exv10w9



 





Exhibit 10.9




EXCLUSIVE LICENSE AGREEMENT




     This Agreement, effective as of April 15, 2003 (the “Effective Date”), is between the
University of Massachusetts Medical School (“Medical School”), a public institution of higher
education of the Commonwealth of Massachusetts having an address of 55 Lake Avenue North,
Worcester, MA 01655, and CytRx Corporation (“Company”), a Delaware corporation having an address of
11726 San Vicente Blvd., Suite 650, Los Angeles, CA 90049.



R E C I T A L S




     WHEREAS, Medical School is owner by assignment of the invention claimed in the United States
Patent Application listed in Exhibit A pertaining to the Medical School’s invention disclosure
number UMMC 02-01 entitled In Vivo Production of Small Interfering RNAs.



     WHEREAS Company desires to obtain an exclusive license in the field of therapeutics,
prophylactics, and diagnostics limited to the narrowed fields of other Medical School license
agreements; specifically, using RNAi to inhibit HCMV Immediate Early (IE) gene expression in
Retinitis applications, using RNAi to inhibit mutant SOD1 gene expression in Amytrophic Lateral
Sclerosis (ALS) applications, and using RNAi to inhibit gene targets implicated in Type II Diabetes
and Obesity under the rights of Medical School in any patent rights claiming those inventions; and



     WHEREAS, Medical School is willing to grant Company an exclusive license on the terms set
forth in this Agreement.



     NOW, THEREFORE, Medical School and Company hereby agree as follows:



1. Definitions.




     1.1. “Affiliate” means any legal entity (such as a corporation, partnership, or
limited liability company) that is controlled by Company. For the purposes of this definition, the
term “control” means (a) beneficial ownership of at least fifty percent (50%) of the voting
securities of a corporation or other business organization with voting securities or (b) a fifty
percent (50%) or greater interest in the net assets or profits of a partnership or other business
organization without voting securities.



     1.2. “Biological Materials” means certain tangible biological materials that are
necessary for the effective exercise of the Patent Rights, which materials are described on
Exhibit A, as well as tangible materials that are routinely produced through use of the
original materials, including, for example, any progeny derived from a cell line, monoclonal
antibodies produced by hybridoma cells, DNA or RNA replicated from isolated DNA or RNA, recombinant
proteins produced through use of isolated DNA or RNA, and substances routinely purified from a
source material included in the original materials (such as recombinant proteins isolated from a
cell
extract or supernatant by non-proprietary affinity purification methods). These Biological







[***] = Portions of this exhibit have been omitted pursuant to a confidential treatment request.
An unredacted version of this exhibit has been filed separately with the Commission.







 









 







Materials shall be listed on Exhibit A, which will be periodically amended to include any
additional Biological Materials that Medical School may furnish to Company.



     1.3. “Combination Product” means a product that contains a Licensed Product component
and at least one other essential functional component.



     1.4. “Confidential Information” means any confidential or proprietary information
furnished by one party (the “Disclosing Party”) to the other party (the “Receiving Party”) in
connection with this Agreement, provided that such information is specifically designated as
confidential. Such Confidential Information shall include, without limitation, any diligence
reports furnished to Medical School under Section 3.1. and royalty reports furnished to Medical
School under Section 5.2.



     1.5. “Field” means therapeutics, prophylactics, and diagnostics arising from the
limited use of RNAi to inhibit HCMV Immediate Early (IE) gene expression in Retinitis applications,
using RNAi to inhibit mutant SOD1 gene expression in Amyotrophic Lateral Sclerosis (ALS)
applications, and using RNAi to inhibit gene targets implicated in Type II Diabetes and Obesity.



     1.6. “Licensed Product” means any product that cannot be developed, manufactured,
used, or sold without (a) infringing one or more claims under the Patent Rights, (b) using or
incorporating some portion of one or more Biological Materials, or (c) using some portion of the
Related Technology.



     1.7. “Net Sales” means the gross amount billed or invoiced on sales by Company and its
Affiliates and Sublicensees of Licensed Products, less the following: (a) customary trade,
quantity, or cash discounts and commissions to non-affiliated brokers or agents to the extent
actually allowed and taken; (b) amounts repaid or credited by reason of rejection or return; (c) to
the extent separately stated on purchase orders, invoices, or other documents of sale, any taxes or
other governmental charges levied on the production, sale, transportation, delivery, or use of a
Licensed Product which is paid by or on behalf of Company; (d) outbound transportation costs
prepaid or allowed and costs of insurance in transit; (e) allowance for bad debt that is customary
and reasonable for the industry and in accordance with genrally accepted accounting principles.
Notwithstanding anything to the contrary in this Section 1.7, Net Sales does not include sales of
Licensed Products at or below the fully burdened cost of manufacturing solely for research or
clinical testing or for indigent or similar public support or compassionate use programs.



     In any transfers of Licensed Products between Company and an Affiliate or Sublicensee, Net
Sales shall be calculated based on the final sale of the Licensed Product to an independent third
party. In the event that Company or an Affiliate or Sublicensee receives non-monetary
consideration for any Licensed Products, Net Sales shall be calculated based on the fair market
value of such consideration.



 









 





     In the case of Combination Products, Net Sales means the gross amount billed or invoiced on
sales of the Combination Product less the deductions set forth above, multiplied by a proration
factor that is determined as follows:




     (i) If all components of the Combination Product were sold separately during the same
or immediately preceding Royalty Period, the proration factor shall be determined by the
formula [A / (A+B)], where A is the aggregate gross sales price of all Licensed Product
components during such period when sold separately from the other essential functional
components, and B is the aggregate gross sales price of the other essential functional
components during such period when sold separately from the Licensed Product Components; or




     (ii) If all components of the Combination Product were not sold separately during the
same or immediately preceding Royalty Period, the proration factor shall be determined by
the formula [C / (C+D)], where C is the aggregate fully absorbed cost of the Licensed
Product components during the prior Royalty Period and D is the aggregate fully absorbed
cost of the other essential functional components during the prior Royalty Period, with such
costs being determined in accordance with generally accepted accounting principles.



     1.8. “Patent Rights” means the U.S. patent applications listed on Exhibit A,
and any divisional, continuation, or continuation-in-part of such patent applications to the extent
the claims are directed to subject matter specifically described therein, as well as any patent
issued thereon and any reissue or reexamination of such patent, and any foreign counterparts to
such patents and patent applications. Exhibit A shall be periodically amended to include
any additional Patent Rights that may arise. “Medical School Patent Rights” means Patent
Rights assigned solely to Medical School (and other academic institutions, if any). “Joint
Patent Rights” means Patent Rights assigned to both Medical School and Company.



     1.9. “Related Technology” means any know-how, technical information, research and
development information, test results, and data necessary for the effective exercise of the Patent
Rights which has been developed by Philip Zamore, Craig Mello, Gyorgy Hutvagner, Juanita McLachlan,
and Alla Grishok as of the Effective Date and which is owned by Medical School.



     1.10. “Royalty Period” means the partial calendar quarter commencing on the date on
which the first Licensed Product is sold or used and every complete or partial calendar quarter
thereafter during which either (a) this Agreement remains in effect or (b) Company has the right to
complete and sell work-in-progress and inventory of Licensed Products pursuant to Section 8.5.



     1.11. “Sublicense Income” means any payments that Company receives from a Sublicensee
in consideration of the sublicense of the rights granted Company under Section 2.1.,
including without limitation license fees, royalties, milestone payments, and license maintenance



 









 







fees, but excluding the following payments: (a) payments made in consideration for the issuance of
equity or debt securities of Company at fair market value, and (b) payments specifically committed
to the development of Licensed Products.



     1.12. “Sublicensee” means any permitted sublicensee of the rights granted Company
under this Agreement, as further described in Section 2.2.



2. Grant of Rights.




     2.1. License Grants.



          (a) Patent Rights and Biological Materials. Subject to the terms of this Agreement,
Medical School hereby grants to Company and its Affiliates an exclusive, worldwide, royalty-bearing
license (with the right to sublicense) under its commercial rights in the Patent Rights and
Biological Materials to develop, make, have made, use, and sell Licensed Products in the Field.




          (b) Related Technology. Subject to the terms of this Agreement, Medical School hereby
grants to Company and its Affiliates a non-exclusive, royalty-bearing license (with the right to
sublicense) under its commercial rights in the Related Technology to develop, make, have made, use,
and sell Licensed Products in the Field.




          (c) Subject to applicable law or the rights of research sponsors, the Medical School shall use
its best efforts to make any improvements to the Patent Rights available to Company.




     2.2. Sublicenses. Company shall have the right to grant sublicenses of its rights
under Section 2.1. with the consent of Medical School, which consent shall not be unreasonably
withheld or delayed. All sublicense agreements executed by Company pursuant to this Article 2
shall expressly bind the Sublicensee to the terms of this Agreement. Company shall promptly
furnish Medical School with a fully executed copy of any such sublicense agreement.



     2.3. Retained Rights.



          (a) Medical School. Medical School retains the right to make and use Licensed
Products for academic research, teaching, and non-commercial patient care, without payment of
compensation to Company. Medical School may license its retained rights under this Section to
research collaborators of Medical School faculty members, post-doctoral fellows, and students.




          (b) Federal Government. To the extent that any invention claimed in the Patent Rights
has been partially funded by the federal government, this Agreement and the grant of any
rights in such Patent Rights are subject to and governed by federal law as set forth in 35 U.S.C.
§§ 201-211, and the regulations promulgated thereunder, as amended, or any successor statutes



 









 






or
regulations. Company acknowledges that these statutes and regulations reserve to the federal
government a royalty-free, non-exclusive, non-transferrable license to practice any
government-funded invention claimed in any Patent Rights. If any term of this Agreement fails to
conform with such laws and regulations, the relevant term shall be deemed an invalid provision and
modified in accordance with Section 10.11. Upon execution of this Agreement, the Medical School
shall disclose in writing to Company any funding that would be subject to this Section 2.3(b).




          (c) Other Organizations. To the extent that any invention claimed in the Patent
Rights has been partially funded by a non-profit organization or state or local agency, this
Agreement and the grant of any rights in such Patent Rights are subject to and governed by the
terms and conditions of the applicable research grant. If any term of this Agreement fails to
conform with such terms and conditions, the relevant term shall be deemed an invalid provision and
modified by the parties pursuant to Section 10.11. Upon execution of this Agreement, the Medical
School shall disclose in writing to Company any funding that would be subject to this Section
2.3(c).




3. Company Obligations Relating to Commercialization.




     3.1. Diligence Requirements. Company shall use diligent efforts, or shall cause its
Affiliates and Sublicensees to use diligent efforts, to develop Licensed Products and to introduce
Licensed Products into the commercial market; thereafter, Company or its Affiliates or Sublicensees
shall make Licensed Products reasonably available to the public. Specifically, Company or
Affiliate or Sublicensee shall fulfill the following obligations:




     (a) Within ninety (90) days after the Effective Date, Company shall furnish Medical
School with a written research and development plan under which Company intends to develop
Licensed Products.




     (b) Within sixty (60) days after each anniversary of the Effective Date, Company shall
furnish Medical School with a written report on the progress of its efforts during the prior
year to develop and commercialize Licensed Products, including without limitation research
and development efforts, efforts to obtain regulatory approval, marketing efforts, and sales
figures. The report shall also contain a discussion of intended efforts and sales
projections for the current year.




     (c) Company shall endeavor to obtain all necessary governmental approvals for the
manufacture, use and sale of Combination Product and Licensed Product. Specifically,
Company shall:




          (i) Within eight (8) years after the Effective Date, file an Investigational New
Drug Application (“IND”) or its equivalent covering at least one Combination Product or
Licensed Product with the U.S. Food and Drug Administration (“FDA”);



 









 






          (ii) Within thirteen (13) years after the Effective Date, file a New Drug
Application (“NDA”) with the FDA covering at least one Combination Product or Licensed
Product;




          (iii) Within eighteen (18) months after receiving FDA approval of the NDA for a
Combination Product or Licensed Product, market at least one Combination Product or
Licensed Product in the U.S.; and




          (iv) reasonably fill the market demand for any Combination Product or Licensed
Product following commencement of marketing of such product at any time during the
exclusive period of this Agreement.




     (d) Within eighteen (18) months after the Effective Date, Company shall successfully
undertake a public or private offering of raising ten million dollars ($10,000,000).




     (e) In addition to the obligations set forth above, Company and/or its sublicensees
shall spend (either directly or through sponsored research by Company or its Sublicensee
at the Medical School) an aggregate of not less than {***} per calendar year for the
development of Combination Product and/or Licensed Product commencing with the year 2004.


Company shall have the responsibility to finance its obligations in this Section 3.1, and the
Medical School shall provide reasonable cooperation to Company in this regard. In the event that
Medical School determines that Company (or an Affiliate or Sublicensee) has not fulfilled its
obligations under this Section 3.1., Medical School shall furnish Company with written notice of
such determination. Within sixty (60) days after receipt of such notice, Company shall either (i)
fulfill the relevant obligation or (ii) negotiate with Medical School a mutually acceptable
schedule of revised diligence obligations, failing which Medical School shall have the right,
immediately upon written notice to Company, to terminate this Agreement or to grant additional
licenses to third parties to the Patent Rights and Biological Materials in the Field. The Medical
School may not unreasonably withhold acceptance of Company’s revised diligence obligations.




     3.2. Indemnification.



          (a) Indemnity. Company shall indemnify, defend, and hold harmless Medical School and
its trustees, officers, faculty, students, employees, and agents and their respective successors,
heirs and assigns (the “Indemnitees”), against any liability, damage, loss, or expense (including
reasonable attorneys fees and expenses of litigation) incurred by or imposed upon any
of the Indemnitees in connection with any claims, suits, actions, demands or judgments arising out
of any theory of liability (including without limitation actions in the form of tort, warranty, or
strict liability and regardless of whether such action has any factual basis) concerning any
product, process, or service that is made, used, or sold pursuant to any right or license granted
under this Agreement; provided, however, that such indemnification shall not apply to any




 









 





liability, damage, loss, or expense to the extent directly attributable to (i) the negligent
activities or intentional misconduct of the Indemnitees or (ii) the settlement of a claim, suit,
action, or demand by Indemnitees without the prior written approval of Company.




          (b) Procedures. The Indemnitees agree to provide Company with prompt written notice
of any claim, suit, action, demand, or judgment for which indemnification is sought under this
Agreement. Company agrees, at its own expense, to provide attorneys reasonably acceptable to
Medical School to defend against any such claim. The Indemnitees shall cooperate fully with
Company in such defense and will permit Company to conduct and control such defense and the
disposition of such claim, suit, or action (including all decisions relative to litigation, appeal,
and settlement); provided, however, that any Indemnitee shall have the right to retain its own
counsel, at the expense of Company, if representation of such Indemnitee by the counsel retained by
Company would be inappropriate because of actual or potential differences in the interests of such
Indemnitee and any other party represented by such counsel. Company agrees to keep Medical School
informed of the progress in the defense and disposition of such claim and to consult with Medical
School with regard to any proposed settlement.




          (c) Insurance. Company shall maintain insurance or self-insurance that is reasonably
adequate to fulfill any potential obligation to the Indemnitees, but in any event not less than one
million dollars ($1,000,000) for injuries to any one person arising out of a single occurrence and
five million dollars ($5,000,000) for injuries to all persons arising out of a single occurrence.
Company shall provide Medical School, upon request, with written evidence of such insurance or
self-insurance. Company shall continue to maintain such insurance or self-insurance after the
expiration or termination of this Agreement during any period in which Company or any Affiliate or
Sublicensee continues to make, use, or sell a product that was a Licensed Product under this
Agreement for a period of two (2) years.




     3.3. Use of Medical School Name. In accordance with Section 7.3., Company and its
Affiliates and Sublicensees shall not use the name “University of Massachusetts Medical School” or
any variation of that name in connection with the marketing or sale of any Licensed Products.



     3.4. Marking of Licensed Products. To the extent commercially feasible and consistent
with prevailing business practices, Company shall mark, and shall cause its Affiliates and
Sublicensees to mark, all Licensed Products that are manufactured or sold under this Agreement with
the number of each issued patent under the Patent Rights that applies to such Licensed Product.



     3.5. Compliance with Law. Company shall comply with, and shall ensure that its
Affiliates and Sublicensees (to the extent commercially feasible) comply with, all local, state,
federal, and international laws and regulations relating to the development, manufacture, use, and
sale of Licensed Products. Company expressly agrees to comply with the following:



 









 






     (a) Company or its Affiliates or Sublicensees shall obtain all necessary approvals from
the United States Food & Drug Administration and any similar governmental authorities of any
foreign jurisdiction in which Company or an Affiliate or Sublicensee intends to make, use,
or sell Licensed Products.




     (b) Company and its Affiliates and Sublicensees shall comply with all United States
laws and regulations controlling the export of certain commodities and technical data,
including without limitation all Export Administration Regulations of the United States
Department of Commerce. Among other things, these laws and regulations prohibit, or require
a license for, the export of certain types of commodities and technical data to specified
countries. Company hereby gives written assurance that it will comply with, and will cause
its Affiliates and Sublicensees to comply with, all United States export control laws and
regulations, that it bears sole responsibility for any violation of such laws and
regulations by itself or its Affiliates or Sublicensees, and that it will indemnify, defend,
and hold Medical School harmless (in accordance with Section 3.2.) for the consequences of
any such violation.




     (c) To the extent that any invention claimed in the Patent Rights has been partially
funded by the United States government, and only to the extent required by applicable laws
and regulations, Company agrees that any Licensed Products used or sold in the United States
will be manufactured substantially in the United States or its territories. Current law
provides that if domestic manufacture is not commercially feasible under the circumstances,
Medical School may seek a waiver of this requirement from the relevant federal agency on
behalf of Company.



4. Consideration for Grant of Rights.




     4.1. License Fee. In partial consideration of the rights granted Company under this
Agreement, Company shall pay to Medical School on the Effective Date (a) a license fee of {***},
and (b) a payment in the amount of {***} to reimburse Medical School for its actual expenses
incurred as of January 31, 2003 in connection with obtaining the Patent Rights. These license fee
payments are nonrefundable and are not creditable against any other payments due to Medical School
under this Agreement.



     4.2. Equity. In partial consideration of the license granted to Company under this
Agreement, on or about April 18, 2003, Company shall issue to Medical School a total number of
shares of Common Stock of Company, ($.01 par value per share) equal to {***} of the
outstanding shares of Company. Company shall register the shares that are issued to the Medical
School within ninety (90) days after their issuance and those shares will then be unrestricted.



     4.3. License Maintenance Fee. Beginning on the first anniversary of the Effective
Date, and on each anniversary of the Effective Date thereafter during the term of the Agreement,
Company shall pay to Medical School {***}. This annual license maintenance fee is



 









 







nonrefundable and
is not creditable against any other payments due to Medical School under this Agreement.



     4.4. Milestone Payments. Company shall pay Medical School the following milestone
payments within thirty (30) days after the occurrence of each event:



	 	 	 
	Milestone	 	Payment
	Filing of IND or equivalent for each
product

	 	${***}
	Entry into Phase I Clinical trial or 

equivalent for each Licensed Product

	 	${***} for first product and ${***}
for each subsequent product
	Entry into Phase II clinical trial 

or equivalent for each Licensed Product

	 	${***} for first product and ${***}
for each subsequent product
	Entry into Phase III clinical trial 

or equivalent for each Licensed Product

	 	${***} for first product and ${***}
for each subsequent product
	Filing for market approval (NDA or 

equivalent) in any country besides 

the United States

	 	${***} for first product and ${***}
for each subsequent product
	Commencement of product marketing in
the United States

	 	${***}
	First market approval for first 

three European countries in total

	 	${***}





These milestone payments are nonrefundable and are not creditable against any other payments due to
University under this Agreement.




     4.5. Royalties.



          (a) Base Royalty. In partial consideration of the rights granted Company under this
Agreement, Company shall pay to Medical School a royalty of {***} of Net Sales of Licensed Products
by Company and its Affiliates (but not Sublicensees).




               (i) If a particular Licensed Product is within the definition of “Licensed Product” solely
because it uses or incorporates Related Technology, the royalty rate applicable to such Licensed
Product shall be reduced by {***}.



               (ii) If there is a competing product in the marketplace, no royalties are due for a Licensed
Product that is within the definition of “Licensed Product” because it uses or incorporates only
Related Technology or Biological Materials.



               (iii) If during the Royalty Period, patents under the Patent Rights have expired or have been
abandoned in a particular country, (I) no royalty is payable by Company, if there is a competing
product in that country, and (II) if Company reduces its prices for Licensed Products in that
country, even if there is no competing product in that country, Company and



 









 




Medical School shall
negotiate in good faith a reduction in the royalty rate to reflect the reduction in Company’s gross
margins caused by the price reduction.




               (iv) Company shall pay Medical School {***} of Net Sales of commercial clinical laboratory
services by Company and its Affiliates.



          (b) Royalty Reduction. If Medical School grants additional licenses to third parties
pursuant to Section 3.1., the royalty rates set forth in Subsection 4.5.(a) shall be adjusted, if
necessary, so as not to exceed the royalty rates charged any other licensee of the Patent Rights
during the term of the non-exclusive license.




     4.6. Minimum Royalty. At the beginning of each calendar year during the term of this
Agreement, beginning January 1, 2016, Company shall pay to Medical School a minimum royalty of
{***}. If the actual royalty payments to Medical School in any calendar year are less than the
minimum royalty payment required for that year, Company shall have the right to pay Medical School
the difference between the actual royalty payment and the minimum royalty payment in full
satisfaction of its obligations under this Section, provided such minimum payment is made to
Medical School within sixty (60) days after the conclusion of the calendar year. Waiver of any
minimum royalty payment by Medical School shall not be construed as a waiver of any subsequent
minimum royalty payment. If Company fails to make any minimum royalty payment within the sixty-day
period, such failure shall constitute a material breach of its obligations under this Agreement,
and Medical School shall have the right to terminate this Agreement in accordance with Section 8.3.



     4.7. Sublicense Income. Company shall pay Medical School {***} of all Sublicense Income.
Such amounts shall be due and payable within sixty (60) days after Company receives the relevant
payment from the Sublicensee.



     4.8. Third-Party Royalties. If Company is legally required to make royalty payments to
Medical School under any agreement other than this Agreement (the “Other Medical School Licenses”),
or to one or more third parties in the same Royalty Period for which royalties are due under
Section 4.5 or 4.7 in order for Company to make, use or sell Licensed Products or have its
sublicense make, use, or sell Licensed Products:




	 	(a)	 	in the case of any payments to Medical School under Other Medical School
Licenses with respect to Licensed Products under this Agreement, the royalty payment
made by Company to Medical School under this Agreement for the applicable Royalty
Payment shall be reduced by fifty percent (50%) of the aggregate amounts payable for
the same Royalty Period under the Other Medical School Licenses (before making any
similar reduction in those payments pursuant to a corresponding reduction clause in
those agreements), with a minimum floor of {***} of Net Sales of Licensed Products or
{***} of the Sublicense Income to be paid under this Agreement; and




 









 






	 	(b)	 	in the case of payments to one or more third parties, an offset of fifty
percent (50%) of the amount paid to third parties may be taken by Company against any
royalties payable by Company to the Medical School under this Agreement with a minimum
floor of {***} of Net Sales of Licensed Products or {***} of all Sublicense Income,
provided that in no event shall the royalty payments under Section 4.5 and 4.7, when
aggregated with any other offsets and credits allowed under this Agreement, be reduced
by more than fifty percent (50%); in the case of payments to one or more third parties,
Medical School shall receive {***} of the Sublicense Income net of the foregoing third
party payments; and
	 
	 	(c)	 	in the case of both payments under Other Medical School Licenses and to third
parties in the same Royalty Period, the reduction described in (i) above shall first be
made, and then the offset described in (ii) above shall be taken, provided that only a
pro rata amount of the offset pursuant to (ii) above shall be taken against the
royalties payable under this Agreement (with the pro-ration calculated based on the
relative royalty rates under this Agreement and the Other Medical School Licenses),
with a minimum floor under this Agreement of {***} of Net Sales of Licensed Products
and {***} of Sublicense Income.





     By way of illustration, assume a royalty of {***} under the Other Medical School Licenses of
Net Sales of Licensed Products and a payment of {***} of Net Sales of Licensed Products to a third
party. The reduction and offsets calculation would be as follows:



     (i) The {***} of Net Sales of Licensed Products would be reduced to {***} of Net
Sales of Licensed Products (i.e., a reduction of 50% of the {***} of Net Sales of
Licensed Products under Other Medical School Licenses); and



     (ii) The remaining {***} of Net Sales of Licensed Products would be
offset by an amount equal to {***} of Net Sales of Licensed Products, for a net royalty to the
Medical School under this Agreement of {***} of Net Sales of Licensed Products (i.e., the offset of
50% of the {***} of Net Sales of Licensed Products payable to the third party is allocated pro rata
against Medical School under this Agreement, with {***} of this net offset of {***} of Net Sales of
Licensed Products being allocated to the royalties under this Agreement (the {***}
royalty rate under this Agreement divided by the {***} royalty rate under this Agreement plus the
{***} royalty rate under the Other Medical School Licenses)).



5. Royalty Reports; Payments; Records.




     5.1. First Sale. Company shall report to Medical School the date of first commercial
sale of each Licensed Product within thirty (30) days of occurrence in each country.



     5.2. Reports and Payments. Within sixty (60) days after the conclusion of each Royalty
Period, Company shall deliver to Medical School a report containing the following information:



 









 






     (a) the number of Licensed Products sold to independent third parties in each country,
and the number of Licensed Products used by Company in each country;




     (b) the gross sales price for each Licensed Product sold by Company and its Affiliates
during the applicable Royalty Period in each country;




     (c) calculation of Net Sales for the applicable Royalty Period in each country,
including a listing of applicable deductions;




     (d) total royalty payable on Net Sales in U.S. dollars, together with the exchange
rates used for conversion; and




     (v) the portion of royalty-based Sublicense Income due to Medical School for the
applicable Royalty Period from each Sublicensee.


All such reports shall be considered Company Confidential Information. If no royalties are due to
Medical School for any Royalty Period, the report shall so state. Concurrent with this report,
Company shall remit to Medical School any payment due for the applicable Royalty Period.




     5.3. Payments in U.S. Dollars. All payments due under this Agreement shall be payable
in United States dollars. Conversion of foreign currency to U.S. dollars shall be made at the
conversion rate existing in the United States (as reported in the Wall Street Journal) on
the last working day of the calendar quarter preceding the applicable Royalty Period. Such
payments shall be without deduction of exchange, collection, or other charges.



     5.4. Payments in Other Currencies. If by law, regulation, or fiscal policy of a
particular country, conversion into United States dollars or transfer of funds of a convertible
currency to the United States is restricted or forbidden, Company shall give Medical School prompt
written notice of such restriction, which notice shall satisfy the sixty-day payment deadline
described in Section 5.2. Company shall pay any amounts due Medical School through whatever lawful
methods Medical School reasonably designates; provided, however, that if Medical School fails to
designate such payment method within thirty (30) days after Medical School is notified of the
restriction, Company may deposit such payment in local currency to the credit of Medical School in
a recognized banking institution selected by Company and identified by written notice to Medical
School, and such deposit shall fulfill all obligations of Company to Medical School with respect to
such payment.



     5.5. Records. Company shall maintain, and shall cause its Affiliates and Sublicensees
to maintain, complete and accurate records of Licensed Products that are made, used, sold, or
performed under this Agreement and any amounts payable to Medical School in relation to such
Licensed Products, which records shall contain sufficient information to permit Medical School to
confirm the accuracy of any reports delivered to Medical School under Section 5.2. The relevant
party shall retain such records relating to a given Royalty Period for at least three (3) years
after the conclusion of that Royalty Period, during which time Medical School shall have



 









 







the right,
at its expense, to cause its internal accountants or an independent, certified public accountant to
inspect such records during normal business hours for the sole purpose of verifying any reports and
payments delivered under this Agreement. Such accountant shall not disclose to Medical School any
information other than information relating to accuracy of reports and payments delivered under
this Agreement. The parties shall reconcile any underpayment or overpayment within thirty (30)
days after the accountant delivers the results of the audit. In the event that any audit performed
under this Section reveals an underpayment in excess of the greater of (a) five thousand dollars
($5,000) or (b) ten percent (10%) in any Royalty Period, Company shall bear the full cost of such
audit. Medical School may exercise its rights under this Section only once every year and only
with reasonable prior notice to Company.



     5.6. Late Payments. Any payments by Company that are not paid on or before the date
such payments are due under this Agreement shall bear interest, to the extent permitted by law, at
two percentage points above the Prime Rate of interest as reported in the Wall Street
Journal on the date payment is due, with interest calculated based on the number of days that
payment is delinquent.



     5.7. Method of Payment. All payments under this Agreement should be made in the name
of the “University of Massachusetts Medical School” and sent to the address identified below. Each
payment should reference this Agreement and identify the obligation under this Agreement that the
payment satisfies.



     5.8. Withholding and Similar Taxes. Royalty payments and other payments due to Medical School
under this Agreement shall be reduced by reason of any withholding or similar taxes applicable to
such payments to Medical School, which shall be paid by Company as required by applicable law and
reported by Company to the Medical School.



6. Patents and Infringement.




     6.1. Responsibility for Medical School Patent Rights. Medical School shall have
primary responsibility, at the expense of Company, for the preparation, filing, prosecution, and
maintenance of all Medical School Patent Rights, using patent counsel reasonably acceptable to
Company. Medical School shall consult with Company as to the preparation, filing, prosecution, and
maintenance of all such Patent Rights reasonably prior to any deadline or action with the U.S.
Patent & Trademark Office or any foreign patent office and shall furnish Company with copies of all
relevant documents reasonably in advance of such consultation.



     6.2. Responsibility for Joint Patent Rights. Company shall have primary
responsibility, at its expense, for the preparation, filing, prosecution, and maintenance of all
Joint Patent Rights, using patent counsel reasonably acceptable to Medical School. Company shall
consult with Medical School as to the preparation, filing, prosecution, and maintenance of all such
Patent Rights reasonably prior to any deadline or action with the U.S. Patent & Trademark Office or
any foreign patent office and shall furnish Medical School with copies of all relevant documents
reasonably in advance of such consultation.



 









 





     6.3. Cooperation. Medical School and Company shall cooperate fully in the
preparation, filing, prosecution, and maintenance of all Patent Rights. Such cooperation includes,
without limitation, (a) promptly executing all papers and instruments or requiring employees of
Medical School or Company to execute such papers and instruments as reasonable and appropriate so
as to enable Medical School or Company to file, prosecute, and maintain such Patent Rights in any
country; and (b) promptly informing the other party of matters that may affect the preparation,
filing, prosecution, or maintenance of any such Patent Rights (such as becoming aware of an
additional inventor who is not listed as an inventor in a patent application).



     6.4. Payment of Expenses. Within thirty (30) days after Medical School invoices
Company, Company shall reimburse Medical School for all reasonable patent-related expenses incurred
by Medical School pursuant to Section 6.1. Company may elect, upon sixty (60) days written notice
to Medical School, to cease payment of the expenses associated with obtaining or maintaining patent
protection for one or more Patent Rights in one or more countries. In such event, Company shall
lose all rights under this Agreement with respect to such Patent Rights in such countries for which
it has elected not to pay.



     6.5. Abandonment. In the event that a party desires to abandon any patent or patent
application within the Patent Rights for which it has primary responsibility, such party shall
provide the other party with reasonable prior written notice of such intended abandonment or
decline of responsibility, and the other party shall have the right, at its expense, to prepare,
file, prosecute, and maintain the relevant Patent Rights.



     6.6. Grant back: The Company agrees that for any patent rights, as defined in the sponsored
research agreement that implements Company’s obligation to the Medical School in Section 3.1(e)
that it has not licensed, the Company grants back to the Medical School, without limiting in any
way its rights under this Agreement, a non-exclusive license to the Patent Rights in order that the
Medical School may license the patent rights from the sponsored research to third parties. Medical
School shall pay Company {***} of any revenues or other consideration received by Medical School
with respect to any patent rights granted back by Company pursuant to this Section 6.6.



     6.7. Infringement.



          (a) Notification of Infringement. Each party agrees to provide written notice to the
other party promptly after becoming aware of any infringement of the Patent Rights.




          (b) Company Right to Prosecute. So long as Company remains the only licensee of the
Patent Rights and Biological Materials in the Field, Company shall have the right, under its own
control and at its own expense, to prosecute any third party infringement of the Patent Rights in
the Field or, together with licensees of the Patent Rights in other fields (if any), to defend the
Patent Rights in any declaratory judgment action brought by a third party which alleges invalidity,
unenforceability, or non-infringement of the Patent Rights. Prior to



 









 






commencing any such action,
Company shall consult with Medical School and shall consider the views of Medical School regarding
the advisability of the proposed action and its effect on the public interest. Company shall not
enter into any settlement, consent judgment, or other voluntary final disposition of any
infringement action under this Subsection without the prior written consent of Medical School,
which consent shall not be unreasonably withheld or delayed. Any recovery obtained in an action
under this Subsection shall be distributed as follows: (i) each party shall be reimbursed for any
expenses incurred in the action (including the amount of any royalty payments withheld from Medical
School as described below), (ii) as to ordinary damages, Company shall receive an amount equal to
its lost profits or a reasonable royalty on the infringing sales (whichever measure of damages the
court shall have applied), less a reasonable approximation of the royalties that Company would have
paid to Medical School if Company had sold the infringing products and services rather than the
infringer, and (iii) as to special or punitive damages, the parties shall share equally in any
award. Company may offset a total of fifty percent (50%) of any expenses incurred under this
Subsection against any royalty payments due to Medical School under this Agreement, provided that
in no event shall the royalty payments under Section 4.5. and 4.7., when aggregated with any other
offsets and credits allowed under this Agreement, be reduced by more than fifty percent (50%) in
any Royalty Period.




          (c) Medical School as Indispensable Party. Medical School shall permit any action
under this Section to be brought in its name if required by law, provided that Company shall hold
Medical School harmless from, and if necessary indemnify Medical School against, any costs,
expenses, or liability that Medical School may incur in connection with such action.




          (d) Medical School Right to Prosecute. In the event that Company fails to initiate an
infringement action within a reasonable time after it first becomes aware of the basis for such
action, or to answer a declaratory judgment action within a reasonable time after such action is
filed, Medical School shall have the right to prosecute such infringement or answer such
declaratory judgment action, under its sole control and at its sole expense, and any recovery
obtained shall be given to Medical School.




          (e) Cooperation. Each party agrees to cooperate fully in any action under this
Section 6.6. which is controlled by the other party, provided that the controlling party reimburses
the cooperating party promptly for any costs and expenses incurred by the cooperating party in
connection with providing such assistance.






 









 








          (f) Grant Back. Company shall grant back to Medical School technology rights in UMMC
02-01 entitled “In Vivo Production of siRNAs that Mediate Gene Silencing” in order that Medical
School may license to third parties certain intellectual property that Company has declined to
license or failed to exercise option rights under terms of the sponsored research agreement
referred to in section 3.1(5).




7. Confidential Information; Publications; Publicity.




     7.1. Confidential Information.



          (a) Designation. Confidential Information that is disclosed in writing shall be
marked with a legend indicating its confidential status (such as “Confidential” or “Proprietary”).
Confidential Information that is disclosed orally or visually shall be documented in a written
notice prepared by the Disclosing Party and delivered to the Receiving Party within thirty (30)
days of the date of disclosure; such notice shall summarize the Confidential Information disclosed
to the Receiving Party and reference the time and place of disclosure.




          (b) Obligations. For a period of five (5) years after disclosure of any portion of
Confidential Information, the Receiving Party shall (i) maintain such Confidential Information in
strict confidence, except that the Receiving Party may disclose or permit the disclosure of any
Confidential Information to its directors, officers, employees, consultants, and advisors who are
obligated to maintain the confidential nature of such Confidential Information and who need to know
such Confidential Information for the purposes of this Agreement; (ii) use such Confidential
Information solely for the purposes of this Agreement; and (iii) allow its trustees or directors,
officers, employees, consultants, and advisors to reproduce the Confidential Information only to
the extent necessary for the purposes of this Agreement, with all such reproductions being
considered Confidential Information.




          (c) Exceptions. The obligations of the Receiving Party under Subsection 7.1.(b) above
shall not apply to the extent that the Receiving Party can demonstrate that certain Confidential
Information (i) was in the public domain prior to the time of its disclosure under
this Agreement; (ii) entered the public domain after the time of its disclosure under this
Agreement through means other than an unauthorized disclosure resulting from an act or omission by
the Receiving Party; (iii) was independently developed or discovered by the Receiving Party without
use of the Confidential Information; (iv) is or was disclosed to the Receiving Party at any time,
whether prior to or after the time of its disclosure under this Agreement, by a third party having
no fiduciary relationship with the Disclosing Party and having no obligation of confidentiality
with respect to such Confidential Information; or (v) is required to be disclosed to comply with
applicable laws or regulations, or with a court or administrative order, provided that the
Disclosing Party receives reasonable prior written notice of such disclosure.




 









 








          (d) Ownership and Return. The Receiving Party acknowledges that the Disclosing Party
(or any third party entrusting its own information to the Disclosing Party) claims ownership of its
Confidential Information in the possession of the Receiving Party. Upon the expiration or
termination of this Agreement, and at the request of the Disclosing Party, the Receiving Party
shall return to the Disclosing Party all originals, copies, and summaries of documents, materials,
and other tangible manifestations of Confidential Information in the possession or control of the
Receiving Party, except that the Receiving Party may retain one copy of the Confidential
Information in the possession of its legal counsel solely for the purpose of monitoring its
obligations under this Agreement.




     7.2. Publications. Medical School and its employees will be free to publicly disclose
(through journals, lectures, or otherwise) the results of any research in the Field or relating to
the subject matter of the Patent Rights, except as otherwise provided by written agreement between
Medical School and Company (e.g., a sponsored research agreement).



     7.3. Publicity Restrictions. Company shall not use the name of Medical School or any
of its trustees, officers, faculty, students, employees, or agents, or any adaptation of such
names, or any terms of this Agreement in any promotional material or other public announcement or
disclosure without the prior written consent of Medical School. The foregoing notwithstanding,
Company shall have the right to disclose such information without the consent of Medical School in
any prospectus, offering memorandum, or other document or filing required by applicable securities
laws or other applicable law or regulation, provided that Company shall have given Medical School
at least ten (10) days (or such prior shorter period in order to enable Company to make a timely
announcement, while affording the Medical School the maximum feasible time to review the
announcement) prior written notice of the proposed text for the purpose of giving Medical School
the opportunity to comment on such text.



8. Term and Termination.




     8.1. Term. This Agreement shall commence on the Effective Date and shall remain in
effect until (a) the expiration of all issued patents within the Patent Rights or (b) for a period
of ten (10) years after the Effective Date if no such patents have issued within that ten-year
period, unless earlier terminated in accordance with the provisions of this Agreement.



     8.2. Termination for Default. In the event that either party commits a material
breach of its obligations under this Agreement and fails to cure that breach within sixty (60) days
after receiving written notice thereof, the other party may terminate this Agreement immediately
upon written notice to the party in breach.



     8.3. Force Majeure. Neither party will be responsible for delays resulting from
causes beyond the reasonable control of such party, including without limitation fire, explosion,
flood, war, strike, or riot, provided that the nonperforming party uses commercially reasonable
efforts to avoid or remove such causes of nonperformance and continues performance under this
Agreement with reasonable dispatch whenever such causes are removed.



 









 





     8.4. Effect of Termination. The following provisions shall survive the expiration or
termination of this Agreement: Articles 1 and 9; Sections 3.2., 3.5., 5.2. (obligation to provide
final report and payment), 5.5., 6.4., 7.1., 7.3., 8.4., and 10.9. Upon the early termination of
this Agreement, Company and its Affiliates and Sublicensees may complete and sell any
work-in-progress and inventory of Licensed Products that exist as of the effective date of
termination, provided that (a) Company is current in payment of all amounts due Medical School
under this Agreement, (b) Company pays Medical School the applicable royalty on such sales of
Licensed Products in accordance with the terms and conditions of this Agreement, and (c) Company
and its Affiliates and Sublicensees shall complete and sell all work-in-progress and inventory of
Licensed Products within six (6) months after the effective date of termination.



9. Dispute Resolution.




     9.1. Procedures Mandatory. The parties agree that any dispute arising out of or
relating to this Agreement shall be resolved solely by means of the procedures set forth in this
Article, and that such procedures constitute legally binding obligations that are an essential
provision of this Agreement; provided, however, that all procedures and deadlines specified in this
Article may be modified by written agreement of the parties. If either party fails to observe the
procedures of this Article, as modified by their written agreement, the other party may bring an
action for specific performance in any court of competent jurisdiction.



     9.2. Dispute Resolution Procedures.



          (a) Negotiation. In the event of any dispute arising out of or relating to this
Agreement, the affected party shall notify the other party, and the parties shall attempt in good
faith to resolve the matter within ten (10) days after the date of such notice (the “Notice Date”).
Any disputes not resolved by good faith discussions shall be referred to senior executives of each
party, who shall meet at a mutually acceptable time and location within thirty (30) days after the
Notice Date and attempt to negotiate a settlement.




          (b) Mediation. If the matter remains unresolved within sixty (60) days after the
Notice Date, or if the senior executives fail to meet within thirty (30) days after the Notice
Date, either party may initiate mediation upon written notice to the other party, whereupon both
parties shall be obligated to engage in a mediation proceeding under the then current Center for
Public Resources (“CPR”) Model Procedure for Mediation of Business Disputes, except that specific
provisions of this Section shall override inconsistent provisions of the CPR Model Procedure. The
mediator will be selected from the CPR Panels of Neutrals. If the parties cannot agree upon the
selection of a mediator within ninety (90) days after the Notice Date, then upon the request of
either party, the CPR shall appoint the mediator. The parties shall attempt to resolve the dispute
through mediation until one of the following occurs: (i) the parties reach a written settlement;
(ii) the mediator notifies the parties in writing that they have reached an impasse; (iii) the
parties agree in writing that they have reached an impasse; or (iv) the parties have not reached a
settlement within one hundred and twenty (120) days after the Notice Date.




 









 








          (c) Trial Without Jury. If the parties fail to resolve the dispute through mediation,
or if neither party elects to initiate mediation, each party shall have the right to pursue any
other remedies legally available to resolve the dispute, provided, however, that the parties
expressly waive any right to a jury trial in any legal proceeding under this Section.




     9.3. Preservation of Rights Pending Resolution.



          (a) Performance to Continue. Each party shall continue to perform its obligations
under this Agreement pending final resolution of any dispute arising out or relating to this
Agreement; provided, however, that a party may suspend performance of its obligations during any
period in which the other party fails or refuses to perform its obligations.




          (b) Provisional Remedies. Although the procedures specified in this Article are the
sole and exclusive procedures for the resolution of disputes arising out of relating to this
Agreement, either party may seek a preliminary injunction or other provisional equitable relief if,
in its reasonable judgment, such action is necessary to avoid irreparable harm to itself or to
preserve its rights under this Agreement.





	 	(a)	 	Statute of Limitations. The parties agree that all applicable statutes
of limitation and time-based defenses (such as estoppel and laches) shall be tolled
while the procedures set forth in Subsections 9.2.(a) and 9.2(b) are pending. The
parties shall take any actions necessary to effectuate this result.





     10. Miscellaneous.




     10.1. Representations and Warranties. Medical School represents and warrants that its
employees have assigned to Medical School their entire right, title, and interest in the
Patent Rights, that it has authority to grant the rights and licenses set forth in this
Agreement, and that, to its best knowledge, Medical School does not hold any other
intellectual property rights that would be infringed by the exploitation of the Patent
Rights. MEDICAL SCHOOL MAKES NO OTHER WARRANTIES CONCERNING THE PATENT RIGHTS, RELATED
TECHNOLOGY, AND BIOLOGICAL MATERIALS, INCLUDING WITHOUT LIMITATION ANY EXPRESS OR IMPLIED
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Specifically, Medical
School makes no warranty or representation (a) regarding the validity or scope of the Patent
Rights, (b) that the exploitation the Patent Rights or any Licensed Product will not
infringe any patents or other intellectual property rights of a third party, and (c) that
any third party is not currently infringing or will not infringe the Patent Rights.



     10.2. Compliance with Law and Policies. Company agrees to comply with applicable law
and the policies of Medical School in the area of technology transfer and shall promptly notify
Medical School of any violation that Company knows or has reason to believe has



 









 







occurred or is
likely to occur. The Medical School policies currently in effect at 365 Plantation Street, Ste.
130, Worcester MA, 01605 campus are available online at www.umassmed.edu/research/policies.



     10.3. Tax-Exempt Status. Company acknowledges that Medical School, as a public
institution of the Commonwealth of Massachusetts, holds the status of an exempt organization under
the United States Internal Revenue Code. Company also acknowledges that certain facilities in
which the licensed inventions were developed may have been financed through offerings of tax-exempt
bonds. If the Internal Revenue Service determines, or if counsel to Medical School reasonably
determines, that any term of this Agreement jeopardizes the tax-exempt status of Medical School or
the bonds used to finance Medical School facilities, the relevant term shall be deemed an invalid
provision and modified in accordance with Section 10.11.



     10.4. Counterparts. This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, and all of which together shall be deemed to be one and the
same instrument.



     10.5. Headings. All headings are for convenience only and shall not affect the
meaning of any provision of this Agreement.



     10.6. Binding Effect. This Agreement shall be binding upon and inure to the benefit
of the parties and their respective permitted successors and assigns.



     10.7. Assignment. This Agreement may not be assigned by either party without the
prior written consent of the other party, except that Company may assign this Agreement to an
Affiliate or to a successor in connection with the merger, consolidation, or sale of all or
substantially all of its assets or that portion of its business to which this Agreement relates.



     10.8. Amendment and Waiver. This Agreement may be amended, supplemented, or otherwise
modified only by means of a written instrument signed by both parties. Any waiver of any rights or
failure to act in a specific instance shall relate only to such instance and shall not be construed
as an agreement to waive any rights or fail to act in any other instance, whether or not similar.



     10.9. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Massachusetts irrespective of any conflicts of law principles.



     10.10. Notice. Any notices required or permitted under this Agreement shall be in
writing, shall specifically refer to this Agreement, and shall be sent by hand, recognized national
overnight courier, confirmed facsimile transmission, confirmed electronic mail, or registered or
certified mail, postage prepaid, return receipt requested, to the following addresses or facsimile
numbers of the parties:



 









 




If to Medical School:



Office of Technology Management

University of Massachusetts Medical School

365 Plantation Street, Suite 130

Worcester, MA 01605

Attention:      Joseph F.X. McGuirl

                      Executive Director



Tel: (508) 856-1626

Fax: (508) 856-1482



If to Company:



CytRx Corporation

11726 San Vicente Blvd., Suite 650

Los Angeles, CA 90049

Attention:     Steven A. Kriegsman

                     Chief Executive Officer



Tel: (310) 826-5449

Fax: (310) 826-5529



All notices under this Agreement shall be deemed effective upon receipt. A party may change its
contact information immediately upon written notice to the other party in the manner provided in
this Section.




     10.11. Severability. In the event that any provision of this Agreement shall be held
invalid or unenforceable for any reason, such invalidity or unenforceability shall not affect any
other provision of this Agreement, and the parties shall negotiate in good faith to modify the
Agreement to preserve (to the extent possible) their original intent. If the parties fail to reach
a modified agreement within sixty (60) days after the relevant provision is held invalid or
unenforceable, then the dispute shall be resolved in accordance with the procedures set forth in
Article 9. While the dispute is pending resolution, this Agreement shall be construed as if such
provision were deleted by agreement of the parties.



     10.12. Entire Agreement. Except for the Common Stock Purchase Agreement, this
Agreement constitutes the entire agreement between the parties with respect to its subject matter
and supersedes all prior agreements or understandings between the parties relating to its subject
matter.



 









 





     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly
authorized representatives as of the date first written above.



	 	 	 	 	 	 	 	 	 
	UNIVERSITY OF MASSACHUSETTS 

MEDICAL SCHOOL	 	 	 	CYTRX CORPORATION
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Joseph F.X. McGuirl
	 	 	 	By:
	 	/s/ Steven A. Kriegsman
	 

	 	 
	 	 	 	 	 	 
	 

	 	Joseph F.X. McGuirl
	 	 	 	 	 	Steven A. Kriegsman
	 

	 	Executive Director, Office of
	 	 	 	 	 	Chief Executive Officer
	 

	 	Technology Management	 	 	 	 	 	 






 









 





EXHIBIT A




List of Patent Rights 





			
	UMMC 02-01:	 	          “In Vivo Production of Small Interfering RNAs”






			
	Inventors:	 	           Phillip Zamore, Craig Mello, Gyorgy Hutvagner, Juanita McLachlan, and Alla Grishock




Provisional Patent Application filed on July 12, 2001 #60/305,185 entitled “In Vivo Production of
Small Interfering RNAs that Mediate Gene Silencing”



U.S. Patent Application filed on July 12, 2002 #10/195,034




WIPO/PCT filing on July 12, 2002




 









 





CONFIDENTIAL




[Letter amendment]



Reference is made to the Exclusive License Agreement between the University of Massachusetts
Medical School and CytRx Corporation dated April 15, 2003, for the University’s invention
disclosure UMMC 02-01 (the “License Agreement”). Capitalized terms used but not defined herein
shall have the meaning ascribed to them in the License Agreement.



Because at least one inventor of the invention covered by the Patent Rights is an investigator of
the Howard Hughes Medical Institute (“HHMI”), the parties which to amend the License Agreement to
add the following terms for the benefit of HHMI.





	1.	 	Notwithstanding anything to the contrary in the License Agreement, HHMI retains a paid-up,
non-exclusive irrevocable license to use any invention(s) claimed in the Patent Rights,
Biological materials and Related Technology for its non-commercial research purposes, but with
no right to assign or sublicense.






	2.	 	Company agrees that Section 2.1(c) of the Licensed Agreement shall not apply to any
improvements conceived or reduced to practice in the laboratory of Dr. Craig Mello, except to
the extent such improvements are within the definition of Patent Rights.






	3.	 	Payments made by Company pursuant to Section 3.1(e) of the License Agreement shall not be
used to fund research conducted in the laboratory of Dr. Craig Mello.






	4.	 	HHMI and its trustees, officers, employees, and agents (collectively, “HHMI Indemnitees”),
will be indemnified, defended by counsel acceptable to HHMI, and held harmless by Company from
and against any claim, liability, cost, expense, damage, deficiency, loss, or obligation, of
any kind or nature (including, without limitation, reasonable attorneys’ fees and other costs
and expenses of defense) (collectively, “Claims”), based upon, arising out of, or otherwise
relating to the License Agreement, including without limitation any cause of action relating
to product liability. The previous sentence will not apply to any Claim that is determined
with finality by a court o competent jurisdiction to result solely from the gross negligence
or willful misconduct of an HHMI Indemnitee. Company agrees not to settle any Claim against
an HHMI Indemnitee without HHMI’s written consent, where (a) such settlement would include any
admission of liability on the part of any HHMI Indemnitee, (b) such settlement would impose
any restriction on any HHMI Indemnitee’s conduct of any of its activities, or (c) such
settlement would not include an unconditional release of all HHMI Indemnitees from all
liability for claims that are the subject matter of the settled Claim. An HHMI Indemnitee
shall provide Licensee with prompt notice of any claim for which indemnification may be sought
pursuant hereto. Notice shall be given reasonably promptly following actual receipt of
written notice thereof by an officer or attorney of HHMI. Notwithstanding the foregoing, the
delay or failure of any HHMI Indemnitee to give reasonably prompt notice to Licensee of any
such claim shall not affect the rights of such HHMI Indemnitee unless, and then only to the
extent that, such delay or failure is
prejudicial to or otherwise adversely affects Licensee. This provision shall survive
termination hereof and of the License Agreement.




 









 












	5.	 	Company acknowledges that under HHMI policy, Company may use the name of any HHMI employee
(including Dr. Craig Mello) and, in doing so, may cite the relationship of the employee with
HHMI, including in any business plan, press release, advertisement, prospectus or other
offering document of the Company or its affiliates, so long as such usage (1) is limited to
reporting factual events or occurrences only, and (2) is made in a manner that could not
reasonably constitute a specific endorsement by HHMI or its employees of Company or its
affiliates or of any program, product or service of Company or its affiliates. However,
Company shall not use the name of HHMI or any HHMI employees in any press release, or quote
any HHMI employee in any company materials (including advertisements) or otherwise use the
name of HHMI or any HHMI employee in a manner not specifically permitted by the preceding
sentence, unless, in each case, Company obtains in advance the written consent of HHMI and, in
the case of use of the HHMI employee’s name, except to the extent such HHMI employee has
agreed otherwise in a separate agreement with the Company (for example, the Scientific
Advisory Board Agreement between Dr. Craig Mello, the Company and one of its subsidiaries),
the written consent of the HHMI employee as well. Notwithstanding the foregoing, if, in the
opinion of the Company’s counsel, Company is required by applicable law to use the HHMI
employee’s name or HHMI’s name in a press release or governmental filing and, under the
circumstances, Company is not reasonably able to obtain the advance written consent of HHMI or
the HHMI employee, as applicable to such use, then Company may proceed without obtaining the
advance consent of HHMI or the HHMI employee, as applicable.






	6.	 	HHMI is not a party to the License Agreement and has no liability to any licensee,
sublicensee, or use of any technology covered by the License Agreement, but HHMI is an
intended third-party beneficiary of the License Agreement and certain of its provisions, in
particular sections 2.3 and 3.2(c), and paragraphs 1 through 5 hereof, are for the benefit of
HHMI and are enforceable by HHMI in its own name.




This letter constitutes an amendment to the License Agreement and is effective as of April 15,
2003. Except as set forth above, all other provisions of the License Agreement, as previously
amended, remain in effect as stated in the License Agreement.



If the foregoing is acceptable, please have this document signed in duplicate and return both
copies to me. I will return a fully endorsed duplicate original to you for your files. If you
have any questions or concerns, please call me at 508-856-1626.




Sincerely,




/s/
Hemi Chopra, Ph.D.

Hemi Chopra, Ph.D.




 









 





     The parties agree to the terms and conditions set forth above.



	 	 	 
	University of Massachusetts
Medical School

	 	CytRx Corporation
	 
	 	 
	     /s/ Chester A. Bisbee, Ph.D., J.D.

	 	     /s/ Steven A. Kriegsman
	 

	 	 
	Typed Name: Chester A. Bisbee, Ph.D., J.D.

	 	Typed Name: Steven A. Kriegsman
	Title: Acting Director, OTM

	 	Title: CEO
	Date: 3/18/04

	 	Date: March 4, 2004






 









 





AMENDMENT TO EXCLUSIVE LICENSE AGREEMENT




     This Amendment, effective September 10, 2004 (the “Amendment Date”), is made between the
University of Massachusetts Medical School (“Medical School”), a public institution of higher
education of the Commonwealth of Massachusetts as represented by its Worcester campus, and CytRx
Corporation (“CytRx”), a Delaware corporation having an address at 11726 San Vicente Blvd., Suite
650, Los Angeles, CA 90049, and amends that certain Exclusive License Agreement dated April 15,
2003 between Medical School and CytRx (the “License”) pertaining to Medical School’s invention
disclosure number UMMC 02-01 entitled In Vivo Production of Small Interfering RNAs. Capitalized
terms used but not defined herein shall have the meanings set forth in the License.



     Whereas, Medical School and CytRx are each party to the License; and



     Whereas, CytRx desires to obtain Patent Rights in Israel as part of the License.



     Therefore, in consideration of the premises and terms of this agreement, the adequacy of which
is acknowledged by both parties, Medical School and CytRx agree as follows:



     1. Exhibit A of the License is hereby replaced in its entirety with Exhibit A attached
hereto.



     2. All other terms of the License remain unchanged and in full force and effect.


The parties have duly executed this Amendment as of the Amendment Date.




	 	 	 
	UNIVERSITY OF MASSACHUSETTS

	 	CYTRX CORPORATION
	 
	 	 
	By:      /s/ Chester A. Bisbee, Ph.D., J.D.

	 	By:
     /s/ Steven Kriegsman
	 

	 	 
	Name: Chester A. Bisbee, Ph.D., J.D.

	 	Name: Steven Kriegsman
	Title: Acting Executive Director

	 	Title: President & CEO
	Date: November 2, 2004

	 	Date: 9/10/04






 









 





EXHIBIT A




List of Patent Rights





			
	UMMC 02-01:	 	     “In Vivo Production of Small Interfering RNAs”






			
	Inventors:	 	     Phillip Zamore, Craig Mello, Gyorgy Hutvagner, Juanita McLaclan and Alla Grishok




Provisional Application serial number 60/305,185, filed July 12, 2001, entitled “In Vivo Production
of Small Interfering RNAs that Mediate Gene Silencing”



U.S. Application serial number 10/195,034, filed July 12, 2002



International Application serial number PCT/US02/22010, filed July 12, 2002



Israeli Application serial number 159756, filed July 12, 2002