EXHIBIT 10.17
LICENSE AND SUPPLY AGREEMENT
This Agreement is made and entered into this 17th day of December, 2002
(the "Effective Date") by and between Tepha, Inc., a corporation duly organized
and existing under the laws of the State of Delaware and having its principal
office at 000 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000 (hereinafter referred
to as "Tepha"), and Vascular Solutions, Inc., a corporation duly organized and
existing under the laws of Minnesota and having its principal office at 0000
Xxxxxx Xxxx Xxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000 (hereinafter referred to as
"Licensee").
WHEREAS, Tepha owns or is the licensee of the Patent Rights (as later
defined);
WHEREAS, Tepha wishes to grant, and Licensee wishes to receive, license
rights to the Patent Rights; and
WHEREAS, certain Polymer (as later defined) is manufactured by or for
Tepha that Licensee wishes to purchase under the terms of this Agreement.
NOW THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto agree as follows:
1. DEFINITIONS.
1.1. "Patent Rights" means: (i) the United States and foreign patent
applications and patents set forth in Appendix A, (ii) any divisionals,
continuations and continuation-in-part applications which shall be
directed to subject matter specifically described in such patent
applications; (iii) the resulting United States and foreign patents;
(iv) any reissues, reexaminations or extensions of such patents; and
(v) all foreign counterparts of the above patent applications and
patents.
1.2. "Field" means medical devices for sealing of a percutaneous
puncture in a blood vessel or organ, but specifically excluding
pericardial and intracardiac (any construct in contact with the inner
compartment of the heart) patches and small and large diameter vascular
grafts to repair, replace or bypass compromised blood vessels.
1.3. "Net Sales" means Licensee's and its Affiliates' xxxxxxxx for the
use, sale, lease or other disposition of Licensed Products, otherwise
than to an Affiliate of the Licensee for resale, and the fair market
value of any noncash consideration, less:
(i) discounts allowed in amounts customary in the trade;
(ii) sales, tariff duties and/or use taxes directly
imposed and with reference to particular sales;
(iii) outbound transportation prepaid or allowed; and
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(iv) invoices which become uncollectible after reasonable
means and time for collection (not to exceed *
of Net Sales in any Reporting Period); and
(v) amounts allowed or credited on returns of damaged
goods, expired goods, or recalls.
No deduction 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" when invoiced. If a Licensed
Product shall otherwise be distributed or invoiced for a discounted
price substantially lower than customary in the trade or distributed at
no cost, to Affiliates of Licensee or otherwise, Net Sales shall be
based on the average amount billed for such Licensed Products during
the applicable Reporting Period (as later defined); provided, however,
Licensee may distribute a reasonable number of evaluation units on a
royalty-free basis, not to exceed * of Net Sales in any Reporting
Period.
1.4. "Polymer" means the poly-3-hydroxybutyrate-co-4-hydroxybutyrate
copolymer (PHA3444) manufactured by or for Tepha and offered for sale
by Tepha to its customers. All current Polymer compositions are listed
on Appendix C, which shall be updated from time to time by Tepha to
include all future improvements to and compositions of PHA3444
developed by Tepha.
1.5. "Licensed Product" means any device for sealing of a percutaneous
puncture in a blood vessel or organ in the Field:
(i) that is covered in whole or in part by an issued,
unexpired valid claim or a pending claim contained in
the Patent Rights in the country in which any such
product or part thereof is made, used, sold or
imported; and/or
(ii) that is manufactured by using a process or is
employed to practice a process which is covered in
whole or in part by an issued, unexpired valid claim
or a pending claim contained in the Patent Rights in
the country in which a process is used or in which
such product or part thereof is used, sold or
imported; and/or
(iii) that incorporates Polymer.
1.6. "Reporting Period" means a three (3) month period ending March 31,
June 30, September 30 or December 31 of each calendar year.
1.7. "Device Master File" means the device master file for Polymer
intended to be filed or filed by Tepha with the U.S. Food and Drug
Administration.
* Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities
Exchange Act of 1934.
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1.8. "Affiliate" means any wholly owned subsidiary of Licensee or
Tepha, respectively.
1.9. "Specification" means the mutually agreed specifications for the
Polymer on the date of manufacture.
2. LICENSE GRANT
2.1 License. Subject to the terms and conditions of this Agreement,
Tepha hereby grants to Licensee the worldwide right and license,
without the right to sublicense, in the Field under the Patent Rights
to make, have made, use, lease, sell, offer for sale and import the
Licensed Products 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 MIT Patent Rights. A subset of the Patent Rights are owned by the
Massachusetts Institute of Technology ("MIT"). Under the terms of its
sublicense to this subset of Patent Rights owned by MIT, Tepha has
agreed that any sublicenses granted by it shall provide that the
obligations to MIT of articles 2, 5, 7, 8, 9, 10, 12, 13, and 15 of the
license with MIT shall be binding upon Licensee as if it were a party
to that license agreement. Tepha further has agreed to attach copies of
these articles to sublicense agreements, and a copy is attached as
Appendix B. To the extent of any conflict between the terms of this
Agreement and Appendix B, as to the Patent Rights owned by MIT only,
the terms of Appendix B shall prevail.
2.3 No Future Grant or Use of Competing Rights. After the Effective
Date and during the term of this Agreement, Tepha shall not grant to
any third party, nor use in its own business, any right under the
Patent Rights in the Field to make, use, lease, sell, offer for sale,
or import a Licensed Product that incorporates Polymer. The parties
acknowledge that prior to the Effective Date Tepha has entered into one
other agreement granting rights to a third party under the Patent
Rights in the field of vascular closure devices for sealing the femoral
artery after catheter based procedures to make, have made, use, lease,
sell, offer for sale, and import Licensed Products that incorporate
Polymer and obligating Tepha to supply Polymer.
2.4 No Other Rights. Nothing in this Agreement shall be construed to
confer any rights upon Licensee by implication, estoppel or otherwise
beyond the express licenses granted by Tepha as to any technology or
patent rights of Tepha or any other entity other than the Patent
Rights.
2.5 Restriction. Licensee shall have no right to use, lease, sell,
offer for sale, import or otherwise dispose of Polymer as stand-alone
products, and may only use, lease, sell, offer for sale, import and
otherwise dispose of Polymer as incorporated into Licensed Products in
the Field. Licensee shall have no right to make or have made Polymer,
except as provided in Paragraph 3.8 hereof.
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2.6 Improvements. Licensee shall promptly disclose to Tepha any
improvements, changes or modifications that Licensee may make to the
composition or processing of any Polymer ("Developments"). Licensee
hereby grants to Tepha a nonexclusive, royalty-free, worldwide,
irrevocable right and license outside the Field under Licensee's
intellectual property rights (including without limitation patent
rights) in Developments, with the right to grant sublicenses, to make,
have made, use, lease, sell and otherwise dispose of products, and to
practice processes and use, copy, modify and distribute information.
Tepha shall promptly disclose to Licensee any future improvements to
and compositions of PHA 3444 that Tepha may make, which shall
automatically be added to the definition of Polymer under this
Agreement under the financial terms set forth herein.
3. SUPPLY OF POLYMERS
3.1 Forecasts. Within thirty (30) days following the Effective Date,
Licensee shall provide Tepha with Licensee's initial forecasts by
Reporting Period of the quantity of each Polymer listed on Appendix C
that Licensee expects to purchase from Tepha during the first four
Reporting Periods. On or before the first day of each subsequent
Reporting Period, Licensee shall submit a revised forecast by Reporting
Period for each Polymer for the next consecutive four Reporting
Periods.
3.2 Supply. During the term of this Agreement, Tepha shall use
commercially reasonable efforts to supply to Licensee such quantities
of Polymer as may be reasonably requested by Licensee. However, if this
Agreement is Assigned by Licensee as may be permitted pursuant to
Paragraph 17.7, purchase orders by the assignee in any Reporting Period
in excess of one hundred and twenty percent (120%) of any of the volume
forecasts for that Reporting Period submitted pursuant to Paragraph 3.1
in any of the immediately preceding four (4) calendar quarters shall be
deemed not to be a "reasonable request" by Licensee. Tepha shall have
the right to contract with third parties to manufacture Polymer for
supply to Licensee, provided that Tepha shall remain liable to Licensee
for its obligations hereunder, and shall notify Licensee of the
identity of any such manufacturer. Tepha, or its sub-contractor, shall
manufacture the Polymer in accordance with all applicable Good
Manufacturing Practices ("GMP") of the U.S. Food & Drug Administration
(the "FDA"). Purchase orders for any Polymer in a Reporting Period in
excess of one hundred twenty percent (120%) of any of the volume
forecasts submitted pursuant to Paragraph 3.1 by Licensee in any of the
immediately preceding four (4) calendar quarters for such Reporting
Period which Tepha is not able to fill shall not be deemed a breach of
this Agreement. Tepha agrees to use commercially reasonable efforts to
accommodate purchase order revisions submitted in writing by Licensee.
Each purchase order must specify a delivery date not less than ninety
(90) days after the date of the purchase order.
3.3 Shipment. Tepha agrees to ship Polymer by the common carrier and
method of shipment designated by Licensee. Shipments will be F.O.B.,
Tepha or its designee's U.S. manufacturing facility, and will be
according to any reasonable shipping schedule specified by Licensee, to
the locations specified in Licensee's purchase orders. Legal title and
risk of loss shall pass to Licensee upon delivery to such common
carrier. Licensee shall pay all costs of shipping.
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3.4 Inspection. Within thirty (30) days of receipt of any shipment,
Licensee shall inspect the shipment and notify Tepha of its rejection
of any Polymer within the shipment. Polymer may be rejected only to the
extent the quantity shipped exceeds the amount ordered in the relevant
purchase order, or if any Polymer fails to meet its Specification. If
Licensee does not notify Tepha of rejection within such thirty (30) day
period, it shall be deemed to have accepted the shipment of any Polymer
not so rejected. Rejected Polymer shall be returned to Tepha or
disposed of at the direction of Tepha, in either case at the expense of
Tepha, except as otherwise provided in Paragraph 16.3. Tepha shall have
thirty (30) days after receipt of a notice from Licensee rejecting any
Polymer to replace the defective Polymer.
3.5 Payment. Licensee shall pay Tepha the then current price of each
Polymer on the date of acceptance of each Purchase Order. The initial
price as of the Effective Date is set forth on Appendix C. Price
adjustments shall be computed annually according to the following
formula: On January 1, 2004 and each January 1 thereafter, Tepha may
increase the price of Polymer from the previous year by the 12-month
average percentage increase in total compensation for private industry
workers for the period ending December 31 as indicated on Table 3 of
the Employment Cost Index published by the Bureau of Labor Statistics
of the United States Department of Labor or, if the Employment Cost
Index should cease to be published, any comparable category in a
comparable index agreeable to both parties. If there is no increase in
such Employment Cost Index, the price of Polymer shall be the same as
the previous January 1. Tepha shall invoice Licensee for each shipment
of Polymer, and payment shall be due from Licensee within thirty (30)
days after the invoice date.
3.6 Adverse Events and Other Reporting. Licensee shall be responsible
for handling and shall promptly notify Tepha of any information that
might give rise to a recall or market withdrawal of any Licensed
Product incorporating the Polymer or which involves any complaint
relating to the Polymer material of a Licensed Product. To the extent
possible under the circumstances, Licensee will inform Tepha prior to
communicating with the FDA concerning any such recall, market
withdrawal or complaint. Tepha shall cooperate and supply on a
confidential basis any information or assistance reasonably required in
Licensee's interaction relating thereto with the Food and Drug
Administration and other governmental authorities, in the United States
or international markets, relating to the Polymer. Licensee shall keep
Tepha promptly informed on an ongoing basis and provide copies of all
correspondence, filings, and documentation to Tepha until resolution of
each such matter.
3.7 Device Master File; Regulatory Assistance. Upon execution of this
Agreement, Tepha will use diligent efforts to complete and file a
Device Master File with the FDA for the Polymer, and to maintain and
update the Device Master File for the remainder of this Agreement.
Tepha will own all right, title and interest in the Device Master File.
Licensee may reference the Device Master File for Polymer to support
Licensee's registration of any Licensed Product; provided, however,
Licensee will not have access to any information or data in the Device
Master File relating to the manufacturing process for the Polymer.
Tepha shall provide to Licensee as Confidential Information, the
information, test results and documentation relating to the Polymer
that is reasonably
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necessary for Licensee's applications for registration of any Licensed
Product in international markets. Licensee will own all right, title
and interest in any regulatory filings (in the United States and
international markets) with respect to the Licensed Product (excluding
the Polymer and Master Device File). Tepha agrees to provide up to
twenty (20) hours of reasonable technical assistance to Licensee with
respect to Licensee's filings and responses to the FDA and
international regulatory agencies for no additional compensation.
Further technical assistance relating to such filings and responses
will be provided at Tepha's standard rates and terms.
3.8 Contingent Manufacturing Rights. If (i) Tepha becomes subject to a
bankruptcy petition under Chapter 7 of the U.S. Bankruptcy Code or (ii)
otherwise files for bankruptcy and ceases its manufacturing operations
for Polymer, or (iii) Tepha ceases to carry on its business operations
with respect to the Polymer, or (iv) Tepha is continually unable to
manufacture and supply any Polymer to Licensee during any consecutive
one hundred and eighty (180) day period, or (v) Licensee elects
pursuant to Paragraph 15.2 ,upon an uncured material breach by Tepha,
to exercise its rights under this Section 3.8, then at Licensee's
request, Tepha shall grant Licensee a nonexclusive right and license,
to manufacture the Polymer, or to have the Polymer manufactured by
direct contract between Licensee and any qualified Tepha third party
subcontractor for use in Licensed Products only, subject to the terms
and conditions of this Agreement. The right and license which may be
granted pursuant to this Paragraph shall continue until Tepha
reasonably demonstrates to Licensee that it is capable and willing to
resume the supply and delivery to Licensee of its requirements of the
Polymer under the terms and conditions of this Agreement, or if
Licensee has made an election under Section 3.8(v), until the material
breach has been cured by Tepha. The obligation of Licensee to make the
royalty payments pursuant to Section 4.3 shall continue notwithstanding
any grant to Licensee of the right and license to manufacture the
Polymer set forth in this Paragraph 3.8, provided that, at Licensee's
election, Licensee may pay directly to any third party that portion of
the royalty payments required to maintain the license rights from such
third party.
4. ROYALTIES
4.1 License Issue Fee. Licensee shall pay Tepha a License Issue Fee
of * which the parties acknowledge has been paid prior to the
Effective Date.
* Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities
Exchange Act of 1934.
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4.2 Research and Development Payments. Licensee shall pay Tepha a total
sum of * to support Tepha's research and developments efforts and
completion of filing of the Device Master File for the Polymer with the
FDA, which said Research and Development payments shall be deemed
earned and due as follows: * which the parties acknowledge has
been paid prior to the Effective Date; and * earned and due at
the rate of * per month beginning January 1, 2003; and *
upon the completion of filing of the Device Master File with the FDA.
Such final * payment shall be subject to a reduction of *
for each month that the filing is delayed beyond December 31, 2003;
provided, however, such date shall be extended if the implantation
studies shall not be completed by November 30, 2003. Such extension
shall equal the additional period of time reasonably necessary for such
studies to be completed, plus one month.
4.3 Royalties. Until expiration of the last to expire patent within the
Patent Rights, Licensee shall pay Tepha a royalty (the "Royalty") as
follows: * of Net Sales of Licensed Products accrued during each
Reporting Period until aggregate Net Sales during the immediately
preceding four (4) Reporting Periods exceeds * and thereafter
* of Net Sales for the remainder of the term of this Agreement.
Each Royalty for a Reporting Period shall be paid within thirty (30)
days after the conclusion of the Reporting Period.
4.4 Minimum Royalties. A minimum royalty payment of * shall be
due and payable by Licensee to Tepha on January 1, 2006 and on
January 1 of each subsequent year during the term of this Agreement.
Royalties (as defined in Section 4.3) subsequently due on Net Sales of
Licensed Products, if any, for each such year shall be creditable
against the Minimum Royalty Payment paid for said year. Any minimum
royalty payment paid in excess of Royalties for any calendar year shall
not be creditable against Royalties due in future calendar years.
4.5 Payments in Full. 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 1.3(ii).
4.6 No Multiple Royalties. No multiple Royalties shall be payable under
Paragraph 4.3 because any Licensed Product, its manufacture, use,
lease, sale or importation are or shall be covered by more than one
patent application or patent licensed under this Agreement or because
any unit of Licensed Product for which a Royalty has been paid shall be
re-sold or re-distributed in Licensee's channel of trade.
* Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities
Exchange Act of 1934.
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4.7 Payment. Royalty payments shall be paid in United States dollars in
Cambridge, Massachusetts, or at such other place as Tepha 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 published in the
Wall Street Journal on the last business day of the Reporting Period to
which such royalty payments relate.
5. RECORDS AND PAYMENTS
5.1 Records and Audit. Licensee shall keep true and accurate books of
account and records that are necessary for the purpose of showing the
amounts payable to Tepha hereunder and compliance with Paragraphs 6 and
16 of this Agreement. Said books of account and records shall be kept
at Licensee's principal place of business and shall be open at all
reasonable times for three (3) years following the end of the calendar
year to which they pertain, to the inspection of Tepha or its agents
for the purpose of verifying Licensee's royalty statements or
compliance in other respect with this Agreement. Tepha shall pay the
cost associated with any inspection; provided that should such
inspection lead to the discovery of a greater than Ten Percent (10%)
discrepancy in reporting to Tepha's detriment, Licensee agrees to pay
the cost of such inspection.
5.2 Reports and Payments. Within thirty (30) days after the end of each
Reporting Period, Licensee shall send to Tepha a report showing the Net
Sales of the Licensed Products, including calculation of deductions
permitted under Paragraph 1.3, for such Reporting Period and shall pay
the appropriate royalties to Tepha. These reports shall include at
least the following: (i) number and total xxxxxxxx of Licensed
Products, (ii) description of Licensed Products made using each Polymer
supplied by Tepha, (iii) deductions applicable as provided in Paragraph
1.3; and (iv) Royalties due under Paragraph 4.3. Licensee shall deliver
to Tepha true and accurate reports, giving a summary of the business
conducted by Licensee under this Agreement as shall be relevant to
diligence under Article 6.1 before the first commercial sale of a
Licensed Product, annually, on or before January 31 of each year.
5.3 Interest. The amounts due under Article 4 shall, if overdue, bear
interest until payment at a per annum rate Two Percent (2%) above the
prime rate in effect at Fleet Bank, or its successors, on the due date.
The payment of such interest shall not foreclose Tepha from exercising
any other rights it may have as a consequence of the lateness of any
payment.
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6. DUE DILIGENCE
6.1 Diligent Efforts. Licensee shall use diligent efforts to bring
Licensed Products to market through a diligent program for exploitation
of the Patent Rights and shall continue diligent commercialization
efforts for the Licensed Products throughout the term of this
Agreement. Licensee shall use diligent efforts to meet the following
projected Net Sales of Licensed Products: 2006: * ; 2007: * ;
and 2008 and thereafter: * ; provided that failure to meet such
projections shall not be deemed to be a breach of this Agreement so
long as Licensee has nevertheless used diligent commercialization
efforts.
6.2 Development Plan. Within ninety (90) days following the execution
of this Agreement, Licensee shall provide Tepha with a development plan
which shall summarize the various phases and expected timing of the
material development of the Licensed Products.
6.3 Diligence Milestones. Licensee shall make a first commercial sale
of a Licensed Product in an international market on or before September
1, 2008, and shall make a first commercial sale of a Licensed Product
in the United States on or before September 1, 2010.
6.4 Notice of Human Clinical Trials; Governmental Approvals and
Marketing of Licensed Products. Licensee shall provide Tepha with
written notice prior to initiating the first human clinical trial of a
Licensed Product. Licensee shall be responsible for obtaining all
necessary governmental approvals for the development, production,
distribution, sale, use, export and import of all Licensed Products, at
Licensee's expense, including, without limitation, any clinical and
safety studies. Licensee shall have sole responsibility for the quality
control for any Licensed Product.
7. INFRINGEMENT
7.1 Notice. Licensee and Tepha shall each inform the other promptly in
writing of any alleged or threatened third party infringement of the
Patent Rights by a third party and of any available evidence thereof.
Licensee and Tepha shall each inform the other promptly in writing of
any allegations of infringement resulting from the use of the Polymer
in the Licensed Product.
7.2 Cooperation. In any infringement suit which Tepha may institute to
enforce the Patent Rights in the Field, or in a suit for patent
infringement which is brought by a third party against Tepha or
Licensee in connection with the Licensed Products, which either party
or both parties are required or elect to defend, the other party hereto
shall, at the request and expense of the party initiating or defending
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.
* Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities
Exchange Act of 1934.
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8. PRODUCT LIABILITY
8.1 Indemnity. Licensee shall at all times during the term of this
Agreement and thereafter indemnify, hold harmless and defend Tepha and
its licensors, and their directors, trustees, officers, employees and
affiliates against all claims and expenses, arising out of the death of
or injury to any person or persons or out of any damage to property and
against any other claim, proceeding, demand, expense and liability of
any kind whatsoever arising out of, resulting from or relating to the
production, manufacture, sale, use, lease, consumption or advertisement
of the Licensed Products, and manufacture of Polymer if Paragraph 3.8
shall ever become applicable, or arising from or relating to Licensee's
breach of any of its obligations hereunder; unless such claims and
expenses are the result of Tepha's (or its Affiliates or
sub-contractors) negligence or intentional misconduct. Prior to the
first use of a Licensed Product for humans, Licensee shall obtain and
carry in full force and effect commercial, general liability insurance,
including product liability insurance, which shall protect the
indemnities with respect to events covered by this Paragraph 8.1. Such
insurance shall list Tepha, Metabolix, Inc. and MIT as additional named
insureds thereunder, shall be endorsed to include product liability
coverage and shall require thirty (30) days written notice to be given
to Tepha prior to any cancellation or material change thereof. The
limits of such insurance shall not be less than One Million Dollars
($1,000,000) per occurrence with an aggregate of Three Million Dollars
($3,000,000) for personal injury including death; and One Million
Dollars ($1,000,000) per occurrence with an aggregate of Three Million
Dollars ($3,000,000) for property damage. Licensee shall provide Tepha
with Certificates of Insurance evidencing the same. Licensee shall
maintain such commercial general liability insurance during the period
that any Licensed Product is being used, distributed or sold and for
six (6) years thereafter.
9. WARRANTIES AND DISCLAIMER
9.1 Tepha warranty. Tepha represents and warrants to Licensee that
Tepha is either the owner of all rights, title and interest in and to
the Patent Rights, or has the right to grant the licenses set forth in
Article 2.
9.2 DISCLAIMER. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT,
NEITHER PARTY, NOR THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES AND
AFFILIATES MAKE ANY REPRESENTATIONS OR EXTEND ANY 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 EITHER PARTY OR BY TEPHA's LICENSORS THAT THE PRACTICE OF THE
LICENSES GRANTED HEREUNDER SHALL NOT INFRINGE THE PATENT RIGHTS OR
OTHER INTELLECTUAL OR PROPRIETARY RIGHTS OF ANY THIRD PARTY.
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10. LIMITATION OF LIABILITY
10.1 NO CONSEQUENTIAL DAMAGES. EXCEPT FOR BREACH BY EITHER PARTY OF
PARAGRAPH 14 (CONFIDENTIALITY), IN NO EVENT SHALL TEPHA, ITS LICENSORS
OR LICENSEE, OR THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES AND
AFFILIATES BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY
KIND INCURRED BY THE OTHER PARTY, INCLUDING ECONOMIC DAMAGE OR INJURY
TO PROPERTY AND LOST PROFITS, REGARDLESS OF WHETHER SUCH PARTY SHALL BE
ADVISED, SHALL HAVE OTHER REASON TO KNOW, OR IN FACT SHALL KNOW OF THE
POSSIBILITY OF THE FOREGOING.
11. EXPORT CONTROLS
11.1 Export Controls. Licensee acknowledges that it may be 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. Tepha neither
represents that a license shall not be required nor that, if required,
it shall be issued.
12. NON-USE OF NAMES
12.1 Non-use of Names. Except as required by law or to accurately
describe this Agreement in connection with filings with the Securities
and Exchange Commission or in connection with raising funding, neither
party shall use the names or trademarks of the other or Tepha's
licensors, nor any adaptation thereof, nor the names of any of the
other party's, or Tepha's licensors', employees, in any advertising,
promotional or sales literature without prior written consent obtained
from such party, or said employee, in each case, such consent not to be
unreasonably withheld, except that Licensee may state that it is
licensed by Tepha, under one or more of the patents and/or applications
comprising the Patent Rights.
13. DISPUTE RESOLUTION
13.1 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 to
prevent irreparable harm, and except for any dispute relating to patent
validity or infringement, any and all claims, disputes or controversies
arising under, out of or in connection with the Agreement, 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. If the parties by their senior management representatives
shall be unable to resolve the dispute within thirty (30) days, then by
no later than forty (40) business days after the
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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 no later than
sixty (60) 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 or another mutually agreeable mediator. 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 thirty (30) business days after such mediation hearing,
the parties shall have the right to pursue any other 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 Tepha and Licensee each hereby irrevocably consents and
submits.
13.2 Notwithstanding the foregoing, nothing in this Article shall be
construed to waive any rights or timely performance of any obligations
under this Agreement.
14. CONFIDENTIALITY
14.1 Confidential Information. Both Tepha and Licensee agree that all
confidential information disclosed to the other party, orally or in
writing, shall be deemed "Confidential Information" of the disclosing
party. In particular, "Confidential Information" shall be deemed to
include, but not be limited to, Developments, trade secrets,
information, ideas, inventions, materials, samples, processes,
procedures, methods, formulations, protocols, packaging designs and
materials, test data, future development plans, product launch dates,
technological know-how and engineering, manufacturing, regulatory,
marketing, servicing, sales, or financial matters relating to the
disclosing party and its business.
14.2 Nondisclosure and Nonuse. During the term and thereafter each
receiving party: (i) shall maintain all Confidential Information in
confidence; (ii) shall not disclose any Confidential Information to any
third party without prior written consent of the disclosing party
except that the receiving party may disclose in connection with
consultants, subcontractors or agents or raising funding and technical
development activities for purposes consistent with this Agreement
pursuant to a written non-disclosure agreement with said parties,
having terms of nondisclosure and nonuse at least as restrictive as
those set forth herein; and (iii) shall use such Confidential
Information only to the extent required to accomplish the purposes of
this Agreement. A receiving party may disclose Confidential Information
that is required to be disclosed pursuant to the law, by request of the
United States Food and Drug Administration ("FDA") or other government
authority or for medical or safety reasons, but only to the extent
required to be disclosed by the FDA or other government authority. Both
parties shall take precautions as each normally takes with its own
confidential and proprietary information to prevent disclosure to third
parties, but no less than reasonable precautions.
14.3 Exceptions. Both parties agree that, notwithstanding the above,
the obligations of confidentiality and nonuse shall not apply to:
Page 12 of 31
14.3.1 Information that at the time of disclosure is, or
thereafter becomes, generally known to the public, through no
wrongful act or failure to act on the part of the receiving
party;
14.3.2 Information that was known by or in the possession of
the receiving party at the time of receiving such information
from the disclosing party, as evidenced by written records;
14.3.3 Information obtained by the receiving party from a
third party who is not breaching a commitment of
confidentiality to the disclosing party by revealing such
information to the receiving party, as evidenced by written
records;
14.3.4 Information that is developed independently by the
receiving party without use of confidential information of the
other party, as evidenced by written records.
14.4 Access. Both Parties shall make diligent efforts to ensure that
all employees, consultants, agents and subcontractors who may have
access to Confidential Information of the other party, and any other
third parties who might have access to Confidential Information, shall
sign nondisclosure agreements consistent with the terms set forth in
this Paragraph. No Confidential Information shall be disclosed to any
employees, subcontractors, agents, consultants or third parties who do
not have a need to receive such information for the purposes of this
Agreement.
15. TERMINATION
15.1 Termination by Tepha. If Licensee shall cease to carry on its
business or is in breach of Paragraph 17.7, this Agreement shall
terminate effective upon notice by Tepha.
15.2 Material Breach. Upon any material breach of this Agreement by
Tepha, Licensee shall have the right to give notice of default, stating
in reasonable detail the nature of the claimed breach. If Tepha shall
not have cured any such material breach within ninety (90) days from
notice, Licensee shall have the option to either: (i) terminate the
Agreement, effective on receipt of notice byTepha, or (ii) exercise its
rights under Section 3.8(v). Upon any material breach of this Agreement
by Licensee, Tepha shall have the right to give notice of default,
stating in reasonable detail the nature of the claimed breach. If
Licensee shall not have cured any such material breach within ninety
(90) days from notice, Tepha may terminate the Agreement, effective on
receipt of notice by Licensee.
15.3 Termination by Licensee. If Tepha shall cease to carry on its
business or is in breach of Paragraph 17.7, this Agreement shall
terminate effective upon notice by Licensee. Licensee shall have the
right to terminate this Agreement at any time on six (6) months' notice
to Tepha, and upon payment of all amounts due Tepha through the
effective date of termination.
15.4 Effects of Termination. Upon expiration or termination of this
Agreement for any reason: (i) nothing herein shall be construed to
release either party from any obligation
Page 13 of 31
that matured prior to expiration or the effective date of termination;
(ii) Articles 1, 2.2, 2.6, 3.6, 3.8, 5, 8, 9.2, 10, 11, 12, 13, 14,
15.4 and 17 shall survive expiration or any termination; (iii) for a
period of six (6) months after the effective date of termination,
Licensee may sell Licensed Products in inventory, and complete Licensed
Products in the process of manufacture at the time of such termination
and sell the same, provided that Licensee shall pay the Running
Royalties thereon as required by Article 4 of this Agreement and shall
submit the reports required by Article 5 hereof on the sales of
Licensed Products; and (iv) each party shall immediately return all
Confidential Information to the disclosing party and shall cease and
refrain from any further use of such Confidential Information.
16. QUALITY SYSTEM OBLIGATIONS
16.1 Raw Materials. All raw materials for the Polymer will be defined
by engineering drawings or specifications of Tepha. Approved vendors
must be designated on the Specifications. Raw materials will be
supplied or specified by Tepha. During the term of this Agreement,
Tepha shall be responsible to maintain a working master cell bank for
the Polymer, with commercially appropriate redundancies and security.
Tepha will use standard operating procedures which define the sampling
methodology and the analytical methods used to assure that the raw
materials meet their respective specifications. Tepha will notify
Licensee in writing of any changes to the Specifications, sampling or
test methods of raw materials or any changes in approved vendors, and
shall obtain prior approval from Licensee prior to making any such
changes that require regulatory approval from the FDA or international
regulatory authorities with respect to a Licensed Product.
16.2 Packaging Materials. Licensee shall be responsible for and shall
provide to Tepha all copy content, artwork and mechanicals for all
printed materials associated with the Polymer to be shipped to
Licensee. This includes, but is not limited to, container labels,
container cartons, package inserts, and promotional material. Any
changes requested by Licensee or required for legal or regulatory
compliance shall be at the expense of Licensee. Licensee shall be
responsible for compliance with all Federal, State and Local laws and
regulations concerning packaging and labeling materials, and for
obtaining any necessary regulatory approvals of printed materials,
artwork and copy. Tepha shall obtain prior approval from Licensee
before revising any printed packaging components, primary container
components and all Licensee supplied packaging components used for the
shipment of the Polymer to Licensee.
16.3 Non-Conforming Polymer. Polymer not found to meet Specifications
will be considered non-conforming. Licensee shall determine the future
usability of non-conforming Polymer; provided that non-conforming
Polymer may not be used except as expressly permitted in the Device
Master File. If Licensee determines that the non-conforming Polymer is
usable, full payment for the non-conforming Polymer will be required.
If Licensee determines that the non-conforming Polymer is not usable,
the non-conforming Polymer may be rejected pursuant to Paragraph 3.4.
Actions taken to investigate the non-conformance and to justify the
release of the batch of Polymer must
Page 14 of 31
be fully documented in compliance with all applicable Federal, State
and Local laws and regulations. Copies of all documentation associated
with non-conformance of Polymer used shall be maintained by Licensee
and provided to Tepha promptly on request.
16.4 Manufacturing Processes. The manufacturing process for the Polymer
shall be maintained by the Document Control / Quality Assurance group
within Tepha. Licensee will be notified of any changes to the
manufacturing process by Tepha, and Licensee will notify Tepha if any
such changes are unacceptable. Each batch or lot of Polymer produced
hereunder must be assigned a unique batch or lot number. Any deviation
from the specified manufacturing process must be documented in the
batch record. Tepha's system shall document the deviation, the
investigation that was undertaken and the conclusion drawn from that
investigation. The documentation associated with any deviation in the
manufacturing process shall become part of the batch record.
16.5 Manufacturing History Record/Device History Record/Batch Record.
Licensee must be provided with a copy of the top-level history record
(batch record for the Polymer) manufactured and supplied to Licensee
hereunder. Tepha agrees to maintain all records that support this
document (e.g., inspection/acceptance records for subassemblies and
components) for the duration of this Agreement, and for at least five
years following the termination of this Agreement.
16.6 Sampling, Testing and Release of Polymer. All in-process and
finished Polymer testing shall be conducted by Tepha using Tepha's
validated test methods. Tepha shall provide Licensee with a certificate
of analysis indicating each test parameter, test method, test result
and the corresponding acceptance criteria for each batch/lot of Polymer
manufactured, as well as a statement indicating that all associated
documentation has been reviewed and approved by the appropriate Tepha
quality control unit. Tepha shall release the Polymer to Licensee as
meeting the agreed and current Specifications for the Polymer.
16.7 Reserve Samples and Quality Review. Licensee is responsible for
obtaining and maintaining file samples of each lot of Polymer
manufactured and shipped to Licensee. Tepha will allow quality systems
audits to be performed, no more than once in any twelve-month period,
by approved representatives of Licensee at reasonable business hours
and with reasonable planning and advanced notice of at least five (5)
business days. Such audits shall be performed in accordance with the
FDA's Quality System Inspection Technique ("QSIT") and Tepha's then
current policy for visitors and no photographs may be taken or
documents reproduced. Any third party contracted by Tepha to provide
manufacturing or component supply under this Agreement shall also be
subject to audit in accordance with QSIT.
16.8 Storage, Validation and Environmental Monitoring. Process/product
and cleaning validation for the manufacture of the Polymer shall be
performed by Tepha in accordance with the Device Master File. Tepha
shall be responsible for conducting the validation studies and
maintaining validation reports. Where particulate and microbial levels
are required for the Polymer, then the facilities and raw materials
used during the manufacturing and packaging shall be subjected to a
monitoring program by Tepha to
Page 15 of 31
assure that the Polymer will meet the required particulate and
microbial levels and shall maintain the records obtained from this
monitoring program. If no specifications are defined, then no
particular manufacturing environment requirements are necessary beyond
applicable Quality System Regulations of the FDA.
16.9 Distribution Records and Returns. Licensee shall maintain
distribution records which contain all of the appropriate information
as specified in 21 CFR, Section 820.160. Returned Licensed Product from
the distribution of the Licensed Product is the responsibility of
Licensee.
16.10 Customer Complaints. Licensee is responsible for investigating
and handling customer complaints and shall promptly notify Tepha of any
complaint relating to the Polymer material of a Licensed Product. To
the extent possible under the circumstances, Licensee will inform Tepha
prior to communicating with the FDA concerning any such complaint.
Tepha shall reasonably cooperate with Licensee's investigations,
including providing manufacturing-related records on a confidential
basis as they relate to the investigation. Licensee shall keep Tepha
promptly informed on an ongoing basis and provide copies of all
correspondence, filings, and documentation to Tepha until resolution of
each such matter.
16.11 Regulatory Compliance. Unless otherwise stated in this document,
Tepha is responsible for compliance to all Federal, State and Local
laws and regulations as they apply to Tepha's supply of Polymer to
Licensee hereunder.
17. GENERAL
17.1. Integrated Agreement. This Agreement (including its Appendices,
which are incorporated herein by reference) constitutes the complete
and exclusive statement of the agreement between the parties, and
supersedes all prior agreements, proposals, negotiations and
communications between the parties, both oral and written, regarding
the subject matter hereof. The terms of this Agreement shall have no
force or effect with respect to any claim based on the use by Licensee
of any intellectual property rights or proprietary rights of Tepha or
its licensors outside the scope of the licenses expressly granted
herein. The preprinted provisions of Licensee's purchase order shall
not apply, and the provisions set forth herein shall prevail.
17.2. Waiver or Amendment. No waiver, alteration or amendment of any of
the provisions of this Agreement shall be binding unless made in
writing and signed by each of the parties hereto.
17.3. Notices. All notices to be given under this Agreement shall be in
writing and shall be deemed duly given if sent by prepaid overnight
courier service to the addresses set forth immediately below (or to
such other addresses as the parties may designate by notice given in
accordance with this provision):
Page 16 of 31
If to Tepha:
Tepha, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxx, President
If to Licensee:
Vascular Solutions, Inc.
0000 Xxxxxx Xxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Attn: Chief Executive Officer
All such notices, if properly addressed, shall be effective when
received.
17.4. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of Massachusetts,
without regard to conflict of laws principles, and as necessary the
laws of the United States of America, 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. Each party agrees
that venue for any dispute arising under this Agreement shall be
Boston, Massachusetts, and waives any objection it has or may have in
the future with respect to such venue, except that the applicable
federal court or other tribunal shall have exclusive jurisdiction with
regard to the scope or validity of any Patent Rights.
17.5. Failure to Exercise Remedy. If either party fails to enforce any
term of this Agreement or fails to exercise any remedy, such failure to
enforce or exercise on that occasion shall not prevent enforcement or
exercise on any other occasion.
17.6. Remedies. The rights and remedies of the parties provided in this
Agreement shall not be exclusive and are in addition to any other
rights and remedies available at law or in equity.
17.7. Assignment. Except as expressly provided in this Agreement,
neither party shall directly or indirectly sell, transfer, assign or
delegate in whole or in part this Agreement, or any rights, duties,
obligations or liabilities under this Agreement (collectively "Assign"
for purposes of Paragraph 15.4 or 17.7), by operation of law or
otherwise, without the prior written consent of the other party.
Notwithstanding the foregoing sentence, both parties shall have the
right to Assign without consent of the other party all of its rights,
duties, obligations and liabilities under this Agreement to any
Affiliate or in connection with any sale, merger, consolidation,
recapitalization or reorganization involving in each case the sale of
substantially all of the capital stock of such party or all or
substantially all of the assets of such party to which this Agreement
relates. Subject to the foregoing, this Agreement shall inure to the
benefit of and be binding upon the permitted successors and permitted
assigns of Tepha and Licensee.
Page 17 of 31
17.8. Independent Contractors. The parties agree that in the
performance of this Agreement they are and shall be independent
contractors. Nothing herein shall be construed to constitute either
party as the agent of the other party for any purpose whatsoever, and
neither party shall bind or attempt to bind the other party to any
contract or the performance of any obligation or represent to any third
party that it has any right to enter into any binding obligation on the
other party's behalf.
17.9. Severability. If any provision of this Agreement is held invalid
by any law, rule, order or regulation of any government or by the final
determination of any court of competent jurisdiction, such invalidity
shall not affect the enforceability of any other provisions. The
parties shall make a good faith effort to renegotiate and replace the
invalid provision with a valid and enforceable one, such that the
original intent of the parties shall be accomplished to the extent
permitted by law.
17.10. Counterparts. This Agreement may be executed in one or more
counterparts, each of which when executed shall be deemed to be an
original but all of which taken together shall constitute one and the
same agreement.
17.11. Patent Marking. Licensee shall apply the patent marking notices
required by the law of any country where Licensed Products are made,
used or sold.
17.12. Rules of Construction. The parties agree that they have
participated equally in the formation of this Agreement and that the
language and terms of this Agreement shall not be presumptively
construed against either of them.
17.13. Affiliates. Each party shall be responsible to the other for all
obligations of its Affiliates in the same fashion and to the full
extent that each party is obligated to the other hereunder, including,
but not limited to, the payment of royalties due with respect to sales
made by Affiliates. A breach by an Affiliate of a party will be treated
as a breach by that party.
17.14. Force Majeure. Neither party shall be in default of its
obligations to the extent its performance is delayed or prevented by
causes beyond its control, including but not limited to acts of God,
earthquake, flood, embargo, riots, sabotage, utility or transmission
disruption, failure or delay of suppliers, fire or labor disturbances.
17.15. Nonsolicitation. During the Term of this Agreement and for a
period of six months thereafter, Licensee and Tepha agree not to,
directly, or indirectly, solicit or attempt to solicit for employment
any person employed by the other party.
Page 18 of 31
IN WITNESS WHEREOF, the parties have duly executed this Agreement the
day and year set forth below.
Tepha, Inc. Vascular Solutions, Inc. ("Licensee")
By: /s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxxxx Xxxx
Name: Xxxxx X. Xxxxxxxx Name: Xxxxxx Xxxx
Title: President Title: Chief Executive Officer
Date: 12/19/02 Date: 12/17/02
Page 19 of 31
APPENDIX A
PATENT RIGHTS
1. US Patent No. 5,229,279 "Method for producing novel polyester
biopolymers" by Peoples and Sinskey, issued July 20, 1993.
2. US Patent No. 5,245,023 "Method for producing novel polyester
biopolymers" by Peoples and Sinskey, issued September 14, 1993.
3. US Patent No. 5,250,430 "Polyhydroxyalkanoate polymerase" by Peoples
and Sinskey, issued October 5, 1993.
4. US Patent No. 5,480,794 "Overproduction and purification of soluble PHA
synthase" by Peoples, Gerngross, and Sinskey, issued January 2, 1996.
5. US Patent No. 5,512,669 "Gene encoding bacterial acetoacetyl-CoA
reductase" by Peoples and Sinskey, issued April 30, 1996.
6. US Patent No. 5,534,432 "Polyhydroxybutyrate polymerase" by Peoples and
Sinskey, issued July 9, 1996.
7. US Patent No. 5,661,026 "Gene encoding bacterial beta-ketothiolase" by
Peoples and Sinskey, issued August 26, 1997.
8. US Patent No. 5,663,063 "Method for producing polyester biopolymers" by
Peoples and Sinskey, issued September 2, 1997.
9. US Patent No. 5,798,235 "Gene encoding acetoacetyl-CoA reductase" by
Peoples and Sinskey, issued August 25, 1998.
10. US Patent No. 5,811,272 "Method for controlling molecular weight of
polyhydroxyalkanoates" by Snell, Hogan, Sim, Sinskey and Rha, issued
September 22, 1998.
11. US Patent No. 6,228,934 "Methods and apparatus for the production of
amorphous polymer suspension" by Xxxxxxxx & Xxxxxxxxx, issued May 8,
2001.
12. US Patent No. 6,245,537 "Removing endotoxin with an oxidizing agent
from polyhydroxyalkanoates produced by fermentation" by Williams,
Martin, Xxxxxxxxx and Xxxxxxxx, issued June 12, 2001.
Page 20 of 31
13. US Patent No. 6,316,262 "Biological systems for manufacture of
polyhydroxyalkanoate polymers containing 4-hydroxyacids" by Huisman,
Skraly, Xxxxxx and Peoples, issued November 13, 2001.
14. US Patent No. 6,323,010 "Polyhydroxyalkanoate biopolymer compositions"
by Skraly and Peoples, issued November 27, 2001.
15. US Patent No. 6,323,276 "Methods and apparatus for the production of
amorphous polymer suspensions" by Xxxxxxxx and Xxxxxxxxx, issued
November 27, 2001.
16. US Patent No. 6,329,183 "Polyhydroxyalkanoate production from polyols"
by Skraly and Peoples, issued December 11, 2001.
17. EP Patent Application No. 0 870 837 A1 "Method for producing novel
polyester biopolymers" by Peoples and Sinskey, published October 14,
1998.
18. EP Patent Xx. 0 000 000 X0 "Xxxxxx for producing novel polyester
biopolymers" by Peoples and Sinskey, published October 21, 1998.
19. WO 98/51812 "Polyhydroxyalkanoates for IN VIVO applications" by
Williams, Martin, Xxxxxxxxx, and Xxxxxxxx, published November 19, 1998.
20. WO 99/32536 "Polyhydroxyalkanoate compositions having controlled
degradation rates" by Martin, Skraly, and Xxxxxxxx, published July 1,
1999.
21. WO 00/56376 "Medical devices and applications of polyhydroxyalkanoates"
by Williams, Martin, and Skraly, published September 28, 2000.
22. WO 00/51662 "Bioabsorbable, biocompatible polymers for tissue
engineering" by Xxxxxxxx, published September 8, 2000.
23. WO 01/19422 "Polyhydroxyalkanoate compositions for soft tissue repair,
augmentation, and viscosupplementation" by Xxxxxxxx and Xxxxxx,
published March 22, 2001.
24. JP 2-510584 Method for producing novel polyester biopolymers, Peoples
and Sinskey.
Page 21 of 31
APPENDIX B
MIT LICENSE TERMS
ARTICLE 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 METABOLIX, INC.
the voting stock of which is directly or indirectly at least
fifty percent (50%) owned and controlled by METABOLIX, INC.,
an organization which directly or indirectly controls more
than fifty percent (50%) of the voting stock of METABOLIX,
INC. and an organization the majority ownership of which is
directly or indirectly common to the ownership of METABOLIX,
INC.
1.2 "PATENT RIGHTS" shall mean all of the following M.I.T.
intellectual property:
1.2.a The United States and foreign patents and/or patent
applications and invention disclosures listed in
Appendix A;
1.2.b United States and foreign patents issued from the
applications and invention disclosures listed in
Appendix A and from divisionals and continuations of
these applications and invention disclosures;
1.2.c claims of United States and foreign
continuation-in-part applications and of the
resulting patents which are directed to subject
matter specifically described in the United States
and foreign applications and invention disclosures
listed in Appendix A;
1.2.d claims of all foreign patent applications and of the
resulting patents which are directed to subject
matter specifically described in the United States
patents and/or patent applications and invention
disclosures described in (a), (b), (c) or (d) above;
and
1.2.e any reissues of United States patents described in
(a), (b), (c) or (d) above.
1.3 A "LICENSED PRODUCT" shall mean any product or part thereof
which:
1.3.a is covered in whole or in part by an issued,
unexpired valid claim or 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
1.3.b is manufactured by using a process or is employed to
practice a process which is covered in whole or in
part by an issued, unexpired valid claim or a pending
claim contained in the PATENT RIGHTS in the country
in which a LICENSED
Page 22 of 31
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:
1.4.a is covered in whole or in part by an issued, expired
valid claim or a pending claim contained in the
PATENT RIGHTS in the country in which such process is
used or in which the LICENSED PRODUCT made thereby is
used or sold.
ARTICLE 2 - GRANT
2.1 M.I.T. hereby grants to LICENSEE the worldwide right and
license to make, have made, use, lease and sell the LICENSED
PRODUCTS and to practice the LICENSED PROCESSES to the end of
the term for which the PATENT RIGHTS are granted unless this
Agreement shall be sooner terminated according to the terms
hereof.
2.2 LICENSEE agrees that to the extent possible LICENSED PRODUCTS
leased or sold in the United States shall be manufactured
substantially in the United States and that in those cases
where domestic manufacture is impractical it will request
appropriate waivers from the Department of Commerce pursuant
to 37 C.F.R. Sec. 401.14(i).
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 and sell LICENSED PRODUCTS or
to utilize LICENSED PROCESSES during the term of this
agreement.
2.4 M.I.T. reserves the right to practice under the PATENT RIGHTS
for its own noncommercial research purposes.
2.5 M.I.T. further grants to LICENSEE a ninety (90) day first
option to negotiate for an exclusive license to new inventions
dominated by the claims of the PATENT RIGHTS as originally
licensed which arise from the laboratory of Xxxx. Xxxxxxx
Xxxxxxx at M.I.T. within four (4) years of the Effective Date
of this Agreement. Such option shall be subject to any rights
granted in sponsorship agreements to sponsors of the research
from which any such invention arises.
2.6 LICENSEE shall have the right to enter into sublicensing
agreements for the rights, privileges and licenses granted
hereunder. In addition, LICENSEE may grant any sublicensee the
right to sublicense to third parties any or all of the rights,
privileges and licenses granted to such
Page 23 of 31
sublicensee and such third party sublicenses may also include
the right to sublicense.
2.7 LICENSEE agrees that any sublicenses granted by it shall
provide that the obligations to M.I.T. of Articles 2, 5, 7, 8,
9, l0, 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.
2.8 LICENSEE agrees to forward to M.I.T. a copy of any and all
sublicense agreements promptly upon execution by the parties.
2.9 The license granted hereunder shall not be construed to confer
any rights upon LICENSEE by implication, estoppel or otherwise
as to any technology not specifically set forth in Appendix A
hereof.
ARTICLE 5 - REPORTS AND RECORDS
5.1 LICENSEE shall keep full, true and accurate books of account
containing all particulars that maybe 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 three (3) 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,
LICENSEE agrees to pay the full cost of such inspection.
5.2 LICENSEE, within sixty (60) days after December 31 of each
year prior to the first commercial sale of a LICENSED PRODUCT
and sixty days after March 31, June 30, September 30 and
December 31, of each year after the first commercial sales of
a LICENSED PRODUCT, shall deliver to M.I.T. true and accurate
reports, giving such particulars of the business conducted by
LICENSEE during the preceding three-month period under this
Agreement as shall be pertinent to a royalty accounting
hereunder. These shall include at least the following: (a)
number of LICENSED PRODUCTS manufactured and sold by LICENSEE;
(b) total xxxxxxxx for LICENSED PRODUCTS manufactured and sold
by LICENSEE; (c) accounting for all LICENSED PROCESSES used or
sold by LICENSEE; (d) deductions applicable as provided in
Paragraph 1.5; (e) total royalties due; and (f) names and
addresses of all sublicensees of LICENSEE. LICENSEE shall
endeavor to obtain similar information from its
Page 24 of 31
sublicensees and will provide such information which is
obtained to M.I.T.
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 Two Percent (2%) 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 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 During the term of this Agreement, LICENSEE shall have the
right, but shall not be obligated, to prosecute at its own
expense any such infringements of the PATENT RIGHTS and, in
furtherance of such right, M.I.T. hereby agrees that LICENSEE
may join 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. LICENSEE may, for such purposes, use the name of
M.I.T. as party plaintiff; provided, however, that such right
to bring an infringement action shall remain in effect only
for so long as the license granted herein remains exclusive.
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 proceedings
commenced and defended solely by LICENSEE.
7.3 In the event that LICENSEE shall undertake the enforcement
and/or defense of the PATENT RIGHTS by litigation, LICENSEE
may withhold up to Fifty Percent (50%) of the royalties
otherwise thereafter due M.I.T. hereunder and apply the same
toward reimbursement of up to half of
Page 25 of 31
LICENSEE's expenses, including reasonable attorneys' fees, in
connection therewith. Any recovery of damages by LICENSEE for
any such suit shall be applied first in satisfaction of any
unreimbursed expenses and legal fees of LICENSEE relating to
the suit, and next toward reimbursement of M.I.T. for any
royalties past due or withheld and applied pursuant to this
Article VII. The balance remaining from any such recovery
attributable to damages for lost sales shall be divided
according to the royalty percentages set forth in Section 4.1;
any remaining balance shall be paid to LICENSEE.
7.4 If within six (6) months after having been notified 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 any
time 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 prosecute
at its own expense any infringement 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 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.
7.5 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 its option,
shall have the right, within sixty (60) days after
commencement of such action, to join in the defense of the
action at its own expense.
7.6 In any infringement suit as either party may institute to
enforce the PATENT RIGHTS pursuant to this Agreement, the
other parry 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 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
8.1 LICENSEE shall at all times during the term of this Agreement
and thereafter, indemnify, defend and hold M.I.T., its
trustees, officers,
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employees and affiliates, harmless against all claims and
expenses, 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 and against any other
claim, proceeding, demand, expense and liability of any kind
whatsoever resulting from the production, 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 Prior to the first use of a LICENSED PRODUCT on humans,
LICENSEE shall obtain and carry in full force and effect
liability insurance which shall protect LICENSEE and M.I.T. in
regard to events covered by Paragraph 8.1 above.
8.3 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. 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 GRANTED HEREUNDER SHALL
NOT INFRINGE THE PATENT RIGHTS OF ANY THIRD PARTY.
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 not that,
if required, it shall be issued.
ARTICLE 10 - NON-USE OF NAMES
Except as required by law, LICENSEE shall not use the names or
trademarks of the Massachusetts Institute of Technology, nor any adaptation
thereof, nor the names of
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any of its 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. LICENSEE
may, however, use the name of Xxxxxx X. Xxxxxxx, Xxxxxxx X. Xxxxxxx, and/or any
other employee of M.I.T. who is a consultant or member of an advisory board of
LICENSEE, with their permission, and provided, also, that their affiliation with
LICENSEE is identified.
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 one hundred and twenty (120) 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 ten (10) 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 twenty (20) 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 thirty (30) business days after such
mediation hearing, the parties shall have the right to pursue
any other 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 If LICENSEE shall cease to carry on its business, this
Agreement shall terminate upon notice by M.I.T., except as
provided in Article 11.
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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' 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., 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 Paragraphs
13.1 and 13.2 hereinabove, 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 one hundred and twenty
(120) 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
one hundred and twenty (120) 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. 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 M.I.T. the
Running Royalties thereon as required by Article 4 of this
Agreement and shall submit the reports required by Article 5
hereof on the sales of LICENSED PRODUCTS.
13.6 Upon termination of this Agreement for any reason, any of
LICENSEE's direct sublicensees that are 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. Notwithstanding the
foregoing, should Tepha, Inc. request a license, M.I.T. hereby
agrees to grant such a license under terms and conditions no
less favorable as a whole than those granted to Tepha, Inc. by
LICENSEE.
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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 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.
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APPENDIX C
PRICE LIST
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|
-------------------------------------------------------- -----------------------
Poly-3-hydroxybutyrate-co-4-hydroxybutyrate (PHA3444) | $ *** *
-------------------------------------------------------- -----------------------
*Current price, price adjustments to be determined in accordance with Paragraph
3.5. Each order must be for a minimum lot size of *** , except for research and
development runs during the initial two-year period after the Effective Date.
**Composition of co-monomers to be agreed between the parties.
*** Denotes confidential information that has been omitted from the exhibit and
filed separately, accompanied by a confidential treatment request, with the
Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities
Exchange Act of 1934.
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