Document:

exv10w7

 

Exhibit 10.7

NON-EXCLUSIVE LICENSE AGREEMENT

     This Agreement, effective as of January 10, 2007 (the “Effective Date”), is between the
University of Massachusetts (“University”), a public institution of higher education of the
Commonwealth of Massachusetts as represented by its Worcester campus, and, RXi Pharmaceuticals
Corporation (“Company”), a Delaware corporation.

RECITALS

     WHEREAS, University owns intellectual property rights which relate to therapeutic applications
of RNAi, as described in University’s invention disclosures numbered UMMC 06-08, entitled “Methods
of Synthesis and Formulation of New Reagents for Efficient Nucleic Acids Delivery in Cells and
Animals” and UMMC 07-08 entitled “Microwave Assisted Method of Synthesis of New Cationic Reagents
for Efficient Drug Delivery in Cells and Animals”;

     WHEREAS, Company is engaged in business relating to the development and commercialization of
products that use or incorporate University’s intellectual property rights and has the capability
of developing commercial applications of the intellectual property;

     WHEREAS, Company desires to obtain a non-exclusive license to University’s intellectual
property rights, and University is willing to grant a non-exclusive license to its intellectual
property rights under the following conditions so that these intellectual property rights may be
developed to their fullest and the benefits enjoyed by the general public; and

     WHEREAS, the license that is granted in this Agreement promotes the development of publicly
funded intellectual property to practical application for the public good.

     THEREFORE, University and Company agree as follows:

1. Definitions.

     1.1 “Affiliate” means an entity that controls, is controlled by, or is under common
control with a party to this Agreement. The term “control” as used in the preceding sentence means
possession of the power to direct or call for the direction of the management and policies of an
entity, whether through ownership of a majority of the outstanding voting securities, by contract,
or otherwise.

     1.2 “Companion UMass License Agreements” means this Agreement and the license
agreements with University that are executed on the same date as this Agreement for University
technologies, UMMC 03-75, UMMC 03-68, UMMC 06-38, UMMC 06-39, and UMMC 06-21, collectively.

     1.3. “Confidential Information” means any confidential or proprietary information
furnished by one party (the “Disclosing Party”) to the other party (the “Receiving Party”) in

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

 Page 1 of 17 

 

connection with this Agreement that is specifically designated as confidential, as further
described in Article 7.

     1.4. “Field” means Primary Field and Secondary Field collectively. Any commercial
sale of research reagents covered by the Patent Rights is specifically excluded from the Field.
The foregoing shall not be interpreted to prevent Company or its Affiliates from performing
research related to discovery or development of Licensed Products for itself or any Affiliate. (a)
“Primary Field” means therapeutic, prophylactic, or diagnostic health care applications for
amyotrophic lateral sclerosis (ALS), diabetes, and obesity, in humans. (b) “Secondary
Field” means therapeutic, prophylactic, or diagnostic health care applications in humans that
are not included in the Primary Field.

     1.5. “Licensed Product” means any product that cannot be developed, manufactured,
used, or sold without infringing one or more Valid Claims.

     1.6. “Net Sales” means the gross amount billed or invoiced on sales of Licensed
Products by Company and its Affiliates less the following: (a) customary trade, quantity, or cash
discounts to non-affiliated brokers or agents to the extent actually allowed and taken; (b) amounts
repaid or credited by reason of rejection or return; (c) to the extent separately stated on
purchase orders, invoices, or other documents of sale, any taxes or other governmental charges
levied on the production, sale, transportation, delivery, or use of a Licensed Product which is
paid by or on behalf of Company; and (d) outbound transportation costs prepaid or allowed and costs
of insurance in transit.

     In any transfers of Licensed Products between any of Company and Affiliates Net Sales are
calculated based on the final sale of the Licensed Product to an independent third party. If
Company or an Affiliate receives non-monetary consideration for any Licensed Products, Net Sales
are calculated based on the fair market value of that consideration. If Company or its Affiliates
use or dispose of a Licensed Product in the provision of a commercial service, the Licensed Product
is sold and the Net Sales are calculated based on the sales price of the Licensed Product to an
independent third party during the same Royalty Period or, in the absence of sales, on the fair
market value of the Licensed Product as determined by the parties in good faith.

     1.7. “Patent Rights” means the United States patent applications listed in Exhibit A,
patent applications covering invention disclosures listed in Exhibit A, and any divisional,
continuation, or continuation-in-part of those patent applications to the extent the claims are
directed to subject matter specifically described therein as well as any patents issued on these
patent applications and any reissues or reexaminations or extensions of the patents, and any
foreign counterparts to any of the foregoing.

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

 Page 2 of 17 

 

     1.9. “Valid Claim” means (a) a claim of an issued and unexpired patent covering the
Patent Rights which has not been permanently revoked or held unenforceable or invalid by an
unappealable or unappealed decision of a court or government agency of competent jurisdiction or
(b) a claim of a pending patent application within the Patent Rights that has not been abandoned or
finally disallowed without the possibility of appeal or refiling.

2. Grant of Rights

     2.1. License Grant. University grants to Company a nonexclusive, worldwide,
royalty-bearing license (without the right to sublicense ) in the Patent Rights to make, have made,
use, offer to sell, sell, have sold and imported Licensed Products in the Field, including research
for development of Licensed Products.

     2.3. Assignment of UMass/CytRx Licenses. On or before March 31, 2007, Company shall
obtain assignment from CytRx Corporation of the license agreements that cover the following RNAi
technologies that CytRx has licensed from University and the Carnegie Institution, UMMC 01-36, UMMC
02-01, UMMC 03-17, UMMC 03-33, UMMC 03-60, and UMMC 98-22, in a manner compliant with the relevant
license agreements. University shall consent to any assignment as necessary. If Company does not
obtain assignment of those license agreements on or before March 31, 2007, this Agreement
immediately terminates.

3. Company Obligations Relating to Commercialization.

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

          (a) Financing the Company. On or before March 31, 2007, Company shall raise at least
Fifteen Million Dollars ($15,000,000) from investors which may include CytRx Corporation (the
“Initial Financing”) or this Agreement automatically terminates, and Company shall pay University
Seventy-Five Thousand Dollars ($75,000) due April 1, 2007 (payable only once under the Companion
UMass License Agreements). However, if Company demonstrates to the reasonable satisfaction of
University that, on March 31, 2007, investors are performing due diligence for, or, in the case of
CytRx Corporation, is otherwise taking actions that are reasonably likely to result in, the
financing of Company of at least $15,000,000, University grants Company a thirty (30) day extension
from March 31, 2007, to fulfill the financing obligation set forth in this Subsection 3.1(a). If
Company can demonstrate to the reasonable satisfaction of University that investors are performing
due diligence for, or, in the case of CytRx Corporation, is otherwise taking actions that are
reasonably likely to result in, the financing of Company of at least $15,000,000, Company shall be
granted up to two additional thirty (30) day extensions to fulfill the financing obligation by
paying to University Twenty-Five Thousand Dollars ($25,000) each on the last day of the previous
extension. The extension fees are non-refundable but creditable to the upfront license fee.

          (b) Development of Licensed Products.

 Page 3 of 17 

 

               (i) On or before execution of this Agreement, Company shall furnish University with a written
business plan under which Company intends as of the Effective Date to develop Licensed Products.
University acknowledges that this business plan is a statement of Company’s current intention
regarding the development of Licensed Product and that Company’s plans regarding the development of
Licensed Products may change.

               (ii) Within sixty (60) days after the start of each calendar year, beginning on January 1,
2008, Company shall furnish University with a written report on progress during the prior year to
develop and commercialize Licensed Products, including without limitation research and development,
efforts to obtain regulatory approval, marketing, and sales figures. The Company shall also
include in the report a discussion of its intended development and commercialization efforts and
sales projections for the current year.

               (iii) Within four (4) years after the Effective Date, Company or its Affiliate shall file an
IND or its equivalent with the FDA covering at least one (1) Licensed Product.

               (iv) Within twelve (12) years after the Effective Date, Company, its Affiliate or Sublicensee
shall file an NDA or BLA with the FDA covering at least one (1) Licensed Product.

               (v) Within three (3) months after receiving FDA approval of the NDA or BLA for each Licensed
Product, Company or its Affiliate shall market the approved Licensed Product in the United States.

     3.2. If University determines that Company has not fulfilled its obligations under Subsection
3.1(b), University shall furnish Company with written notice of the determination. Within sixty
(60) days after receipt of the notice, Company shall either (a) fulfill the relevant obligation or
(b) negotiate with University a mutually acceptable schedule of revised diligence obligations,
failing which University may, immediately upon written notice to Company, terminate this Agreement.

     3.3. Indemnification.

          (a) Indemnity. Company shall indemnify, defend, and hold harmless University and its
trustees, officers, faculty, students, employees, and agents and their respective successors, heirs
and assigns (the “Indemnitees”), against any liability, damage, loss, or expense (including
reasonable attorneys’ fees and expenses of litigation) incurred by or imposed upon any of the
Indemnitees in connection with any claims, suits, actions, demands or judgments arising out of any
theory of liability (including without limitation actions in the form of tort, warranty, or strict
liability and regardless of whether the action has any factual basis) concerning any product,
process, or service that is made, used, or sold pursuant to any right or license granted under this
Agreement. However, indemnification does not apply to any liability, damage, loss, or expense to
the extent directly attributable to (i) the gross negligence or intentional misconduct of the
Indemnitees or (ii) the settlement of a claim, suit, action, or demand by Indemnitees without the
prior written approval of Company.

 Page 4 of 17 

 

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

          (c) Insurance. Company shall maintain insurance or self-insurance that is reasonably
adequate to fulfill any potential obligation to the Indemnitees, but not less than one million
dollars ($1,000,000) for injuries to any one person arising out of a single occurrence and five
million dollars ($5,000,000) for injuries to all persons arising out of a single occurrence.
Company shall provide University, upon request, with written evidence of insurance or
self-insurance. Company shall continue to maintain the insurance or self-insurance after the
expiration or termination of this Agreement while Company or its Affiliate continues to make, use,
or sell a Licensed Product and thereafter for five (5) years.

     3.4. Use of University Name. In accordance with Section 7.2., Company and its
Affiliates may not use the name “University of Massachusetts” or any variation of that name in
connection with the marketing or sale of any Licensed Products.

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

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

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

          (b) Company and its Affiliates shall comply with all United States laws and regulations
controlling the export of commodities and technical data, including without limitation all Export
Administration Regulations of the United States Department of Commerce. Among other things, these
laws and regulations prohibit or require a license for the export of certain types of commodities
and technical data to specified countries and foreign nationals. Company hereby gives written
assurance that it will comply with and will cause its Affiliates to comply with all United States
export control laws and regulations, that it bears sole responsibility

 Page 5 of 17 

 

for any violation of those laws and regulations by itself or its Affiliates, and that it will
indemnify, defend, and hold University harmless (in accordance with Section 3.3.) for the
consequences of any violation.

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

4. Consideration for Grant of Rights.

     4.1. License Fees.

          (a) On the Effective Date, Company shall pay to University{***}.

          (b) Within thirty (30) days after the closing of the Initial Financing, Company shall pay to
University {***}.

The license fees are nonrefundable and are not creditable against any other payments due to
University under this Agreement.

     4.2. Equity.

          (a) Within thirty (30) days after the closing of the Initial Financing, Company shall issue to
University that number shares of Common Stock of Company having an aggregate valuation equal to
{***} according to the Company valuation at the Initial Financing. In connection with the issuance
of stock pursuant to this Subsection 4.2(a), the University agrees to become a party to other
agreements of Company to the same extent (except any limitations relating to the University’s
status as an agency of the Commonwealth of Massachusetts, e.g., prohibition on indemnification) as
holders of more than five percent (5%) of the Common Stock of Company (such as, voting agreement
and stock restriction agreement). University acknowledges that all certificates representing the
shares described in this Subsection 4.2(a) may bear customary legends that require compliance with
the Securities Act of 1933 and related state securities laws upon any transfer of the shares.
Company shall use commercially reasonable efforts to register the stock issued to University
pursuant to this Subsection 4.2(a) as soon as possible, subject to customary terms in connection
with the registration.

          (b) Beginning on the Effective Date, Company shall notify University reasonably prior to each
Company board of directors meeting and provide University with related documentation to the same
extent that is supplied to the board of directors. Company shall permit one representative of
University to attend all board of director meetings until the earlier of five (5) years after the
Effective Date or the commencement by the Company of a Phase II clinical trial relating to a
Licensed Product. The University attendee may not be a voting member of the board. The University
attendee shall comply with restrictions to which other board members are subject, such as,
confidentiality requirements relating to Board

 Page 6 of 17 

 

discussions and shall execute any agreement reasonably required by Company to effect those
restrictions. The Company board of directors may exclude University representative from those
portions of board meetings that pertain to compensation and personnel issues and as deemed
reasonably necessary for the board members to exercise their fiduciary responsibilities and to
comply with applicable laws and regulations.

     4.3. License Maintenance Fee. At the beginning of each calendar year during the term
of this Agreement, commencing on January 1, 2008, Company shall pay to University {***}. This
annual license maintenance fee is nonrefundable and is not creditable against any other payments
due to University under this Agreement.

     4.4. Milestone Payments. Company shall pay University the following milestone
payments within thirty (30) days after the occurrence of each event for each Licensed Product:

	 	 	 	 	 
	Event	 	Payment
	The first issuance of any claim under any Patent Rights
	 	 	{***}	 
	Earlier of filing IND or 3 years after Effective Date
	 	 	{***}	 
	Commencement of Licensed Product marketing in US or 11 years after
the Effective Date
	 	 	{***}	 

If a milestone payment is made under this Section 4.4 based on the passage of time rather than on
the achievement of a particular milestone event, that milestone payment is not due for the first
Licensed Product with respect to the later achievement of that milestone event.

These milestone payments are nonrefundable and are not creditable against any other payments due to
University under this Agreement. For each Licensed Product, Company shall make all milestone
payments, even if an earlier milestone event has not occurred. For example, if Company proceeds
from Phase I clinical trial directly to Phase III, the milestone payments for both Phase II and III
are due upon achievement of the Phase III milestone event. Also, if Company uses a Phase II
clinical trial as a registration trial and proceeds directly to NDA submission without performing a
Phase III trial, then upon filing of the NDA, both the Phase III and NDA milestone payments are
due.

     4.5. Royalties. Company shall pay to University a royalty of {***} of Net Sales of
Licensed Products that are compositions of matter and one percent (1%) of Net Sales of Licensed
Products that are covered only by methods claims.

     4.6. Minimum Royalty. Within sixty (60) days after the beginning of each calendar
year during the term of this Agreement, beginning January 1, 2012, Company shall pay to University
a minimum royalty of {***}. Company may credit the minimum royalty paid under this Section 4.6
against actual royalties due and payable for the same calendar year. Waiver of any minimum royalty
payment by University is not a waiver of any subsequent minimum royalty payment. If Company fails
to make any minimum royalty payment within the sixty-day period, that failure is a material breach
of its obligations under this Agreement, and University may terminate this Agreement in accordance
with Section 8.3.

 Page 7 of 17 

 

5. Royalty Reports; Payments; Records.

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

     5.2. Reports and Payments.

          (a) Within sixty (60) days after the conclusion of each Royalty Period, Company shall deliver
to University a report containing the following information:

               (i) the number of Licensed Products sold to independent third parties in each country and the
number of Licensed Products used by Company and its Affiliates in the provision of services in each
country;

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

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

               (iv) total royalty payable on Net Sales in United States dollars, together with the exchange
rates used for conversion.

          (b) Concurrent with this report, Company shall remit to University any payment due for the
applicable Royalty Period. If no royalties are due to University for any Royalty Period, the
report shall so state.

     5.3. Payments in United States Dollars. Company shall make all payments in United
States dollars. Company shall convert foreign currency to United States dollars at the conversion
rate existing in the United States (as reported in the Wall Street Journal) on the last working day
of the calendar quarter preceding the applicable Royalty Period. Company may not deduct exchange,
collection, or other charges.

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

     5.5. Records. Company shall maintain and shall cause its Affiliates to maintain
complete and accurate records of Licensed Products that are made, used, or sold under this
Agreement and any amounts payable to University in relation to Licensed Products with

 Page 8 of 17 

 

sufficient information to permit University to confirm the accuracy of any reports delivered
to University under Section 5.2. The relevant party shall retain records relating to a given
Royalty Period for at least three (3) years after the conclusion of that Royalty Period, during
which time University may, at its expense, cause its internal accountants or an independent,
certified public accountant to inspect records during normal business hours for the sole purpose of
verifying any reports and payments delivered under this Agreement. The accountant may not disclose
to University any information other than information relating to accuracy of reports and payments
delivered under this Agreement. The parties shall reconcile any underpayment or overpayment within
thirty (30) days after the accountant delivers the results of the audit. If any audit performed
under this Section 5.5 reveals an underpayment in excess of ten percent (10%) in any Royalty
Period, Company shall bear the full cost of the audit. University may exercise its rights under
this Section 5.5 only once every year and only with reasonable prior notice to Company.

     5.6. Late Payments. Any payments by Company that are not paid on or before the date
payments are due under this Agreement bear interest at 1.5% per month, calculated on the number of
days that payment is delinquent.

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

     5.8. Withholding and Similar Taxes. Royalty payments and other payments due to
University under this Agreement may not be reduced by reason of any withholding or similar taxes
applicable to payments to University. Therefore all amounts owed to University under this
Agreement are net amounts and shall be grossed-up to account for any withholding taxes, value-added
taxes or other taxes, levies or charges.

6. Patents and Infringement.

     6.1. Responsibility for Patent Rights.

          (a) University has primary responsibility at the expense of Company for the preparation,
filing, prosecution, and maintenance of all Patent Rights, using patent counsel reasonably
acceptable to Company. University shall consult with Company as to the preparation, filing,
prosecution, and maintenance of all Patent Rights reasonably prior to any deadline or action with
the United States Patent & Trademark Office or any foreign patent office and shall furnish Company
with copies of relevant documents reasonably in advance of consultation. University shall consider
in good faith any comments of Company on any patent filings for the Patent Rights.

          (b) If University desires to abandon any patent or patent application within the Patent
Rights, University shall provide Company with reasonable prior notice of the intended abandonment,
and Company may, at its expense, prepare, file, prosecute, and maintain the relevant Patent Rights.

 Page 9 of 17 

 

     6.2. Cooperation. Each party shall provide reasonable cooperation in the preparation,
filing, prosecution, and maintenance of all Patent Rights. Cooperation includes, without
limitation, promptly informing the other party of matters that may affect the preparation, filing,
prosecution, or maintenance of Patent Rights (such as, becoming aware of an additional inventor who
is not listed as an inventor in a patent application).

     6.3. Payment of Expenses.

          (a) Within thirty (30) days after the Effective Date, Company shall pay the University {***}
to reimburse University for its actual expenses incurred as of the Effective Date in connection
with obtaining the Patent Rights. If this Agreement is terminated according to the terms of
Section 3.2, University shall reimburse Company for any patent expenses that are paid pursuant to
this Subsection 6.3(a), if it enters into a license agreement with another party for the Patent
Rights in the Field.

          (b) Within thirty (30) days after University invoices Company, Company shall reimburse
University for all patent-related expenses that have not been paid under Subsection 6.3(a) and that
are incurred by University pursuant to Section 6.1. Company may elect, upon sixty (60) days’
written notice to University, to cease payment of the expenses associated with obtaining or
maintaining patent protection for one or more Patent Rights in one or more countries. If Company
elects to cease payment of any patent expenses, Company loses all rights under this Agreement with
respect to the particular Patent Rights in those one or more countries.

          (c) University shall use reasonable efforts to have patent costs shared by other licenses that
may be executed under the Patent Rights.

     6.4. Infringement.

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

          (b) Company Right to Prosecute. As long as Company remains the only licensee of the
Patent Rights in the Field, Company may, under its own control and at its own expense, prosecute
any third party infringement of the Patent Rights in the Field or, together with licensees of the
Patent Rights in other fields (if any), defend the Patent Rights in any declaratory judgment action
brought by a third party which alleges invalidity, unenforceability, or infringement of the Patent
Rights. Prior to commencing any action, Company shall consult with University and shall consider
the views of University regarding the advisability of the proposed action and its effect on the
public interest. Company may not enter into any settlement, consent judgment, or other voluntary
final disposition of any infringement action under this Subsection 6.4(b) without the prior written
consent of University, which consent may not be unreasonably withheld or delayed. Any recovery
obtained in an action under this Subsection 6.4(b) shall be distributed as follows: (i) each party
shall be reimbursed for any expenses incurred in the action (including the amount of any royalty
payments withheld from University as described below); (ii) as to ordinary damages, Company shall
receive an amount equal to its lost profits or a reasonable royalty on the infringing sales
(whichever measure of damages the court applied), less a reasonable approximation of the royalties
that Company would have paid to University if

 Page 10 of 17 

 

Company had sold the infringing products and services rather than the infringer; and (iii) as
to special or punitive damages, the parties shall share equally in any award. Company may offset a
total of fifty percent (50%) of any expenses incurred under this Subsection 6.4(b) against any
royalty payments due to University under this Agreement. However, Company may never reduce royalty
payments under Section 4.5. by more than fifty percent (50%) in any Royalty Period.

          (c) University as Indispensable Party. University shall permit any action under
Subsection 6.4(b) to be brought in its name if required by law, provided that Company shall hold
University harmless from, and if necessary indemnify University against, any costs, expenses, or
liability that University may incur in connection with the action.

          (d) University Right to Prosecute. If Company fails to initiate an infringement
action within a reasonable time after it first becomes aware of the basis for the action, or to
answer a declaratory judgment action within a reasonable time after the action is filed, University
may prosecute the infringement or answer the declaratory judgment action under its sole control and
at its sole expense, and any recovery obtained shall be given to University. If University takes
action under this Subsection 6.4(d), University shall keep Company reasonably informed of material
actions taken by University pursuant to the infringement or declaratory action.

          (e) Cooperation. Both parties shall cooperate fully in any action under this Section
6.4. which is controlled by the other party, provided that the controlling party reimburses the
cooperating party promptly for any reasonable costs and expenses incurred by the cooperating party
in connection with providing assistance.

7. Confidential Information; Publications; Publicity.

     7.1. Confidential Information.

          (a) Designation. The Disclosing Party shall mark Confidential Information that is
disclosed in writing with a legend indicating its confidential status (such as, “Confidential” or
“Proprietary”). The Disclosing party shall document Confidential Information that is disclosed
orally or visually in a written notice and deliver the notice to the Receiving Party within thirty
(30) days of the date of disclosure. The notice shall summarize the Confidential Information that
was disclosed and reference the time and place of disclosure.

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

 Page 11 of 17 

 

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

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

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

8. Term and Termination.

     8.1. Term. This Agreement commences on the Effective Date and remains in effect until
the expiration of all issued patents within the Patent Rights unless earlier terminated in
accordance with the provisions of this Agreement.

     8.2. Voluntary Termination by Company. Company may terminate this Agreement for any
reason upon ninety (90) days’ prior written notice to University.

 Page 12 of 17 

 

     8.3. Termination for Default. If either party commits a material breach of its
obligations under this Agreement and fails to cure that breach within sixty (60) days after
receiving written notice of the breach, the other party may terminate this Agreement immediately
upon written notice to the party in breach. If the alleged breach involves nonpayment of any
amounts due University under this Agreement, Company has only one opportunity to cure a material
breach for which it receives notice as described above. Any subsequent material breach by Company
will entitle University to terminate this Agreement immediately upon written notice to Company,
without the sixty-day cure period.

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

     8.5. Effect of Termination. The following provisions survive the expiration or
 termination of this Agreement: Articles 1 and 9; Sections 3.3., 3.4, 3.6., 5.2. (obligation to
provide final report and payment), 5.3., 5.4., 5.5., 5.6., 5.7., 5.8., 6.4., 7.1., 7.2., 8.5 and
10.9. Upon the early termination of this Agreement, Company and its Affiliates may complete and
sell any work-in-progress and inventory of Licensed Products that exist as of the effective date of
termination, provided that (a) Company is current in payment of all amounts due University under
this Agreement, (b) Company pays University the applicable royalty and Sublicense Income on sales
of Licensed Products in accordance with the terms of this Agreement, and (c) Company and its
Affiliates complete and sell all work-in-progress and inventory of Licensed Products within six (6)
months after the effective date of termination.

9. Dispute Resolution.

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

     9.2. Dispute Resolution Procedures.

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

          (b) Mediation. If the matter remains unresolved within sixty (60) days after the
Notice Date, or if the senior executives fail to meet within thirty (30) days after the Notice
Date, either party may initiate mediation upon written notice to the other party, and both parties

 Page 13 of 17 

 

shall engage in a mediation proceeding under the then current CPR Institute for Dispute
Resolution (“CPR”) Model Procedure for Mediation of Business Disputes. Specific provisions of this
Subsection 9.2(b) override inconsistent provisions of the CPR Model Procedure. The parties shall
select the mediator from the CPR Panels of Neutrals. If the parties cannot agree upon the
selection of a mediator within ninety (90) days after the Notice Date, then upon the request of
either party, the CPR shall appoint the mediator. The parties shall attempt to resolve the dispute
through mediation until one of the following occurs: (i) the parties reach a written settlement;
(ii) the mediator notifies the parties in writing that they have reached an impasse; (iii) the
parties agree in writing that they have reached an impasse; or (iv) the parties have not reached a
settlement within one hundred twenty (120) days after the Notice Date.

          (c) Trial Without Jury. If the parties fail to resolve the dispute through mediation,
or if neither party elects to initiate mediation, each party may pursue any other remedies legally
available to resolve the dispute. However, the parties expressly waive the right to a jury trial
in the legal proceeding under this Subsection 9.2(c).

     9.3. Preservation of Rights Pending Resolution.

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

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

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

10. Miscellaneous.

     10.1. Representations and Warranties. University represents that its employees have
assigned to University their entire right, title, and interest in the Patent Rights, and that it
has authority to grant the rights and licenses set forth in this Agreement, and that it has not
granted any rights in the Patent Rights to any third party that is inconsistent with the grant of
rights in this Agreement. UNIVERSITY MAKES NO OTHER WARRANTIES CONCERNING THE PATENT RIGHTS,
INCLUDING WITHOUT LIMITATION ANY EXPRESS OR IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE. Specifically, University makes no warranty or representation (a) regarding the
validity or scope of the Patent Rights, (b) that the exploitation of the Patent Rights or any
Licensed Product will not infringe any patents or other intellectual property rights of a third
party, and (c) that any third party is not currently infringing or will not infringe the Patent
Rights.

 Page 14 of 17 

 

     10.2. Compliance with Law and Policies. Company agrees to comply with applicable law
and the policies of University in the area of technology transfer and shall promptly notify
University of any violation that Company knows or has reason to believe has occurred or is likely
to occur. The University policies currently in effect at the Worcester campus are the Intellectual
Property Policy, Policy on Conflicts of Interest Relating to Intellectual Property and Commercial
Ventures, and Policy on Faculty Consulting and Outside Activities.

     10.3. Tax-Exempt Status. Company acknowledges that University, as a public
institution of the Commonwealth of Massachusetts, is an exempt organization under the United States
Internal Revenue Code of 1986, as amended. Company also acknowledges that certain facilities in
which the licensed inventions were developed may have been financed through offerings of tax-exempt
bonds. If the Internal Revenue Service determines, or if counsel to University reasonably
determines, that any term of this Agreement jeopardizes the tax-exempt status of University or the
bonds used to finance University facilities, the relevant term is invalid and shall be modified in
accordance with Section 10.11.

     10.4. Counterparts. This Agreement may be executed in one or more counterparts, each
of which is an original, and all of which together are one instrument.

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

     10.6. Binding Effect. This Agreement is binding upon and inures to the benefit of the
parties and their respective permitted successors and assigns.

     10.7. Assignment. This Agreement may not be assigned by either party without the
prior written consent of the other party, which consent may not be unreasonably withheld or
delayed. Notwithstanding the foregoing, this Agreement may be assigned by either party in
connection with a merger, consolidation, sale of all of the equity interests of the party, or a
sale of all or substantially all of the assets of the party to which this Agreement relates.

     10.8. Amendment and Waiver. The parties may only amend, supplement, or otherwise
modify this Agreement through a written instrument signed by both parties. The waiver of any rights
or failure to act in a specific instance relates only to that instance and is not an agreement to
waive any rights or fail to act in any other instance.

     10.9. Governing Law. This Agreement is governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts irrespective of any conflicts of law principles. The
parties may only bring legal action that arises out of or in connection with this Agreement in the
Massachusetts Superior Court in Suffolk County.

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

 Page 15 of 17 

 

	 	 	 
	If to University:
	 	If to Company:
	 
	 	 
	Office of Technology Management
	 	RXi Pharmaceuticals Corporation
	University of Massachusetts
	 	One Innovation Drive
	333 South Street, Suite 400
	 	Worcester, MA 01605
	Shrewsbury, MA 01545
	 	 
	Attention: Executive Director
	 	Attention: President

All notices under this Agreement are effective upon receipt. A party may change its contact
information immediately upon written notice to the other party in the manner provided in this
Section 10.10.

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

     10.12. Entire Agreement. This Agreement constitutes the entire agreement between the
parties with respect to its subject matter and supersedes all prior agreements or understandings
between the parties relating to its subject matter.

     The parties have caused this Agreement to be executed by their duly authorized
representatives as of the Effective Date.

	 	 	 	 	 	 	 	 	 
	UNIVERSITY OF MASSACHUSETTS	 	 	 	RXI PHARMACEUTICALS CORP.
	 
	 	 	 	 	 	 	 	 
	By:
	 	/s/ James P. McNamara 	 	 	 	By:	 	/s/ Tod Woolf 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Name:

	 	James P. McNamara, Ph.D.,
	 	 	 	Name:
	 	Tod Woolf, Ph.D.
	Title:

	 	Executive Director,
	 	 	 	Title:
	 	President & CEO
	 

	 	Office of Technology Management	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	Date:	 	 
	 

	 	 
	 	 	 	 	 	 

 Page 16 of 17 

 

EXHIBIT A

Patent Rights

UMMC 06-08

Invention Disclosure

Entitled: Methods of Synthesis and Formulation of New Reagents for Efficient
Nucleic Acids Delivery in Cells and Animals”

Provisional Application

Entitled: “Methods and Compositions for the Efficient Delivery of Therapeutic Agents
to Cells and Animals”

Filed 8/11/2005 – Application No. 60/707,805

U.S. Utility Application

Entitled: “Methods and Compositions for the Efficient Delivery of Therapeutic
Agents to Cells and Animals”

Filed 8/11/2006 – Application No. 11/503,531

PCT Application

Entitled: “Methods and Compositions for the Efficient Delivery of Therapeutic
Agents to Cells and Animals”

Filed 8/11/17/2006

UMMC 07-08

Invention Disclosure

Entitled: “Microwave Assisted Method of Synthesis of New Cationic Reagents for
Efficient Drug Delivery in Cells and Animals”

 Page 17 of 17exv10w8

 

Exhibit 10.8

NON-EXCLUSIVE LICENSE AGREEMENT

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

R E C I T A L S

     WHEREAS, Medical School is owner by assignment of the invention claimed in the United States
Patent Application listed in Exhibit A pertaining to the Medical School’s invention disclosure
number UMMC 01-36 entitled RNA Sequence-Specific Mediators of RNA Interference;

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

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

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

1. Definitions.

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

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

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

 

 

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

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

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

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

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

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

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

 - 2 - 

 

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

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

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

     1.8.“Patent Rights” means the U.S. patent applications listed on Exhibit A,
and any divisional, continuation, or continuation-in-part of such patent applications to the extent
the claims are directed to subject matter specifically described therein, as well as any patent
issued thereon and any reissue or reexamination of such patent, and any foreign counterparts to
such patents and patent applications. Exhibit A shall be periodically amended to include
any additional Patent Rights that may arise. “Medical School Patent Rights” means Patent Rights
assigned to the Medical School and the joint owners Massachusetts Institute of Technology, the
Whitehead Institute for Biomedical Research, and Max-Planck-Gesellschaft Zur Foerderung Der
Wissenschaften E.V.

     1.9.“Royalty Period” means the partial calendar quarter commencing on the date on
which the first Licensed Product is sold or used every complete or partial calendar quarter
thereafter during which either (a) this Agreement remains in effect or (b) Company has the right to
complete and sell work-in-progress and inventory of Licensed Products pursuant to Section 6.5.

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

     1.11. “Sublicense Income” means any payments that Company receives from a Sublicensee in
consideration of the sublicense of the rights granted Company under Section 2.1., including without
limitation license fees, royalties, milestone payments, and license maintenance fees, but excluding
the following payments: (a) payments made in consideration for the issuance of equity or debt
securities of Company at fair market value, and (b) payments specifically committed to the
development of Licensed Products.

 - 3 - 

 

2. Grant of Rights.

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

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

3. Company Obligations Relating to Commercialization.

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

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

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

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

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

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

 - 4 - 

 

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

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

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

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

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

     3.2. Indemnification.

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

          (b) Procedures. The Indemnitees agree to provide Company with prompt written notice
of any claim, suit, action, demand, or judgment for which indemnification is sought under
this Agreement. Company agrees, at its own expense, to provide attorneys reasonably acceptable to
Medical School to defend against any such claim. The Indemnitees shall cooperate

 - 5 - 

 

fully with
Company in such defense and will permit Company to conduct and control such defense and the
disposition of such claim, suit, or action (including all decisions relative to litigation, appeal,
and settlement); provided, however, that any Indemnitee shall have the right to retain its own
counsel, at the expense of Company, if representation of such Indemnitee by the counsel retained by
Company would be inappropriate because of actual or potential differences in the interests of such
Indemnitee and any other party represented by such counsel. Company agrees to keep Medical School
informed of the progress in the defense and disposition of such claim and to consult with Medical
School with regard to any proposed settlement.

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

     3.3. Use of Medical School Name. In accordance with Section 6.3., Company and its
Affiliates and Sublicensees shall not use the name “University of Massachusetts Medical School” or
any variation of that name in connection with the marketing or sale of any Licensed Products.

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

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

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

     (b) Company and its Affiliates and Sublicensees shall comply with all United States
laws and regulations controlling the export of certain commodities and technical data,
including without limitation all Export Administration Regulations of the United
States Department of Commerce. Among other things, these laws and regulations prohibit, or
require a license for, the export of certain types of commodities and technical

 - 6 - 

 

data to
specified countries. Company hereby gives written assurance that it will comply with, and
will cause its Affiliates and Sublicensees to comply with, all United States export control
laws and regulations, that it bears sole responsibility for any violation of such laws and
regulations by itself or its Affiliates and Sublicensees, and that it will indemnify,
defend, and hold Medical School harmless (in accordance with Section 3.1.) for the
consequences of any such violation.

4. Consideration for Grant of Rights.

     4.1. License Fee. In partial consideration of the rights granted Company under this
Agreement, Company shall pay to Medical School, within thirty (30) days after the Effective Date,
(a) a license fee of {***}, and (b) a payment in the amount of {***} to reimburse Medical School
for its actual expenses incurred as of January 31, 2003 in connection with obtaining the Patent
Rights. These license fee payments are nonrefundable and are not creditable against any other
payments due to Medical School under this Agreement.

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

     4.3. License Maintenance Fee. Beginning on the anniversary of the Effective Date, and
in each calendar year during the term of the Agreement, Company shall pay to Medical School {***}.
This annual license maintenance fee is nonrefundable and is not creditable against any other
payments due to Medical School under this Agreement.

     4.4. Royalties. In partial consideration of the rights granted Company under this
Agreement, Company shall pay to Medical School a royalty of {***} of Net Sales of Licensed Products
by Company and its Affiliates.

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

          (b) If during the Royalty Period, patents under the Patent Rights have expired or have been
abandoned in a particular country, (i) no royalty is payable by Company, if there is a competing
product in that country, and (ii) if Company reduces its prices for Licensed Products in that
country, even if there is no competing product in that country, Company and Medical School shall
negotiate in good faith a reduction in the royalty rate to reflect the reduction in Company’s gross
margins caused by the price reduction.

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

 - 7 - 

 

     4.5. Minimum Royalty. At the beginning of each calendar year during the term of this
Agreement, beginning January 1, 2016, Company shall pay to Medical School a minimum royalty of
{***}. If the actual royalty payments to Medical School in any calendar year are less than the
minimum royalty payment required for that year, Company shall have the right to pay Medical School
the difference between the actual royalty payment and the minimum royalty payment in full
satisfaction of its obligations under this Section, provided such minimum payment is made to
Medical School within sixty (60) days after the conclusion of the calendar year. Waiver of any
minimum royalty payment by Medical School shall not be construed as a waiver of any subsequent
minimum royalty payment. If Company fails to make any minimum royalty payment within the sixty-day
period, such failure shall constitute a material breach of its obligations under this Agreement,
and Medical School shall have the right to terminate this Agreement in accordance with Section 7.3.

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

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

 - 8 - 

 

	 	 	 	minimum floor under this Agreement of {***} of Net Sales of Licensed Products and
{***} of Sublicense Income.

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

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

     (ii) The remaining {***} of Net Sales of Licensed Products would be
offset by an amount equal to {***} of Net Sales of Licensed Products, for a net royalty to the
Medical School under this Agreement of {***} of Net Sales of Licensed Products (i.e., the offset of
50% of the {***} of Net Sales of Licensed Products payable to the third party is allocated pro rata
against Medical School under this Agreement, with 33 1/3% of this net offset of {***} of Net Sales
of Licensed Products being allocated to the royalties under this Agreement (the {***} royalty rate
under this Agreement divided by the {***} royalty rate under this Agreement plus the {***} royalty
rate under the Other Medical School Licenses)).

5. Royalty Reports; Payments; Records.

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

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

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

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

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

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

If no royalties are due to Medical School for any Royalty Period, the report shall so state.
Concurrent with this report, Company shall remit to Medical School any payment due for the
applicable Royalty Period. Medical School shall instruct Company as to the method of payment.

 - 9 - 

 

The
contents of all such reports shall be the confidential and proprietary information of Company. To
the extent permitted by applicable law, Medical School shall use reasonable efforts to maintain the
confidentiality of such reports.

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

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

     5.5. Records. Company shall maintain, and shall cause its Affiliates to maintain,
complete and accurate records of Licensed Products that are made, used, sold, or performed under
this Agreement and any amounts payable to Medical School in relation to such Licensed Products,
which records shall contain sufficient information to permit Medical School to confirm the accuracy
of any reports delivered to Medical School under Section 5.2. The relevant party shall retain such
records relating to a given Royalty Period for at least three (3) years after the conclusion of
that Royalty Period, during which time Medical School shall have the right, at its expense, to
cause its internal accountants or an independent, certified public accountant to inspect such
records during normal business hours for the sole purpose of verifying any reports and payments
delivered under this Agreement. Such accountant shall not disclose to Medical School any
information other than information relating to accuracy of reports and payments delivered under
this Agreement. The parties shall reconcile any underpayment or overpayment within thirty (30)
days after the accountant delivers the results of the audit. In the event that any audit performed
under this Section reveals an underpayment in excess of the greater of (a) five thousand dollars
($5,000) or (b) ten percent (10%) in any Royalty Period,
Company shall bear the full cost of such audit. Medical School may exercise its rights under this
Section only once every year and only with reasonable prior notice to Company.

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

 - 10 - 

 

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

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

6. Confidential Information; Publications; Publicity.

     6.1. Confidential Information.

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

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

          (c) Exceptions. The obligations of the Receiving Party under Subsection 6.1.(b) above
shall not apply to the extent that the Receiving Party can demonstrate that certain Confidential
Information (i) was in the public domain prior to the time of its disclosure under
this Agreement; (ii) entered the public domain after the time of its disclosure under this
Agreement through means other than an unauthorized disclosure resulting from an act or omission by
the Receiving Party; (iii) was independently developed or discovered by the Receiving Party without
use of the Confidential Information; (iv) is or was disclosed to the Receiving Party at any time,
whether prior to or after the time of its disclosure under this Agreement, by a third party having
no fiduciary relationship with the Disclosing Party and having no obligation of confidentiality
with respect to such Confidential Information; or (v) is required to be disclosed to comply with
applicable laws or regulations, or with a court or

 - 11 - 

 

administrative order, provided that the
Disclosing Party receives reasonable prior written notice of such disclosure.

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

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

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

7. Term and Termination.

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

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

     7.4. Force Majeure. Neither party will be responsible for delays resulting from
causes beyond the reasonable control of such party, including without limitation fire, explosion,
flood, war, strike, or riot, provided that the nonperforming party uses commercially reasonable
efforts

 - 12 - 

 

to avoid or remove such causes of nonperformance and continues performance under this
Agreement with reasonable dispatch whenever such causes are removed.

     7.5. Effect of Termination. The following provisions shall survive the expiration or
termination of this Agreement: Articles 1 and 8; Sections 3.2., 3.5., 5.2. (obligation to provide
final report and payment), 6.1., 7.5., and 9.9. Upon the early termination of this Agreement,
Company and its Affiliates or Sublicensees may complete and sell any work-in-progress and inventory
of Licensed Products that exist as of the effective date of termination, provided that (a) Company
is current in payment of all amounts due Medical School under this Agreement, (b) Company pays
Medical School the applicable royalty on such sales of Licensed Products in accordance with the
terms and conditions of this Agreement, and (c) Company and its Affiliates or Sublicensees shall
complete and sell all work-in-progress and inventory of Licensed Products within six (6) months
after the effective date of termination.

8. Dispute Resolution.

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

     8.2. Dispute Resolution Procedures.

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

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

 - 13 - 

 

agree in writing that they have reached an impasse; or (iv) the parties have not reached a
settlement within one hundred and twenty (120) days after the Notice Date.

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

     8.3. Preservation of Rights Pending Resolution.

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

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

          (c) Statute of Limitations. The parties agree that all applicable statutes of
limitation and time-based defenses (such as estoppel and laches) shall be tolled while the
procedures set forth in Subsections 8.2.(a) and 8.2(b) are pending. The parties shall take any
actions necessary to effectuate this result.

9. Miscellaneous.

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

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

 - 14 - 

 

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

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

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

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

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

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

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

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

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

 - 15 - 

 

	 	 	 	 	 
	 	 	If to Medical School:
	 
	 	 	 	 
	 	 	Office of Technology Management
	 	 	Medical School of Massachusetts
	 	 	365 Plantation Street, Suite 130
	 	 	Worcester, MA 01605
	 

	 	Attention:
	 	Joseph F.X. McGuirl
	 

	 	 	 	Executive Director
	 
	 	 	 	 
	 	 	Tel: (508) 856-1626
	 	 	Fax: (508) 856-1482
	 
	 	 	 	 
	 	 	If to Company:
	 
	 	 	 	 
	 	 	CytRx Corporation
	 	 	11726 San Vicente Blvd., Suite 650
	 	 	Los Angeles, CA 90049
	 

	 	Attention:
	 	Steven A. Kriegsman
	 

	 	 	 	Chief Executive Officer
	 
	 	 	 	 
	 	 	Tel: (310) 826-5449
	 	 	Fax: (310) 826-5529

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

     9.11. Severability. In the event that any provision of this Agreement shall be held
invalid or unenforceable for any reason, such invalidity or unenforceability shall not affect any
other provision of this Agreement, and the parties shall negotiate in good faith to modify the
Agreement to preserve (to the extent possible) their original intent. If the parties fail to reach
a modified agreement within sixty (60) days after the relevant provision is held invalid or
unenforceable, then the dispute shall be resolved in accordance with the procedures set forth in
Article 7. While the dispute is pending resolution, this Agreement shall be construed as if such
provision were deleted by agreement of the parties.

     9.12. Entire Agreement. This Agreement constitutes the entire agreement between the
parties with respect to its subject matter and supersedes all prior agreements or understandings
between the parties relating to its subject matter.

 - 16 - 

 

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

	 	 	 	 	 	 	 
	MEDICAL SCHOOL OF MASSACHUSETTS	 	CYTRX CORPORATION
	 
	 	 	 	 	 	 
	By:

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

	 	 
	 	 	 	 
	 

	 	Joseph F.X. McGuirl
	 	 	 	Steven A. Kriegsman
	 

	 	Executive Director, CVIP
	 	 	 	Chief Executive Officer

 - 17 - 

 

EXHIBIT A

List of Patent Rights 

UMMC 01-36 “RNA Sequence-Specific Mediators of RNA Interference”
Inventors: David P. Bartel, Philip A. Sharp, Thomas Tuschl, and Philip D. Zamore

     I. United States Patents and Application

USSN 60/265232 entitled “RNA Sequence-Specific Mediators of RNA Interference”, by

David P. Bartel, Philip A. Sharp, Thomas Tuschl, and Philip D. Zamore

USSN 09/821832 entitled “RNA Sequence-Specific Mediators of RNA Interference”, by

David P. Bartel, Philip A. Sharp, Thomas Tuschl, and Philip D. Zamore

     II. International (non-U.S.) Patents and Applications

PCT/US01/10188 entitle “RNA Sequence-Specific Mediators of RNA Interference”, by

David P. Bartel, Philip A. Sharp, Thomas Tuschl, and Philip D. Zamore

 

 

AMENDMENT NO. 1

TO

NON-EXCLUSIVE LICENSE AGREEMENT

(UMMC 01-36)

     This Amendment No. 1, dated as of February 1, 2004 (the “Amendment”) is being made to the
Non-Exclusive License Agreement relating to UMMC 01-36 (the “License Agreement”), effective as of
April 15, 2003, by and between the University of Massachusetts Medical School (“Medical School”), a
public institution of higher education of the Commonwealth of Massachusetts having an address of 55
Lake Avenue North, Worcester, MA 01655, and CytRx Corporation (“Company”), a Delaware corporation
having an address of 11726 San Vicente Boulevard, Suite 650, Los Angeles, California 90049.

R E C I T A L S

     WHEREAS, Section 4.6 of the License Agreement provided for the calculation of payments payable
to Medical School under Section 4.4 of the License Agreement in the event Company was required to
make certain other payments to Medical School or third parties; and

     WHEREAS, Medical School and Company wish to clarify the manner in which Section 4.6 of the
License Agreement shall operate;

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

1. Amendment to Section 4.6.

     Section 4.6 of the License Agreement is hereby amended to read in full as follows:

     “4.6 Third-Party and Other Payments. If Company is legally required to make royalty
or sublicense income payments to Medical School under any other license agreement, as well as this
Agreement, or to one or more third parties, as well as this Agreement, in the same Royalty Period
for which payments are due under Section 4.4 in order for Company to make, use or sell Licensed
Products or have its Sublicensee make, use, or sell Licensed Products:

          (a) Other Medical School Payments. In the case of payments to Medical School under
Section 4.4 with respect to any Licensed Product, Company shall pay only the highest rate among
this Agreement and any other Medical School licenses, and that one payment shall be deemed to
satisfy the payment requirements for the applicable period under not only this Agreement but each
of the other Medical School licenses.

 

 

          (b) Third Party Payments. In the case of payments to one or more third parties with
respect to any Licensed Product under this Agreement, Company may reduce its payment to Medical
School under Section 4.4 of this Agreement for the applicable Royalty Period by fifty percent (50%)
of the amount actually paid to third parties. However, in no event will the reductions made
pursuant to this Section 4.6(b) result in more than a fifty percent (50%) reduction in the payments
that would otherwise be payable to Medical School under Section 4.4 (after taking into account
Section 4.6(b)).

          (c) Example: Royalty Reductions. By way of illustration for Section 4.4 royalty
payment reductions, for a particular Licensed Product, assume a royalty of (***) of Net Sales under
another Medical School license and a payment of (***) of Net Sales to a third party. The reduction
calculation would be as follows: The total (***) royalty rate in this Agreement would apply, and
Company would reduce that rate by 50% due to the (***) due to the third party (with a 50% cap on
the rate reduction pursuant to Section 4.6), resulting in a (***) royalty to Medical School under
this Agreement, and no royalties payable to the Medical School under the other Medical School
license.

2. Continuation of All Other Terms of Agreement.

     Except for the amendment of Section 4.6 of the License Agreement provided for in Section 1 of
this Amendment, all of the terms and conditions of the License Agreement shall continue in full
force and effect.

3. Miscellaneous.

     3.1 Dispute Resolution. The parties agree that any dispute arising out of or relating
to this Amendment shall be resolved solely by means of the procedures set forth in Article 8 of the
Agreement.

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

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

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

     3.5 Amendment. This Amendment may be amended, supplemented, or otherwise modified
only by means of a written instrument signed by all of the parties.

 

 

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

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

	 	 	 	 	 	 	 	 	 
	UNIVERSITY OF MASSACHUSETTS	 	 	 	CYTRX CORPORATION
	MEDICAL SCHOOL	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Chester A. Bisbee
	 	 	 	By:
	 	/s/ Steven A. Kriegsman
	 

	 	 
	 	 	 	 	 	 
	 

	 	Acting Executive Director
	 	 	 	 	 	Steven A. Kriegsman
	 

	 	Office of Technology Management
	 	 	 	 	 	Chief Executive Officer

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00135-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00135-of-00352.parquet"}]]