Exhibit
10.13


 


YALE EXCLUSIVE LICENSE
AGREEMENT


 


THIS AGREEMENT by and between YALE
UNIVERSITY, a corporation organized and existing under and by virtue of a
charter granted by the general assembly of the Colony and State of Connecticut
and located in New Haven, Connecticut (“YALE”), and SCHERING AKTIENGESELLSCHAFT
with Offices in Müllerstrasse 178, D-13353, Berlin, Germany (“LICENSEE”) shall
be effective the date of final execution below (“Effective Date”). Each of
LICENSEE on one hand and YALE on the other hand, is referred to a “Party” and
collectively as the “Parties.”


 


In the course of research conducted under
YALE auspices, Dr. William Sessa, in the Department of Pharmacology at YALE
(the “INVENTOR”), produced an Invention entitled “eNOS Mutations Useful For
Gene Therapy and Therapeutic Screening” (the “INVENTION”); and


 


Pursuant to an
assignment by the INVENTOR to YALE of all his right, title and interest in and
to the INVENTION and any resulting patents, YALE is the owner of the INVENTION,
subject to rights reserved by the U.S. government; and


 


LICENSEE wishes to obtain a license to the
INVENTION and any resulting patents, and YALE is willing to grant such a
license to LICENSEE subject to the terms and conditions of this Agreement;


 


Therefore, in consideration of these
statements, the parties agree as follows:


 


ARTICLE  1           DEFINITIONS


 


The following terms used in this Agreement shall be defined as set
forth below:


 


1.1           “AFFILIATE” means any entity or person that
directly or indirectly controls, is controlled by or is under common control
with LICENSEE. For purposes of this definition, “control” means possession of
the power to direct the management of such entity or person, whether through
ownership of more than 50% of voting securities, by contract or otherwise.


 


1.2           “CONFIDENTIAL INFORMATION” means any and all
information, KNOW-HOW, and data, technical or non-technical, which relates to
LICENSED INTELLECTUAL PROPERTY or to the Agreement itself and which is
disclosed to one Party by the other Party during the negotiation of or under
this Agreement.


 


1.3           “DILIGENCE REPORTS” has the meaning set forth
in Section 6.2.


 


1.4           “FIELD” means all cardiovascular-related
therapeutic uses of LICENSED INTELLECTUAL PROPERTY that does not involve small
molecule drug delivery.


 


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1.5           “FIRST COMMERCIAL SALE” means the date
LICENSEE or an AFFILIATE or sublicensee of LICENSEE first sells commercially,
pursuant to a REGULATORY APPROVAL, a LICENSED PRODUCT in United States, Japan or
any country of the European Union; provided however, that where such
first commercial sale has occurred in any country for which pricing, or
reimbursement approval is necessary for widespread sale, then such sale shall
not be deemed a FIRST COMMERCIAL SALE until such pricing or reimbursement
approval has been obtained.


 


1.6           “IND” means an investigational new drug
application required to be filed with the Federal Food, Drug and Cosmetic
Administration pursuant to 21 C.F.R. §312, as such regulations may be amended
from time to time, to test drug products in humans or foreign equivalent.


 


1.7           “KNOW-HOW means information that relates to
the LICENSED INTELLECTUAL PROPERTY and is contained in manuscripts, the Office
of Cooperative Research at Yale invention disclosure form, or other documents
or information which is disclosed by the INVENTORS of the LICENSED INTELLECTUAL
PROPERTY and which is useful, but not patentable.


 


1.8           “LICENSED INTELLECTUAL PROPERTY” means the
INVENTION as covered by the United States or foreign patent application(s) and
patents(s) arising out of the provisional patent application attached as
Appendix “A” and owned by YALE during the term of this Agreement and includes
LICENSED INTELLECTUAL PROPERTY referred to in the The Research Agreement
between LICENSEE and YALE as of the Effective Date (see Appendix B), together
with any continuations, continuations-in-part, and any divisional, or
substitute patents, any reissues or re-examinations of any such applications or
patents, and any extension of the term of any such patent.


 


1.9           “LICENSED METHODS” means any method,
procedure, process or other subject matter, the manufacture, use or sale of
which without a license from YALE, would infringe any ISSUED CLAIM of the
LICENSED INTELLECTUAL PROPERTY.


 


1.10         “LICENSED PRODUCTS” means any products,
apparatus, kit, or component part thereof in the FIELD, the manufacture, use or
sale of which without a license from YALE, would infringe any ISSUED CLAIM of
the LICENSED INTELLECTUAL PROPERTY,


 


1.11         “LICENSED TERRITORY” shall mean the whole
world.


 


1.12         “ISSUED CLAIM” means a claim of an issued
patent or patent application claiming the LICENSED INTELLECTUAL PROPERTY that
has not been held unenforceable, unpatentable or invalid by a decision of a court or government agency of competent
jurisdiction, unappealable or unappealed within the time allowed to appeal, and
which has not been admitted to be invalid or unenforceable through re-issue,
re-examination, disclaimer or otherwise.


 


1.13         “NDA” means a new drug application filed with
the FDA pursuant to 21 C.F.R. 200, as such regulations may be amended for
approval by such agency for the sale of LICENSED PRODUCT in the United States.
Reference to NDA includes, to the extent applicable, an biologies license
application.


 


1.14         “NET SALES: means the amount invoiced by
LICENSEE, an Affiliate or permitted sublicensee for sales of LICENSED PRODUCTS,
as the case may be, to a third party, less deductions for (i) shipping or
freight charges prepaid or allowed, and other charges such as insurance,
relating thereto as is customary in LICENSEE’S normal business practices; (ii)
sales and excise taxes or customs duties paid by the


 


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selling party and any other governmental charge imposed upon the sales
of such LICENSED PRODUCTS, as the case may be; (iii) distributors fees,
rebates, or allowances actually granted, allowed or incurred; (iv) quantity
cash discounts or chargebacks actually granted, allowed or incurred in the
ordinary course of business in connection with the sale of such LICENSED
PRODUCT, as the case may be; (v) allowances or credits to customers, not in
excess of the selling price of such LICENSED PRODUCTS, as the case may be, on
account of governmental requirements, rejection, outdating recalls or for value
of returned trade goods of such LICENSED PRODUCTS, as the case may be; and (vi)
an estimate for bad debts determined in accordance with such Party’s normal
accounting procedures consistently applied within and across its pharmaceutical
operating units, whether or not invoiced to the customer. For the purpose of
calculating LICENSEE’S NET SALES, the Parties recognize that (a) LICENSEE’S
customers may include persons in the chain of commerce who enter into
agreements with LICENSEE as to price even though title to the LICENSED PRODUCT,
as the case may be, does not pass directly from LICENSEE to such customers, and
even thought payment for such LICENSED PRODUCT, as the case may be, is not made
by such customers directly to LICENSEE and (b) in such cases chargebacks paid
by LICENSEE to or thorough a third party (such as a wholesaler) can be deducted
by LICENSEE from gross revenue in order to calculate a Party’s NET SALES. Any
deductions listed above which involve payment by LICENSEE shall be taken as a
deduction against aggregate sales for the period in which the payment is made.
Sales of LICENSED PRODUCTS, as the case may be, between a Party and its
Affiliates solely for research or clinical testing purposes shall be excluded
from the computation of NET SALES.


 


1.15         “PHASE I CLINICAL TRlAL(S)” means a Phase I
clinical trial for a LICENSED PRODUCT as described in 21 C.F.R. §312 (a).


 


1.16         “REGULATORY APPROVAL”, means any approvals,
product and/or establishment licenses, registrations, or authorizations of any
federal, state or local regulatory agency, department, bureau or other
governmental entity, necessary for the manufacture, use, storage, importation,
export, transport or sale of LICENSED PRODUCT in a regulatory jurisdiction.


 


ARTICLE   2   LICENSE
GRANT AND TERM


 


2.1           Subject to all the terms and conditions of
this Agreement, YALE hereby grants to LICENSEE an exclusive, worldwide license,
under the LICENSED INTELLECTUAL PROPERTY within the FIELD, with the right to
grant sublicenses, to make, have made, use, sell, offer to sell, import and
export LICENSED PRODUCTS and to practice any LICENSED METHOD (the “LICENSE”).


 


2.2           The LICENSE is expressly made subject to Yale’s
reservation of the right to make, use and practice the LICENSED INTELLECTUAL
PROPERTY for its own non-commercial purposes. Nothing in this Agreement shall
be construed to grant by implication, estoppel or otherwise any licenses under
patents of YALE other than the LICENSED INTELLECTUAL PROPERTY.


 


2.3           Unless
terminated earlier as provided in Article 12, the LICENSE shall commence on the
date of full execution of this Agreement and the LICENSE, shall automatically
end on the date of the last to expire of the patents described in the LICENSED
INTELLECTUAL PROPERTY.


 


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2.4           If LICENSED INTELLECTUAL PROPERTY exists in
countries outside the U.S., the LICENSE granted in Article 2.1 shall
automatically convert to a paid-up, non-exclusive license, on a country-by-country
basis when the last to expire of the patents as described in the LICENSED
INTELLECTUAL PROPERTY in that country expires,


 


2.5           Appendix B is incorporated and a part of this
Agreement.


 


ARTICLE   3   SUBLICENSES


 


3.1           YALE hereby grants to LICENSEE the right to
sublicense the right to make, use, sell, offer to sell, import or export any
LICENSED PRODUCT and to practice any LICENSED METHOD, provided this Agreement
is in effect and LICENSEE is not in breach.


 


3.2           Any sublicense granted by LICENSEE shall
include substantially the same Definitions, and provisions on Due Diligence,
Confidentiality and Publicity, Reporting Requirements, Indemnification,
Insurance and Warranties, Patent Notices and Use of Yale’s Name: provided
further, such sublicenses do not relieve LICENSEE from the royalty rate
obligations of Article 5 of this Agreement.


 


3.3           If, prior to LICENSEE reaching the “B3”
decision, that is, to file an IND and initiate Phase I CLINICAL TRIALS in the
United States with respect to a LICENSED PRODUCT, LICENSEE enters into a
sublicense with a third party with respect to such LICENSED PRODUCT for such
third party to Solely develop and commercialize such LICENSED PRODUCT, then
LICENSEE shall pay to YALE Thirty (30%) Percent of any lump sum fee, milestone
payment, or advance payment received by LICENSEE from any sublicensee. “Solely”
means that Schering does not retain any rights to develop and commercialize
such LICENSED PRODUCT, that is, for the avoidance of doubt, Schering acts in
the nature of a broker and grant all its rights and responsibilities to a third
party.


 


3.4           LICENSEE shall promptly:


 


a)   provide YALE with a copy of each sublicense
granted by LICENSEE under this Agreement and any amendments to such sublicense
or termination of it;


 


b)   guarantee to pay all payments due YALE from
sublicenses; and


 


c)   summarize and deliver copies of all reports
due to LICENSEE from sublicensees.


 


ARTICLE   4   LICENSE
ISSUE FEE


 


4.1           LICENSEE shall pay to YALE, upon execution of
this Agreement, a non-refundable license issue fee of Fifty Thousand
($50,000.00) Dollars. Said fee is not an advance upon Earned Royalties.


 


4.2           LICENSEE shall pay the following milestone
payments. Milestone payments are paid once only on the first LICENSED PRODUCT
that meets such milestone regardless of the number of LICENSED PRODUCTS, the
number of times a milestone is reached or number of indications for such
LICENSED PRODUCT (S).


 


4.2.1     One Hundred-Fifty Thousand ($150,000.00)
Dollars:


 


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upon entering LICENSEE’S “B2” phase of drug
development (preclinical development dossier and regulatory toxicity).


 


4.2.2     Eight Hundred-Twenty-Five Thousand
($825,000.00) Dollars:


 


upon filing the first 1ND for the first
LICENSED PRODUCT in any one of the United States, or Japan or a country in the
European Union.


 


4.2.3     Nine Hundred Thousand ($900,000.00) Dollars:


 


upon filing first BLA or NDA in the United
States.


 


4.2.4     One Million Five Hundred Thousand
($1,500,000.00) Dollars:


 


upon the FIRST COMMERCIAL SALE of the first
LICENSED PRODUCT.


 


4.2.5     Three Million ($3,000,000.00) Dollars:


 


upon first Ten Million ($10,000,000.00)
Dollars in NET SALES.


 


4.3           Neither the license issue fee of Article 4.1
nor the milestone payments of Article 4.2 shall be credited against royalties
payable under Article 5.  If there is no
ISSUED CLAIM in the LICENSED INTELLECTUAL PROPERTY claiming the LICENSED
PRODUCT in whole or in part, then LICENSEE shall not pay the Milestones stated
in Sections 4.2.4 and 4.2.5.


 


ARTICLE   5   ROYALTIES


 


5.1           Provided there is a ISSUED CLAIM in
such country, as consideration for the license granted under this Agreement
LICENSEE on a country-by-country basis shall pay to YALE an earned royalty of
NET SALES in each calendar year as follows:


 


4% on NET SALES up to $250 million


 


5% on NET SALES greater than $250 million and
less than $500 million


 


6% on NET SALES greater than $500 million


 


5.2           LICENSEE shall pay all royalties accruing to
YALE within thirty (30) days after the end of each calendar quarter (March 31,
June 30, September 30 and December 31) in which NET SALES occur.


 


5.3           During the term of this Agreement, LICENSEE
agrees to pay an annual License Maintenance Fee (“LMF”) commencing on the
January 1 after the date of final execution and every January 1 thereafter
until the January 1 that LICENSEE starts to pay Minimum Royalty Payments under
Article 5.4. The LMF shall be Fifteen Thousand ($15,000.00) Dollars.


 


5.3.1
The LMF shall not be owed YALE in those years in which LICENSEE is funding
Professor Sessa’s laboratory with a minimum of Seventy Five Thousand ($75,000.00)
Dollars in direct costs.


 


5.4           Provided royalties are due pursuant to
Section 5.1 of this Agreement, during the term of this Agreement, LICENSEE
agrees to pay YALE annual Minimum Royalty Payments (“MRP”), commencing on the
first January 1 to occur Six (6) months after the date of the FIRST COMMERCIAL
SALE in the United States. The MRP shall be in the


 


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amount of Fifty Thousand Dollars ($50,000.00). LICENSEE shall continue
to pay the MRP until the end of the term of the last to expire ISSUED CLAIM in
the LICENSED INTELLECTUAL PROPERTY that claims the LICENSED PRODUCT. YALE shall
fully credit each MRP made against any Earned Royalties payable by LICENSEE in
the same year.


 


5.5           If it is established that any ISSUED CLAIM is
dominated by another patent and LICENSEE is required to obtain a license from a
third party in order to practice the LICENSED INTELLECTUAL PROPERTY, then
royalty payment due YALE may be reduced by the royalty and payments made to
such third party, but in no event may LICENSEE reduce the earned royalty on NET
SALES by more than Forty Percent (40%). LICENSEE shall justify any such
deduction to YALE.


 


YALE shall pay any and all taxes levied on account of royalties or
other payments that it receives from LICENSEE under this Agreement. If laws or
regulations require that taxes be withheld, LICENSEE will (i) deduct those
taxes from the remittable royalty, (ii) timely pay the taxes to the proper
taxing authority, and (iii) send proof of payment to YALE within thirty (30)
days of receipt of confirmation of payment from the relevant taxing authority.
LICENSEE agrees to make all lawful and reasonable efforts to minimize such
taxes to YALE.


 


5.6           Payments by LICENSEE under this Agreement
shall be paid to YALE in U.S. dollars by wire transfer of immediately available
funds to an account at a commercial bank designated by YALE. Where payments are
based on NET SALES in countries other than the United States, the amount of
such NET SALES expressed in the currency of each country shall be converted
first into Deutsche Marks, or if the Deutsche Mark shall have been replaced by
the Euro, into Euros, and then into U.S. dollars
at the average exchange rate (calculated at the average of the “bid” and “asked”
exchange rate) for the applicable quarter,
provided, however, that the conversion of the currency in question into
Deutsche Marks or Euros prior to conversion into U.S. dollars shall be for calculation
purposes only, and no additional fee or commission will be incurred as a consequence
of the multiple currency conversions. In determining the average exchange rate
for any quarter, the standard shall be the exchange rate quoted by the Frankfurt
Fixing or any appropriate successor rate fixing procedure then in effect between
European First Class Banks for the applicable currency at 1:00 p.m. on the last
business day of the applicable quarter. If there is no Frankfurt Fixing or
appropriate successor rate fixing procedure in effect as of any date of
determination, the Parties shall agree on another reference rate. If overdue,
the royalties and any other payments due under this Agreement, shall bear
interest until payment at a per annum rate two percent (2%) above the prime
rate in effect at Citibank on the due date. The payment of such interest shall
not foreclose YALE from exercising any other right it may have as a consequence
of the lateness of any payment.


 


ARTICLE   6   DUE
DILIGENCE


 


6.1           LICENSEE shall plan and as soon as
practicable after execution of this Agreement, implement appropriate research
and development, testing and production


 


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efforts directed toward commercialization of the LICENSED PRODUCTS
and/or LICENSED METHODS and shall provide to YALE a copy of such plan (“Plan”),
which is incorporated into this Agreement and attached as “Appendix C” and
which shall be reviewed annually.


 


6.1.1        The Plan shall discuss, in detail, the
LICENSEE’s goals and objectives with regards to pursuing development plans for
the LICENSED INTELLECTUAL PROPERTY using various gene therapy vectors.


 


6.2           Within thirty (30) days of the anniversary of
the date of final execution of this Agreement, LICENSEE shall provide diligence
reports (“DILIGENCE REPORTS”) to YALE, indicating progress and problems to date
in commercialization, and a forecast and schedule of major events required to
market the LICENSED PRODUCTS.


 


6.3           If at any time LICENSEE abandons or suspends
its development or marketing or its intent to market the LICENSED PRODUCTS and
or LICENSED METHODS for a period exceeding ninety (90) days, LICENSEE shall
immediately notify YALE giving reasons and a statement of its intended actions,


 


6.4           If LICENSEE shall fail to use commercially
reasonable efforts to implement the Plan, YALE shall send LICENSEE a written
notice concerning such alleged failure. YALE and LICENSEE shall meet to discuss
such alleged failure. If, after such discussion, LICENSEE is failing to use
commercially reasonable efforts to implement the Plan, then YALE shall be
entitled to terminate this Agreement in accordance with Article 12.5.


 


ARTICLE   7   CONFIDENTIALITY
AND PUBLICITY


 


7.1           YALE and LICENSEE each recognize that the
other’s CONFIDENTIAL INFORMATION constitutes highly valuable information.
Subject to the Parties’ rights and obligations pursuant to this Agreement, YALE
and LICENSEE agree that during the term of this Agreement and for five years
thereafter, they:


 


a)             will keep confidential and will cause their
Affiliates to keep confidential, the other’s CONFIDENTIAL INFORMATION by taking
whatever action it would take to preserve the confidentiality of its own
CONFIDENTIAL INFORMATION; and


 


b)            will only disclose that part of the other’s
CONFIDENTIAL INFORMATION that is necessary for those officers, employees or
agents who need to know to carry out its responsibilities under this Agreement;
and


 


c)             will, not disclose the other’s CONFIDENTIAL
INFORMATION to any third parties except sublicensees under any circumstance
without written permission from the other Party; and


 


d)            will, within sixty (60) days of the request
of the other Party upon termination of this Agreement, return all the
CONFIDENTIAL INFORMATION disclosed to the other Party pursuant to this Agreement
except for one copy which may be retained by the Recipient for monitoring
compliance with Article 7.


 


7.2           The obligations of confidentiality described
above shall not pertain to that part of the CONFIDENTIAL INFORMATION which:


 


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a)   was known to the recipient Party prior to the
disclosure by the disclosing Party; or


b)   is or becomes publicly known through no fault
or omission attributable to the recipient Party; or


c)   is rightfully given to the recipient Party
from sources independent of the disclosing Party; or


d)   is required to be disclosed by law in the
opinion of recipient Party’s General Counsel, but only after prompt written
notice to the owner of the CONFIDENTIAL INFORMATION and opportunity to seek a protective
order or to agree to such disclosure,


 


7.2           Publicity. Except as required by law, neither Party may disclose the terms of
this Agreement without the written consent of the other Party.


 


ARTICLE   8   REPORTS,
RECORDS AND INSPECTIONS


 


8.1           LICENSEE shall keep, and shall cause each of
its Affiliates and sublicensees to keep full and accurate books of account
containing all particulars that may be necessary for the purpose of calculating
NET SALES and all payments to YALE. Such books of account shall be kept in
their principal place of business and, with all necessary supporting data,
shall for three (3) years next following the end of the calendar year to which
each shall pertain be open for inspection by an independent certified
accountant selected by YALE and reasonable acceptable to LICENSEE upon
reasonable notice during normal business hours at YALE’S expense for the sole
purpose of verifying payments or compliance with this Agreement, but in not
event more than once a each calendar year. All information and data shall be
use only for the purpose of verifying payments. In the event that such
inspection shall indicate that in any calendar year the payments that should
have been paid by LICENSEE are at least five (5%) percent greater than those
that were actually paid by LICENSEE, then LICENSEE shall pay the cost of such
inspection. All underpayments and overpayments are immediately due and payable.


 


8.2           LICENSEE and its sublicensees shall keep and
maintain complete and accurate records and books containing an accurate
accounting of all data in sufficient detail to enable verification of EARNED
ROYALTIES and other payments under this Agreement. LICENSEE shall preserve such
book and record for THREE (3) years after the sales recorded were actually
made. Such books and records shall be open to inspection by YALE or an
independent certified public accountant, at YALE’s expense, during normal business
hours upon TEN (10) days prior written notice, for the purpose of verifying the
accuracy of the reports and computations rendered by LICENSEE.


 


ARTICLE   9   PATENT
PROTECTION


 


9.1           The patent applications covering the
INVENTION and the dates they were filed are listed in Appendix “A.” It is
understood that as of the date of final execution of this Agreement no patent
protection exists in the U.S. or any foreign country but only the potential to
realize the same.


 


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9.2           With regards to the United States, YALE, at
LICENSEE’S request, shall file patent applications and continuations-in-part in
YALE’S name and at LICENSEE’S expense, covering the INVENTION and thereafter,
YALE shall prosecute such patent applications. YALE shall consult with LICENSEE
as to the preparation, filing, prosecution and maintenance of patent applications
for the INVENTION and any patents resulting therefrom and shall promptly
furnish LICENSEE with copies of documents relevant to such consultation. Within
thirty (30) days of receiving such documents from YALE or as soon as reasonably
practical in the event a response is required imminently, LICENSEE will provide
YALE with comments or suggestions relating to such documents. YALE will give
due consideration to any modifications or additions suggested by LICENSEE. Any
and all U.S. patent applications, continuations-in-part, and resulting patents
claiming the INVENTION where inventors are solely employees of YALE shall remain
the property of YALE.  All other U.S.
patents, patent applications, continuations and continuations-in-part that are
subject to this Agreement and arising out of the Research Agreement shall be
owned pursuant to the terms stated in Section 8 of the Research Agreement.


 


9.3           With regards to all intended international
filings, all conversions of international applications according to the Patent
Cooperation Treaty into national or regional patent applications, and all
filings of translations of a granted European patent in the national patent
offices of the member states of the European Patent Convention in relation to
the Licensed Intellectual Property, YALE shall inform LICENSEE as soon as
possible but in no event less than thirty (30) days prior to such intended
international filings, conversions or national filings. LICENSEE will notify
YALE if it wishes YALE to prosecute such Licensed Intellectual Property in the
following group of countries at LICENSEE’S expense: United States, Japan,
Australia, Canada, Europe (only member states of the European Patent
Convention). Upon such notification, YALE agrees to file patent applications in
such countries. In addition, if requested by LICENSEE in writing, YALE shall
file in additional countries designated by LICENSEE, provided that LICENSEE
agrees to pay for the costs associated with such additional filings. If LICENSEE
chooses not to proceed with the filing and/or prosecution of any of the Licensed
Intellectual Property in any country of the countries listed above, it shall
notify YALE not less than thirty (30) days prior to the day on which LICENSEE
intends such patent filing and/or prosecution to cease, or as soon as
reasonably practical in the event a response is required before eminently. In
such case, LICENSEE shall not be obligated to pay on-going patent expenses for
such Licensed Intellectual Property in such country, and LICENSEE’S rights
under this Agreement may be terminated, solely with respect to that country
pursuant to Section 12.5.


 


In the event YALE wishes to file and/or prosecute the Licensed
Intellectual Property in any country other than the countries listed above, and
LICENSEE does not agree to file, YALE may file at its own expense and LICENSEE
shall not be obligated to pay on-going patent expenses for such patent
application or patent in such country. In such case, LICENSEE’S rights under
this Agreement may by terminated, solely with respect to that country pursuant
to Section 12.5. For the avoidance of any doubt, LICENSEE acknowledges that
YALE, at its sole discretion, may cease prosecution of such patent application
or maintenance of any patent resulting therefrom in such country at any time.
Upon the filing of such patent application, YALE shall notify LICENSEE that
Yale has filed a patent application in such
country. YALE shall have the right to license its rights in such patent
application and/or patent in such country to a third party, provided however,
that YALE agrees that during the seven (7) years period from the filing of the


 


9





















 


patent application in such country, before accepting an offer from a
third party, YALE will give LICENSEE the opportunity to obtain a license to
such patent application and/or patent at the same financial compensation that a
third party is willing to pay to YALE, YALE shall inform LICENSEE of such offer
and shall allow LICENSEE sixty (60) days in which to elect whether to license
YALE’S interest in such rights under the terms of such offer.


 


9.4           The costs mentioned in Articles 9.2 and 9.3
shall include, but are not limited to any taxes, annuities, working fees,
maintenance fees, renewal and extension charges. Payment of such costs shall be
made, at YALE’s option, either directly to patent counsel selected by YALE and
reasonably acceptable to LICENSEE. In either case, LICENSEE shall make payment
directly to the appropriate patent counsel within Thirty (30) Days of receiving
their invoice. If LICENSEE fails to make payment within the thirty day period, LICENSEE
shall be obligated to pay any reasonable late charges incurred by YALE as a result
of such delay.


 


9.5           All U.S. patent applications covering the
INVENTION shall be prepared, prosecuted, filed and maintained by independent
patent counsel chosen by YALE and reasonably acceptable to LICENSEE. Said
independent patent counsel shall be ultimately responsible to LICENSEE for
patents, patent applications, continuations and continuations-in-part that
disclose and claim the INVENTION. YALE shall instruct patent counsel to keep
both YALE and LICENSEE fully informed of the progress of all such patent
applications and patents, and to give both YALE and LICENSEE reasonable opportunity
to comment on the type and scope of useful claims and the nature of supporting
disclosures. YALE will not finally abandon any patent application for which LICENSEE
is bearing expenses without LICENSEE’s written consent. The Party directing
prosecution shall have no liability to the other Party for damages, whether direct,
indirect or incidental, consequential or otherwise, allegedly arising from its
good faith decisions, actions and omissions in connection with such
prosecution, except as provided in Article 9.


 


9.6           LICENSEE shall apply, and shall require
sublicensees to apply, the patent marking notices required by the law of any
country where LICENSED PRODUCTS are made, sold or used, to the extent feasible
and practical, and in accordance with the applicable patent laws of that
country.


 


9.7           LICENSEE accepts responsibility for costs
incurred by YALE as of the Effective Date for the conversion of U.S. patent
#60/129550 originally filed April 16, 1999, in an amount of not to exceed
$15,000. LICENSEE shall pay such amount not later than thirty (30) days
following receipt of an invoice from YALE.


 


ARTICLE   10   INFRINGEMENT AND LITIGATION


 


10.1         Each Party shall promptly notify the other in
writing in the event that it obtains knowledge of infringing activity by third
parties, is sued or threatened with an infringement suit in any country as a
result of activities that concern the LICENSED INTELLECTUAL PROPERTY.


 


10.2         a)             LICENSEE shall have the sole obligation to
defend the LICENSED INTELLECTUAL PROPERTY against infringement or interference
by third parties. This


 


10





















 


obligation includes bringing any legal action
for infringement and defending any counter claim of invalidity or action of a
third party for declaratory judgment for non-infringement or non-interference.
LICENSEE may settle such suits solely in its own name and solely at its own
expense and through counsel of its own selection. LICENSEE shall bear the
expense of such legal actions and shall obtain all the benefits from it. Any
recoveries with respect to such patent infringement shall be divided as
follows: (i) LICENSEE shall recover its expenses; (ii) YALE shall receive a
royalty percentage as specified in Article 5; and (iii) LICENSEE shall retain
any remaining amount as revenue.


 


b)            Except for providing reasonable assistance,
at the request and expense of LICENSEE, YALE shall have no obligation regarding
the legal actions described in Article 10.2 unless required to participate by
law. However, YALE shall have the right to participate in any such action
through its own counsel and at its own expense.


 


c)             In the event LICENSEE fails to initiate or
participate in the actions described in Article 10.2(a) within six (6) months
of written notice from YALE. YALE shall have the right to initiate such legal
action to uphold the LICENSED INTELLECTUAL PROPERTY and, provided YALE
initiates such action in such country, YALE may terminate the LICENSEE’s
license in such country.


 


10.3         In the event LICENSEE is permanently enjoined
from exercising its license right granted under this Agreement pursuant to an
infringement action brought by a third party, or if both LICENSEE and YALE
elect not to undertake the defense or settlement of a suit alleging
infringement for a period of six (6) months from notice of such suit, then the
LICENSEE shall have the right to terminate this Agreement in the country where
the suit was filed with respect to the licensed patent following thirty (30)
days written notice to YALE and in accordance with the terms of Article 12.


 


ARTICLE   11   USE
OF YALE’s AND LICENSEE’S NAMES


 


11.1         LICENSEE shall not use the name “Yale” or “Yale
University”, nor any adaptation of it, nor the names of any of its employees,
for any purpose without prior written consent obtained from YALE or said
employee in each instance, except that LICENSEE may state that it is licensed
by YALE under one or more of the patents and/or applications comprising the
LICENSED INTELLECTUAL PROPERTY. YALE shall not use the name of “Schering” or “Berlex”
nor any adaptation of such names, nor the names of any of its employees, for
any purpose without prior written consent obtained from LICENSEE or said
employee in each instance.


 


ARTICLE   12   TERMINATION


 


12.1         Upon termination of this Agreement, for
material breach by LICENSEE as determined by a final judgement of a court of
competent jurisdiction all rights and licenses granted to LICENSEE under the
terms of this Agreement are terminated and YALE has the option to terminate any
sublicense granted by LICENSEE. Upon such termination LICENSEE shall cease to
manufacture LICENSED PRODUCTS and within sixty (60) days of the effective date
of termination LICENSEE shall return to YALE:


 


a)             the last report, and


 


b)            all payments prorated to the date of
termination.


 


11





















 


LICENSEE shall have the right to sell all LICENSED PRODUCT in inventory
at the time of termination. All such sales of LICENSED PRODUCT shall be subject
to the terms of this Agreement, as in effect prior to termination.


 


12.2         Termination of this Agreement shall not
affect any rights or obligations accrued prior to the effective date of such
termination and specifically LICENSEE’s obligation to pay all royalties and other
payments specified by Article 5. Articles 1, and 7, the preservation and
inspection obligations of Article 8, Article 11, and the indemnification obligations
of Article 13 all survive any such termination.


 


12.3         The rights provided in this Article 12 shall
be in addition and without prejudice to any other rights which the parties may
have with respect to any breach or violations of the provisions of this
Agreement.


 


12.4         Waiver by either Party of one or more
defaults or breaches shall not deprive such Party of the right to terminate
because of any subsequent default or breach.


 


12.5         YALE may terminate this Agreement, and such
termination shall be automatically effective at the end of sixty (60) days
written notice or the period specified below, in the event LICENSEE:


 


a)             fails to make any payment whatsoever due and
payable pursuant to this Agreement unless LICENSEE shall make all such payments
within said sixty (60) day period; provided that (i)YALE has sent
LICENSEE a prior written notice that such payment is due and payable, and
(ii)YALE intends to exercise its right to terminate pursuant to this Section
12.5, and (iii) LICENSEE fails to cure within thirty (30) days of the end of
such sixty (60) day period or


 


b)            shall cease to carry on its business, then
this Agreement also terminates automatically without any notice to LICENSEE, or


 


c)             fails to have adequate insurance as described
in Article 13, or


 


d)            commits a material breach as determined by a
final judgement of a court of competent jurisdiction


 


12.6          LICENSEE shall have the right to terminate
this Agreement:


 


a)             at any time on six (6) months notice to YALE
provided LICENSEE is not in breach and upon payment of all amounts due YALE
throughout the effective date of termination. Upon written notice from YALE,
LlCENSEE shall provide YALE with any and all data prepared in development of
the LICENSED PRODUCTS or METHODS.


 


ARTICLE   13   INDEMNIFICATION;
INSURANCE; NO WARRANTIES


 


13.1         LICENSEE shall defend, indemnify and hold
harmless YALE, its, trustees, directors, officers, employees, and agents
against any and all claims, demands, damages, losses and expenses of any
nature, including legal expenses and attorney’s fees arising out of:


 


a)             the death, personal injury, or illness of any
person or out of damage to any property resulting from


 


b)            the production, manufacture, sale, use,
lease, or other disposition or consumption or advertisement of the LICENSED
PRODUCTS by LICENSEE or other transferees; or in connection with


 


12





















 


c)             any
statement, representation or warranty of LICENSEE or other transferees with respect to the LICENSED
PRODUCTS.


 


13.2         LICENSEE is self insured and/or maintains
third party liability insurance adequate to cover liability claims that arise
out of manufacture, use or sale of LICENSED PRODUCTS.


 


13.3         a)             YALE makes NO REPRESENTATIONS or WARRANTIES
that any LICENSED INTELLECTUAL PROPERTY claims, issued or pending, are valid,
or that the manufacture, use, sale or other disposal of the LICENSED PRODUCTS
does NOT infringe upon any patent or other rights NOT vested in YALE.


 


b)            YALE disclaims all warranties whatsoever with
respect to the LICENSED INTELLECTUAL PROPERTY and the LICENSED PRODUCTS either
express or implied, including, but not limited to warranties or merchantability
or fitness for a particular purpose. LICENSEE shall make no statements,
representation or warranties whatsoever to any third parties which are
inconsistent with such disclaimer by YALE.


 


ARTICLE   14   NOTICES,
PAYMENTS


 


14.1         Any payment, notice or other communication
required by this Agreement shall be sent by Registered or Certified first class
U.S. Mail, postage prepaid, and shall be deemed delivered if sent to the
following addresses or to such other address as such Party shall designate by
written notice to the other Party:


 


	
  FOR YALE:

  	
   

  	
  FOR LICENSEE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Director

  	
   

  	
  Schering
  Aktiengesellschaft

  
	
  YALE
  UNIVERSITY

  	
   

  	
  13342
  Berlin

  
	
  Office
  of Cooperative Research

  	
   

  	
  Germany

  
	
  P.O.
  Box 208366

  	
   

  	
  Attention:
  Legal Department

  
	
  155
  Whitney Avenue, Room 210

  	
   

  	
   

  
	
  New Haven, CT 06520-8336

  	
   

  	
  Berlex
  Biosciences

  
	
   

  	
   

  	
  15049
  San Pablo Avenue

  
	
   

  	
   

  	
  Richmond,
  CA 94804

  
	
   

  	
   

  	
  Attention:
  Legal Department

  



 


13





















 


ARTICLE   15  
LAWS AND REGULATIONS


 


15.1         This Agreement shall be governed by and in
accordance with the laws of the state of Connecticut except where the federal
laws of the United States are applicable and have precedence.


 


15.2         LICENSEE shall comply with all foreign and
United States federal, state, and local laws, regulations, rules and orders
applicable to the testing, production, transportation, packaging, labeling,
export, sale and use of the LICENSED PRODUCTS. In particular, LICENSEE shall be
responsible for assuring compliance with all U.S. export laws and regulations
applicable to this license and LICENSEE’s activities under this Agreement.


 


ARTICLE   16   MISCELLANEOUS


 


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


 


16.2         Entire
Agreement.  This Agreement constitutes
the entire agreement of the parties relating to the LICENSED INTELLECTUAL
PROPERTY, and all prior representations and understandings are superseded by
this Agreement.


 


16.3         Severability.  The provisions of this Agreement shall be
deemed separable. If any part of this Agreement is rendered void, invalid, or
unenforceable, such shall not affect the validity or enforceability of the
remainder of this Agreement unless the part or parts which are void, invalid or
unenforceable shall substantially impair the value of the entire Agreement as
to either Party.


 


16.4         Headings.  Paragraph headings are inserted for
convenience of reference only and do not form a part of this Agreement.


 


16.5         No Third Party
Beneficiaries.  No Person not a party to
this Agreement, including any employee of any Party to this Agreement, shall
have or acquire any rights by reason of this Agreement. Nothing contained in
this Agreement shall be deemed to constitute the parties partners with each
other or any third party.


 


16.6         Amendment;
Assignment. This Agreement may not be amended except by written agreement
executed by each of the parties, and shall not be assigned by LICENSEE except
with the written consent of YALE; provided however, LICENSEE may perform some
or all of its obligations under this Agreement through Affiliates, provided
however, LICENSEE shall remain responsible for and be a guarantor of the
performance by its Affiliates and shall cause its Affiliates to comply with the
provisions of this Agreement in connection with such performance. LICENSEE
shall not permit any of its AFFILIATES to commit any act (including any act of
omission) that LICENSEE is prohibited hereunder from committing directly.


 


14





















 


16.7         Surviving Rights. The
rights and obligations set forth in this Agreement shall extend beyond the term
or termination of the Agreement only to the extent expressly provided for
herein, or the extent that the survival of such rights or obligations are
necessary to permit their complete fulfillment or dischange.


 


IN WITNESS to their Agreement the parties have caused this Agreement to
be executed in duplicate originals by their duly authorized representatives.


 


	
  Yale University

  	
  Schering AG

  
	
  /s/ Jon Soderstrom

  	
   

  	
   

  
	
  Jon Soderstrom

  	
   

  	
   

  
	
  Managing Director,
  [ILLEGIBLE]

  	
   

  	
   

  
	
   

  	
  Name

  	
  /s/ [ILLEGIBLE]

  
	
  Cooperative Research 

  	
  Title

  	
   

  
	
  Date

  	
  6/29/00

  	
   

  	
  Date

  	
    09/08/2000

  
	
   

  	
   

  	
   

  
	
   

  	
  Name

  	
  /s/ [ILLEGIBLE]

  
	
   

  	
  Title

  	
   

  
	
   

  	
  Date

  	
    09/08/2000

  
							



 


15