Document:

Exhibit 10.12

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [***], HAS BEEN OMITTED BECAUSE IT IS NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

 

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Collaboration Agreement

 

This COLLABORATION AGREEMENT (“Agreement”), dated as of June 10, 2015, is made by and between Morphic Rock Therapeutic, Inc. (“Client”), a Delaware corporation with offices at 1000 Winter Street, Suite 3350, Waltham, MA 02451 and SCHRÖDINGER, LLC (“Schrödinger”), a Delaware limited liability company, with offices at 120 West 45th Street, 17th Floor, New York, New York 10036.

 

WHEREAS, Schrödinger has developed proprietary software programs that are used in preclinical drug discovery projects including target validation, hit identification, hit-to-lead, and lead optimization;

 

WHEREAS, Schrödinger, through its Drug Discovery Group, enters into scientific collaborations with research teams in biotechnology and pharmaceutical companies and academic labs, pursuant to which the Drug Discovery Group applies the Schrödinger Technology (defined below) and its expertise in drug design to specific targets;

 

WHEREAS, Client is engaged in research into agents that target members of the integrin family of cell adhesion molecules for the purpose of the discovery, design, development and commercialization of such agents; and

 

WHEREAS, the parties wish to enter into this Agreement to set forth the terms on which Schrödinger will perform drug design services for the Target(s) defined in Section 1 below;

 

NOW, THEREFORE, in consideration of the mutual promises set forth herein, the sufficiency of which are hereby acknowledged, the parties agree as follows:

 

1.                                      Definitions.

 

a.                                      “Client Improvements” shall mean any improvement, modification, or enhancement of the Client Confidential Information (as defined in Section 5 below), Client Intellectual Property or Work Product made by either party during the Collaboration, collectively with the Intellectual Property embodied therein.

 

b.                                      “Client Intellectual Property” shall mean (i) Intellectual Property (as defined in Section 1.d.) owned or licensed by Client prior to or independent of this

 

 

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Agreement; (ii) the Intellectual Property embodied in the Client Confidential Information (as defined in Section 5.b.); and (iii) the Intellectual Property embodied in the Work Product (as defined in Section 1.j.).  The Client Intellectual Property excludes Schrödinger Intellectual Property (as defined in Section 1.e.).

 

c.                                       “Collaboration” shall mean the responsibilities specified for each party in Exhibit A.

 

d.                                      “Computer-Generated Model” shall mean the ligand- or structure-based models of the compounds or Targets that are prepared and used by Schrödinger in the evaluation and design of compounds under this Collaboration.

 

e.                                       “Effective Date” shall mean April 21, 2015.

 

f.                                        “Intellectual Property” shall mean all rights in any property now known or hereafter recognized anywhere in the world, including the following: (i) patents, inventions (whether or not patentable), and all applications or registrations in any jurisdiction pertaining to the foregoing, including all provisional applications, reissues, continuations, divisions, continuations-in-part, utility models, renewals or extensions thereof; (ii) trade secrets, including confidential and other non-public information with respect to business or scientific activities, and the right in any jurisdiction to limit the use or disclosure thereof; (iii) copyrights or similar rights in writings, designs, mask works, or other works of authorship, and registrations or applications for registrations of copyrights in any jurisdiction; (iv) trademarks and service marks (registered or unregistered), trade dress, trade names, and other names and slogans embodying business or product goodwill or indications of origin, and all applications or registrations in any jurisdiction pertaining to the foregoing; and all goodwill associated therewith; and (v) Internet Web sites, domain names and registrations or applications for registration thereof.  Examples of property that typically embody Intellectual Property include without limitation software programs (in source and object code forms), algorithms, methods, computer-generated models based on the analysis of structure-activity relationships, and proprietary databases.

 

g.                                       “Schrödinger Improvements” shall mean any improvement, modification, or enhancement of the Schrödinger Confidential Information (as defined in Section 5 below), Schrödinger Technology, Schrödinger Knowhow, Schrödinger Library or Schrödinger Intellectual Property made by either party, collectively with the Intellectual Property embodied therein; provided, however, that no Client Intellectual Property, Client Improvements or Work Product will be added to the Schrödinger Library or otherwise considered Schrödinger Improvements.

 

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h.                                      “Schrödinger Intellectual Property” shall mean the Intellectual Property embodied in the Schrödinger Technology, Schrödinger Knowhow, and Schrödinger Library.

 

i.                                          “Schrödinger Knowhow” shall mean the proprietary techniques, methods, workflows and knowhow of Schrödinger and its licensors, and employed by Schrödinger to perform its services under the Collaboration.  “Schrödinger Knowhow” excludes the Work Product, which the parties acknowledge is a tangible output of Schrödinger’s application of the Schrödinger Knowhow to this Collaboration.

 

j.                                         “Schrödinger Library” shall mean the compilation prepared by Schrödinger of lead- and drug-like compounds that are offered commercially by third party suppliers.

 

k.                                      “Schrödinger Technology” shall mean the proprietary software, programs, tools and technology owned or controlled by Schrödinger.

 

l.                                          “Target(s)” shall mean a member of the target class of human integrins.

 

m.                                  “Work Product” shall mean the work product delivered by Schrödinger to Client in connection with its performance of services under the Collaboration, including the Computer-Generated Models. The “Work Product” excludes the Schrödinger Technology, Schrödinger Knowhow, Schrödinger Library, Schrödinger Improvements, Schrödinger Confidential Information and the Schrödinger Intellectual Property.

 

2.                                      Obligations of Each Party.

 

a.                                      General Obligations.  Each party shall use reasonable efforts, exercised in good faith, to perform its responsibilities under this Agreement, in accordance with the customary standards of professional conduct in such party’s field, and in compliance in all material respects with the requirements of applicable laws and regulations. Client acknowledges and agrees that Schrödinger’s ability to perform its obligations depends upon Client’s fulfillment of its obligations as set forth in this Agreement, including reasonably cooperating with Schrödinger and providing Schrödinger with accurate information and data in a reasonable and timely manner during the Collaboration. Schrödinger will not be responsible for any deficiency or delay in performing its obligations as set forth in this Agreement to the extent such deficiency or delay results from Client’s failure to fulfill its obligations as set forth in this Agreement. Each party shall communicate with the other party regularly and in a timely fashion, and shall meet on a regular basis at such times and locations as may be mutually agreed (whether in person or by telephone) to provide

 

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progress reports and to solicit input.  Each party shall provide reasonable assistance to the other party in connection with the other party’s performance of its obligations hereunder.  Notwithstanding the foregoing, the parties acknowledge the experimental nature of the Collaboration, and neither party shall have any liability to the other with respect to such party’s failure to produce a specific substantive result.

 

b.                                      Other Research Projects.  The parties acknowledge and agree that Schrödinger may use the Schrödinger Technology, Schrödinger Knowhow, Schrödinger Library, Schrödinger Improvements, Schrödinger Confidential Information and Schrödinger Intellectual Property for other research projects for third parties so long as:

 

(i) no Client Confidential Information or Client Intellectual Property is used in connection with such research project; and

 

(ii) during the Term (as defined in Section 9.a.), Schrödinger’s Drug Discovery Group does not perform drug discovery services substantially similar to those provided hereunder by the Drug Discovery Group for any research project that involves any Target (the restriction set forth in this clause (ii), the “Exclusivity Restriction”). For clarity, the Exclusivity Restriction does not apply where Schrödinger is developing its own technology, performing technical support, applications science services, professional IT services or technology development work, or software sales and other IT services in regard to a third party licensee’s use of the Schrödinger Technology (collectively, “Unrestricted Activities”), provided, however, that in no event shall Schrödinger, in the course of conducting such Unrestricted Activities, knowingly design compounds directed at the Targets.

 

c.                                       Joint Steering Committee. Within three (3) weeks after the execution of this Agreement, the parties shall form a joint steering committee (the “JSC”) comprised of four individuals designated as set forth below, which JSC shall be responsible for the general oversight of the research carried out hereunder, including without limitation: (i) reviewing the goals, strategy, Milestone Events (as defined in Exhibit B), and results of the Work Plan (set forth in Exhibit A) and the activities performed thereunder; (ii) recommending and approving changes to the Work Plan; (iii) assigning relative priorities in the Work Plan; (iv) terminating any specific activities under the Work Plan; (v) determining whether a Milestone Event has occurred; and (vi) resolving any disagreements between the parties concerning the research and development activities carried out under this Agreement. Each party shall designate two (2) individual representatives as members of the JSC, each of whom shall be authorized to make decisions on behalf of the designating party (subject to the terms and conditions of this Section 2.c.) and shall have significant experience and expertise in the research and development of pharmaceutical compounds. Each party shall

 

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have the right, at any time, to designate by written notice to the other Party, a replacement for any of such party’s representatives on the JSC. The JSC shall endeavor to work by consensus. Decisions of the JSC shall be made by unanimous written consent and shall be included in amendments to the Work Plan, if applicable. Where unanimity cannot be achieved in respect of any matter following good faith, commercially reasonable efforts on the part of the members of the JSC, such disputed matter shall be referred to the relevant senior management of the parties who shall promptly meet and endeavor to come to an agreement in a timely manner. The JSC will determine, subject to the terms and conditions of this Section 2.c., whether any Milestone Event has occurred. The JSC will notify the relevant senior management of each party in writing that any such Milestone Event has occurred no later than [***] after such a determination.

 

d.                                      Project Scope. Unless otherwise agreed by the JSC pursuant to and in accordance with the terms and conditions of Section 2.c., the parties agree that Schrödinger shall, during the Term, perform virtual screens on up to [***] Targets per year of the Term. For clarity, the parties agree that Schrödinger will perform more than [***] on a single Target, as reasonably required. The parties agree further that Schrödinger shall not be obligated to perform Hit to Lead activities (as set forth in the Work Plan) or Lead Optimization activities (as set forth in the Work Plan) on more than [***] Targets simultaneously.

 

3.                                      Payment and Expenses. Client shall remunerate Schrödinger as set forth in Exhibit B.  All payments shall be made by check, electronic funds transfer or wire transfer payable to Schrödinger at the address designated in Exhibit B, or such other address provided to Client by Schrödinger. Client shall be responsible for paying any sales or other related taxes, if any, that are applicable to the cash payments hereunder for the services received from Schrödinger, but shall not be responsible for taxes on Schrödinger’s income. Schrödinger shall be responsible for all taxes on its income, including in respect of any equity interest in Client received by Schrödinger in connection with this Agreement.  All payments hereunder shall be made without deduction for withholding taxes unless otherwise required by law.  At no time may Client withhold payment of fees that are not subject to a good faith dispute.

 

4.                                      Proprietary Rights.

 

a.                                      Ownership.  As between Client and Schrödinger, Client shall own all right, title, and interest in the Client Confidential Information, Work Product, Client Intellectual Property, and any Client Improvements.  As between Schrödinger and Client, Schrödinger shall own all right, title, and interest in the Schrödinger Confidential Information, Schrödinger Technology, Schrödinger Knowhow, Schrödinger Library, Schrödinger

 

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Intellectual Property, and any Schrödinger Improvements. Client will assign and does hereby assign all right title and interest in and to all Schrödinger Improvements, and will promptly disclose to Schrödinger all Schrödinger Improvements.  Client hereby assigns and, to the extent any such assignment cannot be made at the present time, agrees to assign to Schrödinger, without any additional consideration from Schrödinger, any and all copyrights, patents and other proprietary rights Client may have in any such Schrödinger Improvements, together with the right to file and/or own wholly without restrictions applications for United States and foreign patents, trademark registration and copyright registration and any patent, or trademark or copyright registration issuing thereon.  Client agrees to waive, and hereby does waive, all moral rights or proprietary rights in or to any Schrödinger Improvements and, to the extent that such rights may not be waived, agrees not to assert such rights against Schrödinger or its licensees, successors or assigns. Schrödinger will assign and does hereby assign all right title and interest in and to all Work Product and Client Improvements, and will promptly disclose to Client all Work Product and Client Improvements.  For purposes of the copyright laws of the United States, Work Product and Client Improvements constitute “works made for hire” under the copyright laws of the United States and Schrödinger hereby assigns and, to the extent any such assignment cannot be made at the present time, agrees to assign to Client, without any additional consideration from Client, any and all copyrights, patents and other proprietary rights Schrödinger may have in any such Work Product and Client Improvements, together with the right to file and/or own wholly without restrictions applications for United States and foreign patents, trademark registration and copyright registration and any patent, or trademark or copyright registration issuing thereon.  Schrödinger agrees to waive, and hereby does waive, all moral rights or proprietary rights in or to any Work Product and Client Improvements and, to the extent that such rights may not be waived, agrees not to assert such rights against Client or its licensees, successors or assigns.

 

b.                                      Protection and Enforcement.  Each party will have the responsibility, in its sole discretion and at its sole expense, to protect and enforce its Intellectual Property rights.

 

c.                                       Cooperation.  Each party shall provide such assistance as may reasonably be required for the other party to secure, perfect, maintain and enforce the other party’s Intellectual Property rights in connection with this Agreement.  Reasonable assistance includes executing and delivering the documents reasonably necessary for the other party to secure, perfect, maintain or enforce its rights in such Intellectual Property (including documents to assign rights, to apply for patent protection, or to register a copyright), and responding to reasonable requests for information pertinent thereto; provided, however, that in each case, the party requesting the assistance shall be required to reimburse the assisting party’s reasonable out-of-pocket expenses incurred in connection therewith.  In addition, each party hereby appoints the other party, in the event that such other party is

 

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unable after reasonable inquiry to obtain such party’s (or its employee’s or agent’s) signature on such a document, as its attorney-in-fact to sign such documents as such other party deems necessary to secure, perfect, maintain or enforce such other party’s rights as contemplated by this Section 4.

 

d.                                      License Grant by Schrödinger. Subject to the terms and conditions of this Agreement, Schrödinger will grant and does grant to Client a limited, non-exclusive, internal-use-only, non-transferable, non-assignable, non-sublicensable license to use and disclose to its employees with a need to know for purposes of performing this Agreement, the Schrödinger Technology known as LiveDesign and/or Seurat during the Term as reasonably useful for facilitating the objectives of the Work Plan, including  a number of seats for Client users who are contributing to the Collaboration, which number of seats shall initially be [***], and which number shall be increased or decreased without the payment of additional consideration hereunder upon written notification by Client to Schrödinger of any changes to the number of Client users who are contributing to the Collaboration.  In addition, Client’s use of LiveDesign and Seurat are subject to the terms and conditions set forth in Schrödinger’s End User Agreement for Hosted Software (“EUA”) attached as Exhibit C hereto.  In the event of any inconsistency between the terms of the EUA and this Agreement, the terms of this Agreement shall control.

 

e.                                       No Implied Licenses.  All rights in and to Intellectual Property not expressly granted by Client or Schrödinger under this Agreement are reserved to its owner.  Nothing in this Agreement will be deemed to weaken or waive any rights of either party related to the protection of trade secrets.

 

5.                                      Confidentiality.

 

a.                                     Client hereby acknowledges that the Schrödinger Technology, Schrödinger Knowhow, Schrödinger Library, Schrödinger Improvements and Schrödinger Intellectual Property (collectively, “Schrödinger Confidential Information”) are proprietary and confidential to Schrödinger.  Client agrees not to disclose the Schrödinger Confidential Information (or any portion thereof) to any third party, except as permitted by this Agreement.  Client agrees (i) to protect the Schrödinger Confidential Information in the same manner that it protects its own confidential information (but no less than reasonable care); (ii) to permit access to the Schrödinger Confidential Information only to employees, officers, directors, agents, contractors, consultants and advisors (each, a “Representative”) of Client and its affiliates who reasonably have a need to know for the purposes authorized under this Agreement (including purposes reasonably related to its performance or enforcement) and who are bound by obligations of confidentiality substantially similar to those set forth herein, and will inform such Representatives who will have access to

 

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Schrödinger Confidential Information of the obligations of confidentiality under this Agreement; and (iii) not to copy or use the Schrödinger Confidential Information other than as permitted by this Agreement for the purposes authorized hereunder, or as required by applicable law or regulation.

 

b.                                     Schrödinger hereby acknowledges that the Client Improvements, Work Product and the Client Intellectual Property (collectively, “Client Confidential Information”) are proprietary and confidential to Client. Schrödinger agrees not to disclose the Client Confidential Information (or any portion thereof) to any third party, except as permitted by this Agreement.  Schrödinger agrees (i) to protect the Client Confidential Information in the same manner that it protects its own confidential information (but no less than reasonable care); (ii) to permit access to the Client Confidential Information only to the Representatives of Schrödinger and its affiliates who reasonably have a need to know for the purposes authorized under this Agreement (including purposes reasonably related to its performance or enforcement) and who are bound by obligations of confidentiality substantially similar to those set forth herein, and will inform such Representatives who will have access to Client Confidential Information of the obligations of confidentiality under this Agreement; and (iii) not to copy or use the Client Confidential Information other than as permitted by this Agreement for the purposes authorized hereunder, or as required by applicable law or regulation.

 

c.                                      The receiving party’s obligations of confidentiality are not applicable to any materials of the disclosing party if and to the extent that such materials: (i) were known to the receiving party prior to disclosure hereunder, as evidenced by written documentation or other reasonable evidentiary means; (ii) are in the public domain at the time of disclosure or later enter the public domain through no fault of the receiving party; (iii) were disclosed to the receiving party by a third party not known by the receiving party to be bound by any obligation of confidentiality or prohibition of disclosure; (iv) were independently developed by the receiving party as evidenced by written documentation or other reasonable evidentiary means, or (v) are required to be disclosed by applicable law, regulation, or court order as evidenced by written documentation or other reasonable evidentiary means.

 

d.                                     It is understood that the parties may have performed, and may continue to perform, independent development relating to the confidential or proprietary information received hereunder.  The parties hereto agree that, except as set forth in Section 2.b., neither this Agreement nor the receipt of any confidential or proprietary information shall limit either party’s independent development; provided, however, that in connection with such independent development, (i) Schrödinger shall not use Client Confidential Information, and (ii) Client shall not use Schrödinger Confidential Information.

 

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6.                                      Representations and Warranties.

 

Each party represents and warrants that (i) it has all rights to enter into this Agreement; (ii) it is and will remain a corporation or company duly organized, validly existing and in good standing under the laws of its jurisdiction of organization and (iii) it shall comply with all applicable laws with respect to its rights and obligations under this Agreement. EXCEPT AS EXPRESSLY SET FORTH HEREIN, NEITHER PARTY MAKES ANY OTHER WARRANTIES, EXPRESS OR IMPLIED (INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, ACCURACY, TITLE, AND NON-INFRINGEMENT).

 

7.                                      Publicity.

 

a.                                      Client and Schrödinger may each publish, disseminate or otherwise disclose any information received or generated under this Agreement (subject to the limitations on use of Schrödinger Confidential Information or Client Confidential Information, as applicable and Schrödinger Intellectual Property and Client Intellectual Property, as applicable); provided, however, all such publications and presentations shall (i) bear appropriate acknowledgment of each party’s contributions and (ii) be subject to the prior written approval of each party, which consent shall, in each case, not be unreasonably withheld or delayed.

 

b.                                      Except as provided in Section 7(a) above and in this Section 7(b), neither party will use the name of the other party in any material intended for public disclosure without such other party’s prior express written consent.  Notwithstanding the foregoing, either party may disclose the fact that it is, or has been, in a scientific collaboration with the other party (i) on its external website, (ii) in written or verbal communications with such party’s Representatives, investors, potential investors, customers, and potential customers, and (iii) in a press release agreed upon by the parties and which shall be distributed when and as agreed by the parties, in each case without disclosing any Client Confidential Information or Schrödinger Confidential Information, as the case may be.

 

8.                                      LIMITATION OF LIABILITY.

 

TO THE MAXIMUM EXTENT PERMITTED BY LAW, NEITHER PARTY SHALL BE LIABLE FOR ANY SPECIAL, INCIDENTAL, INDIRECT, PUNITIVE, OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT (INCLUDING WITHOUT LIMITATION DAMAGES FOR LOST

 

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BUSINESS OR PROFITS, LOSS OF DATA OR COSTS OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES), EVEN IF ADVISED OF THE POSSIBILITY THEREOF.  THE ENTIRE AGGREGATE LIABILITY OF EACH OF SCHRÖDINGER OR CLIENT UNDER OR RELATING TO THIS AGREEMENT, FOR ANY REASON(S) AND UPON ANY CAUSE(S) OF ACTION WHATSOEVER, SHALL NOT EXCEED THE GREATER OF (A) THE AMOUNT OF ANY CASH MILESTONE PAYMENTS AS SET FORTH IN EXHIBIT B ACTUALLY RECEIVED BY SCHRÖDINGER FROM CLIENT UNDER THIS AGREEMENT PRIOR TO THE EVENT GIVING RISE TO SUCH LIABILITY OR (B) [***].

 

9.                                      Term; Termination.

 

a.                                     The term of this Agreement shall commence on the Effective Date and shall continue for a period of three (3) years immediately thereafter, or until the effective date of any earlier termination in accordance with the terms of this Section 9 (such period, the “Term”). The parties may agree to extend the Term from time to time, pursuant to a written amendment to this Agreement.

 

b.                                     A party may terminate this Agreement (i) by giving notice in writing to the other party in the event the other party materially breaches this Agreement and shall have failed to cure such breach within [***] of receipt of written notice thereof from the first party, or (ii) at any time by giving notice in writing to the other party, which notice shall be effective upon dispatch, should the other party file a petition of any type as to its bankruptcy, be declared bankrupt, become insolvent, make an assignment for the benefit of creditors, go into liquidation or receivership. Any termination of this Agreement by Client pursuant to the foregoing clauses (i) or (ii) shall be referred to as a “Client Termination for Cause”.

 

c.                                      Client shall remain liable for payment to Schrödinger of all payment obligations under Section 3, including Exhibit B, subject to and in accordance with the terms and conditions thereof.

 

d.                                     The rights and obligations of the parties under the following sections shall survive the expiration or earlier termination of this Agreement: Sections 3 (including any outstanding payment obligation under Exhibit B), 4, 5, 7, 8, 9, 10 and 11.

 

10.                               Notices.

 

a.                                     Any notice under this Agreement shall be in writing and shall be deemed properly delivered, given and received when delivered (by hand, by registered mail, or by

 

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courier or express delivery service during business hours) to the address set forth beneath the name of such party below, unless such party has given a notice of a change of address in writing:

 

If to Schrödinger:

 

Schrödinger, LLC

120 West 45th Street, 17th Floor

New York, NY  10036

USA

Attention:  President

 

with a copy to “Attention: General Counsel” at the same address;

 

If to Client:

 

Morphic Rock Therapeutic, Inc.

1000 Winter Street, Suite 3350

Waltham, MA 02451

Attention:  Kevin Bitterman

 

with a copy (which shall not constitute notice) to:

 

Foley Hoag LLP

155 Seaport Boulevard

Boston, MA 02210

Attention: Mark A. Haddad, Esq.

 

11.                               Miscellaneous.

 

a.                                      Each party acknowledges and agrees that such party’s services hereunder are performed on a non-exclusive basis, except as set forth in Section 2(b).  Each party shall have the right to perform similar services for, or undertake similar collaborations with, parties other than the other party.

 

b.                                      This Agreement does not provide, and shall not be construed to provide, any third parties with any remedy, claim, cause of action or privilege.  Nothing in this Agreement shall be construed as creating an employer-employee or agency relationship, or a partnership or a joint venture between the parties.

 

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c.                                       This Agreement and its enforcement shall be governed by, and construed in accordance with, the laws of The Commonwealth of Massachusetts, without regard to conflicts-of-law principles. The exclusive venue for any action relating to this Agreement shall be the state and federal courts situated in The Commonwealth of Massachusetts, and each party expressly consents to the jurisdiction of such courts.

 

d.                                      Each party to this Agreement recognizes that money damages alone may not adequately compensate the other party in the event of breach by the such party of Sections 4 and 5 of this Agreement, and each party agrees that, in addition to all other remedies available at law, in equity or otherwise, each party shall be entitled to seek injunctive relief for the enforcement thereof without the requirement of posting any bond in connection therewith.  All rights and remedies hereunder are cumulative and are in addition to and not exclusive of any other rights and remedies available at law, in equity, by agreement or otherwise.

 

e.                                       This Agreement may not be assigned, in whole or in part, by either party without the prior written consent of the other party, except that a party may assign this Agreement without consent in the event of a merger, acquisition, sale of all or substantially all of the assets or corporate reorganization of such party.

 

f.                                        Neither party shall be deemed in default hereunder, nor shall it hold the other party responsible for, any cessation, interruption or delay in the performance of its obligations hereunder due to earthquake, flood, fire, storm, natural disaster, act of God, war, armed conflict, terrorism, labor strike, lockout, or boycott, provided, however, that the party relying upon this Section 11.e. shall be required (i) to give the other party prompt written notice thereof and, in any event, within [***] following discovery thereof, and (ii) to take all steps reasonably necessary under the circumstances to mitigate the effects of the force majeure event upon which such notice is based.

 

g.                                       The parties agree that the terms of this Agreement (including all exhibits hereto) are confidential between the parties and shall not be disclosed to third parties. For clarity, the foregoing does not prohibit disclosure of the terms of this Agreement to (i) Representatives and affiliates of each party who reasonably have a need to know for the purposes of this Agreement; or (ii) auditors, investors, potential investors, potential acquirors, attorneys, advisors and similar persons of each party who have a need to know for purposes of corporate and legal compliance, diligence, audits and similar activities; provided however that any such persons are bound by obligations of confidentiality in connection with any disclosure of the terms of this Agreement.

 

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h.                                      This Agreement, including all exhibits hereto, constitutes the entire agreement between the parties concerning the subject matter hereof and supersedes any prior agreements, representations, statements, negotiations, understandings, proposals or undertakings, oral or written, with respect to the subject matter expressly set forth herein.  The parties agree that references to the word “including” mean “including, but not limited to”, references to the phrase “third party” mean parties other than Client, Schrödinger or their respective affiliates, and references to exhibits mean such exhibits as they may be amended from time to time pursuant to this Agreement.  Headings used in this Agreement are for the purpose of reference only and are not to be considered in construction or interpretation of this Agreement.  In the event of any conflict between the terms of this Agreement and any exhibit, the terms of this Agreement shall take precedence.  No provisions of this Agreement may be modified, waived or discharged unless a written modification, waiver or discharge has been signed by both parties.   If any provision of this Agreement shall be held to be illegal, invalid or unenforceable, each party agrees that such provision shall be enforced to the maximum extent permissible so as to effect the intent of the parties, and the validity, legality and enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby.  The failure by any party to exercise any right or remedy provided for herein shall not be deemed a waiver, partial or complete, of any right or remedy hereunder.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall be deemed one and the same instrument.

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the date first set forth above.

 

	
SCHRÖDINGER,   LLC, by its sole member,
    	
 
    
	
SCHRÖDINGER, INC.
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Ramy Farid
    	
 
    
	
 
    	
Ramy   Farid, Ph.D.
    	
 
    
	
 
    	
President
    	
 
    
	
 
    	
 
    
	
MORPHIC   ROCK THERAPEUTIC, INC.
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Kevin Bitterman
    	
 
    
	
 
    	
Name:   Kevin Bitterman
    	
 
    
	
 
    	
Title:   CEO
    	
 
    

 

 

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Exhibit B

 

Payments and Fees

 

I.  In addition to the fees payable to Schrödinger under this Agreement, Schrödinger’s parent company, Schrödinger Inc., (the “Schrödinger Parent”) will receive, upon the effective date of the Operating Agreement (as defined below), as consideration for Schrödinger’s performance of the Services hereunder, 2,962,050 Preferred Units (the “Preferred Units”) of Morphic Rock Holding, LLC (the “Client Parent”), as defined in that certain Amended and Restated Operating Agreement of the Client Parent, dated as of June 10, 2015 (the “Operating Agreement”).  Upon a Client Termination for Cause on or before [***], in addition to any remedies available under applicable law, the following proportion of the Preferred Units shall be immediately forfeited by the Schrödinger Parent to the Client Parent without further action by or compensation from Client or the Client Parent, and in such case neither Client nor the Client Parent shall have any further obligations with respect to such forfeited Preferred Units:

 

(a)                                 [***]; and

 

(b)                                 [***]

 

II. Milestone Payments

 

All fees set forth herein are non-refundable, non-proratable, and payable in United States dollars.

 

The Milestone 1 Payment, Milestone 2 Payment and Milestone 3 Payment set forth below (collectively, the “Milestone Payments”) shall be payable by Client to Schrödinger upon the achievement of the applicable event for each agreed upon Target (each, a “Milestone Event”) as described below.

 

MILESTONE 1

 

	
Milestone   Event 1:

 

[***]
    	
Milestone   1 Payment

 

[***]
    

 

MILESTONE 2

 

2

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [***], HAS BEEN OMITTED BECAUSE IT IS NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

 

CONFIDENTIAL

 

	
Milestone   Event 2:

 

[***]
    	
Milestone   2 Payment

 

[***]
    

 

MILESTONE 3

 

	
Milestone   Event 3:

 

[***]
    	
Milestone   3 Payment

 

[***]
    

 

Payment Procedure

 

1.              If paying by check, payments should be mailed to Schrödinger at the following address:

 

Schrödinger, L.L.C.

101 SW Main Street, Suite 1300

Portland, Oregon 97204

Phone: 503-299-1150

Fax:     [***]

E-mail: orders@schrodinger.com

 

2.              If paying by wire transfer, payments should be wired to Schrödinger as follows:

 

[***]

[***]

Account name: [***]

Account number: [***]
 Bank routing number: [***]

 

3.              Client shall be responsible for applicable sales taxes on any cash payments hereunder.

 

Schrödinger, LLC FEIN (Tax Number):                             [***]

 

3

 

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Confidential — Execution Copy

 

MORPHIC THERAPEUTIC, INC.

 

March 9, 2018

 

Schrödinger, LLC

120 West 45th Street, 17th Floor

New York, NY 10036

Attention: President

 

Re:                             Amendment to Collaboration Agreement, dated as of June 10, 2015, by and between Morphic Therapeutic, Inc. (f/k/a Morphic Rock Therapeutic, Inc.) and Schrödinger, LLC (the “Agreement”)

 

Ladies and Gentlemen:

 

As you know, Morphic Therapeutic, Inc. (f/k/a Morphic Rock Therapeutic, Inc.), a Delaware corporation (“Client”, “we” or “us”), and Schrödinger, LLC, a Delaware limited liability company (“Schrödinger”) are parties to the above-referenced Agreement pursuant to which, among other things, Schrödinger agreed to perform certain drug design services set forth therein.

 

This letter (“Letter Agreement”) confirms our mutual understanding and agreement to amend and extend the Agreement, by incorporating the provisions set forth below, each of which shall be incorporated into the Agreement notwithstanding anything to the contrary set forth therein. All capitalized terms used in this Letter Agreement but not otherwise defined shall have the definitions assigned to them in the Agreement.

 

1.             Extension of Term. The parties hereby confirm that the Term of the Agreement shall be and hereby is extended for an additional period of ten (10) years, commencing on April 21, 2018 (“Renewal Term Commencement Date”) and concluding on April 21, 2028, unless sooner terminated as provided in the Agreement, as amended by this Letter Agreement (the “Renewal Term”). All references to the “Term” in the Agreement shall be deemed to include and apply to the Renewal Term.

 

2.             Termination. Section 9 of the Agreement is hereby amended by deleting subsections b. and c. thereof in their entirety and replacing them with the following:

 

“b.           Without prejudicing any other rights or remedies which may be available to a Party under this Agreement, at law or in equity,

 

 

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(1)         A party may terminate this Agreement (i) by giving notice in writing to the other party in the event the other party materially breaches this Agreement and shall have failed to cure such breach within [***] of receipt of written notice thereof from the first party, or (ii) at any time by giving notice in writing to the other party, which notice shall be effective upon dispatch, should the other party file a petition of any type as to its bankruptcy, be declared bankrupt, become insolvent, make an assignment for the benefit of creditors, go into liquidation or receivership. Any termination of this Agreement by Client pursuant to the foregoing clauses (i) or (ii) shall be referred to as a “Client Termination for Cause”.

 

(2)         Either party may terminate this Agreement, by written notice to the other party in accordance with the penultimate sentence of this subsection (2), following any (a) transaction or series of related transactions in which any individual or entity, or a group of related individuals and/or entities, acquires voting securities of the Client from the holders thereof which securities represent more than fifty percent (50%) of the total outstanding voting power of all outstanding equity securities of the Client; (b) merger (including a reverse triangular merger), reorganization, consolidation, share exchange, or similar transaction involving the Client in which the holders of voting securities of the Client outstanding immediately prior thereto cease to hold voting securities that represent at least fifty percent (50%) of the combined voting power of the surviving entity immediately after such merger, reorganization, consolidation, share exchange, or similar transaction.; or (c) the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, by the Client or any subsidiary of the Client of all or substantially all the assets of the Client and its subsidiaries (if any) taken as a whole, unless the Client is retaining a substantial portion of the proceeds from such sale to continue its operations. Client shall notify Schrodinger of the occurrence of any transaction described in clauses (a), (b) or (c) above within [***] following the closing of such transaction (such notice, a “Sale Notice”). A party electing to terminate this Agreement pursuant to this subsection (2) must provide written notice to the other party of its election, if at all, within [***] after the issuance of a Sale Notice. Termination of the Agreement will be deemed to occur immediately upon the date of issuance of any such termination notice by a party.

 

(3)         Schrödinger may terminate this Agreement pursuant to written notice provided to the Client on or after the fifth anniversary of the Renewal Term Commencement Date (as defined in that certain Letter Agreement, dated March 9, 2018, between the parties (“Letter Agreement”)) if, during the initial five-year period of the Renewal Term (as defined in the Letter Agreement), fewer than two Milestone

 

 

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3 Payments have become payable to Schrödinger by Client pursuant to Exhibit B of the Agreement.

 

c.           Client (or its successors or permitted assigns, as applicable) shall remain liable and obligated to pay to Schrödinger all past and future payment obligations under Section 3 following any termination or expiration of this Agreement, including all milestone and royalty payments under Exhibit B that have accrued prior to the effective date of any termination or expiration of this Agreement or that accrue after the effective date of any termination or expiration of this Agreement, in each case subject to and in accordance with the terms and conditions hereof.”

 

3.             Assignment. Section 11.e of the Agreement is hereby deleted in its entirety and replaced with the following:

 

“e. This Agreement may not be assigned, in whole or in part, by either party without the prior written consent of the other party, except that a party may assign this Agreement without consent in the event of a merger, acquisition, sale of all or substantially all of the assets or corporate reorganization of such party. Any attempted assignment, transfer or sale in violation of this Section 11.e shall be void and of no effect. All validly assigned rights and obligations of the parties hereunder shall be binding upon and inure to the benefit of and be enforceable by and against the successors and permitted assigns of Client or Schrodinger, as the case may be. The permitted assignee or transferee shall assume all obligations of its assignor or transferor under this Agreement.”

 

4.             Royalties.  Exhibit B to the Agreement (Payments and Fees) is hereby amended by adding the new Section III attached hereto as Appendix B-III following the existing Section II thereof.

 

5.             Notices. We hereby notify Schrödinger pursuant to Section 10.a. of the Agreement that notices to be delivered to Client pursuant to the Agreement shall be sent to the Client’s address as follows:

 

Morphic Therapeutic, Inc.

35 Gatehouse Drive

Waltham, MA 02451

Attention: CEO

 

6.             Single Agreement.  Except as otherwise set forth in this Letter Agreement, all of the terms and conditions of the Agreement shall remain in full force and effect.  This Letter Agreement together with the Agreement and all exhibits, schedules and attachments thereto constitute the entire agreement among the parties with respect to the subject matter hereof and thereof and supersede all previous written or oral understandings between the parties.

 

This Letter Agreement is not valid or binding unless and until it is fully executed by Schrödinger and the Client. Please confirm your acknowledgement and agreement to the foregoing by countersigning where indicated below and return one original countersigned letter to us.

 

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [***], HAS BEEN OMITTED BECAUSE IT IS NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

 

	
 
    	
Very truly yours,
    
	
 
    	
 
    
	
 
    	
MORPHIC THERAPEUTIC, INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Praveen Tipirneni
    
	
 
    	
Name: 
    	
Praveen Tipirneni
    
	
 
    	
Title: 
    	
Chief Executive Officer
    
	
 
    	
 
    	
 
    
	
Agreed and accepted:
    	
 
    
	
 
    	
 
    
	
SCHRÖDINGER,   LLC, by its sole member,
    	
 
    
	
SCHRÖDINGER, INC.
    	
 
    
	
 
    	
 
    
	
By:   
    	
/s/   Ramy Farid
    	
 
    
	
Name:   
    	
Ramy   Farid
    	
 
    
	
Title:   
    	
President   and Chief Executive Officer
    	
 
    

 

 

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Appendix B-III

 

III. Royalty Payments

 

A.            Certain Definitions.

 

1.              “Affiliate” means any company or other legal entity controlling, controlled by or under common control with a party.  For purposes of the definition of “Affiliate” the term “control” shall mean: (i) the ownership of at least a majority of the ordinary voting power necessary to effect the election of a majority of the board directors or other governing board, or in the case of a for-profit entity, direct or indirect ownership of at least a majority of the stock or participating shares entitled to vote for the election of directors of that entity; or (ii) in the case of a partnership, the power customarily held by a managing partner to direct the management and policies of such partnership; or (iii) in the case of a joint venture, whether in corporate, partnership or other legal form, a prevailing joint economic interest coupled with a managerial role entailing active direction, control and accountability with respect to the business and affairs of the entity.

 

2.              “Derived Compound” means any chemical compound identified, generated, developed or discovered by Client or its Affiliates or on behalf of Client or any of its Affiliates, including by Schrödinger, during the Term in connection with the Collaboration, as well as all salts, hydrates, solvates, esters, metabolites, intermediates, stereoisomers, polymorphs, and any derivatives or modifications of any of the foregoing which are identified, generated or discovered by or on behalf of Client or its Affiliates at any time during or after the Term.

 

3.              “Covered Product” means any product comprising or containing any Derived Compound, alone or in combination with one or more other active ingredients in any and all forms, in current and future formulations, indications, dosage forms, strengths and delivery modes, including any improvements thereto.

 

4.              “Net Sales” means, as determined under U.S. generally accepted accounting principles, the gross amounts billed or invoiced for sales, leases or other transfers of Covered Products by or on behalf of Client or its Affiliates or any of their respective Third Party licensees or sublicensees (each, an “Invoicing Entity”), less (to the extent actually allowed or incurred and directly related to such sale of Covered Products and not previously deducted from the gross invoice price) the following amounts:

 

a.              allowances and credits on account of rejection, or damaged, recalled or returned Covered Products previously sold;

 

b.              customary rebates, price reductions (including shelf stock adjustments), chargebacks, administrative fee arrangements, reimbursements, quantity

 

 

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and cash discounts to purchasers allowed and taken, including without limitation, with respect to institutions and health care organizations and in respect of Medicare, Medicaid or similar programs;

 

c.               customary amounts for third party transportation, insurance, handling or shipping charges to purchasers; and

 

d.              to the extent separately stated on purchase orders, invoices or other documents of sale, any taxes, duties and other governmental charges levied on or measured by the sale of Covered Products that are paid by or on behalf of an Invoicing Entity, but not franchise or income taxes of any kind whatsoever.

 

Net Sales shall also include the fair market value of any non-cash consideration received by any Invoicing Entity in connection with the sale, lease, or other transfer of Covered Products. Transfer of a Covered Product within Client or between any of Client and its Affiliates or contractors for sale by the transferee shall not be considered a Net Sale for purposes of ascertaining royalty charges owed to Schrödinger under this Agreement.  Notwithstanding anything to the contrary herein, the sale, disposal or use of any Covered Product for marketing, regulatory, development or charitable purposes, such as clinical trials, preclinical trials, compassionate use, named patient use, or indigent patient programs, in each case without consideration, shall not be deemed a sale hereunder. If a Covered Product is sold in combination with another product, device, service or active ingredient, only the amounts allocable to the Covered Product, as determined using practices consistently applied by Client and approved by Schrödinger such approval to not unreasonably be withheld, shall be counted as Net Sales.

 

B.            Royalty Payments.

 

1.              For Covered Products, Client shall pay (or cause its Affiliates to pay) to Schrödinger a royalty as follows:

 

a.              [***] of Net Sales for the first [***] of Net Sales of all Covered Products in each calendar year during or after the Term, and thereafter

 

b.              [***] of Net Sales for all Net Sales of all Covered Products in excess of [***] in each calendar year during or after the Term.

 

 

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MORPHIC THERAPEUTIC, INC.

 

May 30, 2019

 

Schrödinger, LLC

120 West 45th Street, 17th Floor

New York, NY 10036

Attention: President

 

Re:                             Second Amendment to the Collaboration Agreement, dated as of June 10, 2015, by and between Morphic Therapeutic, Inc. (f/k/a Morphic Rock Therapeutic, Inc.) and Schrödinger, LLC, as amended March 9, 2018 (the “Agreement”)

 

Ladies and Gentlemen:

 

As you know, Morphic Therapeutic, Inc. (f/k/a Morphic Rock Therapeutic, Inc.), a Delaware corporation (“Client”, “we” or “us”), and Schrödinger, LLC, a Delaware limited liability company (“Schrödinger”) are parties to the above-referenced Agreement pursuant to which, among other things, Schrödinger agreed to perform certain drug design services set forth therein.

 

This Letter Agreement (“Second Amendment”) confirms our mutual understanding and agreement to amend the Agreement, by incorporating the provisions set forth below, each of which shall be incorporated into the Agreement notwithstanding anything to the contrary set forth therein. All capitalized terms used in this Letter Agreement but not otherwise defined shall have the definitions assigned to them in the Agreement.

 

1.             Section 1 of the Agreement (Definitions) is amended by deleting Section c. (Collaboration) in its entirety and replacing it with the following:

 

c.               “Collaboration” shall mean the responsibilities specified for each party in the Work Plan under Exhibit A or under the Research Plan of a Stage 1 Program or Stage 2 Program.

 

2.             Section 1 of the Agreement (Definitions) is amended by adding new definitions n. through fff. after the end thereof:

 

n.              “Affiliate” means any company or other legal entity controlling, controlled by or under common control with a party. For purposes of the definition of “Affiliate” the term “control” shall mean: (i) the ownership of at least a majority of the ordinary voting power necessary to effect the election of a majority of the board directors or other governing board, or in the case of a for profit entity, direct or indirect ownership of at least a majority of the stock or participating shares entitled to vote for the election of directors of that entity; or (ii) in the case of a partnership, the power customarily held by a managing partner to direct the management and policies of such partnership; or (iii) in the case of a joint venture, whether in corporate, partnership or other legal form, a prevailing joint economic interest

 

 

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coupled with a managerial role entailing active direction, control and accountability with respect to the business and affairs of the entity.

 

o.              “Backup Development Candidate” means a Development Candidate that was identified in the performance of a Backup Search and designated by Client as suitable for post-Lead Optimization development.

 

p.              “Backup Search” has the meaning given in Section 2.d.

 

q.              “Calendar Year” means a one-year period beginning on January 1st and ending on December 31st.

 

r.                 “Change of Control” means an event under Section 9(b)(2)(a)-(c).

 

s.                “Control” means, with respect to any Patent, the possession (whether by ownership or license) by a party or its Affiliates of the ability to enforce such Patent against a Third Party infringer of such Patent without violating the terms of any agreement or other arrangement with any other Third Party.

 

t.                 “Collaboration Compound” means (i) any chemical compound identified, generated, developed or discovered by Client or its Affiliates or on behalf of Client or any of its Affiliates, including by Schrödinger, during the Term in connection with the conduct of the Collaboration, and (ii) all salts, hydrates, solvates, esters, metabolites, intermediates, stereoisomers, polymorphs, and any derivatives or modifications of (i) which are identified, generated or discovered by or on behalf of Client or its Affiliates at any time during or after the Term, in each of cases (i) and (ii) that are Primarily Active against a Target designated by Client under Section 2.f or a Work Plan under Section 2.f.

 

u.              “Collaboration Product” means, on a country-by-country basis, any product comprising or containing any Collaboration Compound, alone or in combination with one or more other active ingredients in any and all forms, in current and future formulations, indications, dosage forms, strengths and delivery modes, including any improvements thereto.

 

v.              “Combination Product” means any product (a) containing (i) as a single formulation, two or more APIs as components, one of which is a Collaboration Product or (ii) in a single package or container and intended for coordinated use, two or more products as components including a Collaboration Product and one or more other products (where such other product may include a device or another API) for therapeutic administration or diagnostic use or (b) defined as a “combination product” by the FDA pursuant to 21 C.F.R. §3.2(e) or its foreign equivalent.

 

w.            “Data” all data, including raw data, processed data, notebook records, documents, reports, presentations, computer models, deliverables, written, printed, graphic, video and audio recorded information contained in any computer database or computer readable form and other results supplied to or generated by or on behalf of Schrödinger or its Affiliates as the result of performing any research activities under this Agreement.

 

2

 

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x.              “Development Candidate” means a Collaboration Compound that was identified during the performance of a Stage 1 Program or Stage 2 Program and designated by Client as suitable for post-Lead Optimization development.

 

y.              “EUA” has the meaning given in Section 4.d.

 

z.               “Exploit” or “Exploitation” means any and all activities directed to researching, developing, improving, making, importing, exporting, transporting, distributing, using, selling, offering for sale, commercializing, holding or keeping (whether for disposal or otherwise), seeking Regulatory Approval, promoting, marketing, or otherwise disposing of any product or service and having Third Parties perform such activities on one’s behalf as well as interacting with Regulatory Authorities with regard to any of the foregoing. When used as a verb, “to Exploit” and “Exploiting” means to engage in Exploitation, and “Exploited” has a corresponding meaning.

 

aa.       “FTE” means a qualified fulltime person, or more than one person working the equivalent of a full-time person, where “full time” is based upon a total of [***] per Calendar Year of scientific or technical work carried out by a duly qualified employee of Schrödinger.  Overtime and work on weekends, holidays and the like shall not be counted with any multiplier (e.g. time-and-a-half or double time) toward the number of hours that are used to calculate the FTE contribution.

 

bb.       “FTE Costs” means, for any period, the FTE Rate multiplied by the number of FTEs in such period.  FTEs will be pro-rated on a daily basis if necessary.

 

cc.         “FTE Rate” means, a rate of [***] per FTE per calendar year.

 

dd.       “Hit to Lead” has the meaning given in Section 2.d.

 

ee.         “Hit Identification” has the meaning given in Section 2.d.

 

ff.           “Indication” means any use of a Collaboration Compound to treat a specified human disease or condition, or sign or symptom of a human disease or condition, the approval of which requires a dedicated pivotal clinical study by the applicable regulatory authority.  For clarity, lines of therapy (e.g., first line, second line etc.) and separate uses of a Collaboration Compound to treat subsets of a disease or condition will not be separate Indications.

 

gg.         “Lead Optimization” has the meaning given in Section 2.d.

 

hh.       “License or Sale Agreement” means an arm’s length written agreement between Client and a Third Party granting such Third Party a license, or sublicense to Exploit (or assigning such Third Party the right to Exploit) at least one product that would constitute a Collaboration Product (including, without limitation, the grant of a license to practice under (or assignment of) any patent rights claiming any Collaboration Product).  For clarity, a Change of Control event and agreements solely for contractors to perform work on Client’s behalf do not constitute License or Sale Agreements.

 

3

 

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ii.               “Licensee Net Sales” means, with respect to any License or Sale Agreement, Net Sales (as defined in such License or Sale Agreement) resulting from sales made by or on behalf of a Licensee of any product that would constitute a Collaboration Product hereunder and reported by such Licensee to Client or as determined by Client from an audit of Licensee.  For the avoidance of doubt, and without limitation, Licensee Net Sales exclude: (i) Licensee upfront payments; (ii) contingent payments of any amounts received in connection with the achievement of a milestone not based on Net Sales; (iii) amounts received for the receipt, exercise, or non-exercise by a Third Party of any option; (iv) amounts received as reimbursement for services including research and development services performed on behalf of a Third Party; and (v) amounts attributable to (a) sales, leases or other transfers of products or services other than Collaboration Products or (b) a license or sublicense to exploit products or services other than Collaboration Products.

 

jj.             “Licensee Payment” means the amounts received by Client or its Affiliates after the Second Amendment Effective Date from a Third Party pursuant to a License or Sale Agreement as consideration for: (I) an exclusive (including as to Client) license to Exploit any Collaboration Product; or (II) the transfer or assignment of Client’s entire right to Exploit any Collaboration Product to such Third Party (including, without limitation, assigning patent rights claiming such Collaboration Product) (each an “Option”); but (i) only to the extent that such amounts are directly attributable to such Option and (ii) excluding any other consideration received by Client in connection with such License or Sale Agreement including (A) contingent payments for any amounts received in connection with the achievement of any milestone; (B) amounts received as reimbursement for services research and development services performed on behalf of a Third Party on an FTE basis; (C) amounts attributable to a license or sublicense to exploit products or services other than Collaboration Products; and (D) Licensee Net Sales.  For clarity, Licensee Payments do not include any amounts received by Client in connection with a Change of Control.

 

kk.       “Licensee” means a Third Party to whom Client grants a license or sublicense to Exploit (or assigns the right to Exploit) at least one product that would constitute a Collaboration Product.

 

ll.               “Morphic Net Sales” means, as determined in accordance with U.S. generally accepted accounting principles (GAAP) and Client’s internal policies, the gross amounts billed or invoiced for sales of Collaboration Products by or on behalf of Client or its Affiliates (each, an “Invoicing Entity”), less (to the extent actually allowed or incurred and directly related to such sale of Collaboration Products and not previously deducted from the gross invoice price) the following amounts:

 

i.                  allowances and credits on account of rejection, or damaged, recalled or returned Collaboration Products previously sold;

 

ii.               customary rebates, price reductions (including shelf stock adjustments), chargebacks, administrative fee arrangements, reimbursements, trade, quantity and cash discounts to purchasers allowed and taken, including without limitation, with

 

4

 

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respect to institutions and health care organizations and in respect of Medicare, Medicaid or similar programs;

 

iii.            any invoiced amounts that are not collected and are written off, including bad debts, unless otherwise recovered;

 

iv.           customary amounts for third party transportation, insurance, handling or shipping charges to purchasers; and

 

v                 to the extent separately stated on purchase orders, invoices or other documents of sale, any taxes, duties and other governmental charges levied on or measured by the sale of Collaboration Products that are paid by or on behalf of an Invoicing Entity, but not franchise or income taxes of any kind whatsoever.

 

Morphic Net Sales shall also include the fair market value of any non-cash consideration received by any Invoicing Entity in connection with the sale of Collaboration Products. Transfer of a Collaboration Product within Client or between any of Client and its Affiliates or contractors for sale by the transferee shall not be considered a Net Sale for purposes of ascertaining royalty charges owed to Schrödinger under this Agreement. Notwithstanding anything to the contrary herein, the sale, disposal or use of any Collaboration Product for marketing, regulatory, development or charitable purposes, such as clinical trials, preclinical trials, compassionate use, named patient use, or indigent patient programs, in each case without consideration, shall not be deemed a sale hereunder.

 

If one or more Collaboration Product(s), is sold in combination with another product, device, service or active ingredient in each case that does not constitute a Collaboration Product, only the amounts allocable to the Collaboration Product(s), as determined using practices consistently applied by Client and approved by Schrödinger such approval to not unreasonably be withheld, shall be counted as Net Sales.

 

For clarity, Licensee Net Sales are not Morphic Net Sales.

 

If a Collaboration Product is sold as part of a Combination Product in a given country, then Morphic Net Sales for such Collaboration Product in such country will be determined as follows:

 

(i)             If the Collaboration Product is sold separately and all other products in such Combination Product are sold separately, then Morphic Net Sales will be calculated by multiplying Morphic Net Sales of such Combination Product by the fraction A/(A+B) where A is the Average Net Selling Price of the Collaboration Product component contained in the Combination Product in the applicable country and B is the sum of the Average Net Selling Prices of all other product components included in the Combination Product in the applicable country.

 

5

 

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(ii)          If the Collaboration Product is sold separately, but not all other products in a Combination Product are sold separately, then Morphic Net Sales will be calculated by multiplying Morphic Net Sales of such Combination Product by the fraction A/C where A is the Average Net Selling Price of the Collaboration Product component in the Combination Product in the applicable country and C is the Average Net Selling Price of the entire Combination Product in the applicable country.

 

(iii)       If the Collaboration Product is not sold separately, but all other products in a Combination Product are sold separately, then Morphic Net Sales will be calculated by multiplying actual Morphic Net Sales of such Combination Product by the fraction (C-B)/C where B is the sum of the Average Net Selling Prices of all other product components included in the Combination Product in the applicable country and C is the Average Net Selling Price of the entire Combination Product in the applicable country.

 

(iv)      If Net Sales of a Collaboration Product cannot be determined using the methods above ((i)-(iii)), then the Parties will negotiate in good faith, at the latest six (6) months before the expected launch of such Combination Product, an allocation of Morphic Net Sales of such Combination Product to the respective API components or product components thereof, as the case may be, based on the fair market value of such components for the purposes of determining a product specific allocated Morphic Net Sales, and if the Parties are unable to agree on such a reasonable allocation no later than three (3) months prior to the estimated launch date of such Combination Product, then Morphic Net Sales of such Collaboration Product will be calculated based on Client’s good faith estimate of the fair market value of the Collaboration Product and each of the other product components included in such Combination Product when sold in such country.

 

As used herein, “Average Net Selling Price” means on a product-by-product basis, for a given product, Calendar Year and country, the aggregate Morphic Net Sales (expressed in the applicable local currency) of such product in such Calendar Year in such country, divided by the number of units of such product for which revenue has been recognized by Client in accordance with GAAP in such Calendar Year in such country.

 

mm. “Morphic Patents” means any Patents Controlled by Morphic.

 

nn.       “Non-Collaboration Compound” means any chemical compound other than a Collaboration Compound.  For clarity, Non-Collaboration Compound includes any chemical compound identified, generated, developed or discovered by Client or any

 

6

 

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permitted sublicensee or their respective Affiliates other than Collaboration Compounds.

 

oo.       “Non-Collaboration Product” means any product having a Non-Collaboration Compound as an active pharmaceutical ingredient but excluding any product having a Collaboration Compound as an active pharmaceutical ingredient.

 

pp.       “Patents” means any and all (a) patents, (b) pending patent applications, including, all provisional applications, substitutions, continuations, continuations-in-part, divisions and renewals and all patents granted thereon, (c) all patents-of-addition, reissues, reexaminations and extensions or restorations by existing or future extension or restoration mechanisms, including, supplementary protection certificates or the equivalent thereof, (d) inventor’s certificates, (e) any other form of government-issued right substantially similar to any of the foregoing and (f) all U.S. and foreign counterparts of any of the foregoing.

 

qq.       “Phase II Clinical Trial” means a clinical trial generally consistent with 21 CFR §312.21(b) that the FDA permits to be conducted under an open IND and that is prospectively designed to generate sufficient data (if successful) to commence a Phase III Clinical Trial for such product and that is conducted to evaluate the effectiveness and the appropriate dose range of a product for a particular indication or indications in patients with the disease or condition under study and to determine the common short-term side effects and risks.

 

rr.             “Primarily Active” means, with respect to a Collaboration Compound and a Target, that the Collaboration Compound meets the (a) potency and (b) affinity with selectivity criteria in each case as set forth in the Lead Optimization planning documents approved by the JSC with respect to such Target and included in the applicable Work Plan or Research Plan.

 

ss.           “Research Plan” has the meaning given in Section 2.g.

 

tt.             “Royalty Term” means, on a Collaboration Product-by-Collaboration Product and country-by-country basis, the period beginning on the date of the first commercial sale of a Collaboration Product in such country, and ending upon the later of: (a) expiration, invalidation or abandonment of the last Valid Claim that covers the composition of matter of the Collaboration Compound of such Collaboration Product in such country; and (b) the [***]  anniversary of such first commercial sale in such country.

 

uu.       “Stage 1 Notice” has the meaning given in Section 2.e.

 

vv.       “Stage 2 Notice” has the meaning given in Section 2.f.

 

ww.   “Stage 1 Program” has the meaning given in Section 2.d.

 

xx.       “Stage 2 Program” has the meaning given in Section 2.d.

 

yy.       “Stage 2 Program Term” for a Stage 2 Program means the period commencing on the date Client approves the Research Plan for such Stage 2 Program pursuant to Section 2.f and ending on the date that such Stage 2 Program becomes a Terminated Program.

 

7

 

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [***], HAS BEEN OMITTED BECAUSE IT IS NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE COMPANY IF PUBLICLY DISCLOSED.

 

zz.         “Sub-Stage” means, with respect to a Stage 1 Program, Target Analysis and Hit Identification and, with respect to a Stage 2 Program, Hit to Lead, Lead Optimization, and Backup Search.

 

aaa. “Target(s)” shall mean (1) a member of the target class of human integrins and/or (2) any other target mutually agreed by the Parties to be a Target under this Agreement.

 

bbb. “Target Analysis” has the meaning given in Section 2.d.

 

ccc. “Terminated Program” has the meaning given in Section 2.j.

 

ddd. “Terminated Sub-Stage” has the meaning given in Section 2.j.

 

eee. “Valid Claim” means a claim of (a) any issued and unexpired patent which has not been held unenforceable or invalid by a decision of a court or other governmental agency of competent jurisdiction, unappealable or unappealed within the time allowed for appeal, and which has not been admitted to be invalid or unenforceable through abandonment, reissue, disclaimer or otherwise; or (b) a pending patent application that is filed and prosecuted in good faith and no more than [***]  have elapsed from its earliest priority date.

 

fff.      “Work Plan” has the meaning given in Section 2.c.

 

3.             Section 2 of the Agreement (Obligations of the Parties) is amended by deleting subsections c. and d. in their entireties and replacing them with the following:

 

“2.c         Joint Steering Committee.  Within [***]  after the execution of this Agreement, the parties shall form a joint steering committee (the “JSC”) comprised of [***]  designated as set forth below, which JSC shall be responsible for the general oversight of the research carried out hereunder, including without limitation: (i) reviewing the goals, strategy, Milestone Events (as defined in Exhibit B), and results and deliverables of the Work Plan (as set forth in Exhibit A, the “Work Plan”) or any Research Plan and the activities performed thereunder; (ii) recommending and approving changes to the Work Plan or any Research Plan; (iii) assigning relative priorities in the Work Plan or any Research Plan; (iv) terminating any specific activities under the Work Plan or any Research Plan; (v) determining whether a Milestone Event has occurred; and (vi) resolving any disagreements between the parties concerning the research and development activities carried out under this Agreement. Each party shall designate [***] individual representatives as members of the JSC, each of whom shall be authorized to make decisions on behalf of the designating party (subject to the terms and conditions of this Section 2.c.) and shall have significant experience and expertise in the research and development of pharmaceutical compounds. Each party shall have the right, at any time, to designate by written notice to the other Party, a replacement for any of such party’s representatives on the JSC. The JSC shall endeavor to work by consensus. Decisions of the JSC shall be made by unanimous written consent and shall be included in amendments to the Work Plan, if applicable. Where unanimity cannot be achieved in respect of any matter following good faith, commercially reasonable efforts on the part of the members of the JSC, such disputed matter shall be referred

 

8

 

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to the relevant senior management of the parties who shall promptly meet and endeavor to come to an agreement in a timely manner. The JSC will determine, subject to the terms and conditions of this Section 2.c., whether any Milestone Event has occurred. The JSC will notify the relevant senior management of each party in writing that any such Milestone Event has occurred no later than [***] after such a determination.

 

2.d          Schrödinger Research Activities.  Under the Collaboration, Schrödinger shall perform research and development activities Stage 1 Programs and Stage 2 Programs.  Schrödinger shall use commercially reasonable efforts, including by use of any applicable Schrödinger Intellectual Property, to prepare and deliver all deliverables and results for each Stage 1 Program and Stage 2 Program in accordance with this Agreement.  As set forth below, each Stage 1 and Stage 2 Program shall have [***] or more Sub-Stages each consistent with activities under the Work Plan.

 

Stage 1 Programs.  Stage 1 Programs means programs that include the following Sub-Stages with respect to an applicable Target: (a) Target analysis and validation activities, which may include protein construct design, protein refinement, binding pose prediction, FEP validation, WaterMap analysis and other activities consistent with the Target Class Analysis and Target Analysis and Validation activities of the Work Plan (collectively, “Target Analysis”); (b) hit identification, which may include ligand-based virtual screening, and structure-based virtual screening and other activities consistent with the Lead Identification activities of the Work Plan (collectively, “Hit Identification”); or (c) such other activities, but, in the case of (c), only to the extent mutually agreed between Schrödinger and Client.  Unless otherwise agreed by the Parties, this Agreement does not obligate Schrödinger to perform activities under more than [***] Stage 1 Programs hereunder per Calendar Year, prorated for any portion thereof.

 

Stage 2 Programs.  Stage 2 Programs shall include the following Sub-Stages with respect to a designated Target: (a) pre-lead optimization to identify a lead series of compounds and other activities consistent with the Hit to Lead activities of the Work Plan (collectively, “Hit to Lead”); (b) lead optimization to identify compounds that meet criteria for nomination of a Development Candidate or Backup Development Candidate for post-lead optimization development and other activities consistent with the Lead Optimization activities of the Work Plan (collectively, “Lead Optimization”); or (c) search for a Backup Development Candidate as an alternative to a Development Candidate (“Backup Search”).  Unless otherwise agreed by the Parties, this Agreement does not obligate Schrödinger to perform activities under more than [***] Stage 2 Programs hereunder.”

 

4.             Section 2 of the Agreement (Obligations of the Parties) is amended by adding new subsections e. — p. following the end thereof:

 

9

 

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2.e           Designating Stage 1 Programs.  From time to time, Client may designate, by written notice (“Stage 1 Notice”), Stage 1 Programs so long as the total number of Stage 1 Programs in the then [***] would not then exceed [***] or such other number agreed to in writing by the Parties.  Following the delivery of a Stage 1 Notice, the parties will develop a Research Plan for the Target designated therein.  Upon approval by Client of a Research Plan, Schrödinger shall commence the activities set forth therein.

 

2.f           Designating Stage 2 Programs and Sub-Stages.  From time to time, Client may designate, by written notice (“Stage 2 Notice”), Stage 2 Programs so long as the number of concurrent Stage 2 Programs would not then exceed [***] or such other number agreed to in writing by the Parties.  Each Stage 2 Notice shall designate the Sub-Stage activities to be performed: Pre-Lead Op, Lead Optimization, or Backup Search and, if applicable, the Collaboration Compounds or other compounds that are to be the subject of such activities.

 

Following the delivery of a Stage 2 Notice, the parties will develop a Research Plan for the designated Sub-Stage.  Upon approval by Client of such Research Plan, Schrödinger shall commence the activities set forth under the Research Plan.

 

2.g           Research Plan.  Each Research Plan for a Stage 1 Program or Stage 2 Program or Sub-Stage thereof shall: (i) have a scope and content consistent with Section 2.d or as otherwise agreed by the Parties, (ii) set forth the results and deliverables expected to be required for each Sub-Stage, (iii) the protocols and plans to be performed by Schrödinger under the Research Plan, and (iv) the estimated timeline for providing such results and deliverables (“Research Plan”).   Client shall have the final decision, in its sole discretion, to approve or disapprove of any Research Plan.

 

2.h          Updates to Research Plan.  The parties may, from time to time, update each Research Plan (whether under a Stage 1 Program or Stage 2 Program or Sub-Stage thereof) upon (and only upon) mutual written agreement.

 

2.i            Research Reports.  During the term of each Research Plan, Schrödinger shall, upon Client’s reasonable request, provide Client with reports regarding the status and progress of Schrödinger’s research activities thereunder.  For each Research Plan, the reports will include the characteristics of any Collaboration Compound identified and the selection of any Collaboration Compound for further study (including those for which Client may determine to commence post-Lead Optimization activities).  The parties shall confer regarding relevant deliverables and results generated under each Research Plan and consider any technical or budgetary issues that may arise.

 

2.j           Terminating Stage 1 or Stage 2 Programs or Sub-Stages.  Client may terminate, by written notice (“Program Termination Notice”), a Stage 1 Program or Stage 2 Program in its entirety (each a “Terminated Program”) or a given Sub-Stage of a Program (each a “Terminated Sub-Stage”).  Upon receipt of the Program Termination Notice: (1) all research and development activities under a Terminated Program shall cease and all Research Plans under such Terminated Program shall terminate in accordance with Section 2.k of this Agreement.  For a Terminated Sub-

 

10

 

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Stage, only the research and development activities under the applicable Research Plan shall terminate and the applicable Stage 1 or Stage 2 Program shall continue in accordance with any remaining Research Plans.  Notwithstanding the termination of a Stage 1 or Stage 2 Program in its entirety, the Target that was the subject of such Terminated Program shall remain a Target for all purposes hereunder, unless such Target is not a member of the target class of human integrins in which case such Target shall cease to be a Target for any purposes hereunder.  Schrödinger has no obligation to undertake any other Stage 2 Programs for the Target of any Stage 2 Program that becomes a Terminated Program.

 

2.k          Term of Research Plan.  The term of each Research Plan shall begin on the date of receipt by Schrödinger of Client’s written notice approving the Research Plan.  The term of each Research Plan shall end on the earlier of: (i) the date of receipt by Schrödinger of a Program Termination Notice terminating the applicable Stage 1 or Stage 2 Program or Sub-Stage, (ii) the date of determination by the JSC that all results and deliverables under such Research Plan have been achieved, or (iii) the termination of this Agreement.

 

2.l            Research Plan Costs.  For each Stage 1 Program, Client shall pay Schrödinger an up-front total of [***] in full payment of Schrödinger’s costs and expenses in performing such Stage 1 Program.  For each Stage 2 Program, during the corresponding Stage 2 Program Term, Client shall pay Schrödinger a flat rate of a total of [***] per Calendar Year, prorated for any portion thereof.  During the term of each Stage 2 Program, Schrödinger will provide Client a quarterly invoice specifying the amount due in connection with the performance of the corresponding Research Plan during the prior calendar quarter.  For all purposes of this Section 2.1, each of the three (3) programs existing as of the current date (i.e. the programs for the avb6 Target, a4b7 Target, and avb1/avb6 dual Target, respectively) (the “Existing Programs”) shall be deemed Stage 2 Programs.

 

2.m         Payment of Research Plan Costs.  Client will pay all amounts (other than those amounts that Client disputes in good faith in accordance with the terms and conditions of this Agreement) set forth in each invoice under Section 2.l within [***]  of the receipt of each invoice in accordance with Appendix B.IV.

 

2.n          Research Plan Records.  Schrödinger will, for [***] after the termination of each Stage 1 Program or Stage 2 Program (the “Retention End Date”), maintain records of its activities under the Research Plan applicable thereto in accordance with applicable good research practices.  Schrödinger shall keep a written or electronic notebook record of its recorded activity associated with the performance of services under this Agreement and such records shall be separate from other research projects Schrödinger may perform in accord with Section 2.b.  All Data must be made available either as an original or as an electronic copy by Schrödinger to Client at mutually agreed upon time points during the term of a Research Plan.  Data which were generated or modified in electronic format must be transferred to Client in electronic format and in a format reasonably accessible to Client representing the Data.  Prior to the Retention End Date, Schrödinger will not destroy Data without the prior written approval of Client.  During and up to [***] after the completion of each Research Plan under this Agreement, Schrödinger will

 

11

 

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ensure that representatives of Client have access to Schrödinger’s and its Affiliates’ premises, upon reasonable advance notice during regular business hours, for the purpose of reviewing Data under this Agreement. Schrödinger will seek to resolve any identified quality or data integrity issues with the Data generated under this Agreement, within a mutually agreed upon time period.

 

2.o          Performance by Schrödinger of Research Plan Activities.  Schrödinger will (a) use commercially reasonable efforts to perform all research activities assigned to Schrödinger under a Research Plan and (b) perform all such activities with reasonable care and skill in accordance with all applicable laws and the terms of this Agreement.  During the term of each Research Plan, Schrödinger shall devote the efforts of suitably qualified and trained employees and research assistants capable of carrying out the activities thereunder to a professional, workmanlike standard and will provide all necessary materials and facilities therefor.”

 

5.             Section 4 of the Agreement (Proprietary Rights) is amended by adding new subsections f. — g. following the end thereof:

 

4.f           Software Access.  During the Term, Schrödinger agrees to provide Client and its Affiliates, and Client’s current collaborator as identified in the Client press release dated [***]  and its Affiliates (the “Collaborator”), (i) access to the Service (as such term is defined in the Schrodinger End User Agreement for Hosted Software Service located at https://www.schrodinger.com/schrodinger-eua-hosted-software/ (the “EUA”)) subject to the terms of the EUA, and (ii) a license grant to its current suite of software applications subject to the terms of the End User License Agreement located at https://www.schrodinger.com/salesagreements/, in each case of (i) and (ii), for (and only for) use in the performance of the current collaboration agreement between Client and the Collaborator.

 

4.g           Schrödinger Assistance.  The Parties understand and agree that it may be necessary for Client from time to time to seek training or guidance from Schrödinger in order for Client and its Collaborator to use the Services (as such term is defined in the EUA) to conduct research and development activities both: (a) under the collaboration agreement; and (b) corresponding generally to Target Analysis, Hit Identification, Hit to Lead, Lead Optimization, and Backup Search.  Schrödinger hereby agrees to provide Client and its Collaborator reasonable training and guidance in connection with such activities as a consultant.  Schrödinger shall invoice Client for its documented reasonable FTE Costs and out-of-pocket expenses reasonably incurred in connection with providing such training and guidance, and Client shall pay Schrödinger all undisputed amounts due under this Section 4.g within [***] of the receipt of each invoice in accordance with Appendix B.IV.

 

6.             Section 5 of the Agreement (Confidentiality) is amended by adding new subsection e. following the end thereof:

 

“5.e         Client may use and disclose Schrödinger Confidential Information, including this Agreement, if, in the reasonable opinion of the Client’s legal counsel and to the extent that, a disclosure is required by applicable law, including any securities law or regulation or the

 

12

 

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rules of a securities exchange.”

 

7.             Milestones. Section II (Milestone Payments) of Exhibit B (Payments and Fees) to the Agreement is deleted in its entirety and replaced with the new Section II (Milestone Payments) attached hereto as Appendix B-II.  For clarity, such new Section II applies to Collaboration Products relating to the Existing Programs.

 

8.             Royalties. Section III (Royalties) of Exhibit B (Payments and Fees) to the Agreement is deleted in its entirety and replaced with the new Section III (Royalties and Upfront Payment Sharing) attached hereto as Appendix B-III.  For clarity, such new Section III applies to Collaboration Products relating to the Existing Programs.

 

9.             Payment Procedure.  Exhibit B to the Agreement (Payments and Fees) is amended by adding the new Section IV (Payment Procedure) attached hereto as Appendix B-IV following Section III (Royalties and Upfront Payment Sharing) thereof.

 

10.          Single Agreement.  Except as otherwise set forth in this Second Amendment, all of the terms and conditions of the Agreement shall remain in full force and effect.  This Second Amendment together with the Agreement and all exhibits, schedules and attachments thereto constitute the entire agreement among the parties with respect to the subject matter hereof and thereof and supersede all previous written or oral understandings between the parties.

 

13

 

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This Second Amendment is not valid or binding unless and until the date on which it is fully executed by Schrödinger and Client (“Second Amendment Effective Date”). Please confirm your acknowledgement and agreement to the foregoing by countersigning where indicated below and return one original countersigned letter to us.

 

 

	
 
    	
Very   truly yours,
    
	
 
    	
 
    
	
 
    	
MORPHIC THERAPEUTIC, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Praveen Tipirneni
    
	
 
    	
Name:
    	
Praveen Tipirneni
    
	
 
    	
Title:
    	
Chief Executive Officer
    

 

 

	
Agreed and accepted:
    	
 
    
	
 
    	
 
    
	
SCHRÖDINGER,   LLC, by its sole member,
    	
 
    
	
SCHRÖDINGER, INC.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Ramy Farid, Ph.D.
    	
 
    
	
Name:
    	
Ramy   Farid, Ph.D.
    	
 
    
	
Title:
    	
President
    	
 
    

 

14

 

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Appendix B-II

 

Milestones

 

All fees set forth herein are non-refundable, non-proratable, and payable in United States dollars.

 

The Milestone 1 Payment, Milestone 2 Payment, Milestone 3 Payment, and Milestone 4 Payment set forth below (collectively, the “Milestone Payments”) shall be payable by Client to Schrödinger only upon the achievement of the applicable event (each, a “Milestone Event”) as set forth herein.  Milestone 1 Payment shall be payable, on a Target-by-Target basis, only once the first time such Milestone Event is achieved by such Target.  Milestone 2 Payment, Milestone 3 Payment, and Milestone 4 Payment shall be payable, on a Target-by-Target basis, (i) the first time such Milestone Event is achieved by a first Collaboration Compound Primarily Active against such Target for a first Indication, and (ii) each time such Milestone Event is subsequently achieved by a different Collaboration Compound Primarily Active against such Target for a different Indication.   For clarity, for a Target, Milestone 2 Payment, Milestone 3 Payment, and Milestone 4 Payment shall be payable (x) only once with respect to an Indication regardless of the number of times Collaboration Compounds Primarily Active against such Target achieve such Milestone Event for such Indication, and (y) only once with respect to a Collaboration Compound Primarily Active against such Target regardless of the number of times it achieves such Milestone Event.  No Milestone Payment shall be due for any Non-Collaboration Compound or Non-Collaboration Product.

 

MILESTONE 1

 

	
Milestone Event 1:

 

Initiation of Lead Optimization, as determined by   the JSC in accordance with Sections 2.c.; provided that (i) except in   the case of an avb1/avb6   dual Target, Milestone Event 1 will not be achieved and will not be payable   with respect Collaboration Compounds Primarily Active against either of the   following Targets: avb6   or a4b7 and   (ii) any Milestone 1 Payment owed for an avb1/avb6   dual Target shall be discounted by any Milestone Payment for such dual Target   previously paid to Schrödinger by Client upon initiation of Lead Optimization   for such dual Target (if any).
    	
 
    	
Milestone 1 Payment

 

[***]
    

 

MILESTONE 2

 

	
Milestone Event 2:

 

Initiation of IND enabling studies with respect to a   Collaboration Compound (as defined by initiation by Client, its Affiliates of   GLP-tox studies)
    	
 
    	
Milestone 2 Payment

 

[***]

 
    

 

15

 

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MILESTONE 3

 

	
Milestone Event 3:

 

First subject dosed in a human trial of a   Collaboration Product.
    	
 
    	
Milestone 3 Payment

 

[***]
    

 

MILESTONE 4

 

	
Milestone Event 4:

 

First subject dosed in a Phase II Clinical Trial of   a Collaboration Product; provided that Milestone Event 4 will not be achieved   and will not come due with respect to a Collaboration Product containing a   Collaboration Compound Primarily Active against avb6   (and not containing any other Collaboration Compound).
    	
 
    	
Milestone 4 Payment

 

[***]
    

 

16

 

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Appendix B-III

 

Royalties and License Payments

 

1.              Royalties.  During the Royalty Term, on a Collaboration Product-by-Collaboration Product basis, Client shall pay (or cause its Affiliates to pay) to Schrödinger a percentage (“Royalty Rate”) of Morphic Net Sales and Licensee Net Sales of such Collaboration Product as applicable and set forth in the below table.  The term “Total Net Sales” means, with respect to any given Collaboration Product, the total of Morphic Net Sales and Licensee Net Sales for such Collaboration Product in a Calendar Year.  Notwithstanding anything to the contrary herein, royalties payable by Client to Schrödinger for any Licensee Net Sales shall not exceed [***] of the amounts actually received by Client as royalties for such Licensee Net Sales from the associated Licensee under the applicable License or Sale Agreement.  Client shall pay Schrödinger the foregoing royalties within [***] after the end of the calendar quarter to which the applicable Morphic Net Sales and Licensee Net Sales relate.  For clarity, no royalties shall be owed for any Non-Collaboration Compound or Non-Collaboration Product.

 

	
Applicable Products
    	
 
    	
Royalty Tier
    	
 
    	
Royalty Rate
    
	
Collaboration Products that do not include a   Collaboration Compound Primarily Active against at least one of avb6   or a4b7
    	
 
    	
First [***] of Total Net Sales 
    	
 
    	
[***]
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Collaboration Products that do not include a   Collaboration Compound Primarily Active against at least one of avb6   or a4b7
    	
 
    	
Total Net Sales in excess of [***] 
    	
 
    	
[***]
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
All Collaboration Products including at least one   Collaboration Compound Primarily Active against avb6   or a4b7
    	
 
    	
N/A
    	
 
    	
[***]
    

 

2.              Option Exercise Payment Sharing.  Client shall pay Schrödinger a one-time payment of [***] of each Licensee Payment within [***] of receipt by Morphic of such Licensee Payment.  For clarity, no payment under this Section 2 of Appendix B-III shall be owed to the extent attributable to any Non-Collaboration Compound or Non-Collaboration Product.  In the event that no Licensee Payment becomes due and payable to Schrödinger prior to December 15, 2019, Client shall pay Schrödinger a one-time, non-refundable payment of one million dollars ($1,000,000) on December 15, 2019 and no Licensee Payment shall be due for any Licensee Payment relating to a Collaboration Product Primarily Active against avb6. A Licensee Payment will be due only once per Collaboration Compound.

 

17

 

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Appendix B-IV

 

Payment Procedure

 

[***]

 

18Exhibit 10.13

 

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EXCLUSIVE LICENSE AGREEMENT

 

BETWEEN

 

CHILDREN’S MEDICAL CENTER CORPORATION

 

AND

 

MORPHIC ROCK HOLDING, LLC

 

 

Execution Copy — Confidential

 

TABLE OF CONTENTS

 

	
Articles
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
I.
    	
Definitions
    	
 
    	
5
    
	
 
    	
 
    	
 
    	
 
    
	
II.
    	
Grant of Licenses and   Options
    	
 
    	
10
    
	
 
    	
 
    	
 
    	
 
    
	
III.
    	
Due Diligence
    	
 
    	
16
    
	
 
    	
 
    	
 
    	
 
    
	
IV.
    	
Royalties and Other   Payments
    	
 
    	
18
    
	
 
    	
 
    	
 
    	
 
    
	
V.
    	
Reports and Records
    	
 
    	
22
    
	
 
    	
 
    	
 
    	
 
    
	
VI.
    	
Confidentiality
    	
 
    	
24
    
	
 
    	
 
    	
 
    	
 
    
	
VII.
    	
Patent Prosecution
    	
 
    	
26
    
	
 
    	
 
    	
 
    	
 
    
	
VIII.
    	
Infringement
    	
 
    	
27
    
	
 
    	
 
    	
 
    	
 
    
	
IX.
    	
Uniform Indemnification   and Insurance Provisions
    	
 
    	
29
    
	
 
    	
 
    	
 
    	
 
    
	
X.
    	
Representations
    	
 
    	
31
    
	
 
    	
 
    	
 
    	
 
    
	
XI.
    	
Compliance with Laws;   Export Controls
    	
 
    	
32
    

 

2

 

	
XII.
    	
Non-Use of Names
    	
 
    	
33
    
	
 
    	
 
    	
 
    	
 
    
	
XIII.
    	
Assignment
    	
 
    	
34
    
	
 
    	
 
    	
 
    	
 
    
	
XIV.
    	
Dispute Resolution and   Arbitration
    	
 
    	
35
    
	
 
    	
 
    	
 
    	
 
    
	
XV.
    	
Term and Termination
    	
 
    	
36
    
	
 
    	
 
    	
 
    	
 
    
	
XVI.
    	
Payments, Notices and   Other Communications
    	
 
    	
38
    
	
 
    	
 
    	
 
    	
 
    
	
XVII.
    	
General Provisions
    	
 
    	
39
    
	
 
    	
 
    	
 
    	
 
    
	
Appendix 1
    	
Patent Rights
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Appendix 2
    	
List of Structure   Targets
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Appendix 3
    	
Materials
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Appendix 4
    	
Development Plan
    	
 
    	
 
    

 

3

 

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EXCLUSIVE LICENSE AGREEMENT

 

This Agreement is made and entered into as of the date last written below (the “Effective Date”), by and between CHILDREN’S MEDICAL CENTER CORPORATION, a charitable corporation duly organized and existing under the laws of the Commonwealth of Massachusetts and having its principal office at 300 Longwood Avenue, Boston, Massachusetts, 02115, U.S.A. (hereinafter referred to as “CMCC”), and Morphic Rock Holding, LLC., a business corporation organized and existing under the laws of the State of Delaware and having its principal office at 35 Gatehouse Drive A2, Waltham, MA 02154 (hereinafter referred to as “Licensee”). CMCC and Licensee may also be referred to individually as (“Party”) or collectively as (“Parties”).

 

WHEREAS, CMCC is the owner of certain Patent Rights (as defined below) and has the right to grant exclusive licenses under the Patent Rights, subject only to a royalty-free, nonexclusive license granted to the United States Government for those inventions and ensuing patents developed with U.S. Government funding, and certain laws and regulations relating to Federally-funded projects and institutions; and

 

WHEREAS, as part of its charitable mission, CMCC desires to have the Patent Rights used to promote the public interest; and

 

WHEREAS, Licensee desires to engage in the development, production, manufacture, marketing and sale of Licensed Products and/or the use of Licensed Processes (as such terms are defined below) and implement a development program as described in this Agreement; and

 

WHEREAS, in order to promote effective development and distribution of a Licensed Product for the public interest and other purposes as set forth herein, Licensee desires to obtain an exclusive license, within a designated territory and for a prescribed field of use, relating to certain licensed products and processes within the scope of the Patent Rights, subject to the terms and conditions of this Agreement.

 

NOW, THEREFORE, in consideration of the promises and the mutual covenants contained herein, the Parties hereby agree as follows:

 

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ARTICLE I.  DEFINITIONS

 

For the purpose of this Agreement, the following words and phrases shall have the meanings set forth below:

 

A.            “Affiliate” means any company or other legal entity controlling, controlled by or under common control with a Party.  For purposes of the definition of “Affiliate” the term “control” shall mean: (i) the ownership of at least a majority of the ordinary voting power necessary to effect the election of a majority of the board directors or other governing board, or in the case of a for-profit entity, direct or indirect ownership of at least a majority of the stock or participating shares entitled to vote for the election of directors of that entity; or (ii) in the case of a partnership, the power customarily held by a managing partner to direct the management and policies of such partnership; or (iii) in the case of a joint venture, whether in corporate, partnership or other legal form, a prevailing joint economic interest coupled with a managerial role entailing active direction, control and accountability with respect to the business and affairs of the entity.

 

B.            “BCH” means CMCC’s Affiliate d/b/a Boston Children’s Hospital.

 

C.  “Commercially Reasonable Efforts” means the efforts and resources consistent with practices commonly used in Licensee’s industry by companies of similar size and scope as Licensee for a  product at a similar state in its development or product life, taking into account product profiles, efficacy, safety, the competitiveness of alternative products in the marketplace, the patent and other proprietary position of the product, regulatory approvals, profitability of the product (taking into account payments under this Agreement), maintaining the priority of rapid and effective development of the technology in Licensee’s corporate strategy and other relevant scientific, technical and commercial factors.

 

D.            “Field of Use” means integrin targeting for therapeutic and diagnostic uses in all human and veterinary applications. The Field of Use expressly excludes sales of the Materials as listed in Appendix 3 for the research tool market.

 

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E.   “First Commercial Sale” means, with respect to each country:  (i) the first sale of any Type 1 Product and Type 2 Product by Licensee or any Sublicensee, following approval of such product’s marketing by the appropriate governmental agency, if any such approval is necessary, for the country in which the sale is to be made; or (ii) when governmental approval is not required, the first sale in that country of the respective Type 1 Products and Type 2 Products.

 

F.              “Know-How” means any unpatented manufacturing information, technical information, confidential information, biological knowledge, protein and crystal structure data, testing and analytic methods and specifications in the Field of Use which is embodied in written materials or presented orally, by way of example, powerpoint presentations, electronic mail and the like, and which CMCC owns and has the rights to license, prior to the Effective Date, deriving from the activities of Timothy Springer during the course of his work at BCH on each of the structure targets listed in Appendix 2.

 

G.            “Know-How After Execution” means any unpatented manufacturing information, technical information, confidential information, biological knowledge, protein and crystal structure data, testing and analytic methods and specifications in the Field of Use which is embodied in written materials or presented orally, by way of example, powerpoint presentations, electronic mail and the like, and which CMCC owns and has the right to license, and deriving from the activities solely of Timothy Springer during the course of his work at BCH, and developed on each of the structure targets listed in Appendix 2 after the Effective Date.

 

H. “Licensed Product(s)” means Type 1 Products and Type 2 Products.

 

I.                “Material(s)” means the Transferred Materials and Progeny and Unmodified Derivatives of those Transferred Materials, but excluding Modifications of the Transferred Materials.  For purposes of this definition, Progeny shall mean an unmodified descendant from the Material, such as a virus from virus, cell from a cell, or organism from an organism; Unmodified Derivatives shall mean substances created by the Licensee which constitute an unmodified functional subunit or product expressed by the Transferred Material (such as subclones of unmodified cell lines, purified or fractionated subsets of the original

 

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Material, proteins expressed by DNA/RNA, or monoclonal antibodies secreted by a hybridoma cell line); and Modifications shall mean substances created by the Licensee which contain or incorporate the Material.

 

J.   “Net Sales” means, as determined under U.S. generally accepted accounting principles (“GAAP”), the gross sales invoiced for sales, or other transfers of Licensed Products by Licensee, its Affiliates, its agents, or its Sublicensees for any Licensed Products, less (to the extent actually allowed or incurred and directly related to such sale of Licensed Products) the following amounts:

 

(a)                                 credits and allowances for price adjustment, shelf stock adjustments, promotional payments, and other similar allowances;

 

(b)                                 allowances and credits on account of rejection, or damaged, recalled or returned Licensed Products previously sold;

 

(c)                                        rebates, price reductions, chargebacks, administrative fee arrangements, reimbursements, quantity and cash discounts to purchasers allowed and taken, including without limitation, with respect to institutions and health care organizations and in respect of Medicare, Medicaid or similar programs;

 

(d)                                 amounts for third party transportation, insurance, handling or shipping charges to purchasers;

 

(e)                                  taxes, duties and other governmental charges levied on or measured by the sale of Licensed Products whether absorbed by Licensee or paid by the purchaser so long as Licensee’s price is reduced thereby, but not franchise or income taxes of any kind whatsoever;

 

(i)                                     for any sale in which the United States government, on the basis of a royalty-free license pursuant to 35 USC Sec. 202(c) to any Patent Right, requires that the gross sales price of any Licensed Product subject to such Patent Right, be reduced by the amount of such royalty owed Licensor, the amount of such royalty.

 

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Net Sales shall also include the fair market value of any non-cash consideration received by Licensee or any Sublicensee in connection with the sale, lease, or other transfer of Licensed Products. Transfer of a Licensed Product within Licensee or between any of Licensee, Affiliates or Sublicensees or contractors for sale by the transferee shall not be considered a Net Sale for purposes of ascertaining royalty charges owed to CMCC under this Agreement.  Notwithstanding anything to the contrary herein, the sale, disposal or use of any Licensed Product for marketing, regulatory, development or charitable purposes, such as clinical trials, preclinical trials, compassionate use, named patient use, or indigent patient programs, in each case without consideration, shall not be deemed a sale hereunder. If a Licensed Product is sold in combination with another product, device, service or active ingredient, only the amounts allocable to the Licensed Product, as determined using practices consistently applied by Licensee and approved by CMCC such approval to not unreasonably be withheld, shall be counted as Net Sales.

 

K.            “New Patent Rights” means new patentable inventions in the Field of Use developed in the laboratory of Dr. Springer and that are directed to the structure targets listed in Appendix 2 and created and/or reduced to practice after the Effective Date of the Agreement and owned solely by CMCC.

 

L.  “Patent Rights” means all of the following intellectual property which CMCC owns and  has the rights to license during the Term as hereafter defined:

 

1.              The United States and foreign patents and/or patent applications listed in Appendix 1 attached hereto and incorporated herein by reference and divisionals and continuations thereof.

 

2.              The United States and foreign patents issued from the applications listed in Appendix 1 and from divisionals and continuations of those applications.

 

3.              Claims of United States and foreign continuation-in-part applications, and of the resulting patents, which are directed to the subject matter described in the United States and foreign patent applications described in Appendix 1 or subparagraphs 4 or 5 of this Paragraph L.

 

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4.              Claims of all later filed foreign patent applications, and of the resulting patents, which are directed to the subject matter specifically described in the United States patent and/or patent applications described in subparagraphs 1, 2 or 3 of this Article I, Paragraph L.

 

5.              Any reissues, re-examinations, renewals, substitutions, divisions, amendments or extensions of the United States or foreign patents described in subparagraphs 1, 2, 3 or 4 of this Article I, Paragraph L.

 

M.         “Sublicensee” means a person or entity other than Licensee’s Affiliate to whom Licensee has granted an arm’s length sublicense to Patent Rights, Know-How or Materials as permitted under this Agreement.

 

N. “Territory” means worldwide.

 

O. “Term” has the meaning stated in Paragraph A of Article XV.

 

P.              “Transferred Materials” means those materials listed on Appendix 3, which may be updated from time to time upon mutual written agreement of  an authorized signatory of each of CMCC and Licensee.

 

Q. “Type 1 Product(s)” means products and processes the manufacture, use, sale, offer for sale, importation or practice of which absent the license granted under this Agreement would infringe any one of the issued, valid, enforceable, unexpired claim(s) or any one of the pending claim(s) contained in the Patent Rights in the Field of Use. A claim of any issued, unexpired Patent Right shall be presumed to be valid unless and until it has been held to be invalid, unenforceable or unpatentable by a final judgment of a court or other governmental authority of competent jurisdiction from which no appeal can be or is taken and which has not been abandoned, disclaimed, denied or admitted to be invalid or unenforceable through reissue, re-examination or disclaimer or otherwise. A claim of any patent application shall be pending, as used in this Article I, Paragraph Q if it has been pending less than five (5) years from receipt of the first office action on the merits from the United States Patent and Trademark Office. However in the event such

 

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aforementioned pending claim issues after such five (5) year period, such claim will at the time of issuance be a valid claim.

 

R.            “Type 2 Product(s)” means each product or derivative thereof identified within five (5) years of the Effective Date (“Type 2 Product Term”) by Licensee, its Affiliates, Sublicensees or contractors which modulates an integrin with a small molecule that does not cause the integrin to adopt an open or intermediate conformation for therapeutic and diagnostic uses, and that is not a Type 1 Product.

 

ARTICLE II.  GRANT of LICENSES AND OPTIONS

 

A.            Licenses. Subject to the terms of this Agreement CMCC hereby grants the following to Licensee in the Field of Use in the Territory until the end of the Term, unless sooner terminated as provided in this Agreement: (i) The right and exclusive license to the Patent Rights to develop, make, use, sell, offer for sale and have sold, import, export and otherwise commercialize Type 1 Products and Type 2 Products; (ii) A non-exclusive license to research, develop, have developed, make, have made, use, sell, offer for sale and have sold, import, export and otherwise commercialize Know-How; and (iii) A non-exclusive license to use Materials in connection with Licensee’s research and development of Licensed Products.

 

B.            Option to New Patent Rights. Subject to the terms of this Agreement CMCC hereby grants to Licensee an exclusive first option for an exclusive commercial license to CMCC’s ownership interest in New Patent Rights for a period beginning on the Effective Date and expiring [***] months thereafter provided that Licensee pays the annual option fee of [***]at the beginning of the [***]year of the option term whether or not Licensee exercises its option described herein.  Upon disclosure of New Patent Rights by CMCC to Licensee, Licensee will have [***] to exercise its exclusive option for an exclusive commercial license to such New Patent Rights.  Licensee may exercise such option by written notice to CMCC at any time within such [***]period.  The Parties will negotiate fair market value of such New Patent Rights for [***]after Licensee exercises its option, in a range between [***], however in the event that such value is not fair market value at the time of the creation of such New Patent Rights, the Parties will negotiate for fair market

 

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value.  Thereafter, to the extent the New Patent Rights are then amended into the existing license subject to such exercise, such New Patent Rights and any additional diligence and development milestones agreed by the Parties shall be added to Appendix 1, Article III and Appendix 4, and shall be deemed Patent Rights under this Agreement and subject to applicable royalty and milestone obligations. For purposes of valuing New Patent Rights, fair market value shall mean the price a reasonable independent third party (without access to the Patent Rights) would pay in consideration for such New Patent Rights in an arm’s length transaction. In the event that Licensee does not timely pay the option fee owed to CMCC as described herein, the option rights granted herein shall terminate upon written notice from CMCC, provided that Licensee does not cure such payment default within [***]after receiving such notice.

 

C.            Option to Know-How After the Execution. CMCC hereby grants grant MORPHIC an option for a nonexclusive commercial license to Know-How After Execution for a period beginning on the Effective Date and expiring [***] months thereafter provided that Licensee pays the annual option fee of [***]at the beginning of the [***]of the option term whether or not Licensee exercises its option described herein.  Upon disclosure of Know-How After Execution by CMCC to Licensee, Licensee will have [***] to exercise its option for a nonexclusive license to such Know-How After Execution. Licensee may exercise such option by written notice to CMCC at any time within such [***]period. The Parties will negotiate fair market value of such Know-How After Execution for  [***] after Licensee exercises its option in a range between [***], however in the event that such value is not fair market value at the time of the creation of such Know-How After Execution, the Parties will negotiate for fair market value. Thereafter, to the extent the Know-How After Execution is then expressly amended into this Agreement subject to such exercise such Know-How After Execution shall be deemed Know-How under the Agreement. For purposes of valuing Know-How After Execution, fair market value shall mean the price a reasonable independent third party (without access to the Know-How) would pay in consideration for such Know-How After Execution in an arm’s length transaction. In the event that Licensee does not timely pay the option fee owed to CMCC as described herein, the option rights granted herein shall terminate upon written 

 

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notice from CMCC, provided that Licensee does not cure such payment default within [***]after receiving such notice.

 

D.            Notwithstanding anything above to the contrary, CMCC shall retain for itself and its Affiliates a royalty-free,  nonexclusive, right to practice and use the Patent Rights for internal research, teaching, educational, and treatment of such Affiliates patients and the right to license for no more than a nominal fee (such as shipping and handling charges) to other academic nonprofit research organizations (“Academic Institutions”) to practice and/or use the Patent Rights for internal research, teaching, and educational purposes only.  Any such license to such Academic Institutions shall specifically exclude and prohibit commercialization of the Patent Rights unless the Academic Institutions enters into an agreement with Licensee on terms consistent with this Agreement but in other respects agreeable to Licensee in Licensee’s sole discretion.  CMCC reserves all of its rights to Know-how, and Materials for any lawful purposes.

 

E.             Notwithstanding any other provision of this Agreement, the license and any sublicense shall be subject to the rights of the United States government, if any, under Public Law 96-517, 97-226, and 98-620, codified at 35 U.S.C. sec. 200-212 and any regulations promulgated thereunder; the obligations of CMCC under applicable laws and regulations; and Licensee’s warranty to comply with all applicable laws and regulations.

 

F.              Licensee agrees that, if the Patent Rights arose in whole or in part from federally-funded research, Licensed Products leased or sold in the United States shall be manufactured substantially in the United States to the extent required by applicable law or government regulation.  Upon the First Commercial Sale and thereafter, Licensee’s annual report to CMCC shall certify Licensee’s compliance with this provision.

 

G.            The license granted hereunder shall not be construed to confer any rights upon Licensee by implication, estoppel or otherwise as to any inventions, discoveries, know-how, technology or other intellectual property not granted under Paragraphs A, B and C of this Article II.

 

H.           As a condition of the license granted hereunder, Licensee hereby covenants and agrees that it will not use or cause to be used proprietary, non-public information it has acquired

 

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from CMCC or any Affiliate thereof in the course of prosecution of the Patent Rights from CMCC and/or patent counsel prosecuting the Patent Rights on behalf of CMCC.  Licensee shall not advise CMCC’s counsel prosecuting such Patent Rights to include information in any such patent application that would, to Licensee’s knowledge, have a material, negative impact on CMCC’s ownership of such rights or the validity of such Patent Right. Such information shall be considered Confidential Information of CMCC and is subject to the provisions of Article VI.  Any assignment or sublicense granted by Licensee shall contain an identical commitment by the assignee or Sublicensee.

 

I.                Subject to the terms and conditions of this Agreement, neither CMCC, nor any officer, director, employee, member of its medical staff, or of any CMCC Affiliate, shall be limited or constrained from continuing to engage in related research; or from the development of related or unrelated inventions, discoveries, rights or technology, and from practicing, licensing or sublicensing related or unrelated intellectual property rights arising from inventions occurring after the Effective Date; or from academic publication related thereto; or from entering into agreements and other relationships with other persons or organizations related to matters not expressly within the scope of this Agreement; or from exercising any rights whatsoever with respect to the Materials and Know-how licensed hereunder, subject to the royalty reductions under Article IV, Paragraph A, subparagraph 8.

 

J.                Licensee shall have the right to enter into sublicensing agreements, through multiple tiers, with respect to any of the rights, privileges, and licenses granted hereunder, subject to the terms and conditions hereof. In the event CMCC terminates this Agreement prior to the end of the Term, Licensee shall be responsible for promptly notifying Sublicensees of such termination. Sublicensees so notified may, to the extent their Sublicenses allow, may request CMCC to enter into a direct license with such Sublicensee by sending to CMCC written notice, received no later than thirty (30) days after the termination of this Agreement takes effect, that the Sublicensee: (i) reaffirms the terms and conditions of this Agreement as it relates to the rights the Sublicensee has been granted under its sublicense with Licensee; (ii) agrees to abide by all of the terms and conditions of this Agreement applicable to Sublicensees and to discharge 

 

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directly all pertinent obligations of Licensee which Licensee is obligated hereunder to discharge; and (iii) acknowledges that CMCC shall have no obligations to the Sublicensee other than its pertinent obligations set forth in this Agreement with regard to Licensee. Provided that the Sublicensee notice to CMCC as set forth in this clause is satisfactory, and Sublicensee is not in breach of its sublicense with Licensee, CMCC and Sublicensee shall negotiate in good faith to grant to such Sublicensee license rights and terms equivalent to the sublicense rights and terms which the Licensee shall have previously granted to such Sublicensee, to the extent that those rights were granted by CMCC to the Licensee under this Agreement. CMCC may decline to enter into a direct license agreement where Sublicensee cannot or declines to perform the obligations of Licensee hereunder, including without limitation Development Plan (as defined below) obligations.

 

K.            Licensee agrees that any sublicense granted by it to a Sublicensee shall ensure that Licensee is able to comply with the obligations to CMCC under this Agreement. Any agreement granting a sublicense shall provide that, upon the termination of this Agreement (provided that such Sublicensee is not in breach of such sublicense), each such sublicense will either, at the option of the Sublicensee, terminate or convert to a license directly between the Sublicensee and CMCC, which direct license shall be limited in scope as set forth in such Sublicense and which such conversion shall be contingent upon Sublicensee agreeing to the inclusion of the following provisions in substantially the same form as included herein: V (Reports, Records and Related Matters), VIII (Infringement), IX (Uniform Indemnification and Insurance Provisions), XI (Compliance with Laws; Export Controls), XII (Non-Use of Names), XIII (Assignment), XIV (Dispute Resolution and Arbitration), XV (Term and Termination) and XVII (General Provisions) of this Agreement. Licensee shall use commercially reasonable efforts to include such provisions in each such sublicense it enters. In addition, every sublicense shall contain within it requirements for commercially reasonable due diligence in developing or exploiting the Patent Rights, or selling Licensed Products, as specifically applicable, and shall obligate Licensee to enforce those provisions consistent with achieving Licensee’s obligations pursuant to this Agreement. Licensee shall make CMCC a third-party beneficiary of the sublicense entered with a Sublicensee with

 

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respect to XI (Compliance with Laws; Export Controls), IX (Uniform Indemnification and Insurance Provisions), and XII (Non-Use of Names).  Licensee agrees to provide to CMCC notice of any sublicense granted to a Sublicensee hereunder and shall forward to CMCC a copy of any and all fully executed sublicense agreements with a Sublicensee within thirty (30) days of execution thereof, which copy may be redacted to exclude information not relevant to the licenses granted hereunder or CMCC’s exercise of rights under this Agreement.  Licensee further agrees to forward to CMCC annually a copy of such reports received by Licensee from its Sublicensees during the preceding twelve (12) month period as shall be pertinent to a royalty accounting under the applicable sublicense and compliance with the other terms of this Agreement, and which may be redacted to exclude information not relevant to such royalty accounting and compliance.

 

L.             Licensee shall advise CMCC in writing of any consideration received from Sublicensees, and, at CMCC’s request, provide such information in  mutually agreeable format recognizable by CMCC’s data processing systems e.g. Microsoft® Excel®.  Without restriction of any remedies Licensee may have in law or equity against a Sublicensee, Licensee shall not accept from any Sublicensee anything of value in lieu of cash payments to discharge Sublicensee’s payment obligations under any sublicense or distribution agreement entered by Licensee related to the rights granted under this Agreement or marketing and sale of Licensed Products, without the express written permission of CMCC, which permission shall not be unreasonably withheld, conditioned or delayed, but may take into account a reasonable valuation for purposes of Licensee’s payment obligations to CMCC.

 

M.         If, during the Term, Licensee makes any discovery or invention in the course of its activities under this Agreement that is not within the scope of the Patent Rights but necessary to practice the Patent Rights licensed to Licensee hereunder (“Developed Rights”), Licensee hereby covenants that it shall not, nor shall it cause any Affiliate, licensee, or transferee of its rights, to, in whole or in part, enforce against CMCC or any Affiliate of CMCC any of the Developed Rights in any action claiming that the practice of the Patent Rights by CMCC or any Affiliate of CMCC as permitted by this Agreement infringes or misappropriates the Developed Rights. Licensee shall incorporate this

 

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covenant for the benefit of CMCC and its Affiliates in any contractual transfer or license of such Developed Rights with any third-party, such that the third-party is identically bound and the covenant operates for the benefit of CMCC and its Affiliates.

 

N.            Without limiting the foregoing, Licensee will be entitled to sublicense Know-How to contractors for the purpose of carrying out the Development Plan or to a commercial third party as part of a sublicense or option arrangement in connection with the Licensed Products.

 

ARTICLE III.  DUE DILIGENCE AND RELATED MATTERS

 

A.            Licensee, upon execution of this Agreement, shall use Commercially Reasonable Efforts to bring one or more Licensed Products to market. Thereafter, until expiration or termination of this Agreement, Licensee shall keep Licensed Products available to the public, in quantities sufficient to meet market demand, in the Territory, on terms appropriate for public access and public benefit.

 

B.            In addition, Licensee shall use Commercially Reasonable Efforts to implement the written development plan that has been provided hereunder (“Development Plan”) within the timeframes set forth therein, which may be amended from time to time pursuant to Paragraph C of this Article.  Licensee’s initial Development Plan is attached hereto as Appendix 4 and is hereby incorporated herein by reference.  Such Development Plan and revisions to such Development Plan under Paragraph C of this Article III disclosed to CMCC shall be considered Licensee’s Confidential Information, and shall be subject to the provisions set forth in Article VI.

 

C.            Except for Diligence Specifications as defined in Paragraph D of this Article, CMCC shall not unreasonably withhold its consent to revision of the Development Plan or revision to the Diligence Specifications as defined in Paragraph D when requested in writing in advance by Licensee and the request is supported by evidence reasonably acceptable to CMCC of legal or technical difficulties or delays in the clinical studies or regulatory process that could not reasonably have been avoided; provided that (i) Licensee is proposing and will implement reasonable means of addressing such difficulties or

 

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delays, including by procuring sufficient financial and technical resources; and (ii) that Licensee, its Affiliates and/or Sublicensees have in good faith made Commercially Reasonable Efforts and expended resources contemplated by the Development Plan.

 

D.            Notwithstanding Paragraphs B and C of this Article III, Licensee agrees that Licensee’s failure to achieve the following specific requirements of the Development Plan through itself, its Affiliates or its Sublicensees (“Diligence Specifications”) shall be sufficient grounds for the actions specified in this Paragraph D:

 

(i) initiate research on integrin target specified in the Development Plan, [***];

 

(ii) develop criteria of integrin full antagonism proof of concept in vitro in at least [***]  with respect to the integrin target specified in the Development Plan by [***];

 

(iii) enter into a definitive agreement to obtain additional financing of at least [***];

 

(iv) initiate research on second integrin target as specified in the Development Plan by [***];

 

(v) develop criteria of integrin full antagonism proof of concept in vivo in at least two (2) models with respect to the integrin target(s) specified in the Development Plan by [***];

 

(vi) assign [***] additional full-time persons on the research set forth in the Development Plan by [***]; and

 

(vii) develop criteria for pre-clinical toxicology studies for the lead molecule, by [***].

 

The Parties agree that Licensee’s failure to achieve any of the Diligence Specifications listed in this paragraph will irreparably harm CMCC’s ability to ensure that a Licensed Product is timely developed for the public benefit. In the event Licensee fails to meet any of the Diligence Specifications set forth in this Paragraph D in a timely manner, CMCC shall notify Licensee thereof in writing, and Licensee shall have [***]following the later of the milestone date, if applicable or the date of such notification to establish, through written response to CMCC in reasonably sufficient detail, to the reasonable 

 

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satisfaction of CMCC that (i) it has met such objective(s); or (ii) a revision to the Diligence Specification is necessary and appropriate as contemplated above, which shall be established to CMCC’s reasonable satisfaction. If such failure is due to (x) legal or technical difficulties or  (y) delays in the clinical studies or regulatory process and such difficulties or delays could not reasonably have been avoided, or (z) other reasons beyond the reasonable control of Licensee where Licensee, its Affiliates and/or Sublicensees have in good faith made Commercially Reasonable Efforts and have expended resources contemplated by the Development Plan, then in each case of (x), (y) or (z),  Licensee shall submit an action plan to  address such difficulties or delays, including as applicable, by procuring sufficient financial and technical resources and CMCC shall reasonably accept such action plan.  In the event Licensee fails to establish the foregoing, CMCC shall have the right in its sole discretion to terminate in whole or in part the license granted to Licensee under this Agreement pursuant to Article XV effective immediately.

 

ARTICLE IV.  ROYALTIES AND OTHER PAYMENTS

 

A.            For the rights, privileges and exclusive license granted hereunder, Licensee shall pay to CMCC the following amounts in the manner hereinafter provided. Unless expressly stated otherwise in this Agreement, periodic payment obligations listed below shall endure through the Term, unless this Agreement shall be sooner terminated as hereinafter provided in Article XV. The payments are as follows:

 

1.              License Issue Fee. A license issue fee of [***]which shall be deemed earned and due as of the Effective Date, however payable to CMCC within [***] of the Effective Date.

 

2.              Patent Prosecution Expenses. Payments for accrued past patent prosecution costs for the Patent Rights in the amount of [***]and payments for continuing patent costs for the Patent Rights as set forth in Article VII. Licensee shall pay CMCC such past and continuing prosecution costs respectively within [***] after receipt of an invoice from CMCC.

 

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3.              Equity. Within [***]of the Effective Date, Licensee shall issue to CMCC a number of common units of Morphic Rock Holding, LLC, representing [***]of the issued and outstanding units on a fully diluted basis of Licensee as of the Effective Date.  The Parties acknowledge that Licensee has already raised in excess of [***] in capital, grants, the sale of debt or equity securities, corporate collaborations or in-kind corporate contributions from an independent third party prior to the Effective Date.

 

4.              Participation in Future Private Equity Offerings.  CMCC shall have the right to purchase additional units of Licensee as set forth in Licensee’s Amended and Restated Operating Agreement, as amended from time to time.

 

5.              License Maintenance Fee. A license maintenance fee (“License Maintanance Fee”) in the amount of [***] per year for the first three (3) anniversary dates of the Effective Date and the amount of [***], payable to CMCC within [***] after each anniversary thereafterduring the Term, as may be offset in each year by Running Royalty payments as set forth below in Paragraph B of this Article IV.

 

6.              Option Fees.The option fees of [***] and [***] respectively as set forth in Article II Paragraphs B and C.

 

7.              Type 1 Product Royalties. Running Royalties in an amount equal to [***] of annual Net Sales of Type 1 Products.

 

8.              Type 2 Product Royalties. Running Royalties for Type 2 Products in an amount equal to [***] of Net Sales.  As it pertains to Type 2 Products, the royalty term begins on the First Commercial Sale of each such product in any country and expires ten (10) years therefrom (“Type 2 Royalty Term”). Following such time, the license set forth in Article II, Paragraph A shall be a perpetual, transferable, irrevocable, sublicensable, fully paid-up license without the payment of royalties or other consideration with respect to Type 2 Products. In the event CMCC grants a license to the Know How for use in the Field to any commercial third parties during the Type 2 Royalty Term Running Royalties due on any Type 2 Products shall be reduced by [***] for such products identified after the grant of such commercial license during the Type 2 Product Term.

 

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9.              Milestones. Licensee shall make the following payments to CMCC upon the occurrence of the following events (“Milestones”) within thirty days after each of the following milestones is first achieved by Licensee, its Affiliates or its Sublicensees with respect to a Type 1 Product.  Payments with respect to Milestones shall not be due for any Type 2 Product. For avoidance of doubt, each Milestone payment listed in 6(a)-(d) below shall become payable only once:

 

(a)                                 [***] to CMCC within [***] after allowance by the United States Food and Drug Administration (“FDA”) or foreign equivalent of the first Investigational New Drug (“IND”) application, or comparable application with respect to any Type 1 Product.

 

(b)                                 [***] to CMCC within [***] after the dosing of the second patient in Phase II clinical trial with respect to any Type 1 Product.

 

(c)                                  [***] to CMCC within [***] after the dosing of the second patient in Phase III clinical trial with respect to any Type 1 Product.

 

(d)                                 [***] to CMCC within [***] after approval by the FDA or foreign equivalent of the first NDA, BLA, or comparable application with respect to any Type 1 Product.

 

10.       Non-Royalty Sublicense Income. In the event Licensee has granted options or sublicenses to Sublicensees under this Agreement, Licensee shall pay CMCC the following percentages on payments it receives from Sublicensee (other than royalties based on Net Sales) including but not limited to sublicense issue fees, any lump sum payments, option fees, milestone payments, technology transfer payments or other similar fees, payments, and cash consideration, but excluding, in any event, equity issuances, payments for patent prosecution or enforcement of the Patent Rights, research and development payments or payments for capital equipment expenses (“Non-Royalty Sublicense Income”):

 

(i) [***] of all Non-Royalty Sublicense Income, if the option or such sublicense is granted prior to filing an IND on  each option or sublicensed asset; and

 

20

 

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(ii) [***] of all Non-Royalty Sublicense Income, if the option or sublicense is granted after filing an IND on each optioned or sublicensed asset.

 

B.            Notwithstanding anything herein to the contrary, any Running Royalties subsequently due on Net Sales of Licensed Products, if any, for each such year shall be creditable against the License Maintenance Fee for said year. License Maintenance Fees paid in excess of royalties in a given year shall not be creditable against royalties due in future years.

 

C.            No multiple royalties shall be payable because any Licensed Product, its manufacture, use, lease or sale are, or shall be, covered by more than one patent or patent application of the Patent Rights licensed to Licensee under this Agreement.

 

D.            All payments shall be paid in United States dollars in Boston, Massachusetts, or at such other place as CMCC may reasonably designate consistent with the laws and regulations controlling in any foreign country. If the currency conversion shall be required in connection with the payments of royalties or other amounts hereunder, the conversion shall be made by using the exchange rate published in the Wall Street Journal on the last business day of the calendar quarterly reporting period to which such royalty payments relate or if such exchange rate is unavailable, the exchange rate normally used by Licensee for conversion of revenue owed to Licensee.

 

E.             Payment of Running Royalties specified in this Article IV shall be made by Licensee to CMCC within [***] after March 31, June 30, September 30 and December 31 each year during the Term covering the quantity of Licensed Products sold by Licensee during the preceding calendar quarter.  The last such payment shall be made within [***] days after termination of this Agreement.  All payments set forth in this Agreement shall, if overdue, bear interest until payment at a per annum rate of [***] above the prime rate as reported in the Wall Street Journal eastern edition on the due date. The payment of such interest shall not foreclose CMCC from exercising any other rights it may have as a consequence of the lateness of any payment.

 

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ARTICLE V.  REPORTS, RECORDS AND RELATED MATTERS

 

A.            Licensee shall keep, and shall require its Affiliates and Sublicensees to keep, full, true and accurate books and records, including books of account in accordance with GAAP, in sufficient detail to enable CMCC to determine Licensee’s compliance with this Agreement, including diligence with respect to development as set forth in Article III, and the royalty and other amounts payable to CMCC under this Agreement.  Said books and records, including books of account in accordance with GAAP, shall be kept at Licensee’s principal place of business or the principal place of business of the appropriate division of Licensee to which this Agreement relates.  Said books and the supporting data shall be retained for at least [***] following the end of the calendar year to which they pertain or such longer period as required by applicable law, rule or regulation.

 

B.            CMCC shall have the right to inspect, copy and audit, on [***] notice, the books and records described above from time to time to verify the reports provided for herein or compliance in other respects with this Agreement.  CMCC or its agents shall perform such inspection, copying and auditing at CMCC’s expense during Licensee’s regular business hours, however pursuant to such audit, in the event there is a discrepancy of amounts owed to CMCC of greater than [***], then Licensee shall pay all expenses of such audit.

 

C.            Until the later of First Commercial Sale of a Licensed Product or the last development milestone, Licensee shall provide to CMCC at least [***] prior to the end of each calendar year an annual report reasonably detailing the activities of Licensee and Licensee’s Affiliates and Sublicensees to demonstrate Licensee is meeting its development and diligence obligations under this Agreement, including but not limited to, research and development activities of Licensee or its Sublicensees and Affiliates; the progress of obtaining regulatory approvals, with appropriate documentation; strategic alliances and manufacturing, sublicensing and marketing efforts (“Progress Report”).  In addition to the required Progress Report, Licensee shall also report on its progress under the Development Plan from time to time at CMCC’s written request 

 

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however Licensee shall not be required to report more than twice a year. CMCC agrees that Development Plans and Progress Reports provided to CMCC shall be considered Licensee’s Confidential Information, and shall be subject to the provisions set forth in Article VI.

 

D.            After First Commercial Sale, within [***] after the end of each calendar quarter, Licensee shall deliver to CMCC, at Licensee’s expense, true and accurate royalty reports for the said preceding quarter, in sufficient detail to calculate the amount of such royalty owed to CMCC under this Agreement.  These reports shall, at CMCC’s request, be provided by Licensee in an electronic or other format compatible with CMCC’s data processing and/or license management systems mutually agreeable to the Parties e.g. in Microsoft® Excel®. Reports shall include at least the following:

 

1. Number of Licensed Products manufactured and sold.

 

2. Number of Licensed Products sold to Boston Children’s Hospital.

 

3. Total Net Sales for Licensed Products sold, specified by country.

 

4. Applicable deductions and adjustments.

 

5. Total royalties payable to CMCC.

 

6. Payments received by Licensee from Affiliates and Sublicensees.

 

7. To the extent legally required, Licensed Products manufactured and sold to the U.S. Government, segregating those sold at a profit from those sold at cost in light of any royalty-free, nonexclusive license that may heretofore have been granted to the U.S. Government.

 

8. Royalties and fees received from Sublicensees.

 

E.             Licensee acknowledges that policies of CMCC, Harvard Medical School and affiliated organizations, relating to, inter alia, conflicts of interest and intellectual property, may affect certain direct and indirect arrangements between inventors and Licensee or related organizations.  During the Term, to the extent Licensee becomes actually aware, 

 

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Licensee shall notify CMCC in writing at least [***] before, or immediately thereafter if Licensee or its subsidiaries plans to enter or enters into any agreement other than this Agreement with or involving Dr. Timothy Springer, or his family, relatives or members or staff of his laboratories, whether relating to sponsored research, consulting, board membership, securities, or otherwise. Licensee’s notice to CMCC shall include a detailed description of all proposed terms and conditions. Licensee shall not enter into such an agreement if it would violate such policies unless the terms and conditions of the agreement have been duly approved by CMCC or its Affiliates pursuant to such policies.

 

ARTICLE VI. CONFIDENTIALITY

 

A.            Each Party agrees, during the Term and for [***] after termination of this Agreement to maintain the confidentiality of the Confidential Information of the other Party. “Confidential Information” shall mean (1) information acquired by Licensee pursuant to Article II Paragraph H; (2) information disclosed to CMCC pursuant to Article II Paragraph K, Article III Paragraphs B, C and Article V Paragraphs C, D, E or (3) other information relevant to this Agreement that the disclosing Party marks as confidential upon disclosure to the receiving Party. The Parties agree not to disclose the other Party’s Confidential Information to any third-party without the prior written consent of such other Party, and to use such Confidential Information only as necessary to fulfill its obligations, or comply with any laws or in the reasonable exercise of rights granted to it under this Agreement. Furthermore, either Party may disclose Confidential Information of the other Party to (a) its Affiliates, and to its and their officers, directors, employees, consultants, and agents in each case who have a specific need to know such Confidential Information and who are bound by a like obligation of confidentiality and restriction on use, or (b) to the extent such disclosure is required to comply with applicable law or regulation or the order of a court of competent jurisdiction, to defend or prosecute litigation or to comply with the rules of the U.S. Securities and Exchange Commission, any stock exchange or listing entity; provided, however, that the receiving Party provides prior written notice of such disclosure to the disclosing Party, to the extent legally permissible, and takes reasonable and lawful actions to avoid or minimize 

 

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the degree of such disclosure. Notwithstanding any other provision of this Agreement, each Party may disclose and use Confidential Information of the other Party as necessary to file or prosecute patent applications, prosecute or defend litigation or otherwise establish rights or enforce obligations under this Agreement, or to submit regulatory filings. Similarly, notwithstanding any other term of this Agreement, and in addition to (a) and (b) of this Paragraph A, CMCC shall have the right to disclose the nature, terms and copy of the Agreement to oversight bodies of CMCC, such as the institutional review board or conflicts of interest committee, and to disclose the nature of this Agreement (without including financial terms of the license but including reasonable detail about its overall structure, business goals and status of active clinical trials) in its organizational communications. However Confidential Information does not include any portion of the Confidential Information which:

 

(i)    at the time of disclosure is in the public domain;

 

(ii)   after disclosure hereunder enters the public domain, except through breach of this Agreement by the receiving Party;

 

(iii)  the receiving Party can demonstrate was in the receiving Party’s possession prior to the time of disclosure by or on behalf of the disclosing Party hereunder, and was not acquired directly or indirectly from the disclosing Party;

 

(iv)  becomes available to the receiving Party from a third-party which, to the knowledge of the receiving Party, is not legally prohibited from disclosing such Confidential Information; or

 

(v)   the receiving Party can demonstrate was developed by or for the receiving Party independently of the disclosure of Confidential Information by the disclosing Party or its Affiliates.

 

B.            Licensee and CMCC agree that the confidentiality obligations hereunder shall require that each Party use confidentiality procedures and practices as each would use for its own confidential information of a similar nature.

 

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C.            Licensee agrees that nothing herein shall prevent CMCC from disclosing or publishing CMCC’s Confidential Information, or create any legal liability for doing so, irrespective of whether such information comprises Know-How, Structure Targets or Materials.

 

ARTICLE VII.  PATENT PROSECUTION

 

A.            CMCC shall apply for, seek prompt issuance of, and maintain during the Term, the Patent Rights set forth in Appendix 1. The specifications of any such patent application and any patent issuing thereon shall state, to the extent applicable and legally required, “This invention was made with government support under [contract] awarded by [Federal agency]. The government has certain rights in this invention.” The prosecution, filing and maintenance of all Patent Rights applications and patents shall be the primary responsibility of CMCC in its sole but reasonable discretion, except that Licensee shall have the right and reasonable opportunities to review and provide input on, and shall cooperate with CMCC in, all preparation, filing, prosecution and maintenance of the Patent Rights.  CMCC shall instruct the patent counsel prosecuting such Patent Rights to reasonably consider incorporating the comments and requests of Licensee or its patent counsel and to send copies to Licensee and its patent counsel of all patent prosecution documents that are received from or filed with the United States Patent and Trademark Office. CMCC reserves the sole right to make all final decisions with respect to the preparation, filing, prosecution and maintenance of such patent applications and patents for the Patent Rights.

 

B.            Licensee shall reimburse CMCC for all present and future patent costs incurred by CMCC, and [***] for past patent costs incurred by CMCC, for the preparation, filing, prosecution and maintenance of patents underlying the Patent Rights. Upon request of CMCC, and only upon such CMCC request, Licensee agrees to have CMCC’s patent counsel directly bill Licensee and Licensee shall directly pay such invoices in compliance with such counsel’s customary business terms. If Licensee elects to no longer pay the expenses of a patent application or patent included within Patent Rights, Licensed Products or Licensed Processes, Licensee shall notify CMCC not less than [***] prior to such action and shall thereby surrender its rights under such patent or patent application. Such notice shall not relieve Licensee from responsibility to reimburse

 

26

 

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CMCC for patent-related expenses incurred prior to the expiration of the [***] notice period (or such longer period specified in Licensee’s notice).  CMCC shall then be free to license its rights to that patent or patent application to any other party on any other terms.

 

C.            In the event CMCC elects, in its sole discretion, not to pursue, maintain or retain a particular Patent Right licensed to Licensee hereunder, then CMCC shall so notify Licensee as promptly as practicable, but in any event no less than [***] prior to abandonment, and, subject to the rights of the United States government and any other contractual obligations to research sponsors, Licensee may in CMCC’s name,  assume the filing, prosecution and/or maintenance of such application or patent at Licensee’s expense. In such event, CMCC shall provide to Licensee any authorization necessary to permit Licensee to pursue and/or maintain such Patent Right.

 

D.            With respect to the prosecution or enforcement of any patent rights arising from joint inventions that may be related to the Patent Rights or any patent right claiming or disclosing a joint invention, the Parties shall negotiate in good faith either an amendment to this Agreement or separate agreement for a mechanism for prosecuting or enforcing such patent rights.

 

ARTICLE VIII.  INFRINGEMENT

 

A.            Licensee and CMCC shall each inform the other promptly in writing with reasonably sufficient facts of any alleged infringement by a third-party of the Patent Rights in the Field of Use within the scope of this Agreement and of any available evidence thereof.

 

B.            Licensee will have the first right, but not the obligation, at its own costs and expense, to defend the Patent Rights throughout the Territory with respect to the Field of Use (subject to consultation with CMCC on strategy, filings and selection and use of outside counsel), provided that Licensee will not settle or compromise any claim, without the prior approval of CMCC, which may not be withheld, conditioned or delayed, unreasonably and will not make any admission as to CMCC without the prior approval of CMCC.

 

27

 

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C.            During the Term, Licensee shall have the first right, but not the obligation, to prosecute at its own expense any infringement of the Patent Rights provided however that if such alleged infringer is an academic institution, a non-profit entity or a foundation (each a “NP Party”), then to the extent Licensee’s rights to prosecute such action are not limited or compromised by such delay because of a tolling or statute of limitations with respect to bringing a cause of action, CMCC shall have two (2) months from receipt from Licensee of sufficient facts of alleged infringement so that CMCC may investigate and persuade such NP Party to desist. Licensee shall not take any action against such NP Party during such two month period. If CMCC is unsuccessful within such two months or waives its initial right with respect to a NP Party, then Licensee shall have the right to proceed as set forth herein. CMCC may join Licensee as a party plaintiff in any such suit described herein, at its own expense, and hereby consents to join Licensee as a party plaintiff, at Licensee’s expense, if CMCC is required as a necessary party for such suit. Any recovery of damages by Licensee for each such suit shall be applied first in satisfaction of any unreimbursed expenses and legal fees of CMCC and Licensee relating to such suit and next toward reimbursement of CMCC for any payments under Article IV past due or withheld and applied pursuant to this Article VIII.  Any balance remaining will then be divided [***] to Licensee and [***] to CMCC. Notwithstanding the foregoing, such right to bring such an infringement action permitted under this Paragraph C shall remain in effect only for so long as the license granted hereunder remains exclusive. No settlement, consent judgment or other voluntary final disposition of the suit may be entered into without the consent of CMCC, which consent shall not be unreasonably withheld, conditioned or delayed. Licensee shall indemnify CMCC against any order for costs that may be made against CMCC in such proceedings caused by Licensee which are not due to the negligence, recklessness or intentional misconduct of any CMCC Indemnitee (defined below), breach by CMCC of any of its obligations under this Agreement or CMCC’s use of any Patent Right.

 

D.            If within [***] after having been notified of any alleged infringement, Licensee shall have been unsuccessful in persuading the alleged infringer to desist or alternatively actively negotiating a license agreement with such alleged infringer and shall not have brought or shall not be diligently prosecuting an infringement action, or if Licensee shall notify

 

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CMCC of its intention not to bring suit against any alleged infringer then, CMCC shall have the right, but shall not be obligated, to prosecute at its own expense any infringement of the Patent Rights.

 

E.             In the event Licensee shall undertake the enforcement and/or defense of the Patent Rights by litigation pursuant to Paragraph C of this Article VIII, Licensee may withhold up to [***] of the payments otherwise thereafter due to CMCC under Article IV above and apply the same toward reimbursement of up to [***] of Licensee’s expenses, including reasonable attorneys’ fees, in connection therewith, provided that Licensee sends a quarterly report to CMCC detailing such expenses, offset and withholdings.

 

F.              In the event that a declaratory judgment action alleging invalidity or non-infringement of any of the Patent Rights shall be brought against Licensee, CMCC, at its option, shall have the right, within [***] after commencement of such action, to participate in the defense of the action at its own expense under the lead of Licensee however in collaboration with CMCC.

 

G.            In any infringement suit which either Party may institute to enforce the Patent Rights pursuant to this Agreement, the other Party hereto shall cooperate in all reasonable respects and, to the extent reasonably possible, have its employees testify when requested and make available relevant records, papers, information, samples, specimens, and the like.

 

H.           Licensee shall during the exclusive period of this Agreement have the sole right subject to the terms and conditions hereof to sublicense any alleged infringer for future use of the Patent Rights to the extent licensed by this Agreement. Any upfront fees paid to Licensee as part of such a sublicense shall be shared between Licensee and CMCC as if they were Non-Royalty Sublicensing Income.

 

ARTICLE IX. UNIFORM INDEMNIFICATION AND INSURANCE PROVISIONS

 

A.            Licensee shall indemnify, defend and hold harmless CMCC, its Affiliates, current or future directors, trustees, officers, faculty, medical and professional staff, employees,

 

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students and agents and their respective successors, heirs and assigns (the “CMCC Indemnitees”), against any third party claim, liability, cost, damage, deficiency, loss, expense or obligation of any kind or nature (including without limitation reasonable attorneys’ fees and other costs and expenses of litigation) (“Loss”) incurred by or imposed upon the CMCC Indemnitees or any one of them in connection with any third party claims,  suits, actions, demands or judgments arising out of any theory of product liability (including, but not limited to, actions in the form of tort, warranty, or strict liability) concerning any product, process or service made, used or sold pursuant to any right or license granted under this Agreement.

 

B.            Licensee’s indemnification under Article IX, Paragraph A above shall not apply to any Loss to the extent that it is attributable to the negligent activities, recklessness or intentional misconduct of the CMCC Indemnitees or breach of an obligation by CMCC under this Agreement.

 

C.            Licensee agrees, at its own expense, to provide attorneys reasonably acceptable to CMCC to defend any actions brought or filed against any party indemnified hereunder that are subject to the indemnification obligations of Licensee contained herein.

 

D.            Beginning at the time as any such product, process or service is being commercially distributed or sold (other than for the purpose of obtaining regulatory approvals) by Licensee or by a Sublicensee, Affiliate or agent of Licensee, Licensee shall, at its sole cost and expense, procure and maintain commercial general liability insurance in amounts not less than [***] per incident and [***] annual aggregate and naming the CMCC Indemnitees as additional insureds. Such commercial general liability insurance shall provide (i) product liability coverage and (ii) contractual liability coverage for Licensee’s indemnification under Article IX, Paragraphs A through B of this Agreement. If Licensee elects to self-insure all or part of the limits described above (including deductibles or retentions which are in excess of [***] annual aggregate), such self-insurance program must be acceptable to CMCC and the Risk Management Foundation of the Harvard Medical Institutions, Inc. The minimum amount of insurance coverage required under this Article IX, Paragraph D, shall not be construed to create a limit of

 

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Licensee’s liability with respect to its indemnification under Article IX, Paragraphs A through B of this Agreement.

 

E.             Licensee shall provide CMCC with written evidence of such insurance upon request of CMCC. Licensee shall provide CMCC with written notice at least [***] prior to the cancellation, non-renewal or material change in such insurance. Notwithstanding any other term of this Agreement, if Licensee does not obtain replacement insurance providing comparable coverage within such [***] period, CMCC shall have the right to terminate this Agreement effective at the end of such [***] period without notice of any additional waiting periods.

 

F.              Licensee shall maintain such commercial general liability insurance during (i) the period that any such product, process or service is being commercially distributed or sold (other than for the purpose of obtaining regulatory approvals) by Licensee or by a Sublicensee, Affiliate or agent of Licensee and (ii) a reasonable period after the period referred to above which in no event shall be less than [***].

 

G.            The provisions of this Article IX survives expiration or termination of this Agreement.

 

H.           EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, CMCC MAKES NO WARRANTY, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY EXPRESS OR IMPLIED WARRANTY OF MERCHANTABILITY OR ANY EXPRESS OR IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, OR WARRANTY OF NON-INFRINGEMENT, WITH RESPECT TO ANY MATTER WITHIN THE SCOPE OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION ANY WARRANTY WITH RESPECT TO THE PATENT RIGHTS, LICENSED PRODUCTS, MATERIALS, OR ANY PATENT, TRADEMARK, SOFTWARE, TRADE SECRET, TANGIBLE RESEARCH PROPERTY, MATERIALS, INFORMATION OR DATA LICENSED OR OTHERWISE PROVIDED TO LICENSEE HEREUNDER, AND HEREBY DISCLAIMS THE SAME.

 

ARTICLE X. REPRESENTATIONS

 

A. Each Party hereby represents to the other Party as follows:

 

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1.              It is a company or corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated or organized, and has full corporate or other power and authority and the legal right to own or license and operate its property and assets and to carry on its business as it is now being conducted and as contemplated in this Agreement.

 

2.              This Agreement has been duly executed and delivered on behalf of such Party, by signatories duly authorized to enter into this Agreement.

 

B.            CMCC hereby represents to Licensee that

 

1.              As of the Effective Date, to the best knowledge of the Technology and Innovation Development Office of Boston Children’s Hospital (“TIDO”), CMCC is the owner of its right, title and interest in and to the Patent Rights, and the Patent Rights are free and clear of any liens, charges and encumbrances. In addition, neither the Office of General Counsel of CMCC nor the Technology and Innovation Development Office of Boston Children’s Hospital (“TIDO”) have received notice of any claim made against CMCC asserting the invalidity, misuse, or unenforceability of any of the Patent Rights or challenging CMCC’s ownership of the Patent Rights and to the best knowledge of TIDO, no such claim has been threatened.

 

2.              As of the Effective Date, TIDO has no knowledge of any activities by third parties that would constitute infringement or misappropriation of the Patent Rights within the Field of Use.

 

ARTICLE XI.  COMPLIANCE WITH LAWS; EXPORT CONTROLS

 

A.            Licensee shall comply with all applicable laws and regulations, including, without limitation, statutes and regulations affecting drug testing, development, marketing and distribution; laws and implementing regulations of the Department of Commerce governing intellectual property in federally-funded inventions; and Export Administration Regulations of the United States Department of Commerce issued pursuant to the Export Administration Act of 1979 (50 App. U.S.C. §2401 et. seq.).  Licensee understands and acknowledges that transfer of certain technical data, computer

 

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software, laboratory prototypes and other commodities is subject to United States laws and regulations controlling their export, some of which prohibit or require a license for the export of certain types of technical data, to certain specified countries. CMCC neither represents that a license shall not be required, nor that if required, it shall be issued. Licensee hereby represents and warrants that it will comply with all United States laws and regulations, and any applicable similar laws and regulations of any other country, controlling the export of commodities and technical data, that it will be responsible for any violation of such by Licensee and/or its Affiliates and/or Sublicensees, and that it will defend and hold CMCC, its Affiliates and their officers, directors, employees, agents, and medical staff harmless in the event of any third party legal action of any nature occasioned by such violation, and any action by any governmental agency or authority, relating to any asserted illegality or regulatory violation in the development, production, approval, marketing, sale, storage, manufacture, distribution, export or commercialization of Licensed Products or Licensed Processes.

 

B.            It is the intention of the Parties hereto to comply with all applicable laws, rules, and regulations, including (i) the federal anti-kickback statute (42 U.S.C. §1320a-7b) and related safe harbor regulations, and (ii) the Limitation Certain Physician Referrals (42 U.S.C. §1395nn, the “Stark Law”).  Accordingly, the Parties agree and acknowledge that no consideration received under this Agreement is, or is intended to be, a prohibited payment for the recommending or arranging for the referral of business or ordering of items or services, nor is any such consideration intended to induce illegal referrals of business.

 

ARTICLE XII.  NON-USE OF NAMES

 

Licensee will not use the name, names, logos or trademarks of CMCC or any CMCC Affiliates, nor the name or photograph or other depiction of any employee or member of the staff of CMCC or such Affiliates, nor any adaptation of any of the foregoing, in any advertising, promotional, or sales literature without, in each case, prior written consent from CMCC and from the individual staff member, employee, or student if such individual’s name, photograph or depiction is used. Notwithstanding the above, Licensee may state that it is 

 

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licensed by CMCC under one or more patents and/or applications consistent with this Agreement, and Licensee may comply with disclosure requirements of all applicable laws relating to its business, including United States and state security laws. In addition, Licensee may refer to publications by staff of BCH in the scientific literature.

 

ARTICLE XIII.  ASSIGNMENT

 

CMCC may assign this Agreement at any time without the prior written consent of Licensee to an Affiliate in connection with the assignment of the Patent Rights.  In addition, CMCC may assign its right to receive payment hereunder (but not its obligations hereunder) to any other party without the prior consent of Licensee.  Except as otherwise provided herein, this Agreement is not assignable or delegable, in whole or in part, by either Party without the prior written consent of the other Party acting through an authorized designee, and other than as otherwise permitted in this Paragraph, any purported assignment otherwise shall be void and of no effect. Notwithstanding the foregoing, (1) Licensee may assign this Agreement to an Affiliate, or (2) in the event Licensee merges with another entity, is acquired by another entity, or sells all or substantially all of its assets to another entity to which this Agreement relates, Licensee may assign its rights and obligations hereunder to the surviving or acquiring entity if: (i) Licensee is not then in breach of this Agreement; (ii) the proposed assignee has a net worth at least equivalent or greater to the net worth Licensee had as of the Effective Date; (iii) the proposed assignee has or will have sufficient available resources, including liquid financial resources that will be committed in order to satisfy its obligations hereunder; (iv) Licensee provides written notice of the assignment to CMCC, together with documentation sufficient to demonstrate the requirements set forth in subparagraphs (i) through (iii) above, at least thirty (30) days after the effective date of the assignment; and (v) CMCC receives from the assignee, in writing, at least thirty (30) days after the effective date of the assignment: (a) reaffirmation of the terms of this Agreement; (b) an agreement to be bound by the terms of this Agreement; (c) an agreement to perform the obligations of Licensee under this Agreement.  Any and all rights of Licensee hereunder may be exercised by one or more Affiliates of Licensee, without the need to sublicense, provided, however, that it is understood that all activities of such Affiliates are subject to the

 

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terms of this Agreement and that Licensee will remain obligated to CMCC for the compliance by Licensee and its Affiliates with the terms of this Agreement.

 

ARTICLE XIV.  DISPUTE RESOLUTION AND ARBITRATION

 

A.            Any and all claims, disputes or controversies arising under, out of, or in connection with this Agreement, which have not been resolved by good faith negotiations between the Parties as described below, shall be resolved by final and binding arbitration in Boston, Massachusetts, in accordance with the rules then obtaining applicable to the appointment of a single arbitrator of the American Health Lawyers Association, or in the event such arbitration is not then available under those rules, the rules of the American Arbitration Association (“AAA”).  All expenses and costs of the arbitrators and the arbitration in connection therewith will be shared equally, except that each Party will bear the costs of its prosecution and defense, including without limitation attorneys’ fees and the production of witnesses and other evidence. Any award rendered in such arbitration shall be final and may be enforced by either Party in a court of competent jurisdiction.

 

B.            Notwithstanding the foregoing, prior to commencing any arbitration, a Party must inform the other Party in writing of the dispute and the desire to commence arbitration within [***] if the dispute is not amicable resolved by good faith negotiations between the parties.  Upon receipt of such notice through such [***] period the parties shall negotiate in good faith a resolution of the matter.  If the matter is not resolved within the first [***] the parties shall escalate the matter to the CEO of the Licensee and the CMCC’s Senior Director of Technology and Innovation Development Office, Vice President of Research Administration or their respective designee.  If the Parties are unable to resolve such dispute within such [***] period, either party may thereafter bring an arbitration claim pursuant to Article XIV Paragraph A above.

 

C.            Notwithstanding the foregoing, nothing in this Agreement shall be construed to waive any rights or timely performance of any obligations existing under this Agreement, including without limitation Licensee’s obligations to make royalty and other payments, and also, unless CMCC has terminated the Agreement, Licensee’s obligation to 

 

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continue due diligence and development obligations. Licensee agrees that it shall not withhold or offset such payments, and agrees that Licensee’s sole remedy for alleged breaches by CMCC is pursuant to this Article XIV.

 

D.            Notwithstanding any other term of this Agreement, prior arbitration shall not be required, nor shall any arbitrator have the power to enjoin, notice of termination or effective termination of the license by a Party pursuant to Paragraphs B, C or D of Article XV of this Agreement.

 

ARTICLE XV.  TERM AND TERMINATION

 

A.            The term (“Term”) of this Agreement, with respect to any Type 1 Product or Type 2 Product, as applicable, in a country, begins on the Effective Date and expires on the date of the last expiring Patent Right covering a Type 1 Product in such country, however in the case of Type 2 Products the Term begins on the Effective Date and runs for the duration of the Type 2 Royalty Term.

 

B.            Notwithstanding Article XIV of this Agreement, CMCC may terminate this Agreement immediately upon (1) the bankruptcy, legal insolvency, liquidation, dissolution or cessation of operations of Licensee; or the filing of any voluntary petition for bankruptcy, dissolution, liquidation or winding-up of the affairs of Licensee; or any assignment by Licensee for the benefit of creditors; or the filing of any involuntary petition for bankruptcy, dissolution, liquidation or winding-up of the affairs of Licensee which is not dismissed within [***] of the date on which it is filed or commenced; or (2) upon any final judicial or administrative determination that this Agreement violates, or if continued would violate, in a substantial manner, any provision of the Federal Internal Revenue Code, applicable rights of the United States or obligations of CMCC under Title 15 of the United States Code, or other Federal or State laws applicable to CMCC; or (3) in the circumstances providing for immediate termination as described in Article III of this Agreement.

 

C.            CMCC may terminate this Agreement upon [***] prior written notice in the event of Licensee’s failure to pay to CMCC royalties due and payable hereunder in a timely manner, unless Licensee shall make all such payments to CMCC within said [***] period. 

 

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Notwithstanding Article XIV of this Agreement, upon the expiration of the [***] period, if Licensee shall not have made all such payments to CMCC, the rights, privileges and licenses granted hereunder shall terminate without further action by CMCC.

 

D.            Except as otherwise provided in Paragraphs B and C above, and notwithstanding Article XIV of this Agreement, in the event that either Party shall default in any material respect in the performance of any obligations under this Agreement, and the default has not been remedied to the other Party’s reasonable satisfaction within sixty (60) days after the date of notice in writing of such default, such other Party may by written notice to the defaulting Party terminate this Agreement effective immediately or upon such date indicated in such notice.

 

E.             Notwithstanding Article XIV of this Agreement, CMCC may terminate this Agreement upon [***] written notice to Licensee if Licensee or Licensee’s Affiliates, or Sublicensee challenge, in a judicial or administrative proceeding, the validity of any Patent Right licensed hereunder, provided that Licensee has not revoked or caused to be revoked such proceeding within such [***] period.

 

F.              Licensee shall have the right to terminate this Agreement at any time upon [***] prior written notice to CMCC.

 

G.            Upon termination of this Agreement for any reason, nothing herein shall be construed to release either Party from any obligation that matured prior to the effective date of such termination.

 

H.           Upon or before the effective date of any termination by CMCC or Licensee, Licensee shall return or destroy all Materials, and certify in writing to CMCC that it has done so.  Licensee hereby consents to an injunction to compel compliance with this section, in the event it has failed to comply, and shall reimburse CMCC for all costs and fees of any litigation undertaken by CMCC to enforce this provision.

 

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ARTICLE XVI.  PAYMENTS, NOTICES, AND OTHER COMMUNICATIONS

 

All notices, reports and/or other communications made in accordance with this Agreement shall be sufficiently made or given if delivered by hand, delivered by facsimile (with mechanical confirmation of transmission), or sent by overnight receipted mail, postage prepaid, or by reasonable, customary and reliable commercial overnight carrier in general usage, and addressed as follows:

 

In the case of CMCC:

 

Senior Director

Technology & Innovation Development Office-Mailstop BCH3183

Boston Children’s Hospital

300 Longwood Avenue

Boston, MA 02115

 

Payments shall be transmitted by reliable means to the same addressee, payable to Boston Children’s Hospital.

 

In the case of Licensee:

 

Chief Executive Officer
 Morphic Rock Therapeutic, LLC
 35 Gatehouse Drive A2
 Waltham, MA 02154

 

With a copy, which shall not constitute notice, to:

 

Foley Hoag LLP
 155 Seaport Boulevard
 Boston, MA
 Attn: Mark A Haddad, Esq.

 

or such other address as either Party shall notify the other in writing.  NOTICE SHALL BE EFFECTIVE UPON RECEIPT.

 

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ARTICLE XVII.  GENERAL PROVISIONS

 

A.            All rights and remedies hereunder will be cumulative and not alternative. This Agreement shall be construed and governed by the laws of the Commonwealth of Massachusetts without regard to any provision for the conflicts of laws.

 

B.            This Agreement may be amended only by written agreement signed by the Parties.

 

C.            It is expressly agreed by the Parties hereto that CMCC and Licensee are independent contractors and nothing in this Agreement is intended to create an employer relationship, joint venture, or partnership between the Parties. No Party has the authority to bind the other.

 

D.            This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all proposals, representations, negotiations, agreements and other communications between the Parties, whether written or oral, with respect to the subject matter hereof. Where inconsistent with the terms of any contemporaneous related agreements (such as sponsored research agreements), terms in this Agreement shall control.

 

E.             If any provisions of this Agreement shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions of this Agreement shall not be impaired thereby.

 

F.              This Agreement may be executed in any number of counterparts, including by email of a scanned copy, each of which shall be deemed an original as against the Party whose signature appears thereon, but all of which taken together shall constitute but one and the same instrument.

 

G.            The failure of either Party to assert a right to which it is entitled, or to insist upon compliance with any term or condition of this Agreement, shall not constitute a waiver of that right or excuse a similar subsequent failure to perform any such term or condition by the other Party.

 

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H.           Licensee agrees to mark any Licensed Products sold in the United States with all applicable United States patent numbers. All Licensed Products shipped to or sold in other countries shall be marked in such a manner as to conform with the patent laws and practices of the country of manufacture or sale.

 

I.                Each Party hereto agrees to execute, acknowledge and deliver such further instruments as may be necessary or appropriate to carry out the purposes and intent of this Agreement.

 

J.                The paragraph headings contained in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

 

K.            Each Party shall be excused from liability for the failure or delay in performance of any obligation under this Agreement by reason of any event beyond such Party’s reasonable control, including, but not limited to, acts of God, fire, flood, explosion, earthquake, or other natural forces, war, civil unrest, terrorism, accident, destruction or other casualty, any lack or failure of transportation facilities, any lack or failure of supply of raw materials, any strike or labor disturbance, or any other event similar to those enumerated above. Such excuse from liability shall be effective only to the extent and duration of the event(s) causing the failure or delay in performance, provided that the Party has not caused such event(s) to occur. All delivery dates under this Agreement that have been affected by force majeure shall be tolled for the duration of such force majeure.

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date last written below.

 

	
CHILDREN’S MEDICAL   CENTER CORPORATION
    	
 
    	
MORPHIC ROCK HOLDING,   LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ Irene Abrams
    	
 
    	
By:
    	
/s/ Praveen Tipirneni
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Irene Abrams
    	
 
    	
Name:
    	
Praveen Tipirneni
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
Senior Director   Technology & Innovation Development Office
    	
 
    	
Title:
    	
CEO, Morphic Rock
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
10/7/15
    	
 
    	
Date:
    	
5 Oct 2015
    

 

 

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APPENDIX 1

 

Patent Rights

 

Patent Rights under CMCC-2662 “Modified integrin polypeptides, Modified integrin polypeptide dimers, and uses thereof”

 

1.              US Provisional Patent Application 62/033,699 entitled “Modified Integrin Polypeptides, Modified Integrin Polypeptide Dimer, and Uses Thereof”.

 

 

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APPENDIX 2

 

List of Structure Targets

 

[***]

 

 

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APPENDIX 3

 

Materials

 

[***]

 

 

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APPENDIX 4

Development Plan

 

[***]

 

 

Figure 1. (A) Conformational states of integrin αIIbβ3; the Springer lab discovered 6 intermediate states between the low-affinity closed headpiece (state 1), and high-affinity open headpiece (state 8); full antagonists require binding and stabilization of state 1.  (B and C) Structural basis for two full antagonists (pyrazole and piperazine series); full antagonists stabilize, via hydrogen bonds, a metal-coordinating water molecule (Wat1) that is displaced in the earliest steps (state 2-3) in integrin opening (Lin et al, unpublished results).

 

[***]

 

 

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AMENDMENT NUMBER ONE

to the

EXCLUSIVE LICENSE AGREEMENT

 

This first amendment (“Amendment One”) is made and entered into on October 7, 2018 (the “Amendment Effective Date”) by and between The Children’s Medical Center Corporation, having a principal place of business located at 300 Longwood Avenue, Boston, Massachusetts 02115 (“CMCC”), and Morphic Rock Holding, LLC, a business corporation organized and existing under the laws of the State of Delaware and having a principal place of business located at 35 Gatehouse Drive A2, Waltham, MA 02154 (“Licensee”). CMCC and Licensee may each individually also be referred to herein as a “Party” and collectively referred to as the “Parties”.

 

WHEREAS, CMCC and Licensee entered into that certain Exclusive License Agreement on October 7th, 2015 (the “Agreement”);

 

WHEREAS, pursuant to the Agreement, Licensee has the exclusive first option to negotiate an exclusive commercial license to CMCC’s ownership interest in New Patent Rights;

 

WHEREAS, pursuant to the Agreement, Licensee has an option to negotiate a non-exclusive commercial license to Know-How After Execution;

 

WHEREAS, the Parties wish to extend the option periods for both the New Patent Rights and the Know-How After Execution in consideration of Licensee’s payment of additional annual option fees as set forth in this Amendment One; and

 

WHEREAS, the Parties desire to amend the Agreement as set forth herein, and the Agreement otherwise remains unchanged.

 

In consideration of these premises and of the mutual promises set forth below, the Parties agree to amend the Agreement in accordance with this Amendment One as follows:

 

Amendments to the Agreement:

 

1.                                      The first sentence of Article II, Paragraph B shall be amended to read in its entirety as follows:

 

“Option to New Patent Rights. Subject to the terms of this Agreement, CMCC hereby grants to Licensee an exclusive first option for an exclusive commercial license to CMCC’s ownership interest in New Patent Rights for a period beginning on the Effective Date and expiring [***] years thereafter, provided that Licensee pays the annual option fee of [***] at the beginning of the [***] year of the option term and [***] at the beginning of the [***] year of the option term whether or not Licensee exercises its option described herein.”

 

 

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2.                                      The first sentence of Article II, Paragraph C shall be amended to read in its entirety as follows:

 

“Option to Know-How After the Execution. Subject to the terms of this Agreement, CMCC hereby grants to Licensee an option for a non-exclusive commercial license to Know-How After Execution for a period beginning on the Effective Date and expiring [***] years thereafter, provided that Licensee pays the annual option fee of [***] at the beginning of the [***] year of the option term and [***] at the beginning of the [***] year of the option term whether or not Licensee exercises its option described herein.”

 

3.                                      Upon execution, this Amendment One shall be made a part of the Agreement and shall be incorporated by reference. Except as provided herein, all other terms and conditions of the Agreement shall remain in full force and effect. Capitalized terms contained in this Amendment One not otherwise defined herein have the meanings set forth in the Agreement.

 

4.                                      This Amendment One may be executed by facsimile or a portable document format (PDF) and in any number of counterparts, each of which shall be deemed to be an original, and all of which together will constitute one and the same instrument.

 

IN WITNESS WHEREOF, the Parties have hereunto duly executed this Amendment One by their respective authorized signatories as of the Amendment Effective Date.

 

 

	
THE   CHILDREN’S MEDICAL CENTER CORPORATION 
    	
 
    	
MORPHIC   ROCK HOLDING, LLC 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By
    	
/s/   Irene Abrams
    	
 
    	
By
    	
/s/Robert   Farrell
    
	
 
    	
 
    	
 
    	
 
    
	
Name &   Title:
    	
Irene   Abrams 
    	
 
    	
 
    	
 
    
	
 
    	
Vice   President 
    	
 
    	
Name &   Title:
    	
Robert   Farrell Jr.
    
	
 
    	
Technology   Development & New Ventures 
    	
 
    	
 
    	
VP   Finance & Treasurer 
    
	
 
    	
 
    	
 
    
	
Date
    	
11/5/2018
    	
 
    	
 
    
	
 
    	
 
    	
Date
    	
11/5/2018

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