Exhibit 10.1
Text marked by [* * *] has been omitted pursuant to a Request for Confidential
Treatment
and was filed separately with the Securities and Exchange Commission
LICENSE AGREEMENT
AMONG
THE HENRY M. JACKSON FOUNDATION FOR THE
ADVANCEMENT OF MILITARY MEDICINE, INC.
AND
THE BOARD OF REGENTS OF THE UNIVERSITY OF TEXAS SYSTEM and
THE UNIVERSITY OF TEXAS M. D. ANDERSON CANCER CENTER
AND
RXI PHARMACEUTICALS CORPORATION
     THIS EXCLUSIVE LICENSE AGREEMENT is entered into as of the date of the last
signature on the signature page of this document (the “Effective Date”), by and
among The Henry M. Jackson Foundation for the Advancement of Military Medicine,
Inc., a tax-exempt corporation organized under the laws of the State of Maryland
and having its principal offices at 6720-A Rockledge Drive, Suite 100 Bethesda,
Maryland 20817 (the “Foundation”), The Board of Regents (“Board”) of The
University of Texas System (“System”), an agency of the State of Texas, whose
address is 201 West 7th Street, Austin, Texas 78701, on behalf of The University
of Texas M. D. Anderson Cancer Center (“UTMDACC”), a member institution of
System, and RXi Pharmaceuticals Corporation, a corporation organized under the
laws of the State of Delaware and having its principal offices at 60 Prescott
Street, Worcester, Massachusetts 01605 (“Licensee”). Board, UTMDACC and the
Foundation sometimes are referred to collectively as “Owners.” The Foundation,
Board, UTMDACC, and Licensee sometimes are referred to collectively herein as
the “Parties” and individually as a “Party.”
     WHEREAS the Foundation and the Uniformed Services University of the Health
Sciences, an institution of higher learning within the Department of Defense, an
agency of the United States Government, located at 4301 Jones Bridge Road,
Bethesda, Maryland 20814 (“USU”) have agreed to collaborate in the development
and commercialization of inventions, patents, trade secrets, and other
intellectual property rights; and
     WHEREAS, the Foundation and USU are committed to the policy that ideas or
creative works produced at the Foundation and USU should be used for the
greatest possible public benefit and 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

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     WHEREAS, the Owners, by virtue of assignments from inventors and other
parties, are the owners of or control certain Patent Rights (as hereinafter
defined) and have the right to grant licenses of said Patent Rights, subject
only to a royalty-free, nonexclusive license heretofore granted to or retained
by the United States Government; and
     WHEREAS, the Owners have entered into an Amended and Restated
Inter-Institutional Sharing Agreement with an effective date of July 8, 2009,
whereby Foundation is responsible for maintenance of the Patent Rights and for
negotiating and administering all licenses of the Patent Rights;
     WHEREAS Licensee has represented to Owners, to induce Owners to enter into
this Agreement, that Licensee is experienced in the development, production,
manufacture, marketing, and sale of products similar to the Licensed Products
and the use of processes similar to the Licensed Processes (both as hereinafter
defined) and is willing to undertake as provided in this Agreement a thorough,
vigorous, and diligent program of exploiting the Patent Rights so that public
utilization may result therefrom; and
     WHEREAS Licensee desires to obtain from Owners, and Owners agree to grant
to Licensee, a license upon the terms and conditions set forth herein;
     NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth in this Agreement, the Parties, intending to be legally bound, agree as
follows:
ARTICLE I
DEFINITIONS
     As used in this Agreement, the following terms shall have the following
meanings:
     1.1 “Affiliate” means, with respect to any Person, any other Person that
directly or indirectly through one or more intermediaries controls, is
controlled by, or is under common control with such Person. For purposes of this
definition, the term “controls” (including its correlative meanings “controlled
by” and “under common control with”) means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract, or otherwise.
     1.2 “Agreement” means this Agreement, including all Appendices hereto, as
the same may be amended from time to time in accordance with the terms hereof.
     1.3 “Business Day” means any day other than a Saturday, a Sunday, or a day
on which banking institutions in Montgomery County, Maryland are closed.
     1.4 “Confidential Information” means information, disclosed by one Party to
another Party, that is treated as proprietary or confidential by the disclosing
Party and, at the time of disclosure, that is marked “proprietary” or
“confidential” or that bears a marking or legend of like import restricting its
use, copying, or dissemination or that is identified as being

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confidential in a letter or other written communication sent to the receiving
Party prior to or contemporaneously with disclosure to the receiving Party. Any
such information that is in another form when disclosed, such as oral or visual,
shall be treated as Confidential Information only if and to the extent the
disclosing Party informs the receiving Party of the proprietary or confidential
nature of the information prior to or at the time of the disclosure, and
thereafter creates a written record of the disclosure (marked in accordance with
this Agreement) and delivers the written record to the receiving Party promptly,
but in no event more than thirty (30) days after the original disclosure to the
receiving Party. Confidential Information does not include any information that
(i) was known to the receiving Party without a duty of confidentiality before
receipt from the disclosing Party as evidenced by written records made prior to
such receipt or disclosure (when such prior knowledge did not become known to
such receiving Party through disclosure by a third party known to the receiving
Party to be subject to an obligation to maintain the confidentiality thereof);
(ii) is or becomes a matter of public knowledge through no fault of the
receiving Party or any of its agents; (iii) is rightfully received by the
receiving Party from a third party without a duty of confidentiality; or (iv) is
independently developed by the receiving Party as evidenced by written records
of the receiving Party.
     1.5 “Field” means the field of human therapeutics.
     1.6 “Follow-on Intellectual Property” means any intellectual property
developed by one or more of the inventors listed on Appendix A and acquired by
the Foundation after the Effective Date that may be necessary or useful in
connection with the development or manufacture of Licensed Products, to the
extent the Foundation has the right to license such intellectual property to
Licensee. All such Follow-on Intellectual Property, if any, shall be expressly
included in this Agreement in an Appendix B to be added pursuant to future
modification or amendment signed by the Foundation and Licensee that satisfies
the requirements of Section 10.16. For the avoidance of doubt, Follow-on
Intellectual Property does not include intellectual property of Board or
UTMDACC.
     1.7 The term “License” has the meaning set forth in Section 2.1.
     1.8 “Licensed Process” means any process that: (a) is covered in whole or
in part by an unexpired issued or pending claim contained in the Patent Rights,
or (b) utilizes any Follow-on Intellectual Property Rights or Technology Rights.
     1.9 “Licensed Product” means any product or part thereof that: (a) is
covered in whole or in part by an unexpired issued or pending claim contained in
the Patent Rights, or (b) is manufactured by using or is employed to practice a
Licensed Process Follow-on Intellectual Property Rights, or Technology Rights.
     1.10 “Marketing Approval” means the approval or authorization required for
the marketing of a Licensed Product or Licensed Process in the United States,
the European Union, or other country within the Territory, such as the issuance
of an approval action by the United States Food and Drug Administration (“FDA”)
on an NDA in the United States, or the issuance of its equivalent by the
European Medicines Agency in the European Union.

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     1.11 “NDA” means a New Drug Application or Biologics License Application
filed with the FDA for Marketing Approval of a Licensed Product or Licensed
Process, or an equivalent application filed with any equivalent agency or
governmental authority outside the United States.
     1.12 “Net Sales” means the gross revenues received by Licensee or any
sublicensee(s) or Affiliate(s) from sales, leases, or other transfers of
Licensed Products or Licensed Processes, less the sum of the following: sales
discounts actually granted and taken; sales or use taxes actually paid; import
or export duties actually paid; outbound transportation expenses actually
prepaid or actually allowed; and amounts actually allowed or credited due to
returns (not exceeding the original billing or invoice amount), all as recorded
by Licensee in Licensee’s official books and records in accordance with
generally accepted accounting practices and consistent with Licensee’s financial
statements and regulatory filings with the United States Securities and Exchange
Commission, if any. No deductions shall be made for commissions paid to
individuals, whether they be with independent sales agencies or regularly
employed by and on the payroll of Licensee or sublicensees, or for the cost of
collections.
     1.13 “Non-commercial Research Purposes” means use of Patent Rights for
academic research or other not-for-profit scholarly purposes that are undertaken
at a non-profit or governmental institution that does not use the Patent Rights
in the production or manufacture of products for sale or the performance of
services for a fee.
     1.14 “Non-royalty Sublicense Income” means all sublicense issue fees,
sublicense maintenance fees, sublicense milestone payments, and similar
non-royalty payments made by sublicensees to Licensee on account of sublicenses
pursuant to this Agreement.
     1.15 “Patent Rights” means any or all of the following intellectual
property to the extent owned or controlled by one or more of the Owners:
          (a) the United States and foreign patents and patent applications
listed in Appendix A (including any and all patents and patent applications, if
any, that may be added by a future modification or amendment of this Agreement
that satisfies the requirements of Section 10.16), and all divisions and
continuations of such applications;
          (b) United States and foreign patents issued from the applications
listed in Appendix A or from divisionals or continuations of such applications;
          (c) claims of United States and foreign continuation-in-part
applications, and all divisions and continuations of such continuation-in-part
applications, and of the resulting patents, to the extent that the claims are
directed to subject matter specifically described in the United States or
foreign patent applications listed in Appendix A;
          (d) claims of all foreign and United States counterpart patent
applications to (a), (b), or (c) above, and of the resulting patents, to the
extent that the claims are directed to subject matter specifically described in
the patents or patent applications described in (a), (b), or (c) above; and

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          (e) any reissues, renewals, extensions, or supplementary protection
certificates of patents described in (a), (b), (c), or (d) above.
Patent Rights shall not include (c), (d), or (e) above to the extent that the
claims are directed to new matter that is not the subject matter described in
(a) above.
     1.16 “Person” means any individual, corporation, limited liability company,
general or limited partnership, joint venture, association, joint stock company,
trust, unincorporated business or organization, government or agency or
political subdivision thereof, or other entity, whether acting in an individual,
fiduciary, or other capacity.
     1.17 “Phase I Clinical Trial” means the first human clinical trial on a few
individuals to determine the safety of the drug, dosage, or toxicity limits.
     1.18 “Phase II Clinical Trial” means a controlled clinical study conducted
to evaluate the effectiveness of the drug for a particular indication or
indications in patients with the disease or condition under study and to
determine the common short-term side effects and risks.
     1.19 “Phase III Clinical Trial” means: (a) that portion of the drug
development and review process in which an expanded clinical trial is conducted
to gather the additional information about effectiveness and safety that is
needed to evaluate the overall benefit-risk relationship of an investigational
new drug, as more specifically defined by the rules and regulations of the FDA,
including 21 C.F.R. § 312.21 or any future revisions or substitutes therefore;
or (b) a similar clinical trial in the European Union or any nation other than
the United States. Commencement of a Phase III Clinical Trial shall be deemed to
occur upon the administration of Licensed Product (or Licensed Process) or
placebo to the first patient enrolled in the Phase III Clinical Trial.
     1.20 “Technology Rights” means any of the Owners’ rights in any technical
information, know-how, trade secret, process, procedure, composition, device,
method, formula, protocol, technique, software, design, drawing, or data that
are: (a) created before the Effective Date by one or more of the inventor(s)
listed in Appendix A at the respective institution of such inventor
(specifically, with respect to Constantine G. Ioannides, created before the
Effective Date by him at UTMDACC while he was an employee of UTMDACC), and
(b) not specifically claimed in Patent Rights but that are necessary for
practicing Patent Rights.
     1.21 “Territory” means worldwide.
     1.22 “Valid Claim” means a claim of: (a) any issued, unexpired Patent Right
that has not been revoked or held unenforceable or invalid by a decision of a
court or governmental agency of competent jurisdiction from which no appeal can
be taken, or with respect to which an appeal is not taken within the time
allowed for appeal; or (b) any pending application for Patent Right that has not
been cancelled, withdrawn, or abandoned.

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ARTICLE II
GRANT OF RIGHTS
     2.1 The Owners hereby grant to Licensee and Licensee accepts, subject to
the terms and conditions hereof, in the Territory and for the Field: (a) a
non-exclusive license to practice under the Technology Rights and Follow-on
Intellectual Property Rights, if any, and (b) an exclusive (even as to Owners,
except as provided in Section 2.4) license to practice under the Patent Rights
(including, to the extent not prohibited by other patents, the right under
Patent Rights in the Field in the Territory to make, have made, use, have used,
sell, have sold, export and import Licensed Products and to practice Licensed
Processes) (collectively, the “License”), until the expiration of this
Agreement, unless this Agreement shall be sooner terminated in accordance with
the terms hereof.
     2.2 In order to establish a period of commercial exclusivity for Licensee,
the Owners agree that they will not grant, in the Territory for the Field, any
other license to practice under the Patent Rights, except as required by the
obligations related to Section 2.4(a) or as permitted in Section 2.4(b) or
Section 2.4(d), during the period of time commencing with the Effective Date and
ending with the first to occur of:
          (a) the expiration of all Patent Rights;
          (b) a court or tribunal, in a final decision not subject to further
appeal, declaring invalid or unenforceable all claims in the Patent Rights;
          (c) the abandonment of all claims in the Patent Rights; or
          (d) the termination of this Agreement or the termination of the
exclusivity of the License in accordance with Article IX.
     2.3 Subject to the Foundation’s prior approval, which approval shall not be
unreasonably withheld or delayed, Licensee shall have the right to grant
sublicenses hereunder via written sublicense agreements. The License granted to
Licensee hereunder does not extend to any Affiliate of Licensee unless and until
such Affiliate enters into a written sublicense agreement with Licensee that is
consistent with the requirements hereof and the Foundation approves the written
sublicense agreement.
          (a) In all sublicenses granted hereunder, Licensee shall provide that
the sublicense is subject and subordinate to all terms and conditions of this
Agreement, except: (i) the sublicensee may not grant any sublicenses except with
the Foundation’s prior express written approval, and (ii) any royalty or other
payment paid by the sublicensee to Licensee may exceed the rate set forth in
this Agreement. Licensee shall attach a copy of this Agreement to any sublicense
agreement and shall provide a complete copy of the sublicense agreement to the
Foundation promptly after signing by the parties thereto.

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          (b) Licensee may not receive from any sublicensee anything of value in
lieu of cash payments in consideration for any sublicense under this Agreement,
without the Foundation’s prior express written approval.
          (c) Sublicenses may extend past the expiration date of the exclusive
period but any exclusivity of such sublicenses shall expire upon the termination
or expiration of Licensee’s exclusivity. Upon any termination of this Agreement,
sublicensees’ rights shall also terminate, subject to Section 9.3.
     2.4 The granting and exercise of the License is subject to the following
conditions:
          (a) The U.S. Government retains a nonexclusive, nontransferable,
irrevocable, world-wide, paid-up license to practice all invention(s) covered by
the Patent Rights, Follow-on Intellectual Property Rights, or Technology Rights
and to have such invention(s) practiced by or on behalf of the U.S. Government
and on behalf of any foreign government or international organization pursuant
to any existing or future treaty or agreement to which the U.S. Government is a
signatory. This Agreement is explicitly made subject to the Government’s rights
under any such license and any applicable law or regulation. To the extent that
there is a conflict between any such license of the U.S. Government, applicable
law or regulation and this Agreement, the terms of such Government license,
applicable law or regulation shall prevail.
          (b) The Foundation, the USU, Board and UTMDACC reserve the rights to
make and use, and grant to others non-exclusive licenses to make and use, for
Non-commercial Research Purposes, the subject matter described or claimed in
Patent Rights. The Foundation, the USU, Board and UTMDACC reserve the rights to
make and use, and grant to others non-exclusive licenses to make and use, for
any and all purposes, the subject matter described or claimed in Technology
Rights. The Foundation and the USU reserve the rights to make and use, and grant
to others non-exclusive licenses to make and use, for any and all purposes, the
subject matter described or claimed in Follow-on Intellectual Property Rights.
          (c) Licensee shall cause any Licensed Product produced for use or sale
in the United States to be manufactured substantially in the United States or
its territories.
          (d) Notwithstanding anything to the contrary in this Agreement, any
license or other rights granted to Licensee herein are subject to the following
rights retained by Board and UTMDACC: (i) Board and UTMDACC retain the right to
publish the general scientific findings from research related to inventions,
discoveries, know-how, and information covered by Patent Rights or Technology
Rights or described in UTMDACC Invention Disclosure Report MDA00-043 entitled
“Induction of Tumor Immunity by Variants of FBP”; and (ii) Board and UTMDACC
retain the right to use the inventions, discoveries, know-how, and information
covered by Patent Rights or Technology Rights or described in UTMDACC Invention
Disclosure Report MDA00-043 entitled “Induction of Tumor Immunity by Variants of
FBP”, for patient care, research, teaching, and other educationally-related
purposes.
     2.5 The License granted hereunder shall not be construed to confer any
rights upon Licensee (or sublicensees, if any) by implication, estoppel, or
otherwise as to any technology

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not included in the Patent Rights, the Follow-on Intellectual Property Rights,
or the Technology Rights as defined herein.
ARTICLE III
LICENSE FEES AND MILESTONE AND ROYALTY PAYMENTS
     3.1 Licensee shall pay to the Foundation a non-creditable, non-refundable
License issue royalty in the sum of [***] within thirty (30) days after the
Effective Date. Additionally, Licensee shall pay the Foundation a
non-creditable, nonrefundable License issue royalty in the sum of [***] for each
additional item of Follow-on Intellectual Property, such payment to be paid
within thirty (30) days after the effective date of the associated modification
or amendment adding such Follow-on Intellectual Property to Appendix B
     3.2 Licensee shall, commencing December 31, 2011, pay to the Foundation
semi-annually, within sixty (60) days after each calendar half year ending
June 30 and December 31, on a country-by-country basis, a royalty of [***] of
Net Sales in any and all jurisdictions in which a Licensed Product or Licensed
Process is covered by at least one Valid Claim, and [***] of Net Sales in all
other jurisdictions. In the case of sublicenses, Licensee shall also pay to the
Foundation a royalty of [***] of Non-royalty Sublicense Income.
     3.3 Licensee shall pay the Foundation annually, no later than the
anniversary of the Effective Date indicated below, the following minimum,
annual, non-refundable License maintenance royalties:
          (a) First anniversary of the Effective Date, the sum of [***];
          (b) Second anniversary of the Effective Date, the sum of [***];
          (c) Third anniversary of the Effective Date, the sum of [***]; and
          (d) Fourth anniversary of the Effective Date and every anniversary of
the Effective Date thereafter, the sum of [***], which commencing with the year
after the first sale of Licensed Product or Licensed Process, shall be
creditable against other royalties, if any, due under Section 3.2 for the same
calendar year only, but shall not be credited against any milestone payments, if
any, due pursuant to Section 3.4 nor against royalties due for any other
calendar year.
     3.4 Licensee shall pay to the Foundation the following milestone payments:
          (a) [***] for each additional item of Follow-on Intellectual Property
within thirty (30) days of issuance of the first patent in the Territory related
to any portion of such Follow-on Intellectual Property;
          (b) [***] within thirty (30) days of the start of the first Phase I
Clinical Trial;
          (c) [***] within thirty (30) days of the start of the first Phase II
Clinical Trial;

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          (d) [***] within thirty (30) days of the start of the first Phase III
Clinical Trial;
          (e) [***] within thirty (30) days following the filing of the first
NDA (or equivalent filing) for any Licensed Product;
          (f) [***] within thirty (30) days following the first Marketing
Approval of any Licensed Product; and
          (g) [***] within thirty (30) days following the date that cumulative
total Net Sales in the Territory reach [***].
     3.5 All payments due hereunder shall be paid in full, without deduction for
any taxes or other fees imposed by any government or any transfer, collection,
or similar charges; any such tax, fee, or charge shall be paid by Licensee.
     3.6 Royalty payments shall be paid, by check or by wire transfer, in United
States dollars in Rockville, Maryland, or at such other place and manner as the
Foundation may designate in writing consistent with the laws and regulations
controlling in any foreign country. If any currency conversion is required in
connection with any payments due hereunder, such conversion shall be made by
using the exchange rate existing in the United States as reported in The Wall
Street Journal on the last Business Day of the calendar half-year reporting
period to which such payments relate.
     3.7 [***] shall be due to the Foundation for any Licensed Product as to
which the manufacture, use, lease, or sale is, or shall be, covered by more than
one Patent Right licensed hereunder.
     3.8 If Licensee is required to pay royalties to a third party to avoid
infringing such third party’s intellectual property rights, as documented by a
written advice of Licensee’s patent counsel, Licensee shall be entitled to
reduce the royalty payments made pursuant to Section 3.2 by the amounts paid to
such thirty party; provided, however, that the amounts paid pursuant to Section
3.2 will not be reduced by more than [***] and in no event shall be less than
[***]. Such reduction of royalty payments paid pursuant to Section 3.2 shall
occur only in the same calendar year as such required payment is made to such
third party. Any such required payment shall not be applied to reduce any
milestone payments, nor to reduce any royalties due for any other calendar year.
ARTICLE IV
DUE DILIGENCE
     4.1 Licensee shall use its commercially reasonable efforts to bring one or
more of the Licensed Products or the Licensed Processes to market, in the
Territory for the Field, through a thorough, vigorous, and diligent program for
exploitation of the Patent Rights and to continue active, diligent development
and marketing efforts for such Licensed Products and Licensed

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Processes throughout the life of this Agreement. Thereafter, until the
expiration of this Agreement, Licensee shall endeavor to keep the Licensed
Products and the Licensed Processes continuously available to the public in the
Territory for the Field.
     4.2 In addition, Licensee shall adhere to the following milestones:
          (a) Licensee shall deliver to the Foundation on or before sixty
(60) days following the Effective Date a business plan showing the estimated
amount of money, number and kind of personnel, and time budgeted and planned for
each phase of development of the Licensed Products and the Licensed Processes
during the period ending on the first anniversary of the Effective Date.
Licensee shall provide an updated, similarly detailed business plan to the
Foundation each year on or before the anniversary of the Effective Date.
          (b) Licensee shall enter into a Phase I Clinical Trial no later than
six (6) months after the Effective Date.
          (c) Licensee shall enter into a Phase II Clinical Trial no later than
three (3) years after the Effective Date.
          (d) Licensee shall enter into a Phase III Clinical Trial no later than
seven (7) years after the Effective Date.
          (e) Licensee shall have commenced the first sale of any Licensed
Product no later than twelve (12) years after the Effective Date.
ARTICLE V
REPORTING
     5.1 No later than sixty (60) days after December 31 of each calendar year,
Licensee shall provide to the Foundation 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 ended December 31 and plans for the forthcoming year. The
Progress Report shall describe the status of Licensee’s efforts to develop and
commercialize Licensed Product(s) or Licensed Process(es) in sufficient detail
to enable the Foundation to reasonably determine whether anticipated performance
and payment milestones have been met and to provide assurance that Licensee is
developing Licensed Product(s) or Licensed Process(es). If multiple technologies
are covered by the License hereunder, the Progress Report shall provide the
information set forth above for each technology. If progress differs in any
material respect from that anticipated in the plan required under
Section 4.2(a), Licensee shall explain the reasons for the difference and
propose a modified development plan for the Foundation’s review and approval,
not to be unreasonably withheld. Licensee shall also provide any reasonable
additional data the Foundation requires to evaluate Licensee’s performance.

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     5.2 Licensee shall report to the Foundation the date of the first sale of
Licensed Products (or use or sale of Licensed Processes) in each country within
thirty (30) days of occurrence.
     5.3 Royalty Reports.
          (a) Licensee shall, commencing December 31, 2011, submit to the
Foundation, within sixty (60) days after each calendar half year ending June 30
and December 31 during the term of this Agreement, a Royalty Report setting
forth for such half year at least the following information:
          (i) the number of Licensed Products sold by Licensee and all
sublicensees in each country;
          (ii) total dollar amount of billings, invoices, and receipts for
Licensed Products sold by Licensee and all sublicensees in each country
(together with an accounting for currency conversions, if any);
          (iii) an accounting for all Licensed Processes used or sold by
Licensee and all sublicensees in each country;
          (iv) the calculation of Net Sales, including applicable deductions;
          (v) the amount of Non-royalty Sublicense Income received by Licensee;
          (vi) an accounting for any deduction made pursuant to Section 3.8; and
          (vii) the amount of royalty due to the Foundation for the reporting
period or, if no royalties are due for any reporting period, the statement that
no royalties are due.
Such Royalty Report shall be certified as correct by an officer of Licensee and
shall include a detailed listing of all deductions from royalties otherwise due
pursuant to this Agreement.
          (b) Contemporaneous with the submission of each Royalty Report,
Licensee shall pay to the Foundation 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) Late payments shall be subject to a charge of one and one-half
percent (1-1/2%) per month, or $250, whichever is greater.
     5.4 In the event of an acquisition, merger, change of corporate name, or
change of organization or identity, Licensee shall notify the Foundation in
writing within thirty (30) days of such event.

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     5.5 If Licensee or any Affiliate or sublicensee (or optionee) does not
qualify or ceases to qualify as a “small entity” as provided by the United
States Patent and Trademark Office, Licensee shall notify the Foundation
immediately.
ARTICLE VI
RECORD KEEPING
     6.1 Licensee shall keep, and shall require its sublicensees to keep,
accurate records (together with supporting documentation) of Licensed Products
and Licensed Processes made, used or sold under this Agreement, appropriate to
determine the amount of royalties due to the Foundation 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, on not less than ten (10) days’ prior notice from the
Foundation, for examination by an accountant selected by the Foundation, for the
sole purpose of verifying reports and payments hereunder, provided that the
Foundation shall have the right to conduct such an examination not more than
once in any calendar year and only with respect to prior years that have not
previously been subject to such examination. In conducting examinations pursuant
to this section, the Foundation’s accountant shall have access to all records
that the Foundation reasonably believes to be relevant to the calculation of
royalties and other payments required under Article III.
     6.2 The Foundation’s accountant shall not disclose to the Foundation any
information other than information relating to the accuracy of reports and
payments made hereunder. In cases of inaccurate reports and payment, Licensee
shall promptly pay the Foundation any additional sum that would have been
payable to the Foundation had the Licensee reported correctly, plus interest on
said sum at the rate of one and one half percent (1-1/2%) per month.
     6.3 Such examination by the Foundation’s accountant shall be at the
Foundation’s expense, except that if such examination shows an underreporting or
underpayment in excess of the greater of (i) five percent (5%) or (ii) Ten
Thousand Dollars ($10,000) for any twelve (12) month period, then Licensee shall
pay the Foundation the reasonable cost of such examination (as well as any
additional sum that would have been payable to the Foundation had the Licensee
reported correctly, plus interest on said sum at the rate of one and one half
percent (1-1/2%) per month).
ARTICLE VII
DOMESTIC AND FOREIGN PATENT FILING AND MAINTENANCE
     7.1 Licensee Prosecution
          (a) Owners grant Licensee the right to be responsible for the
preparation, filing, prosecution and maintenance of any and all Patent Rights in
the Field in the Territory (as such terms are defined herein). Licensee agrees
to prosecute and maintain at Licensee’s expense the patent applications listed
under Appendix A. Licensee further agrees to file at Licensee’s expense any
additional continuation or divisional application(s) required to retain all
embodiments of Patent Rights contained in said patent applications. Licensee
agrees not to

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abandon or otherwise undermine prosecution of any Patent Rights without the
prior written approval of the Foundation. If UTMDACC or Foundation has
reasonable concerns regarding the quality of the legal representation provided
by Licensee in connection with the prosecution of the Patent Rights, then
(i) Foundation or UTMDACC shall give Licensee written notice to terminate its
prosecution of Patent Rights, (ii) UTMDACC and Foundation will appoint new legal
counsel to prosecute Patent Rights that is reasonably acceptable to Licensee,
and (iii) Licensee will pay for the cost of filing, preparation, prosecution,
and maintenance of Patent Rights.
          (b) Licensee shall consult with the Foundation as to the preparation,
filing, prosecution and maintenance of the Patent Rights, and agrees to keep the
Foundation promptly and fully informed of the course of patent prosecution of
the Patent Rights by providing the Foundation with copies of all documents
relevant to any such preparation, filing, prosecution, or maintenance, including
but not limited to substantive communications and notices, search reports, third
party observations submitted to or received from patent offices throughout the
Territory, foreign patent applications, Office Actions and Examination Reports
from patent offices, and proposed draft responses. The Foundation shall have the
right to review all such documents, prior to their submission, and may offer
recommendations to Licensee to amend such contemplated preparation, filing,
prosecution, or maintenance, and provide a list of the countries where the
Foundation desires Licensee to file patent applications. Licensee will make a
reasonable effort to implement such Foundation recommendations, provided the
Foundation recommendations are acceptable to outside patent counsel and are
received in sufficient time to meet any pertinent deadlines. The Foundation
shall provide such patent consultation to Licensee at no cost to Licensee.
          (c) In the event the Licensee elects not to, or fails to, continue
prosecution, in whole or in part, of any Patent Rights in any particular country
or countries, the Foundation shall have the right (but not the obligation) at
its own expense to undertake the prosecution and maintenance of the Patent
Rights. The Licensee shall notify the Foundation in writing of any election not
to pursue the prosecution or maintenance of any Patent Rights at least sixty
(60) days prior to any applicable deadline or loss of rights. Licensee shall
have an obligation to pay a royalty on Net Sales of Licensed Products or
Licensed Processes in any country in which Licensee discontinued prosecuting or
abandoned Patent Rights. In addition, Licensee shall reimburse Foundation for
all patent prosecution expenses that Foundation reasonably incurs pursuant to
its election to prosecute Patent Rights under this Section 7.1(c) in any country
in which Licensee has Net Sales.
          (d) Foundation shall provide reasonable efforts to aid Licensee in
obtaining signatures or inventor assistance as necessary to further prosecution
and to secure the full protection and ownership of all rights in and to the
Licensed Products and the Licensed Processes, but Licensee acknowledges that
inventors include employees of the U.S. Government and other individuals, none
of whom are employed by the Foundation. Licensee further acknowledges that, as
of the Effective Date, none of the inventors listed on Appendix A are employees
of System, Board, or UTMDACC.
     7.2 After execution of this Agreement and within thirty (30) days of the
Foundation’s submission of an invoice, Licensee shall reimburse the Foundation
for up to [***] of all third

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party expenses the Owners have incurred and paid prior to the Effective Date for
the preparation, filing, prosecution, and maintenance of Patent Rights. If
expenses are incurred by Foundation after the Effective Date that are
reimbursable by Licensee under the terms hereof, the Licensee shall reimburse
the Foundation for all such future third party expenses within thirty (30) days
after Licensee’s receipt of invoices from the Foundation. Payment of these
invoices that is made more than the number of days specified above after
submission shall be considered late and subject to interest charges of one and
one-half percent (1-1/2%) per month.
     7.3 The Foundation and Licensee shall cooperate fully in the preparation,
filing, prosecution and maintenance of Patent Rights licensed to Licensee
hereunder, executing all papers and instruments or requiring employees or agents
to execute such papers and instruments so as to enable the Foundation or
Licensee to apply for, to prosecute, and to maintain patent applications and
patents in the Foundation’s name in any country. Each Party shall provide to the
other prompt notice as to all matters that come to its attention and that may
affect the preparation, filing, prosecution, or maintenance of any such patent
applications or patents; provided however, that with respect to Board and
UTMDACC, such obligation shall be limited to matters that come to the attention
of UTMDACC’s Office of Technology Commercialization.
     7.4 Licensee may elect to surrender its Patent Rights in any country upon
sixty (60) days written notice to the Foundation. Such notice shall not relieve
Licensee from responsibility for Patent Right-related expenses incurred prior to
the expiration of the sixty (60)-day notice period (or such longer period
specified in Licensee’s notice).
     7.5 The Parties agree that they share a common legal interest to get valid
enforceable patents and will keep all privileged information received pursuant
to this Article confidential.
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, within the
Territory, 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. The Foundation agrees to notify Licensee promptly
of each infringement of such patents of which the Foundation 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 the
Foundation and to potential effects on the public interest in making its
decision whether or not to sue.
          (a) If Licensee elects to commence an action as described above,
Foundation may, to the extent permitted by law and at the Foundation’s own
expense, elect to join as a party in that action. Regardless of whether the
Foundation elects to join as a party, the Foundation shall cooperate fully with
Licensee in connection with any such action.
          (b) If the Foundation elects to join as a party pursuant to subsection
(a), the Foundation shall jointly control the action with Licensee.

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     8.2 If Licensee elects to commence an action as described above, Licensee
may deduct from its royalty payments to the Foundation with respect to the
patent(s) subject to suit an amount not exceeding [***] of Licensee’s expenses
and costs of such action, including reasonable attorneys’ fees; provided,
however, that such reduction shall not exceed [***] of the total royalty due to
the Foundation with respect to the patent(s) subject to suit for each calendar
year. If such [***] 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 the Foundation from Licensee in succeeding
calendar years, but never by more than [***] of the total royalty due in any one
year with respect to the patent(s) subject to suit.
     8.3 No settlement, consent, judgment or other voluntary final disposition
of the suit may be entered into without the prior written consent of the
Foundation and UTMDACC, which consent shall not be unreasonably withheld or
delayed.
     8.4 Recoveries or reimbursements from actions commenced pursuant to this
Article shall first be applied to reimburse Licensee and the Foundation for
litigation costs (excluding Licensee litigation costs deducted from royalty
payments pursuant to Section 8.2) not paid from royalties and then to reimburse
the Foundation for royalties deducted by Licensee pursuant to Section 8.2.
Licensee, and Foundation shall share any remaining recoveries or reimbursements
[***].
     8.5 If Licensee elects not to exercise its right to prosecute an
infringement of the Patent Rights pursuant to this Article, the Foundation may
do so at Foundation’s own expense, controlling such action and retaining all
recoveries therefrom. Licensee shall cooperate fully with the Foundation in
connection with any such action.
     8.6 Without limiting the generality of Section 8.5, the Foundation 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
the Foundation is or becomes aware. If, by the end of such sixty (60)-day
period, Licensee has not commenced such an action, the Foundation 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 the Foundation in good faith, Licensee shall pay over to
Foundation any payments (whether or not designated as “royalties”) made by the
alleged infringer to Licensee under any existing or future sublicense
authorizing Licensed Products or Licensed Processes, up to the amount of the
Foundation’s unreimbursed litigation expenses (including, but not limited to,
reasonable attorneys’ fees).
     8.7 If a declaratory judgment action is brought naming Licensee as a
defendant and alleging invalidity of any of the Patent Rights, the Foundation
may elect to take over the sole defense of the action at its own expense.
Licensee shall cooperate fully with the Foundation in connection with any such
action.
     8.8 Subject to Section 2.4, during the exclusive period of Licensee’s
License hereunder, Licensee shall have the sole right, in accordance with the
terms and conditions hereof, to sublicense Patent Rights to any alleged
infringer within the Territory for the Field.

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Any upfront fees paid in connection with such sublicense shall be shared [***]
between Licensee and the Foundation; other royalties shall be treated in
accordance with Article III.
     8.9 Nothing in this Article VIII shall constitute a waiver or surrender of
any rights by Board or UTMDACC to enforce any rights owned or controlled by
Board or UTMDACC.
ARTICLE IX
TERMINATION OF AGREEMENT
     9.1 This Agreement, unless terminated as provided herein, shall remain in
effect until (a) the last patent or patent application in Patent Rights has
expired or been abandoned or (b) fifteen (15) years from the Effective Date,
whichever is later.
     9.2 The Foundation may terminate this Agreement in the circumstances set
forth in this Section, and any such termination shall be effective immediately
upon the Foundation giving written notice to Licensee of any of the following:
          (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
Section 5.3(c)) within thirty (30) days after the date of notice in writing of
such non-payment by the Foundation;
          (b) if Licensee defaults in any of its material obligations under
Sections 10.4(c), 10.4(d), and 10.4(e) to procure and maintain insurance;
          (c) at any time after two (2) years from the Effective Date of this
Agreement, the Foundation may, in its sole discretion, either terminate this
Agreement and the License granted hereunder or render the exclusive portion of
the License non-exclusive if, in the Foundation’s reasonable judgment, the
Progress Reports furnished by Licensee do not demonstrate that Licensee has:
          (i) either (A) put the licensed subject matter into commercial use in
the Territory, directly or through a sublicense, and is keeping the licensed
subject matter continuously available to the public, or (B) has been and
continues to be engaged in research, development, manufacturing, marketing or
sublicensing activity appropriate to achieving the purposes set forth in
Section 4.1; and
          (ii) met all relevant performance milestone(s) for the period covered
by the most recent Progress Report and all preceding Progress Reports;
          (d) if Licensee: is unable to pay its debts as such debts become due;
makes a general assignment for the benefit of creditors; has a petition in
bankruptcy or a suit seeking reorganization, liquidation, dissolution, or
similar relief filed against it and such petition or suit is not dismissed
within sixty (60) days of its filing; or files or permits the filing of any
petition or answer seeking to adjudicate itself bankrupt or insolvent, or
seeking for itself any liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of Licensee or its debts under
any law relating to bankruptcy, insolvency, or reorganization or relief

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of debtors, or seeking or consenting to the appointment of a trustee, custodian,
receiver, liquidator or other similar official for Licensee or for any
substantial part of its property; or takes any corporate action to authorize any
of the foregoing actions;
          (e) if an examination by Foundation’s accountant pursuant to
Article VI shows an underreporting or underpayment by Licensee in excess of
fifteen percent (15%) for any twelve (12) month period;
          (f) if Licensee is convicted of a felony relating to the manufacture,
use, or sale of any Licensed Product or Licensed Process; or
          (g) except as provided in subsections (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 the Foundation.
     9.3 Licensee shall provide, in all sublicenses granted by it under this
Agreement, that Licensee’s interest in such sublicenses shall at the
Foundation’s option terminate or be assigned to the Foundation and Board upon
termination of this Agreement.
     9.4 This Agreement may be terminated at any time by mutual written
agreement between the Parties, subject to any terms herein which survive
termination. Upon termination, Licensee shall submit a final Royalty Report to
the Foundation and any royalty payments, including royalty payments on any and
all future sales of Licensed Products made but not yet sold at the time of
termination, and unreimbursed patent expenses invoiced under this Agreement by
the Foundation prior to termination shall become immediately payable.
     9.5 Upon termination, Licensee shall promptly provide to Foundation all
data, including all pre-clinical data, clinical data, manufacturing data, and
marketing data, derived during development or attempted development of Licensed
Products or Licensed Processes. Licensee shall also provide to Foundation copies
of all FDA submissions and correspondence related to Licensed Products or
Licensed Processes. In addition, Licensee shall promptly provide Foundation the
entire official file wrapper concerning prosecution of Patent Rights whether
from outside counsel or internal counsel.
     9.6 Upon termination, Licensee grants to Foundation and Board a
nonexclusive royalty-bearing license with the right to sublicense with respect
to improvements made by Licensee (including improvements licensed by Licensee
from third parties to the extent Licensee has the right to grant such
sublicenses). Licensee and Foundation agree to negotiate in good faith the
royalty rate for such nonexclusive license. Foundation’s and Board’s right to
sublicense others hereunder is solely for the purpose of permitting others to
develop and commercialize the entire technology related to the subject matter of
this Agreement.
     9.7 Articles I, VI, and X and Sections 2.5, 5.3 (only as it relates to any
overdue Royalty Report(s) and to the Royalty Report for the half year during
which the termination occurs), 7.2, 8.3, 8.4, 9.5, 9.6, and 9.7 shall survive
any expiration or termination of this

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Agreement indefinitely. Additionally, any rights or remedies arising out of a
breach or violation of any terms of this Agreement will survive any expiration
or termination of this Agreement. The expiration or termination of this
Agreement shall not discharge any Party from any obligation that it owes to
another Party by reason of any loss, cost, damage, expense, liability, or
contractual duty that occurs or arises (or the circumstances, events, or basis
of which occurs or arises) prior to such expiration or termination, and shall
not affect the right of any Party to institute or maintain any action for
damages relating to any breach of this Agreement by another Party prior to the
date of termination. It is the intent of the Parties that any such obligation
owed by a Party to another Party arising before the date of expiration or
termination (whether the same shall be known or unknown at such date, or whether
the circumstances, events, or basis of the same shall be known or unknown at
such date), including royalty obligations (computed in accordance with
Article III) on sales made or ordered prior to the date of termination or
expiration, indemnification obligations, and confidentiality obligations, shall
survive the expiration or termination of this Agreement.
ARTICLE X
MISCELLANEOUS PROVISIONS
     10.1 Rules of Construction. This Agreement is to be interpreted in
accordance with the following rules of construction:
          (a) Number and Gender. All definitions of terms apply equally to both
the singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine, and
neuter forms.
          (b) Including; Herein; Etc. The words “include,” “includes,” and
“including” are deemed to be followed by the phrase “without limitation.” The
words “herein,” “hereof,” and “hereunder” and words of similar import refer to
this Agreement (including all Appendices) in its entirety and are not limited to
any part hereof, unless the context shall otherwise require. The word “or” is
not exclusive and means “and/or.”
          (c) Sales. The terms “sold,” “sell,” and “sale(s)” include leases and
other transfers and similar transactions for consideration.
          (d) Subdivisions and Attachments. All references in this Agreement to
Articles, Sections, subsections, paragraphs, and Appendices are, respectively,
references to Articles, Sections, subsections, and paragraphs of, and Appendices
to, this Agreement, unless otherwise specified.
          (e) References to Documents and Laws. All references to this Agreement
or any Appendix hereof are to it as amended, modified, and supplemented from
time to time in accordance with the terms of this Agreement. All references to
(i) any other agreement or instrument or (ii) any statute, law, regulation,
permit, or similar item are to it as amended and supplemented from time to time
(and, in the case of a statute, law or regulation, to any corresponding
provisions of successor statutes, laws, or regulations), unless otherwise
specified.

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          (f) References to Days. Any reference in this Agreement to a “day” or
number of “days” (without the explicit qualification “Business”) is a reference
to a calendar day or number of calendar days. If any action or notice is to be
taken or given on or by a particular calendar day, and such calendar day is not
a Business Day, then such action or notice may be taken or given on the next
Business Day.
          (g) Examples. If, in any provision of this Agreement any example is
given (through the use of the words “such as,” “for example,” “e.g.,” or
otherwise) of the meaning, intent, or operation of any provision of this
Agreement, such example is intended to be illustrative only and not exclusive.
          (h) Currency. Except as expressly provided herein, all prices or other
monetary amounts stated in this Agreement are, and all monetary amounts stated
in any report to be delivered pursuant hereto shall be, stated in United States
Dollars.
          (i) Participation in Drafting. All Parties and their respective legal
counsel have participated, or had the opportunity to participate, in the
drafting of this Agreement, and this Agreement will be construed simply and
according to its fair meaning and not strictly for or against any Party.
     10.2 Representations and Warranties.
          (a) Foundation and Licensee each covenants, represents, and warrants
that: it is a corporation duly organized and validly existing under the laws of
the jurisdiction in which it is incorporated; this Agreement is legally binding
upon it and enforceable in accordance with its terms; and the execution,
delivery and performance of this Agreement does not conflict with any agreement,
instrument or understanding, oral or written, to which it is a party or by which
it may be bound, nor violate any material law or regulation of any governmental
or regulatory authority having jurisdiction over it. Foundation further
covenants, represents, and warrants to Licensee that:
          (i) Owners are the sole owners of the Patent Rights and have the right
to grant the License to Licensee as set forth in this Agreement;
          (ii) Foundation has not granted any rights in the Licensed Patents or
the Licensed Process that are inconsistent with or that limit the rights granted
to Licensee under this Agreement; and
          (iii) Foundation is not aware that any of the Licensed Patents or the
Licensed Process infringes the rights of any third party.
          (b) Except for the rights, if any, of the Government of the United
States of America as set forth herein (and the rights of Foundation), Board
represents and warrants its belief that (i) it is an owner or co-owner of the
right, title, and interest in and to Patent Rights and Technology Rights,
(ii) it has the right to grant licenses thereunder, and (iii) it has not
knowingly

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granted licenses thereunder to any other entity that would restrict rights
granted hereunder except as stated herein.
          (c) The Owners do not warrant the validity of the Patent Rights
licensed hereunder and make no representations whatsoever with regard to the
scope of the licensed Patent Rights or that such Patent Rights may be exploited
by Licensee or any sublicensee without infringing other patents.
          (d) EXCEPT AS EXPRESSLY PROVIDED IN SECTION 10.2(a), FOUNDATION
EXPRESSLY DISCLAIMS ANY AND ALL IMPLIED AND EXPRESS WARRANTIES AND MAKE NO
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE PATENT
RIGHTS, OR INFORMATION SUPPLIED BY THE FOUNDATION, OR OF THE LICENSED PROCESSES
OR LICENSED PRODUCTS CONTEMPLATED BY THIS AGREEMENT.
          (e) LICENSEE UNDERSTANDS AND AGREES THAT NEITHER BOARD NOR UTMDACC, BY
THIS AGREEMENT, MAKES ANY REPRESENTATION AS TO THE OPERABILITY OR FITNESS FOR
ANY USE, SAFETY, EFFICACY, APPROVABILITY BY REGULATORY AUTHORITIES, TIME AND
COST OF DEVELOPMENT, PATENTABILITY, OR BREADTH OF THE SUBJECT MATTER OF THIS
AGREEMENT OR AS TO WHETHER ANY PATENT COVERED BY THE LICENSED PATENTS IS VALID
OR AS TO WHETHER THERE ARE ANY PATENTS NOW HELD, OR WHICH WILL BE HELD, BY
OTHERS OR BY HJF, BOARD OR UTMDACC, NOR DOES BOARD OR UTMDACC MAKE ANY
REPRESENTATION THAT THE INVENTIONS CONTAINED IN THE LICENSED PATENTS DO NOT
INFRINGE ANY OTHER PATENTS NOW HELD OR THAT WILL BE HELD BY OTHERS OR BY HJF OR
BOARD.
     10.3 Limitation of Liability. IN NO EVENT SHALL ANY PARTY (OR SYSTEM) BE
LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE, OR CONSEQUENTIAL DAMAGES
(INCLUDING WITHOUT LIMITATION DAMAGES FOR LOSS OF PROFITS OR EXPECTED SAVINGS OR
OTHER ECONOMIC LOSSES, OR FOR INJURY TO PERSONS OR PROPERTY) ARISING OUT OF OR
IN CONNECTION WITH THIS AGREEMENT OR ITS SUBJECT MATTER, REGARDLESS OF WHETHER
SUCH PARTY KNOWS OR SHOULD KNOW OF THE POSSIBILITY OF SUCH DAMAGES. THE OWNERS’
AGGREGATE LIABILITY FOR ALL DAMAGES OF ANY KIND RELATING TO THIS AGREEMENT OR
ITS SUBJECT MATTER SHALL NOT EXCEED THE AMOUNT PAID BY LICENSEE TO THE
FOUNDATION UNDER THIS AGREEMENT. THE FOREGOING EXCLUSIONS AND LIMITATIONS SHALL
APPLY TO ALL CLAIMS AND ACTIONS OF ANY KIND, WHETHER BASED ON CONTRACT, TORT
(INCLUDING BUT NOT LIMITED TO NEGLIGENCE), OR ANY OTHER GROUNDS. NOTWITHSTANDING
THE FOREGOING, NOTHING IN THIS SECTION 10.3 SHALL LIMIT LICENSEE’S
INDEMNIFICATION OBLIGATIONS UNDER THIS AGREEMENT OR LIMIT THE SCOPE OF LIABILITY
FOR ANY CLAIMS AGAINST LICENSEE FOR INDEMNIFICATION OR MISAPPROPRIATION OR
INFRINGEMENT OF ANY OWNER’S INTELLECTUAL PROPERTY RIGHTS.

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     10.4 Indemnification and Insurance.
          (a) Licensee shall indemnify, defend and hold harmless each and every
Owner, System (and its member institutions, including UTMDACC), Board, and their
current and former Regents, directors, board members, trustees, officers,
employees, students, scientists, Affiliates, and agents and their respective
successors, heirs and assigns (collectively, the “Indemnitees”), from and
against any and all claims, demands, causes of action, liabilities, costs,
expenses, damages, deficiencies, losses or obligations of any kind or nature
(including reasonable attorneys’ fees and other costs and expenses of
litigation) (collectively “Claims”) based upon, arising out of, or otherwise
relating to this Agreement, including without limitation (i) any of the
foregoing caused by, or arising out of, or resulting from, the exercise or
practice by Licensee, its officers, its affiliates or their officers, employees,
agents, sublicensees (if any), or representatives of the rights granted
hereunder, (ii) any Claims arising on account of any injury or death of persons
or damage to property, or (iii) any causes of action relating to product
liability concerning any product, process, or service made, used, or sold
pursuant to any right or license granted under this Agreement. Licensee’s
obligation to defend Board, System, and UTMDACC as set forth in this
Section 10.4(a) or under any other provision of this Agreement shall apply to
the extent authorized by the Texas Constitution and the laws of the State of
Texas and shall be subject to the statutory duties of the Texas Attorney
General.
          (b) To the extent authorized by the Texas Constitution and the laws of
the State of Texas and subject to the statutory duties of the Texas Attorney
General, Licensee shall, at its own expense, provide attorneys reasonably
acceptable to the affected Indemnitee(s) to defend against any actions brought
or filed against any Indemnitee(s) hereunder with respect to the subject of
indemnity contained herein, whether or not such actions are rightfully brought.
          (c) Beginning at the time any such product, process or service is
being commercially distributed or sold (including for the purpose of obtaining
regulatory approvals) by Licensee or by any sublicensee 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
$4,000,000 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 the Foundation 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 that are in excess of $250,000 annual
aggregate) such self-insurance program must be acceptable to the Foundation and
UTMDACC in their sole discretion. The minimum amounts of insurance coverage
required shall not be construed to create a limitation of Licensee’s liability
with respect to its indemnification under this Agreement.
          (d) Licensee shall provide the Foundation and UTMDACC with written
evidence of such insurance upon request of the Foundation or UTMDACC. Licensee
shall provide the Foundation and UTMDACC 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

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replacement insurance providing comparable coverage within such fifteen (15) day
period, both or one of the Foundation or UTMDACC 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 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 or agent of Licensee and (ii) a reasonable period, but in no event
less than five (5) years, after the period referred to in clause (i), above.
     10.5 Limitation on Advertising and Publicity. Except as required by law,
including applicable rules and regulations of the U.S. Securities and Exchange
Commission and stock exchange listing requirements, Licensee shall not use the
Foundation’s, UTMDACC’s, System’s, Board’s, or USU’s name or insignia, or the
name or insignia of the U.S. Government or any agency thereof, or any adaptation
of the foregoing, or the name of any of Foundation’s, UTMDACC’s, System’s,
Board’s, or USU’s inventors or employees, in any press release, public
announcement, advertising, promotional, or sales literature or its website or
for the purpose of raising capital without the prior written approval of the
Foundation, UTMDACC, System, Board, or USU, as the case may be. Advance express
written consent of System, Board and UTMDACC may be secured through: The
University of Texas M. D. Anderson Cancer Center, Legal Services, Unit 0537,
P.O. Box 301439, Houston, TX 77230-1439, ATTENTION: Lori Stiffler, Email: [***].
Such consent shall be granted (or denied) within a reasonable timeframe.
     10.6 Assignment. 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, without
the prior written consent of the Foundation, which will not unreasonably be
withheld or delayed. Notwithstanding the foregoing, this Agreement and
Licensee’s rights hereunder may be assigned or transferred to an entity that
acquires all or substantially all of the assets or business of Licensee or
Licensee’s business unit holding the License, whether through merger, sale of
stock, sale of assets, reorganization, or otherwise. This Agreement shall be
binding upon and inure to the benefit of the Parties and their respective
successors, legal representatives, and permitted assignees.
     10.7 Compliance with Laws and Regulations. Licensee shall comply with all
applicable federal, state, and local laws and regulations, including U.S. Export
Administration Regulations, as well as end-user, end-use, and destination
restrictions applied by the United States , and international laws and
regulations controlling exports,. Licensee agrees that it will be solely
responsible for any violation of applicable laws or regulations by Licensee or
its Affiliates or sublicensees, and that it will defend and hold the Owners
harmless in the event of any legal action of any nature occasioned by such
violation.
     10.8 Regulatory Approvals; Patent Markings. 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

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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 Confidential Information and Intellectual Property. Except as
specifically required to comply with obligations set forth in this Agreement, no
Party shall be obligated to disclose or furnish to any other Party any
Confidential Information of such first Party or any confidential or proprietary
information, technology, or intellectual property of any third party in such
first Party’s possession or control. If, however, all Parties have heretofore
entered or hereafter enter into a confidential information nondisclosure
agreement or similar agreement (the “NDA”), no Party may terminate the NDA prior
to the termination or expiration of this Agreement. If all Parties have not
entered into an NDA, each Party agrees, for the greater of a period of five
(5) years after each disclosure or during the pendency of this Agreement, to
maintain in confidence all Confidential Information disclosed to it by another
Party and to protect such Confidential Information by using the same degree of
care, but no less than a reasonable degree of care, as the receiving Party uses
to protect its own similar confidential information. For the avoidance of doubt,
neither Board nor UTMDACC shall be under any obligation to provide any
information or materials to Licensee under this Agreement.
     10.10 Headings. The article, section, and other headings contained in this
Agreement are for reference purposes only and are not intended to describe,
interpret, define, or limit the scope, extent, or intent of this Agreement.
     10.11 Waivers; Remedies Generally. The observance of any term of this
Agreement may be waived (whether generally or in a particular instance and
either retroactively or prospectively) by the Party entitled to enforce such
term, but any such waiver will be effective only if in a writing signed by the
Party against which such waiver is to be asserted. Except as otherwise provided
in this Agreement, no failure or delay of any Party in exercising any power,
right, or remedy under this Agreement will operate as a waiver thereof, nor will
any single or partial exercise of any such right, power, or remedy, preclude any
other or further exercise thereof or the exercise of any other right, power, or
remedy. A waiver by any Party shall be limited to the specific instance in which
it is given and, therefore, any waiver by any Party of any obligation of another
Party under or breach by another Party of this Agreement or of any power, right,
or remedy of the waiving Party shall not be a waiver of any other obligation or
further or future performance of the same obligation, of any other or succeeding
breach, of any other or further exercise of such power, right, or remedy or any
other power, right, or remedy.
     10.12 Severability. To the extent that any provision of this Agreement
shall be judicially unenforceable in any one or more jurisdictions, such
provision shall not be affected with respect to any other jurisdiction, each
provision with respect to each jurisdiction being construed as several and
independent. If any term or provision of this Agreement or the application
thereof to any person or circumstance is, to any extent, declared or found to be
illegal, unenforceable, or void, then all Parties will be relieved of all
obligations arising under such term or provision, but only to the extent that
such term or provision is illegal, unenforceable, or void, it being the intent
and agreement of the Parties that this Agreement will be deemed amended by
modifying such term or provision to the extent necessary to make it legal and
enforceable while preserving its intent or, if that is not possible, by
substituting

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therefor another term or provision that is legal and enforceable and achieves
the same objective. If the remainder of this Agreement will not be affected by
such declaration or finding and is capable of substantial performance, then each
term and provision not so affected will be enforced to the extent permitted by
law. If necessary to effect the intent of the Parties, the Parties will
negotiate in good faith to amend this Agreement to replace the unenforceable
language with enforceable language that as closely as possible reflects such
intent and to amend any other term or provision thereby rendered incapable of
substantial performance or otherwise affected thereby to the extent necessary to
permit the practical realization, insofar as legally possible, of the intent of
the Parties.
     10.13 Relationship of the Parties; Disclaimer of Agency.
          (a) Independent Contractors. In entering into and carrying out this
Agreement, the Parties will be acting solely as independent contractors. Nothing
in this Agreement creates, has created, or will create any partnership, joint
venture, or other business association between the Parties, nor any duties or
responsibilities of partners, venturers, or members of a business association.
          (b) No Agency. Except for provisions in this Agreement expressly
authorizing one Party to act for the other, this Agreement will not constitute
any Party as a legal representative or agent of another Party, nor will any
Party have the right or authority to assume, create, or incur any liability or
any obligation of any kind, expressed or implied, against or in the name or on
behalf of another Party unless otherwise expressly permitted by such Party.
     10.14 No Third-Party Beneficiaries. The representations, warranties,
covenants, and undertakings contained in this Agreement are for the sole benefit
of the Parties, their sublicensees, and the Parties’ permitted successors and
assigns and shall not be construed as creating any third party beneficiaries of
this Agreement or as conferring any rights whatsoever on any third party.
     10.15 Notices. Unless otherwise expressly agreed by the Party receiving
notice, any notice, demand, or other communication required or permitted to be
given by any Party under any provision of this Agreement must be in writing, in
the English language, and mailed (certified or registered mail, postage prepaid,
return receipt requested) or sent by hand or overnight courier, charges prepaid
and addressed to the intended recipient at such Party’s address set forth below,
or to such other address or number as such Party may from time to time specify
by notice to the other Party(ies) as provided in this Section. All notices and
other communications given in accordance with the provisions of this Agreement
will be deemed to have been given and received when actually delivered by hand,
by mail, or by courier.

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If to Licensee:
RXi Pharmaceuticals Corporation
60 Prescott Street
Worcester, Massachusetts 01605
Attention: President and Chief Executive Officer
If to the Foundation:
The Henry M. Jackson Foundation for
the Advancement of Military Medicine, Inc.
6720-A Rockledge Drive, Suite 100
Bethesda, Maryland 20817
Attention: General Counsel
     If to UTMDACC:
The University of Texas M. D. Anderson Cancer Center
Office of Technology Commercialization
7515 S. Main, Suite 490, Unit 0510
Houston, Texas 77030
ATTENTION: Christopher C. Capelli
with copy to Board:
BOARD OF REGENTS
The University of Texas System
201 West Seventh Street
Austin, Texas 78701
ATTENTION: Office of General Counsel.
     10.16 Entire Agreement; Modifications. This Agreement constitutes the
complete agreement between the Parties concerning the subject matter hereof and
replaces any prior oral or written communications between the Parties. There are
no conditions, understandings, agreements, representations, or warranties,
express or implied, that are not specified herein, and no Party shall be
obligated by any condition or representation other than those expressly stated
herein or as may be subsequently agreed by the Parties in writing. Any purported
modification or amendment of the express terms or provisions of this Agreement
shall be effective only if contained in a written instrument signed by each
Party. Notwithstanding the foregoing, any Amendment to this Agreement concerning
Foundation Follow-on Intellectual Property shall require only the signatures of
Foundation and Licensee. Notwithstanding the foregoing, nothing in this
Agreement replaces, modifies, or supersedes the terms and conditions of the
Amended

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and Restated Inter-Institutional Sharing Agreement between Board, UTMDACC and
Foundation having an effective date of July 8, 2009.
     10.17 Force Majeure. No Party shall be liable to any other Party for any
losses or damages to the extent and for the period of time that they are
attributable to a default or breach of this Agreement that is the result of war
(whether declared or undeclared), acts of God, revolution, acts of terrorism,
fire, earthquake, flood, pestilence, riot, enactment of change of law following
the Effective Date, accident, labor trouble, or shortage of or inability to
obtain material equipment or transport or any other cause beyond the reasonable
control of such Party; provided, however, that if such a cause occurs, then the
Party affected will promptly notify the other Party(ies) of the nature and
likely result and duration (if known) of such cause and use commercially
reasonable efforts to mitigate any adverse effects under this Agreement. If the
event lasts for a period longer than three (3) months, the Parties shall meet
and discuss appropriate modifications to this Agreement or other remedial
measures.
     10.18 Covenant. Licensee, by execution hereof, acknowledges, covenants and
agrees that Licensee has not been induced in any way by Foundation, Board,
System, UTMDACC or employees thereof to enter into this Agreement, and further
warrants and represents that (a) Licensee has conducted sufficient due diligence
with respect to all items and issues pertaining to this Agreement; and
(b) Licensee has adequate knowledge and expertise, or has used knowledgeable and
expert consultants, to adequately conduct such due diligence, and agrees to
accept all risks inherent herein.
     10.19 Late Payment Rates. If and only to the extent that this Agreement
would require any interest rate to be applied to any late payments owed directly
to Board or UTMDACC, notwithstanding anything to the contrary set forth in this
Agreement, such rate payable to Board or UTMDACC shall not exceed the maximum
rate allowed by applicable law.
     10.20 Sovereign Immunity. The Parties acknowledge that Board, System and
UTMDACC are agencies of the State of Texas and under the Constitution and laws
of the State of Texas possess certain rights and privileges and only have such
authority as is granted to them under the Constitution and laws of the State of
Texas. Nothing in this Agreement is intended to be, nor will it be construed to
be, a waiver of the sovereign immunity of the State of Texas, System, Board, or
UTMDACC or a prospective waiver or restriction of any of the rights, remedies,
claims, and privileges of the State of Texas, System, Board, or UTMDACC. Nothing
in this Agreement shall be construed as an obligation or agreement by System,
Board or UTMDACC to join as a party to litigation. Moreover, notwithstanding the
generality or specificity of any provision hereof, the provisions of this
Agreement, with respect to Board, System and UTMDACC, are enforceable only to
the extent authorized by the Constitution and laws of the State of Texas.
Nothing in this Agreement shall be construed to require Board, System or UTMDACC
to perform any act or to refrain from any act that would violate any state or
federal law. This Agreement is subject to, and the Parties agree to comply with,
all applicable local, state, and federal laws, statutes, rules and regulations.
Any provision of any applicable law, statute, rule or regulation that
invalidates any provision of this Agreement, that is inconsistent with any
provision of this Agreement, or that would cause one or both of the Parties
hereto to be in violation of law will be deemed to have superseded the terms of
this

26

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Agreement. The Parties, however, will use commercially reasonable efforts to
accommodate the terms and intent of this Agreement to the greatest extent
possible consistent with the requirements of the law and negotiate in good faith
toward amendment of this Agreement in such respect.
SIGNATURE PAGE FOLLOWS

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THE FOUNDATION, BOARD, UTMDACC, AND LICENSEE HAVE READ THIS AGREEMENT INCLUDING
ALL APPENDICES HERETO AND AGREE TO BE BOUND BY ALL THE TERMS AND CONDITIONS
HEREOF AND THEREOF.
     IN WITNESS WHEREOF, the Parties have entered into this License Agreement as
of the Effective Date.

     
THE HENRY M. JACKSON
   
FOUNDATION FOR THE
   
ADVANCEMENT OF MILITARY
   
MEDICINE, INC.
   
 
   
/s/ John W. Lowe
   
 
John W. Lowe
   
President & CEO
   
 
       
8/24/11
   
 
Date
   
 
   
RXI PHARMACEUTICALS
   
CORPORATION
   
 
   
/s/ Mark J. Ahn, Ph.D.
   
 
Mark J. Ahn, Ph.D.
   
President and CEO
   
 
   
8/23/11
   
 
Date
   

          BOARD OF REGENTS OF THE     UNIVERSITY OF TEXAS SYSTEM    
 
       
By
  /s/ John Mendelsohn, M.D.    
 
 
 
John Mendelsohn, M.D.    
 
  President    
 
  The University of Texas    
 
  M. D. Anderson Cancer Center    
 
       
9/16/11
       
 
Date
       

          THE UNIVERSITY OF TEXAS     M. D. ANDERSON CANCER CENTER    
 
       
By
  /s/ Leon Leach    
 
 
 
Leon Leach    
 
  Executive Vice President    
 
  The University of Texas    
 
  M. D. Anderson Cancer Center    
 
       
9/13/11
       
 
Date
       

          Approved as to Content:    
 
       
By
  /s/ Christopher C. Capelli    
 
 
 
Christopher C. Capelli    
 
  Vice President, Technology Transfer    
 
  M. D. Anderson Cancer Center    
 
       
8/30/11
       
 
Date
       

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APPENDIX A
     The following patent applications are included in the Patent Rights:

     
Title:
  HJF 068-01 “Induction of Tumor Immunity by Variants of Folate Binding
Protein.”
 
   
Inventors:
  Constantine G. Ioannides, Ph.D. and George E. Peoples, Jr., M.D.
 
   
 
  as described in U.S. Provisional Application No. 60/274,676 filed on
03/09/2001; and
 
   
 
  as described in U.S. Patent Application No. 10/094,097 and International
Patent Application No. PCT/US2002/007167 filed on 03/08/2002, claiming priority
to U.S. Provisional Application No. 60/274,676, and all corresponding National
Stage Applications including but not limited to Canadian Patent Application
No. 2,440,610 filed on 09/04/2003, Japanese Patent Application No. 2002-571822
filed on 09/08/2003, and European Patent Application No. 02750589.0 filed on
10/07/2003; and
 
   
 
  as described in U.S. Patent Application No. 12/422,600 filed on 04/13/2009,
claiming priority to U.S. Patent Application No. 10/094,097; and
 
   
 
  as described in Japanese Patent Application No. 2008-289217 filed on
05/28/2009, claiming priority to Japanese Patent Application No. 2002-571822.

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APPENDIX B
     Follow-on Intellectual Property

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