Document:

exv10w14

 

Exhibit 10.14

DATED May 19, 2004

 

IMPERIAL COLLEGE INNOVATIONS LIMITED

And

IMPERIAL COLLEGE OF SCIENCE AND TECHNOLOGY

And

CYTRX CORPORATION

 

PATENT LICENCE AGREEMENT

 

Birmingham London Brussels

Tel +44 (0)870 903 1000  Fax +44 (0)870 904 1099  mail@wragge.com  www.wragge.com

 

 

THIS AGREEMENT is made on May 19, 2004

BETWEEN:

	(1)	 	IMPERIAL COLLEGE INNOVATIONS LIMITED (Registered in England No 2060639) whose registered
office is at Sherfield Building, Imperial College, London SW7 2AZ (“ICIL”), and
	 
	(2)	 	IMPERIAL COLLEGE OF SCIENCE, TECHNOLOGY & MEDICINE a college incorporated by royal charter,
of Exhibition Road, London SW7 2AZ (“Imperial”); and
	 
	(3)	 	CYTRX CORPORATION, a company established under the laws of the State of Delaware, U.S.A. and
having its principal place of business at 11726 San Vicente Boulevard, Suite 650, Los Angeles,
California 90049 USA (“CytRx”).

BACKGROUND:

	(a)	 	Professor Parker is a full-time employee of Imperial, engaged by Imperial to carry out
research. In the course of his normal employment duties for Imperial Professor Parker made
inventions and developed technology, materials and know-how relating to the potential role of
RIP140 in obesity and anorexia including without limitation inventions in respect of which a
patent application has been made (defined below as the “Patent Application”) and consequently
Professor Parker’s share in the Licensed Patents belongs to Imperial pursuant to Section 39 of
the Patents Act 1977. In order to further the clinical applications and commercial
exploitation of the above technology, Imperial has assigned to Innovations all its rights,
title and interest in the Patent Application and Materials under an assignment agreement dated
14th May 2004. Accordingly ICIL is the sole legal owner of the Patent Application and the
Materials.

 

 

	(b)	 	CytRx is a biopharmaceutical company dedicated to the commercialisation of high value human
therapeutics, including those for the treatment of obesity and diabetes.
	 
	(c)	 	CytRx wishes to obtain a licence to the Materials in the Field and the Licensed Patents (as
defined below).
	 
	(d)	 	ICIL is willing to grant a licence to CytRx under the conditions set out in this Agreement
including the payment of royalties and milestones.

In consideration of the mutual covenants and undertakings set out below, THE PARTIES AGREE as
follows:

	1	 	Definitions

	1.1	 	In this Agreement, the terms defined in this Clause shall have the meanings specified below:
	 
	 	 	“Affiliate” means any company, partnership or other entity which directly or indirectly
Controls, is Controlled by or is under common Control with any other entity.
	 
	 	 	“Agreement” means this agreement and any and all Schedules, appendices and other addenda to
it as may be amended from time to time in accordance with the provisions of this agreement.
	 
	 	 	“Biological Materials” means tangible biological or biochemical materials that are necessary
for the effective exercise of the Licensed Patents (e.g., reagents, cell lines, cDNAs, DNA
constructs, animal models), to the extent that Imperial is free and able to grant access
and commercialisation rights to such materials, which materials are set out in Schedule 2.
Schedule 2 shall be periodically amended by mutual consent to include any additional
Biological Materials that Imperial may furnish to CytRx.
	 
	 	 	“Business Day” means a day (other than a Saturday or Sunday) on which the banks are
ordinarily open for business in both the City of London and the City of Los Angeles.

 

 

	 	 	“Combination Product” means a product (for which Marketing Authorisation has been granted)
sold in the form of a combination product containing a Licensed Product as an active
component and one or more Other Elements. As used herein, “Other Elements” shall mean
either one or more active components which are not Licensed Products or one or more other
components (such as a delivery device) which are not Licensed Products.
	 
	 	 	“Commencement Date” means the date of this Agreement.
	 
	 	 	“Competent Authority” means any national or local agency, authority, department,
inspectorate, minister, ministry official, parliament or public or statutory person or other
entity (whether autonomous or not) of any government of any country having jurisdiction or
authority over either any of the activities and functions contemplated or described by this
Agreement or the Parties including the European Commission, the Court of First Instance and
the European Court of Justice.
	 
	 	 	“Confidential Information” means Know How and trade secrets or confidential information
relating to the business affairs or finances of the other Party supplied or otherwise made
available to them or coming into their possession in relation to the performance of this
Agreement, irrespective of form.
	 
	 	 	“Control” means either (a) in the case of (i) corporate entities, direct or indirect
ownership of at least fifty percent (50 %) of the stock or shares entitled to vote for the
election of director, (ii) non-corporate entities, direct or indirect ownership of at least
fifty percent (50 %) of the equity interest with the power to direct the management and
policies of such noncorporate entities or (b) with respect to any item of or right under the
Licensed Patents, the possession of (whether by ownership or licence, other than pursuant
to this Agreement) or the ability of a Party to grant access to, or a licence or sublicence
of, such item or right as provided for herein without violating the terms of any agreement
or other arrangement with any Third Party existing at the time such Party would be required
hereunder to grant the other Party such access or licence or sublicence. “Controls” and
“Controlled by” shall be construed accordingly.
	 
	 	 	“CytRx Foreground Improvements” has the meaning set out in Clause 7.1.

 

 

	 	 	“CytRx Materials Improvements” has the meaning set out in Clause 8.3.
	 
	 	 	“CytRx Sublicensee” means any Third Party that acquires rights to the use of the Materials
and under the Licensed Patents through CytRx or its Affiliates by virtue of this Agreement.
	 
	 	 	“Diagnostic Product” means any preparation in the form of a device, compound, kit or service
with utility in the diagnosis, prognosis, prediction or management of obesity, anorexia or
diabetes in humans which contains or comprises:

	 	(a)	 	either in its entirety or in shortened form the RIP140 gene or RIP140 gene
product howsoever modified including without limitation nucleotides, oligonucleotides,
nucleic acid vectors, peptides, polypeptides, proteins etc.; or
	 
	 	(b)	 	an agent that binds to the RIP140 gene or an RIP140 gene product (excluding the
RIP140 protein or any subunit thereof) with the purpose of enhancing, interfering with,
silencing, suppressing or modulating the expression thereof such agents including
without limitation complementary sequences, ligands, cDNA, mRNA, tRNA, antibodies,
antibody fragments, peptides, fusion proteins, mimetics, aptamers, antisense (or other
nucleic acid based gene or gene product modulators), ribozymes, molecular imprinted
polymers, RNAi, microRNA, dsRNA, siRNA, shRNA, vaccines, immunotherapeutics and gene
therapy products; or
	 
	 	(c)	 	an agent (including without limitation small molecule entities) that has a
mechanism of action through interaction with or binding to the RIP140 protein (or a
subunit thereof); and

	 	 	which have been identified by CytRx, a CytRx Affiliate or a CytRx Sublicensee as a direct
result of (i) the use of the Materials (or the use of an Improvement to the Materials
licensed to CytRx under Clauses 8.1 and/or 8.2) or (ii) an activity that falls within a
Valid Claim.

 

 

	 	 	“Directive” means any present or future directive, regulation, requirement, instruction,
direction or rule of any Competent Authority including any amendment, extension or
replacement thereof then in force.
	 
	 	 	“Disclosing Party” means a Party which discloses Confidential Information to another Party.
	 
	 	 	“Documents” means any graphic, written or computer readable material on which Know How can
be permanently stored.
	 
	 	 	“Exploit” means to develop, make, have made, use, have used, sell, have sold, or import, or
have imported and “Exploitation” shall be construed accordingly.
	 
	 	 	“FDA” means the United States Food and Drug Administration, the equivalent Competent
Authority in any country of the Territory or any successor bodies thereto.
	 
	 	 	“Field” means the in vitro or in vivo screening of compounds, molecules or compositions of
matter acting against or as agonists or antagonists of RIP140 to select compounds, molecules
or compositions of matter which may be useful in the treatment or prevention of obesity,
anorexia or diabetes.
	 
	 	 	“First Commercial Sale” means in respect of a Licensed Product the first commercial sale of
any such product by CytRx, a CytRx Affiliate or a CytRx Sublicensee in any country after
grant of a Marketing Authorisation.
	 
	 	 	“Force Majeure” means any event outside the reasonable control of either Party affecting its
ability to perform any of its obligations (other than payment) under this Agreement,
including Act of God, fire, flood, lightning, war, revolution, act of terrorism, riot or
civil commotion, but excluding strikes, lock-outs or other industrial action, whether of the
affected Party’s own employees or others, failure of supplies of power, fuel, transport,
equipment, raw materials or other goods or services.
	 
	 	 	“GAAP” means United States generally accepted accounting principles, consistently
applied.

 

 

	 	 	“Improvement” means any improvement or enhancement or modification, whether patentable or
otherwise.
	 
	 	 	“IND” means investigational new drug application filed with, and accepted by, the FDA prior
to Initiation of clinical trials in humans in the USA, or any comparable application filed
with the Regulatory Authority of a country or group of countries other than the U.S.A. or
any successor body thereto prior to Initiation of clinical trials in humans in that country
or in that group of countries.
	 
	 	 	“Initiation” of a clinical trial shall mean the enrolment of the first human subject into
the trial.
	 
	 	 	“Investigation Authorisation Application” means an IND, an IDE or any other equivalent
application not covered by an IND or IDE required by a Competent Authority anywhere in the
Territory.
	 
	 	 	“Know-How” means unpatented technical and other information which is not in the public
domain. Know-How includes Documents. The fact that an item is known to the public shall
not be taken to exclude the possibility that a compilation including the item, and/or a
development relating to the item, is (and remains) not known to the public. Know-How
includes any rights including copyright, database or design rights protecting such Know-How.
	 
	 	 	“Licensed Patents” means (a) the Patent Application listed in Schedule 1 which may be
updated from time to time as applicable and as mutually agreed between the Parties, and any
non-provisional applications claiming priority thereto; (b) any patents issued from any such
applications described in (a) anywhere in the world; (c) any divisions, registrations,
confirmations, reissues, re-examinations, extensions, renewals, continuations,
continuations-in-part, revalidations, additions, substitutions, or renewals entitled to
claim priority to any such patent applications or patents described in (a); and (d) all
national, regional and foreign counterparts or other forms of protection, including
supplementary protection certificates, claiming priority from the patents or patent
applications described in (a) to (c) above.

 

 

	 	 	“Licensed Product” means any preparation for the treatment or prevention of obesity,
anorexia or diabetes in humans that:

	 	(d)	 	incorporates either in its entirety or in shortened form the RIP140 gene or
RIP140 gene product howsoever modified including without limitation nucleotides,
oligonucleotides, nucleic acid vectors, peptides, polypeptides, proteins etc.; or
	 
	 	(e)	 	is an agent that binds to the RIP140 gene or an RIP140 gene product (excluding
the RIP140 protein or any subunit thereof) with the purpose of enhancing, interfering
with, silencing, suppressing or modulating the expression thereof such agents including
without limitation complementary sequences, ligands, cDNA, mRNA, tRNA, antibodies,
antibody fragments, peptides, fusion proteins, mimetics, aptamers, antisense (or other
nucleic acid based gene or gene product modulators), ribozymes, molecular imprinted
polymers, RNAi, microRNA, dsRNA, siRNA, shRNA, vaccines, immunotherapeutics and gene
therapy products; or
	 
	 	(f)	 	is an agent (including without limitation small molecule entities) that has a
mechanism of action through interaction with or binding to the RIP140 protein (or a
subunit thereof); and

	 	 	which have been identified by CytRx, a CytRx Affiliate or a CytRx Sublicensee as a direct
result of (i) the use of the Materials (or the use of an Improvement to the Materials
licensed to CytRx under Clauses 8.1 and/or 8.2) or (ii) an activity that falls within a
Valid Claim.
	 
	 	 	“Licence” has the meaning set out in Clause 2.1.
	 
	 	 	“Licensed Services” means services using the Licensed Patents, Materials or Licensed
Products (for example a screening service against RIP140, where such service is provided to
a Third Party).
	 
	 	 	“Major Market” means any one of the following: (i) the United States of America, (ii) the
European Union, (iii) Japan, (iv) Canada or (v) Australia.

 

 

	 	 	“Marketing Authorisation” means any approval (including all applicable pricing and
governmental reimbursement approvals in those countries where such approvals are necessary
to sell medicines to a substantial segment of that country’s market for the medicine that is
the subject of the marketing authorisation) required from the FDA or relevant Competent
Authority to market and sell a Licensed Product in a particular country.
	 
	 	 	“Marketing Authorisation Application” means an application for a Marketing Authorisation
including but not limited to a New Drug Application or a Biologics License Application as
required by the FDA or its foreign equivalents.
	 
	 	 	“Materials” means Biological Materials and Related Technology.
	 
	 	 	“Net Sales Value” means in relation to any Licensed Product, the gross invoice price of
Licensed Products sold, leased or disposed of by or on behalf of CytRx (including by any
CytRx Affiliate or CytRx Sublicensee) to independent third parties in arm’s length
transactions exclusively for money or where a transaction is not at arm’s length the price
which would have been invoiced if the transaction had been at arms length less the following
deductions applicable to the Licensed Product for:

	 	(a)	 	transportation charges and insurance charges paid by or on behalf of CytRx (or
any CytRx Affiliate or CytRx Sublicensee);
	 
	 	(b)	 	sales and excise taxes or customs duties paid by or on behalf of CytRx (or any
CytRx Affiliate or CytRx Sublicensee) or any other governmental charges imposed upon
the sale of the Licensed Product and paid by or on behalf of CytRx (or any CytRx
Affiliate or CytRx Sublicensee) (excluding income, corporation or similar taxes);
	 
	 	(c)	 	fees paid to distributors, consignees or agents in connection with the sale of
the Licensed Product;
	 
	 	(d)	 	rebates and premiums actually granted or allowed in connection with the sale of
a Licensed Product;

 

 

	 	(e)	 	allowances or credits actually given to customers on account of governmental
requirements, price differences, rejection, outdating, returns or recalls of the
Licensed Product;
	 
	 	(f)	 	quantity discounts, cash discounts or chargebacks actually granted in
connection with the sale of the Licensed Product; and
	 
	 	(g)	 	provisions for price reductions actually given after any sale of a product, for
example but not by way of limitation for late delivery.

If an invoice in respect of the sale or lease of Licensed Products has not been paid within
four months of the due date for payment of the invoice then ICIL shall credit (against
future royalties, milestones and other amounts payable to ICIL) CytRx in respect of any
royalties paid on such invoice (a “Bad Debt Credit”). The Bad Debt Credit will be given in
respect of the Quarter in which the date four months from the due date for payment of the
invoice falls. Should CytRx subsequently be paid in relation to an invoice in respect of
which a Bad Debt Credit has been given then royalties on such invoice will again become
payable by CytRx. The royalties will be payable in respect of the Quarter in which the
payment is received.

No royalties shall be payable by CytRx to ICIL in relation to any disposals of Licensed
Products among CytRx and any of CytRx’s Affiliates (or any CytRx Sublicensee or any
Affiliates of such CytRx Sublicensee) provided that the recipient does not consume or use
the Licensed Products save for testing, quality control and research and development
purposes where such testing, quality control and research and development relates to the
testing, quality control and research and development of such Licensed Products. No
royalties shall be paid on any sales or donations of Licensed Products by CytRx (or any
CytRx Affiliate or CytRx Sublicensee) at or below CytRx’s (or CytRx Affiliate’s or CytRx
Sublicensee’s) fully loaded cost for the Licensed Products as part of any government or
other charitable assistance program.

In the event that a Licensed Product is sold as part of a Combination Product in any
country, the Net Sales Value of the Licensed Product in that country for the purposes of

 

 

determining royalty payments shall be determined by multiplying the Net Sales Value of the
Combination Product in that country by the fraction (A/A+B) where A is the average sale
price in the relevant Quarter (as hereinafter defined) of the Licensed Product in that
country when sold separately in finished form and B is the average sale price in the
relevant Quarter of the Other Element in that country sold separately in finished form.

In the event that the average sale price of the Licensed Product in that country can be
determined but the average sale price of the Other Element in that country cannot be
determined, the Net Sales Value of the Licensed Product in that country for the purposes of
determining royalty payments shall be calculated by multiplying the Net Sales Value of the
Combination Product in that country by the fraction (C/D) where C is the selling Party’s
average sales price in the relevant Quarter of the Licensed Product and D is the average
selling price in the relevant Quarter of the Combination Product in that country.

If the average sale price of the Other Element in that Quarter can be determined but the
average price of the Licensed Product in that country cannot be determined, Net Sales Value
of the Combination Product in that country for the purposes of determining royalty payments
shall be calculated by multiplying the Net Sales Value of the Combination Product in that
country by the following formula: one (1) minus E/D where E is the average selling price in
the relevant Quarter of the Other Element in that country and D is the average selling price
of the Combination Product in that country in the relevant Quarter.

If the average sale price of both the Product and the Other Element cannot be determined,
the Net Sales Value of Product shall be reasonably agreed upon by the Parties and if the
Parties fail to agree on a calculation method within thirty (30) days of commencing
negotiations the matter shall be referred to Expert’s Decision Procedure in Schedule 3.

“Non-Commercially Sensitive” means that CytRx in its sole discretion has determined that (a)
no information relating to the CytRx Foreground Improvement is confidential and (b) it does
not wish to Exploit such an Improvement itself or by way of the grant of commercial
licences.

 

 

“Non-Severable Improvement” means an Improvement to the technology disclosed in the Licensed
Patents that cannot be Exploited without infringing a Valid Claim of the Licensed Patents.

“Option Notice” has the meaning set out in Clause 15.1.

“Party” means ICIL, Imperial or CytRx.

“Patent Application” means the PCT application PCT/2004/000413 filed on 3rd
February 2004 and claiming priority from UK priority patent application number 0302446.0
filed 3rd February 2003 entitled “Screening for Modulators of Fat Storage”.

“Patenting Territories” means USA, Canada, Australia, Europe (EPO designating all states),
Japan, New Zealand and Mexico.

“Patent Rights” – shall mean patent applications and patents, author certificates, inventor
certificates, utility certificates, improvement patents and models and certificates of
addition and all foreign counterparts thereof, including any divisional applications and
patents, refilings, renewals, continuations, continuations-in-part, patents of addition,
extensions, reissues, substitutions, confirmations, registrations, revalidation and
additions of or to any of them, as well as any supplementary protection certificates and
equivalent protection rights in respect of any of them.

“Phase I Clinical Trial” means the first administration of a Licensed Product in human
subjects that would satisfy the requirements of 21 CFR 312.21(a) or its non-U.S.A.
equivalent.

“Phase II Clinical Trial” means a human clinical trial in any country that is intended to
initially evaluate the effectiveness of a Licensed Product in the targeted patient
population for a particular indication or indications in human subjects with the disease or
indication under study that would satisfy the requirements of 21 CFR 312.21(b) or its
non-U.S.A. equivalent.

 

 

“Phase III Clinical Trial” means a controlled human clinical trial in any country involving
patients with the disease or condition of interest the results of which could be used to
establish safety and efficacy of a Licensed Product as a basis for a Marketing Authorisation
that would satisfy the requirements of U.S. 21 CFR 312.21(c) or its non-U.S.A. equivalent.

“Quarter” means each period of three (3) months ending on March 31, June 30, September
30, or December 31 and “Quarterly” shall be construed accordingly.

“Recipient Party” means a Party that receives Confidential Information from another Party.

“Related Technology” means Know-How, technical information, research and development
information, test results, and data necessary for the effective exercise of the Licensed
Patents by the Licensee in order to identify and/or generate and/or develop Licensed
Products and/or Diagnostic Products which are Controlled by ICIL and have been developed by
the Research Group .

“Research Group” means Professor Malcolm Parker and/or his associates in their laboratories
at the Institute of Reproductive and Developmental Biology at Imperial.

“RIP140” means (a) nuclear receptor interacting protein 140 also known as Nrip1 (nuclear
receptor interacting protein 1), and /or (b) a target protein for nuclear receptor
interacting protein 140 and/or (c) a complex of nuclear receptor interacting protein 140 and
its target protein(s).

“Royalty” means the sums payable by CytRx to ICIL based on Net Sales Value of Licensed
Products as set out in Clauses 4.11 to 4.13.

“Severable Improvement” means an Improvement to the technology disclosed in the Licensed
Patents that can be Exploited without infringing a Valid Claim of the Licensed Patents.

“Signature Fee” has the meaning set out in Clause 4.1.2.

 

 

“Sublicensing Revenue” means milestone payments and upfront fees that CytRx receives from a
CytRx Sublicensee in consideration of a sublicence of the Licence (in whatever form, for
example but not limited to cash, warrants, loans, debentures, swaps etc.), but excluding the
following payments: (a) royalties, (b) payments made in consideration for the issuance of
equity or debt securities of CytRx at fair market value (taking into account customary
discounts for restricted securities), and (c) payments specifically committed to the
development of Licensed Products, Diagnostic Products or Licensed Services on behalf, or for
the benefit of a Sublicensee subject to such payments and their application to such
development being available for audit under clause 5.7 .

“Third Party” means any person or entity other than ICIL, Imperial or CytRx and their
respective Affiliates.

“U.S.A.” means the United States of America and its territories, possessions and
commonwealths.

“Valid Claim” means a claim of an issued and unexpired patent included within the Licensed
Patents which has not been held permanently revoked, unenforceable or invalid by a decision
of a court or other governmental agency of competent jurisdiction unappealed within the time
allowed for appeal, and which has not been admitted to be invalid or unenforceable through
reissue or disclaimer or otherwise.

“Year” means the period of twelve months commencing on the Commencement Date and on each
successive anniversary of the Commencement Date and ending on the day before each successive
anniversary of the Commencement Date.

	1.2	 	The headings to clauses are inserted for convenience only and shall not affect the
interpretation or construction of this Agreement.
	 
	1.3	 	Words imparting the singular shall include the plural and vice versa. References to persons
include an individual, company, corporation, firm or partnership.

 

 

	1.4	 	The words and phrases “other”, “including” and “in particular” shall not limit the generality
of any preceding words or be construed as being limited to the same class as any preceding
words where a wider construction is possible.
	 
	1.5	 	References to any statute or statutory provisions of the United Kingdom, the USA or the
European Union, shall include (i) any subordinate legislation made under it, (ii) any
provision which it has superseded or re-enacted (whether with or without modification), and
(iii) any provision which subsequently supersedes it or re-enacts it (whether with or without
modification).
	 
	2	 	Grant of Licence 
	 
	2.1	 	ICIL grants to CytRx and, and for such time as they hold that status, its Affiliates:

	 	2.1.1	 	a worldwide, exclusive licence, with the right to grant sublicences, under the
Licensed Patents to do all acts which would otherwise infringe the Licensed Patents
including, without limitation, the right to Exploit the Licensed Products and
Diagnostic Products and provide Licensed Services or otherwise do all acts which would
otherwise infringe a Valid Claim of the Licensed Patents; and
	 
	 	2.1.2	 	a worldwide, exclusive license, with the right to grant sublicenses in
connection with a grant of sublicences of the Licensed Patents, to use the Biological
Materials in the Field, including, without limitation, the right to Exploit the
Licensed Products and Diagnostic Products and provide Licensed Services; and
	 
	 	2.1.3	 	a worldwide, non-exclusive license, with the right to grant sublicenses in
connection with a grant of sublicences of the Licensed Patents, to use the Related
Technology in the Field, including, without limitation, the right to Exploit the
Licensed Products and Diagnostic Products and provide Licensed Services

(all the licences in this Clause 2.1 being the “Licence”).

	2.2	 	CytRx and/or its Affiliates grants to ICIL and Imperial an irrevocable, royalty-free,
non-assignable (other than to successors in business), non-sublicensable, non-exclusive

 

 

	 	 	license for (a) ICIL and Imperial and every employee, student, agent and appointee of
Imperial to use the Licensed Patents, Materials and Related Technology solely for internal
non-commercial academic research and teaching purposes and (b) for ICIL and Imperial to make
the Licensed Patents, Materials and Related Technology available to other academic
institutions solely for non-commercial research and teaching purposes under written material
transfer agreements that adequately protect any intellectual property rights created through
such research; provided that in the case of both (a) and (b) and subject to Clause
2.3, ICIL and/or Imperial shall not jeopardize the confidential nature of any Know-How.
Imperial shall have the right to use the Licensed Patents, Materials and Related Technology
as enabling technology in non-commercial research projects, including projects which benefit
from external funding.

	2.3	 	If Imperial’s scientific research activities conducted by the Research Group for
non-commercial purposes in relation to the Materials in the Field or Licensed Patents or
Improvements licensed to Imperial under Clause 7.2 where such Improvements have been disclosed
to the Research Group at Imperial produce information that Imperial wishes to present or
publish within twenty four (24) months of the date of this Agreement, then the proposed text
shall be disclosed to CytRx in advance of its submission for presentation or publication.
CytRx shall have thirty (30) Business Days to review the text during which period the
information may not be presented or published. CytRx may suggest amendments or omissions to be
made to any proposed text, which Imperial shall reasonably accept, provided that such
amendments are reasonably necessary to prevent any commercial damage to CytRx except where
failure to publish would materially prevent the advancement of medical science;

	2.4	 	If Imperial’s scientific research activities conducted by the Research Group for
non-commercial purposes in relation to the:

	 	2.4.1	 	Materials within the Field,
	 
	 	2.4.2	 	Licensed Patents within the Field; or

 

 

	 	2.4.3	 	Improvements within the Field licensed to Imperial under Clause 7.2 where such
Improvements have been disclosed to the Research Group at Imperial

produce information that Imperial wishes to present or publish after twenty four (24) months
of the date of this Agreement, then Imperial shall use reasonable efforts to ensure that the
proposed text shall be disclosed to CytRx at least thirty (30) days in advance of its
submission for presentation or publication.

	2.5	 	Sub-licensing.
	 
	 	 	CytRx shall be entitled to grant sub-licences of its rights under the terms and conditions
of Clause 2.1 of this Agreement to any person, provided that:

	 	(a)	 	the sub-licence shall include performance and financial obligations on the
sub-licensee which are at least equivalent to the obligations on CytRx under this
Agreement;
	 
	 	(b)	 	the sub-licence shall continue following the termination of this Agreement for
any reason as a licence between ICIL and the sub-licensee pursuant to clause 14.5.2,
provided that if the royalties and other consideration provided for in the sub-licence
are less that that provided for in this Agreement such royalties or other consideration
shall be increased to be the same as provided for in this Agreement and further
provided that the sub-licensee agrees in writing to such new financial terms and to the
substitution of CytRx by ICIL;
	 
	 	(c)	 	within thirty (30) days of the grant of any sub-licence CytRx shall provide to
ICIL a summary of the material terms of the sub-licence and a written agreement from
the sub-licensee to be bound by the provisions of this Agreement to the extent
applicable;
	 
	 	(d)	 	except in the case of the continuation of the licence pursuant to Clause 2.5(b)
CytRx shall be responsible for any breach of the sub-licence by the sub-licensee, as if
the breach had been that of CytRx under this

 

 

	 	 	 	Agreement, and CytRx shall indemnify ICIL against any loss, damages, costs,
claims or expenses which are awarded against or suffered by ICIL as a result
of any such breach by the sub-licensee; and
	 
	 	(e)	 	no sub-licence shall carry any right to sub-sub-licence all of the rights
granted to CytRx under this Agreement without the consent of ICIL (such consent not to
be unreasonably withheld) save that a sub-licence can be sub-licensed for the purposes
of manufacture or co-marketing without the consent of ICIL.

	2.6	 	CytRx shall use commercially reasonable endeavours to ensure that all of the Licensed
Products marketed by it and its sub-licensees are of satisfactory quality and comply with all
material applicable laws in each country. CytRx shall maintain, or cause a CytRx Sublicensee
to maintain, adequate product liability insurance from the date of first commercial sale of a
Licensed Product for the term of this Agreement.
	 
	2.7	 	CytRx or any CytRx Sublicensees shall be exclusively responsible for the technical and
commercial development and manufacture of Licensed Products and for incorporating any
modifications or developments thereto that may be necessary or desirable and for all Licensed
Products sold or supplied, and accordingly CytRx shall indemnify ICIL in the terms of Clause
12.7.

	3	 	Materials
	 
	3.1	 	Within a reasonable time after the Commencement Date Imperial will, at the cost of CytRx, and
in accordance with shipping instructions from CytRx, deliver sufficient Materials as set out
in Schedule 2 to CytRx at its laboratories in Worcester, Massachusetts, U.S.A. to allow CytRx
to develop RIP140 screening assays and functional assays in their own laboratories.
	 
	4	 	Consideration
	 
	4.1	 	In consideration of the grant of the Licence to CytRx, CytRx shall on signature of this
Agreement:

 

 

4.1.1 allot and issue to ICIL, credited as fully paid, {***} shares of common stock in CytRx
(the “Consideration Shares”); and

4.1.2 pay ICIL {***} (the “Signature Fee”).

	4.2	 	In the event of a delisting from Nasdaq of the Consideration Shares within the Lock In Period
(as defined below):

	 	4.2.1	 	the Consideration Shares shall be immediately cancelled and returned to CytRx;
and
	 
	 	4.2.2	 	CytRx shall pay ICIL {***}.

	4.3	 	The Consideration Shares will rank pari passu in all respects with the existing issued shares
of CytRx common stock. CytRx shall cause the consideration shares to be listed on the Nasdaq
Small Cap market or such other principal market on which CytRx’s common stock is then traded.
	 
	4.4	 	Subject to Clause 4.5, the Consideration Shares shall not be sold, disposed of or otherwise
transferred (in whole or part) by ICIL for a period of seven (7) months after the
Commencement Date (the “Lock In Period”). Any public resale of the Consideration Shares after
the Lock In Period will be subject to compliance with all U.S. securities laws, which require
the registration of those shares or an applicable exemption from registration, such as the
rule known as “Rule 144”. CytRx agrees that upon signature of this Agreement, CytRx will use
its commercially reasonable best efforts to comply with all U.S. securities laws in order for
ICIL to be in a position to execute a public resale of the Consideration Shares immediately
after the Lock In Period and will file a registration statement with the US Securities and
Exchange Commission covering ICIL’s public resale of the Consideration Shares and use its
commercially reasonable best efforts to have that registration become effective prior to the
end of the Lock In Period. ICIL will provide reasonable assistance to CytRx in this regard .
	 
	4.5	 	The Consideration Shares will be transferable by ICIL to the inventors of the Licensed
Patents before the end of the Lock In Period but the inventors will be not be able to

 

 

	 	 	further sell, dispose of or transfer such Consideration Shares (in whole or part) during the
Lock in Period.
	 
	 	 	Milestones
	 
	4.6	 	Subject to Clauses 4.7, 5.4 and 5.5, CytRx shall pay to ICIL the following payments upon
achievement of the specified milestones by CytRx or a CytRx Affiliate or a CytRx Sublicensee
for the first Licenced Product to reach such milestone:

	 	 	 
	Payable upon Initiation of the first Phase I Clinical Trial
	 	{***}
	 
	 	 
	Payable upon Initiation of the first Phase II Clinical Trial
	 	{***}
	 
	 	 
	Payable upon Initiation of the first Phase III Clinical Trial
	 	{***}
	 
	 	 
	Payable upon first grant of Marketing Authorisation in a Major Market
	 	{***}

	4.7	 	CytRx shall pay to ICIL {***} of any Sublicensing Revenue. In relation to milestone payments,
if {***} of any milestone payment received by CytRx from a CytRx Sublicensee is less than the
sum payable by CytRx in respect of the same milestone under Clause 4.6, then CytRx shall pay
ICIL the amount set out in Clause 4.6.
	 
	4.8	 	If CytRx is paid any Sublicensing Revenue in the form of non-cash consideration, ICIL and
CytRx will meet to agree the value of such non-cash consideration and the {***} proportion
payable to ICIL will be paid immediately (unless otherwise agreed between the parties) by
CytRx to ICIL, at the option of CytRx, in cash or in kind. If CytRx and ICIL cannot agree,
then the issue will be referred to the Expert’s Decision Procedure in Schedule 3.
	 
	4.9	 	CytRx shall pay to ICIL {***} of any fees received by CytRx from the provision by CytRx of
Licensed Services.
	 
	4.10	 	CytRx shall notify ICIL in writing within thirty (30) days upon the achievement of each
milestone set forth in Clause 4.6 and shall make the appropriate milestone payment within
thirty (30) days of the achievement of such milestone.

 

 

	 	 	Royalties
	 
	4.11	 	Subject to Clause 4.12, CytRx shall pay to ICIL a royalty of {***} of Net Sales Value of
Licensed Product(s) sold by CytRx or a CytRx Affiliate or a CytRx Sublicensee. CytRx shall
only be obliged to pay royalties to ICIL on sales by a CytRx Sublicensee or a CytRx Affiliate
on receipt by CytRx of royalty payments from a CytRx Sublicensee or a CytRx Affiliate in
respect of such sales.
	 
	4.12	 	Where in addition to the rights licensed by ICIL to CytRx under this Agreement, CytRx (or a
CytRx Affiliate or CytRx Sublicensee) requires one or more licences from a Third Party to
carry out research in relation to, or Exploit, a Licensed Product (each, a “Third Party
Licence”) because, absent such Third Party Licence, CytRx’s (or a CytRx Affiliate or CytRx
Sublicensee’s) research relating to, or the Exploitation of, the Licensed Product would
infringe a claim of a patent or patent application or other intellectual property of such
Third Party, the provisions of this Clause 4.12 shall apply. Any royalty payments on Licensed
Products due to such Third Party from CytRx (or a CytRx Affiliate or CytRx Sublicensee) under
any Third Party Licence shall be credited against any royalty payments due to ICIL under
Clause 4.11, provided however, that under no circumstances shall the aggregate of the set offs
in this Clause 4.12 reduce the royalty rate for payments due to ICIL from CytRx under Clause
4.11 to below {***}.
	 
	4.13	 	CytRx shall pay to ICIL a royalty of {***} of Net Sales Value (such definition being varied
mutatis mutandis to substitute Diagnostic Products for Licensed Products) of Diagnostic
Product(s) sold by CytRx or a CytRx Affiliate or a CytRx Sublicensee. CytRx shall only be
obliged to pay royalties to ICIL on sales by a CytRx Sublicensee on receipt by CytRx of
royalty payments from a CytRx Sublicensee in respect of such sales.
	 
	4.14	 	All royalties due to ICIL under this Agreement for any Licensed Product shall be payable on a
country-by-country basis until the last Valid Claim for that country expires.
	 
	4.15	 	For the purpose of calculating royalties under this Clause 4, a Licensed Product or a
Diagnostic Product shall be regarded as sold, leased or licensed by CytRx when invoiced, or if
not invoiced, when shipped or delivered by CytRx. If a Licensed Product is

 

 

	 	 	transferred to and further sold on by an Affiliate, the royalty on each
such Licensed Product shall be calculated on prices at which it is sold
by the Affiliate; provided, however, that in no event shall royalty be
paid more than once on each Licensed Product.

	5	 	Provisions relating to Payment of Consideration
	 
	5.1	 	All sums payable under this Agreement by CytRx shall be paid in US Dollars. For any payment
to CytRx (where ICIL is due a share of that payment) and where CytRx receives the payment in a
currency other than US Dollars, CytRx will convert the relevant sum due to ICIL into US
Dollars. CytRx will use the conversion rate reported in the Wall Street Journal two (2)
Business Days before the day on which CytRx pays ICIL.
	 
	5.2	 	Within fifty (50) days of the end of each Quarter (and within fifty (50) days of termination
of this Agreement) after the First Commercial Sale of each Licensed Product in any country,
CytRx shall prepare a statement which shall show on a country-by-country basis for the
previous Quarter all monies due to ICIL under Clause 4.11. That statement shall include
details of Net Sales Value showing the country of the sales and the total Net Sales Value on a
Licensed Product by Licensed Product and/or Diagnostic Product by Diagnostic Product basis
together with the quantities sold in such country and shall be submitted to ICIL within such
fifty (50) day period together with remittance of the monies due.
	 
	5.3	 	All lump sum payments under this Agreement (including the Signature Fee and milestone
payments) shall be paid by CytRx within thirty (30) days of the due date (which in the case of
milestone payments shall be in accordance with Clause 4.10).
	 
	5.4	 	If the US$/£ rate exceeds 2.00:1.00 at the time that a milestone payment is due under Clause
4.10 then that milestone payment will be increased using the following formula:

	 	5.4.1	 	If the US$/£ rate (as shown in the Wall Street Journal averaged over the five
Business Days before that milestone payment is due under Clause 4.10) is between 2.0001
and 2.1000 then the appropriate milestone payment set out in Clause 4.6 will be
increased by seven and a half percent (7.5%);

 

 

	 	5.4.2	 	If the US$/£ rate (as shown in the Wall Street Journal averaged over the five
Business Days before that milestone payment is due under Clause 4.10) is between 2.1001
and 2.2000 then the appropriate milestone payment set out in Clause 4.6 will be
increased by twelve percent (12.0%);
	 
	 	5.4.3	 	If the US$/£ rate (as shown in the Wall Street Journal averaged over the five
Business Days before that milestone payment is due under Clause 4.10) is between 2.2001
and 2.3000 then the appropriate milestone payment set out in Clause 4.6 will be
increased by sixteen percent (16.0%); and
	 
	 	5.4.4	 	If the US$/£ rate (as shown in the Wall Street Journal averaged over the five
Business Days before that milestone payment is due under Clause 4.10) increases above
2.3000 then the appropriate milestone payment set out in Clause 4.6 will be not be
increased by more than sixteen percent (16.0%).

	5.5	 	If the US$/£ rate goes below 1.700:1.000 at the time that a milestone payment is due under
Clause 4.10 then that milestone payment will be decreased using the following formula:

	 	5.5.1	 	If the US$/£ rate (as shown in the Wall Street Journal averaged over the five
Business Days before that milestone payment is due under Clause 4.10) is between
1.69999 and 1.69000 then the appropriate milestone payment set out in Clause 4.6 will
be decreased by seven and a half percent (7.5%);
	 
	 	5.5.2	 	If the US$/£ rate (as shown in the Wall Street Journal averaged over the five
Business Days before that milestone payment is due under Clause 4.10) is between
1.68999 and 1.68000 then the appropriate milestone payment set out in Clause 4.6 will
be decreased by twelve percent (12.0%);
	 
	 	5.5.3	 	If the US$/£ rate (as shown in the Wall Street Journal averaged over the five
Business Days before that milestone payment is due under Clause 4.10) is between
1.67999 and 1.67000 then the appropriate milestone payment set out in Clause 4.6 will
be decreased by sixteen percent (16.0%); and

 

 

	 	5.5.4	 	If the US$/£ rate (as shown in the Wall Street Journal averaged over the five
Business Days before that milestone payment is due under Clause 4.10) falls below
1.67:1 then the appropriate milestone payment set out in Clause 4.6 will not be
decreased by any more than sixteen percent (16.0%).

	5.6	 	All payments shall be made free and clear of and without deduction or deferment in respect of
any disputes or claims whatsoever and/or as far as is legally possible in respect of any taxes
imposed by or under the authority of any government or public authority. Any tax (other than
VAT) which CytRx is required to pay or withhold in respect of the payments to be made to ICIL
hereunder shall be deducted from the amount otherwise due provided that, in regard to any such
deduction, CytRx shall give ICIL reasonable assistance, which shall include the provision of
such documentation as may be required by any revenue authority and other revenue services, as
may be necessary to enable ICIL to claim exemption therefrom or obtain a repayment thereof or
a reduction thereof and shall upon request provide such additional documentation from time to
time as is needed to confirm the payment of tax.
	 
	5.7	 	CytRx shall keep and shall procure that CytRx Sublicensees keep true and accurate records and
books of account containing all data necessary for the production of the royalty statements
under Clause 5.2 and the calculation of the amounts payable by it to ICIL pursuant to this
Agreement. Those records and books of account shall be kept for two (2) years following the
end of the Year to which they relate. Upon ICIL’s written request and, except as set forth in
Clause 5.7.6, at ICIL’s expense, a firm of independent certified accountants appointed by ICIL
(which accountants shall not have performed auditing or other services for any Party or their
Affiliates):

	 	5.7.1	 	shall be given access to and shall be permitted to examine and copy any books
and records of CytRx, its Affiliates Sublicensees at all reasonable times on Business
Days in a manner calculated so as not to disturb the business affairs of the auditee
for the purpose of certifying that the Net Sales Value or other relevant sums
calculated by CytRx, its Affiliates and Sublicensees during any Year and previous
Years were reasonably calculated, true and accurate or, if this is not their

 

 

	 	 	 	opinion, certify the Net Sales Value figure or other relevant sums for such period
which in their judgment is true and correct;
	 
	 	5.7.2	 	the examination in Clause 5.7.1 may cover books and records that are in
existence and currently held by Cytrx, its Affiliates or Sublicensees at the date of
the inspection;
	 
	 	5.7.3	 	prior to any such examination taking place, such firm of accountants shall
undertake to CytRx that they shall keep all information and data contained in such
books and records, strictly confidential and shall not disclose such information or
copies of such books and records to any third person including ICIL, but shall only use
the same for the purpose of calculations which they need to perform in order to issue
the certificate to which this Clause envisages;
	 
	 	5.7.4	 	any such access examination and certification shall occur no more than once
per Year, save that in the event that the certification of the accountant shows that
CytRx has underpaid sums to ICIL by more than the greater of five thousand US Dollars
($5,000) and five percent (5%) of the amount properly owing, such access, examination
and certification shall occur no more than twice in the Year following the
certification of such discrepancy;
	 
	 	5.7.5	 	CytRx and CytRx Sublicensees shall make available personnel to answer queries
on all books and records required for the purpose of that certification; and
	 
	 	5.7.6	 	the cost of the accountant shall be the responsibility of CytRx if the
certification shows it to have underpaid monies to ICIL by more than the greater of
five thousand US Dollars ($5,000) and five percent (5%) of the amount properly owing,
or shall be the responsibility of ICIL otherwise.

	5.8	 	If the accountant concludes that additional royalties or other sums under this Agreement were
owed for the two (2) year period prior to the inspection, CytRx shall pay the additional
royalties or other sums within thirty (30) days of the date ICIL delivers to CytRx such
accountant’s written report so concluding. No additional royalties or other sums under this
Agreement shall be payable by CytRx in relation to any period more than

 

 

	 	 	two (2) years before any inspection. In the event that the accountant concludes that there
has been an overpayment of royalties or other sums under this Agreement, then subject to
Clause 14.5.5, the amount of the overpayment shall be credited against the next and any
following royalty or milestone payments of CytRx under this Agreement.

	5.9	 	No royalties payable by CytRx to ICIL shall be refundable or creditable against any other sum
payable by CytRx to ICIL under this Agreement.
	 
	5.10	 	All payments due to ICIL under the terms of this Agreement are expressed to be exclusive of
value added or other sales tax howsoever arising.
	 
	5.11	 	All payments made to ICIL under this Agreement shall be made to the bank account of ICIL as
notified by ICIL to CytRx from time to time.

	6	 	Conduct in relation to the Field
	 
	6.1	 	CytRx shall, at its own expense, use Reasonable Commercial Efforts to develop and
commercialise at least one Licensed Product (being either a product directed at the treatment
or prevention of obesity or a product directed at the treatment or prevention of diabetes or a
product directed at the treatment or prevention of both clinical indications) under the
Licence. For the purposes of this Clause 6.1 “Reasonable Commercial Efforts” shall mean
efforts which are similar to the efforts used by CytRx in pursuing the development,
commercialisation and marketing of other products under similar commercial circumstances that
have similar commercial value, status and potential to the Licensed Product in question. In
the event that CytRx has not developed any other products under similar commercial
circumstances that have similar commercial value, status and potential to the Licensed Product
in question then the efforts of CytRx shall be those employed by similar companies to CytRx in
terms of their size and financial resources. Notwithstanding the foregoing, and for the
avoidance of doubt, CytRx shall not be required by this Clause 6.1 or otherwise to continue
with its commercialisation or development efforts of any Licensed Product in any country if
for safety, efficacy, technical or reasonable business reasons it decides in good faith to
abandon the same.

 

 

	6.2	 	CytRx shall provide a report to ICIL on each anniversary of the Commencement Date which shall
be deemed Confidential Information and shall include:

	 	6.2.1	 	the status and any outcomes of research and development carried out by CytRx,
any CytRx Affiliate or CytRx Sublicensee in the Field;
	 
	 	6.2.2	 	a general statement on the progress of the development by CytRx,any CytRx
Affiliate or CytRx Sublicensee of Licensed Products;
	 
	 	6.2.3	 	in addition to CytRx’s ongoing obligation under Clause 4.10, confirmation of
the achievement of any of the milestones in Clause 4.6 by CytRx, its Affiliates or
Sublicensees; and
	 
	 	6.2.4	 	following the payment of the milestone payment payable upon Initiation of the
first Phase II Clinical Trial a commercialisation plan showing all past, current and
proposed actions by CytRx, a CytRx Affiliate of CytRx Sublicensee to market any
Licensed Product that has reached at least the Initiation of a Phase II Clinical Trial.

	6.3	 	Any failure by CytRx, a CytRx Affiliate or CytRx Sublicensee to comply with a timetable or
action set out in a report under Clause 6.2 shall not of itself be deemed to be a failure to
employ Reasonable Commercial Efforts.
	 
	6.4	 	ICIL’s receipt of any report under Clause 6.2 shall not be taken to waive or qualify the
Licensee’s obligations under Clause 6.1

	7	 	Improvements to the Licensed Patents.
	 
	7.1	 	Both Severable Improvements and Non-Severable Improvements made by CytRx and any Patent
Rights therein (“CytRx Foreground Improvements”) will be owned by CytRx. CytRx shall have
responsibility for filing any Patent Rights relating to CytRx Foreground Improvements and
shall own any subsequent patents. Except as set forth in Clause 7.2, Imperial and ICIL shall
have no rights in CytRx Foreground Improvements or

 

 

	 	 	be entitled to any additional payments with respect to CytRx’s exploitation of the CytRx
Foreground Improvements.
	 
	7.2	 	CytRx will notify ICIL of all Non-Commercially Sensitive CytRx Foreground Improvements which
are limited to Non-Severable Improvements (after CytRx has taken all steps it believes
necessary to protect such Improvements). Upon such notification CytRx will grant to Imperial a
royalty-free non-exclusive, non-sublicensable, world-wide licence to use such Non-Severable
Improvements solely for the purpose of teaching and scientific research for non-commercial
purposes.
	 
	7.3	 	Both Severable Improvements and Non-Severable Improvements made by Imperial and any Patent
Rights therein (“IC Foreground Improvements”) will be owned by ICIL. Imperial’s obligations
set out in Clause 2.3 in relation to the publication of its results shall apply to all IC
Foreground Improvements arising from the Research Group.
	 
	7.4	 	For 24 months after the date of this Agreement, ICIL and/or Imperial shall notify CytRx of
all Severable and Non-Severable Improvements arising from the Research Group promptly after
they are created, the date that such notification is received by CytRx being the “Notification
Date”.
	 
	7.5	 	If under Clause 7.4 ICIL notifies CytRx of the creation of a Non-Severable Improvement made
by Imperial it shall also state in such notice whether or not it intends to patent such
Non-Severable Improvement. CytRx shall within forty five (45) days of the Notification Date
inform ICIL whether it wishes to takes a licence of such Non-Severable Improvement.
	 
	7.6	 	If CytRx does not reply within such forty five (45) day period or states that it does not
wish to take a licence of the Non-Severable Improvement then ICIL shall be free to Exploit,
license or assign such Non-Severable Improvement as it sees fit.
	 
	7.7	 	If CytRx notifies ICIL in accordance with Clause 7.5 that it wishes to take a licence of such
Non-Severable Improvement and ICIL has indicated that it intends to file a patent on such
Non-Severable Improvement then ICIL will be entitled to control in its sole discretion the
prosecution of any Patent Rights relating to such Non-Severable

 

 

	 	 	Improvement, and such control shall include, but not be limited to, deciding which patent
attorney shall have the conduct of the prosecution, what claims to prosecute and the terms
of such claims, which countries in which to file for Patent Rights, the conduct of any
defence to an opposition (if any) and whether to appeal any decision. Such Patent Rights
will become part of the Licensed Patents and will be automatically licensed to CytRx under
Clause 2.1.1 of this Agreement provided that such licence will be limited to the Field.
ICIL and CytRx will decide what proportion of the patenting costs associated with the
prosecution of such Patent Rights will be paid by either Party, which will be dependant on
factors such as the scope of the claims and their relationship to the subject matter of this
Agreement and the benefit that each Party is likely to obtain from such patent protection.
In default of agreement the dispute will be subject to the dispute resolution procedure in
Clause 11.
	 
	7.8	 	If CytRx notifies ICIL in accordance with Clause 7.5 that it wishes to take a licence of such
Non-Severable Improvement and ICIL has indicated that it does not intend to file a patent on
such Non-Severable Improvement and CytrX believes that the Non-Severable Improvement should be
patented then:

	 	7.8.1	 	ICIL shall file for Patent Rights in relation to such Non-Severable
Improvement and shall own all subsequent Patents Rights; and
	 
	 	7.8.2	 	the length of time that publication is delayed under Clause 2.3 in relation to
any such Improvement shall be extended by thirty (30) Business Days to a total of sixty
(60) Business Days.

	7.9	 	CytRx will be entitled to control in its sole discretion the prosecution of any Patent Rights
filed under Clause 7.8.1, and such control shall include, but not be limited to, deciding
which patent attorney shall have the conduct of the prosecution, what claims to prosecute and
the terms of such claims, which countries in which to file for Patent Rights, the conduct of
any defence to an opposition (if any) and whether to appeal any decision. If ICIL file and
prosecute the Patent Rights then CytRx will within 30 days or receipt of an invoice from ICIL,
pay the patenting costs associated with the filing and prosecution

 

 

	 	 	of such Patent Rights and such Patent Rights will become part of the Licensed Patents and
will be automatically licensed to CytRx under Clause 2.1.1 of this Agreement.
	 
	7.10	 	If CytRx notifies ICIL in accordance with Clause 7.5 that it wishes to take a licence of such
Non-Severable Improvement and neither ICIL nor CytRx wishes to patent such Non-Severable
Improvement then it will be automatically licensed to CytRx (a) to the extent that it falls
within the scope of a Valid Claim of the Licensed Patents under Clause 2.1.1 of this Agreement
in addition to the Licensed Patents, and to extent that it does not falls within the scope of
a Valid Claim of the Licensed Patents under clauses 2.1.2 or 2.1.3 as appropriate depending on
the nature of the Improvement.
	 
	7.11	 	ICIL grants CytRx a first right to be granted a worldwide, exclusive licence to commercialise
any Severable Improvements in the Field to the Licensed Patents made by Imperial and notified
to CytRx under Clause 7.4, where such Severable Improvements are unencumbered by any rights of
any Third Party. In relation to any Severable Improvement CytRx shall notify ICIL within sixty
(60) Business Days of the Notification Date for that Severable Improvement (the “Decision
Period”) whether or not it wishes to take a licence of such Severable Improvement. If CytRx
notifies ICIL that it does wish to take a licence then the parties will negotiate in good
faith to agree terms. If:

	 	7.11.1	 	CytRx notifies ICIL that it does not wish to take a licence of such Severable
Improvement; or
	 
	 	7.11.2	 	CytRx does not notify ICIL within the Decision Period; or
	 
	 	7.11.3	 	the Parties cannot agree the terms of a licence to such Severable Improvement within
six (6) months of the end of the Decision Period (the “Negotiation Period”)

then ICIL will be free, subject to Clause 7.12, to license or assign the Severable
Improvement to a Third Party.

	7.12	 	If a Third Party makes a genuine offer to take a licence or an assignment of a Severable
Improvement that ICIL is free to license or assign under Clause 7.11 (a “Third Party

 

 

	 	 	Offer”) (in circumstances where CytRx and ICIL have
previously failed to agree terms under 7.11.3) within
a period of twenty four (24) months from the end of
the Negotiation Period then ICIL will notify CytRx
immediately and CytRx will have the option to match
the Third Party Offer within forty-five (45) days of
being so notified. If CytRx does match the offer then
it shall be granted a licence or assignment of the
Severable Improvement provided that it executes a
licence or assignment agreement within forty-five (45)
days (or such longer period agreed by the Parties) of
being notified by ICIL of the Third Party Offer. The
Parties will use reasonable endeavours to agree and
execute the licence or assignment agreement within the
three (3) month period. If the Parties do not execute
a licence or assignment agreement in respect of the
Severable Improvement within the three (3) month
period then ICIL will be free to license or assign the
Severable Improvement to a Third Party without any
further reference to CytRx.

	8	 	Improvements to the Materials
	 
	8.1	 	If the Research Group at Imperial creates an Improvement to the Biological Materials within
24 months of the date of this Agreement then such Improvement will be owned by ICIL and become
part of the Biological Materials. It will be exclusively licensed to CytRx for the Field under
the terms of Clause 2.1.2 of this Agreement and Imperial will supply CytRx with a reasonable
quantity of such Biological Materials within a reasonable time of notification of the
Improvement under Clause 7.4.
	 
	8.2	 	If the Research Group at Imperial creates an Improvement to the Related Technology within 24
months of the date of this Agreement then such Improvement will become part of the Related
Technology and will be non-exclusively licensed to CytRx for the Field under the terms of
Clause 2.1.3 of this Agreement.
	 
	8.3	 	Any Improvement made by CytRx to the Materials and any Patent Rights therein (“CytRx
Materials Improvements”) will be owned by CytRx. CytRx shall have responsibility for filing
any Patent Rights relating to CytRx Materials Improvements and shall own any subsequent
patents.

 

 

	 
	9	 	Prosecution of the Patents
	 
	9.1	 	Subject to Clause 9.3, CytRx will control in its sole discretion the prosecution of any
Patent Rights included within the Licensed Patents. Such control shall include, but not be
limited to, deciding which patent attorney shall have the conduct of the prosecution, what
claims to prosecute and the terms of such claims, the conduct of any defence to an opposition
(if any) and whether to appeal any decision.
	 
	9.2	 	Subject to Clause 9.4, CytRx shall only be obliged to prosecute the Licensed Patents within
the Patenting Territories but it may at its sole discretion prosecute the Licensed Patents
outside such territories. CytRx and its Affiliates and Sublicensees shall not conduct
screening activities relating to the identification of Licensed Products or Diagnostic
Products outside of the Patenting Territories.
	 
	9.3	 	CytRx will not narrow any claims, or abandon any patent applications within the Licensed
Patents in any Patenting Territory without the consent of ICIL, such consent not to be
unreasonably withheld or delayed.
	 
	9.4	 	If CytRx does not wish to apply for, maintain or register Patent Rights in connection with
the Licensed Patents in one or more of the Patenting Territories then ICIL shall not
unreasonably withhold its consent to the removal of such country from the list of Patenting
Territories. ICIL shall have the right to file, maintain or register patent applications at
its own expense in such country so removed, and such applications and resultant patents shall
not be subject to this Agreement.
	 
	9.5	 	CytRx will pay for all ongoing and future patent expenses in relation to the Licensed Patents
prosecuted under Clause 9.1 incurred from the Commencement Date until termination or expiry of
the Agreement and will instruct and settle all costs directly with the relevant patent agents
or other bodies requiring payment for patent expenses or maintenance fees as authorized by a
letter of instruction from ICIL.
	 
	9.6	 	CytRx shall be entitled to register this licence, if possible in abbreviated form, in
whichever territories it wishes. Imperial and ICIL shall provide all reasonable assistance to
CytRx to:

	 	9.6.1	 	register this Agreement throughout the world; and

 

 

	 	9.6.2	 	prosecute any Patent Rights within the Licensed Patents

including, without limitation, providing scientific support and advice, providing laboratory
notebooks and signing further documentation and handing over any current files relating to
the prosecution of the Licensed Patents. CytRx will meet Imperial’s and ICIL’s reasonable
out of pocket external legal costs and travel expenses incurred in providing such
assistance.

	10	 	Proceedings relating to the Licensed Patents
	 
	10.1	 	Each Party shall notify the other promptly during the term of the Agreement if it becomes
aware of:

	 	10.1.1	 	any proceedings or applications emanating from a Third Party challenging the validity
or enforceability of the Licensed Patents including, without limitation, any
revocation, interference or opposition proceedings; or
	 
	 	10.1.2	 	a Third Party taking or threatening to take any proceedings for infringement of any
patents of that Third Party by reason of CytRx’s or CytRx Sublicensees’ operation of
the Licensed Patents or the manufacture, use or sale of Licensed Products; or
	 
	 	10.1.3	 	any patent infringement or potential patent infringemnt of the Licensed Patents by a
Third Party (all such proceedings in Clauses 10.1.1 to 10.1.3 being “Actions”).

	10.2	 	CytRx shall have the first right at its sole discretion and cost to conduct (or have a CytRx
Sublicensee conduct) any lawsuits, claims or proceedings relating to any Actions. ICIL and
Imperial shall provide CytRx (or the CytRx Sublicensee) with all reasonable assistance in
relation to any such lawsuits, claims or proceedings and shall, if necessary, consent to be
joined as a party to them.
	 
	10.3	 	If CytRx (or the CytRx Sublicensee) does not bring or defend any Action within ninety (90)
days of the date that such Action is first notified by one Party to both of the other Parties
then ICIL can bring or defend such Action and CytRx and Imperial shall provide

 

 

	 	 	reasonable assistance to ICIL at ICIL’s cost. ICIL can require CytRx to grant a sublicence
under this Agreement to any infringer that is the subject of an Action brought by ICIL under
this Clause 10.3, provided that the terms of such sub-licence are reasonably acceptable to
CytRx and Imperial.
	 
	10.4	 	IfCytRx brings proceedings against a Third Party for infringement of the Licensed Patents, or
any of them, and ICIL is joined in as a party to such proceedings then ICIL will have the
option to pay two percent (2%) of the legal costs associated with such proceedings including
two percent (2%) of any costs awarded against the Parties. If ICIL exercises this option then
it will share any damages awarded (after all patenting costs incurred in relation to the
Licensed Patents at the point that the damages are awarded have been deducted from such
damages and paid to the Party who incurred such patenting costs) in the proportion ninety
eight percent (98%) to CytRx and two percent (2%) to ICIL. If CytRx pays all the legal costs
it shall retain all the damages awarded.
	 
	10.5	 	If ICIL brings proceedings against a Third Party for infringement of the Licensed Patents, or
any of them, and CytRx is joined in as a party to such proceedings then CytRx will have the
option to pay half the legal costs associated with such proceedings including half of any
costs awarded against the Parties. If CytRx exercises this option then it will share any
damages awarded (after all patenting costs incurred in relation to the Licensed Patents at the
point that the damages are awarded have been deducted from such damages and paid to CytRx) in
the proportion fifty per cent (50%) to CytRx and fifty percent (50%) to ICIL. If ICIL pays all
the legal costs it shall retain all the damages awarded.
	 
	11	 	Dispute Resolution Procedure
	 
	11.1	 	The Parties will use all reasonable endeavours to resolve disputes arising out of this
Agreement. The Parties may refer any dispute to the CEO of CytRx and Managing Director of
ICIL, who shall co-operate in good faith to resolve the dispute as amicably as possible within
15 Business Days of the dispute being referred to them.
	 
	11.2	 	If the CEO of CytRx and Managing Director of ICIL fail to resolve the dispute in the allotted
time, the Parties may within that period on the written request of both Parties

 

 

	 	 	agree in writing to enter into an alternative dispute resolution procedure with the
assistance of a mediator agreed by the parties or, in default of such agreement appointed by
the Centre for Dispute Resolution, Harbour Exchange Square, London.
	 
	11.3	 	If the alternative dispute procedure fails to resolve the dispute then the dispute will be
resolved by arbitration in accordance with Clause 26.
	 
	12	 	Representations and Warranties
	 
	12.1	 	Each Party represents, warrants, undertakes and agrees for the benefit of the other that:

	 	12.1.1	 	it has full power to enter into and perform this Agreement;
	 
	 	12.1.2	 	so far as it is aware the execution and delivery of this Agreement and the
performance of and compliance with its terms and provisions will not:

	 	(i)	 	conflict with or result in a breach of, or constitute a default
under, any agreement or instrument to which it is a party or by which it is
bound or with its memorandum and articles of association or certificate of
incorporation; or
	 
	 	(ii)	 	conflict with or result in a breach of any law, regulation or
order of any court.

	12.2	 	ICIL represents, warrants, undertakes and agrees that:

	 	12.2.1	 	full and accurate details of all registrations of and applications for registration
of the Licensed Patents as at the Commencement Date are set out Schedule 1;
	 
	 	12.2.2	 	to the best of its actual knowledge (and without having made any special enquiries)
it is the sole legal and beneficial owner of the Licensed Patents and Materials;
	 
	 	12.2.3	 	to the best of its actual knowledge (and without having made any special enquiries)
it does not know of any reason why the Patent Application will not be

 

 

	 	 	 	granted at least in part and with commercially significant claims or any Patent
Rights based on it will not be granted in any country;
	 
	 	12.2.4	 	to the best of its actual knowledge (and without having made any special enquiries)
it does not know of any activities carried out now by any Third Party which if carried
out after any of the Licensed Patents are granted would infringe such Licensed Patents;
	 
	 	12.2.5	 	to the best of its knowledge (and without having made any special enquiries) it does
not own nor is it licensed to use any intellectual property that relates to RIP140 in
the area of obesity or diabetes other than the Licensed Patents;
	 
	 	12.2.6	 	to the best of its knowledge (and without having made any special enquiries) it does
not own nor is it licensed to use any intellectual property that:

	 	(a)	 	would prevent CytRx Exploiting the rights granted under this
Agreement; or
	 
	 	(b)	 	would result in CytRx being liable to pay a royalty or any
other sum, in addition to the sums set out in Clause 4 above, to Exploit the
Licensed Patents or Materials; or

	 	12.2.7	 	to the best of its actual knowledge and without having conducted any special
enquiries, all necessary registration, maintenance and renewal fees currently due in
connection with the Licensed Patents have been made and all necessary documents and
certificates in connection with such Licensed Patents have been filed with the relevant
patent or other authorities in the United Kingdom for the purposes of maintaining such
Licensed Patents;

	12.3	 	Imperial represents, warrants, undertakes and agrees that it will use its best endeavours to
ensure that any Biological Materials supplied to CytRx under this Agreement are in accordance
with the description of such Biological Materials. If they are found by CytRx not be in
accordance with such description then, without prejudice to any other rights accrued by CytRx
as a result of the breach of Imperials obligation in this Clause 12.3,

 

 

	 	 	Imperial will use its best endeavours to provide Biological Materials in accordance with the
description.
	 
	12.4	 	Without limiting the scope of Clause 12.2 and 12.3, ICIL does not give any warranty,
representation or undertaking:

	 	12.4.1	 	as to the efficacy, scope or usefulness of the Licensed Patents or Materials; or
	 
	 	12.4.2	 	except as expressly set forth in clause 12.2.6 that the use of any of the Licensed
Patents or Related Technology, the manufacture, sale or use of the Licensed Products or
the exercise of any of the rights granted under this Agreement after the date of this
Agreement will not infringe any other intellectual property or other rights of any
other person; or
	 
	 	12.4.3	 	that the Licensed Patents or Materials or any other information communicated by ICIL
to CytRx under or in connection with this Agreement will produce Licensed Products of
satisfactory quality or fit for the purpose for which CytRx intended; or
	 
	 	12.4.4	 	subject to Clause 10.2, as imposing any obligation on ICIL to bring or prosecute
actions or proceedings against third parties for infringement or to defend any action
or proceedings for revocation of any of the Licensed Patents; or
	 
	 	12.4.5	 	as imposing any liability on ICIL in the event that any third party supplies Licensed
Products to end-user customers.

	12.5	 	CytRx acknowledges that the Materials and Related Technology are at an early stage of
development. Accordingly, but subject to Clause 12.3, specific results cannot be guaranteed
and any results, materials, information or other items (together “Delivered Items”) provided
under this Agreement are provided “as is” and without any express or implied warranties,
representations or undertakings other than that the Delivered Items have been created and
provided in good faith. As examples, but without limiting the foregoing, ICIL does not give
any warranty that Delivered Items are of merchantable or

 

 

	 	 	satisfactory quality, are fit for any particular purpose, or are viable, uncontaminated,
safe or non-toxic.
	 
	12.6	 	Except as expressly stated in this Clause 12, no representations, or warranty whatsoever are
made or given by or on behalf of the Parties.
	 
	12.7	 	Subject always to the provisions of Clause 12.11, CytRx shall indemnify ICIL and Imperial
against any loss, damages, costs, expenses or other liabilities which are awarded against or
incurred by ICIL and Imperial as a result of any claim or threatened claim against them by a
Third Party concerning the use by CytRx, its Affiliates or any of its sub-licensees of the
Licensed Patents or Materials or otherwise in connection with the manufacture, use or sale of
or any other dealing in any of the Licensed Products by CytRx or its Affiliates or any of its
sub-licensees (hereinafter a “Claim”), provided:

	 	12.7.1	 	CytRx shall not be obligated to indemnify ICIL and/or Imperial under this Clause if
it is shown by evidence acceptable in a court of law having jurisdiction over the
subject matter and meeting the appropriate degree of proof for such action, that the
Claim was the result of the negligence, failure to reasonably act or wilful misconduct
of any employee or agent of ICIL and/or Imperial or the conduct of any activity to be
performed by ICIL and/or Imperial pursuant to this Agreement; and
	 
	 	12.7.2	 	CytRx shall have no obligation under this Clause 12.7 unless ICIL and/or Imperial:

	 	(a)	 	gives CytRx prompt written notice of any Claim for which it
seeks to be indemnified under this Agreement;
	 
	 	(b)	 	CytRx is granted full authority and control over the defence
(at the cost of CytRx), including settlement, against such Claim; and
	 
	 	(c)	 	ICIL and/or Imperial co-operates as reasonably required with
CytRx and its agents in defence of such Claim at the cost of CytRx.

 

 

	12.8	 	Imperial and/or ICIL shall have the right to participate in the defence of any such Claim
referred to in Clause 12.7 utilising attorneys of its choice at its own cost and expense,
provided, however, that CytRx shall have full authority and control to handle any such Claim,
including any settlement or other disposition thereof, for which the ICIL and/or Imperial
seeks indemnification under Clause 12.7.
	 
	12.9	 	CytRx undertakes to make no claim against any employee, student, agent or appointee of ICIL
or Imperial, being a claim which seeks to enforce against any of them any liability whatsoever
in connection with this Agreement or its subject matter save that CytRx can apply for
injunctive relief in relation to an employee, student, agent or appointee of ICIL or Imperial
if they have (or are threatening to) wilfully disclose any Confidential Information under this
Agreement.
	 
	12.10	 	In any event, the maximum liability of ICIL to CytRx under or otherwise in connection with
this Agreement or its subject-matter shall not exceed the return of all monies paid by CytRx
under this Agreement, together with interest on the balance of such monies from time to time
outstanding, accruing from day to day at the National Westminster Bank plc base rate from time
to time in force.
	 
	12.11	 	Notwithstanding any other provision of this Agreement, no Party shall be liable to any other
Party to this Agreement in contract, tort, negligence, breach of statutory duty or otherwise
for any loss, damage, costs or expenses of any nature whatsoever incurred or suffered by that
other party or its Affiliates of an indirect or consequential nature including without
limitation any economic loss or other loss of turnover, profits, business or goodwill.

	13	 	Confidentiality 
	 
	13.1	 	The Parties each undertake and agree to:

	 	13.1.1	 	only use the Confidential Information for the purposes envisaged under this Agreement
and not to use the same for any other purpose whatsoever;

 

 

	 	13.1.2	 	ensure that only those of its officers and employees who are directly concerned with
the carrying out of this Agreement have access to the Confidential Information on a
strictly applied “need to know” basis and are informed of the secret and confidential
nature of it;
	 
	 	13.1.3	 	keep the Confidential Information secret and confidential and not to directly or
indirectly disclose or permit to be disclosed the same to any Third Party excluding any
consultants or other advisors for any reason without the prior written consent of the
Disclosing Party;

	13.2	 	Subject to clause 24, the Parties each agree not to disclose any of the terms of this
Agreement or its existence to any Third Party without the prior consent of the other Party,
except as may be required by law or to fulfil any other obligations under this Agreement.
	 
	13.3	 	The obligations of confidence referred to in Clause 13.1 shall not extend to any Confidential
Information which:

	 	13.3.1	 	is or becomes generally available to the public otherwise than by reason of breach by
a Recipient Party of the provisions of this Clause;
	 
	 	13.3.2	 	is known to the Recipient Party and is at its free disposal (having been generated
independently by the Recipient Party or a Third Party in circumstances where it has not
been derived directly or indirectly from the Disclosing Party’s Confidential
Information prior to its receipt from the Disclosing Party provided that evidence of
such knowledge is furnished by the Recipient Party to the Disclosing Party within 28
days of receipt of that Confidential Information);
	 
	 	13.3.3	 	is subsequently disclosed to the Recipient Party without obligations of confidence by
a Third Party owing no such obligations to the Disclosing Party in respect of that
Confidential Information; or
	 
	 	13.3.4	 	is required by law to be disclosed (including as part of any regulatory submission or
approval process) and then only when prompt written notice of this requirement has been
given to the Disclosing Party so that it may, if so advised,

 

 

	 	 	 	seek appropriate relief to prevent such disclosure provided always that in such
circumstances such disclosure shall be only to the extent so required and shall be
subject to prior consultation with the Disclosing Party with a view to agreeing
timing and content of such disclosure.

	13.4	 	All Confidential Information disclosed by one Party to the other shall remain the property of
the Disclosing Party. In the event that a court or Competent Authority assumes partial or
complete control over the assets of a Recipient Party based on the insolvency or bankruptcy of
that Party, the Recipient Party shall:

	 	13.4.1	 	promptly notify such court or Competent Authority:
	 
	 	(a)	 	that Confidential Information received from the Disclosing Party under this
Agreement remains the property of the Disclosing Party; and
	 
	 	(b)	 	of the confidentiality obligations under this Agreement; and
	 
	 	13.4.2	 	to the extent permitted by law, take all steps necessary or desirable to maintain the
confidentiality and security of the Disclosing Party’s Confidential Information and to
ensure that the court or Competent Authority maintains that Confidential Information in
confidence in accordance with this Agreement.

	13.5	 	The obligations of the Parties under Clause 13.1 to 13.4 shall survive the expiration or
termination of this Agreement for whatever reason for a period of 7 years.
	 
	13.6	 	The Parties understand and agree that remedies in damages may be inadequate to protect
against any breach of any of the provisions of this Clause 13 by either Party or their
employees, officers or any other person acting in concert with it or on its behalf.
Accordingly, each Party shall be entitled to seek the granting of interim and final injunctive
relief by a court of competent jurisdiction in the discretion of that court against any action
that constitutes any breach of this Clause without the necessity of posting a bond or proving
damages.

 

 

	 
	14	 	Duration and Termination 
	 
	14.1	 	The term of this Agreement shall extend to the expiry of the last Valid Claim in any country
or the earlier termination of this Agreement in accordance with Clauses 14.2 or 14.3 below.
	 
	14.2	 	CytRx shall have the right to terminate this Agreement upon three (3) months written notice.
	 
	14.3	 	CytRx shall have the right to terminate the Agreement and the Licence forthwith in the event
that:

	 	(a)	 	ICIL or Imperial commit a material or persistent breach of any of their
material obligations under this Agreement which is incapable of remedy; or
	 
	 	(b)	 	ICIL or Imperial fail to remedy, where it is capable of remedy, or persists in
any breach of any of their obligations under this Agreement after having been required
in writing to remedy or desist from such breach within a period of sixty (60) days of
receipt of a notice from CytRx detailing such breach and of its intention to exercise
its rights under this Clause.

	14.4	 	ICIL shall have the right to terminate the Agreement and the Licence forthwith in the event
that:

	 	(a)	 	CytRx commits a material or persistent breach of any of its material
obligations under this Agreement which is incapable of remedy; or
	 
	 	(b)	 	CytRx fails to remedy, where it is capable of remedy, or persists in any
material breach of any of its obligations under this Agreement after having been
required in writing to remedy or desist from such breach within a period of sixty (60)
days of receipt of a notice from ICIL detailing such breach and of its intention to
exercise its rights under this Clause.

	14.5	 	Upon termination or expiry of this Agreement for any reason whatsoever:

	 	14.5.1	 	the relationship of the Parties hereunder shall cease save as (and to the extent)
expressly provided for in this Clause 14.5;

 

 

	 	14.5.2	 	ICIL shall grant licences to each CytRx Sublicensee on the equivalent terms as those
set out in this Agreement which will allow such CytRx Sublicensee to continue to
Exploit or use the rights granted to it by CytRx under this Agreement (with no
obligation for CytRx to make payments to ICIL based on sales of Licensed Products by
the CytRx Sublicensee), provided always that the termination of this Agreement was not
caused directly or indirectly by a CytRx Sublicensee in which case ICIL shall have no
obligation under this Clause 14.5.2 with respect to such CytRx Sublicensee;
	 
	 	14.5.3	 	CytRx and any CytRx Sublicensee shall be entitled to fulfill any orders which, as at
the date of termination, they are contracted to fulfill and otherwise sell or dispose
of any stock which is in their possession, custody or control at the date of
termination provided that CytRx shall pay royalties on such sales on the terms of this
Agreement. Within six (6) months of the date of expiry or termination of this
Agreement, CytRx will return to ICIL or dispose of all Materials or Related Technology
in its possession and cease to Exploit Licensed Products which incorporate Biological
Materials that have been provided to CytRx under this Agreement by ICIL or Imperial,
provided that, following termination of this Agreement by CytRx, CytRx may continue to
Exploit Licensed Products subject to CytRx continuing to comply with the provisions of
Clauses 4 and 5 relating to the payment of milestones and royalties and Clauses 12.7 to
12.11. If following termination of this Agreement CytRx does so continue to Exploit
Licensed Products in any country where there is no Valid Claim still in force the
royalty payable pursuant to Clause 4 on Licensed Products sold in that country will be
reduced by fifty (50) per cent;
	 
	 	14.5.4	 	CytRx shall have no obligation to prosecute, maintain or enforce the Licensed Patents
and any patented Non-Severable Improvements and shall transfer to ICIL all right and
title to the Licensed Patents, any patented Non-Severable Improvements and intellectual
property rights in any Related Technologies; and

 

 

	 	14.5.5	 	Any overpayments made by CytRx to ICIL, that have not been credited against royalties
or other amounts payable by CytRx to ICIL under Clause 5.8 will become immediately due
and payable by ICIL to CytRx.

	14.6	 	The obligation to make payments under this Agreement with respect to any period prior to its
expiry or termination shall survive the expiry or termination of this Agreement.
	 
	14.7	 	Termination of this Agreement for whatever reason shall not affect the accrued rights of the
Parties arising in any way out of this Agreement as at the date of termination including
without limitation the right to recover damages against each other and all provisions which
are expressed or are implied to survive this Agreement shall remain in full force and effect.
	 
	15	 	Commercialisation Option
	 
	15.1	 	Following termination of this Agreement, if CytRx notifies in writing ICIL (an “Option
Notice”) that it no longer wishes to develop and/or market a Licensed Product for the
treatment of obesity (an “Option Product”) ICIL will have a first right to take over the
development of such an Option Product and to purchase from CytRx at a commercially reasonable
rate all information, data, intellectual property, Know-How, regulatory approval data,
marketing authorisations relating to it.
	 
	15.2	 	If ICIL notifies CytRx in writing within thirty (30) days of the Option Notice that it wishes
to enter into negotiations to take over the development of such an Option Product and to
purchase the rights set out in Clause 15.1, then the Parties will promptly enter into
negotiations to agree terms.
	 
	15.3	 	The value of the Option Product will be based on:

	 	15.3.1	 	the direct costs incurred by CytRx in developing the product up to the date of any
agreement between CytRx and ICIL to transfer the development of such a Licensed Product
and to purchase the rights set out in Clause 15.1; and

 

 

	 	15.3.2	 	a premium to take account of the risk taken by CytRx in developing the Option
Product up to that point, the likelihood of the product reaching the market and its
potential sales. The valuation of the Option Product shall be carried out by the
Parties according to reasonable and mutually agreed principles at the time that ICIL
notifies CytRx that it wishes to enter into negotiations.

	15.4	 	If the negotiations described in Clause 15.2 do not result in an executed agreement within
seven (7) months of the date of the Option Notice then CytRx will be free to negotiate with a
Third Party and dispose to them the Option Product and all information, data, intellectual
property, Know-How, regulatory approval data, marketing authorisations relating to it.
	 
	15.5	 	If ICIL notifies CytRx in writing within thirty (30) days of the Option Notice that it does
not wish to enter into negotiations, or does not respond within such thirty (30) day period,
then CytRx will be free to negotiate with a Third Party and dispose to them the Option Product
and all information, data, intellectual property, Know-How, regulatory approval data,
marketing authorisations relating to it.

	16	 	Assignment
	 
	16.1	 	This Agreement may not be assigned by either Party without the prior written consent of the
other Party (such consent not to be unreasonably withheld and such consent or refusal of
consent to be given within 30 days of a request), except that either Party may assign the
Agreement to any of its Affiliates 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 pertaining to the subject matter of the Agreement, with prompt notice to the other
party of any such assignment. The Agreement shall inure to the benefit of and be binding upon
the Parties and their respective lawful successors and assigns.
	 
	17	 	Force Majeure
	 
	17.1	 	If a Party (the “Non-Performing Party”) is unable to carry out any of its obligations under
this Agreement due to Force Majeure this Agreement shall remain in effect but the Affected
Party’s relevant obligations under this Agreement and the corresponding

 

 

	 	 	obligations of the other Party
under this Agreement, shall be
suspended for a period equal to
the circumstance of Force
Majeure.
	 
	18	 	Waiver
	 
	18.1	 	Save as expressly provided in this Agreement neither Party shall be deemed to have waived any
of its rights or remedies whatsoever provided by law or under this Agreement unless the waiver
is made in writing, signed by a duly authorised representative of that Party and may be given
subject to any conditions thought fit by the grantor. Unless otherwise expressly stated any
waiver shall be effective only in the instance and for the purpose for which it is given.
	 
	18.2	 	No delay or failure of any Party in exercising or enforcing any of its rights or remedies
whatsoever shall operate as a waiver of those rights or remedies or so as to preclude or
impair the exercise or enforcement of those rights or remedies. No single or partial exercise
or enforcement of any right or remedy by any Party shall preclude or impair any other exercise
or enforcement of that right or remedy by that Party.
	 
	19	 	Severance of Terms
	 
	19.1	 	If the whole or any part of this Agreement (including any one or more of the clauses of this
Agreement or any sub-clause or paragraph or any part of one or more of these clauses) is or
becomes or is declared illegal, invalid or unenforceable in any applicable jurisdiction for
any reason (including both by reason of the provisions of any legislation and also by reason
of any decision of any court or Competent Authority which either has jurisdiction over this
Agreement or has jurisdiction over any of the Parties) then:

	 	19.1.1	 	in the case of the illegality, invalidity or un-enforceability of the whole of this
Agreement it shall terminate in relation to the jurisdiction in question; or
	 
	 	19.1.2	 	in the case of the illegality, invalidity or un-enforceability of part of this
Agreement that part shall be severed from this Agreement in the jurisdiction in
question and that illegality, invalidity or un-enforceability shall not in any way

 

 

	 	 	 	whatsoever prejudice or affect the remaining parts of this Agreement which shall
continue in full force and effect.

	20	 	Entire Agreement/Variations
	 
	20.1	 	This Agreement constitutes the entire agreement and understanding between the Parties and
supersedes all prior oral or written understandings, arrangements, representations or
agreements between them relating to the subject matter of this Agreement. The Parties
acknowledge that no claims shall arise in respect of any understandings, arrangements,
representations or agreements so superseded. No director, employee or agent of any Party is
authorised to make any representation or warranty to another Party not contained in this
Agreement, and each Party acknowledges that it has not relied on any such oral or written
representations or warranties. Nothing in this Agreement removes or overrides any right of
action by any Party in respect of any fraudulent misrepresentation, fraudulent concealment or
other fraudulent action.
	 
	20.2	 	No variation, amendments, modification or supplement to this Agreement shall be valid unless
made in writing in the English language and signed by a duly authorised representative or
representatives of each Party.
	 
	21	 	Notices
	 
	21.1	 	Any notice or other communication to be given pursuant to or made under or in connection with
the matters contemplated by this Agreement shall be in writing in the English language and
shall be delivered by courier, sent by post or sent by facsimile to the address or facsimile
number of the recipient set out in Schedule 4 or as specified by the recipient from time to
time in accordance with this Clause 21. Notices sent by e-mail shall not be valid of
themselves and must be confirmed in hard copy form by courier, by post or facsimile.
	 
	21.2	 	Any notice given pursuant to this Clause 21 shall be deemed to have been received:

	 	21.2.1	 	in the case of delivery by hand, when delivered; or

 

 

	 	21.2.2	 	in the case of sending by post:

	 	(a)	 	where posted in the country of the addressee, on the second working day
following the day of posting, and
	 
	 	(b)	 	where posted in any other country, on the fifth working day following the day
of posting; or
	 
	 	21.2.3	 	in the case of facsimile, on acknowledgement by the recipient’s facsimile receiving
equipment on a Business Day if the acknowledgement occurs before 1700 hours local time
of the recipient and in any other case on the following Business Day.

	22	 	Counterparts
	 
	22.1	 	This Agreement may be executed in any number of counterparts and by the different Parties on
separate counterparts, each of which when so executed shall be an original of this Agreement,
and all of which shall together constitute one and the same instrument. Complete sets of
counterparts shall be lodged with each Party.
	 
	23	 	This Agreement not to constitute a Partnership; Third Parties.
	 
	23.1	 	Nothing on this Agreement and no action taken by the Parties pursuant to this Agreement shall
constitute or be deemed to constitute a partnership association, joint-venture or other
co-operative entity between the Parties and none of the Parties shall have any authority to
bind the others in any way except as provided in this Agreement.
	 
	23.2	 	The Contracts (Rights of Third Parties) Act 1999 will not apply to this Agreement. No person
who is not a party to this Agreement (including any employee, officer, agent, representative
or subcontractor of either party) except any Affiliates of CytRx will have the right (whether
under the Contracts (Rights of Third Parties) Act 1999 or otherwise) to enforce any term of
this Agreement which expressly or by implication confers a benefit on that person without the
express prior agreement in writing of the Parties which agreement must refer to this Clause
23.2.

 

 

	24	 	Press Releases
	 
	24.1	 	Subject to Clause 24.2, no public announcement or other disclosure to Third Parties (except
to Affiliates of the Parties) concerning this Agreement shall be made, whether directly or
indirectly, by any Party to this Agreement without first obtaining the approval of the other
Party and agreement upon the nature and text of such announcement or disclosure with the
exception that:

	 	24.1.1	 	a Party may disclose the full terms of this Agreement to its investment bankers,
lawyers, accountants and other professional advisors without the other Party’s prior
approval provided that such disclosure is made under the terms of confidentiality
whether express or implied; and
	 
	 	24.1.2	 	a Party may disclose those terms which it is required by a Directive to disclose and
CytRx may file a copy of the Agreement with the United States Securities and Exchange
Commission provided that it takes advantage of all provisions to keep confidential as
many terms of the Agreement as possible.
	 
	 	24.1.3	 	a Party may further disclose the terms where such disclosure is a repeat of a
previous disclosure or items included in such previous disclosure..

	24.2	 	CytRx will use reasonable commercial endeavours to provide a draft press release to ICIL by
18 May 2004. Such press release will not be issued for publication until its contents have
been agreed by CytRx and ICIL. The Parties will use reasonable endeavours to agree the terms
of such press release within a reasonable time with a view to CytRx publishing the press
release on 19 or 20 May 2004.
	 
	25	 	Governing Law
	 
	25.1	 	The validity and construction and interpretation of this Agreement and any determination of
the performance which it requires shall be governed by the internal laws of the State of New
York, USA.

 

 

	 
	26	 	Jurisdiction
	 
	26.1	 	Subject to Clauses 11 and 26.2, all disputes between the Parties arising under, out of or
relating to this Agreement or arising out of the circumstances and relationships contemplated
by this Agreement including disputes relating to the validity, construction or interpretation
of this Agreement and including its formation, validity, binding effect, interpretation,
performance, breach or termination as well as non-contractual claims and including disputes
relating to pre-contractual representations which result in any action or proceeding shall be
referred to and finally resolved by arbitration under the Rules of the ICC International Court
of Arbitration which Rules are deemed to be incorporated by reference into this Clause. The
number of arbitrators shall be one. The place of arbitration shall be New York. The language
to be used in the arbitral proceedings shall be English.
	 
	26.2	 	Clauses 11 and 26.1 shall not prevent either Party applying for and obtaining interim relief
from a court.

IN WITNESS OF THE ABOVE the Parties have signed this Agreement on the date written at the head of
this Agreement.

	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	SIGNED by

	 	 	)	 	 	/s/ Susan Searle	 	 
	 

	 	 	 	 	 	 	 	 
	for and on behalf of

	 	 	)	 	 	Authorised Signatory	 	 
	IMPERIAL COLLEGE INNOVATIONS LIMITED

	 	 	)	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	SIGNED by

	 	 	)	 	 	/s/ Peter Bearman	 	 
	 

	 	 	 	 	 	 	 	 
	for and on behalf of

	 	 	)	 	 	Authorised Signatory	 	 
	IMPERIAL COLLEGE

	 	 	)	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	SIGNED for and on behalf of
	 	 	 	 	 	 	 	 
	CYTRX CORPORATION by

	 	 	)	 	 	/s/ Steven Kriegsman	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	)	 	 	Authorised Signatory	 	 

 

 

Schedule 1

Licensed Patents

PCT application PCT/2004/000413 filed on 3rd February 2004 and claiming priority
from UK priority patent application number 0302446.0 filed 3rd February 2003
entitled “Screening for Modulators of Fat Storage”

 

 

Schedule 2

Biological Materials

	 	•	 	Animals: RIP140 null mice – upon request 3 pairs of heterozygous males and females
	 
	 	•	 	Cells:   RIP140 null cells called RIPKO-1.
	 
	 	•	 	Rip140/ nuclear receptor responsive Reporter cell lines (e.g., PPRE-luciferase, ERE Luc,
SRE-Luc 
	 
	 	•	 	DNA clones: Expression vectors for RIP140 and mutant version thereof.
	 
	 	•	 	Expression vectors for RIP140 expressed as GST or other fusion protein  
	 
	 	•	 	Reporter assays & NR vectors
	 
	 	•	 	Antibodies: MP45 polyclonal antibody and 6D7 MAb.

 

 

Schedule 3

Expert’s Decision

	1.	 	Any matter or dispute relating to (a) the calculation method for royalty payments to be made
on any Combination Product or (b) the valuation of any Sublicensing Revenue received by CytRx
in a form other than cash shall be referred to a person suitably qualified to determine that
matter or dispute (an “Expert”) who shall be nominated jointly by the Parties or, failing
agreement between the Parties within twenty (20) Business Days of a written request by either
Party to the other seeking to initiate the Experts’ Decision procedure set out below, either
Party may request the president or chairman for the time being of The American Pharmaceutical
Manufacturers Association or any successor body to it to nominate the Expert.
	 
	2.	 	The Parties shall within fourteen (14) days of the appointment of the Expert meet with him or
her in order to agree a program for the exchange of any relevant information and the structure
to be adopted for the negotiations.
	 
	3.	 	In all cases the terms of appointment of the Expert by whomsoever appointed shall include:

	 	3.1.	 	a commitment by the Parties to share equally the payment of the Expert’s fee;
	 
	 	3.2.	 	a requirement on the Expert to act fairly as between the Parties and according
to the principles of natural justice;
	 
	 	3.3.	 	a requirement on the Expert to hold professional indemnity insurance both then
and for three (3) years following the date of his or her determination;
	 
	 	3.4.	 	a commitment by the Parties to supply to the Expert all such assistance,
documents and information as he or she may require for the purpose of his or her
determination; and
	 
	 	3.5.	 	a commitment by the Parties that all negotiations connected with the dispute
shall be conducted in confidence and without prejudice to the rights of the Parties in
any future proceedings.

	4.	 	The Expert’s recommendations shall be reduced to writing and once signed by their duly
authorised representatives, shall be binding on the Parties (save in the case of negligence or
manifest error on the part of the Expert).

 

 

 

	 	 	 	 
		 
	Schedule 4
		 
		 
	Addresses for Notices
		 
		 
		ICIL and Imperial:

	 	Imperial College Innovations
		 
		 

	 	Imperial College London
		 
		 

	 	12th Floor, EEE Building, South Kensington

Campus, London SW7 2AZ, UK
		 
		 

	 	Facsimile: (0207) 589 3553 or (0207) 594 6584
		 
		 

	 	Attention: Managing Director
		 
		 
		CytRx

	 	CytRx Corporation
		 
		 

	 	11726 San Vicente Boulevard,
		 
		 

	 	Suite 650,
		 
		 

	 	Los Angeles,
		 
		 

	 	California 90049 USA
		 
		 

	 	Facsimile: +310 826 5529
		 
		 

	 	Attention: Steven Kriegsman, CEOexv10w22

 

Exhibit 10.22

L E A S E

     THIS LEASE is dated as of September 25, 2007, between the Landlord and the Tenant named
below, and is of space in the Building described below.

ARTICLE 1

BASIC DATA; DEFINITIONS

     1.1 Basic Data. Each reference in this Lease to any of the following terms shall be
construed to incorporate the data for that term set forth in this Section:

     Landlord: Newgate Properties, LLC

     Landlord’s Address: 100 Institute Road, Worcester, MA 01609

     Tenant: RXI Pharmaceuticals Corporation

     Tenant’s Address: One Innovation Drive, Worcester, MA

     Property: 60-68 Prescott Street, One Gateway Place, Worcester, MA

     Building: The building commonly known and numbered as 60 Prescott Street, Worcester, MA.

     Premises: The portion of the first floor of the Building consisting of approximately 2,882
usable square feet of office space and a portion of the third floor consisting of approximately
2,425 usable square feet of laboratory space, all as more particularly shown on Exhibit A
attached hereto. The specific area of the Premises shall be determined by the registered architect
for the Landlord in accordance with the methodology set forth in Exhibit A-1.

     Basic Rent: The Basic Rent for the Premises is as follows:

	 	 	 	 	 
	RENTAL PERIOD	 	MONTHLY BASIC RENT	 
	Rent Commencement Date to July 31, 2009
	 	$	15,036.50	 

          Security Deposit. Upon the execution of the Lease, the Tenant shall be obligated to
pay to the Landlord one month’s rent (the “Security Deposit”) in the manner described at Section
1.1 hereof, which shall be held as security for the Tenant’s performance as herein provided and
refunded to the Tenant at the end of the Lease subject to the Tenant’s satisfactory compliance with
the conditions hereof. The Landlord shall not be obligated to pay interest on or segregate such
amount from other funds of the Landlord.

 

 

     Lease Commencement Date: Upon Substantial Completion of the Landlord’s Improvements described
herein by the Landlord and delivery to the Tenant in accordance with the terms of this Lease. The
parties shall acknowledge the Lease Commencement Date on the form attached hereto as Exhibit
B.

     Rent Commencement Date: Upon the later of: (i) Landlord’s Substantial Completion of the
Landlord’s Improvements described herein by the Landlord; or (ii) December 1, 2007.

     Term: One term of approximately twenty (20) months (“Initial Term”), commencing on the Lease
Commencement Date and expiring on the last day of the calendar month after the expiration of twenty
(20) calendar months after the Rent Commencement Date. Notwithstanding anything to the contrary
herein, Tenant shall have the options (i) to terminate this Lease effective on any date at least
six (6) months after the Term Commencement Date as may be specified by at least ninety (90) days’
notice to Landlord (in which event this Lease shall terminate on such effective date with the same
effect as if such effective date were the date originally specified herein for the expiration
hereof); and (ii) in the event Tenant has signed a lease of other space in Gateway Park to which
Tenant intends to relocate its operations from the Premises, by notice to Landlord, either to
extend the Term of this Lease on a month-to-month basis until, or to terminate this Lease early
when, such other leased space has been prepared for and Tenant has accomplished such relocation and
Tenant’s occupancy.

     Option Space: During the term of this Lease, the Tenant shall have the option to add to the
Premises that portion of the Building in Exhibit D marked as “Option Space” upon not less
than sixty (60) days written notice to the Landlord. It is agreed that the Option Space consists
of approximately 1,030 usable square feet of floor area. Upon such exercise, the Option Space
shall be deemed to be a part of the Premises and the Basic Rent shall be increased at a rate of
usable square footage of the Option Space multiplied by $34.00 per annum. In addition, Tenant
shall have full access to Room 3238, the common area immediately across the corridor from the open
lab space. Tenant shall not have the right to use the Option Space absent exercise of the option
by written notice to the Landlord. In addition, in the event Blue Sky Biotech vacates the office
space set forth in blue and marked “Blue Sky” on Exhibit E, Tenant shall have a first right of
refusal to occupy such space. It is agreed that the Blue Sky space is approximately 500 usable
square feet.

     Initial General Liability Insurance: $1,000,000 per occurrence/$2,000,000 aggregate (combined
single limit) for property damage, bodily injury or death.

     Permitted Uses: General office uses and scientific laboratory space for research and
development in the life sciences field of study which shall be conducted in compliance with all
applicable municipal, state and federal laws, rules and regulations and in all events the Permitted
Uses shall be conducted in a manner so as to not be unreasonably disruptive in any manner to any
other tenant or occupant in the Building. Tenant will procure and maintain in full force and
effect all licenses and permits which may be required for any use made of the Premises.

     1.2 Definitions. In addition to the terms defined throughout this Lease, when used in Lease, the capitalized
terms set forth below shall bear the meanings set forth below.

-2-

 

     Business Day: All days except Saturdays, Sundays, local, state and federal holidays.

     Force Majeure: Collectively and individually, strikes or other labor trouble, fire or other
casualty, acts of God, governmental preemption of priorities or other controls in connection with a
national or other public emergency or shortages of fuel, supplies or labor resulting therefrom, or
any other cause, whether similar or dissimilar, beyond the reasonable control of the party required
to perform an obligation.

     Substantial Completion: Shall mean that the Landlord’s Improvements have been completed in
accordance with Exhibit A and the plans and specifications approved by Tenant so that
either a temporary or a permanent certificate of occupancy has been issued by the City of
Worcester, subject to minor items of repair, correction, adjustment or completion set forth in a
so-called “punch list” signed by Landlord and Tenant, the incompletion of which do not and the
subsequent completion of which will not, adversely affect or interfere with Tenant’s use of the
Premises or the completion of Tenant’s Work. Landlord will complete the punch list items within
thirty (30) days after the Lease Commencement Date. In the event the punch list items are not
complete within thirty (30) days after the Lease Commencement Date, Tenant shall have the right to
withhold thirty percent of the Monthly Basic Rent until such punch list items are completed.

     1.3 Enumeration of Exhibits. The following Exhibits are a part of this Lease, are
incorporated herein by reference attached hereto, and are to be treated as a part of this Lease for
all purposes. Undertakings contained in such Exhibits are agreements on the part of Landlord and
Tenant, as the case may be, to perform the obligations stated therein.

	 	 	 
	Exhibit A –

	 	Plan of the Premises and Landlord Improvements
	Exhibit A-1 –

	 	Measurement Methodology
	Exhibit B –

	 	Lease Commencement Date Acknowledgment
	Exhibit C –

	 	WPI Equipment and Vivarium Space Subject to Tenant Use
	Exhibit D –

	 	Option Space
	Exhibit E –

	 	First Floor Option Office Space

ARTICLE 2

PREMISES AND APPURTENANT RIGHTS

     2.1 Lease of Premises. Landlord hereby leases and demises to Tenant and Tenant hereby
leases from Landlord the Premises for the Term and upon the terms and conditions hereinafter set
forth.

     2.2 Appurtenant Rights and Reservations.

          (a) Tenant shall have, as appurtenant to the Premises, the non-exclusive right to use, and
permit its invitees, employees and authorized subtenants to use in common with Landlord and others,
public or common walkways necessary for access to the Building and the Premises and the access
roads, driveways, loading areas, pedestrian sidewalks, landscaped areas,

-3-

 

bathrooms and other areas
or facilities, if any, which are located in or on the Property (the “Common Facilities”); but such
rights shall always be subject to reasonable rules and regulations from time to time established by
Landlord pursuant to Section 14.5 (the “Rules and Regulations”) and to the right of Landlord to
designate and change from time to time areas and facilities so to be used, provided, however, that
any newly designated or changed Common Facilities shall be substantially similar to those in
existence on the Lease Commencement Date.

          (b) Landlord shall have the right to place in the Premises (but in such manner as to cause no
interference with Tenant’s use of the Premises) utility lines, equipment, stacks, pipes, conduits,
ducts and the like.

          (c) Tenant shall have the right, as appurtenant to the Premises, the non-exclusive and
subordinate right to utilize the kitchen area, conference rooms and auditorium within that portion
of the Building leased and occupied by Worcester Polytechnic Institute (“WPI”) as may be reasonably
required by Tenant and in all events subject to the scheduling requirements of WPI.

          (d) In conjunction with the Lease, Tenant shall be provided the opportunity to utilize certain
pieces of equipment and space owned by WPI, including but not limited to the Vivarium located
within that portion of the Building leased by WPI. A list of such equipment and a plan of such
space as are subject to this provision is attached as Exhibit C. Tenant shall be obligated
to coordinate the use of the equipment and the Vivarium with WPI and shall pay to WPI a reasonable
rate to be agreed to on a per hour or per animal basis for the use of such equipment and the
Vivarium.

ARTICLE 3

BASIC RENT AND SECURITY DEPOSIT

     3.1 Payment of Basic Rent.

          (a) Tenant agrees to pay the Basic Rent to Landlord, or as directed by Landlord, commencing on
the Rent Commencement Date, without offset, abatement, deduction or demand except as set forth in
this Lease. Basic Rent shall be payable in equal monthly installments, in advance, on the first
day of each and every calendar month during the Term of this Lease, to Landlord at Landlord’s
Address or at such other place as Landlord shall from time to time designate by notice, in lawful
money of the United States. In the event that any installment of Basic Rent is not paid within
twenty (20) business days of when due, Tenant shall pay, in addition to any charges under the
Lease, an administrative fee equal to five (5%) percent of the overdue payment. Landlord and
Tenant agree that all amounts due from Tenant under or in respect of this Lease shall be considered
as rental reserved under this Lease for all purposes,
including without limitation regulations promulgated pursuant to the Bankruptcy Code, and
including further without limitation Section 502(b) thereof.

          (b) Basic Rent for any partial month shall be pro-rated on a daily basis, and if the first day
on which Tenant must pay Basic Rent shall be other than the first day of a calendar month, the
first payment which Tenant shall make to Landlord shall be equal to a proportionate

-4-

 

part of the
monthly installment of Basic Rent for the partial month from the first day on which Tenant must pay
Basic Rent to the last day of the month in which such day occurs.

          (c) Basic Rent is full service gross rent and includes all real estate taxes, insurance,
utilities, operating expenses and other costs and expenses except as herein expressly provided.

ARTICLE 4

CONDITION OF THE PREMISES

     4.1 Condition of the Premises. Subject to the completion of Landlord’s Improvements by
the Landlord, at Landlord’s expense, relative to the office space portion of the Premises and the
work described in this Section and (the “Landlord’s Improvements”), the Premises are being leased
in their “AS IS” condition. The Landlord agrees that at the time of delivery (i) the Premises
shall be in conformity with all applicable laws, ordinances, rules and regulations, (ii) the
Premises shall be free of latent defects, (iii) the Landlord’s Improvements and the work described
in this Section shall be completed in a good and workmanlike manner, using only new materials, (iv)
the Landlord, at the Landlord’s expense, shall have obtained all permits required for the
completion and occupancy of the Landlord’s Improvements and the work described in this Section, (v)
all base building mechanical, electrical, plumbing and other Building systems shall be in good
operating condition and repair, and (vi) the Premises shall be free and clear of all tenants and
occupants. If the Landlord’s Improvements and the work described in this Section are not
substantially completed by December 15, 2007, the Landlord will credit one-half day’s Basic Rent
for each day after December 15, and one full day’s Basic Rent for each day after December 31, that
the office space is not Substantially Completed, excluding, any delays that are attributable to
RXi. If the Landlord’s Improvements and the work described in this Section are not complete by
February 1, 2008, then the Tenant may terminate this Lease by delivering written notice to the
Landlord, in which case this Lease shall terminate on the date set forth in the notice. There are
no Landlord’s Improvements contemplated or anticipated to the laboratory portion of the Premises
and any such work shall be conducted by Tenant pursuant to Section 5.2.

ARTICLE 5

USE OF PREMISES

     5.1 Permitted Use.

          (a) Tenant agrees that the Premises shall be used and occupied by Tenant and its authorized
subtenants only for Permitted Uses (defined hereinabove) and for no other use
without Landlord’s express written consent which consent may be withheld or conditioned in the
sole and unfettered discretion of the Landlord. It shall be the Tenant’s responsibility and
obligation to obtain and maintain the proper licenses and permits for the Tenant’s business at the
Tenant’s expense and the Landlord makes no representation with respect to the availability or

-5-

 

non-availability of such licenses or permits. Landlord represents and warrants that the Premises
may be used for the Permitted Uses under applicable zoning and other land use laws.

          (b) Tenant agrees for itself and its authorized subtenants to conform to the following
provisions during the Term of this Lease:

          (i) Tenant will not place on the exterior of the Premises, Property or on any part of
the Building, any sign, symbol, advertisement or the like, other than the existing signs
located on the Property, without first obtaining Landlord’s consent, which shall not be
unreasonably withheld, for interior signs. Landlord agrees to cooperate with Tenant as to
sign locations. With regard to the installation of any signs, the Tenant shall comply with
all provisions of Section 5.2 herein. The Tenant shall maintain and repair the Tenant’s
signs located on the Property as of the date of this Lease and shall bear all costs and
expenses associated therewith. Tenant agrees to have a sign installed in the lobby of the
Building prior to the Rent Commencement Date and to permit Landlord to advertise the tenancy
of the Tenant in the Building in accordance with Section 14.10 (the “Publicity
Restrictions”):

          (ii) Tenant shall not perform any act or carry on any practice which may injure the
Premises, or any other part of the Building and shall operate the Premises in a reputable
manner;

          (iii) Tenant shall, in its use of the Premises, comply with the requirements of all
applicable governmental laws, rules and regulations, including, without limitation, the
Americans With Disabilities Act of 1990 and the regulations of the Massachusetts
Architectural Access Board, subject to Tenant’s right to contest the same in good faith and
postpone such compliance during the pendency of such contest; provided, that Tenant shall
not be responsible for ensuring the Premises complies with such laws when (i) such legal
requirements are imposed on a Building-wide basis or would be generally applicable to any
office space and do not relate to Tenant’s particular manner of use of the Premises, (ii) a
notice of violation or order was issued prior to the date Tenant is given possession of the
Premises, or (iii) such legal requirements require investigating, certifying, monitoring,
encapsulating, removing or in any way dealing with asbestos or hazardous substances unless
such asbestos or hazardous substances were introduced into the Premises by Tenant; and

          (iv) Tenant agrees that the Premises and any other part of the Building will be used
and occupied in a careful, reasonably safe and proper manner and that Tenant will not permit
waste therein that results from negligence or breach hereof on the part of Tenant, its
employees, agents, invitees and others acting on its behalf.

     5.2 Installations and Alterations by Tenant.

          (a) Tenant shall be responsible for any and all alterations, additions and improvements
(“Improvements”) that are required to complete the Premises such that the Premises can be used for
the Tenant’s purposes, with the sole exclusion being the Landlord’s

-6-

 

Improvements. Prior to any
structural Improvements being made, the Tenant shall provide any and all plans and specifications
and a list of contractors for the prior consent and approval of the Landlord, which shall not be
unreasonably withheld, delayed or conditioned. All work shall be (i) performed in a good and
workmanlike manner and in compliance with all applicable laws, ordinances and regulations; (ii) be
made at Tenant’s sole cost and expense (excluding the Landlord’s Improvements); (iii) other than
Tenant’s Removable Property, become part of the Premises and the property of Landlord; and (iv) be
coordinated with any work being performed by Landlord in such a manner as not to damage the
Building or interfere with the construction or operation of the Building.

          (b) Tenant shall be responsible for the installation and payment of all phone systems desired
by the Tenant at the Premises.

          (c) All articles of personal property and all laboratory hoods and other business and trade
fixtures, inventory, machinery and equipment and furniture owned or installed by Tenant solely at
its expense in the Premises (“Tenant’s Removable Property”) shall remain the property of Tenant and
may be removed by Tenant at any time prior to the expiration or earlier termination of the Term,
provided that Tenant, at its expense, shall repair any damage to the Building caused by such
removal.

          (d) Notice is hereby given that Landlord shall not be liable for any labor or materials
furnished or to be furnished to Tenant upon credit, and that no mechanic’s or other lien for any
such labor or materials shall attach to or affect the reversion or other estate or interest of
Landlord in and to the Premises, the Building or the Property. Tenant agrees that if, any lien is
filed against all or any part of the Property for work claimed to have been done for, or materials
claimed to have been furnished to, Tenant or its agents, employees or independent contractors,
Tenant, at its sole cost and expense, shall cause such lien to be dissolved within ten (10)
business days after receipt of notice that such lien has been filed, by the payment thereof or by
the filing of a bond sufficient to accomplish the foregoing. If Tenant shall fail to discharge any
such lien within ten (10) business days’ notice, Landlord may, at its option, discharge such lien
and treat the cost thereof (including reasonable attorneys’ fees incurred in connection therewith)
as payable within ten (10) days of demand, it being expressly agreed that such discharge by
Landlord shall not be deemed to waive or release the Event of Default in not discharging such lien.
Tenant shall indemnify and hold Landlord harmless from and against any and all expenses, liens,
claims, liabilities and damages based on or arising, directly or indirectly, by reason of the
making of any alterations, additions or improvements by or on behalf of Tenant to the Premises
under this Section, which obligation shall survive the expiration or termination of this Lease.

          (e) In the course of any work being performed by Tenant (including, without limitation, the
“field installation” of any Tenant’s Removable Property), Tenant agrees to use labor compatible
with that being employed by Landlord for work in the Building or on the
Property or other buildings owned by Landlord or its affiliates (which term, for purposes
hereof, shall include, without limitation, entities which control or are under common control with
or are controlled by Landlord or, if Landlord is a partnership or limited liability company, by any
partner or member of Landlord and which may include Consigli Construction Co., Inc.) and not to
employ or permit the use of any labor or otherwise take any action which might result in a

-7-

 

labor
dispute involving personnel providing services in the Building or on the Property pursuant to
arrangements made by Landlord. Tenant intends to use Conlangelo & Son as its contractor and
Landlord has no objection to same.

          (f) No Improvements shall be performed in a manner that is unreasonably disruptive to other
tenants, or invitees of Landlord in the Building, or to the public in general, or which causes
unreasonable noise, vibration, dust or is unreasonably unclean or unsightly. Upon notice from the
Landlord, subject to Sections 10.4 and 11.2, the Tenant shall, at its sole cost and expense, repair
any damage to the Building or the Property caused by or resulting from any Improvements.

          (g) To the fullest extent permitted by law, Tenant shall indemnify and hold harmless Landlord
and its agents and employees from and against all claims, damages, losses and expenses (except if
arising in whole or in part from the negligence, willful misconduct or breach hereof on the part of
Landlord or its agents, employees or contractors) including, but not limited to, reasonable
attorneys’ fees, to the extent arising out of or resulting from any Improvements, provided that
such claim, damage, loss or expense is attributable to bodily injury, sickness, disease or death,
or to injury to or destruction of tangible property, including loss of use resulting therefrom, but
only to the extent caused in whole or in part by negligent acts or willful misconduct of Tenant or
its contractors or anyone for whose acts they may be liable. Such obligation shall not be
construed to negate, abridge, or reduce other rights or obligations of indemnity elsewhere in this
Lease or which would otherwise exist as to a party or person described in this Article.

          (h) Tenant shall ensure that all contractors (which include sub-contractors of any contractor)
who will enter the Premises or the Building, and others employed directly or indirectly by them,
shall purchase insurance which, at a minimum, shall be consistent with the following:

	 	(a)	 	insurance covering workers’ or workmen’s compensation claims.
	 
	 	(b)	 	commercial general liability insurance covering
claims for personal injury and property damage.
	 
	 	(c)	 	During the period of any construction of the
Tenant’s Improvements or alterations pursuant to this Section,
contractor’s or builder’s “all risk” insurance covering property damage
and loss of use claims.

The insurance required by this Article shall be written for not less than limits specified herein
for Tenant’s Insurance. Coverages, whether written on an occurrence or claims-made basis, shall be
maintained without interruption from date of commencement of the Work until date of final payment
and termination of any coverage required to be maintained after final payment.

Original certificates of insurance evidencing full compliance with this Article shall be delivered
to Landlord prior to commencement of the Improvements. These certificates and the insurance

-8-

 

policies required by this Article shall expressly name Landlord and Landlord’s mortgagee as
additionally insured, and shall contain a provision that coverages afforded under the policies will
not be canceled or allowed to expire until at least thirty (30) days’ prior written notice has been
given to Landlord.

     5.3 Cleanliness, Maintenance of Certain Equipment, Trash

     The Landlord shall be responsible for storage and disposing of any non-hazardous trash and
waste. Tenant shall be responsible for placing all such trash in the appropriate receptacles
provided by the Landlord. With regard to any hazardous or infectious materials defined in any
federal or state laws, rules or regulations, used in the Premises by Tenant or any of Tenant’s
officers, employees, contractors or agents, the Tenant shall be responsible for disposing such
materials within or from the Premises at its sole cost and expense and in accordance with all
applicable law, rule or regulation. The Tenant shall be required to comply with any and all
municipal, state or federal regulations or laws with regard to the storage, handling and disposal
of hazardous material and with any reasonable guidelines as developed for the Property by the
Landlord.

ARTICLE 6

ASSIGNMENT AND SUBLETTING

     6.1 Terms and Conditions.

          (a) Tenant and Landlord covenant and agree that, except in the case of a sublease or
assignment in connection with a merger, consolidation or sale of substantially all of its assets by
the Tenant, the Tenant may not sublet or assign all or a portion of the Premises without the
express written consent of the Landlord, which consent shall not be unreasonably withheld, delayed
or conditioned.

          (b) Notwithstanding any assignment or subletting, Tenant shall remain fully and primarily
liable for all of its obligations hereunder.

          (c) All of the provisions of this Lease shall be fully binding on any assignee or sublessee,
except wherever in this Lease a provision is expressly stated to be inapplicable to an assignee or
sublessee, in which event such provision shall be considered deleted from this Lease as applicable
to such assignee or sublessee. Without limiting the generality of the foregoing, no assignee or
sublessee may itself assign this Lease or sublet the Premises.

          (d) Tenant shall deliver to Landlord a fully executed counterpart of any
purported assignment permitted under this Section within ten (10) days of the execution thereof.
In the event that Tenant fails to execute and deliver any assignment to which Landlord shall have
consented within sixty (60) days after the giving of such consent, then Landlord’s consent
automatically shall be deemed revoked and of no further force and effect.

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ARTICLE 7

RESPONSIBILITY FOR REPAIRS AND CONDITION OF PREMISES; SERVICES TO BE FURNISHED BY LANDLORD 

     7.1 Landlord Repairs. Subject to Section 7.2 below, Landlord, at Landlord’s expense,
agrees to keep in good order, condition, and repair, and make all required replacements to, the
roof, exterior walls and structure of the Building, the interior walls of the Building and the
Property, the foundation of the Building, the HVAC systems and components, electric, water and
sewer systems and components, the Common Facilities and the elevators, all as are necessary to
maintain the same in a safe and tenantable condition for the Permitted Uses, except that Landlord
shall in no event be responsible for any condition in the Premises or the Building caused by any
willful misconduct, neglect or breach hereof on the part of Tenant, its invitees or contractors.
Landlord, at Landlord’s expense, shall also keep and maintain all Common Facilities in a good and
clean order, condition and repair, free of snow and ice and accumulation of dirt and rubbish, and
shall keep and maintain all landscaped areas on the Property in a neat and orderly condition.
Landlord shall make the repairs and replacements to maintain the Building in a condition comparable
to other first class mixed-office/laboratory buildings in the Worcester area. Landlord shall not
be responsible to make any improvements or repairs to the Building other than as expressly
described in this Section 7.1 provided, unless expressly provided otherwise in this Lease.

     7.2 Tenant Repairs. Subject to Section 7.1 above, Tenant shall be responsible for
making repairs to the Premises necessary to keep the Premises and every part thereof neat and
clean, and will maintain the same, excluding the HVAC, plumbing, mechanical and electrical systems,
in good order, condition and repair, excepting only those repairs for which Landlord is responsible
under the terms of this Lease, reasonable wear and tear of the Premises, and damage by fire or
other casualty or due to Landlord’s negligence, willful misconduct or breach hereof, occurring as a
consequence of the exercise of the power of eminent domain; and Tenant shall surrender the
Premises, at the end of the Term, in such condition. Subject to Sections 10.4 and 11.2, Tenant
shall be responsible for the cost of repairs which may be made necessary by reason of damage to the
Building caused by any willful misconduct, neglect or breach hereof on the part of Tenant or its
contractors.

     7.3 Interruption of Service. Landlord reserves the right to curtail, suspend,
interrupt and/or stop the supply of water, sewage, electrical current, cleaning, and other
services, and to curtail, suspend, interrupt and/or stop use of entrances and/or lobbies serving
access to the Building, or other portions of the Property, without thereby incurring any liability
to Tenant, when necessary by reason of accident or emergency, or for repairs, alterations,
replacements or improvements in the judgment of Landlord, reasonably exercised, desirable or
necessary, or when prevented from supplying such services or use due to any willful misconduct,
neglect or breach hereof on the part of Tenant or Tenant’s agents, employees or contractors or by
Force Majeure, including, but not limited to, strikes, lockouts, difficulty in obtaining materials,
accidents, laws or orders, or inability, by exercise of reasonable diligence, to obtain
electricity, water, gas, steam, coal, oil or other suitable fuel or power. Notwithstanding
anything to the contrary contained herein, if any essential services (such as HVAC, electricity,
water, passenger elevators if necessary for reasonable access to the Premises, etc.) supplied by
Landlord are

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interrupted rendering a material portion of the Premises untenantable, or if a
material portion of the Premises are rendered untenantable in whole or in part as a result of a
default by Landlord, a constructive eviction, contamination of the Premises, Building or Property,
or any other cause, and such untenantability does not result in whole or in part from the
negligence, willful misconduct or breach hereof on the part of Tenant, its employees, contractors,
or agents, Tenant shall be entitled to an equitable abatement of Basic Rent beginning on the day a
material portion of the Premises were first rendered untenantable in whole or in part. The
abatement shall end when tenantability is restored by Landlord and Tenant is able to use the entire
Premises to conduct its business operations therein. During any such untenantability, Landlord
shall use commercially reasonable efforts to restore the services and render the entire Premises
tenantable.

ARTICLE 8

REAL ESTATE TAXES

     Not applicable.

ARTICLE 9

OPERATING AND UTILITY EXPENSES

     Not applicable.

ARTICLE 10

INDEMNITY AND PUBLIC LIABILITY INSURANCE

     10.1 Tenant’s Indemnity. Except if arising in whole or in part from the negligence or
willful misconduct or breach hereof on the part of Landlord or its agents, contractors or
employees, Tenant agrees to indemnify and save harmless Landlord and Landlord’s partners, members,
shareholders, officers, directors, managers, employees, agents and contractors and any Holder from
and against all claims, losses, cost, damages, liability or expenses of whatever nature to the
extent arising: (i) from any accident, injury or damage whatsoever to any person, or to the
property of any person, occurring in or about the Premises (ii) from any accident, injury or damage
whatsoever to any person, or to the property of any person, occurring outside of the Premises but
on or about the Property, where such accident, damage or injury results or is claimed to have
resulted from any negligence or willful misconduct or breach hereof on the part of Tenant or
Tenant’s agents, employees, contractors or sublessees; or (iii) the use or occupancy of the
Premises or of any business conducted therein or any thing or work whatsoever done or any condition
created (other than by or on behalf of Landlord) in or about the Premises, and, in any case,
occurring after the Commencement Date (or such earlier date as of which Tenant takes possession of the Premises) until
the expiration of the Term of this Lease and thereafter so long as Tenant is in occupancy of any
part of the Premises. This indemnity and hold harmless agreement shall include indemnity against
all losses, costs, damages, expenses and liabilities incurred in or in connection with any such
claim or any proceeding brought thereon, and the defense thereof, including, without limitation,
reasonable attorneys’ fees and costs at both the

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trial and appellate levels. The provisions of
this Section 10.1 shall survive the expiration or earlier termination of this Lease.

     10.2 Tenant Insurance. Tenant agrees to maintain in full force from the date upon which
Tenant first enters the Premises for any reason, throughout the Term of this Lease, and thereafter
so long as Tenant is in occupancy of any part of the Premises, a policy of commercial general
liability and property damage insurance (including broad form contractual liability, independent
contractor’s hazard and completed operations coverage), fire and extended coverage with Tenant
named as an insured and Landlord, and, at Landlord’s request, Landlord’s property manager, any
Holder, and such other persons as Landlord reasonably may request are named as additional insureds.
Each policy required hereunder shall be non-cancelable and non-amendable with respect to Landlord
and Landlord’s said designees without thirty (30) days’ prior notice, shall be written on an
“occurrence” basis, and shall be in at least the amounts of the Initial General Liability Insurance
specified in Section 1.1, and a duplicate original or certificates thereof satisfactory to
Landlord, shall be delivered to Landlord. All such policies shall contain a clause that such
policy and the coverage evidenced thereby shall be primary with respect to any insurance policies
carried by the Landlord and shall be obtained from responsible companies qualified to do business
and in good standing in the Commonwealth of Massachusetts and rated A- or better in the most
current issue of Best’s Insurance Reports. Tenant shall procure and pay for any and all renewals
of such insurance from time to time during the term of the Lease and shall provide such renewal
policies or certificates.

     10.3 Tenant’s Risk. Tenant agrees to use and occupy the Premises and to use such other
portions of the Property as Tenant is herein given the right to use at Tenant’s own risk. Except in
the event of negligence, willful misconduct or breach hereof on the part of Landlord, or any of its
agents, contractors or employees, Landlord shall not be liable to Tenant, its employees, agents,
invitees or contractors for any damage, injury, loss, compensation, or claim (including, but not
limited to, claims for the interruption of or loss to Tenant’s business) based on, arising out of
or resulting from any cause whatsoever, including, but not limited to, repairs to any portion of
the Premises or the Property, any fire, robbery, theft, mysterious disappearance and/or any other
crime or casualty, the actions of any other tenants of the Building or of any other person or
persons, or any leakage in any part or portion of the Premises or the Building, or from water, rain
or snow that may leak into, or flow from any part of the Premises or the Building, or from drains,
pipes or plumbing fixtures in the Building. Any goods, property or personal effects stored or
placed in or about the Premises shall be at the sole risk of Tenant, and neither Landlord nor
Landlord’s insurers shall in any manner be held responsible therefor. Landlord shall not be
responsible or liable to Tenant, or to those claiming by, through or under Tenant, for any loss or
damage that may be occasioned by or
through the acts or omissions of persons occupying adjoining premises or any part of the premises
adjacent to or connecting with the Premises or any part of the Property or otherwise.
Notwithstanding the foregoing, Landlord shall not be released from liability for any injury, loss,
damages or liability to the extent arising from any negligence, willful misconduct or breach hereof
on the part of Landlord, its servants, employees or agents acting within the scope of their
authority on or about the Premises. The provisions of this Section 10.3 shall be applicable from
and after the execution of this Lease and until the end of the Term of this Lease, and during such
further period as Tenant may use or be in occupancy of any part of the Premises or of the Building.

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     10.4 Waiver of Subrogation. Notwithstanding anything to the contrary contained herein,
Landlord and Tenant each hereby waives on behalf of itself and its property insurers (none of which
shall ever be assigned any such claim or be entitled thereto due to subrogation or otherwise) any
and all rights of recovery, claim, action, or cause of action against the other, its agents,
officers, servants, partners, shareholders, contractors or employees for any loss or damage that
may occur to the Building or the Premises, or any improvements thereto, or any personal property of
such party therein, by reason of fire, the elements, or any other cause or origin, which is insured
against under any property insurance policy actually being maintained from time to time, even if
not required hereunder, or which would be insured against under the terms of any so-called “all
risk” or “broad form” policy or any other property insurance policy required to be carried or
maintained by the waiving party hereunder, whether or not such insurance coverage is actually being
maintained and regardless of the cause or origin, including, in every instance, negligence by the
other party hereto, its agents, officers, partners or employees. Landlord and Tenant each agrees
to cause appropriate clauses to be included in its property insurance policies necessary to
implement the foregoing provisions.

ARTICLE 11

FIRE, EMINENT DOMAIN, ETC.

     11.1 Landlord’s Right of Termination. If the Premises or the Building are substantially
damaged by fire or casualty (the term “substantially damaged” meaning damage of such a character
that the same cannot, in the ordinary course, reasonably be expected to be repaired within ninety
(90) days from the date of the fire or casualty), or if any part of the Building is taken by any
exercise of the right of eminent domain, then Landlord shall have the right to terminate this Lease
(even if Landlord’s entire interest in the Premises may have been divested) by giving notice of
Landlord’s election so to do prior to the expiration of the said ninety (90) days, whereupon this
Lease shall terminate thirty (30) days after the date of such notice with the same force and effect
as if such date were the date originally established as the expiration date hereof.

     11.2 Restoration; Tenant’s Right of Termination. If the Premises or the Building are damaged by fire or other casualty (or the Premises or access
to the Premises are taken by the power of eminent domain), and this Lease is not terminated
pursuant to Section 11.1, Landlord shall thereafter use reasonable efforts to restore the Building
and the Premises (excluding any Alterations made by Tenant pursuant to Section 5.2) to proper
condition for Tenant’s use and occupation, provided that Landlord shall have no obligation to
restore damage that would not be covered by a property insurance policy of the sort referred to in
Section 10.4. If, for any reason, including Force Majeure, such restoration shall not be
substantially completed within 180 days after the date of the fire or other casualty, Tenant shall
have the right to terminate this Lease by giving notice to Landlord thereof. This Lease shall
cease and come to an end without further liability or obligation on the part of either party on the
date specified in such notice from Tenant. Such right of termination shall be Tenant’s sole and
exclusive remedy at law or in equity for Landlord’s failure so to complete such restoration, and
time shall be of the essence with respect thereto. Notwithstanding the forgoing, Tenant’s
termination rights set forth in Section 1.1 Term shall remain in full force and effect.

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     11.3 Abatement of Rent. If the Premises or the Building are damaged by fire or other
casualty, Basic Rent payable by Tenant shall abate proportionately for the period during which, by
reason of such damage, there is substantial interference with Tenant’s use of the Premises, having
regard for the extent to which Tenant may be required to discontinue Tenant’s use of all or any
undamaged portion of the Premises due to such damage, but such abatement or reduction shall end if
and when Landlord shall have completed sufficient restoration that Tenant is reasonably able to use
the Premises and the Premises are in substantially the condition in which they were prior to such
damage. If the Premises shall be affected by any exercise of the power of eminent domain, Basic
Rent payable by Tenant shall be justly and equitably abated and reduced according to the nature and
extent of the loss of use thereof suffered by Tenant. In no event shall Landlord have any
liability for damages to Tenant for inconvenience, annoyance, or interruption of business arising
from any fire or other casualty or eminent domain.

     11.4 Condemnation Award. Landlord shall have and hereby reserves and accepts, and Tenant
hereby grants and assigns to Landlord, all rights to recover for damages to the Property and the
leasehold interest hereby created, and to compensation accrued or hereafter to accrue by reason of
any taking, by exercise of the right of eminent domain, and by way of confirming the foregoing,
Tenant hereby grants and assigns, and covenants with Landlord to grant and assign to Landlord, all
rights to such damages or compensation, and covenants to deliver such further assignments and
assurances thereof as Landlord may from time to time request, and Tenant hereby irrevocably
appoints Landlord its attorney-in-fact to execute and deliver in Tenant’s name all such assignments
and assurances. Nothing contained herein shall be construed to prevent Tenant from prosecuting in
any condemnation proceedings a claim for the value of any of Tenant’s Removable Property installed
in the Premises by Tenant at Tenant’s expense and for relocation expenses.

ARTICLE 12

HOLDING OVER; SURRENDER

     12.1 Holding Over. Any holding over by Tenant after the expiration of the Term of this
Lease shall be treated as a daily tenancy at sufferance at a rate equal to one and one-half (1 1/2)
times the Basic Rent then in effect (prorated on a daily basis). In all other respects, such
holding over shall be on the terms and conditions set forth in this Lease as far as applicable.

     12.2 Surrender of Premises. Subject to the provisions of Section 7.2, upon the expiration
or earlier termination of the Term of this Lease, Tenant shall peaceably quit and surrender to
Landlord the Premises together with all alterations, additions and improvements other than Tenant’s
Removable Property which may have been made or installed in, on or to the Premises prior to or
during the Term of this Lease by either Landlord or Tenant or any authorized subtenant (except as
hereinafter provided) in neat and clean condition and in such order, condition and repair as Tenant
is required to maintain the same hereunder. Tenant shall remove all of Tenant’s Removable Property
and shall repair any damages to the Premises or the Building caused by such removal. Any Tenant’s
Removable Property which shall remain in the Building or on the Premises after the expiration or
termination of the Term of this Lease shall be deemed conclusively to have been abandoned, and
either may be retained by Landlord as its

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property or may be disposed of in such manner as Landlord
may see fit, at Tenant’s sole cost and expense.

ARTICLE 13

DEFAULT; REMEDIES

     13.1 Tenant’s Default.

          (a) If at any time subsequent to the date of this Lease any one or more of the following
events (herein referred to as an “Event of Default”) shall occur:

          (i) Tenant shall fail to pay the Basic Rent or any other charges hereunder when
due and such failure shall continue for five (5) Business Days after the date due
and written notice thereof; or

          (ii) Tenant shall neglect or fail to perform or observe any other covenant
herein contained on Tenant’s part to be performed or observed and Tenant shall fail
to remedy the same within thirty (30) days after written notice to Tenant specifying
such neglect or failure, or if such failure is of such a nature that it cannot
reasonably remedy the same within such thirty (30) day period, Tenant shall fail to
commence promptly (and in any event within such thirty (30) day period) to remedy
the same and to prosecute such remedy to completion with diligence and continuity,
subject to the Force Majeure; or

          (iii) Tenant’s leasehold interest in the Premises shall be taken on execution
or by other process of law directed against Tenant; or

          (iv) Tenant shall make an assignment for the benefit of creditors or shall be
adjudicated insolvent, or shall file any petition or answer seeking any
reorganization, arrangement, composition, readjustment, liquidation, dissolution or
similar relief for itself under any present or future Federal, State or other
statute, law or regulation for the relief of debtors (other than the Bankruptcy
Code, as hereinafter defined), or shall seek or consent to or acquiesce in the
appointment of any trustee, receiver or liquidator of Tenant or of all or any
substantial part of its properties, or shall admit in writing its inability to pay
its debts generally as they become due; or

          (v) A petition shall be filed against Tenant under any law (other than the
Bankruptcy Code) seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution, or similar relief under any present or future Federal,
State or other statute, law or regulation and shall remain undismissed or unstayed
for an aggregate of sixty (60) days (whether or not consecutive), or if any trustee,
conservator, receiver or liquidator of Tenant or of all or any substantial part of
its properties shall be appointed without the consent or acquiescence of Tenant and
such appointment shall remain unvacated or unstayed for an aggregate of sixty (60)
days (whether or not consecutive).

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then in any such case Landlord may terminate this Lease as hereinafter provided and exercise any
other rights or remedies available under this Lease, at law or in equity.

     13.2 Landlord’s Remedies.

          (a) Upon the occurrence of an Event of Default, Landlord may terminate this Lease by notice to
Tenant, specifying a date not less than thirty (30) days after the giving of such notice on which
this Lease shall terminate and this Lease shall come to an end on the date specified therein as
fully and completely as if such date were the date herein originally fixed for the expiration of
the Term of this Lease, and Tenant will then quit and surrender the Premises to Landlord, but
Tenant shall remain liable as hereinafter provided.

          (b) If this Lease shall have been terminated as provided in this Article, or if any execution
or attachment shall be issued against Tenant or any of Tenant’s property whereupon the Premises
shall be taken or occupied by someone other than Tenant, then Landlord may re-enter the Premises,
either by summary proceedings, ejectment or otherwise, and remove and dispossess Tenant and all
other persons and any and all property from the same, as if this Lease had not been made.

          (c) If this Lease shall have been terminated as provided in this Article, Tenant shall pay the
Basic Rent, or charges and other sums payable hereunder up to the time of such termination, and
thereafter Tenant, until the end of what would have been the Term of this Lease in the absence of
such termination, shall be liable to Landlord for, and shall pay to Landlord, as
liquidated current damages: the Basic Rent, or charges and other sums that would be payable
hereunder if such termination had not occurred, less the net proceeds, if any, of any reletting of
the Premises, after deducting all expenses in connection with such reletting, including, without
limitation, all repossession costs, brokerage commissions, reasonable legal expenses, reasonable
attorneys’ fees, advertising, expenses of employees, alteration costs and expenses of preparation
for such reletting. Tenant shall pay the portion of such current damages referred to above to
Landlord monthly on the days which the Basic Rent would have been payable hereunder if this Lease
had not been terminated. Landlord shall use commercially reasonable efforts to mitigate its
damages.

          (d) At any time within two (2) months after termination of this Lease as provided in this
Article, whether or not Landlord shall have collected any such current damages, as liquidated final
damages and in lieu of all such current damages beyond the date of such demand, at Landlord’s
election Tenant shall pay to Landlord an amount equal to the excess, if any, of the Basic Rent,
for what would be the then unexpired Term of this Lease if the same remained in effect, over the
then fair net rental value of the Premises for the same period (discounted to present value).

          (e) In case of any Event of Default, re-entry, expiration and dispossession by summary
proceedings or otherwise, Landlord may (i) re-let the Premises or any part or parts thereof, either
in the name of Landlord or otherwise, for a term or terms which may at Landlord’s option be equal
to or less than or exceed the period which would otherwise have constituted the balance of the Term
of this Lease and may grant concessions or free rent to the extent that Landlord considers
advisable and necessary to re-let the same and (ii) make such

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alterations, repairs and decorations
in the Premises as Landlord considers advisable and necessary for the purpose of reletting the
Premises; and the making of such alterations, repairs and decorations shall not operate or be
construed to release Tenant from liability hereunder as aforesaid. Tenant hereby expressly waives
any and all rights of redemption granted by or under any present or future laws in the event of
Tenant being evicted or dispossessed, or in the event of Landlord obtaining possession of the
Premises, by reason of the violation by Tenant of any of the covenants and conditions of this
Lease.

     13.3 Intentionally Omitted.

     13.4 Remedying Defaults. Landlord shall have the right, but shall not be required, to pay
such sums or do any act which may be necessary to cure any Event of Default on the part of Tenant
under any of the provisions of this Lease, and in the event of the exercise of such right by
Landlord, Tenant agrees to pay to Landlord forthwith within ten (10) days of demand all such sums
or the reasonable costs of such cure, together with interest thereon at a rate equal to 3% plus the
prime rate published from time to time in The Wall Street Journal or its successor publication, as
Additional Rent. Any payment of Basic Rent or other sums payable hereunder not paid within ten
(10) days of due shall, at the option of Landlord, bear interest at a rate equal to 3% over the
prime rate published from time to
time in The Wall Street Journal or its successor publication from the due date thereof and shall be
payable forthwith within ten (10) days of demand by Landlord, as Additional Rent.

     13.5 Remedies Cumulative. The specified remedies to which Landlord may resort hereunder
are not intended to be exclusive of any remedies or means of redress to which Landlord may at any
time be entitled lawfully, and Landlord may invoke any remedy (including the remedy of specific
performance) allowed at law or in equity as if specific remedies were not herein provided for.

     13.6 Enforcement Costs. Tenant shall pay all out-of-pocket costs and expenses (including,
without limitation, reasonable attorneys’ fees and expenses at both the trial and appellate levels)
incurred by or on behalf of Landlord in connection with the successful enforcement of any rights of
Landlord or obligations of Tenant hereunder, whether or not occasioned by an Event of Default. In
the event of any other litigation between the parties related to this Lease or the Premises the
prevailing party shall be entitled to receive from the other a full reimbursement of its legal fees
and expenses incured in such litigation.

     13.7 Waiver.

          (a) Failure on the part of Landlord or Tenant to complain of any action or non-action on the
part of the other, no matter how long the same may continue, shall never be a waiver by Tenant or
Landlord, respectively, of any of the other’s rights hereunder. Further, no waiver at any time of
any of the provisions hereof by Landlord or Tenant shall be construed as a waiver of any of the
other provisions hereof, and a waiver at any time of any of the provisions hereof shall not be
construed as a waiver at any subsequent time of the same provisions. The consent or approval of
Landlord or Tenant to or of any action by the other requiring such consent or approval shall not be
construed to waive or render unnecessary Landlord’s or Tenant’s consent or approval to or of any
subsequent similar act by the other.

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          (b) No payment by Tenant, or acceptance by Landlord, of a lesser amount than shall be due from
Tenant to Landlord shall be treated otherwise than as a payment on account of the earliest
installment of any payment due from Tenant under the provisions hereof. The acceptance by Landlord
of a check for a lesser amount with an endorsement or statement thereon, or upon any letter
accompanying such check, that such lesser amount is payment in full, shall be given no effect, and
Landlord may accept such check without prejudice to any other rights or remedies which Landlord may
have against Tenant.

     13.8 Landlord’s Default. Landlord shall in no event be in default under this Lease unless
Landlord shall neglect or fail to perform any of its obligations hereunder and shall fail to remedy
the same within ten (10) days after notice to Landlord specifying such neglect or failure, or if
such failure is of such a nature that Landlord cannot reasonably remedy the same within such ten
(10) day period, Landlord shall fail
to commence promptly (and in any event within such ten (10) day period) to remedy the same and to
prosecute such remedy to completion with diligence and continuity.

ARTICLE 14

MISCELLANEOUS PROVISIONS

     14.1 Rights of Access, Inspection. Landlord or its representatives shall have the right
without charge to it and without reduction in Base Rent during regular business hours, after at
least 24 hours’ prior notice and in the presence of a representative of the Tenant, enter to view
the Premises for any reasonable purpose (including, without limitation, showing the Premises to
prospective purchasers, tenants and lenders, and, in case of an emergency, whether resulting from
circumstances in the Premises or elsewhere in the Landlord’s Property, Landlord or its
representatives may enter the Premises (forcibly, if necessary) at any time to take such measures
as may be needed to cope with such emergency. Such access shall include, but not be limited to,
the right to open floors, walls, ceilings, and building systems for the foregoing purposes.
Landlord may, during the six (6) months next preceding the expiration of the Lease Term, show the
Premises to parties wishing to lease the Premises. Landlord shall use good faith efforts as is
practical under the circumstances not to materially and adversely interfere with Tenant’s use
during Landlord’s access as described in this Section and to provide Tenant with reasonable notice
of the Landlord’s intentions to enter, and Tenant agrees to use good faith efforts to cooperate and
assist Landlord in its access as described in this Section.

     14.2 Covenant of Quiet Enjoyment. Subject to the terms and conditions of this Lease, on
payment of the Basic Rent and other charges and observing, keeping and performing all of the other
terms and conditions of this Lease on Tenant’s part to be observed, kept and performed, in both
instances within any applicable grace or cure period after notice, Tenant shall lawfully, peaceably
and quietly enjoy the Premises for the Permitted Use during the term hereof, without hindrance or
ejection by any persons lawfully claiming under Landlord to have title to the Premises superior to
Tenant. The foregoing covenant of quiet enjoyment is in lieu of any other covenant, express or
implied.

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     14.3 No Liability for Consequential Damages.

          (a) In no event shall Landlord or Tenant ever be liable to the other under or for any breach
of any provision of this Lease for any loss of business or any other indirect or consequential
damages suffered by the other, from whatever cause.

     14.4 Estoppel Certificate. Tenant and Landlord shall each, at any time and from time to
time, upon not less than ten (10) business days prior written notice from the other, execute,
acknowledge and deliver to the requesting party an estoppel certificate containing such statements
of fact as the requesting party reasonably requests.

     14.5 Rules and Regulations. Tenant shall abide by reasonable Rules and Regulations from
time to time established by Landlord by notice to Tenant, it being agreed that such Rules and
Regulations shall be established and applied by Landlord in a non-discriminatory fashion, shall be
generally applicable to other office and laboratory tenants of the Building. Landlord agrees to
use reasonable efforts to insure that any such Rules and Regulations are uniformly enforced, but
Landlord shall not be liable to Tenant for violation of the same by any other tenant or occupant of
the Building, or persons having business with them. In the event that there shall be a conflict
between such Rules and Regulations and the provisions of this Lease, the provisions of this Lease
shall control.

     14.6 Invalidity of Particular Provisions. If any term or provision of this Lease, or the
application thereof to any person or circumstance shall, to any extent, be invalid or
unenforceable, the remainder of this Lease, or the application of such term or provision to persons
or circumstances other than those as to which it is held invalid or unenforceable, shall not be
affected thereby, and each term and provision of this Lease shall be valid and be enforced to the
fullest extent permitted by law.

     14.7 Provisions Binding, Etc. Except as herein otherwise provided, the terms hereof shall
be binding upon and shall inure to the benefit of the successors and assigns, respectively, of
Landlord and Tenant (except in the case of Tenant, only such successors and assigns as may be
permitted hereunder) and, if Tenant shall be an individual, upon and to his heirs, executors,
administrators, successors and permitted assigns. Any reference in this Lease to successors and
assigns of Tenant shall not be construed to constitute a consent to assignment by Tenant.

     14.8 Notice. All notices or other communications required hereunder shall be in writing
and shall be deemed duly given if sent by reputable overnight delivery or courier service (e.g.,
Federal Express) providing for receipted delivery prepaid, to the following address:

(a) if to Landlord at Landlord’s Address to

Newgate Properties, LLC

c/o Worcester Polytechnic Institute

100 Institute Road

Worcester, MA 01609

Attn: Jeffrey Solomon, Executive Vice President

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With a copy to:

Mark L. Donahue, Esquire

Fletcher, Tilton & Whipple, P.C.

370 Main Street

Worcester, MA 01608

Tel: (508) 459-8000

Fax: (508) 459-8329

	 	(b)	 	if to Tenant Attn: Tod Woolf, CEO at the Premises, except
that prior to Tenant’s taking occupancy of the Premises at Tenant’s current
address:

RXi Pharmaceuticals Corporation

One Innovation Drive

Worcester, Massachusetts 01605

With a copy to:

Christopher F. Dunn, Esq.

Ropes & Gray LLP

One International Place

Boston, MA 02110-2624

Receipt of notice or other communication shall be conclusively established with receipt or evidence
that delivery was first attempted. Either party may change its address for the giving of notices
by notice given in accordance with this Section.

     14.9 Waiver of Jury Trial. Landlord and Tenant hereby each waive trial by jury in any
action, proceeding or counterclaim brought by either against the other, on or in respect of any
matter whatsoever arising out of or in any way connected with this Lease, the relationship of
Landlord and Tenant or Tenant’s use or occupancy of the Premises.

     14.10 Publicity Restrictions. In no event shall Landlord or Tenant ever use the name
of the other party (or any of its officers, employees, advisors, or agents, or any adaptation of
their names), or any terms of this Agreement in any promotional material or other public
announcement or disclosure without the prior written consent of said party.

     14.11 Multiple Counterparts. This Lease may be executed in multiple counterparts, each of
which shall be deemed an original and all of which together shall constitute one and the same
document.

     14.12 Governing Law. This Lease shall be governed by the laws of the Commonwealth of
Massachusetts without regard to its conflict of laws provision.

     14.13 Access. The Tenant shall have access to the Premises 24 hours a day 7 days a
week. Provided that the Tenant has complied with the insurance provisions of this Lease, and
provided further that the Tenant does not unreasonably interfere with the performance of the
Landlord’s Improvements to be completed as part of this Lease, then the Tenant may access the

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Premises prior to the Lease Commencement Date for the purpose of installing Tenant’s Improvements,
Tenant’s cabling and wiring and Tenant’s fixtures and equipment.

     14.14 Landlord’s Title and Authority. Landlord covenants and agrees that the Landlord
is the record owner of the Premises and has full right and title to lease the Premises to the
Tenant under this Lease.

     14.15 Recording. The Tenant may record a Notice of Lease pursuant to G.L. c. 183, §4
and the Landlord agrees to execute such a notice if requested by the Tenant within five (5)
business days of the date of the Tenant’s request.

     14.16. Parking. The Tenant shall have the right to use one parking space per employee
in the card access parking lot adjacent to the Property on a non-exclusive and non-reserved basis
for Tenant’s employees and Tenant’s visitors shall have the right to park in the designated visitor
parking spaces in the parking lot adjacent to the Property. One (1) space shall be specifically
designated reserved for Dr. Craig Mello as a principal of the Tenant and shall be as near the
Building as is reasonably practicable. There shall be no additional fee for the use of the parking
spaces.

     14.17. Expression of Interest. Tenant hereby affirms and ratifies the letter of Tod Woolf,
CEO of Tenant, to D’Anne Hurd dated August 8, 2007, referencing “Gateway Park, Worcester-Indication
of Interest in 100,000 sq. ft. building (Building #1).”

     IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be duly executed, under
seal, by persons hereunto duly authorized, as of the date first set forth above.

	 	 	 	 	 
	 	LANDLORD:

Newgate Properties, LLC

 	 
	 	By:  	/s/
D'Anne Hurd	 
	 	 	 	 
	 	 	 	 
	 
	 	TENANT:

RXI Pharmaceutical Corporation

 	 
	 	By:  	/s/
Tod Woolf	 
	 	 	 	 
	 	 	 	 

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EXHIBIT A – FIRST FLOOR PREMISES

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EXHIBIT A – LANDLORD IMPROVEMENTS

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EXHIBIT A – THIRD FLOOR PREMISES

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EXHIBIT A – THIRD FLOOR PREMISES

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EXHIBIT A-1

     Method of Measurement:

    The usable area of the space is calculated to the inside face of the dominant portion of the
exterior walls, and the inside face of all interior demising partitions.

 

	 	 	 	 	 	 	 	 	 
	Landlord

	 	 	 	Tenant	 	 	 	 
	 

	 	 

	 	 	 	 

	 	 
	 

	 	Initials
	 	 	 	Initials	 	 

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EXHIBIT B

Lease Commencement Date Acknowledgement

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EXHIBIT C

WPI Equipment and Vivarium Space Subject to Tenant Use

Gateway Research Equipment — Core Capabilities

Prepared for RXi, Inc.

Fee-for-use, internal rates will apply

Microscopy

	 	•	 	Zeiss Axiovert 200M inverted microscope — fitted for high resolution (Apotome)
brightfield (DIC) and fluorescence imaging (static, 3D, live/real time). Coupled with
PC-driven, high resolution, low light digital camera (Roper CoolSnap) and Axiovision image
rendering software
	 
	 	•	 	Conventional (Zeiss, Nikon) upright, inverted and stereo DIC/fluorescence microscopes
(several)
	 
	 	•	 	Zeiss/Eppendorf micromanipulation station
	 
	 	•	 	Zeiss Confocal microscope suite (on order)

Gel/Image Documentation

	 	•	 	Gel doc and Chemi-doc systems

	 	•	 	Darkroom

Analytical Instrumentation

	 	•	 	500 MHz NMR
	 
	 	•	 	GC-MS
	 
	 	•	 	LC-MS
	 
	 	•	 	Xray defractometer (2)

Gateway Vivarium Facility

	 	•	 	Housing for rodents: Housing and associated husbandry care will be provided for three
(3) racks of mice in the second floor vivarium of the Life Sciences & Bioengineering
Center. An additional accommodation for up to 3 racks will also be provided in the barrier
room. Per diem pricing will be at WPI internal rates (under development) and billed
monthly. Requests and associated fees for special housing/husbandry requests ( quarantine,
special diets, etc), will be determined on a case-by-case basis using conventional
institutional pricing matrices.
	 
	 	•	 	Use of surgery suite: Use of the surgical suite will be available through the facility

 

 

	 	 	 	scheduling mechanism (under development). Dedicated, secure storage capabilities
(disposables, regulated drugs, etc) will be provided within the surgical suite. User fees
will be determined on a case-by case basis using conventional institutional pricing
matrices. The landlord will make suitable space available for a dedicated procedure room
for use by RXi and other tenants.
	 
	 	•	 	Dedicated whole animal imaging suite: Room GP2108 will be provided for dedicated and
secured use by the tenant as a whole animal imaging suite. Appropriate utilities will be
provided. No user fee will apply.
	 
	 	•	 	Veterinary services/oversight: The WPI attending veterinarian (currently Dr. Richard
Rodger) will serve as the attending clinician for all IACUC-approved animal procedures and
protocols for the tenant. The WPI IACUC will review and concur with all tenant
IACUC-approved protocols to be conducted within the WPI vivarium facility. Requests and
associated fees for special veterinary or technical service requests (technical procedures,
euthanasia, carcass disposal, etc) will be determined on a case-by-case basis using
conventional institutional pricing matrices.

 

 

EXHIBIT D – OPTION SPACE

 

 

EXHIBIT E – FIRST FLOOR OPTION OFFICE SPACE

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