and Company
shall be addressed to: One Becton Drive
Franklin Lakes, NJ 07417
Attention: Chief Technology Officer
with a copy to: Attention: Chief Intellectual Property and
Licensing Counsel
Either Party may change its address by giving notice to the other Party in the
manner herein provided.
9.5 Nothing herein shall be deemed to constitute Ontogeny, on the one
hand, or BD, on the other hand, as the agent or representative of the other, or
as joint venturers or partners for any purpose.
9.6 This Agreement, the Note Purchase Agreement and the Schedules hereto
(which Schedules are deemed to be a part of this Agreement for all purposes)
contain the full understanding of the Parties with respect to the subject matter
hereof and supersede all prior
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understandings and writings relating thereto. No waiver, alteration or
modification of any of the provisions hereof shall be binding unless made in
writing and signed by the Parties.
9.7 The headings contained in this Agreement are for convenience of
reference only and shall not be considered in construing this Agreement.
9.8 In the event that any provision of this Agreement is held by a court
of competent jurisdiction to be unenforceable because it is invalid or in
conflict with any law of any relevant jurisdiction, the validity of the
remaining provisions shall not be affected, and the Parties shall negotiate a
substitute provision that, to the extent possible, accomplishes the original
business purpose.
9.9 Neither this Agreement nor any of the rights or obligations hereunder
may be assigned by either Party with the prior written consent of the other
Party, which consent shall not be unreasonably withheld.
9.10 This Agreement shall be binding upon and inure to the benefit of the
Parties hereto and their successors and permitted assigns.
9.11 This Agreement may be executed in two (2) counterparts, each of which
shall be deemed an original but all of such together shall constitute one and
the same instrument.
9.12 Neither Party to this Agreement shall be responsible to the other
Party for nonperformance or delay in performance of the terms or conditions of
this Agreement due to acts of God, earthquakes, acts of governments, war, riots,
strikes, accidents in transportation, or other similar causes beyond the
reasonable control of such Party.
9.13 BD understands that it receives no right to a license, implied or
otherwise, under any patent or other right now or hereafter owned or controlled
by Ontogeny.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names by their properly and duly authorized officers or
representatives as of the date first above written.
Ontogeny, Inc. Becton, Dickinson and Company
/s/ Doros Platika /s/ Deborah J. Neff
- --------------------------------- --------------------------------------
By: Doros Platika By: Deborah J. Neff
-----------------------------------
Title: President and CEO Title: President-BOIS
--------------------------------
Date: 1/13/99 Date: 1/13/99
------------------------------- ---------------------------------
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Exhibit A
Ontogeny, Inc.
- --------------------------------------------------------------------------------
INVENTION, NON-DISCLOSURE AND
NON-COMPETITION AGREEMENT
This Agreement is made this _____ day of ___________, 19___ between
Ontogeny, Inc., a Delaware corporation (hereinafter referred to as the
"Company"), and _________________(the "BD Sponsored FTE").
In consideration of the employment to work on-site at company in
connection with the Research Collaboration and Option Agreement between BD and
Company ("BD Agreement") or the continued employment of the BD Sponsored FTE by
the Becton Dickinson and Company ("BD"), the Company and the BD Sponsored FTE
agree as follows:
1. Proprietary Information
(a) The BD Sponsored FTE agrees that all information, whether or not in
writing, of a private, secret or confidential nature concerning the
Company's business, business relationships or financial affairs
(collectively, "Proprietary Information") is and shall be the exclusive
property of the Company. By way of illustration, but not limitation,
Proprietary Information may include inventions, products, processes,
methods, techniques, formulas, compositions, compounds, projects,
developments, plan, research data, clinical data, financial data,
personnel data, computer programs, customer and supplier lists, and
contacts at or knowledge of customers or prospective customers of the
Company. The BD Sponsored FTE will not disclose any Proprietary
Information to any person or entity other than employees of the Company or
use the same for any purposes (other than in the performance of his/her
duties under the BD Agreement) without written approval by an officer of
the Company, either during or after his/her employment with the Company,
unless and until such Proprietary Information has become public knowledge
without fault by the BD Sponsored FTE.
(b) The BD Sponsored FIFE agrees that all files, letters, memoranda,
reports, records, data, sketches, drawings, laboratory notebooks, program
listings, or other written, photographic, or other tangible material
containing Proprietary Information, whether created by the BD Sponsored
FTE or others, which shall come into his/her custody or possession, shall
be and are the exclusive property of the Company to be used by the BD
Sponsored FTE only in the performance of his/her duties for the Company
under the BD Agreement. All such materials or copies thereof and all
tangible property of the Company in the custody or possession of the BD
Sponsored FTE shall be delivered to the Company, upon the earlier of (i) a
request by the Company or (ii) termination of his/her employment as a BD
sponsored FTE under the BD Agreement. After such delivery, the BD
Sponsored FTE shall not retain any such materials or copies thereof or any
such tangible property.
(c) The BD Sponsored FTE agrees that his/her obligation not to disclose or
to use information and materials of the types set forth in paragraphs (a)
and (b) above, and his/her obligation to return materials and tangible
property, set forth in paragraph (b) above, also extends to such types of
information, materials and tangible property of customers of the Company
or suppliers to the Company or other third parties who may have disclosed
or entrusted the same to the Company or the BD Sponsored FTE.
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2. Developments
(a) The BD Sponsored FTE will make full and prompt disclosure to the
Company of all inventions, improvements, discoveries, methods,
developments, software, and works of authorship, whether patentable or
not, which are created, made, conceived, or reduced to practice by him/her
or under his/her direction or jointly with others during his/her tenure at
the Company whether or not during normal working hours or on the premises
of the Company (all of which are collectively referred to in this
Agreement as "Developments").
(b) The BD Sponsored FTE agrees to assign and does hereby assign to the
Company (or any person or entity designated by the Company) all his/her
right, title and interest in and to all Developments and all related
patents, patent applications, copyrights and copyright applications.
However, this paragraph 2(b) shall not apply to Developments which do not
relate to the present or planned business or research and development of
the Company and which are made and conceived by the BD Sponsored FTE not
during normal working hours, not on the Company's premises and not using
the Company's tools, devices, equipment or Proprietary Information.
(c) The BD Sponsored FTE agrees to cooperate fully with the Company, both
during, and after his/her tenure with the Company, with respect to the
procurement, maintenance and enforcement of copyrights, patents and other
intellectual property rights (both in the United States and foreign
countries) relating to Developments. The BD Sponsored FTE shall sign all
papers, including, without limitation, copyright applications, patent
applications, declarations, oaths, formal assignments, assignments of
priority rights, and powers of attorney, which the Company may deem
necessary or desirable in order to protect its rights and interest in any
Development. The BD Sponsored FTE further agrees that if the Company is
unable, after reasonable effort, to secure the signature of the BD
Sponsored FTE on any such papers, any executive officer of the Company
shall be entitled to execute any such papers as the agent and the
attorney-in-fact of the BD Sponsored FTE, and the BD Sponsored FTE hereby
irrevocably designates and appoints each executive officer of the Company
as his/her agent and attorney-in-fact to execute any such papers on
his/her behalf, and to take any and all actions as the Company may deem
necessary or desirable in order to protect its rights and interests in any
Development, under the conditions described in this sentence.
3. Non-competition
(a) During the BD Sponsored FTE's tenure at the Company and for a period
of one year after the termination or cessation of such tenure for any
reason, the BD Sponsored FTE will not directly or indirectly:
(i) as an individual proprietor, partner, stockholder, officer,
employee, director, joint venturer, investor, lender, consultant, or
in any other capacity whatsoever (other than as the holder of not
more than one percent of the combined voting power of the
outstanding stock of a publicly held company), engage in the
business of developing, designing, producing, marketing, selling or
rendering (or assisting any other person in developing, designing,
producing, marketing, selling or rendering) products or services
competitive with those being developed, designed, produced,
marketed, sold or rendered by the Company while the BD Sponsored FTE
was working at the Company with the exception of working for BD as
part of any Ontogeny/BD Collaboration; or
(ii) solicit, divert or take away, or attempt to divert or to take
away, the business or patronage of any of the clients, customers
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<PAGE>
or accounts, or prospective clients, customers or accounts, of the
Company which were contacted, solicited or served by the BD
Sponsored FTE while at the Company.
(b) If the BD Sponsored FTE violates the provisions of Section 3(a), the
BD Sponsored FTE shall continue to be bound by the restrictions set forth
in Section 3(a) until a period of one year has expired without any
violation of such provisions.
4. Non-Solicitation
(a) During the BD Sponsored FTE's tenure at the Company and for a period
of two years after the termination or cessation of such tenure for any
reason, the BD Sponsored FTE will not directly or indirectly recruit,
solicit or hire any employee of the Company, or induce or attempt to
induce any employee of the Company to terminate his/her employment with,
or otherwise cease his/her relationship with, the Company.
(b) If the BD Sponsored FTE violates the provisions of Section 4(a), the
BD Sponsored FTE shall continue to be bound by the restrictions set forth
in Section 4(a) until a period of two years has expired without any
violation of such provisions.
5. Other Agreements
The BD Sponsored FTE hereby represents that, except as the BD Sponsored FTE has
disclosed in writing to the Company on Appendix A to this Agreement, the BD
Sponsored FTE is not bound by the terms of any agreement with any previous
employer, current employer or other party to refrain from using or disclosing
any trade secret or confidential or proprietary information in the course of
his/her tenure at Company or to refrain from competing, directly or indirectly,
with the business of such previous employer or any other party. The BD Sponsored
FTE further represents that his/her performance of all the terms of this
Agreement and as an BD Sponsored FTE under the BD Agreement does not and will
not breach any agreement to keep in confidence proprietary information,
knowledge or data acquired by the BD Sponsored FTE in confidence or in trust
prior to his/her employment with the Company, and the BD Sponsored FTE will not
disclose to the Company or induce the Company to use any confidential or
proprietary information or material belonging to any previous employer or
others.
6. United States Government Obligations
The BD Sponsored FTE acknowledges that the Company from time to time may have
agreements with the other persons or with the United States Government, or
agencies thereof, which impose obligations or restrictions on the Company
regarding inventions made during the course of work under such agreements or
regarding the confidential nature of such work. The BD Sponsored FTE agrees to
be bound by all such obligations and restrictions which are made known to the BD
Sponsored FTE and to take all action necessary to discharge the obligations of
the Company under such agreements.
7. No Employment Contract
The BD Sponsored FTE understands that this Agreement does not constitute a
contract of employment and does not imply that his/her status as a BD Sponsored
under the BD Agreement will continue for any period of time.
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<PAGE>
8. Miscellaneous
(a) The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of
this Agreement.
(b) This Agreement supersedes all prior agreements, written or oral,
between the BD Sponsored FTE and the Company relating to the subject
matter of this Agreement. This Agreement may not be modified, changed or
discharged in whole or in part, except by an agreement in writing signed
by the BD Sponsored FTE and the Company.
(c) No delay or omission by the Company in exercising any right under this
Agreement will operate as a waiver of that or any other right. A waiver or
consent given by the Company on any one occasion is effective only in that
instance and will not be construed as a bar to or waiver of any right on
any other occasion.
(d) The BD Sponsored FTE expressly consents to be bound by the provisions
of this Agreement for the benefit of the Company or any subsidiary or
affiliate thereof to whose employ the BD Sponsored FTE may be transferred
without the necessity that this Agreement be resigned at the time of such
transfer.
(e) The restrictions contained in this Agreement are necessary for the
protection of the business and goodwill of the Company and are considered
by the BD Sponsored FTE to be reasonable for such purpose. The BD
Sponsored FTE agrees that any breach of this Agreement is likely to cause
the Company substantial and irrevocable damage and therefore, in the event
of any such breach, the BD Sponsored FTE agrees that the Company, in
addition to such other remedies which may be available, shall be entitled
to specific performance and other injunctive relief.
(f) If any restriction set forth in Sections 3 or 4 is found by any court
of competent jurisdiction to be unenforceable because it extends for too
long a period of time or over too great a range of activities or in too
broad a geographic area, it shall be interpreted to extend only over the
maximum period of time, range of activities or geographic area as to which
it may be enforceable.
(g) This Agreement is governed by and will be construed as a sealed
instrument under and in accordance with the laws of the Commonwealth of
Massachusetts. Any action, suit, or other legal proceeding which is
commenced to resolve any matter arising under or relating to any provision
of this Agreement shall be commenced only in a court of the Commonwealth
of Massachusetts (or, if appropriate, a federal court located within
Massachusetts), and the Company and the BD Sponsored FTE each consents to
the jurisdiction of such a court.
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<PAGE>
THE BD SPONSORED FTE ACKNOWLEDGES THAT HE/SHE HAS CAREFULLY READ THIS AGREEMENT
AND UNDERSTANDS AND AGREES TO ALL OF THE PROVISIONS IN THIS AGREEMENT.
Ontogeny, Inc.
Name:
------------------------------
please print
Name:
------------------------------
signature
Title:
------------------------------
Date:
------------------------------
BD Sponsored FTE Becton Dickinson and Company
Name: Name:
------------------------------- -------------------------------
please print please print
Name: Name:
------------------------------- -------------------------------
signature signature
Date: Title:
------------------------------- -------------------------------
Date:
-------------------------------
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<PAGE>
Confidential Materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
SCHEDULE A
Research Work Plan
Objective 1: [**] the [**] can be [**] to [**].
Objective 2: [**] the ability of [**] a [**] in the [**].
Objective 3: [**] of the [**] to [**]:
* [**] the [**] of [**] in [**];
* [**] and [**] of [**] and [**] into [**];
* [**] in [**] of these [**]in a [**].
Objective 1:
(i) Assess the [**] containing [**] of [**] with the [**];
(ii) Determine whether such [**] are [**];
(iii) If not, using the [**], establish [**] from the [**];
(iv) [**] vs. [**]. This should be [**] and to what extent [**], and
whether [**].
(v) [**] which define such [**] and [**]. Assess ability to [**].
(vi) [**] from all [**] of [**]of a [**] may be required [**] in a [**].
Then, by [**] of a [**] which are [**] in a [**] determine the [**]
for the [**].
The conclusions from this [**] should permit [**] of [**] which can be served by
a [**].
Objective 2:
(i) Establish [**], and [**], for [**] using [**]. Demonstrate initially
in [**] with [**] being [**], or in [**] or [**];
(ii) Repeat in [**] treated [**] stability and [**] of [**];
(iii) Using [**] and [**] from these [**], then repeat in both [**]
treated [**], using the [**] derived [**].
(iv) Assess the [**] of [**].
(v) Monitor the [**] from such [**].
(vi) [**] to assess the [**] to function in [**] such as the [**]. As
restoration of [**] and [**].
[**] from this [**] and [**] efficacy of the [**] estimated from [**].
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<PAGE>
Confidential Materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
Objective 3:
(i) Determine ability to [**] from [**] using [**] and [**] with [**].
(ii) Apply knowledge from [**] to [**].
(iii) As of [**] the [**] for the [**], and the [**] of [**].
(iv) [**] to the [**], using various approaches to [**].
(v) [**] of such [**] for [**] and [**] using [**] such as [**].
[**] from the section should establish the [**] of a [**] derived and [**] of
[**].
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<PAGE>
APPENDIX A
OTHER AGREEMENTS:
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<PAGE>
Exhibit 10.65
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
EXCLUSIVE LICENSE AGREEMENT
Effective as of November 2, 1998 ("Effective Date"), THE BOARD OF TRUSTEES
OF THE LELAND STANFORD JUNIOR UNIVERSITY, a body having corporate powers
under the laws of the State of California ("STANFORD"), JOHNS HOPKINS
UNIVERSITY, a Maryland Corporation ("JHU") and Ontogeny, Inc., having a
principal place of business at 45 Moulton Street, Cambridge, MA 02138
("LICENSEE"), agree as follows:
1. BACKGROUND
1.1 STANFORD has an assignment of [**] from the laboratory of Dr. Roel Nusse,
a Howard Hughes Medical Institute ("HHMI") investigator at STANFORD, as
described in Stanford Docket S96-030 and Johns Hopkins University has an
assignment of [**] from the laboratory of Dr. Jeremy Nathans, an HHMI
investigator at JHU, as described in DM-3250, collectively referred to as
"Invention", and any Licensed Patent, as hereinafter defined, which may
issue to such Invention.
1.2 STANFORD and JHU desire to have the Invention perfected and marketed at
the earliest possible time in order that products resulting therefrom may
be available for public use and benefit.
1.3 LICENSEE desires a license under Invention and Licensed Patent to develop,
manufacture, use, and sell Licensed Product in the field of use of human
and veterinary therapeutics, drug discovery and diagnostics.
1.4 The Invention was made in the course of research supported by the Howard
Hughes Medical Institute.
2. DEFINITIONS
2.1 "Exclusive" means that, subject to Article 3, STANFORD or JHU shall not
grant further licenses in the Licensed Territory in the Licensed Field of
Use.
2.2 "Licensed Field of Use" means human and veterinary therapeutics, drug
discovery and diagnostics.
2.3 "Licensed Materials" means proprietary materials of JHU or Stanford which
are developed by JH or Stanford as a result of research concerning the
Licensed Invention and identified in Appendix A hereto. Such Appendix to
be periodically updated by reasonable mutual agreement and supplied to
Licensee by Stanford and JHU.
2.4 "Licensed Patent" means U.S. Patent Application, Serial Number 832,340,
filed April 11, 1997, and any divisions, continuations, and continuation
in part patent applications (CIPs) which CIPs are directed to subject
matter specifically described in the above patent application, and any
foreign patent application or equivalent corresponding thereto
<PAGE>
and any Letters patent or equivalent thereof issuing thereon or reissue,
reexamination or extension thereof.
2.5 "Licensed Product" means any product or part thereof in the Licensed Field
of Use, the manufacture, use, or sale of which:
(a) Is covered by a valid claim of an issued, unexpired Licensed Patent
directed to the Invention in the country in which it is made, used
or sold. A claim of an issued, unexpired Licensed Patent shall be
presumed to be valid unless and until it has been held to be invalid
by a final judgment of a court of competent jurisdiction from which
no appeal can be or is taken; or
(b) Is covered by any claim being prosecuted in a pending application of
Licensed Patent(s) in the country in which it is made, used or sold
unless such claim has been pending in such application or an earlier
application of Licensed Patent(s) for greater than 5 years; or
(c) Incorporates any of the Licensed Materials.
2.6 "Licensed Territory" means worldwide.
2.7 "Net Sales" means the gross revenue derived by LICENSEE from Licensed
Product, less the following items but only insofar as they actually
pertain to the disposition of such Licensed Product by LICENSEE, are
included in such gross revenue, and are separately billed:
(a) Import, export, excise and sales taxes, and custom duties;
(b) Costs of installation at the place of use;
(c) Credit for returns, allowances, or trades.
(d) Costs of insurance, packing and transportation from the place of
manufacture to the customer's premises or point of installation; and
(e) Customary trade, quantity or cash discounts actually allowed or
taken. Where Licensed Products are not sold separately, but are sold
in combination with or as parts of other products, hereinafter such
combinations referred to as "a Combination Product" and the Licensed
Product and each such other product being referred to as a Component
Product", the Net Sales price to be used for the purpose of
calculating royalties payable in respect of Combination Products
must be determined by multiplying the Net Sales price of the
Combination Product by the percentage value of the Licensed Product
comprising a Component Product contained in the Combination Product,
such percentage value being determined by dividing the current
market value of the Licensed Product comprising a Component Product
by a sum of the separate current market values of each of the
Component Products which are contained in the Combination Product.
The current market value of each of the Component Products must be
for a quantity
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<PAGE>
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
comparable to that contained in the Combination Product and of the
same class, purity and potency. When no current market value is
available for a Component Product, a reasonable hypothetical market
value for such Component Product based upon the allocation of the
same proportions of costs, reasonable overhead and profits (all of
which must be determined on the basis of generally accepted
accounting principles) as are or should be allocated to similar
Component Products and having an ascertainable market value.
3. GRANT
3.1 (a) STANFORD and JHU hereby grants and LICENSEE hereby accepts a license
in the Licensed Field of Use to make, use, and sell Licensed Product
in the Licensed Territory and to use Invention and Licensed
Materials.
(b) LICENSEE acknowledges that STANFORD and JHU have granted to HHMI a
royalty-free, non-exclusive, non-transferable license with respect
to the Invention, the Licensed Materials, and the Licensed Patents
solely for HHMI's research and other noncommercial purposes.
3.2 Said license set forth in Section 3.1(a) above is Exclusive, including the
right to sublicense pursuant to Article 12, in the Licensed Field of Use
for a term commencing as of the Effective Date and ending, on a
country-by-country basis, [**] from the date of first commercial sale of a
Licensed Product by LICENSEE or sublicensee(s) in such country. LICENSEE
agrees to promptly inform STANFORD in writing of the date of first
commercial sale. If three months prior to the expiration of the exclusive
term, LICENSEE can demonstrate to STANFORD that it has and will continue
to effectively exploit the Inventions, Licensed Patents and Licensed
Materials under this Agreement, then the term of the exclusive rights
granted may be extended, such extension not to be unreasonably withheld by
STANFORD. Upon expiration of the exclusive term of the license, said
license shall be nonexclusive until expiration of the last to expire of
Licensed Patents.
3.3 STANFORD and JHU shall have the right to practice the Invention and use
the Licensed Materials for their own research and other noncommercial
purposes or in non-commercial research collaborations with third party
academic or not-for-profit research institutions, including STANFORD's and
JHU's right to make Licensed Materials available to colleagues at academic
and not-for-profit institutions. Any Licensed Materials that are
transferred to a third party academic or not-for-profit institution by
STANFORD or JHU shall be sent by Ontogeny tinder an MTA. STANFORD and JHU
shall have the right to publish any information included in Licensed
Patents.
4. DILIGENCE
4.1 As an inducement to STANFORD and to JHU to enter into this Agreement,
LICENSEE agrees to use reasonable efforts and diligence to proceed with
the development, manufacture, and sale or lease of Licensed Product and to
diligently develop markets for
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<PAGE>
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
the Licensed Product. Unless LICENSEE has a Licensed Product available for
commercial sale prior to [**], LICENSEE agrees that STANFORD may terminate
this Agreement. Anytime after [**] years from the date of license,
STANFORD may terminate this Agreement if ONTOGENY or a sublicensee has not
sold a Licensed Product for a period of 1 year and is not demonstrably
engaged in a research, development, manufacturing, marketing or licensing
program, as appropriate, directed toward the development and
commercialization of the licensed subject matter.
4.2 Progress Report - On or before September 1 of each year until LICENSEE
markets a Licensed Product, STANFORD may request in writing that LICENSEE
shall submit a written annual report to STANFORD covering the preceding
year ending June 30, regarding the progress of LICENSEE toward commercial
use of Licensed Product. Such report shall include, as a minimum,
information sufficient to enable STANFORD and JHU to satisfy reporting
requirements of HHMI and for STANFORD to ascertain progress by LICENSEE
toward meeting the diligence requirements of this Article 4.
5. ROYALTIES
5.1 In connection with a Letter of Intent signed by the parties on August 28,
1998, LICENSEE has paid to STANFORD a noncreditable, nonrefundable license
issue royalty of [**], which money was to be held in escrow until the
execution of this Agreement.
5.2 Beginning October 1, 1999 and each October 1 thereafter, LICENSEE also
shall pay to STANFORD the following yearly royalty:
Anniversaries 1-5 [**]
Anniversary 6 and thereafter [**].
If this agreement becomes non-exclusive, the yearly royalty shall be
reduced to an amount equal to 1/n times the yearly royalty in this Section
5.2 owed during the exclusive period of the Agreement where n equals that
number of licensees of the Licensed Patent.
Said yearly royalty payments are nonrefundable, but they are creditable
against earned royalties to the extent provided in Paragraph 5.5.
5.3 In addition, LICENSEE shall pay STANFORD earned royalties on Net Sales as
follows:
Royalties on Net Sales by Ontogeny:
(a) If gene product claimed in Licensed Patent is the drug and Licensed
Patent is the sole patent/patent application covering sale of such
Licensed Product: [**]
(b) If Licensed Patent is the key, but not sole, patent/patent
application having claim(s) covering sale of Licensed Product: [**]
(c) If patent claim of Licensed Patent covers sale of Licensed Product,
but is not key patent/patent application covering sale of Licensed
Product: [**]
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<PAGE>
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
(d) If product commercialized by LICENSEE is not covered by a claim of
Licensed Patents, but such product is identified or discovered in
material part through the use of a Licensed Product:
on Net Sales in the United States up to [**] [**]
on Net Sales in the United States over [**] [**]
If this agreement becomes non-exclusive, the royalty shall be reduced to
an amount equal to 1/n times the earned royalty in this Section 5.3 owed
during the exclusive period of the Agreement where n equals the number of
licensees of the Licensed Patent.
5.4 LICENSEE also agrees to make the following milestone payments for the
first Licensed Product to attain such a milestone:
Upon IND filing [**]
Initiation of Phase III clinical trials [**]
Upon NDA filing [**]
Said milestone payments are nonrefundable, but they are creditable against
earned royalties in the manner set forth in Section 5.5.
5.5 Creditable payments under Sections 5.2 and 5.4 of this Agreement shall be
an offset to LICENSEE against up to fifty percent (50%) of each earned
royalty payment which LICENSEE would be required to pay pursuant to
Paragraph 5.3 until the entire credit is exhausted.
5.6 If this Agreement is not terminated in accordance with other provisions
hereof, LICENSEE's obligation to pay royalties hereunder shall continue
for so long as LICENSEE, by its activities would, but for the license
granted herein, infringe a valid claim of an unexpired Licensed Patent of
STANFORD covering said activity or, with regard to a product set forth in
Paragraph 5.3(d) which is not covered by a claim of Licensed Patent, until
6 years after first commercial sale of a product set forth in Paragraph
5.3 (d).
5.7 The royalty on sales in currencies other than U.S. Dollars shall be
calculated using the appropriate foreign exchange rate for such currency
quoted by the Bank of America (San Francisco) foreign exchange desk, on
the close of business on the last banking day of each calendar quarter.
Royalty payments to STANFORD shall be in U.S. Dollars. All non-U.S. taxes
related to royalty payments shall be paid by LICENSEE and are not
deductible from the payments due STANFORD. In the event that LICENSEE is
required to withhold taxes imposed upon STANFORD for any payment under
this Agreement by virtue of the statutes, laws, codes or governmental
regulations of a foreign country in which Licensed Products are sold, then
such payments will be made by LICENSEE without deduction from the payment
due STANFORD. STANFORD shall assist LICENSEE as reasonably requested by
LICENSEE and at LICENSEE's expense, in recovering such taxes to the extent
possible tinder applicable tax laws and treaties.
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<PAGE>
5.8 Within forty-five (45) days after receipt of a statement from STANFORD,
LICENSEE shall reimburse STANFORD for all costs incurred by STANFORD,
prior to the Effective Date which shall not exceed $12,000, in connection
with the preparation, filing, and prosecution of all patent applications
and maintenance of patents corresponding to the Invention. After the
Effective Date, and during the exclusive term of the license, LICENSEE
will be responsible for the filing, prosecution and maintenance of the
Licensed Patent (s) and the costs incurred by LICENSEE related to such
filing, prosecution and maintenance. Licensee may use patent counsel of
its own choosing, reasonably acceptable to STANFORD and JHU, provided that
STANFORD and JHU shall be kept informed of and shall receive copies of all
documentation and substantive actions pertaining to the filing,
prosecution and maintenance of Licensed Patent(s). STANFORD and JHU shall
have reasonable opportunities to participate in decision making and
LICENSEE will use diligent efforts to incorporate STANFORD's and JHU's
reasonable suggestions. If LICENSEE elects not to continue to seek or
maintain patent protection on any Licensed Patent in any country during
the exclusive term of the license, STANFORD and JHU shall have the right,
at its expense, to procure, maintain and enforce in any country such
Licensed Patent(s) and LICENSEE shall have no further rights under the
Licensed Patent(s) in such country.
5.9 Only one royalty is due on each Licensed Product sold by LICENSEE
regardless of whether its manufacture, use or sale are or shall be covered
by more than one patent or patent application included in Licensed Patent
(s) licensed under this Agreement, and no further royalties will be due
for use of such Licensed Product by LICENSEES customers.
5.10 STANFORD and JHU shall work out a mutually agreeable arrangement for the
sharing of revenue underneath this Exclusive License Agreement.
6. ROYALTY REPORTS, PAYMENTS, AND ACCOUNTING
6.1 Quarterly Earned Royalty Payment and Report - Beginning with the first
sale of a Licensed Product, LICENSEE shall make written reports (even if
there are no sales) and earned royalty payments to STANFORD within
forty-five (45) days after the end of each calendar quarter. This report
shall state the number, description, and aggregate Net Sales of Licensed
Product during such completed calendar quarter, and resulting calculation
pursuant to Paragraph 5.3 of earned royalty payment due STANFORD for such
completed calendar quarter. Concurrent with the making of each such
report, LICENSEE shall include payment due STANFORD of royalties for the
calendar quarter covered by such report.
6.2 Accounting - LICENSEE agrees to keep and maintain records for a period of
three (3) years showing the manufacture, sale, use, and other disposition
of products sold or otherwise disposed of under the license herein
granted. Such records will include general ledger records showing cash
receipts and expenses, and records which include production records,
customers, serial numbers, and related information in sufficient detail to
enable the royalties payable hereunder by LICENSEE to be determined.
LICENSEE further agrees to permit its books and records to be examined by
an independent certified public accountant selected by STANFORD and
acceptable to LICENSEE from time to time to
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<PAGE>
the extent necessary to verify reports provided for in Paragraph 6.1. Such
examination is to be made at the expense of STANFORD, except in the event
that the results of the audit reveal an underreporting of royalties due
STANFORD of five percent (5%) or more, then the audit costs shall be paid
by LICENSEE.
7. WARRANTIES
7.1 To the best of STANFORD's OTL and JHU's OTL knowledge, STANFORD and JHU
are sole owners of U.S. Patent Application, Serial No. 832,340, filed
April 11, 1997.
7.2 Nothing in this Agreement is or shall be construed as:
(a) A warranty or representation by STANFORD or JHU as to the validity
or scope of any Licensed Patent;
(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 patents, copyrights, and other
rights of third parties; however, STANFORD does represent that
neither it nor JHU has received notice of any assertion that any of
the patents or subject inventions infringe upon any third party's
know-how, patent or other intellectual property rights as of the
Effective Date.
(c) An obligation to bring or prosecute actions or suits against third
parties for infringement, except to the extent and in the
circumstances described in Article 11;
(d) Granting by implication, estoppel, or otherwise any licenses or
rights under patents or other rights of STANFORD or JHU or other
persons other than Licensed Patent, regardless of whether such
patents or other rights are dominant or subordinate to any Licensed
Patent; or
(e) A warranty or representation by STANFORD or JHU that any Letters
Patent will issue with respect to Licensed Patent.
7.3 Except as expressly set forth in this Agreement, STANFORD or JHU MAKE NO
REPRESENTATIONS AND EXTENDS 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 USE OF THE INVENTION, THE
LICENSED PATENT, OR THE LICENSED PRODUCT WILL NOT INFRINGE ANY PATENT,
COPYRIGHT, TRADEMARK, OR OTHER RIGHTS OR ANY OTHER EXPRESS OR IMPLIED
WARRANTIES.
7.4 LICENSEE agrees that nothing in this Agreement grants LICENSEE any express
or implied license or right under or to U.S. Patent 4,656,134
'Amplification of Eucaryotic Genes' or any patent application
corresponding thereto.
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<PAGE>
8. INDEMNITY
8.1 LICENSEE agrees on behalf of itself and each Affiliate to indemnify, hold
harmless, and defend STANFORD, JHU, and Stanford Health Services, JHU,
HHMI and UCSF Stanford Health Care and their respective trustees,
officers, employees, students, and agents against any and all claims,
actions, demands, suits or causes of action for damages, whether arising
from death, illness, personal injury, property damage, and improper
business practices, or otherwise, arising out of (a) any breach or alleged
breach of this Agreement by LICENSEE and to the extent that the LICENSEE
may be responsible for payment to a third party under this indemnity, or
any of its Affiliates or any company that has a controlling interest in
LICENSEE, or (b) any manufacture, use, sale, or other disposition of
Invention, Licensed Patent, Licensed Material, or Licensed Product, by
LICENSEE or its affiliates except if such claims are due to the gross
negligence or willful acts of STANFORD and JHU. STANFORD agrees to
promptly notify LICENSEE in writing of any such claim, other than any
claim for breach of this Agreement by LICENSEE, LICENSEE shall manage and
control, at its own expense, the defense of such claim and its settlement,
utilizing attorney's reasonably acceptable to STANFORD, JHU and HHMI.
LICENSEE agrees not to settle any such claim against any Indemnitee
without STANFORD's, JHU's and HHMI's written consent where such settlement
would include any admission of liability on the part of any Indemnitee,
where the settlement would impose any restriction on the conduct by the
Indemnitee of any of its activities, or where the settlement would not
include an unconditional release of such Indemnitee from all liability for
claims that are the subject matter of such claim. STANFORD, HHMI and JHU
shall not settle any claim covered by the indemnity without the prior
written consent of LICENSEE which consent shall not be unreasonably
withheld or delayed. This section 8.1 will survive termination of this
Agreement.
8.2 Without limiting Section 8.1, STANFORD shall not be liable for any
indirect, special, or consequential damages whatsoever unless due to the
gross negligence or willful misconduct of STANFORD or JHU. STANFORD and
JHU shall have no responsibilities or liabilities whatsoever with respect
to Licensed Products.
8.3 LICENSEE shall 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.
8.4 In addition to the foregoing, LICENSEE shall maintain, during the term of
this Agreement, Comprehensive General Liability Insurance, including
Products Liability Insurance, with reputable and financially secure
insurance carrier(s) to cover the activities of LICENSEE and its
sublicensee(s). Upon initiation of clinical trials of the Licensed
Product, such insurance shall provide minimum limits of liability of
$5,000,000 and shall expressly include STANFORD, Stanford Health Services,
HHMI, JHU, their respective trustees, directors, officers, employees,
students, and agents as additional insureds. Such insurance shall be
written to cover claims incurred, discovered, manifested, or made during
or after the expiration of this Agreement up to a limit of 7 years after
the product
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<PAGE>
is no longer sold and should be placed with carriers with ratings of at
least A- as rated by A.M. Best. At STANFORD's request, LICENSEE shall
furnish a Certificate of Insurance evidencing primary coverage and
requiring thirty (30) days prior written notice of cancellation or
material change to STANFORD. LICENSEE shall advise STANFORD, in writing,
that it maintains excess liability coverage (following form) over primary
insurance for at least the minimum limits set forth above. All such
insurance of LICENSEE shall be primary coverage; insurance of STANFORD,
HHMI, JHU or Stanford Health Services shall be excess and noncontributory.
9. MARKING
Prior to the issuance of patents on the Invention, LICENSEE agrees to mark
Licensed Products (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," and following the issuance of one or more patents,
with the numbers of the Licensed Patent.
10. STANFORD NAMES AND MARKS
LICENSEE agrees not to identify STANFORD, JHU or HHMI in any promotional
advertising or other promotional materials to be disseminated to the
public or any portion thereof or to use the name of any STANFORD, JHU or
HHMI faculty member, employee, or student or any trademark, service mark,
trade name, or symbol of STANFORD, JHU or HHMI or the Stanford Health
Services, or that is associated with any or either of them, without
STANFORD's, JHU's or HHMI's prior written consent.
11. INFRINGEMENT BY OTHERS: PROTECTION OF PATENTS
11.1 LICENSEE, STANFORD and JHU shall promptly inform the other party of any
suspected infringement of any Licensed Patent by a third party. During the
exclusive period of this Agreement, STANFORD and LICENSEE each shall have
the right to institute an action for infringement of the Licensed
Patent(s) against such third party in accordance with the following:
(a) Within 30 days of notification, if STANFORD and LICENSEE agree to
institute suit jointly, the suit shall be brought in both their
names, the out-of-pocket costs thereof shall be borne equally, and
any recovery or settlement shall be shared equally. LICENSEE and
STANFORD shall agree to the manner in which they shall exercise
control over such action. Each party may, if it so desires, also be
represented by separate counsel of its own selection, the fees for
which counsel shall be paid by such party.
(b) If STANFORD and LICENSEE do not institute suit jointly within 30
days of notification as set forth in 11.1(a), LICENSEE shall be
empowered to bring suit in its own name to enjoin such infringement.
Licensee shall bear the entire cost of such litigation and shall be
entitled to retain the entire amount of any recovery or
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<PAGE>
settlement. However, any recovery in excess of litigation costs will
be considered Net Sales, and LICENSEE will pay STANFORD royalties as
indicated in Section 5.3. STANFORD shall provide reasonable
assistance to LICENSEE in the prosecution of any such suit brought
by LICENSEE.
(c) In the event that LICENSEE does not terminate such infringement or
initiate steps to do so within six months of learning of such
infringement, STANFORD may bring suit against infringer at its sole
expense and shall be entitled to retain the entire amount of any
recovery or settlement. LICENSEE will give reasonable assistance to
STANFORD in the prosecution of any such suit brought by STANFORD.
This Paragraph 11.1 shall survive termination of this Agreement.
11.2 Should either STANFORD or LICENSEE commence a suit under the provisions of
Paragraph 11.1 and thereafter elect to abandon the same, it shall give
timely notice to the other party who may, if it so desires, continue
prosecution of such suit, provided, however, that the sharing of expenses
and any recovery in such suit shall be as agreed upon between STANFORD and
LICENSEE.
12. SUBLICENSE(S)
12.1 LICENSEE may grant sublicense(s) to Licensed Patents and Licensed
Materials during the term of this Agreement.
12.2 If LICENSEE is unable or unwilling to serve or develop a potential market
or market territory for which there is a willing sublicensee(s), LICENSEE
will, at STANFORD's request, negotiate in good faith a sublicense(s)
hereunder. Bona fide business concerns of LICENSEE will be considered in
any good faith negotiations for a sublicense under this Agreement.
12.3 Any sublicense(s) granted by LICENSEE under this Agreement shall be
subject and subordinate to terms and conditions of this Agreement, except
that the earned royalty rate specified in the sublicense(s) may be at
higher rates than the rates in this Agreement and the sublicensee may
further sublicense any rights under Licensed Patents or Licensed Materials
only as: (a) needed or implied in the course of distribution, installation
or performance of service as required for the sale to an end user of
Licensed Products or Licensed Materials, or (b) not specifically rejected
in writing by STANFORD within thirty (30) days of written notification of
sub-sublicensee by LICENSEE, any such rejection not being unreasonably
made by STANFORD. Without limiting the foregoing, any such sublicense(s)
also shall expressly include the provisions of Articles 6, 7, 8, 10 and 15
for the benefit of STANFORD, JHU and/or HHMI, as the case may be, and
provide, at LICENSEE'S option, for the transfer of all obligations,
including the payment of royalties specified in such sublicense(s), to
STANFORD or its designee, in the event that this Agreement is terminated.
12.4 LICENSEE agrees to promptly provide STANFORD in confidence with a copy of
the relevant portions of any sublicense granted pursuant to this Article
12.
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<PAGE>
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
12.5 LICENSEE will pay to STANFORD [**] of all payments received from a
sublicensee in consideration for the sublicensing of Licensed Patents as
well as [**] of any royalties, fees or other amounts received by LICENSEE
as a result of the sublicensee's sale of Licensed Products, excluding
equity payments, milestone payments, amounts paid to fund research and
development activities conducted by LICENSEE, and
12.6 reimbursement of patent costs. If LICENSEE is required to pay royalties to
an additional party, STANFORD agrees in good faith to consider negotiating
a reduction in royalties under this section.
13. TERMINATION
13.1 LICENSEE may terminate this Agreement by giving STANFORD notice in writing
at least thirty (30) days in advance of the effective date of termination
selected by LICENSEE.
13.2 STANFORD and JHU may terminate this Agreement if LICENSEE:
(a) Is in default in payment of royalty or providing of reports;
(b) Is in breach of any provision hereof; or
(c) Provides any false report; and LICENSEE fails to remedy any such
default, breach, or false report within thirty (30) days after
written notice thereof by STANFORD.
13.3 Surviving any termination are:
(a) LICENSEE's obligation to pay royalties accrued or accruable;
(b) Any cause of action or claim of LICENSEE or STANFORD, accrued or to
accrue, because of any breach or default by the other party; and
(c) The provisions of Articles 6, 7, and 8;
(d) The obligation to pay earned royalties under Paragraph 53(d) shall
survive any termination until 6 years after first commercial sale of
such product..
14. ASSIGNMENT
This Agreement may not be assigned except that LICENSEE may assign this
Agreement to a party which acquires all or substantially all of that
portion of LICENSEE's business to which this Agreement pertains, ,whether
by merger, sale of assets or otherwise
15. ARBITRATION
15.1 Apart from any controversy or claim pertaining to HHMI's rights under
Article 8 or otherwise under this Agreement, any controversy arising under
or related to this
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<PAGE>
Agreement, and any disputed claim by either 0 party against the other
under this Agreement excluding any dispute relating to patent validity or
infringement arising under this Agreement, shall be settled by arbitration
in accordance with the Licensing Agreement Arbitration Rules of the
American Arbitration Association.
15.2 Upon request by either party, arbitration will be by a third party
arbitrator mutually agreed upon in writing by LICENSEE and STANFORD within
thirty (30) days of such arbitration request. Judgment upon the award
rendered by the arbitrator shall be final and nonappealable and may be
entered in any court having jurisdiction thereof.
15.3 The parties shall be entitled to discovery in like manner as if the
arbitration were a civil suit in the California Superior Court. The
Arbitrator may limit the scope, time and/or issues involved in discovery.
16. NOTICES
All notices under this Agreement shall be deemed to have been fully given
when done in writing and deposited in the United States mail, registered
or certified, and addressed as follows:
To STANFORD: Office of Technology Licensing
Stanford University
900 Welch Road, Suite 350
Palo Alto, CA 94304-1850
Attention: Director
To LICENSEE: Ontogeny, Inc.
45 Moulton Street
Cambridge, MA 02138-1118
Attention: President and CEO
Either party may change its address upon written notice to the other
party.
17. WAIVER
None of the terms of this Agreement can be waived except by the written
consent of the party waiving compliance.
18. APPLICABLELAW
This Agreement shall be governed by the laws of the State of California
applicable to agreements negotiated, executed and performed wholly within
California.
19. CONFIDENTIALITY
STANFORD and JHU agree that reasonable effort shall be used to maintain
the confidentiality of reports or documents received from LICENSEE by
STANFORD
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<PAGE>
pursuant to this Agreement, provided that such reports or documents are
marked as confidential.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
duplicate originals by their duly authorized officers or representatives.
THE BOARD OF TRUSTEES OF THE LELAND STANFORD JUNIQR
UNIVERSITY
Signature: /s/ Katharine Ku
----------------------------------------------
Name: Katharine Ku
Title: Director Oncology Licensing
Date: November 5, 1998
JOHN HOPKINS UNIVERSITY
Signature: /s/ Bart Chernow
----------------------------------------------
Name: Bart Chernow, M.D.
Title: Vice Dean for Research and Technology
Date: November 16, 1998
ONTOGENY, ICN.
Signature: /s/ Raul Rodriguez
----------------------------------------------
Name: Raul Rodriguez
Title: Vice President, Business Development
Date: December 1, 1998
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<PAGE>
APPENDIX A - LICENSED MATERIALS
(NONE)
<PAGE>
Exhibit 10.66
Confidential Materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
Nonexclusive License
97-107-.MW
11/20/97
LICENSE AGREEMENT
Effective as of November 20, 1997 ("Effective Date"), THE BOARD OF TRUSTEES OF
THE LELAND STANFORD JUNIOR UNIVERSITY, a body having corporate powers under the
laws of the State of California ("STANFORD"), and Ontogeny, Inc., having a
business address at 45 Moulton Street, Cambridge, MA 02138-1118 ("LICENSEE"),
agree as follows;
1. BACKGROUND
1.1 STANFORD has certain rights to biological material known as "Transgenic
Mice Carrying a Reporter Gene for the Hedgehog Signaling Pathway"
("Biological Material") developed in the laboratory of Dr. Matthew Scott,
a Howard Hughes Medical Institute ("HHMI") investigator at STANFORD, and
described in Stanford docket S97-107.
1.2 STANFORD desires to have the Biological Material utilized at the earliest
possible time in order that products resulting therefrom may be available
for public use and benefit.
1.3 LICENSEE wishes to acquire a license to said Biological Material to use
Biological Material in the Licensed Field of Use.
1.4 Biological Material was developed in the course of research supported by
the Howard Hughes Medical Institute.
2. DEFINITIONS
2.1 "Biological Material" means "Transgenic Mice containing an E. Coli
laczgene inserted in the patched gene" and provided to LICENSEE pursuant
to this Agreement.
2.2 "Licensed Field of Use" means any use of the Biological Material for
research purposes. The Biological Material may be used to identify,
discover or characterize products. The Licensed Field of Use specifically
excludes any use of Biological Material which requires U. S. F. D. A.
approval, including any human in vitro and human in vivo diagnostic or
therapeutic applications, and any human in vivo use for whatever purpose.
3. GRANT
3.1 STANFORD hereby grants, and LICENSEE accepts, a nonexclusive license to
the Biological Material in the Licensed Field of Use. Said license does
not include the right to grant sublicense(s). However, if LICENSEE is
collaborating with a corporate partner, such corporate partner shall be
allowed access to Biological Material solely for purposes of the
collaboration and provided that it is bound by the same restrictions on
use and transfer as LICENSEE under conditions outlined in Section 5.4.
LICENSEE is only
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<PAGE>
Confidential Materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
allowed to provide the mice under collaboration to 2 corporate partners.
In addition, STANFORD will supply LICENSEE with 2 pairs of homozygous
breeding mice and 4 pairs of heterozygote transgenic mice to begin
research.
3.2 The term of said license shall commence as of the Effective Date of this
Agreement and shall expire November 1, 2017 unless sooner terminated
according to Article 9 hereunder.
3.3 STANFORD reserves the right to supply any or all of Biological Material to
academic research scientists, subject to limitation of use by such
scientists for research purposes only.
3.4 STANFORD will not file a patent application covering the Biological
Material.
3.5 The Biological Material were made in the course of research conducted by
Howard Hughes Medical Institute ("HHMI") in affiliation with Stanford
University. LICENSEE acknowledges that STANFORD has granted to HHMI an
irrevocable, nonexclusive, non-transferable, royalty-free license with
respect to the Biological Materials.
3.6 LICENSEE agrees to take all action necessary on its part as LICENSEE to
enable STANFORD to satisfy its reporting obligations to HHMI relating to
Invention(s) and Biological Material as follows: "HHMI shall have the
right to require periodic reporting, in confidence, on the utilization or
efforts at obtaining utilization of any subject discovery or invention."
4. ROYALTIES
4.1 LICENSEE agrees to pay to STANFORD a noncreditable, nonrefundable license
issue royalty of [**]. Upon receipt of payment, STANFORD shall send a
breeding pair of Biological Material to LICENSEE. LICENSEE shall not
transfer Biological Material to any third party without prior written
consent from STANFORD.
4.2 LICENSEE shall pay license maintenance royalties of [**] on November 7,
1998, and [**] on every November 7 thereafter through November 7, 2017.
Said payments are nonrefundable.
4.3 LICENSEE shall make a payment of [**] for each of the first two IND
filings of products identified or discovered through material use of the
Biological Material. LICENSEE shall not pay any more than [**] pursuant to
this Section 4.3.
4.4 If LICENSEE should decide to make Biological Material available to a
corporate partner under a collaboration as described in Section 3.1,
LICENSEE will pay to STANFORD [**] upon transfer. This payment will be
made for each collaborator who receives the mice.
4.5 All payments to STANFORD shall be in U.S. Dollars, net of any non-U.S.
taxes.
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<PAGE>
4.6 No other payments are due under this Agreement to STANFORD with regard to
the Biological Material or products identified or discovered through the
use of the Biological Material.
5. NEGATION OF WARRANTIES
5.1 Nothing in this Agreement shall be construed as:
(a) 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 patents,
copyrights, and trademarks, of third parties;
(b) Conferring rights to use in advertising, publicity, or
otherwise any trademark or the name of "STANFORD"; or
(c) Granting by implication, estoppel, or otherwise any licenses
or rights under patents of STANFORD.
5.2 Except as expressly set forth in this Agreement, STANFORD makes no
representations and extends 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 use of the Licensed
Product(s) will not infringe any patent, copyright, trademark or other
rights or any other . express or implied warranties. As of the Effective
Date, STANFORD is unaware of any patents or other rights which cover the
Biological Material.
5.3 LICENSEE agrees that nothing in this Agreement grants LICENSEE any express
or implied license or right under or to: U.S. Patent 4,656,134,
"Amplification of Eucaryotic Genes," or any patent application
corresponding thereto.
6. INDEMNITY
6.1 LICENSEE agrees to indemnify, hold harmless, and defend STANFORD, Stanford
Health Services and Howard Hughes Medical Institute and their respective
trustees, officers, employees, students, and agents against any and all
claims for death, illness, personal injury, property damage, and improper
business practices arising out of the use of Biological Material by
LICENSEE or for any breach of this Agreement by LICENSEE, unless due to
the gross negligence or willful misconduct of STANFORD. STANFORD shall
promptly notify LICENSEE of such claim, other than any claim for breach of
this Agreement by LICENSEE, and to the extent that the LICENSEE is
responsible for payment to a third party under this indemnity, LICENSEE
shall manage and control the defense and/or settlement of said
indemnifiable claim, utilizing attorney's reasonably acceptable to
STANFORD and HHMI. LICENSEE agrees not to settle any such claim against
any Indemnitee without STANFORD's and HHMI's written consent where such
settlement would include any admission of liability on the part of any
Indemnitee, where the settlement would impose any restriction on the
conduct by the Indemnitee of any of its activities, or where the
settlement would not include an unconditional release of such Indemnitee
from all liability for claims that are the subject matter of such claim.
This Section 6.1 shall survive termination of this Agreement.
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<PAGE>
6.2 Neither STANFORD nor Howard Hughes Medical Institute shall be liable for
any indirect, special, consequential, or other damages whatsoever, whether
grounded in tort (including negligence), strict liability, contract, or
otherwise arising out of the use of Biological Material by LICENSEE,
unless due to the gross negligence and willful misconduct of STANFORD.
6.3 LICENSEE shall 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.
7. STANFORD NAMES AND MARKS
Except as required by law, LICENSEE agrees not to identify STANFORD in any
promotional advertising or other promotional Material(s) to be disseminated to
the public or any portion thereof or to use the name of any STANFORD faculty
member, employee, or student or any trademark, service mark, trade name, or
symbol of STANFORD or the Stanford Health Services, or that is associated with
either of them, without STANFORD's prior written consent, which shall not be
unreasonably withheld.
8. TERMINATION
8.1 LICENSEE may terminate this Agreement for any reason and at any time by
giving STANFORD notice in writing at least ninety (90) days in advance of
the Effective Date of termination provided that LICENSEE shall thereupon
cease use of Biological Material.
8.2 STANFORD may terminate this Agreement if LICENSEE is in material breach of
any provision hereof; and LICENSEE fails to remedy any such breach within
thirty (30) days after written notice thereof by STANFORD.
8.3 Surviving any termination are:
(a) Any cause of action or claim of LICENSEE or STANFORD, accrued
or to accrue, because of any breach by the other party;
(b) Payment of royalties due under Section 4 hereof; and
(c) The provisions of Articles 5 and 7.
8.4 At STANFORD's request, LICENSEE will return all Biological Material in its
possession upon the effective date of termination of this Agreement.
9. ASSIGNMENT
This Agreement may not be assigned except by LICENSEE to a party which acquires
all of substantively all of the business to which the Agreement relates through
a merger or sale of assets or otherwise.
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<PAGE>
10. MISCELLANEOUS
10.1 LICENSEE agrees to make written reports annually on or about November 1
until the expiration of this license on November 1, 2017. These reports
should contain a brief description of LICENSEE's use of Biological
Material during the preceding year and shall be held by STANFORD in
confidence.
10.2 Arbitration - If a controversy should arise out of this Agreement, or the
breach thereof, the individuals executing this Agreement on behalf of each
party, or their respective successors or designees (hereinafter referred
to as "the parties") will provide written notice of the existence and
nature of the dispute to each other and will attempt in good faith to
resolve the dispute informally through discussion, the exchange of
documents, or meetings. If the parties are unable to resolve the dispute
informally within thirty (30) days after the date of the initial written
notice to a party informing the party of a dispute, the parties may agree
in writing to submit the dispute to arbitration in accordance with the
Licensing Agreement Arbitration Rules of the American Arbitration
Association. If the parties are unable to resolve the dispute informally
within thirty (30) days after the date of the initial written notice of
the dispute, either party may elect not to arbitrate the dispute and to
file instead a civil action in a court of competent jurisdiction. These
provisions shall not apply to HHMI's right to indemnification under this
Agreement.
10.3 Termination Report - LICENSEE also agrees to make a written report to
STANFORD within ninety (90) days after the date of termination of this
Agreement, stating in such report the number and description of all
Biological Material made or otherwise disposed of which were not
previously reported to STANFORD.
10.4 Notices - All notices under this Agreement shall be deemed to have been
fully given when done in writing and deposited in the United States mail,
registered or certified, and addressed as follows:
To STANFORD: Office of Technology Licensing
Stanford University
900 Welch Road, Suite 350
Palo Alto, CA 94304-1850
Attention: Director
To LICENSEE: Ontogeny
45 Moulton Street
Cambridge, MA 02138-1118
Attention: ____________________
Either party may change its address upon written notice to the other party.
10.5 None of the terms of this Agreement can be waived except by the written
consent of the party waiving compliance.
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<PAGE>
10.6 This Agreement shall be governed by the laws of the State of California
applicable to agreements negotiated, executed, and performed wholly within
California.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in duplicate
originals by their duly authorized officers or representatives.
THE BOARD OF TRUSTEES OF THE LELAND
STANFORD JUNIOR UNIVERSITY
Signature: /s/
----------------------------------
Name:
----------------------------------------
Title: Director, Technology Licensing
Date:
----------------------------------------
ONTOGENY, INC.
Signature: /s/
----------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
Date:
----------------------------------------
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<PAGE>
Exhibit 10.67
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
S96-172:MW
Exclusive License
11/11/98
LICENSE AGREEMENT
Effective as of November 30, 1998 ("Effective Date"), THE BOARD OF TRUSTEESOF
THE LELAND STANFORD JUNIOR UNIVERSITY, a body having corporate powers under the
laws of the State of California ("STANFORD"), and Ontogeny, Inc., a Delaware
corporation having a principal place of business at 45 Moulton Street,
Cambridge, MA 02138 ("LICENSEE"), agree as follows:
1. BACKGROUND
1.1 STANFORD has an assignment of "Sprouty Family of Proteins" from the
laboratory of Dr. Mark Krasnow , as described in Stanford Docket S96-172,
("Invention(s)") and any Licensed Patent(s), as hereinafter defined, which
may issue to such Invention(s).
1.2 STANFORD has certain technical data and information as herein defined
("Technology") pertaining to Invention(s).
1.3 STANFORD desires to have the Technology and Invention(s) perfected and
marketed at the earliest possible time in order that products resulting
therefrom may be available for public use and benefit.
1.4 LICENSEE desires a license under said Technology, Invention(s), and
Licensed Patent(s) to develop, manufacture, use, and sell Licensed
Product(s) in the field of use of human and veterinary therapeutics, drug
discovery and diagnostics.
1.5 The Technology and Invention(s) were made in the course of research
supported by the National Institutes of Health.
2. DEFINITIONS
2.1 "Licensed Patent(s)" means U.S. Patent Application, Serial Number 965,903,
filed 11/7/97, and any divisions, continuations, continuation-in-part
applications (CIPs) which CIPs are ' directed to subject matter
specifically described in the above mentioned patent application
including, but not limited to, the function of sprouty in normal or
pathological conditions in mammals and the mechanism by which sprouty
functions, including proteins with which it directly interacts, with the
understanding that any applications which includes such information shall
be filed as a CIP, and any foreign patent application or equivalent
corresponding thereto and any Letters patent or equivalent thereof issuing
thereon or reissue, reexamination or extension thereof.
2.2 "Technology" means existing technical data and information from Dr. Mark
Krasnow's laboratory, provided by STANFORD to LICENSEE in writing and
listed in Exhibit A hereto, which data and information pertains to the
Invention(s) and is confidential and non-public at the time of first
commercial sale of a Licensed Product which incorporates such data and
information.
2.3 "Licensed Product(s)" means any product or part thereof in the Licensed
Field of Use, the manufacture, use, or sale of which:
<PAGE>
(a) Is covered by a valid claim of an issued, unexpired Licensed
Patent(s) directed to the Invention(s) in the country in which
it is made, used or sold. A claim of an issued, unexpired
Licensed Patent(s) shall be presumed to be valid unless and
until it has been held to be invalid by a final judgment of a
court of competent jurisdiction from which no appeal can be or
is taken;
(b) Is covered by any claim being prosecuted in a pending
application of Licensed Patent(s) in the country in which it
is made, used or sold unless such claim has been pending in
such application or an earlier application of Licensed
Patent(s) for greater than five years; or
(c) Incorporates any of the Technology or Licensed Materials.
2.4 "Net Sales" means the gross revenue derived by LICENSEE from Licensed
Product(s), less the following items but only insofar as they actually
pertain to the disposition of such Licensed Product(s) by LICENSEE, are
included in such gross revenue, and are separately billed:
(a) Import, export, excise and sales taxes, and custom duties
(b) Costs of installation at the place of use;
(c) Costs of insurance, packing, and transportation from the place
of manufacture to the customer's premises or point of
installation;
(d) Credit for returns, allowances, or trades; and
(e) Customary trade, quantity or cash discounts.
Where Licensed Products are not sold separately, but are sold in combination
with or as parts of other products, hereinafter such combinations referred to as
a "Combination Product" and the Licensed Product and each such other product
being referred to as a "Component Product"', the Net Sales price to be used for
the purpose of calculating royalties payable in respect of Combination Products
must be determined by multiplying the Net Sales price of the Combination Product
by the percentage value of the Licensed Product comprising a Component Product
contained in the Combination Product, such percentage value being determined by
dividing the current market value of the Licensed Product comprising a Component
Product by a sum of the separate current market values of each of the Component
Products which are contained in the Combination Product. The current market
value of each of the Component Products must be for a quantity comparable to
that contained in the Combination Product and of the same class, purity and
potency. When no current market value is available for a Component Product, a
reasonable hypothetical market value for such Component Product based upon the
allocation of the same proportions of costs, reasonable overhead and profits
(all of which must be determined on the basis of generally accepted accounting
principles) as are or should be allocated to similar Component Products and
having an ascertainable market value.
2.5 "Licensed Field of Use" means human and veterinary therapeutics, drug
discovery and diagnostics.
2.6 "Licensed Territory" means worldwide.
2.7 "Licensed Materials" means any physical embodiment of the Invention
produced by Dr. Mark Krasnow's laboratory including the Invention
embodiments described in Licensed Patents and included in Exhibit B
hereto. STANFORD and LICENSEE will update Exhibit B should additional
materials become available and STANFORD agrees to make these materials
available under this Agreement.
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<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
2.8 "Exclusive" means that, subject to Article 4, STANFORD shall not grant
further licenses in the Licensed Territory in the Licensed Field of Use.
3. GRANT
3.1 STANFORD hereby grants and LICENSEE hereby accepts a license in the
Licensed Field of Use to make, use, and sell Licensed Product(s), to use
Technology and to use Licensed Materials in the Licensed Territory.
3.2 Said license is Exclusive, including the right to sublicense pursuant to
Article 13, in the Licensed Field of Use for a term commencing as of
Effective Date and ending, on a country-by-country basis, [**] from the
date of first commercial sale of a Licensed Product(s) by LICENSEE or
sublicensee(s) in such country; LICENSEE agrees to promptly inform
STANFORD in writing of the date of first commercial sale. If three months
prior to the expiration of the Exclusive term, LICENSEE can demonstrate to
STANFORD that it has and will continue to effectively exploit the
Inventions and Licensed Patents under this Agreement, then the term of the
Exclusive rights granted may be extended, such extension not to be
unreasonably withheld by STANFORD. Upon expiration of the Exclusive term
of the license, the license shall be nonexclusive until expiration of the
last to expire of Licensed Patent(s).
3.3 Although STANFORD cannot license at third party under the Licensed
Patent(s) in the Licensed Field of Use during the exclusive term of the
Agreement, STANFORD may enter into a third party collaboration, which
includes Technology or Licensed Materials. If Stanford enters into a third
party collaboration which includes Technology or Licensed Materials, the
Exclusive license to Technology or Licensed Materials will automatically
become non-exclusive ("Non-exclusive Materials Period").
3.4 STANFORD shall have the right to practice the Invention(s) and use the
Technology and Licensed Materials for its own bona fide research purposes.
Any Licensed Materials that are to be transferred to third party academic
or not-for-profit research institutions shall be transferred by LICENSEE
under an MTA. During the Non-exclusive Materials Period, Stanford has the
right to transfer Licensed Materials independently. STANFORD shall have
the right to publish any information included in Technology and Licensed
Patent(s).
4. GOVERNMENT RIGHTS
This Agreement is subject to all of the terms and conditions of Title 35 United
States Code Sections 200 through 204, including an obligation that Licensed
Product(s) sold or produced in the United States be "manufactured substantially
in the United States," and LICENSEE agrees to take all reasonable action
necessary on its part as licensee to enable STANFORD to satisfy its obligation
thereunder, relating to Invention(s).
5. DILIGENCE
5.1 As an inducement to STANFORD to enter into this Agreement, LICENSEE agrees
to use all reasonable efforts and diligence to proceed with the
development, manufacture, and sale of Licensed Product(s) and to
diligently develop markets for the Licensed Product(s). Unless LICENSEE
has a Licensed Product(s) available for commercial sale prior to[**],
LICENSEE agrees that STANFORD may convert this Agreement to a
non-exclusive
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
license Agreement. In addition, LICENSEE agrees to meet the milestones set
forth in Exhibit C. If LICENSEE in good faith fails to meet a milestone
set forth in Exhibit C, then LICENSEE shall have a six month period of
time to reestablish diligence towards its objectives, and if LICENSEE
reestablishes diligence towards its objectives during this six month
period, any prior lack of diligence will be deemed cured. Anytime after
[**] years from the Effective Date, STANFORD may terminate this Agreement
if LICENSEE or a sublicensee(s) has not sold Licensed Product(s) for a
period of one (1) year and is not demonstrably engaged in a research,
development, manufacturing, marketing or licensing program, as
appropriate, directed toward the development and commercialization of the
licensed subject matter.
5.2 Progress Report - On or before September 1 of each year until LICENSEE
markets a Licensed Product(s), LICENSEE shall make a written annual report
to STANFORD covering the preceding year ending June 30, regarding the
progress of LICENSEE toward commercial use of Licensed Product(s). Such
report shall include, as a minimum, information sufficient to enable
STANFORD to satisfy reporting requirements of the U.S. Government and for
STANFORD to ascertain progress by LICENSEE toward meeting the diligence
requirements of this Article 5.
6. ROYALTIES
6.1 LICENSEE agrees to pay to STANFORD a noncreditable, nonrefundable license
issue royalty of [**] upon signing this Agreement.
6.2 Beginning October 1, 1999 and each October 1 thereafter, LICENSEE also
shall pay to STANFORD the following yearly royalty:
Anniversaries 1-5 $[**]
Anniversaries 6 and thereafter $[**]
Upon initiation of Phase III clinical trials, annual payments stop until
first commercial sale of Licensed Product for which royalties are due
hereunder. They resume at the level of 1/3 the previous year's royalties
or $[**], whichever is greater ("Commercial Yearly Royalties") with the
exception of the following: If all of the Licensed Products being
commercially sold fall under Section 2.3 (c) and not Sections 2.3 (a) or
(b), then the yearly royalties due under this section shall resume at 1/5
of such Commercial Yearly Royalties ("'Reduced Yearly Royalties"). If this
Agreement enters the Nonexclusive Materials Period, LICENSEE is no longer
responsible for paying Reduced Yearly Royalties. If this Agreement becomes
non-exclusive, the yearly royalty shall be reduced to an amount equal to
1/n times the yearly royalty in this Section 6.2 owed during the Exclusive
period of the Agreement where n equals the number of licensees in the
Licensed Field of Use of the Licensed Patents, Technology or Licensed
Materials. The first 5 annual payments are nonrefundable and
noncreditable. If an IND has been filed by the 6th anniversary, all future
yearly royalty payments are nonrefundable, but are creditable against
earned royalties to the extent provided in Paragraph 6.5. If no IND has
been filed, the future yearly royalty payment is nonrefundable and
noncreditable until an IND has been filed.
6.3 In addition, LICENSEE shall pay STANFORD earned royalties on Net Sales
during the Exclusive period of the Agreement as follows:
Royalties on Net Sales by LICENSEE:
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
(a) If manufacture, use or sale of Licensed Product is covered by
a valid composition of matter claim of an issued unexpired
Licensed Patent in the country in which it is made, used or
sold : [**]%
(b) If the manufacture, use or sale of Licensed Product is not
covered by a valid composition of matter claim of an issued,
unexpired Licensed Patent in the country in which it is made,
used or sold, but the manufacture, use or sale of Licensed
Product is covered by a valid claim of Licensed Patents in the
country in which it is made, used or sold according to the
following schedule:
On Net Sales up to $[**] [**]%
On Net Sales of $[**] to $[**] [**]%
On Net Sales of $[**] to $[**] [**]%
On Net Sales over $[**] [**]%
(c) If the manufacture, use or sale of Licensed Product is not
covered by a valid composition of matter claim of an issued,
unexpired Licensed Patent or a valid claim of Licensed Patents
in the country in which it is made, used or sold, but the
Licensed Product incorporates Technology or Licensed Materials
and is not included in a third party collaboration, according
to the following schedule:
On Net Sales up to $[**] [**]%
On Net Sales of $[**] to $[**] [**]%
On Net Sales over $[**] [**]%
The royalty will be applied to the sales in the particular range and
not applied to the entire amount should the sales level reach that
level. If this Agreement becomes non-exclusive, the earned royalty
shall be reduced to an amount equal to 1/n times the earned royalty
in this Section 6.3 (a) and 6.3(b) owed during the Exclusive period
of the Agreement where n equals the number of licensees in the
Licensed Field of Use of the Licensed Patent. If this Agreement
enters the Non-exclusive Materials Period, no earned royalties under
6.3(c) will be owed.
6.4 LICENSEE also agrees to make the following milestone payments for the
first Licensed Product to attain such a milestone:
Upon IND Filing: $[**]
Upon Initiation of Phase III Human Clinical Trials $[**]
Upon Filing of an NDA (or equivalent) in US: $[**]
Upon Approval of an NDA (or equivalent) in US: $[**];
provided, however, that if the first Licensed Product for which the
milestone is obtained falls under Section 2.3 (c) and not Sections 2.3 (a)
or (b), then the milestone payments to be made hereunder shall be at 1/5
of the milestones payments set forth in this Section 6.4 unless the
Agreement has entered the Non-exclusive Materials Period, in which case no
milestone payment will be due. If a subsequent Licensed Product attains a
milestone set forth in this Section 6.4 and such Licensed Product falls
under Sections 2.3 (a) or (b), then LICENSEE agrees to pay STANFORD the
difference between the milestone payments set forth in this Section 6.4
and the amount which has been previously paid by LICENSEE . Said milestone
payments are nonrefundable, but they are creditable against earned
royalties in the manner set forth in Section 6.5.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
6.5 Creditable payments under Sections 6.2 and 6.4 of this Agreement shall be
an offset to LICENSEE against up to fifty percent (50%) of each earned
royalty payment which LICENSEE would be required to pay pursuant to
Paragraph 6.3 until the entire credit is exhausted.
6.6 If this Agreement is not terminated in accordance with other provisions
hereof, LICENSEE shall be obligated to pay royalties hereunder until the
latter of:
(a) If the Licensed Product is covered by a claim of a Licensed
Patent that has not issued, for a period of [**] from the date
the claim has been pending in the country in which the
Licensed Product is made, used or sold; or
(b) For so long as LICENSEE, by its activities would, but for the
license granted herein, infringe a valid claim of an issued,
unexpired Licensed Patent(s) of STANFORD covering said
activity. LICENSEE shall be obligated to pay royalties on all
Licensed Product(s) that are either sold or produced during
the term of this Agreement under the license granted in
Article 3, regardless of whether such Licensed Product(s) are
produced prior to the Effective Date of this Agreement or sold
after the expiration of the Licensed Patent(s).
6.7 The royalty on sales in currencies other than U.S. Dollars shall be
calculated using the appropriate foreign exchange rate for such currency
quoted by the Bank of America (San Francisco) foreign exchange desk, on
the close of business on the last banking day of each calendar quarter.
Royalty payments to STANFORD shall be in U.S. Dollars. All non-U.S. taxes
related to royalty payments shall be paid by LICENSEE and are not
deductible from the payments due STANFORD. In the event that LICENSEE is
required to withhold taxes imposed upon STANFORD for any payment under
this Agreement by virtue of the statutes, laws, codes or governmental
regulations of a foreign country in which Licensed Products are sold, then
such payments will be made by LICENSEE without deduction from the payment
due STANFORD. STANFORD shall assist LICENSEE as reasonably requested by
LICENSEE and at LICENSEE's expense, in recovering such taxes to the extent
possible under applicable tax laws and treaties.
6.8 Within forty-five (45) days after receipt of a statement from STANFORD,
LICENSEE shall reimburse STANFORD for all costs incurred by STANFORD,
prior to the Effective Date which shall not exceed $24,000, in connection
with the preparation, filing, and prosecution of all patent applications
and maintenance of patents corresponding to the Invention. After the
Effective Date, and during the Exclusive term of the license, LICENSEE
will be responsible for the filing, prosecution and maintenance of the
Licensed Patent(s) and the costs incurred by LICENSEE related to such
filing, prosecution and maintenance. Licensee may use patent counsel of
its own choosing, reasonably acceptable to STANFORD, provided that
STANFORD shall be kept informed of and shall receive copies of all
documentation and substantive actions pertaining to the filing,
prosecution and maintenance of Licensed Patent(s). STANFORD shall have
reasonable opportunities to participate in decision making and LICENSEE
will use diligent efforts to incorporate Stanford's reasonable
suggestions. If LICENSEE elects not to continue to seek or maintain patent
protection on any Licensed Patent in any country during the Exclusive term
of the license, STANFORD shall have the right, at its
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expense, to procure, maintain and enforce in any country such Licensed
Patent(s) and LICENSEE shall have no further rights under the Licensed
Patent(s) in such country.
6.9 Only one royalty is due on each Licensed Product sold by LICENSEE
regardless of whether its manufacture, use or sale are or shall be covered
by more than one patent or patent application included in Licensed Patent
(s) licensed under this Agreement, and no further royalties will be due
for use of such Licensed Product by LICENSEES customers.
7. ROYALTY REPORTS, PAYMENTS, AND ACCOUNTING
7.1 Quarterly Earned Royalty Payment and Report - Beginning with the first
sale of a Licensed Product(s), LICENSEE shall make written reports (even
if there are no sales) and earned royalty payments to STANFORD within
forty-five (45) days after the end of each calendar quarter. This report
shall state the number, description, and aggregate Net Sales of Licensed
Product(s) during such completed calendar quarter, and resulting
calculation pursuant to Paragraph 6.3 of earned royalty payment due
STANFORD for such completed calendar quarter. Concurrent with the making
of each such report, LICENSEE shall include payment due STANFORD of
royalties for the calendar quarter covered by such report.
7.2 LICENSEE also agrees to make a written report to STANFORD within ninety
(90) days after the expiration of the license pursuant to Section 3.2.
LICENSEE shall continue to make reports pursuant to the provisions of this
Section 7.2 concerning royalties payable in accordance with Section 6.6(b)
in connection with the sale of Licensed Product(s) after expiration of the
license, until such time as all such Licensed Product(s) produced under
the license have been sold or destroyed. Concurrent with the submittal of
each post-termination report, LICENSEE shall pay STANFORD all applicable
royalties.
7.3 Accounting - LICENSEE agrees to keep and maintain records for a period of
three (3) years showing the manufacture, sale, use, and other disposition
of products sold or otherwise disposed of under the license herein
granted. Such records will include general ledger records showing cash
receipts and expenses, and records which include production records,
customers, serial numbers, and related information in sufficient detail to
enable the royalties payable hereunder by LICENSEE to be determined.
LICENSEE further agrees to permit its books and records to be examined by
an independent certified public accountant selected by STANFORD from time
to time to the extent necessary to verify reports provided for in
Paragraph 7.1 and 7.2. Such examination. is to be made by STANFORD or its
designee, at the expense of STANFORD, except in the event that the results
of the audit reveal an underreporting of royalties due STANFORD of five
percent (5%) or more, then the audit costs shall be paid by LICENSEE.
8. NEGATION OF WARRANTIES
8.1 To the best of STANFORDS OTL's knowledge, STANFORD is the sole owner of
U.S. patent application Serial No. 965, 903 filed 11/7/97 and U.S.
provisional patent application Serial No. 60/030,232 filed 11/7/96.
8.2 Nothing in this Agreement is or shall be construed as:
(a) A warranty or representation by STANFORD as to the validity or
scope of any Licensed Patent(s);
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<PAGE>
(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 patents,
copyrights, and other rights of third parties; however,
STANFORD does represent that it has not received notice of any
assertion that any of the patents/patent applications or
subject inventions infringe upon any third party's know-how,
patent or other intellectual property rights as of the
Effective Date;
(c) An obligation to bring or prosecute actions or suits against
third parties for infringement, except to the extent and in
the circumstances described in Article 12; or
(d) Granting by implication, estoppel, or otherwise any licenses
or rights under patents or other rights of STANFORD or other
persons other than Licensed Patent(s), regardless of whether
such patents or other rights are dominant or subordinate to
any Licensed Patent(s).
8.3 Except as expressly set forth in this Agreement, STANFORD MAKES NO
REPRESENTATIONS AND EXTENDS 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 USE OF THE LICENSED
PRODUCT(S) WILL NOT INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK, OR OTHER
RIGHTS OR ANY OTHER EXPRESS OR IMPLIED WARRANTIES.
8.4 LICENSEE agrees that nothing in this Agreement grants LICENSEE any express
or implied license or right under or to U.S. Patent 4,656,134
'Amplification of Eucaryotic Genes' or any patent application
corresponding thereto.
9. INDEMNITY
9.1 LICENSEE agrees to indemnify, hold harmless, and defend STANFORD,
UCSF-Stanford Health Care and Stanford Health Services and their
respective trustees, officers, employees, students, and agents against any
and all claims for death, illness, personal injury, property damage, and
improper business practices arising out of the manufacture, use, sale, or
other disposition of Invention(s), Licensed Patent(s), Licensed
Product(s), or Technology by LICENSEE or sublicensee(s), except if such
claims are due to the gross negligence of willful acts of STANFORD.
STANFORD agrees to promptly notify LICENSEE in writing of any such claim
and LICENSEE shall manage and control, at its own expense, the defense of
such claim and its settlement, utilizing attorney's reasonably acceptable
to STANFORD. LICENSEE agrees not to settle any such claim against STANFORD
without STANFORD's, written consent where such settlement would include
any admission of liability on the part of STANFORD, where the settlement
would impose any restriction on the conduct by STANFORD of any of its
activities, or where the settlement would not include an unconditional
release of STANFORD from all liability for claims that are the subject
matter of such claim. STANFORD shall not settle any claim covered by the
indemnity without the prior written consent of LICENSEE which consent
shall not be unreasonably withheld or delayed. This section 9.1 will
survive termination of this Agreement.
9.2 STANFORD shall not be liable for any indirect, special, consequential or
other damages whatsoever, unless due to the gross negligence or willful
misconduct of STANFORD.
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STANFORD shall not have any responsibilities or liabilities whatsoever
with respect to Licensed Products(s).
9.3 LICENSEE shall 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.
9.4 In addition to the foregoing, LICENSEE shall maintain, during the term of
this Agreement, Comprehensive General Liability Insurance, including
Products Liability Insurance, with reputable and financially secure
insurance carrier(s) to cover the activities of LICENSEE. Upon initiation
of clinical trials of the Licensed Product such insurance shall provide
minimum limits of liability of $5 Million and shall include STANFORD,
UCSF-Stanford Health Care, Stanford Health Services, their trustees,
directors, officers, employees, students, and agents as additional
insureds. Such insurance shall be written to cover claims incurred,
discovered, manifested, or made during or after the expiration of this
Agreement up to a limit of seven years after the product is no longer sold
and should be placed with carriers with ratings of at least A- as rated by
A.M. Best. At Stanford's request, LICENSEE shall furnish a Certificate of
Insurance evidencing primary coverage and additional insured requirements
and requiring thirty (30) days prior written notice of cancellation or
material change to STANFORD. LICENSEE shall advise STANFORD, in writing,
that it maintains excess liability coverage (following form) over primary
insurance for at least the minimum limits set forth above. All such
insurance of LICENSEE shall be primary coverage; insurance of STANFORD,
UCSF-Stanford Health Care, and Stanford Health Services shall be excess
and noncontributory.
10. MARKING
Prior to the issuance of patents on the Invention(s), LICENSEE agrees to mark
Licensed Products (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," and following the issuance of one or more patents, with the
numbers of the Licensed Patent(s).
11. STANFORD NAMES AND MARKS
LICENSEE agrees not to identify STANFORD in any promotional advertising or other
promotional materials to be disseminated to the public or any portion thereof or
to use the name of any STANFORD faculty member, employee, or student or any
trademark, service mark, trade name, or symbol of STANFORD, Stanford Health
Services or UCSF-Stanford Health Care, or that is associated with any of them,
Without STANFORD's prior written consent, which shall not be unreasonably
withheld.
12. INFRINGEMENT BY OTHERS: PROTECTION OF PATENTS
12.1 LICENSEE and STANFORD shall promptly inform the other party of any
suspected infringement of any Licensed Patent(s) by a third party. During
the Exclusive period of this Agreement, STANFORD and LICENSEE each shall
have the right to institute an action for infringement of the Licensed
Patent(s) against such third party in accordance with the following:
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(a) Within 30 days of notification, if STANFORD and LICENSEE agree
to institute suit jointly, the suit shall be brought in both
their names, the out-of-pocket costs thereof shall be borne
equally, and any recovery or settlement shall be shared
equally. LICENSEE and STANFORD shall agree to the manner in
which they shall exercise control over such action. Each party
may, if it so desires, also be represented by separate counsel
of its own selection, the fees for which counsel shall be paid
by such party.;
(b) If STANFORD and LICENSEE do not institute suit jointly within
30 days of notification as set forth in 12.1(a), LICENSEE
shall be empowered to bring suit in its own name to enjoin
such infringement. LICENSEE shall bear the entire cost of such
litigation and shall be entitled to retain the entire amount
of any recovery or settlement. However, any recovery in excess
of litigation costs will be considered Net Sales, and LICENSEE
will pay STANFORD royalties as indicated in Section 6.3.
STANFORD shall provide reasonable assistance, at LICENSEE"s
cost, to LICENSEE in the prosecution of any such suit brought
by LICENSEE.
(c) In the event that LICENSEE does not terminate such
infringement or initiate steps to do so within six months of
learning of such infringement, STANFORD may bring suit against
infringer at its sole expense and shall be entitled to retain
the entire amount of any recovery or settlement. LICENSEE will
give reasonable assistance to STANFORD in the prosecution of
any such suit brought by STANFORD.
12.2 Should either STANFORD or LICENSEE commence a suit under the provisions of
Paragraph 12.1 and thereafter elect to abandon the same, it shall give
timely notice to the other party who may, if it so desires, continue
prosecution of such suit, provided, however, that the sharing of expenses
and any recovery in such suit shall be as agreed upon between STANFORD and
LICENSEE.
13. SUBLICENSE(S)
13.1 LICENSEE may grant sublicense(s) to Licensed Patents, Technology and/or
Licensed Materials during the term of this Agreement.
13.2 If LICENSEE is unable or unwilling to serve or develop a potential market
or market territory for which there is a willing sublicensee(s), LICENSEE
will, at STANFORD's request, negotiate in good faith a sublicense(s)
hereunder. Bona fide business concerns of LICENSEE will be considered in
any good faith negotiations for a sublicense under this Agreement.
13.3 Any sublicense(s) granted by LICENSEE under this Agreement shall be
subject and subordinate to terms and conditions of this Agreement, except:
(a) Sublicense terms and conditions shall reflect that any
sublicensee(s) may further sublicense any rights under
Licensed Patents, Technology or Materials only as: (a) needed
or implied in the course of distribution, installation or
performance of service as required for the sale to an end-user
of Licensed Products or Licensed Materials, or (b) not
specifically rejected in writing by STANFORD within thirty
(30) days of written notification of subsublicensee by
LICENSEE, any such rejection not being unreasonably made by
STANFORD; and
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
(b) The earned royalty rate specified in the sublicense(s) may be
at higher rates than the rates in this Agreement. Any such
sublicense(s) also shall expressly include the provisions of
Articles 7, 8, and 9 for the benefit of STANFORD and provide,
at LICENSEE'S option, for the transfer of all obligations,
including the payment of royalties specified in such
sublicense(s), to STANFORD or its designee, in the event that
this Agreement is terminated.
13.4 LICENSEE agrees to provide STANFORD in confidence with a copy of the
relevant portions of any sublicense granted pursuant to this Article 13.
13.5 LICENSEE will pay to STANFORD [**] of all upfront payments received from
a sublicensee in consideration for the sublicensing of Licensed Patents as
well as [**] of any royalties, fees or other amounts received by LICENSEE
as a result of the sublicensee's sale of Licensed Products, excluding but
not limited to equity payments, milestone payments, amounts paid to fund
research and development activities conducted by LICENSEE, and
reimbursement of patent costs. If LICENSEE is required to pay royalties to
an additional party, STANFORD agrees in good faith to consider a reduction
in royalties under this section by LICENSEE.
14. TERMINATION
14.1 LICENSEE may terminate this Agreement by giving STANFORD notice in writing
at least thirty (30) days in advance of the effective date of termination
selected by LICENSEE.
14.2 Subject to Section 5.1 of this Agreement, STANFORD may terminate this
Agreement if LICENSEE:
(a) Is in default in payment of royalty or providing of reports;
(b) Is in material breach of any provision hereof; or
(c) Provides any false report;
and LICENSEE fails to remedy any such default, breach, or false report within
thirty (30) days after written notice thereof by STANFORD.
14.3 Surviving any termination or expiration are:
(a) LICENSEE's obligation to pay royalties accrued or accruable;
(b) Any cause of action or claim of LICENSEE or STANFORD, accrued
or to accrue, because of any breach or default by the other
party; and
(c) The provisions of Section 6-6(b), Articles 7, 8, and 9 and any
other provisions that by their nature are intended to survive.
15. ASSIGNMENT
This Agreement may not be assigned except that LICENSEE may assign this
Agreement to a party which acquires all or substantially all of that portion of
LICENSEE's business to which this Agreement pertains, whether by merger, sale of
assets or otherwise.
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16. ARBITRATION
16.1 Any controversy arising under or related to this Agreement, and any
disputed claim by either party against the other under this Agreement
excluding any dispute relating to patent validity or infringement arising
under this Agreement, shall be settled by arbitration in accordance with
the Licensing Agreement Arbitration Rules of the American Arbitration
Association.
16.2 Upon request by either party, arbitration will be by a third party
arbitrator mutually agreed upon in writing by LICENSEE and STANFORD within
thirty (30) days of such arbitration request. Judgement upon the award
rendered by the arbitrator shall be final and nonappealable and may be
entered in any court having jurisdiction thereof.
16.3 The parties shall be entitled to discovery in like manner as if the
arbitration were a civil suit in the California Superior Court. The
Arbitrator may limit the scope, time and/or issues involved in discovery.
17. NOTICES
All notices under this Agreement shall be deemed to have been fully given when
done in writing and deposited in the United States mail, registered or
certified, and addressed as follows:
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To STANFORD:
Office of Technology Licensing
Stanford University
900 Welch Road, Suite 350
Palo Alto, CA 94304-1850
Attention: Director
To LICENSEE:
Ontogeny, Inc.
45 Moulton Street
Cambridge, MA 02138
Attention: President and CEO
Either party may change its address upon written notice to the other party.
18. WAIVER
None of the terms of this Agreement can be waived except by the written consent
of the party waiving compliance.
19. APPLICABLE LAW
This Agreement shall be governed by the laws of the State of California
applicable to agreements negotiated, executed and performed wholly within
California.
20. CONFIDENTIALITY
STANFORD agrees that reasonable effort shall be used to maintain the
confidentiality of reports or documents received from LICENSEE by STANFORD
pursuant to this Agreement, provided that such reports or documents are marked
as confidential.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement in duplicate
originals by their duly authorized officers or representatives.
THE BOARD OF TRUSTEES OF THE LELAND
STANFORD JUNIOR UNIVERSITY
Signature /s/ Katharine Ku
-------------------------------------
Name Katharine Ku
-------------------------------------
Title Director
-------------------------------------
Date 11/10/98
-------------------------------------
ONTOGENY, INC.
Signature /s/ Raul Rodriguez
-------------------------------------
Name Raul Rodriguez
-------------------------------------
Title Vice President Business Development
-------------------------------------
Date 11/30/98
-------------------------------------
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EXHIBIT A
LICENSED MATERIALS
None as of the Effective Date
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EXHIBIT B
TECHNOLOGY
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EXHIBIT C
DILIGENCE MILESTONES
1. Observations and Reagents
a. Complete full length cDNA cloning and Q4,1999
sequencing of sprouty genes
b. Search for new sprouty genes in mouse and Q4, 1999
human genomes
c. Attempt to generate antibodies to sprouty Q4, 1999
proteins
2. Conduct expression experiments in tumor
tissues and in developing and adult organ
systems Q4, 2000
3. Conduct mechanism of action studies including
establishing FGF-based cell culture assays Q4,2001
4. Using functional assays define appropriate
screens to find small molecules, antibodies or
other proteins which interact with the sprouty
pathway Q4, 2003
5. Define clinical candidate Q4, 2005
6. File IND or other initial regulatory filing Q4, 2007
STANFORD and LICENSEE agree to discuss potential updates to the above milestones
if indicated.
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Exhibit 10.68
Confidential Materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
LICENSE AGREEMENT
BETWEEN
PRESIDENT AND FELLOWS OF HARVARD COLLEGE
AND
ONTOGENY, INC
Effective as of June 13, 1996
Re: Harvard Case No. 1222
In consideration of the mutual promises and covenants set forth below, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
1.1 AFFILIATE: any company, corporation, or business in which LICENSEE owns or
controls at least fifty percent (50%) of the voting stock or other
ownership. Unless otherwise specified, the term LICENSEE includes
AFFILIATES.
1.2 HARVARD: President and Fellows of Harvard College, a nonprofit
Massachusetts educational corporation having offices at the Office for
Technology and Trademark Licensing, 124 Mt. Auburn Street, Suite 410
South, Cambridge, Massachusetts 02138.
1.3 BIOLOGICAL MATERIALS: the materials supplied by HARVARD (identified in
Appendix B, such Appendix to be periodically updated by mutual consent of
LICENSEE and HARVARD) together with any progeny, mutants, or derivatives
thereof supplied by HARVARD or created by LICENSEE.
1.4 LICENSED PROCESSES: the processes covered by PATENT RIGHTS or processes
utilizing BIOLOGICAL MATERIALS or some portion thereof.
1.5 LICENSED PRODUCTS: products covered by PATENT RIGHTS or products made or
services provided in accordance with or by means of LICENSED PROCESSES or
products made or services provided utilizing BIOLOGICAL MATERIALS or
incorporating some portion of BIOLOGICAL MATERIALS..
1.6 MILESTONE PRODUCTS: products identified or discovered through the use of
PATENT RIGHTS but which are not LICENSED PRODUCTS.
1.7 LICENSEE: Ontogeny, Inc, a corporation organized under the laws of
Delaware having its principal offices at One Kendall Square, Building 600,
Cambridge, MA 02139.
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1.8 NET SALES: the amount billed, invoiced, or received (whichever occurs
first) for sales, leases, or other transfers of LICENSED PRODUCTS, less:
(a) customary trade, quantity or cash discounts and non-affiliated
brokers' or agents' commissions actually allowed and taken;
(b) amounts repaid or credited by reason of rejection or return; and
(c) to the extent separately stated on purchase orders, invoices, or
other documents of sale, taxes levied on and/or other governmental
charges made as to production, sale, transportation, delivery or use
and paid by or on behalf of LICENSEE or sublicensees.
(d) reasonable charges for delivery or transportation provided by third
parties, if separately stated.
NET SALES also includes the fair market value of any non-cash
consideration received by LICENSEE or sublicensees for the sale,
lease, or transfer of LICENSED PRODUCTS.
1.9 NON-COMMERCIAL RESEARCH PURPOSES: use of PATENT RIGHTS and/or BIOLOGICAL
MATERIALS for academic research or other not-for-profit scholarly purposes
which are undertaken at a non-profit or governmental institution that does
not use the PATENT RIGHTS or BIOLOGICAL MATERIALS in the production or
manufacture of products for sale or the performance of services for a fee.
1.10 PATENT RIGHTS: United States patent application Serial No. 08/580,031
filed December 20,1995, jointly owned by HARVARD and LICENSEE, the
inventions described and claimed therein, and any divisions,
continuations, continuations-in-part to the extent the claims are directed
to subject matter specifically described in USSN 08/580,031 and are
dominated by the claims of the existing PATENT RIGHTS, patents issuing
thereon or reissues thereof, and any and all foreign patents and patent
applications corresponding thereto, all to the extent owned or controlled
by HARVARD. Such continuations-in-part shall include, but are not limited
to, CIPs which are directed to other signalin homologs, bioactive
fragments thereof, diagnostic methods involving the signalin genes and/or
gene products and drug screening protocols involving signalin genes and/or
gene products, all to the extent that the claims of such CIPs are
dominated by claims of USSN 08/580,031.
1.11 TERRITORY: Worldwide
1.12 The terms "Public Law 96-517" and "Public Law 98-620" include all
amendments to those statutes.
1.13 The terms "sold" and "sell" include, without limitation, leases and other
transfers and similar transactions.
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Confidential Materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
ARTICLE II
REPRESENTATIONS
2.1 HARVARD is owner by assignment from the Howard Hughes Medical Institute
(HHMI) and Dr. D. Melton and Dr. J. Graff of their entire right, title and
interest in United States Patent Application Serial No. 08/580,031 filed
December 12, 1995 entitled "[**]", (H.U. Case #1222), in the foreign
patent applications corresponding thereto, and in the inventions described
and claimed therein.
2.2 HARVARD has the authority to issue licenses to HARVARD's ownership
interests under PATENT RIGHTS.
2.3 HARVARD is committed to the policy that ideas or creative works produced
at HARVARD should be used for the greatest possible public benefit, and
believes that every reasonable incentive should be provided for the prompt
introduction of such ideas into public use, all in a manner consistent
with the public interest.
2.4 LICENSEE is prepared and intends to diligently develop the invention and
to bring products to market which are subject to this Agreement. LICENSEE
is desirous of obtaining an exclusive license in the TERRITORY in order to
practice the above-referenced invention covered by PATENT RIGHTS in the
United States and in certain, foreign countries, and to manufacture, use
and sell in the commercial market the products made in accordance
therewith, and HARVARD is desirous of granting such a license to LICENSEE
in accordance with the terms of this Agreement.
2.5 LICENSEE is desirous of obtaining an exclusive license in the TERRITORY in
order to practice the above-referenced invention covered by PATENT RIGHTS
in the United States and in certain, foreign countries, and to
manufacture, use and sell in the commercial market the products made in
accordance therewith, and HARVARD is desirous of granting such a license
to LICENSEE in accordance with the terms of this Agreement.
ARTICLE III
GRANT OF RIGHTS
3.1 HARVARD hereby grants to LICENSEE and LICENSEE accepts, subject to the
terms and conditions hereof, in the TERRITORY:
(a) an exclusive commercial license to HARVARD's ownership interest
under PATENT RIGHTS, and
(b) a license to use BIOLOGICAL MATERIALS
to make and have made, to use and have used, to sell and have sold
the LICENSED PRODUCTS, and to practice the LICENSED PROCESSES, for
the fife of the PATENT RIGHTS. Such licenses shall include the right
to grant sublicenses, subject to HARVARD's approval, which approval
shall not be unreasonably withheld. In order to provide LICENSEE
with commercial exclusivity for so long as the license under PATENT
RIGHTS remains exclusive, HARVARD agrees that it will not grant
licenses under PATENT RIGHTS to others except as required by
HARVARD's obligations in paragraph 3.2(a)or as permitted in
paragraph 3.2(b)
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Confidential Materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
and that it will not provide BIOLOGICAL MATERIALS to others for any
commercial purpose.
3.2 The granting and exercise of this license is subject to the following
conditions:
(a) HARVARD's "Statement of Policy in Regard to Inventions, Patents and
Copyrights," dated March 17, 1986, Public Law 96-517, Public Law
98-620, and HARVARD's obligations to the Howard Hughes Medical
Institute (HHMI) as attached in Appendix C. HHMI retains a
nonexclusive license, without the right to sublicense, to use PATENT
RIGHTS and BIOLOGICAL MATERIALS for its own internal research. Any
right granted in this Agreement greater than that permitted under
Public Law 96-517, or Public Law 98-620, shall be subject to
modification as may be required to conform to the provisions of
those statutes.
(b) HARVARD reserves the right to
(i) make, use, and provide the BIOLOGICAL MATERIALS to others on a
non-exclusive basis, and grant others non-exclusive licenses
to make and use the BIOLOGICAL MATERIALS, all for
NON-COMMERCIAL RESEARCH PURPOSES. BIOLOGICAL MATERIALS will be
transferred under a Material Transfer Agreement which
acknowledges LICENSEE's rights in the BIOLOGICAL MATERIALS and
provides for an option on reasonable commercial terms to
LICENSEE of any invention which could not have been made
except by use of the BIOLOGICAL MATERIALS; and
(ii) make and use, and grant to others non-exclusive licenses to
make and use for NON-COMMERCIAL RESEARCH PURPOSES the subject
matter described and claimed in PATENT RIGHTS.
(c) LICENSEE shall use diligent efforts to effect introduction of the
LICENSED PRODUCTS into the commercial market as soon as practicable,
consistent with sound and reasonable business practice and judgment;
thereafter, until the expiration of this Agreement, LICENSEE shall
endeavor to keep LICENSED PRODUCTS reasonably available to the
public.
(d) At any time after [**] from the effective date of this Agreement,
HARVARD may terminate or render this license nonexclusive if, in
HARVARD's reasonable judgment, the Progress Reports furnished by
LICENSEE do not demonstrate that LICENSEE: has put the licensed
subject matter into commercial use in the country or countries
hereby licensed, directly or through a sublicense, and is not
keeping the licensed subject matter reasonably available to the
public, or
(i) is engaged in research development, manufacturing, marketing
or sublicensing activity appropriate to achieving 3.2(d)(i).
(e) HARVARD may terminate this Agreement if LICENSEE does not adhere to
the following performance milestones for a therapeutic product and
if LICENSEE does not correct such non-performance within 90 days
after being so notified in writing
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Confidential Materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
by HARVARD. HARVARD shall have the right to terminate this Agreement
if LICENSEE does not pay the following milestone fees and if
LICENSEE does not correct such failure within 45 days after being so
notified in writing by HARVARD.
Milestone To be accomplished by Fee
(year)
IND Filing [**] $[**]
Completion of Phase [**] $[**]
I clinical trial
Completion of [**] $[**]
Phase III clinical
trial
(f) LICENSEE shall pay to HARVARD the following payments upon execution
of the first corporate partnership in a field primarily related to
the subject matter of PATENT RIGHTS:
(1) [**], if the partnership has a determined value of
between [**] and [**] dollars ($[**]), or
(2) [**] dollars ($[**]), if the partnership has a
determined value of greater than [**]
Determined value shall include the sum of any equity payments,
up-front payments or fees, and the total of committed research
sponsorship payments.
(g) In all sublicenses granted by LICENSEE hereunder, LICENSEE shall
include a requirement that the sublicensee use its best efforts to
bring the subject matter of the sublicense into commercial use as
quickly as is reasonably possible. LICENSEE shall further provide in
such sublicenses that such sublicenses are subject and subordinate
to the terms and conditions of this Agreement, except:
(i) The sublicensee may further sublicense any rights under PATENT
RIGHTS or BIOLOGICAL MATERIALS only as
(1) needed or implied in the course of distribution,
installation or performance of service as required
for the sale to an end-user of LICENSED PRODUCTS,
or
(2) not specifically rejected in writing by HARVARD
within twenty (20) days of written notification of
sub-sublicense by LICENSEE, any such rejection not
being unreasonably made by HARVARD; and
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Confidential Materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
(ii) The earned royalty rate on NET SALES paid by the sublicensee
to the LICENSEE may be higher than the rates in this
Agreement.
Copies of all sublicense agreements shall be provided promptly to HARVARD.
(h) If LICENSEE is unable or unwilling to grant sublicenses, either as
suggested by HARVARD or by a potential sublicensee or otherwise,
then HARVARD may directly license such potential sublicensee unless,
in Harvard's reasonable judgment, such license would be contrary to
sound and reasonable business practice and the granting of such
license would not materially increase the availability to the public
of LICENSED PRODUCTS.
(i) During the period of exclusivity of this license in the United
States, LICENSEE shall cause any LICENSED PRODUCT produced for sale
in the United States to be manufactured substantially in the United
States.
3.3 All rights reserved to the United States Government and others under
Public Law 96-517, and Public Law 98-620, shall remain and shall in no way
be affected by this Agreement.
ARTICLE IV
ROYALTIES
4.1 LICENSEE shall pay to HARVARD a non-refundable license royalty fee in the
sum of [**] dollars ($[**]) upon execution of this Agreement.
4.2 (a) LICENSEE shall pay to HARVARD during the term of this Agreement a
royalty of [**] of NET SALES by LICENSEE of LICENSED PRODUCTS in the field
of therapeutics. LICENSEE shall pay to HARVARD during the term of this
Agreement a royalty of [**] of NET SALES by LICENSEE of LICENSED PRODUCTS
in the field of diagnostics. LICENSEE shall also pay to HARVARD a royalty
of [**] of NET SALES by sublicensees in any field.
(b) If the license pursuant to this Agreement is converted to a
nonexclusive one and if other non-exclusive licenses in the same
field territory are granted, the above royalties shall not exceed
the royalty rate to be paid by other licensees in the same field and
territory during the term of the non-exclusive license.
(c) On sales between LICENSEE and its AFFILIATES or sublicensees, for
resale, the royalty shall be paid on the NET SALES of the AFFILIATE
or sublicensee.
4.3 In lieu of the royalties of paragraph 4.2, LICENSEE shall pay to HARVARD a
fee of [**] for each MILESTONE PRODUCT, such payment to be made within six
(6) months after the date of first sale of the MILESTONE PRODUCT. Such
payments are in recognition of LICENSEE's early and exclusive use of the
licensed subject matter.
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Confidential Materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
4.4 If LICENSEE, in order to make, use, sell or otherwise exploit LICENSED
PRODUCTS or LICENSED PROCESSES in any jurisdiction, reasonably determine
that they must make royalty payments (`Third Party Payments") to one or
more independent third parties to obtain a license or similar right to
make, use, sell or otherwise exploit the LICENSED PRODUCTS or LICENSED
PROCESSES such that the total royalty burden equals or exceeds [**].
LICENSEE may reduce the royalty due to HARVARD by [**] of a percentage
point for each percent above [**], but the residual royalty payable to
HARVARD shall, in no event, be lower than [**] percent.
4.5 No later than January 1 of each calendar year after the effective date of
this Agreement, LICENSEE shall pay to HARVARD the following nonrefundable
license maintenance royalty and/or advance on royalties. Such payments may
be credited against running royalties due for that calendar year and
Royalty Reports shall reflect such a credit. Such payments shall not be
credited against milestone payments (if any) nor against royalties due for
any subsequent calendar year.
January 1, 1997 to January 1, 1999 $[**]
January 1, 2000 to January 1, 2002 $[**]
January 1, 2003 $[**]
each year thereafter $[**]
ARTICLE V
REPORTING
5.1 Prior to signing this Agreement, LICENSEE has provided to HARVARD a
written research and development plan under which LICENSEE intends to
bring the subject matter of the licenses granted hereunder into commercial
use upon execution of this Agreement. Such plan includes projections of
sales and proposed marketing efforts.
5.2 No later than sixty (60) days after June 30 of each calendar year,
LICENSEE shall provide to HARVARD a written annual Progress Report
describing progress on research and development, regulatory approvals,
manufacturing, sublicensing, marketing and sales during the most recent
twelve (12) month period ending June 30 and plans for the forthcoming
year. If multiple technologies are covered by the license granted
hereunder, the Progress Report shall provide the information set forth
above for each technology. If progress differs from that anticipated in
the plan required under Paragraph 5.1, LICENSEE shall explain the reasons
for the difference and propose a modified research and development plan
for HARVARD's review and approval. LICENSEE shall also provide any
reasonable additional data HARVARD requires to evaluate LICENSEE's
performance.
5.3 LICENSEE shall report to HARVARD the date of first sale of LICENSED
PRODUCTS (or results of LICENSED PROCESSES) in each country within thirty
(30) days of occurrence.
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5.4 (a) LICENSEE shall submit to HARVARD within sixty (60) days after each
calendar half year ending June 30 and December 31, a Royalty Report
setting forth for such half year at least the following information:
(i) the number of LICENSED PRODUCTS sold by LICENSEE, its
AFFILIATES and sublicensees in each country;
(ii) total billings for such LICENSED PRODUCTS;
(iii) an accounting for all LICENSED PROCESSES used or sold;
(iv) deductions applicable to determine the NET SALES thereof;
(v) the amount of royalty due thereon, or, if no royalties are due
to HARVARD for any reporting period, the statement that no
royalties are due.
Such report shall be certified as correct by an officer of LICENSEE
and shall include a detailed listing of all deductions from
royalties.
(b) LICENSEE shall pay to HARVARD with each such Royalty Report the
amount of royalty due with respect to such half year. If multiple
technologies are covered by the license granted hereunder, LICENSEE
shall specify which PATENT RIGHTS are utilized for each LICENSED
PRODUCT and LICENSED PROCESS included in the Royalty Report.
(c) All payments due hereunder shall be deemed received when funds are
credited to Harvard's bank account and shall be payable by check or
wire transfer in United States dollars. Conversion of foreign
currency to U.S. dollars shall be made at the conversion rate
existing in the United States (as reported in the New York Times or
the Wall Street journal) on the last working day of each royalty
period. No transfer, exchange, collection or other charges shall be
deducted from such payments.
(d) All such reports shall be maintained in confidence by HARVARD except
as required by law; however, HARVARD may include in its usual
reports annual amounts of royalties paid.
(e) Late payments shall be subject to a charge of one and one half
percent (1 1/2%) per month, or $250, whichever is greater.
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ARTICLE VI
RECORD KEEPING
6.1 LICENSEE shall keep, and shall require its AFFILIATES and sublicensees to
keep, accurate records (together with supporting documentation) of
LICENSED PRODUCTS and MILESTONE PRODUCTS made, used or sold under this
Agreement, appropriate to determine the amount of royalties due to HARVARD
hereunder. Such records shall be retained for at least three (3) years
following the end of the reporting period to which they relate. They
shall. be available during normal business hours for examination by an
accountant selected by HARVARD, for the sole purpose of verifying reports
and payments hereunder. In conducting examinations pursuant to this
paragraph, HARVARD's accountant shall have access to all records which
HARVARD reasonably believes to be relevant to the calculation of royalties
under Article IV.
6.2 HARVARD's accountant shall not disclose to HARVARD any information other
than information relating to the accuracy of reports and payments made
hereunder.
6.3 Such examination by HARVARD's accountant shall be at HARVARD's expense,
except that if such examination shows an underreporting or underpayment in
excess of five percent (5%) for any twelve (12) month period, then
LICENSEE shall pay the cost of such examination as well as any additional
sum that would have been payable to HARVARD had the LICENSEE reported
correctly, plus interest on said sum at the rate of one and one half per
cent (11/2%) per month.
ARTICLE VII
DOMESTIC AND FOREIGN PATENT FILING AND MAINTENANCE
7.1 Upon execution hereof, LICENSEE shall reimburse HARVARD for any reasonable
expenses HARVARD has incurred for the preparation, filing, prosecution and
maintenance of PATENT RIGHTS.
7.2 LICENSEE shall assume primary responsibility for the filing, prosecution
and maintenance of any and all patents and patent applications included in
PATENT RIGHTS, using patent counsel reasonably acceptable to HARVARD, and
LICENSEE shall be responsible for all costs relating thereto. Counsel will
directly notify HARVARD and LICENSEE and provide them copies of any
official communications from the United States and foreign patent offices
relating to said prosecution. Counsel shall also provide HARVARD with
advance copies of all relevant communications to the various patent
offices, so that HARVARD may be informed and apprised of the continuing
prosecution of patent applications in PATENT RIGHTS. HARVARD shall have
reasonable opportunities to participate in decision making on all key
decisions affecting filing, prosecution and maintenance of patents and
patent applications in PATENT RIGHTS including, without limitation, the
right to approve or disapprove the abandonment of any patent or claims
thereof and LICENSEE will use reasonable efforts
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to incorporate HARVARD's reasonable suggestions regarding said
prosecution. LICENSEE shall use all reasonable efforts to amend any patent
application to include claims reasonably requested by HARVARD to protect
LICENSED PRODUCTS.
7.3 HARVARD and LICENSEE agree to cooperate fully in the preparation, filing,
prosecution and maintenance of PATENT RIGHTS and of all patents and patent
applications licensed to LICENSEE hereunder, executing all papers and
instruments or requiring members of HARVARD to execute such papers and
instruments so as to enable LICENSEE to apply for, to prosecute and to
maintain patent applications and patents in HARVARD's and LICENSEE's name
in any country.
7.4 In the event that LICENSEE elects not to prosecute or maintain any of the
patents or patent applications relating to the PATENT RIGHTS or any
portion thereof in any jurisdiction, then HARVARD shall have the right, at
its own expense to prosecute or maintain the patents or patent
applications relating to the PATENT RIGHTS or portion thereof in such
jurisdiction. LICENSEE shall assign its rights to HARVARD and shall have
no further rights to such patents or patent applications or portion
thereof.
7.5 If HARVARD can demonstrate that it is not being adequately informed or
apprised of the continuing prosecution of patents or patent applications
in PATENT RIGHTS, or that it is not being provided with reasonable
opportunities to participate in decision making or that its interests are
not being adequately protected, HARVARD shall be entitled to engage, at
LICENSEE's expense, independent patent counsel to review and evaluate
patent prosecution and filing of patents and patent applications included
in PATENT RIGHTS. Henceforth HARVARD and LICENSEE shall share
responsibility for patent prosecution, with LICENSEE reimbursing HARVARD
in full for any patent expenses incurred by HARVARD.
ARTICLE VIII
INFRINGEMENT
8.1 With respect to any PATENT RIGHTS that are exclusively licensed to
LICENSEE pursuant to this Agreement, LICENSEE shall have the right to
prosecute in its own name and at its own expense any infringement of such
patent, so long as such license is exclusive at the time of the
commencement of such action. HARVARD agrees to notify LICENSEE promptly of
each infringement of such patents of which HARVARD is or becomes aware.
Before LICENSEE commences an action with respect to any infringement of
such patents, LICENSEE shall give careful consideration to the views of
HARVARD and to potential effects on the public interest in making its
decision whether or not to sue.
8.2 (a) If LICENSEE elects to commence an action as described above, Harvard
may, to the extent permitted by law, elect to join as a party in that
action. Regardless of whether HARVARD elects to join as a party, HARVARD
shall cooperate fully with LICENSEE
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in connection with any such action and will join the suit as required for
enforcement of PATENT RIGHTS.
(b) If HARVARD elects to join as a party pursuant to subparagraph (a),
HARVARD shall jointly control the action with LICENSEE.
(c) LICENSEE shall reimburse HARVARD for any costs HARVARD incurs,
including reasonable attorneys' fees, as part of an action brought
by LICENSEE, irrespective of whether HARVARD becomes a co-plaintiff.
8.3 If LICENSEE elects to commence an action as described above, LICENSEE may
deduct from its royalty payments to HARVARD with respect to the patent(s)
subject to suit an amount not exceeding fifty percent (50%) of LICENSEE's
expenses and costs of such action, including reasonable attorneys' fees;
provided, however, that such reduction shall not exceed fifty percent
(50%) of the total royalty due to HARVARD with respect to the patent(s)
subject to suit for each calendar year. If such fifty percent (50%) of
LICENSEE's expenses and costs exceeds the amount of royalties deducted by
LICENSEE for any calendar year, LICENSEE may to that extent reduce the
royalties due to HARVARD from LICENSEE in succeeding calendar years; but
never by more than fifty percent (50%) of the total royalty due in any one
year with respect to the patent(s) subject to suit.
8.4 No settlement, consent judgment or other voluntary final disposition of
the suit may be entered into without the prior written consent of HARVARD,
which consent shall not be unreasonably withheld.
8.5 Recoveries or reimbursements from actions commenced pursuant to this
Article shall first be applied to reimburse LICENSEE and HARVARD for
litigation costs not paid from royalties and then to reimburse HARVARD for
royalties deducted by LICENSEE pursuant to paragraph 8.3. Any remaining
recoveries or reimbursements shall be shared equally by LICENSEE and
HARVARD.
8.6 If LICENSEE elects not to exercise its right to prosecute an infringement
of the PATENT RIGHTS pursuant to this Article, HARVARD may do so at its
own expense, controlling such action and retaining all recoveries
therefrom. LICENSEE shall cooperate fully with HARVARD in connection with
any such action.
8.7 Without limiting the generality of paragraph 8.6, HARVARD may, at its
election and by notice to LICENSEE, establish a time limit of sixty (60)
days for LICENSEE to decide whether to prosecute any infringement of which
HARVARD is or becomes aware. If, by the end of such sixty (60)-day period,
LICENSEE has not commenced such an action, HARVARD may prosecute such an
infringement at its own expense, controlling such action and retaining all
recoveries therefrom. With respect to any such infringement action
prosecuted by HARVARD in good faith, LICENSEE shall pay over to Harvard
any payments (whether or not designated as "royalties") made by the
alleged infringer to LICENSEE under any existing or future sublicense
authorizing LICENSED
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Confidential Materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
PRODUCTS, up to the amount of HARVARD's unreimbursed litigation expenses
(including, but not limited to, reasonable attorneys' fees).
8.8 If a declaratory judgment action is brought naming LICENSEE as a defendant
and alleging invalidity of any of the PATENT RIGHTS, HARVARD may elect to
take over the sole defense of the action at its own expense. LICENSEE
shall cooperate fully with HARVARD in connection with any such action.
ARTICLE IX
TERMINATION OF AGREEMENT
9.1 This Agreement, unless terminated as provided herein, shall remain in
effect until the last patent or patent application in PATENT RIGHTS has
expired or been abandoned.
9.2 HARVARD may terminate this Agreement as follows:
(a) If LICENSEE does not make a payment due hereunder and fails to cure
such non-payment (including the payment of interest in accordance
with paragraph 5.4(e)) within forty-five (45) days after the date of
notice in writing of such non-payment by HARVARD.
(b) If LICENSEE defaults in its obligations under paragraph
10.4(c)and(d) to procure and maintain insurance.
(c) If, at any time after [**] from the date of this Agreement, HARVARD
determines that the Agreement should be terminated pursuant to
paragraph 3.2(d).
(d) If LICENSEE shall become insolvent, shall make an assignment for the
benefit of creditors, or shall have a petition in bankruptcy filed
for or against it. Such termination shall be effective immediately
upon HARVARD giving written to LICENSEE.
(e) If an examination by Harvard's accountant pursuant to Article VI
shows an underreporting or underpayment by LICENSEE in excess of 20%
for any twelve (12) month period.
(f) If LICENSEE is convicted of a felony relating to the manufacture,
use, or sale of LICENSED PRODUCTS.
(g) Except as provided in subparagraphs; (a), (b), (c), (d), (e) and (f)
above, if LICENSEE defaults in the performance of any obligations
under this Agreement and the default has not been remedied within
ninety (90) days after the date of notice in writing of such default
by HARVARD.
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9.3 LICENSEE shall provide, in all sublicenses granted by it under this
Agreement, that LICENSEE' S interest in such sublicenses shall at
HARVARD's option terminate or be assigned to HARVARD upon termination of
this Agreement.
9.4 LICENSEE may terminate this Agreement by giving ninety (90) days advance
written notice of termination to HARVARD. Upon termination, LICENSEE shall
submit a final Royalty Report to HARVARD and any royalty payments shall
become immediately payable.
9.5 Paragraphs 6.1, 6.2, 6.3, 7.1, 8.5, 9.4, 9.5, 9.6, 10.2, 10.4, 10.5, 10.8
and 10.9 of this Agreement shall survive termination.
ARTICLE X
GENERAL
10.1 HARVARD does not warrant the validity of the PATENT RIGHTS licensed
hereunder and makes no representations whatsoever with regard to the scope
of the licensed PATENT RIGHTS or that such PATENT RIGHTS may be exploited
by LICENSEE, an AFFILIATE, or sublicensee without infringing other
patents.
10.2 HARVARD EXPRESSLY DISCLAIMS ANY AND ALL IMPLIED OR EXPRESS WARRANTIES AND
MAKES NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR
ANY PARTICULAR PURPOSE OF T`HE PATENT RIGHTS, OR INFORMATION SUPPLIED BY
HARVARD, LICENSED PROCESSES OR LICENSED PRODUCTS CONTEMPLATED BY THIS
AGREEMENT.
10.3 (a) LICENSEE shall indemnify, defend and hold harmless HARVARD and HHMI
and their current or former directors, governing board members, trustees,
officers, faculty, medical and professional staff, employees, students,
and agents and their respective successors, heirs and assigns
(collectively, the "Indemnitees"), against any liability, damage, loss or
expenses (including reasonable attorneys' fees and expenses of litigation)
incurred by or imposed upon the Indemnitees or any of them in connection
with any claims, suits, actions, demands or judgments arising out of any
theory of product liability (including, but not limited to, actions in the
form of tort, warranty, or strict liability) concerning any product,
process or service made, used or sold pursuant to any right or license
granted under this Agreement.
(b) LICENSEE shall indemnify and hold harmless HHMI against any claims,
liability costs, loss or obligation, including without limitation,
reasonable attorneys's fees and costs, in connection with any aspect
of this License Agreement including but not limited, to such product
liability indemnity identified in Section 10.3(a) above.
(c) LICENSEE shall, at its own expense, provide attorneys reasonably
acceptable to HARVARD to defend against any actions brought or filed
against any Indemnitee
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<PAGE>
hereunder with respect to the subject of indemnity contained herein,
whether or not such actions are rightfully brought.
(d) Beginning at the time any such product, process or service is being
commercially distributed or sold (other than for the purpose of
obtaining regulatory approvals) by LICENSEE or by a sublicensee,
AFFILIATE or agent of LICENSEE, LICENSEE shall, at its sole cost and
expense, procure and maintain commercial general liability insurance
in amounts not less than $2,000,000 per incident and $2,000,000
annual aggregate and naming the Indemnitees as additional insureds.
During clinical trials of any such product, process or service,
LICENSEE shall, at its sole cost and expense, procure and maintain
commercial general liability insurance in such equal or lesser
amount as HARVARD shall require, naming the Indemnitees as
additional insureds. Such commercial general liability insurance
shall provide (i) product liability coverage and (ii) broad form
contractual liability coverage for LICENSEE's indemnification under
this Agreement. If LICENSEE elects to self-insure all or part of the
limits described above (including deductibles or retentions which
are in excess of $250,000 annual aggregate) such self-insurance
program must be acceptable to HARVARD and the Risk Management
Foundation of the Harvard Medical Institutions, Inc. in their sole
discretion. The minimum amounts of insurance coverage required shall
not be construed to create a limit of LICENSEE's liability with
respect to its indemnification under this Agreement.
(e) LICENSEE shall provide HARVARD with written evidence of such
insurance upon request of HARVARD. LICENSEE shall provide HARVARD
with written notice at least fifteen (15) days prior to the
cancellation, non-renewal or material change in such insurance; if
LICENSEE does not obtain replacement insurance providing comparable
coverage within such fifteen (15) day period, HARVARD shall have the
right to terminate this Agreement effective at the end of such
fifteen (15) day period without notice or any additional waiting
periods.
(f) LICENSEE shall maintain such commercial general liability insurance
beyond the expiration or termination of this Agreement during (i)
the period that any product, process, or service, relating to, or
developed pursuant to, this Agreement is being commercially
distributed or sold by LICENSEE or by a sublicensee, AFFILIATE or
agent of LICENSEE and (ii) a reasonable period after the period
referred to in (e)(i) above which in no event shall be less than
fifteen (15) years.
10.4 LICENSEE shall not use the name of HHMI nor use HARVARD's name or
insignia, or any adaptation of them, or the name of any of HARVARD's
inventors in any advertising, promotional or sales literature without the
prior written approval of HARVARD and HHMI.
10.5 Without the prior written approval of HARVARD in each instance, neither
this Agreement nor the rights granted hereunder shall be transferred or
assigned in whole or in part by LICENSEE to any person whether voluntarily
or involuntarily, by operation of law or otherwise. This Agreement shall
be binding upon the respective successors, legal representatives and
assignees of HARVARD and LICENSEE.
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<PAGE>
10.6 The interpretation and application of the provisions of this Agreement
shall be governed by the laws of the Commonwealth of Massachusetts.
10.7 LICENSEE shall comply with all applicable laws and regulations. In
particular, it is understood and acknowledged that the transfer of certain
commodities and technical data is subject to United States laws and
regulations controlling the export of such commodities and technical data,
including all Export Administration Regulations of the United States
Department of Commerce. These laws and regulations among other things,
prohibit or require a license for the export of certain types of technical
data to certain specified countries. LICENSEE hereby agrees and gives
written assurance that it will comply with all United States laws and
regulations controlling the export of commodities and technical data, that
it will be solely responsible for any violation of such by LICENSEE or its
AFFILIATES or sublicensees, and that it will defend and hold HARVARD
harmless in the event of any legal action of any nature occasioned by such
violation.
10.8 LICENSEE agrees (i) to obtain all regulatory approvals required for the
manufacture and sale of LICENSED PRODUCTS and LICENSED PROCESSES and (ii)
to utilize appropriate patent marking on such LICENSED PRODUCTS. LICENSEE
also agrees to register or record this Agreement as is required by law or
regulation in any country where the license is in effect.
10.9 Any notices to be given hereunder shall be sufficient if signed by the
party (or party's attorney) giving same and either (a) delivered in
person, or (b) mailed certified mail return receipt requested, or (c)
faxed to other party if the sender has evidence of successful transmission
and if the sender promptly sends the original by ordinary mail, in any
event to the following addresses:
If to LICENSEE:
Ontogeny, Inc.
One Kendall Square, Bldg 600
Cambridge, MA 02139
Fax No.:(617) 225-0096
If to Harvard to:
Office for Technology and
Trademark Licensing
Harvard University
124 Mt. Auburn Street, Suite 410 South
Cambridge, MA 02138
Fax No.: 617-495-9568
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<PAGE>
By such notice either party may change their address for future
notices.
Notices delivered in person shall be deemed given on the date
delivered. Notices sent by fax shall be deemed given on the date
faxed. Notices mailed shall be deemed given on the date postmarked
on the envelope.
10.10 Should a court of competent jurisdiction later hold any provision of this
Agreement to be invalid, illegal, or unenforceable, and such holding is
not reversed on appeal, it shall be considered severed from this
Agreement. All other provisions, rights and obligations shall continue
without regard to the severed provision, provided that the remaining
provisions of this Agreement are in accordance with the intention of the
parties.
10.11 In the event of any controversy or claim arising out of or relating to any
provision of this Agreement or the breach thereof, the parties shall try
to settle such conflict amicably between themselves. Subject to the
limitation stated in the final sentence of this section, any such conflict
which the parties are unable to resolve promptly shall be settled through
arbitration conducted in accordance with the rules of the American
Arbitration Association. The demand for arbitration shall be filed within
a reasonable time after the controversy or claim has arisen, and in no
event after the date upon which institution of legal proceedings based on
such controversy or claim would be barred by the applicable statute of
limitation. Such arbitration shall be held in Boston, Massachusetts. The
award through arbitration shall be final and binding. Either party may
enter any such award in a court having jurisdiction or may make
application to such court for judicial acceptance of the award and an
order of enforcement, as the case may be. Notwithstanding the foregoing,
either party may, without recourse to arbitration, assert against the
other party a third-party claim or cross-claim in any action brought by a
third party, to which the subject matter of this Agreement may be
relevant.
10.12 This Agreement constitutes the entire understanding between the parties
and neither party shall be obligated by any condition or representation
other than those expressly stated herein or as may be subsequently agreed
to by the parties hereto in writing.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives.
PRESIDENT AND FELLOWS LICENSEE
OF HARVARD COLLEGE
/s/ Joyce Brinton . /s/ Heidi Wyle .
--------------------- -------------------
----------------------------------
Joyce Brinton, Director Heidi Wyle
Office for Technology and COO
Trademark Licensing
6/13/96 6/23/96
---------------------------------- ---------------------------------
Date Date
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<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Appendix A
The following comprise PATENT RIGHTS:
United States Patent Application Serial No. 08/580,031, filed December 20, 1995,
entitled "[**]."
Appendix B
The following comprise BIOLOGICAL MATERIALS:
Appendix C
Excerpt from the "Collaboration Agreement between Howard Hughes Medical
Institute and President and Fellows of Harvard College" for the Faculty of
Arts and Sciences dated February 6, 1987.
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<PAGE>
Appendix C
ARTICLE IV
PATENTS, COPYRIGHTS, AND
INTELLECTUAL PROPERTY
4.1 Ownership and Assignment of Rights and Obligations.
(a) Except as provided in subparagraphs (b), (c) and (d) of this
Section, the rights and obligations with respect to inventions,
discoveries, improvements, and other intellectual property, whether
or not patentable or copyrightable (each a "Subject Invention"),
conceived or reduced to practice by employees of the Institute
participating in the Research Program will be assigned to and be the
sole property of the University, and will be determined in
accordance with the applicable policies and procedures of the
University subject to the other provisions of this Article 4.
(b) Rights and obligations with respect to Subject Inventions conceived
or reduced to practice in whole at the Children's Hospital
Laboratory shall be assigned to the Hospital.
(c) Rights and obligations with respect to Subject Inventions conceived
or reduced to practice in part at the Children's Hospital Laboratory
and in part at the Cambridge Laboratory shall be assigned jointly to
the University and the Hospital. Subject Inventions assigned jointly
to the University and the Hospital shall be administered by-the
University, in consultation with the Hospital, and costs and
royalties with respect to such Subject Inventions (as defined in
Section 4.5 below) shall be shared equally among the Institute, the
University and the Hospital.
(d) Subject Inventions arising from the Research Program in structural
biology which are assigned solely to the Hospital or solely to the
University shall be administered by the assignee in consultation
with the other party. Licensing efforts by the Hospital and the
University shall be cooperative for all Subject Inventions arising
from the Research Program in structural biology, whether assigned
solely to the Hospital, solely to the University or jointly to the
Hospital and the University.
4.2 Mutual Objective. The parties agree that their mutual objective in respect
of intellectual property conceived or developed pursuant to this Agreement
is to disseminate such property for public use and benefit. The parties
will consult periodically with respect to any potential changes in their
respective intellectual property policies.
4.3 Paid-Up License. The University will grant the Institute a paid-up,
non-exclusive, irrevocable license to use each Subject Invention for its
research and academic purposes, but with no right to sub-license for
commercial purposes.
4.4 Use of the Property. The University will have the right to determine how
best to utilize the Subject invention; provided that (a) the Institute
will, upon request, be given annual
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<PAGE>
reports by the University on the utilization thereof; (b) the Institute
will have the right to require licensing to others where, in its judgment,
effective steps to achieve practical application of Subject Inventions
have not been taken-by the University within a reasonable time or such
licensing is necessary to meet the needs of public health or safety, and
the University, within 90 days following notice from the Institute, fails
to take such effective steps or otherwise to meet the needs of public
health and safety through the enforcement of contractual rights or by
other action; and (c) any license or sub-license by the University of any
Subject Invention to a third party (i) will not relieve the University of
its obligations to the Institute under Sections 4.3, 4.5 and 4.6 of this
Article in respect of the Subject Invention and (ii) will provide that the
Institute shall be indemnified and held harmless against any claims,
liability, costs, loss or obligation, including without limitation,
reasonable attorney's fees and costs in connection with such license or
sub-license.
4.5 Sharing of Costs and Royalties. Except as provided in Section 4.1(b), the
Institute will share equally with the University (a) the reasonable costs
incurred by the University and not borne by the inventor(s) for patenting,
copyrighting, protecting and preserving patent and copyright rights,
maintaining patents and copyrights, the licensing of patents and
copyrights and related property rights, and such other reasonable costs,
taxes or reimbursements as may be necessary or desirable, in connection
with a Subject Invention, and (b) any royalty income from such Subject
Invention after distribution to the inventor(s) of such inventor's(s')
share of royalty income.
4.6 Failure to Proceed. If the University declines or fails within a
reasonable period of time to obtain patent or copyright protection with
respect to any Subject invention, the Institute, subject to any rights of
the United States Government, and upon 90-days' notice to the University,
will have the right to do so and all rights and obligations with respect
to such invention will be determined in accordance with the Institute's
intellectual property policy and without regard to the terms of the patent
policy and procedures of the University; however, the Institute will grant
the University a paid-up, non-exclusive, irrevocable license to use each
Subject Invention for its research and academic purposes, but with no
right to sublicense for commercial purposes.
ARTICLE V
OCCUPANCY, USE, AND OWNERSHIP
OF THE PREMISES
5.1 Occupancy. The Institute will have the right to occupy and use the
Cambridge Laboratories (in conjunction with the Children's Hospital
Laboratory) as a medical research laboratory and office facility for the
conduct of the Research Program. The Institute will have exclusive and
quiet possession of the Cambridge Laboratories. Subject to Section 5.3 of
this Article, (1) the Institute's right to use and occupy the Cambridge
Laboratories will commence on the effective date of this Agreement and
will terminate upon dissolution of the collaboration under this Agreement,
and (2) the Institute will have the right, with the University's consent
(not to be unreasonably withheld) and at the Institute's own expense, to
make additional renovations, refurbishments, alterations, and improvements
to the Cambridge Laboratories.
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<PAGE>
Exhibit 10.69
Confidential Materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
LICENSE AGREEMENT
This Agreement, effective as of February 1, 1997, is made and entered into
between the President and Fellows of Harvard College (hereinafter HARVARD)
having offices at the Office for Technology and Trademark Licensing, 124 Mt.
Auburn Street, Suite 410, Cambridge, Massachusetts, 02138 and Ontogeny, Inc.
(hereinafter LICENSEE), a corporation of Delaware having offices at 45 Moulton
St., Cambridge, MA 02138.
Whereas HARVARD is Owner by assignment from Drs. A. McMahon and P. Chuang
entitled 'Hedgehog Interacting Proteins and Uses Related Thereto', filed on
September 20, 1996, in the foreign patent applications corresponding thereto,
and in the inventions described and claimed therein (HU Case No. 1311-96); and
Whereas HARVARD is committed to a policy that ideas or creative works produced
at HARVARD should be used for the greatest possible public benefit; and
Whereas LICENSEE is prepared and intends to diligently develop the invention and
to bring products to market which are subject to this Agreement; and
Whereas HARVARD accordingly believes that every reasonable incentive should be
provided for the prompt introduction of such ideas into public use, all in a
manner consistent with the public interest; and
Whereas LICENSEE is desirous of obtaining an exclusive worldwide license in
order to practice the above referenced inventions covered by PATENT RIGHTS in
the United States and in certain foreign countries, and to manufacture, use and
sell in the commercial market the products made in accordance therewith; and
Whereas HARVARD is desirous of granting such a license to LICENSEE in accordance
with the terms of this Agreement.
Now therefore, in consideration of the foregoing premises, the parties agree as
follows:
ARTICLE I
DEFINITIONS
1.1 PATENT RIGHTS shall mean United States patent application Serial No.
60/026,155 filed September 20, 1996, the inventions described and claimed
therein, and any divisions, continuations, continuations-in-part to the
extent that their claims are dominated by existing PATENT RIGHTS, patents
issuing thereon or reissues thereof, and any and all foreign patents and
patent applications corresponding thereto, to the extent these are owned
by or controlled by HARVARD; which will be automatically incorporated in
and added to this Agreement and shall periodically be added to Appendix A
attached to this Agreement and made a part thereof.
<PAGE>
1.2 CLAIM shall mean (a) a valid and enforceable claim of an issued patent
included in the PATENT RIGHTS and (b) with respect to a patent application
of the PATENT RIGHTS, a claim of such patent application which has not
been abandoned or rejected by an administrative agency from which no
appeal can be taken.
1.3 BIOLOGICAL MATERIALS shall mean the proprietary materials developed in the
laboratories of Dr. A. McMahon as a result of research concerning the
licensed subject matter, identified in Appendix B, such Appendix to be
periodically updated by mutual agreement, and supplied to LICENSEE by
HARVARD together with any progeny, mutants or derivatives, to the extent
that they contain a substantial portion of the original BIOLOGICAL
MATERIALS. Proprietary materials shall mean materials which are not
generally available from another source and which are under the control of
HARVARD.
1.4 LICENSED PRODUCTS shall mean products, the manufacture, use or sale of
which would, absent the license granted hereunder, infringe a CLAIM.
1.5 ROYALTY PRODUCTS shall mean products which are not LICENSED PRODUCTS and
(a) are identified or discovered in material part through the use of
processes or subject matter covered in a CLAIM or (b) incorporate a
substantial portion of a BIOLOGICAL MATERIAL or which could not be made
except by utilizing a BIOLOGICAL MATERIAL.
1.6 NET SALES shall mean the amount billed or invoiced for sales of LICENSED
PRODUCTS:
(a) Customary trade, quantity or cash discounts and non-affiliated
brokers' or agents' commissions actually allowed and taken;
(b) Amounts repaid or credited by reason of rejection or return; and/or
(c) To the extent separately stated on purchase orders, invoices or
other documents of sale, taxes levied on and/or other governmental
charges made as to production, sale, transportation, delivery or use
and paid by or on behalf of LICENSEE.
(d) Amounts charged for shipping, packaging, insurance, storage or
handling to the extent these are individually itemized on invoices.
1.7 AFFILIATES shall mean any third party company, corporation, or business
controlling, controlled by or under common control with LICENSEE. Control
shall mean ownership or control of at least fifty percent (50%) of the
voting stock.
ARTICLE II
GRANT
2.1 HARVARD hereby grants to LICENSEE and LICENSEE accepts, subject to the
terms and conditions hereof, a worldwide license, under PATENT RIGHTS to
make and have made, to use and have used, to sell and have sold the
LICENSED PRODUCTS for the life of PATENT RIGHTS, and a worldwide license
to use BIOLOGICAL MATERIALS
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<PAGE>
Confidential Materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
to make and have made, to use and have used, to sell and have sold or to
identify the ROYALTY PRODUCTS. Such license shall include the right to
grant sublicenses. In order to provide LICENSEE with a period of
exclusivity, HARVARD agrees it will not grant licenses under PATENT RIGHTS
to others except as required by HARVARD's obligations in paragraph 2.2 (a)
or as permitted in paragraph 2.2 (b) and that it will not provide
BIOLOGICAL MATERIALS to others for any commercial purpose. LICENSEE agrees
during the period of exclusivity of this license in the United States that
any product subject to this Agreement to be sold in the United States by
LICENSEE or its AFFILIATES or sublicensees will be manufactured
substantially in the United States.
2.2 The granting and acceptance of this license is subject to the following
conditions:
(a) HARVARD's "Statement of Policy in Regard to Inventions, Patents and
Copyrights" dated March 17, 1986, Public Law 96-517, Public Law
98-620 and HARVARD's obligations under agreements with other
sponsors of research. Any right granted in this Agreement greater
than that permitted under Public Law 96-517 or Public Law 98-620
shall be subject to modification as may be required to conform to
the provisions of that statute.
(b) HARVARD shall have the right to make and to use and to grant
nonexclusive licenses to make and to use, for research purposes only
and not for any commercial purpose, the BIOLOGICAL MATERIALS and the
subject matter described and claimed in PATENT RIGHTS. HARVARD, to
the extent it is aware of any patent rights arising from such
research conducted during the term of this Agreement, shall notify
LICENSEE of said rights. For clarification, HARVARD's rights under
this clause 2.2(b) extend only for academic research or other
not-for-profit scholarly purposes which are undertaken at a
non-profit or governmental institution that does not use PATENT
RIGHTS and/or BIOLOGICAL MATERIALS in the production or manufacture
of products for sale or the performance of services for a fee.
(c) LICENSEE shall use reasonable efforts to effect introduction of the
LICENSED PRODUCTS into the commercial market as soon as practicable,
consistent with sound and reasonable business practices and
judgment; thereafter, until the expiration of this Agreement,
LICENSEE shall endeavor to keep such LICENSED PRODUCTS reasonably
available to the public.
(d) HARVARD shall have the right to terminate or render this license
nonexclusive at any time after [**] from the date of license if, in
HARVARD's reasonable judgment, LICENSEE fails to satisfy both of the
following conditions, which such failure is not cured within ninety
(90) days after written notice of such failure by HARVARD to
LICENSEE:
(i) is not demonstrably engaged in research, development,
manufacturing, marketing or licensing program, as appropriate,
directed toward the development and commercialization of the
licensed subject matter, and
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<PAGE>
Confidential Materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
(ii) has not devoted at least the level of resources outlined below
to the development and commercialization of the licensed
subject matter:
Year Minimum Number of FTEs Minimum Annual Budget
---- ---------------------- ---------------------
1 [**] [**]
2 [**] [**]
3 [**] [**]
4 (and after) [**] [**]
FTEs are defined as full-time equivalent scientists and/or
technicians and/or consultants. Of those FTEs dedicated to the
development of the licensed subject matter, fifty percent
(50%) will possess an advanced scientific degree or its
equivalent.
In making this determination, HARVARD shall take into account
the normal course of such programs conducted with sound and
reasonable business practices and judgment and shall take into
account the reports provided hereunder by LICENSEE.
(e) HARVARD shall have the right to terminate this Agreement if LICENSEE
does not adhere to the following performance MILESTONEs for at least
one potential LICENSED PRODUCT or ROYALTY PRODUCT.
Years from Date
of Agreement ROYALTY
--------------- ---------------------------------------------------
[**] Lead Candidates Identified
[**] IND (or equivalent) Filing
[**] Commencement of Phase I (or equivalent) study
[**] Commencement of Phase II (or equivalent) study
(f) LICENSEE shall pay to HARVARD the following payments upon execution
of the first corporate partnership in a field primarily relating to
the hedgehog-interacting protein technology:
(1) [**], if the partnership has a determined value of between
[**]and [**] dollars ([**] and [**], or
(2) [**], if the partnership has a determined value of greater
than [**] dollars [**].
If the corporate partnership incorporates both the
hedgehog-interacting protein technology and the hedgehog technology,
the parties will discuss the relative
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<PAGE>
Confidential Materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
contributions of each technology to the partnership. If it is
determined that the two technologies have roughly equal importance,
then the payments of (1) and (2) above shall be reduced by fifty
(50%) percent. If it is determined that the contribution of the
hedgehog-interacting protein technology is less than fifty (50%)
percent, no payments shall be due.
Determined value shall include the sum of any equity payments,
up-front payments or fees, and the total of committed research
sponsorship payments. Such payments shall be creditable against
royalty payments as defined in Section 3.3. Deductions from royalty
payments based on this credit may not exceed fifty percent (50%) of
the royalty payment due HARVARD in any one year.
(g) All sublicenses granted by LICENSEE hereunder shall include a
requirement that the sublicensee use reasonable commercial efforts
to bring the subject matter of the sublicense into commercial use as
quickly as is reasonably possible. Such sublicenses shall be subject
and subordinate to the terms and conditions of this Agreement.
Copies of all sublicense agreements shall be provided to HARVARD.
(h) If LICENSEE (or its sublicensees) do not devote resources equivalent
to the full time of at least one FTE (which shall possess an
advanced scientific degree) for any calendar year (commencing in
1997) to the development and/or commercialization, as appropriate,
of any part of the subject matter of the PATENT RIGHTS for use in
any specific field and if HARVARD requests in writing that LICENSEE
grant a sublicense to a third party to develop and/or commercialize
such part of the subject matter for use in such field, LICENSEE
shall within ninety (90) days after receipt of such notice either
(i) commit at least one FTE toward such development and/or
commercialization or (ii) grant such requested sublicense, unless
LICENSEE reasonably satisfies HARVARD that such sublicense would be
contrary to sound and reasonable business practice and that the
granting of such sublicense would not materially increase the
availability to the public of products manufactured under this
license.
2.3 HARVARD hereby grants to LICENSEE the right to assign the licenses granted
or to be granted in paragraph 2.1 to an AFFILIATE subject to the terms and
conditions hereof.
2.4 All rights reserved to the United States Government and others under
Public Law 96-517 and 98-620 shall in no way be affected by this
Agreement.
ARTICLE III
ROYALTIES
3.1 Upon execution of this Agreement, LICENSEE shall pay to HARVARD a
nonrefundable, non-creditable fee of [**] dollars.
3.2
(a) Upon execution of this Agreement, LICENSEE, shall issue to HARVARD
[**] shares (the "Shares") of LICENSEE'S Common Stock ("Common
Stock"). Such
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<PAGE>
Confidential Materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
shares shall be considered a part of the royalty consideration for
the grant of this license. The Common Stock issued to HARVARD shall
have the characteristics, rights, preferences and privileges set
forth in the Certificate of Incorporation of the LICENSEE.
(b) LICENSEE shall issue to HARVARD another [**] shares (the "Shares")
of LICENSEE's Common stock ("Common Stock") and shall pay an
additional non-refundable, non-creditable fee of [**] dollars, if it
is demonstrated that any member of the hedgehog-interacting protein
gene family can exist as an extracellular factor and can be
solubilized. Such demonstration must occur within eighteen (18)
months from the date of execution of this Agreement. Payment shall
be made within thirty (30) days from the date such data are
disclosed to LICENSEE.
(c) HARVARD represents and warrants to LICENSEE as follows:
(i) HARVARD is acquiring the Shares for its own account for
investment and not with a view to, or for sale in connection
with any distribution thereof, nor with any present intention
of distributing or selling the same; and HARVARD has no
present or contemplated agreement, undertaking, arrangement,
obligation, indebtedness or commitment providing for the
disposition thereof.
(ii) HARVARD has full power and authority to enter into and to
perform this Agreement in accordance with its terms.
(iii) HARVARD has sufficient knowledge and experience in investing
in companies similar to LICENSEE so as to be able to evaluate
the risks and merits of its investment in LICENSEE and is able
financially to bear the risks thereof.
(d) 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 such shares are registered under
such Act or an opinion of counsel satisfactory to the Company
is obtained to the effect that such registration is not
required."
The foregoing 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 the
Securities Act of 1933, as amended.
(e) at any time LICENSEE proposes to register any of its Common Stock,
under the Securities Act of 1933, LICENSEE shall offer HARVARD the
opportunity to
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<PAGE>
Confidential Materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
have its Shares registered under the registration statement to be
filed at such time, in accordance with the terms.
3.3
(a) LICENSEE shall pay HARVARD during the term of this license a royalty
of [**] of the NET SALES of all LICENSED PRODUCTS sold by LICENSEE
and its AFFILIATES; provided, however, that in the case of LICENSED
PRODUCTS covered by a pending patent claim, such royalty of [**]
shall be due and payable as follows: [**] percent shall be payable
to HARVARD pursuant to Section 4.4(a), and the remainder shall
accumulate and shall not be required to be paid by LICENSEE to
HARVARD unless and until such claim is issued as part of a patent in
the applicable jurisdiction. A LICENSED PRODUCT that is a LICENSED
PRODUCT solely as a result of any such claim that has been
abandoned, has been rejected by an administrative agency from which
no appeal can be taken or has been pending for more than five years
in any jurisdiction shall cease to be a LICENSED PRODUCT in such
jurisdiction unless and until such claim is issued as part of a
patent.
(b) If LICENSEE grants a sublicense under this Agreement to a
sublicensee (other than an AFFILIATE) for development of a product
in a field as to which LICENSEE or an AFFILIATE has committed or
provides a written commitment to devote within the succeeding six
(6) month period the resources equivalent to the full time of at
least two of its own FTEs, one having an scientific advanced degree
(a "Joint Field"), LICENSEE shall pay to HARVARD [**] of any
royalties, fees or other amounts received by LICENSEE or its
AFFILIATES as a result of the sublicensee's development and/or sale
of LICENSED PRODUCTS or ROYALTY PRODUCTS, excluding (i) amounts paid
in partial or full consideration of equity of LICENSEE or its
AFFILIATES, (ii) amounts paid to fund research and development
activities conducted by LICENSEE or its AFFILIATES and (iii)
non-monetary considerations, including, without limitation
intellectual property rights, noncompetition covenants and the like.
If LICENSEE grants a sublicense under this Agreement to a
sublicensee (other than an AFFILIATE) for development of a product
in a field other than a joint Field, LICENSEE shall pay to HARVARD
[**] of any royalties, fees or other amounts received by the
LICENSEE or its AFFILIATES as a result of the sublicensee's
development and/or sale of ROYALTY PRODUCTS or LICENSED PRODUCTS,
excluding (i) amounts paid in partial or full consideration of
equity of LICENSEE or its AFFLIATES, (ii) amounts paid to fund
research and development activities conducted by LICENSEE or its
AFFILIATES and (iii) non-monetary consideration, including, without
limitation, intellectual property rights, noncompetition covenants
and the like.
LICENSEE shall not grant a sublicense hereunder (other than to an
AFFILIATE) pursuant to a transaction in which LICENSEE surrenders
substantially all of its legal rights and economic interest in the
PATENT RIGHTS and LICENSED
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<PAGE>
Confidential Materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
PRODUCTS to a third party in exchange for the transfer by such third
party to LICENSEE of rights to a different technology or products.
(c) If LICENSEE or its sublicensees, in order to make, use, sell or
otherwise exploit the LICENSED PRODUCTS in any jurisdiction,
reasonably determine that they must make royalty payments ("Third
Party Payments") to one or more independent third parties to obtain
a license or similar right to make, use, sell or otherwise exploit
the LICENSED PRODUCTS such that the total royalty burden for such
LICENSED PRODUCT equals or exceeds [**] percent, LICENSEE may reduce
the royalty due to HARVARD by [**] for each percent above [* *]
percent, but in no event shall any such payment due to HARVARD be
reduced by more than [**] as a result of such reduction.
(d) If this license is converted to a non-exclusive one and if other
non-exclusive licenses are granted, the above royalties shall not
exceed and shall be reduced to the royalty being paid by other
licensees during the term of the nonexclusive license.
(e) In the case of ROYALTY PRODUCTS, LICENSEE shall pay a royalty of
[**] percent of NET SALES of such ROYALTY PRODUCT and shall not pay
the royalties specified in Section 3.3a. Such payments are in
recognition of LICENSEE's early and exclusive use of the licensed
subject matter.
If this license is terminated by LICENSEE or its AFFILIATES, or is
converted to a non-exclusive one or terminated by HARVARD for a
financial default the above royalty payments shall still be due with
respect to all ROYALTY PRODUCTS identified by LICENSEE or its
AFFILIATES prior to such termination or conversion. If this license
is converted to a non-exclusive one or terminated by HARVARD for any
reason other than a financial default, the above royalty payments
will be due on only the first ROYALTY PRODUCT sold after such
termination or conversion and identified prior to such termination
and conversion.
(f) On sales between LICENSEE and its AFFILIATES or sublicensees, for
resale, the royalty shall be paid only on the resale by the
AFFILIATE or sublicensee, and a single royalty shall be paid by
LICENSEE and its AFFILIATES with respect to amounts received by them
as a result of such resale.
(g) If any of the LICENSED PRODUCTS include one or more material, active
components not covered by a CLAIM of PATENT RIGHTS (a "Combination
Product"), NET SALES for purposes of determining royalties for the
Combination Product shall be calculated by multiplying NET SALES for
the Combination Product by a fraction, A/A+B, where A is the total
invoice price of the component or components covered by a CLAIM of
PATENT RIGHTS if sold separately in the relevant market and B is the
total invoice price of any other material components in the
combination if sold separately in the relevant market. In the event
that the material component covered by a CLAIM of PATENT
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Confidential Materials omitted and filed separately with the Securities
and Exchange Commission. Asterisks denote omissions.
RIGHTS or any other material component in the Combination Product is
not sold separately, NET SALES for purposes of determining royalties
shall be calculated by multiplying NET SALES of the Combination
Product by a fraction, n/C, where n is the number of components
covered by a CLAIM of PATENT RIGHTS and C is the number of material,
active components in the Combination Product.
3.4 On January 1 of each calendar year after the effective date of this
Agreement, LICENSEE shall pay HARVARD a non-refundable license maintenance
LICENSED and/or advance on royalties of [**]; such payment may be credited
against running royalties due for that calendar year and LICENSED reports
should reflect the use of this credit. None of these payments are
creditable against ROYALTY payments nor against royalties due for any
subsequent calendar year. HARVARD shall have the right to terminate this
license, subject to the cure period defined in Section 8.2, in the event
that LICENSEE does not pay the following license maintenance fees and/or
advance on royalties.
ARTICLE IV
REPORTING
4.1 Prior to signing this Agreement, LICENSEE has provided to HARVARD
LICENSEE's corporate overview and will provide prior to the date of
execution of this Agreement, a written business plan and a reasonable
written research and development plan under which LICENSEE intends to
bring the subject matter of the licenses granted hereunder into commercial
use upon execution of this Agreement. Such plan, which is subject to
change, shall include proposed marketing efforts.
4.2 LICENSEE shall provide written annual reports within sixty (60) days after
June 30 of each calendar year which shall include but not be limited to:
reports of progress on research and development, regulatory approvals,
manufacturing, sublicensing, marketing and sales during the preceding
twelve (12) months as well as plans for the coming year. If progress
differs from that anticipated in the plan provided under Section 4.1,
LICENSEE shall explain the reasons for the difference and submit a
modified plan for HARVARD's review. LICENSEE shall also provide any
reasonable additional data HARVARD requires to evaluate LICENSEE's
performance.
4.3 LICENSEE shall report to HARVARD the date of first sale of LICENSED
PRODUCTS and ROYALTY PRODUCTS in each country within sixty (60) days of
occurrence.
4.4 (a) After the commencement of sales, LICENSEE agrees to submit to
HARVARD within sixty (60) days after the calendar half years ending
June 30 and December 31, reports setting forth for the preceding six
(6) month period at least the following information:
(i) the number of the LICENSED PRODUCTS sold by LICENSEE, its
AFFILIATES and sublicensees in each country;
(ii) total billings for such LICENSED PRODUCTS;
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(iii) deductions applicable to determine the NET SALES thereof;
(iv) sublicense income subject to sharing with HARVARD;
(v) such other information as shall be necessary to determine
royalty payments or other payments due to HARVARD;
(vi) the amount of royalty due thereon;
and with each such royalty report to pay the amount of royalty due.
LICENSEE shall specify which PATENT RIGHTS are utilized for each
LICENSED PRODUCT included in the report. Such report shall be
certified as correct by an officer of LICENSEE and shall include a
detailed listing of all deductions from royalties as specified
herein. If no royalties are due to HARVARD for any reporting period,
the written report shall so state.
(b) All payments due hereunder shall be payable in United States
dollars. Conversion of foreign currency to U.S. dollars shall be
made at the conversion rate existing in the United States (as
reported in the New York Times or, if not in the New York Times,
then in the Wall Street Journal) on the last working day of each
LICENSED period. Such payments shall be without deduction of
exchange, collection or other charges.
(c) All such reports shall be maintained in confidence by HARVARD,
except as required bylaw, including Public Law 96-517 and 98-620;
however, HARVARD may include annual amounts of royalties paid in its
usual financial reports.
(d) Late payments shall be subject to an interest charge of one and one
half percent (1 1/2%) per month.
ARTICLE V
RECORD KEEPING
5.1 LICENSEE shall keep, and shall require its AFFILIATES and sublicensees to
keep accurate and correct records of LICENSED PRODUCTS and ROYALTY
PRODUCTS made, used or sold under this Agreement, appropriate to determine
the amount of royalties due hereunder to HARVARD. Such records shall be
retained for at least three (3) years following a given reporting period.
They shall be available during normal business hours for inspection at the
expense of HARVARD by HARVARD's Internal Audit Department or by a
Certified Public Accountant selected by HARVARD and approved by LICENSEE
for the sole purpose of verifying reports and payments hereunder. Such
accountant shall not disclose to HARVARD any information other than
information relating to accuracy of reports and payments made under this
Agreement. In the event that any such inspection shows an underreporting
and underpayment in excess of five percent (5%) for any twelve (12) month
period, then LICENSEE shall pay the cost of such examination as well as
any additional sum that would have been payable to HARVARD had the
LICENSEE reported correctly, plus interest.
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ARTICLE VI
DOMESTIC AND FOREIGN PATENT FILING & MAINTENANCE
6.1 Upon execution hereof, LICENSEE shall reimburse HARVARD for all reasonable
expenses HARVARD has incurred for the preparation, filing, prosecution and
maintenance of PATENT RIGHTS. LICENSEE shall also reimburse HARVARD for
all such expenses it incurs prior to LICENSEE's assumption of these costs
per Section 6.2.
6.2 As soon as reasonably possible after execution of this Agreement, LICENSEE
shall assume primary responsibility for the filing, prosecution and
maintenance of any and all patents and patent applications included in
PATENT RIGHTS, using patent counsel reasonably acceptable to HARVARD, and
LICENSEE shall be responsible for all costs relating thereto. Counsel will
directly notify HARVARD and LICENSEE and provide them copies of any
official communications from the United States and foreign patent offices
relating to said prosecution. Counsel shall also provide HARVARD with
advance copies of all relevant communications to the various patent
offices, so that HARVARD may be informed and apprised of the continuing
prosecution of patent applications in PATENT RIGHTS. HARVARD shall have
reasonable opportunities to participate in decision making on all key
decisions affecting filing, prosecution and maintenance of patents and
patent applications in PATENT RIGHTS including, without limitation, the
right to approve or disapprove the abandonment of any patent or claims
thereof and LICENSEE will use reasonable efforts to incorporate HARVARD's
reasonable suggestions regarding said prosecution. LICENSEE shall use all
reasonable efforts to amend any patent application to include claims
reasonably requested by HARVARD to protect LICENSED PRODUCTS.
6.3 HARVARD and LICENSEE agree to cooperate fully in the preparation, filing,
prosecution and maintenance of PATENT RIGHTS and of all patents and patent
applications licensed to LICENSEE hereunder, executing all papers and
instruments or requiring members of HARVARD to execute such papers and
instruments so as to enable LICENSEE to apply for, to prosecute and to
maintain patent applications and patents in HARVARD's name in any country.
HARVARD agrees to deliver manuscripts authored by Dr. A. McMahon and
relating to the subject matter of PATENT RIGHTS to LICENSEE in a timely
fashion to allow review and, where appropriate, filing of
continuation-in-part patent applications.
6.4 If LICENSEE elects no longer to pay the expenses of a patent application
or patent included within PATENT RIGHTS, LICENSEE shall notify HARVARD not
less than sixty (60) days prior to such action, such date being at least
30 (thirty) days prior to any pending action or expenditure, and shall
thereby surrender its rights under such patent or patent application.
6.5 In the event that LICENSEE elects not to prosecute or maintain any of the
patents or patent applications relating to the PATENT RIGHTS or any
portion thereof in any jurisdiction, then HARVARD shall have the right, at
its own expense to prosecute or maintain the patents or patent
applications relating to the PATENT RIGHTS or portion
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<PAGE>
thereof in such jurisdiction, but LICENSEE shall have no further rights to
such patents or patent applications or portion thereof.
6.6 If HARVARD can demonstrate that it is not being adequately informed or
apprised of the continuing prosecution of patents or patent applications
in PATENT RIGHTS, or that it is not being provided with reasonable
opportunities to participate in decision making or that its interests are
not being adequately protected, HARVARD shall be entitled to engage, at
LICENSEE's expense, independent patent counsel to review and evaluate
patent prosecution and filing of patents and patent applications included
in PATENT RIGHTS. Henceforth HARVARD and LICENSEE shall share
responsibility for patent prosecution, with LICENSEE reimbursing HARVARD
in full for any patent expenses incurred by HARVARD.
ARTICLE VII
INFRINGEMENT
7.1 With respect to any PATENT RIGHTS under which LICENSEE is exclusively
licensed pursuant to this Agreement, LICENSEE or its sublicensee shall
have the right to prosecute in its own name and at its own expense any
suspected infringement of such patent, so long as such license is
exclusive at the time of the commencement of such action. HARVARD agrees
to notify LICENSEE promptly of each infringement of such patents of which
HARVARD is or becomes aware. Before LICENSEE or its sublicensees commences
an action with respect to any infringement of such patents, LICENSEE shall
give careful consideration to the views of HARVARD and to potential
effects on the public interest in making its decision whether or not to
sue and in the case of a LICENSEE sublicense, shall report such views to
the sublicensee.
7.2 If LICENSEE or its sublicensee elects to commence an action as described
above and HARVARD is a legally indispensable party to such action, HARVARD
shall have the right to assign to LICENSEE all of HARVARD's right, title
and interest in each patent which is a part of the PATENT RIGHTS and is
the subject of such action (subject to all HARVARD's obligations to the
government and others having rights in such patent). In the event that
HARVARD makes such an assignment, such assignment shall be irrevocable,
and such action by LICENSEE on that patent or patents shall thereafter be
brought or continued without HARVARD as a party, if HARVARD is no longer
an indispensable party. Notwithstanding any such assignment to LICENSEE by
HARVARD and regardless of whether HARVARD is or is not an indispensable
party, HARVARD shall cooperate fully with LICENSEE in connection with any
such action. In the event that any patent is assigned to LICENSEE by
HARVARD, pursuant to this paragraph, such assignment shall require
LICENSEE to continue to meet its obligations under this Agreement as if
the assigned patent or patent application were still licensed to LICENSEE.
7.3 If LICENSEE or its sublicensee elects to commence an action described
above and HARVARD is a legally indispensable party to such action, HARVARD
may join the action as a co-plaintiff. Upon doing so, HARVARD shall be
consulted on any actions LICENSEE or its sublicensees intend with respect
to the suspected infringement.
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<PAGE>
7.4 LICENSEE shall reimburse HARVARD for any reasonable costs it incurs as
part of an action brought by LICENSEE or its sublicensee, irrespective of
whether HARVARD shall become a co-plaintiff.
7.5 If LICENSEE or its sublicensee elects to commence an action as described
above, LICENSEE may reduce, by up to fifty percent (50%), the LICENSED due
to HARVARD earned under the patent subject to suit by fifty percent (50%)
of the amount of the expenses and costs of such action, including attorney
fees. In the event that such fifty percent (50%) of such expenses and
costs exceed the amount of royalties withheld by LICENSEE for any calendar
year, LICENSEE may to that extent reduce the royalties due to HARVARD from
LICENSEE in succeeding calendar years, but never by more than fifty
percent (50%) of the LICENSED due in any one year.
7.6 No settlement, consent judgement or other voluntary final disposition of
the suit may be entered into without the consent of HARVARD, which consent
shall not be unreasonably withheld.
7.7 Recoveries or reimbursements from such action shall first be applied to
reimburse LICENSEE and HARVARD for litigation costs not paid from
royalties and then to reimburse HARVARD for royalties withheld. Any
remaining recoveries or reimbursements shall be shared 75% to LICENSEE and
25% to HARVARD.
7.8 In the event that LICENSEE and its sublicensee, if any, elect not to
exercise their right to prosecute an infringement of the PATENT RIGHTS
pursuant to the above paragraphs, HARVARD may do so at its own expense,
controlling such action and retaining all recoveries therefrom. LICENSEE
shall cooperate fully with HARVARD in connection with any such action.
7.9 Without limiting the generality of paragraph 7.8, HARVARD may, at its
election and by notice to LICENSEE, establish a time limit of one hundred
and twenty (120) days for LICENSEE to decide whether to prosecute any
infringement of which HARVARD is or becomes aware. If, by the end of such
one hundred and twenty (120) day period, LICENSEE has not commenced such
an action, HARVARD may prosecute such an infringement at its own expense,
controlling such action and retaining all recoveries therefrom. With
respect to any such infringement action prosecuted by HARVARD in good
faith, LICENSEE shall pay over to HARVARD any payments (whether or not
designated as "royalties") made by the alleged infringer to LICENSEE under
any existing or future sublicense authorizing LICENSED PRODUCTS, up to the
amount of HARVARD's unreimbursed litigation expenses (including, but not
limited to, reasonable attorneys' fees).
7.10 In the event that a declaratory judgement action alleging invalidity of
any of the PATENT RIGHTS shall be brought against LICENSEE, HARVARD, at
its sole option, shall have the right to intervene, in which event both
parties shall jointly control the defense of such action and share equally
its expenses and costs.
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ARTICLE VIII
TERMINATION OF AGREEMENT
8.1 This Agreement, unless extended or terminated as provided herein, shall
remain in effect until the last patent or patent application in the PATENT
RIGHTS has expired or been abandoned.
8.2 In the event LICENSEE fails to make payments or stock transfers due
hereunder, HARVARD shall have the right to terminate this Agreement upon
forty-five (45) days written notice of such failure, unless LICENSEE makes
such payments plus interest within the forty-five (45) day notice period.
If payments are not so made, HARVARD may immediately terminate this
Agreement, unless such occurs as a result of a bona fide dispute as to the
amount due.
8.3 In the event that LICENSEE shall be in default in the performance of any
obligations under this Agreement (other than as provided in 8.2 above
which shall take precedence over any other default), and if the default
has not been remedied within ninety (90) days after the date of notice in
writing of such default, HARVARD may terminate this Agreement by written
notice.
8.4 In the event that LICENSEE shall become insolvent, shall make an
assignment for the benefit of creditors, or shall have a petition in
bankruptcy filed for or against it, which petition is not dismissed within
90 days of filing, HARVARD shall have the right to terminate this entire
Agreement immediately upon giving LICENSEE written notice of such
termination.
8.5 Any sublicenses granted by LICENSEE under this Agreement shall provide for
termination or assignment to HARVARD, at the option of HARVARD, of
LICENSEE's interest therein upon termination of this Agreement.
8.6 LICENSEE shall have the right to terminate this Agreement by giving ninety
(90) days advance written notice to HARVARD to that effect. Upon
termination, a final report shall be submitted and any LICENSED payments
and unreimbursed patent expenses due to HARVARD become immediately
payable.
8.7 Sections 33(c), 8.6, 9.2, 9.3 9.4 and 9.5 of this Agreement shall survive
termination.
ARTICLE IX
GENERAL
9.1 HARVARD represents and warrants that Drs. A. McMahon and P. Chuang have
assigned to HARVARD their entire right, title, and interest in the patent
applications or patents comprising the PATENT RIGHTS and that HARVARD has
the authority to issue the licenses granted to LICENSEE hereunder under
said PATENT RIGHTS. HARVARD does not warrant the validity of the PATENT
RIGHTS licensed hereunder and makes no representations whatsoever with
regard to the scope of the licensed PATENT RIGHTS or that such PATENT
RIGHTS may be exploited by LICENSEE, an AFFILIATE, or sublicensee without
infringing other patents.
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<PAGE>
9.2 HARVARD EXPRESSLY DISCLAIMS ANY AND ALL IMPLIED OR EXPRESS WARRANTIES AND
MAKES NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR
ANY PARTICULAR PURPOSE OF THE PATENT RIGHTS, BIOLOGICAL MATERIAL, OR
INFORMATION SUPPLIED BY HARVARD OR LICENSED PRODUCTS OR ROYALTY PRODUCTS
CONTEMPLATED BY THIS AGREEMENT. Further HARVARD has made no investigation
and makes no representation that the BIOLOGICAL MATERIALS supplied by it
or the methods used in making or using such materials are free from
liability for patent infringement.
9.3 LICENSEE shall not distribute or release the BIOLOGICAL MATERIALS to
others except to further the purposes of this Agreement. LICENSEE shall
protect the BIOLOGICAL MATERIAL at least as well as it protects its own
valuable tangible personal property and shall take reasonable and legal
measures in any bankruptcy proceeding to protect the BIOLOGICAL MATERIAL
from any claims by third parties including creditors and trustees in
bankruptcy.
9.4
(a) LICENSEE shall indemnify, defend and hold harmless HARVARD and its
directors, governing board members, trustees, officers, faculty,
medical and professional staff, employees, students, and agents and
their respective successors, heirs and assigns (the " Indemnitees"),
against any liability, damage, loss or expenses (including
reasonable attorneys' fees and expenses of litigation) incurred by
or imposed upon the Indemnitees or any one of them in connection
with any claims, suits, actions, demands or judgments arising out of
any theory of product liability (including, but not limited to,
actions in the form of tort, warranty, or strict liability)
concerning any product, process or service made, used or sold
pursuant to any right or license granted under this Agreement. The
above indemnification shall apply whether or not such liability,
damage, loss or expense is attributable to the negligent activities
of the Indemnitees.
(b) LICENSEE agrees, at its own expense, to provide attorneys reasonably
acceptable to HARVARD to defend against any actions brought or filed
against any party indemnified hereunder with respect to the subject
of the indemnity contained herein, whether or not such actions are
rightfully brought.
(c) Beginning at the time as any such product, process or service is
being commercially distributed or sold (other than for the purpose
of obtaining regulatory approvals) by LICENSEE or by a sublicensee,
AFFILIATE or agent of LICENSEE, LICENSEE shall, at its sole cost and
expense, procure and maintain comprehensive general liability
insurance in amounts not less than $2,000,000 per incident and
$2,000,000 annual aggregate and naming the Indemnitees as additional
insureds. During clinical trials of any such product, process or
service, LICENSEE shall, at its sole cost and expense, procure and
maintain comprehensive general liability insurance in such equal or
lesser amount as HARVARD shall require, naming the Indemnitees as
additional insureds. Such
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comprehensive general liability insurance shall provide (i) product
liability coverage and (ii) broad form contractual liability
coverage for LICENSEE's indemnification under this Agreement. If
LICENSEE elects to self-insure all or part of the limits described
above (including deductibles or retentions which are in excess of
$250,000 annual aggregate) such selfinsurance program must be
acceptable to HARVARD and the Risk Management Foundation of the
Harvard Medical Institutions, Inc. The minimum amounts of insurance
coverage required shall not be construed to create a limit of
LICENSEE's liability with respect to its indemnification under this
Agreement.
(d) LICENSEE shall provide HARVARD with written evidence of such
insurance upon request of HARVARD. LICENSEE shall provide HARVARD
with written notice at least fifteen (15) days prior to the
cancellation, non-renewal or material reduction in coverage in such
insurance; if LICENSEE does not obtain replacement insurance
providing comparable coverage within such fifteen (15) day period,
HARVARD shall have the right to terminate this Agreement effective
at the end of such fifteen (15) day period without notice or any
additional waiting periods.
(e) LICENSEE shall maintain such comprehensive general liability
insurance beyond the expiration or termination of this Agreement
during (i) the period that any product, process, or service,
relating to, or developed pursuant to, this Agreement is being
commercially distributed or sold by LICENSEE or by a sublicensee,
AFFILIATE or agent of LICENSEE and (ii) a reasonable period after
the period referred to in (e) (i) above which in no event shall be
less than ten (10) years.
9.5 LICENSEE shall not use HARVARD's name or any adaptation of it or the name
or names of any of HARVARD's inventors in any advertising, promotional or
sales literature without the prior written assent of HARVARD, provided,
however, that LICENSEE shall have the right to confirm the existence and
general content of this Agreement.
9.6 Without the prior written approval of HARVARD, the license granted
pursuant to this Agreement shall not be transferred or assigned in whole
or in part by LICENSEE to any party other than to an AFFILIATE or
successor to the business interest of LICENSEE relating to the PATENT
RIGHTS. This Agreement shall be binding upon the successors, legal
representatives and assignees of HARVARD and LICENSEE.
9.7 The interpretation and application of the provisions of this Agreement
shall be governed by the laws of the Commonwealth of Massachusetts.
9.8 LICENSEE agrees to comply with all applicable laws and regulations. In
particular, it is understood and acknowledged that the transfer of certain
commodities and technical data is subject to United States laws and
regulations controlling the export of such commodities and technical data,
including all Export Administration Regulations of the United States
Department of Commerce. These laws and regulations, among other things,
prohibit or require a license for the export of certain types of technical
data to
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<PAGE>
certain specified countries. LICENSEE hereby agrees and gives written
assurance that it will comply with all United States laws and regulations
controlling the export of commodities and technical data, that it will be
responsible for any violation of such by LICENSEE or its AFFILIATES or
sublicensees, unless its AFFILIATES and sublicensees so agree in a
separate and binding arrangement, and that it will defend and hold HARVARD
harmless in the event of any legal action of any nature occasioned by such
violation.
9.9 LICENSEE agrees to obtain all regulatory approvals required for the
manufacture and sale of LICENSED PRODUCTS and ROYALTY PRODUCTS and to
utilize appropriate patent marking on such LICENSED PRODUCTS. LICENSEE
also agrees to register or record this Agreement as is required by law or
regulation in any country where the license is in effect.
9.10 Written notices required to be given under this Agreement shall be
addressed as follows:
If to HARVARD: Office for Technology and Trademark
Licensing
Harvard University
124 Mt. Auburn Street, Suite 410
Cambridge, MA 02138-5701
If to LICENSEE: Ontogeny, Inc.
45 Moulton St.
Cambridge, MA 02138
Attn: President
With a copy to: Hale and Dorr LLP
60 State Street
Boston, MA 02109
Attn: Mark G. Borden, Esq.
or such other address as either party may request in writing.
9.11 Should a court of competent jurisdiction later consider any provision of
this Agreement to be invalid, illegal, or unenforceable, it shall be
considered severed from this Agreement. All other provisions, rights and
obligations shall continue without regard to the severed provision,
provided that the remaining provisions of this Agreement are in accordance
with the intention of the parties.
9.12 In the event of any controversy or claim arising out of or relating to any
provision of this Agreement or the breach thereof, the parties shall try
to settle such conflicts amicably between themselves.
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9.13 This Agreement constitutes the entire understanding between the parties
and neither party shall be obligated by any condition or representation
other than those expressly stated herein or as may be subsequently agreed
to by the parties hereto in writing.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized representatives.
PRESIDENT AND FELLOWS ONTOGENY, INC.
OF HARVARD COLLEGE
/s/ Joyce Brinton /s/_Thomas D. Ingolia
- ---------------------------------------- --------------------------------
Joyce Brinton, Director Thomas D. Ingolia, PhD
Office for Technology and Trademark Senior Vice President
Licensing
1/28/97 2/1/97
------------------ --------------
Date Date
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APPENDIX A
The following comprise PATENT RIGHTS:
US provisional application serial no. 60/026,155
APPENDIX B
The following comprise BIOLOGICAL MATERIALS:
1. HIP gene cDNA
2. DNA sequence information on the HIP gene(s)
3. In situ hybridization probes for HIP
4. Bacterial and eukaryotic expression constructs for HIP
5. Polyclonal antibodies to HIP
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