Document:

LICENSE AGREEMENT

MICHIGAN FILE 290 and 1225

This Agreement is effective as of the 4th day of September, 2003 (the "Effective Date"), between Cellectar, LLC, a Wisconsin limited liability company, with offices located at 505 South Rosa Road, Madison, Wisconsin ("LICENSEE"), and the Regents of the University of Michigan, a constitutional corporation of the State of Michigan ("MICHIGAN").  LICENSEE and MICHIGAN agree as follows:

	
ARTICLE 1 – DEFINITIONS

1.1            “FIELD OF USE” means all fields.

1.2           “FIRST COMMERCIAL SALE” means the first sale of any LICENSED PRODUCT or first commercial use of any LICENSED PROCESS by LICENSEE or a SUBLICENSEE, other than sale of a LICENSED PRODUCT or use of a LICENSED PROCESS for use in trials, such as field trials or clinical trials, being conducted to obtain FDA or other governmental approvals to market LICENSED PRODUCTS or otherwise commercially use LICENSED PROCESSES.

1.3           “LICENSED PRODUCT(S)” means any product or product part which:

	 	
(a) 

	
is covered in whole or in part by an issued, unexpired claim or a pending claim contained in the PATENT RIGHTS in the country in which any such product or product part is made, used, imported, offered for sale or sold; or

	 	
(b) 

	
is manufactured by using a LICENSED PROCESS or is employed to practice a LICENSED PROCESS.

1.4           “LICENSED PROCESS(ES)” means any process or method that is covered in whole or in part by an issued, unexpired claim or a pending claim contained in the PATENT RIGHTS.

1.5           “NET SALES” means the amount billed or invoiced on sales, rental or lease, however characterized, by LICENSEE and SUBLICENSEES of LICENSED PRODUCTS and uses of LICENSED PROCESSES, less

	
  

	
(a)

	
discounts allowed in amounts customary in the trade;

	
  

	
(b)

	
sales, tariff duties and/or use taxes included in bills or invoices with reference to particular sales and actually paid by LICENSEE or SUBLICENSEE(S) to a governmental unit;

	 	
(c) 

	
outbound transportation prepaid or allowed; or

	
  

	
(d)

	
amounts refunded or credited on returns.

 

  

  

  

 

No deductions shall be made for the cost of collections or for commissions, whether paid to independent sales agencies or regular employees of LICENSEE or SUBLICENSEE(S).

Whenever the term “LICENSED PRODUCT” may apply to a property during various stages of manufacture, use, sale, or other transfer, NET SALES shall be based on the amount derived by LICENSEE or SUBLICENSEES from the sale, distribution or use of such LICENSED PRODUCT at the stage of its highest billed or invoiced value to unrelated third parties.

1.6           “PATENT RIGHTS” means MICHIGAN’S legal rights under the patent laws of the United States or relevant foreign countries for all of the following:

	
  

	
(a)

	
the United States and foreign patents and/or patent applications listed in Appendix A;

	
  

	
(b)

	
United States and foreign patents issued from the applications listed in Appendix A and from divisionals and continuations (except continuations-in-part) of these applications;

	
  

	
(c)

	
claims in all foreign patent applications listed in Appendix A, and of the resulting patents, which are directed to subject matter specifically described in the United States patents and/or patent applications described in (a) or (b) above;

	
  

	
(d)

	
claims in all patent applications, and of the resulting patents, which are directed to subject matter specifically described as of the Effective Date in the MICHIGAN Office of Technology Transfer files listed in Appendix A; and

	
  

	
(e)

	
any reissued or reexamined patents based upon the United States patents described in (a), (b) or (d) above.

1.7           “ROYALTY PERIOD(S)” means the six-month periods ending on the last days of June and December.

1.8           “SUBLICENSEE(S)” means any person or entity sublicensed by LICENSEE under this Agreement.

1.9           “TERRITORY” means the United States; provided, however, only with respect to File No. 1225 identified on Appendix A, "TERRITORY" means the United States and Canada.

 

  

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ARTICLE 2 - GRANT OF LICENSE

2.1           MICHIGAN hereby grants to LICENSEE an exclusive license with the right to grant sublicenses, both subject to the terms and conditions of this Agreement, in the FIELD OF USE and the TERRITORY to make, have made, import, use, market, offer for sale and sell LICENSED PRODUCTS and to practice LICENSED PROCESSES.

2.2           MICHIGAN reserves (without limiting the rights granted to LICENSEE in paragraph 2.1) the right for MICHIGAN and its subsidiaries to practice the PATENT RIGHTS for research, internal and/or educational purposes only.

2.3           This Agreement shall extend until expiration of the last to expire of the licensed PATENT RIGHTS, unless sooner terminated as provided in another specific Article of this Agreement.

2.4           LICENSEE agrees that LICENSED PRODUCTS used, leased or sold in the United States shall be manufactured substantially in the United States.

2.5           MICHIGAN further reserves the right to grant to the U.S. Government a nonexclusive, irrevocable, royalty-free license or licenses, with the right to sublicense, to all patent applications and resulting patents included in the PATENT RIGHTS, to the extent that such grant of license(s) is or may be required by research funding agreements between MICHIGAN and the U.S. Government entered into prior to the Effective Date of this Agreement.

	
ARTICLE 3 - CONSIDERATION

3.1            LICENSEE shall pay royalties to MICHIGAN until the expiration date of the last to expire of PATENT RIGHTS or until this Agreement is terminated.  Royalties shall include:

	 	
(a) 

	
Running Royalties equal to three percent (3%) of NET SALES.   If LICENSEE makes any NET SALES to any party affiliated with LICENSEE, or in any way directly or indirectly related to or under the common control with LICENSEE, at a price less than the regular price charged to other parties, the Running Royalties payable to MICHIGAN shall be computed on the basis of the regular price charged to other parties.  LICENSEE shall be entitled to reduce the Running Royalties for any LICENSED PRODUCT by up to fifty percent (50%) by applying as a credit against such Running Royalties up to fifty percent (50%) of any royalties actually paid during the applicable ROYALTY PERIOD to any third party for the same LICENSED PRODUCT pursuant to a license agreement for the third party's patent rights covering such LICENSED PRODUCT.   Further, in the event that the Running Royalties payable to LICENSEE by any SUBLICENSEE pursuant to the terms of a sublicense agreement do not exceed five percent (5%) of NET SALES (but are at least four percent (4%) of NET SALES) then the Running Royalty rate applicable to NET SALES made by such SUBLICENSEE shall (in lieu of a three percent (3%) rate), be a rate equal to fifty percent (50%) of the rate set forth in such sublicense agreement.

 

  

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(b) 

	
During the one year period immediately following the Effective Date, fifty percent (50%), during the one year period immediately following the first anniversary of the Effective Date, twenty-five percent (25%), and during the period following the second anniversary of the Effective Date, ten percent (10%) of any revenue not based on NET SALES (e.g., license issue fees, maintenance fees) LICENSEE receives from SUBLICENSEES or assignees in consideration for rights to practice PATENT RIGHTS, provided, however, that such revenue shall not include amounts received by LICENSEE which are  "research and/or development funds."

	 	
(c)

	
MICHIGAN'S back patent costs in the amount of Fifty Three Thousand Nine Hundred Seventy Four and 62/100 Dollars ($53,974.62), one-third (1/3) of this amount due thirty (30) days from the Effective Date of this Agreement and one-third (1/3) of this amount due on each of the first and second anniversaries of the Effective Date of this Agreement.  Pursuant to the Patent Option Agreement (the “Patent Option Agreement”) entered into on November 18, 2002 between LICENSEE and MICHIGAN, LICENSEE shall receive a credit in the amount of Ten Thousand Dollars ($10,000) toward the first of these three (3) installment payments; and in lieu of the credit toward the License Issue Fee referred to in the Patent Option Agreement (the parties having agreed that LICENSEE shall not be required to pay a License Issue Fee) LICENSEE shall receive an additional credit in the amount of Five Thousand Dollars ($5,000) toward the first of these three (3) installment payments.

	 	
(d)

	
LICENSEE shall pay to MICHIGAN an annual license maintenance fee ("Annual Fee") in the amount of Ten Thousand Dollars ($10,000).  This Annual Fee shall be due on the last day of June, in the year 2004, and in each year thereafter during the term of this Agreement.  LICENSEE may credit each annual fee in full against all royalties otherwise due MICHIGAN for the calendar year in which LICENSEE pays the specific Annual Fee.  The year for which LICENSEE may credit a given Annual Fee against royalties includes the ROYALTY PERIOD in which the Annual Fee is due and the next ROYALTY PERIOD.

	
  

	
(e)

	
LICENSEE shall make the Milestone payments set forth in Appendix B on or before the respective payment dates set forth therein.

3.2           LICENSEE shall be responsible for the payment of all taxes (excluding income taxes  owed by MICHIGAN), duties, levies, and other charges imposed by any taxing authority with respect to the royalties payable to MICHIGAN under this Agreement.  Should LICENSEE be required under any law or regulation of any government entity or authority, domestic or foreign, to withhold or deduct any portion of the payments on royalties due to MICHIGAN, then the sum payable to MICHIGAN shall be increased by the amount necessary to yield to MICHIGAN an amount equal to the sum it would have received had no withholdings or deductions been made; provided, however, that in such event, MICHIGAN shall not be entitled to any refund of such amounts withheld or deducted.  MICHIGAN shall cooperate reasonably with LICENSEE in the event LICENSEE elects to assert, at its own expense, MICHIGAN’s exemption from any such tax or deduction or in the event LICENSEE claims a refund of any amounts which it withheld or deducted.

 

  

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3.3           LICENSEE is not obligated to pay multiple royalties if any LICENSED PRODUCT or LICENSED PROCESS is covered by more than one claim of PATENT RIGHTS.

3.4           Royalty payments shall be paid to the "Regents of the University of Michigan" in United States dollars in Ann Arbor, Michigan, sent as provided in Article 13 or at such other place as MICHIGAN may reasonably designate consistent with the laws and regulations controlling in any country.

3.5           In computing royalties, LICENSEE shall convert any revenues it receives in foreign currency into its equivalent in United States dollars at the exchange rate LICENSEE ordinarily employs in making reports to relevant regulatory and taxing authorities, consistent with fair business practices and generally accepted accounting principles.

3.6           Royalty payments shall be made on a semi-annual basis with submission of the reports required by Article 4.  All amounts due under this Agreement, including amounts due for the payment of patent expenses, shall, if overdue, bear interest until payment at a per annum rate five percent (5%) above the prime rate in effect at the JP Morgan Chase Bank or its successor on the due date, or at the highest allowed rate if a lower rate is required by law.  The payment of such interest shall not foreclose MICHIGAN from exercising any other rights it may have resulting from any late payment.

3.7           In further consideration of the license hereby granted, LICENSEE agrees that MICHIGAN shall be entitled to an equity interest in LICENSEE on the following basis:

Within thirty (30) days of the Effective Date of this Agreement, LICENSEE shall issue to MICHIGAN the number of Units of LICENSEE equal to three percent (3%) of the total of LICENSEE's issued and outstanding Units on a fully diluted basis (the "MICHIGAN Units").  The term "fully diluted basis" means the number of all Units of LICENSEE issued and outstanding as of the Effective Date of this Agreement, and the number of all Units of LICENSEE which are issuable, as of the Effective Date of this Agreement, pursuant to any Unit option, warrant, or other security convertible into Units of LICENSEE, whether vested, unvested, exercisable or unexercisable.  The MICHIGAN Units shall be provided with preferences equal, as of the date of their issuance, to those held by each holder of LICENSEE's Units as of such date; provided, however, that the holders of MICHIGAN Units shall not be entitled to the special allocations to the holders of “First Round Units” as set forth in the Amendments to LICENSEE’s Operating Agreement dated as of December 12, 2002 and as of August 28, 2003. Prior to or concurrent with the issuance of the MICHIGAN Units, MICHIGAN shall execute a subscription agreement for the MICHIGAN Units, in a form mutually acceptable to MICHIGAN and LICENSEE, pursuant to which MICHIGAN will (i) make standard investment representations and warranties (including a representation and warranty that MICHIGAN is an accredited investor as defined under Regulation D promulgated under the Securities Act of 1933, as amended), (ii) acknowledge that it will become a "Member" of LICENSEE (as such term is defined in LICENSEE’S Operating Agreement), and (iii) agree to execute an Addendum to LICENSEE’s Operating Agreement pursuant to which MICHIGAN agrees to be bound by the terms and provisions of LICENSEE’s Operating Agreement.  MICHIGAN acknowledges that its percentage interest in LICENSEE will be subject to dilution upon the future issuance by LICENSEE of additional Units of LICENSEE’s equity in accordance with the terms and provisions of LICENSEE’s Operating Agreement.

 

  

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ARTICLE 4 - REPORTS

4.1           Until the FIRST COMMERCIAL SALE, LICENSEE shall provide to MICHIGAN a written annual report on or before September 1 of each calendar year.  The annual report shall include: reports of progress on research and development, regulatory approvals, manufacturing, sublicensing, marketing and sales during the preceding twelve (12) months, and plans for the coming year.

4.2           After the FIRST COMMERCIAL SALE, LICENSEE shall provide semi-annual reports to MICHIGAN.  Within thirty (30) days after each ROYALTY PERIOD closes (including the close of the ROYALTY PERIOD immediately following any termination of this Agreement), LICENSEE shall report to MICHIGAN for that ROYALTY PERIOD:

	
  

	
(a)

	
number of LICENSED PRODUCTS manufactured and sold by LICENSEE and all SUBLICENSEES;

	
  

	
(b)

	
total billings for LICENSED PRODUCTS sold by LICENSEE and all SUBLICENSEES;

	
  

	
(c)

	
total billings by LICENSEE and all SUBLICENSEES for all LICENSED PROCESSES;

	
  

	
(d)

	
deductions applicable as provided in the definition for NET SALES in Paragraph 1.5;

	
  

	
(e)

	
royalties due on additional payments from SUBLICENSEES under Paragraph 3.1(b);

	
  

	
(f)

	
total royalties due;

	
  

	
(g)

	
names and addresses of all SUBLICENSEES; and

	
  

	
(h)

	
for each sublicense or amendment thereto completed in the prior six-month period, the date of each agreement and amendment, the territory of the sublicense, the scope of the sublicense, and the nature, timing and amounts of all fees and royalties to be paid thereunder.

LICENSEE shall include the amount of all payments due, and the various calculations used to arrive at those amounts, including the quantity, description (nomenclature and type designation as described in Paragraph 4.3), country of manufacture and country of sale of LICENSED PRODUCTS.  If no payment is due, LICENSEE shall so report.  LICENSEE shall direct its authorized representative to certify that reports required hereunder are correct to the best of LICENSEE's knowledge and information.  Failure to provide reports as required under this Article shall be a material breach of this Agreement.

 

  

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4.3           LICENSEE covenants that it will promptly establish and consistently employ a system of specific nomenclature and type designations for LICENSED PRODUCTS and LICENSED PROCESSES to permit identification and segregation of various types where necessary.  LICENSEE shall consistently employ, and shall require SUBLICENSEES to consistently employ, the system when rendering invoices thereon and shall inform MICHIGAN, or its auditors, when requested, as to the details concerning such nomenclature system, all additions thereto and changes therein.

4.4           LICENSEE shall keep, and shall require SUBLICENSEES to keep, true and accurate records containing data reasonably required for the computation and verification of payments due under this Agreement.  LICENSEE shall, and it shall require all SUBLICENSEES to:

	
  

	
(1)

	
open such records for inspection upon reasonable notice during business hours by either MICHIGAN auditor(s) or an independent certified accountant selected by MICHIGAN, for the purpose of verifying the amount of payments due; and

	
  

	
(2)

	
retain such records for six (6) years from date of origination.

The terms of this Article shall survive any termination of this Agreement.  MICHIGAN is responsible for all expenses of such inspection, except that if any inspection reveals an underpayment greater than five percent (5%) of royalties due MICHIGAN, then LICENSEE shall pay all expenses of that inspection and the amount of the underpayment and interest to MICHIGAN within twenty (20) days of written notice thereof.  LICENSEE shall also reimburse MICHIGAN for reasonable expenses required to collect the amount underpaid.

ARTICLE 5 - DILIGENCE

5.1           LICENSEE has the responsibility to do all that is necessary to obtain and retain any governmental approvals to manufacture and/or sell LICENSED PRODUCTS and/or use LICENSED PROCESSES for all relevant activities of LICENSEE and SUBLICENSEES.

5.2            LICENSEE shall use commercially reasonable efforts to bring one or more LICENSED PRODUCTS to market or one or more LICENSED PROCESSES to commercial use through a thorough, vigorous and diligent program for exploiting the PATENT RIGHTS and to continue active, diligent marketing efforts for one or more LICENSED PRODUCTS or LICENSED PROCESSES throughout the life of this Agreement.

5.3           As part of the diligence required by Paragraph 5.2, LICENSEE agrees to reach the  commercialization and research and development milestones for the LICENSED PRODUCTS and LICENSED PROCESSES (together the “MILESTONES”) set forth in Appendix C.

 

  

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5.4           (a)  MICHIGAN acknowledges that the technology licensed to LICENSEE is very early stage.  Its successful commercialization into LICENSED PRODUCTS will require considerable additional research, testing, funding, regulatory approval, strategic alliances, and substantial commitments to third parties, and may require LICENSEE to secure additional intellectual property rights.  The MILESTONES are believed to be appropriate and reasonable as of the Effective Date of this Agreement, but are inherently speculative and based upon events that are not completely under the control of LICENSEE.

(b)  LICENSEE will use reasonable efforts to achieve the MILESTONES on or before the deadline dates indicated on Appendix C and shall notify MICHIGAN if it appears that its achievement of such MILESTONES is unrealistic.  If  LICENSEE fails to meet any MILESTONE on Appendix C, fails to provide a reasonable explanation for such failure, and fails to provide a commercially reasonable, adjusted schedule for achieving such MILESTONE, and if such failure continues for sixty (60) days after the date of any MILESTONE deadline (or revised MILESTONE deadline), LICENSEE will be deemed to be in material breach of this Agreement and MICHIGAN may terminate this Agreement effective on thirty (30) days notice, unless LICENSEE achieves the MILESTONE within this thirty (30) day period or unless LICENSEE reasonably disputes the basis for the termination.

ARTICLE 6 - SUBLICENSING

6.1           LICENSEE shall notify MICHIGAN in writing of every sublicense agreement and each amendment thereto within thirty (30) days after their execution, and indicate the name of the SUBLICENSEE, the territory of the sublicense, the scope of the sublicense, and the nature, timing and amounts of all fees and royalties to be paid thereunder.

6.2           LICENSEE shall not receive from SUBLICENSEES anything of value other than cash payments in consideration for any sublicense under this Agreement, without the express prior written permission of MICHIGAN, which permission shall not be unreasonably withheld or delayed.

6.3           Each sublicense granted by LICENSEE under this Agreement shall provide for its termination upon termination of this Agreement.  Each sublicense shall terminate upon termination of this Agreement unless LICENSEE has previously assigned its rights under the sublicense to MICHIGAN and MICHIGAN has agreed at its sole discretion in writing to such assignment.

	
6.4

	
LICENSEE shall require that all sublicenses:

	
  

	
(1)

	
be consistent with the terms and conditions of this Agreement;

	
  

	
(2)

	
contain the SUBLICENSEE'S acknowledgment of the disclaimer of warranty and limitation on MICHIGAN's liability, as provided by Article 9 below; and

 

  

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(3)

	
contain provisions under which the SUBLICENSEE accepts duties at least equivalent to those accepted by the LICENSEE in the following Articles:

	
  

	
4.4

	
duty to keep records

	
  

	 

	
  

	
9.4

	
duty to avoid improper representations or responsibilities

	
  

	
10.1

	
duty to defend, hold harmless, and indemnify MICHIGAN

	
  

	
10.3

	
duty to maintain insurance

	
  

	
14.5

	
duty to properly mark LICENSED PRODUCTS with patent notices.

 

	
  

	
14.7

	
duty to restrict the use of MICHIGAN's name

	
  

	
14.8

	
duty to control exports

6.5           LICENSEE shall cause every sublicense to provide LICENSEE the right to assign its rights under the sublicense to MICHIGAN.  Any such assignment is subject to the limitations of Article 14.11 herein and, to be effective, MICHIGAN must first accept at its sole discretion such assignment in writing.

ARTICLE  7 - PATENT APPLICATIONS AND MAINTENANCE

7.1           MICHIGAN has the right to control all aspects of filing, prosecuting, and maintaining all of the patents and patent applications that form the basis for the PATENT RIGHTS, including foreign filings and Patent Cooperation Treaty filings.  LICENSEE shall, at its own expense, perform all actions and execute or cause to be executed all documents necessary to support such filing, prosecution, or maintenance.

7.2           MICHIGAN shall notify LICENSEE of all information received by MICHIGAN relating to the filing, prosecution and maintenance of the patents and patent applications which form the basis of the PATENT RIGHTS, including any lapse, revocation, surrender, invalidation or abandonment of any of the patents or patent applications which form the basis for the PATENT RIGHTS, and shall make reasonable efforts to allow LICENSEE to review and comment upon such information.

7.3           LICENSEE shall reimburse MICHIGAN for all fees and costs relating to the filing, prosecution, interference proceedings and maintenance of the PATENT RIGHTS except as specifically provided below.  Such reimbursement shall be made within thirty (30) days of receipt of MICHIGAN’s invoice and shall bear interest, if overdue, at the rate specified in Paragraph 3.6 above.

7.4           LICENSEE  may elect to not reimburse MICHIGAN for fees and costs related to a particular foreign patent application or patent within PATENT RIGHTS, subject to the terms of this Paragraph.  If LICENSEE makes such an election, LICENSEE shall provide reasonable notice to MICHIGAN in writing of an election under this Paragraph.  Under such circumstances, MICHIGAN may elect to continue the prosecution and/or maintenance of such application or patent at its sole expense, provided that such patent applications and issued patents thereafter shall be excluded from the definition of PATENT RIGHTS.

 

  

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ARTICLE 8 - ENFORCEMENT

8.1           Each party shall promptly advise the other in writing of any known acts of potential infringement of the PATENT RIGHTS by another party.  LICENSEE has the first option to police the PATENT RIGHTS against infringement by other parties within the TERRITORY and the FIELD OF USE, but LICENSEE shall notify MICHIGAN in writing twenty (20) days before filing any suit.  This right to police includes defending any action for declaratory judgment of noninfringement or invalidity; and prosecuting, defending or settling all infringement and declaratory judgment actions at its expense and through counsel of its selection, except that LICENSEE shall make any such settlement only with the advice and consent of MICHIGAN.  MICHIGAN shall provide reasonable assistance to LICENSEE with respect to such actions, but only if LICENSEE reimburses MICHIGAN for out-of-pocket expenses incurred in connection with any such assistance rendered at LICENSEE'S request or reasonably required by MICHIGAN and if LICENSEE notifies MICHIGAN in writing twenty (20) days before filing any suit.  MICHIGAN retains the right to participate, with counsel of its own choosing and at its own expense, in any action under this Paragraph.  LICENSEE shall defend, indemnify and hold harmless MICHIGAN with respect to any counterclaims asserted by an alleged infringer reasonably related to the enforcement of the PATENT RIGHTS under this Paragraph, including but not limited to antitrust counterclaims.

8.2            If LICENSEE undertakes to enforce and/or defend the PATENT RIGHTS by litigation in the United States, LICENSEE may withhold up to fifty percent (50%) of the payments otherwise thereafter due during the course of such litigation to MICHIGAN under Article 3 under the following terms.  LICENSEE may apply the amounts withheld to pay up to half of LICENSEE's out-of-pocket litigation expenses, including reasonable attorneys’ fees, but not including salaries of LICENSEE’s employees.  If LICENSEE recovers damages in the patent litigation, the award shall be applied first to satisfy LICENSEE’S unreimbursed expenses and legal fees for the litigation, next to reimburse MICHIGAN for any payments under Article 3 which are past due or were withheld pursuant to this Article 8, and then to reimburse MICHIGAN for any other unreimbursed expenses and legal fees for the litigation.  The remaining balance shall be divided equally between LICENSEE and MICHIGAN.

If LICENSEE undertakes to enforce and/or defend the PATENT RIGHTS by litigation in a foreign county, and recovers damages in the patent litigation, the award shall be applied first to satisfy LICENSEE’S unreimbursed expenses and legal fees for the litigation, and next to reimburse MICHIGAN for any payments under Article 3 which are past due, and then to reimburse MICHIGAN for any unreimbursed expenses and legal fees for the litigation.  The remaining balance shall be divided equally between LICENSEE and MICHIGAN.

8.3           If LICENSEE fails to take action to abate any alleged infringement of patents which form the basis for the PATENT RIGHTS within sixty (60) days of a request by MICHIGAN to do so (or within a shorter period if required to preserve the legal rights of MICHIGAN under any applicable laws) then MICHIGAN has the right to take such action (including prosecution of a suit) at its expense and LICENSEE shall use reasonable efforts to cooperate in such action, at LICENSEE's expense.   LICENSEE shall incur no liability to MICHIGAN for LICENSEE'S failure to take any such abatement action requested by MICHIGAN.  MICHIGAN has full authority to settle on such terms as MICHIGAN determines, except that MICHIGAN shall not reach any settlement whereby it provides a license for future activities to a third party under the PATENT RIGHTS in the TERRITORY and the FIELD OF USE without the consent of LICENSEE, which consent LICENSEE can withhold for any reason.  MICHIGAN retains one hundred percent (100%) of any recovery or settlement under this Paragraph 8.3 after reimbursement of MICHIGAN’s out-of-pocket expenses and payment to LICENSEE (such payment not to exceed the recovery or settlement amounts MICHIGAN actually receives) of any unrecovered expenses LICENSEE pays at MICHIGAN's request to third parties in furtherance of such action.

 

  

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ARTICLE  9 - NO WARRANTIES; LIMITATION ON MICHIGAN'S LIABILITY

9.1           MICHIGAN, including its Regents, fellows, officers, employees and agents, makes no representations or warranties that PATENT RIGHTS are or will be held valid, or that the manufacture, importation, use, offer for sale, sale or other distribution of any LICENSED PRODUCTS or use of LICENSED PROCESSES will not infringe upon any patent or other rights.

9.2           MICHIGAN, INCLUDING ITS REGENTS, FELLOWS, OFFICERS, EMPLOYEES AND AGENTS, MAKES NO REPRESENTATIONS, EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND ASSUMES NO RESPONSIBILITIES WHATEVER WITH RESPECT TO DESIGN, DEVELOPMENT, MANUFACTURE, USE, SALE OR OTHER DISPOSITION BY LICENSEE OR SUBLICENSEES OF LICENSED PRODUCTS OR LICENSED PROCESSES.

9.3           LICENSEE AND SUBLICENSEES ASSUME THE ENTIRE RISK AS TO PERFORMANCE OF LICENSED PRODUCTS AND LICENSED PROCESSES.  In no event shall MICHIGAN, including its Regents, fellows, officers, employees and agents, be responsible or liable for any direct, indirect, special, incidental, or consequential damages or lost profits or other economic loss or damage with respect to LICENSED PRODUCTS or LICENSED PROCESSES, to LICENSEE, SUBLICENSEES or any other individual or entity regardless of legal theory.  The above limitations on liability apply even though MICHIGAN, its Regents, fellows, officers, employees or agents may have been advised of the possibility of such damage.

9.4           LICENSEE shall not, and shall require that its SUBLICENSEES do not, make any statements, representations or warranties whatsoever to any person or entity, or accept any liabilities or responsibilities whatsoever from any person or entity that are inconsistent with any disclaimer or limitation included in this Article 9.

 

  

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ARTICLE 10 - INDEMNITY; INSURANCE

10.1           LICENSEE shall defend, indemnify and hold harmless and shall require SUBLICENSEES to defend, indemnify and hold harmless MICHIGAN, its Regents, fellows, officers, employees and agents, for and against any and all claims, demands, damages, losses, and expenses of any nature (including attorneys' fees and other litigation expenses), resulting from, but not limited to, death, personal injury, illness, property damage, economic loss or products liability arising from or in connection with, any of the following:

	 	
(1) 

	
Any manufacture, use, sale or other disposition by LICENSEE or SUBLICENSEES  of LICENSED PRODUCTS or LICENSED PROCESSES;

	 	
(2) 

	
The direct or indirect use by any person of LICENSED PRODUCTS made, used, sold or otherwise distributed by LICENSEE or SUBLICENSEES;

	 	
(3) 

	
The use or practice by LICENSEE or SUBLICENSEES of any invention related to the PATENT RIGHTS.

 

10.2           MICHIGAN is entitled to participate at its option and expense through counsel of its own selection, and may join in any legal actions related to any such claims, demands, damages, losses and expenses under Paragraph 10.1 above.

10.3           Prior to any distribution or commercial use of any LICENSED PRODUCT or use of any LICENSED PROCESS by LICENSEE, LICENSEE shall purchase and maintain in effect a policy of product liability insurance, completed operations, and/or errors and omissions insurance, whichever is applicable to such activity.  Prior to any distribution or use of any LICENSED PRODUCT or use of any LICENSED PROCESS  by a SUBLICENSEE, LICENSEE shall require that the SUBLICENSEE purchase and maintain in effect a policy of product liability insurance and/or errors and omissions insurance, whichever is applicable to such activity.  Each such insurance policy must provide reasonable coverage for all claims with respect to any LICENSED PROCESS used and any LICENSED PRODUCTS manufactured, used, sold, licensed or otherwise distributed by LICENSEE -- or, in the case of a SUBLICENSEE's policy, by said SUBLICENSEE -- and must specify MICHIGAN, including its Regents, fellows, officers and employees, as an additional insured.  LICENSEE shall furnish certificate(s) of such insurance to MICHIGAN, upon request.

	
ARTICLE 11 - TERM AND TERMINATION

11.1           If LICENSEE ceases to carry on its business, this Agreement shall terminate upon written notice by MICHIGAN.

11.2           If LICENSEE fails to make any payment due to MICHIGAN, MICHIGAN has the right to terminate this Agreement effective on thirty (30) days' written notice, unless LICENSEE makes all such payments within the thirty (30) day period.  If LICENSEE has not made all such payments to MICHIGAN by the time the thirty (30) day period expires, this Agreement shall automatically terminate.

 

  

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11.3           Upon any material breach or default of this Agreement by LICENSEE other than those occurrences listed in Paragraphs 5.3, 5.4, 11.1 and 11.2 (the terms of which shall take precedence over the handling of any other material breach or default under this Paragraph 11.3), MICHIGAN has the right to terminate this Agreement effective on sixty (60) days' written notice to LICENSEE.  Such termination shall become automatically effective upon expiration of the sixty (60) day period unless LICENSEE cures the material breach or default before the period expires.

11.4           LICENSEE has the right to terminate this Agreement at any time on six (6) months' written notice to MICHIGAN if LICENSEE:

	
  

	
(a)

	
pays all amounts due MICHIGAN through the effective date of the termination;

	
  

	
(b)

	
submits a final report of the type described in Paragraph 4.2;

	
  

	
(c)

	
returns any confidential or trade-secret materials provided to LICENSEE by MICHIGAN in connection with this Agreement, or, with prior approval by MICHIGAN, destroys such materials, and certifies in writing that such materials have all been returned or destroyed ;

	
  

	
(d)

	
suspends its use of the LICENSED PROCESS(ES) AND LICENSED PRODUCT(S) (subject to Paragraph 11.5  below);

	
  

	
(e)

	
provides MICHIGAN with all data and know-how developed by LICENSEE on or after the Effective Date of this Agreement and which are directly related to LICENSED PRODUCTS and LICENSED PROCESSES.  MICHIGAN shall have the non-exclusive right to use such data and know-how for any purpose whatsoever, including the right to transfer same to future licensees; and

	
  

	
(f)

	
provides MICHIGAN the right to access any regulatory information filed with any U.S. or foreign government agency with respect to LICENSED PRODUCTS and LICENSED PROCESSES.

Upon written notice from LICENSEE of intent to terminate, MICHIGAN may elect by written notice to LICENSEE to immediately terminate this Agreement.

11.5           Upon any termination of this Agreement, and except as provided herein to the contrary, all rights and obligations of the parties hereunder shall cease, except any previously accrued rights and obligations and further as follows:

	
  

	
(1)

	
Obligations to pay royalties and other sums accruing hereunder up to the effective date of the termination;

 

  

13

  

 

	
  

	
(2)

	
MICHIGAN's rights to inspect books and records as described in Article 4, and LICENSEE's obligations to keep such records for the required time;

	
  

	
(3)

	
Obligations to hold harmless, defend and indemnify MICHIGAN and its Regents, fellows, officers, employees and agents under Article 10;

	
  

	
(4)

	
Any cause of action or claim of LICENSEE or MICHIGAN accrued or to accrue because of any breach or default by the other party hereunder;

	
  

	
(5)

	
The provisions of Articles 1, 9, and 14; and

	
  

	
(6)

	
All other terms, provisions, representations, rights and obligations contained in this Agreement that by their sense and context are intended to survive until performance thereof by either or both parties.

11.6            After the license(s) granted herein terminate, if LICENSEE has filed patent applications or obtained patents to any modification or improvement to LICENSED PRODUCTS or LICENSED PROCESSES within the scope of the PATENT RIGHTS, LICENSEE agrees upon request to enter into good faith negotiations with MICHIGAN or MICHIGAN’s future licensee(s) for the purpose of granting licensing rights to said modifications or improvements in a timely fashion and under commercially reasonable terms.

	
ARTICLE 12 - REGISTRATION AND RECORDATION

12.1           If the terms of this Agreement, or any assignment or license under this Agreement are or become such as to require that the Agreement or license or any part thereof be registered with or reported to a national or supranational agency of any area in which LICENSEE or SUBLICENSEES would do business, LICENSEE will, at its expense, undertake such registration or report.  Prompt notice and appropriate verification of the act of registration or report or any agency ruling resulting from it will be supplied by LICENSEE to MICHIGAN.

12.2           LICENSEE shall also carry out, at its expense, any formal recordation of this Agreement or any license herein granted that the law of any country requires as a prerequisite to enforceability of the Agreement or license in the courts of any such country or for other reasons, and shall promptly furnish to MICHIGAN appropriately verified proof of recordation.

ARTICLE 13 - NOTICES

13.1           Any notice, request, report or payment required or permitted to be given or made under this Agreement by either party may be mailed if sent by certified or registered mail, return receipt requested, or may be delivered by a nationally recognized courier service, to the address set forth below or such other address as such party specifies by written notice given in conformity herewith.  Any notice, request, report or payment is not effective until actually received by the other party.

 

  

14

  

 

	 	
To MICHIGAN:

	
The University of Michigan

	 	
  

	
Office of Technology Transfer

	 	
  

	
Wolverine Tower, Room 2071

	 	
  

	
3003 S. State Street

	 	
  

	
Ann Arbor, MI  48109-1280

	 	
  

	
Attn:  File No. 290 and 1225

	 	
To LICENSEE:

	
Cellectar, LLC

	 	
  

	
505 South Rosa Road

	 	
  

	
Madison, WI 53719

	 	
  

	
Attn: President

	 	
With a courtesy copy to:

	
Neider & Boucher, S.C.

440 Science Drive, Suite 300

	 	
  

	
Madison, WI 53711

	 	
  

	
Attn: Charles E. Neider

ARTICLE 14 - MISCELLANEOUS PROVISIONS

14.1           This Agreement shall be construed, governed, interpreted and applied according to United States and State of Michigan law, except that questions affecting the construction and effect of any patent shall be determined by the law of the country in which the patent was granted.

14.2           The parties hereby consent to the jurisdiction of the courts in the State of Michigan over any dispute concerning this Agreement or the relationship between the parties.  Should LICENSEE bring any claim, demand or other action against MICHIGAN, its Regents, fellows, officers, employees or agents, arising out of this Agreement or the relationship between the parties, LICENSEE agrees to bring said action only in the Michigan Court of Claims.

14.3           MICHIGAN and LICENSEE agree that this Agreement sets forth their entire understanding concerning the subject matter of this Agreement, and no modification of the Agreement will be effective unless both MICHIGAN and LICENSEE agree to it in writing.

14.3.1           Except as otherwise provided in this Paragraph 14.3.1, during the term of this Agreement and for a period of seven (7) years thereafter, each party shall maintain in confidence and use only for purposes of this Agreement all information and data ("Information") supplied by the other party under this Agreement and marked "Confidential."

To the extent it is reasonably necessary or appropriate to fulfill its obligations or exercise its rights under this Agreement, (a) a party may disclose Information it is otherwise obligated under this Paragraph 14.3.1 not to disclose, to its affiliates, sublicensees, consultants, outside contractors and clinical investigators, on a need-to-know basis on condition that such third parties agree to keep the Information confidential for the same time periods and to the same extent as the disclosing party is required to keep the Information confidential; and (b) a party may disclose such Information to government or other regulatory authorities to the extent that such disclosure is required by applicable law, regulation or court order, or is reasonably necessary to obtain patents or authorizations to conduct clinical trials with, and to commercially market the LICENSED PRODUCTS, provided that the disclosing party shall provide written notice to the other party and sufficient opportunity to the other party to object to such disclosure or to request confidential treatment thereof.

 

  

15

  

 

The obligation not to disclose or use Information shall not apply to any part of such Information that (i) is or becomes patented, published or otherwise part of the public domain other than by acts of the party obligated not to disclose such Information or its affiliates or sublicensees in contravention of this Agreement; (ii) is disclosed to the receiving party, its affiliates or sublicensees by a third party, provided such Information was not obtained by such third party directly or indirectly from the other party; (iii) prior to disclosure under this Agreement, was already in the possession of the receiving party, its affiliates or sublicensees, provided such Information was not obtained directly or indirectly from the other party; or (iv) is independently developed by or for the receiving party or its affiliates or sublicensees by third parties who did not have access to Information disclosed by the other party.

The foregoing provisions shall not prohibit the disclosure of any of the terms or conditions of this Agreement to any third party.

14.4           If a court of competent jurisdiction finds any term of this Agreement invalid, illegal or unenforceable, that term will be curtailed, limited or deleted, but only to the extent necessary to remove the invalidity, illegality or unenforceability, and without in any way affecting or impairing the remaining terms.

14.5           LICENSEE agrees to mark the LICENSED PRODUCTS sold in the United States with all applicable United States patent numbers.  All LICENSED PRODUCTS shipped to or sold in other countries shall be marked to comply with the patent laws and practices of the countries of manufacture, use and sale.

14.6           No waiver by either party of any breach of this Agreement, no matter how long continuing or how often repeated, is a waiver of any subsequent breach thereof, nor is any delay or omission on the part of either party to exercise or insist on any right, power, or privilege hereunder a waiver of such right, power or privilege.

14.7           LICENSEE agrees to refrain from using and to require SUBLICENSEES to refrain from using the name of MICHIGAN in publicity or advertising without the prior written approval of MICHIGAN.  Reports in scientific literature and presentations of joint research and development work are not publicity.  Notwithstanding this provision, without prior written approval of MICHIGAN, LICENSEE and SUBLICENSEES may state publicly that LICENSED PRODUCTS and LICENSED PROCESSES were developed by LICENSEE based upon an invention(s) developed at the University of Michigan and/or that the PATENT RIGHTS were licensed from the University of Michigan.

14.8           LICENSEE agrees to comply with all laws and regulations applicable to the LICENSED PRODUCTS and LICENSED PROCESSES.  In particular, LICENSEE understands and acknowledges that the transfer of certain commodities and technical data is subject to United States laws and regulations controlling the export of such commodities and technical data, including all Export Administration Regulations of the United States Department of Commerce.  These laws and regulations prohibit or require a license for the export of certain types of technical data to certain specified countries.  LICENSEE agrees to comply with all United States laws and regulations controlling the export of LICENSED PRODUCTS and technical data related to LICENSED PRODUCTS or LICENSED PROCESSES, to be solely responsible for any violation of such laws and regulations by LICENSEE or its sublicensees, and to defend, indemnify and hold harmless MICHIGAN and its Regents, fellows, officers, employees and agents if any legal action of any nature results from the violation.

 

  

16

  

 

14.9           The relationship between the parties is that of independent contractor and contractee.  Neither party is an agent of the other in connection with the exercise of any rights hereunder, and neither has any right or authority to assume or create any obligation or responsibility on behalf of the other.

14.10           Neither party hereto is in default of any provision of this Agreement for any failure in performance resulting from acts or events beyond the reasonable control of such party, such as Acts of God, acts of civil or military authority, civil disturbance, war, strikes, fires, power failures, natural catastrophes or other "force majeure" events.

14.11           LICENSEE may not assign this Agreement without the prior written consent of MICHIGAN, which consent shall not be unreasonably withheld or delayed and shall not pledge any of the license rights granted in this Agreement as security for any creditor.  Any attempted pledge of any of the rights under this Agreement or assignment of this Agreement without the prior consent of MICHIGAN will be void from the beginning.  No assignment by LICENSEE will be effective until the intended assignee agrees in writing to accept all of the terms and conditions of this Agreement.

14.12    If during the term of this Agreement, LICENSEE makes or attempts to make an assignment for the benefit of creditors, or if proceedings in voluntary or involuntary bankruptcy or insolvency are instituted on behalf of or against LICENSEE (and any such involuntary bankruptcy or insolvency proceeding is not dismissed within sixty (60) days of its filing), or if a receiver or trustee is appointed for the property of LICENSEE, MICHIGAN may, at its option, terminate this Agreement and revoke the license(s) herein granted by written notice to LICENSEE.  LICENSEE shall notify MICHIGAN of any such event mentioned in this Paragraph as soon as reasonably practicable, and in any event within five (5) days after any such event.

 

  

17

  

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement in duplicate originals by their duly authorized officers or representatives.

 

 

	FOR LICENSEE   	 	FOR THE REGENTS OF THE	 
	 	 	 	UNIVERSITY OF MICHIGAN	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	By	
/s/ Terry Sivesind

	 	By	
/s/ Kenneth J. Nisbet 

	 
	(authorized representative)	 	(authorized representative)	 
	 	 	 	 
	Typed Name: Terry Sivesind   	 	Typed Name: Kenneth J. Nisbet	 
	 	 	 	 
	Title:  Chief Operating Officer	 	Title: Executive Director UM Technology Transfer	 
	 	 	 	 
	Date:  September 5, 2003  	 	Date:  September 16, 2003	 

 

 

	
Version 01.30.03

 

  

18

  

 

	
APPENDIX A

	
TO THE LICENSE AGREEMENT FOR MICHIGAN OFFICE OF TECHNOLOGY TRANSFER FILES  290 AND 1225

	
EFFECTIVE THE 4TH DAY OF SEPTEMBER, 2003

	
BETWEEN CELLECTAR, LLC

	
AND THE REGENTS OF THE UNIVERSITY OF MICHIGAN

	
PATENTS, PATENT APPLICATIONS, and MICHIGAN FILES

 

FILE NO. 290

	
  

	
·

	
US Patent No. 4,965,391 issued 10/23/90

FILE NO. 290P2

	
  

	
·

	
US Patent No. 5,087,721 issued 2/11/92

FILE NO. 290P2D1

	
  

	
·

	
US Patent No. 5,347,030 issued 9/13/94

FILE NO. 290P2D1C1

	
  

	
·

	
US Patent No. 5,795,561 issued 8/18/98

FILE NO. 1225

	
  

	
·

	
US Patent No. 6,255,519 issued 7/3/2001

	
  

	
·

	
Canadian Application Serial No. 227628 pending

FILE NO. 1225D1

	
  

	
·

	
US Patent No. 6,417,384 issued 7/9/2002

 

  

19

  

 

	
APPENDIX B

	
TO THE LICENSE AGREEMENT FOR MICHIGAN OFFICE OF TECHNOLOGY TRANSFER FILES 290 AND 1225

	
EFFECTIVE THE 4TH DAY OF SEPTEMBER, 2003

	
BETWEEN CELLECTAR, LLC

	
AND THE REGENTS OF THE UNIVERSITY OF MICHIGAN

	
MILESTONE PAYMENTS

	
1.

	
Upon LICENSEE’S filing of a corporate sponsored New Drug Application (“NDA”) to the Food and Drug Administration (“FDA”) for a LICENSED PRODUCT intended for use in a diagnostic application, LICENSEE will pay to MICHIGAN the sum of Fifty Thousand Dollars ($50,000); provided, however, that LICENSEE may elect to defer all or part of this payment until the first payment pursuant to paragraph (2) below is due.

	
2.

	
Within twelve (12) months of the date of the FIRST COMMERCIAL SALE of a diagnostic LICENSED PRODUCT, LICENSEE will pay to MICHIGAN the sum of One Hundred Thousand Dollars ($100,000); provided, however, that if the total sales proceeds and royalties received by LICENSEE from all commercial sales of diagnostic LICENSED PRODUCTS within such twelve (12) month period is less than Two Hundred Thousand Dollars ($200,000), LICENSEE will pay to MICHIGAN fifty percent (50%) of all such sales proceeds and royalties received by LICENSEE during such twelve (12) month period and will continue to pay to MICHIGAN, within ninety (90) days of LICENSEE’S receipt thereof, fifty percent (50%) of all additional sales proceeds and royalties received by LICENSEE from all commercial sales of diagnostic LICENSED PRODUCTS until LICENSEE has paid to MICHIGAN a total of One Hundred Thousand Dollars ($100,000).

	
3.

	
Upon LICENSEE’S filing of an NDA to the FDA involving a LICENSED PRODUCT with an intended use in a therapeutic indication, LICENSEE will pay to MICHIGAN the sum of Fifty Thousand Dollars ($50,000); provided, however, that LICENSEE may elect to defer all or part of this payment until the first payment pursuant to paragraph (4) below is due.

	
4.

	
Within twelve (12) months of the date of the FIRST COMMERCIAL SALE of a therapeutic LICENSED PRODUCT, LICENSEE will pay to MICHIGAN the sum of Two Hundred Thousand Dollars ($200,000); provided, however, that if the total sales proceeds and royalties received by LICENSEE from all commercial sales of therapeutic LICENSED PRODUCTS within such twelve (12) month period is less than Four Hundred Thousand Dollars ($400,000), LICENSEE will pay to MICHIGAN fifty percent (50%) of all such sales proceeds and royalties received by LICENSEE during such twelve (12) month period and will continue to pay to MICHIGAN, within ninety (90) days of LICENSEE’S receipt thereof, fifty percent (50%) of all additional sales proceeds and royalties received by LICENSEE from all commercial sales of therapeutic LICENSED PRODUCTS until LICENSEE has paid to MICHIGAN a total of Two Hundred Thousand Dollars ($200,000).

 

  

20

  

 

	
APPENDIX C

	
TO THE LICENSE AGREEMENT FOR MICHIGAN OFFICE OF TECHNOLOGY TRANSFER FILES 290 AND 1225

	
EFFECTIVE THE 4TH DAY OF SEPTEMBER, 2003

	
BETWEEN CELLECTAR, LLC

	
AND THE REGENTS OF THE UNIVERSITY OF MICHIGAN

	
MILESTONES

 

 

Diagnostic Product Milestones:

	
  

	
1.

	
Within ­­1 year of the EFFECTIVE DATE, LICENSEE will initiate preclinical safety and efficacy studies required to support clinical trials involving [124-I]-NM404 using PET imaging for diagnostic indications.  Preclinical safety and efficacy studies shall be considered to be “initiated” upon the first administration of [124-I]-NM404 to a laboratory animal in a pre-clinical efficacy study with a study design that is consistent with industry standards for experiments designed to support an initial regulatory filing for [124-I]-NM404 for use in preliminary clinical trials for diagnostic indications.

	
  

	
2.

	
Within 16 months of the EFFECTIVE DATE, LICENSEE will substantially complete a physician-sponsored IND diagnostic Phase I NM404 trial for NSCLC non-small cell lung cancer patients.  The diagnostic Phase I NM404 trial shall be considered to be “substantially complete” when the number of patients who have fully completed the NM404 study protocol is sufficient to permit LICENSEE to proceed with the work needed to meet Milestone No. 3 below.

	
  

	
3.

	
Within 3 years of the completion of a successful Phase I clinical trial, or within 56 months of the EFFECTIVE DATE, whichever is first, LICENSEE will submit a corporate NDA to the FDA for a LICENSED PRODUCT intended for use in a diagnostic application.  A Phase I  clinical trial shall be considered to be “completed” on the earlier of (1) one hundred and twenty (120) days after the final patient in the Phase I trial has completed the NM404 study protocol or (2) upon the approval by the relevant regulatory authority to initiate the next phase of clinical testing.  This Milestone can be extended by one-year increments with the payment of a Twenty Thousand Dollar ($20,000) Milestone extension fee for each such increment.

	
  

	
4.

	
Within 18 months of the EFFECTIVE DATE, LICENSEE will either initiate a physician-sponsored IND diagnostic Phase I NM404 trial for at least one other cancer type or amend the IND referred to in Milestone No. 2 above so as to provide for such a trial for at least one other cancer type.  A Phase I trial shall be considered to be “initiated” upon the first administration of NM404 to a patient in such a trial.

  

21

  

 

Therapeutic Product Milestone:

	
  

	
1.

	
Within 18 months of the EFFECTIVE DATE, LICENSEE will initiate preclinical safety and efficacy studies required to support clinical trials involving [131-I]-NM404 for therapeutic uses. Preclinical safety and efficacy studies shall be considered to be “initiated” upon the first administration of [131-I]-NM404 to a tumor-bearing laboratory animal in a pre-clinical efficacy study with a study design that is consistent with industry standards for experiments designed to support an initial regulatory filing for [131-I]- NM404 for use in preliminary clinical trials for therapeutic indications.

 

  

22

  

 

FIRST AMENDMENT TO LICENSE AGREEMENT BETWEEN

THE REGENTS OF THE UNIVERSITY OF MICHIGAN (FILE Nos. 0290 and 1225)

and

CELLECTAR, LLC

Effective February 1, 2005, Cellectar, LLC,  a Wisconsin limited liability company, with offices located at 505 South Rosa Road, Madison, Wisconsin ("LICENSEE"), and the Regents of the University of Michigan, a constitutional corporation of the State of Michigan ("MICHIGAN"), hereby amend their License Agreement of September 4, 2003 as follows:

	
  

	
I.

	
Appendix C, Milestone No. 2, is amended to read as follows:

	
  

	
2.

	
By June 30, 2005, LICENSEE will substantially complete a physician-sponsored IND diagnostic Phase I NM404 trial for NSCLC non-small cell lung cancer patients.  The diagnostic Phase I NM404 trial shall be considered to be “substantially complete” when the number of patients who have fully completed the NM404 study protocol is sufficient to permit LICENSEE to proceed with the work needed to meet Milestone No. 3 below.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement in duplicate originals by their duly authorized officers or representatives.

 

 

	FOR CELLECTAR, LLC	 	FOR THE REGENTS OF THE	 
	 	 	 	UNIVERSITY OF MICHIGAN	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	By:	
/s/ Terry Sivesind

	 	By:	
/s/ Kenneth J. Nisbet

	 
	 	(authorized representative)	 	 	(authorized representative)	 
	 	 	 	 
	Typed Name: Terry Sivesind 	 	Typed Name: Kenneth J. Nisbet	 
	 	 	 	 
	Title: Chief Operating Officer	 	Title:  Executive Director UM Technology Transfer	 
	 	 	 	 
	Date:  February 10, 2005   	 	Date:  February 15, 2005	 

 

  

23

  

 

SECOND AMENDMENT TO LICENSE AGREEMENT BETWEEN

THE REGENTS OF THE UNIVERSITY OF MICHIGAN (FILE Nos. 0290 and 1225)

and

CELLECTAR, LLC

 

 

Effective October 10, 2005, Cellectar, LLC,  a Wisconsin limited liability company, with offices located at 505 South Rosa Road, Madison, Wisconsin ("LICENSEE"), and the Regents of the University of Michigan, a constitutional corporation of the State of Michigan ("MICHIGAN"), hereby amend their License Agreement of September 4, 2003 as follows:

	 	
I. 

	
Appendix C, Diagnostic Product Milestone No. 2, is amended to read as follows:

2.           By June 30, 2006, LICENSEE will substantially complete a physician-sponsored IND diagnostic Phase I NM404 trial for NSCLC non-small cell lung cancer patients.  The diagnostic Phase I NM404 trial shall be considered to be “substantially complete” when the number of patients who have fully completed the NM404 study protocol is sufficient to permit LICENSEE to proceed with the work needed to meet Milestone No. 3 below.

	 	
II. 

	
Appendix C, Diagnostic Product Milestone No. 4 is amended to read as follows:

4.           By March 31, 2006, LICENSEE will either initiate a physician-sponsored IND diagnostic Phase I NM404 trial for at least one other cancer type or amend the IND referred to in Milestone No. 2 above so as to provide for such a trial for at least one other cancer type.  A Phase I trial shall be considered to be “initiated” upon the first administration of NM404 to a patient in such a trial.

	
  

	
III.

	
Appendix C, Therapeutic Product Milestone No. 1 is amended to read as follows:

1.           By April 30, 2005, LICENSEE will initiate preclinical safety and efficacy studies required to support clinical trials involving [125-I]-NM404 for therapeutic uses.  Preclinical safety and efficacy studies shall be considered to be “initiated” upon the first administration of [125-I]-NM404 to a tumor-bearing laboratory animal in a pre-clinical efficacy study with a study design that is consistent with industry standards for experiments designed to support an initial regulatory filing for [125-I]-NM404 for use in preliminary clinical trials for therapeutic indications.

MICHIGAN hereby acknowledges that the requirements of Therapeutic Product Milestone No. 1 were fulfilled on March 31, 2005.

 

  

24

  

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement in duplicate originals by their duly authorized officers or representatives.

 

	FOR CELLECTAR, LLC	 	FOR THE REGENTS OF THE	 
	 	 	 	UNIVERSITY OF MICHIGAN	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	By:	
/s/ Terry Sivesind 

	 	By:	
/s/ Kenneth J. Nisbet

	 
	 	(authorized representative)	 	 	(authorized representative)	 
	 	 	 	 
	Typed Name: Terry Sivesind 	 	Typed Name: Kenneth J. Nisbet	 
	 	 	 	 
	Title: Chief Operating Officer   	 	Title: Executive Director Um Technology Transfer	 
	 	 	 	 
	Date:  October 28, 2005 	 	Date:  October 10, 2005	 

 

  

25

  

 

THIRD AMENDMENT TO LICENSE AGREEMENT BETWEEN

THE REGENTS OF THE UNIVERSITY OF MICHIGAN (FILE Nos. 0290 and 1225)

and

CELLECTAR, LLC

Effective May 3, 2006, Cellectar, LLC, a Wisconsin limited liability company, with offices located at 510 Charmany Drive, Madison, Wisconsin ("LICENSEE"), and the Regents of the University of Michigan, a constitutional corporation of the State of Michigan ("MICHIGAN"), hereby amend their License Agreement of September 4, 2003 as follows:

I.           Appendix C, Diagnostic Product Milestone No. 4 is amended to read as follows:

4.           By June 30, 2006, LICENSEE will either initiate a physician-sponsored IND diagnostic Phase I NM404 trial for at least one other cancer type or amend the IND referred to in Milestone No. 2 above so as to provide for such a trial for at least one other cancer type.  A Phase I trial shall be considered to be “initiated” upon the first administration of NM404 to a patient in such a trial.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement in duplicate originals by their duly authorized officers or representatives.

 

 

	FOR CELLECTAR, LLC 	 	FOR THE REGENTS OF THE	 
	 	 	 	UNIVERSITY OF MICHIGAN	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	By:	
/s/ Terry Sivesind 

	 	By:	
/s/ Kenneth J. Nisbet

	 
	 	(authorized representative)	 	 	(authorized representative)	 
	 	 	 	 
	Typed Name: Terry Sivesind	 	Typed Name: Kenneth J. Nisbet	 
	 	 	 	 
	Title: Chief Operating Officer 	 	Title: Executive Director UM Technology Transfer	 
	 	 	 	 
	Date:  May 8, 2006	 	Date:  May 3, 2006	 

 

  

26

  

 

FOURTH AMENDMENT TO LICENSE AGREEMENT BETWEEN

THE REGENTS OF THE UNIVERSITY OF MICHIGAN (FILE Nos. 0290 and 1225)

and

CELLECTAR, LLC

Effective June 29, 2006, Cellectar, LLC, a Wisconsin limited liability company, with offices located at 510 Charmany Drive, Madison, Wisconsin (“LICENSEE”), and the Regents of the University of Michigan, a constitutional corporation of the State of Michigan (“MICHIGAN”), hereby amend their License Agreement of September 4, 2003 (the “Agreement”) as follows:

I.           Appendix C, Diagnostic Product Milestone Nos. 2 and 3 are hereby deleted in their entirety, and LICENSEE shall have no further obligations under the Agreement with respect to these Milestones.

II.           Appendix C, Diagnostic Product Milestone No. 4 is hereby amended to read as follows:

4.           By December 31, 2006, LICENSEE will either initiate a physician-sponsored IND diagnostic Phase I NM404 trial for at least one other cancer type or amend the IND referred to in former Diagnostic Product Milestone No. 2 (now deleted) so as to provide for such a trial for at least one other cancer type.  A Phase I trial shall be considered to be “initiated” upon the first administration of NM404 to a patient in such a trial.

	
  

	
III.

	
Appendix B, Milestone Payment No. 1 is hereby amended to read as follows:

	
  

	
1.

	
Upon the filing by LICENSEE or any SUBLICENSEE of a corporate sponsored New Drug Application (“NDA”) to the Food and Drug Administration (“FDA”) for a LICENSED PRODUCT intended for use in a diagnostic application, LICENSEE will pay to MICHIGAN the sum of Fifty Thousand Dollars ($50,000); provided, however, that LICENSEE may elect to defer all or part of this payment until the first payment pursuant to paragraph (2) below is due.

 

  

27

  

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement in duplicate originals by their duly authorized officers or representatives.

 

	FOR CELLECTAR, LLC	 	FOR THE REGENTS OF THE	 
	 	 	 	UNIVERSITY OF MICHIGAN	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	By:	
/s/ Terry Sivesind 

	 	By:	
Kenneth J. Nisbet

	 
	 	(authorized representative)	 	 	(authorized representative)	 
	 	 	 	 
	Typed Name: Terry Sivesind  	 	Typed Name: Kenneth K. Nisbet	 
	 	 	 	 
	Title: Chief Operating Officer	 	Title: Executive Director UM Technology Transfer	 
	 	 	 	 
	Date:  June 29, 2006	 	Date:  June 29, 2006	 

 

  

28

  

 

FIFTH AMENDMENT TO LICENSE AGREEMENT BETWEEN

THE REGENTS OF THE UNIVERSITY OF MICHIGAN

(File Nos. 0290 and 1225)

and

CELLECTAR, LLC

Effective June 29, 2007, Cellectar, LLC, a Wisconsin limited liability company, with offices located at 545 Science Drive, Madison, Wisconsin (“LICENSEE”), and the Regents of the University of Michigan, a constitutional corporation of the State of Michigan (“MICHIGAN”), hereby amend their License Agreement of September 4, 2003 as follows:

Appendix C, Diagnostic Product Milestone No. 4 is hereby amended to read as follows:

4.           By March 31, 2008, LICENSEE will either initiate a physician-sponsored IND diagnostic Phase I CLTR404 (previously known as NM404) trial for at least one other cancer type or amend the IND referred to in former Diagnostic Product Milestone No. 2 so as to provide for such a trial for at least one other cancer type.  A Phase I trial shall be considered to be “initiated” upon the first administration of CLTR404 to a patient in such a trial.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement in duplicate originals by their duly authorized officers or representatives.

 

 

	FOR CELLECTAR, LLC	 	FOR THE REGENTS OF THE	 
	 	 	 	UNIVERSITY OF MICHIGAN	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	By:	
/s/ William R. Clarke  

	 	By:	
/s/ Kenneth J. Nisbet

	 
	 	(authorized representative)	 	 	(authorized representative)	 
	 	 	 	 
	Typed Name: William R. Clarke 	 	Typed Name: Kenneth J. Nisbet	 
	 	 	 	 
	

Title: Chief Executive Officer

	 	

Title: Executive Director UM Technology Transfer

	 
	 	 	 	 
	Date:  July 19, 2007	 	Date:  July 11, 2007	 

 

  

29

  

 

SIXTH AMENDMENT TO LICENSE AGREEMENT BETWEEN

THE REGENTS OF THE UNIVERSITY OF MICHIGAN

(File Nos. 0290 and 1225)

and

CELLECTAR, INC.

Effective March 31, 2008, Cellectar, Inc., a Wisconsin corporation (formerly known as Cellectar, LLC, a Wisconsin limited liability company), with offices located at 3301 Agriculture Drive, Madison, Wisconsin (“LICENSEE”), and the Regents of the University of Michigan, a constitutional corporation of the State of Michigan (“MICHIGAN”), hereby amend their License Agreement of September 4, 2003 as follows:

Appendix C, Diagnostic Product Milestone No. 4 is hereby amended to read as follows:

4.           By September 30, 2008, LICENSEE will either initiate a physician-sponsored IND diagnostic Phase I CLR1404 (previously known as NM404) trial for at least one other cancer type or amend the IND referred to in former Diagnostic Product Milestone No. 2 so as to provide for such a trial for at least one other cancer type.  A Phase I trial shall be considered to be “initiated” upon the first administration of CLR1404 to a patient in such a trial.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement in duplicate originals by their duly authorized officers or representatives.

 

 

	FOR CELLECTAR, LLC	 	FOR THE REGENTS OF THE	 
	 	 	 	UNIVERSITY OF MICHIGAN	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	By:	
/s/ William R. Clarke

	 	By:	
/s/ Kenneth J. Nisbet

	 
	 	(authorized representative)	 	 	(authorized representative)	 
	 	 	 	 
	Typed Name: William R. Clarke   	 	Typed Name: Kenneth J. Nisbet	 
	 	 	 	 
	

Title: Chief Executive Officer

	 	

Title: Executive Director UM Technology Transfer

	 
	 	 	 	 
	Date:  April 22, 2008  	 	Date:  April 16, 2008	 

 

  

30

  

 

SEVENTH AMENDMENT TO LICENSE AGREEMENT BETWEEN

THE REGENTS OF THE UNIVERSITY OF MICHIGAN

(File Nos. 0290 and 1225)

and

CELLECTAR, INC.

Effective September 30, 2008, Cellectar, Inc., a Wisconsin corporation (formerly known as Cellectar, LLC, a Wisconsin limited liability company), with offices located at 3301 Agriculture Drive, Madison, Wisconsin (“LICENSEE”), and the Regents of the University of Michigan, a constitutional corporation of the State of Michigan (“MICHIGAN”), hereby amend their License Agreement of September 4, 2003 as follows:

Appendix C, Diagnostic Product Milestone No. 4 is hereby amended to read as follows:

4.           By March 31, 2009, LICENSEE will either initiate a physician-sponsored IND diagnostic Phase I CLR1404 (previously known as NM404) trial for at least one other cancer type or amend the IND referred to in former Diagnostic Product Milestone No. 2 so as to provide for such a trial for at least one other cancer type.  A Phase I trial shall be considered to be “initiated” upon the first administration of CLR1404 to a patient in such a trial.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement in duplicate originals by their duly authorized officers or representatives.

 

	FOR CELLECTAR, LLC	 	FOR THE REGENTS OF THE	 
	 	 	 	UNIVERSITY OF MICHIGAN	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	By:	
/s/ William R. Clarke

	 	By:	
/s/ Kenneth J. Nisbet

	 
	 	(authorized representative)	 	 	(authorized representative)	 
	 	 	 	 
	Typed Name: William R. Clarke   	 	Typed Name: Kenneth J. Nisbet	 
	 	 	 	 
	

Title: Chief Executive Officer

	 	

Title: Executive Director UM Technology Transfer

	 
	 	 	 	 
	Date:  October 30, 2008	 	Date:  October 3, 2008	 

 

  

31

  

 

EIGHTH AMENDMENT TO LICENSE AGREEMENT BETWEEN

THE REGENTS OF THE UNIVERSITY OF MICHIGAN

(File Nos. 0290 and 1225)

and

CELLECTAR, INC.

Effective March 31, 2009, Cellectar, Inc., a Wisconsin corporation (formerly known as Cellectar, LLC, a Wisconsin limited liability company), with offices located at 3301 Agriculture Drive, Madison, Wisconsin (“LICENSEE”), and the Regents of the University of Michigan, a constitutional corporation of the State of Michigan (“MICHIGAN”), hereby amend their License Agreement of September 4, 2003 as follows:

Appendix C, Diagnostic Product Milestone No. 4 is hereby amended to read as follows:

4.           By March 31, 2010, LICENSEE will either initiate a physician-sponsored IND diagnostic Phase I CLR1404 (previously known as NM404) trial for at least one other cancer type or amend the IND referred to in former Diagnostic Product Milestone No. 2 so as to provide for such a trial for at least one other cancer type.  A Phase I trial shall be considered to be “initiated” upon the first administration of CLR1404 to a patient in such a trial.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement in duplicate originals by their duly authorized officers or representatives.

 

 

	FOR CELLECTAR, LLC	 	FOR THE REGENTS OF THE	 
	 	 	 	UNIVERSITY OF MICHIGAN	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	By:	
/s/ William R. Clarke

	 	By:	
/s/ Kenneth J. Nisbet

	 
	 	(authorized representative)	 	 	(authorized representative)	 
	 	 	 	 
	Typed Name: William R. Clarke   	 	Typed Name: Kenneth J. Nisbet	 
	 	 	 	 
	

Title: Chief Executive Officer

	 	

Title: Executive Director UM Technology Transfer

	 
	 	 	 	 
	Date:  March 30, 2009  	 	Date:  April 2, 2009	 

 

  

32

  

 

NINTH AMENDMENT TO LICENSE AGREEMENT BETWEEN

THE REGENTS OF THE UNIVERSITY OF MICHIGAN

(File Nos. 0290 and 1225)

and

CELLECTAR, INC.

Effective March 31, 2010, Cellectar, Inc., a Wisconsin corporation (formerly known as Cellectar, LLC, a Wisconsin limited liability company), with offices located at 3301 Agriculture Drive, Madison, Wisconsin (“LICENSEE”), and the Regents of the University of Michigan, a constitutional corporation of the State of Michigan (“MICHIGAN”), hereby amend their License Agreement of September 4, 2003 as follows:

MICHIGAN hereby acknowledges that the safety and dosimetry data collected and analyzed by LICENSEE during the course of its Phase 1(a) Clinical Trial has shown the uptake of CLR1404 in both prostate and colorectal cancers; that this data has advanced the potential diagnostic imaging applications of CLR1404; and that the collection and analysis of this data satisfies the intent of Diagnostic Product Milestone No. 4 (Appendix C to the License Agreement).  Therefore, MICHIGAN considers the requirements of Diagnostic Product Milestone No. 4 to have been fulfilled, and LICENSEE shall have no further obligations under the License Agreement with respect thereto.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement in duplicate originals by their duly authorized officers or representatives.

 

 

	FOR CELLECTAR, LLC	 	FOR THE REGENTS OF THE	 
	 	 	 	UNIVERSITY OF MICHIGAN	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	By:	
/s/ William R. Clarke

	 	By:	
/s/ Kenneth J. Nisbet

	 
	 	(authorized representative)	 	 	(authorized representative)	 
	 	 	 	 
	Typed Name: William R. Clarke   	 	Typed Name: Kenneth J. Nisbet	 
	 	 	 	 
	

Title: Chief Executive Officer

	 	

Title: Executive Director UM Technology Transfer

	 
	 	 	 	 
	Date:  June 3, 2010  	 	Date:  April 26, 2010	 

 

  

33LEASE

THIS LEASE is entered into this 5th day of September, 2007, by and between McAllen Properties, LLC, hereinafter referred to as “Landlord” and Cellectar, LLC, hereinafter referred to as “Tenant.”

WITNESSETH:

1.           Leased Premises.  Landlord, for and in consideration of the rents to be paid by Tenant, and the conditions, provisions, reservations and stipulations herein contained, does hereby:

 

(a)           Demise, lease and let unto Tenant approximately 16,100 square feet of floor space (measured from the exterior wall of the building to the centerline of the demising walls) (the “Leased Premises”) of the building located at 3301 Agriculture Drive, Madison, Wisconsin (the “Building”).  (The Building, the land upon which it is situated, and the Common Areas (as defined below) are hereinafter referred to as the “Property.”)  The Property is shown on the Site Layout Plan attached hereto and made a part hereof as Exhibit A.  The Leased Premises are shown on the Floor Plan attached hereto and made a part hereof as Exhibit B.

	
  

	
(b)

	
Grant to Tenant for the term of this Lease a nonexclusive right of its

customers, invitees and employees, to use the driveways, walkways and parking areas located on the Property, for purposes of pedestrian and vehicular ingress, egress and parking.  Landlord warrants that the parking areas will be sufficient to provide no less than thirty (30) parking stalls for use by Tenant’s employees.

2.           Term.                      Tenant shall have and hold the Leased Premises for a three (3) year term commencing from and after the Rent Commencement Date (defined below).  The lease year shall be set by reference to the twelve-month period which commences on the Rent Commencement Date.

3.           Base Rental.                      Tenant shall pay to Landlord a base rent equal to $6.00 per square foot of the Leased Premises, per annum (the “Base Rent”), payable in twelve (12) equal monthly installments of Eight Thousand Fifty Dollars ($8,050) which monthly installments shall be paid in advance commencing on September 15, 2007 (the “Rent Commencement Date”) and continuing on the first day of each and every month thereafter throughout the term.  Thereafter, commencing on the second anniversary of the Rent Commencement Date and continuing on each successive one year anniversary thereafter, the Base Rent shall increase to an amount equal to one hundred three percent (103%) of the previous annual Base Rent.

Rent for any partial calendar month during the term of this Lease shall be pro-rated based on the number of days during such period.  The rent for the month of September, 2007, shall be due on the Rent Commencement Date.

 

  

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4.           Options to Extend.  Tenant shall have the right, at its option, to extend the term of this Lease for seven (7) additional terms of two (2) years each.  To effectively exercise each option, Tenant must give written notice to Landlord at least six (6) months prior to the end of the original term, or the extended term, if applicable, and Tenant shall not be in default of its obligations under this Lease at the time the option is exercised and at the end of the original term or extended term, as applicable.  If Tenant elects to extend this Lease, all the terms and conditions hereof shall be the same during the extended term(s) except for: (a) the Base Rent provided for under paragraph 3 above, which shall be increased at the beginning of each year of an extended term to an amount equal to one hundred three percent (103%) of the then effective Base Rent, and (b) Tenant shall have no option to extend this Lease beyond the seven (7) additional terms provided for in this paragraph 4.

5.           Expandable Square Feet.  Tenant agrees to lease and Landlord agrees to lease to Tenant, commencing on the Rent Commencement Date, the adjacent 3,416 square feet of floor space shown on the Floor Plan attached hereto and made a part hereof as Exhibit B, for an additional $4.00 per square foot. Landlord shall, on the Rent Commencement Date, deliver such adjacent space in a “white-box” condition pursuant to the specifications agreed to by the parties and described in Exhibit C, attached hereto and made a part hereof.  The rental rate for the adjacent space includes the taxes, insurance and CAM charges.  Tenant will be responsible for heating of this space to prevent the sprinkler system from freezing.  In addition, Tenant will pay all utility costs charged to this space.  Tenant may at its sole cost build-out this adjacent space with the written approval of Landlord, which Landlord shall not unreasonably withhold, condition, or delay.  In the event that Tenant (or any subtenant of Tenant) builds-out this adjacent space, Landlord will provide Tenant with a credit toward the cost of such build-out by either promptly paying to Tenant, or directly paying to Tenant’s contractor, the initial Nine Thousand One Hundred Fifty Dollars ($9,150) of Tenant’s (or such subtenant’s) expenses toward such build-out.  All terms and conditions of this Lease, other than provisions regarding the payment of rents and the build-out of such space, shall apply to the lease of this adjacent space as if it were included within the definition of the Leased Premises; provided, however, that once Tenant has built-out this adjacent space and Tenant’s personnel have begun to occupy such space, then the rent for this adjacent space shall be adjusted to the same annual rate per square foot then applicable to the Leased Premises, together with an Allocable Percentage of the Shared Expenses for this adjacent space determined in the same manner as Shared Expenses for the Leased Premises, and all of the foregoing shall be paid in installments due at the same time as the payments of monthly rent and Shared Expenses for the Leased Premises.

6.           Repair and Maintenance.  Tenant agrees to make and pay for all necessary repairs and for redecorating the Leased Premises (other than the Landlord’s Work, defined below) after commencement of the Lease term at its expense and to keep the Leased Premises in as good repair and condition as existed as of completion of the Landlord’s Work, including the maintenance, repair and replacement of all fixtures, heating, air-conditioning, plumbing and electrical equipment installed as part of Landlord’s Work that service only the Leased Premises, excepting only ordinary wear and tear and those items for which Landlord is responsible as hereafter stated, and further provided that any such fixtures or equipment required to be replaced by Tenant may be replaced with functioning and serviceable used fixtures or equipment that have a remaining useful life consistent with fixtures or equipment that are the same age as the fixtures or equipment being replaced.  Landlord shall cause any warranties applicable to these improvements to be transferred to Tenant.  Tenant agrees to keep the Leased Premises free of dirt and rubbish, and will provide for prompt removal thereof.  If Tenant contracts with a rubbish removal company, and Landlord provides a dumpster enclosure, it is Tenant’s responsibility to keep the dumpster within the enclosure at all times.  Tenant shall replace or repair any damaged exterior windows or doors of the Leased Premises with materials of the same size and quality.  In addition, Tenant shall be responsible for upkeep and the cost of correcting any violations of the applicable governmental laws and regulations (including without limitation, the Americans with Disabilities Act) with respect to the Leased Premises.  Landlord shall be responsible for necessary structural repairs and replacement to the roof and foundation of the Building, and for maintenance of those components of the water, plumbing and electrical systems that serve areas of the Building other than the Leased Premises including the Common Areas, excepting those repairs necessitated by damage caused by Tenant or Tenant’s invitees.  Landlord shall also be responsible for all damage caused by the negligent, willful or intentional misconduct of the Landlord or Landlord’s agents.  Landlord shall also perform such maintenance and make such replacements and repairs to the Common Areas (defined below) as are necessary to maintain the same in good, clean, and safe condition.

 

  

- 2 -

  

 

7.           Electricity, Gas, Water and Sewer; Telephone.  Landlord represents and warrants that all “Utilities” to the Building, consisting of electricity, gas, sewer and water, as well as heating and cooling, shall be metered separately from those to the Leased Premises.  Tenant shall pay such of the Utilities as are metered to the Leased Premises to the provider as billed.  Tenant shall be responsible for all telephone charges and telephone expenses incurred in respect to the Leased Premises.

8.           Shared Expenses.  The Leased Premises is part of the Building, and the following sub-paragraphs (a) [taxes], (b) [special assessments], (c) [insurance], and (d) [common area maintenance] (sub-paragraphs (a)-(d) collectively, the “Shared Expenses”) make reference to an “Allocation Percentage” whereby some of the expenses covered by such sub-paragraphs are allocated to the Leased Premises.  The parties agree that the Allocation Percentage shall be determined by the provider of the items being allocated in cases where such provider in the ordinary course determines charges separately for the Leased Premises; in all other cases, the Allocation Percentage shall be determined on a square-foot basis.  The parties agree that the entire Building comprises approximately 45,335 square feet, and the Leased Premises comprises approximately 16,100 square feet.  Therefore, Tenant’s Allocation Percentage for the Leased Premises equals 35.51%.

The total amount of Shared Expenses shall be estimated in advance by Landlord for each calendar year.  Tenant shall timely pay as Additional Rent the then-current assessment of the Shared Expenses allocable to the Leased Premises, as determined by the Allocation Percentage.  For the purposes of calculating the initial year’s assessment, the assessment is $2.00/square foot.  Tenant shall timely pay the then-current assessment until notified of any adjusted assessment.  Such assessment shall be paid by Tenant each and every month in installments of one twelfth (1/12) of the assessment.  Within ninety (90) days of the conclusion of each calendar year, Landlord shall account for the amount of actual Shared Expenses for that calendar year, and any assessments collected by Landlord in excess of the actual amount of the Shared Expenses shall be credited to Tenant; and any shortage assessed to Tenant shall become due within (10) days of notification.  If the term of this Lease commences or ends at any time other than the first day of a calendar year, Tenant shall be responsible for a prorated portion of that calendar year’s estimated Shared Expenses, said pro-ration to be on a daily basis.

 

  

- 3 -

  

 

(a)           Taxes.  Tenant shall each and every month pay, as Additional Rent, an assessment of the estimated real estate taxes levied against the Property which is allocable to Tenant as determined by the Allocation Percentage.  Real estate taxes shall be estimated on the basis of the real estate taxes for the next preceding tax year.

(b)           Special Assessments.  If Landlord receives a municipal special assessment relative to the Property, Tenant shall pay to Landlord that part of the special assessment which is allocable to Tenant according to the Allocation Percentage.  Tenant shall either pay its allocable share of special assessments in full within thirty (30) days of the date of notice from Landlord, or if offered by the assessing authorities, Tenant may, at its option, pay its allocable portion of a special assessment on the installment basis, together with applicable interest (charged by the assessing authority) attributable to said portion, as said installments become due and prior to delinquency, provided that any balance owing of Tenant’s allocable share on the first day of the last month of the Lease term shall then be due and payable in full.

 

(c)           Insurance.  Tenant shall keep in effect, at its sole expense, a comprehensive general liability policy or policies, naming Landlord as an additional insured, covering Tenant’s operations in the Leased Premises and providing coverage for bodily injury and property damage sustained in, or upon the Leased Premises, with a limit of at least One Million Dollars ($1,000,000) per occurrence.  Tenant shall also maintain fire insurance with extended coverage covering all of Tenant’s equipment, fixtures, merchandise, and other property located within the Leased Premises, including the interior decorating installed by Tenant or constituting Tenant’s Work, in an amount equal to one hundred percent (100%) of its replacement value.  Evidence of such insurance shall be provided by Tenant to Landlord prior to Tenant’s occupancy of the Leased Premises, and from time to time thereafter, as Landlord may request.  Landlord shall maintain fire and extended coverage insurance covering the Building, including the improvements to and (if any) equipment in the Leased Premises that remain the property of Landlord upon termination of the Lease, or that would be required to be removed by Tenant, as described on Exhibit E, in an amount equal to one hundred percent (100%) of the replacement value of the Building and such improvements and equipment, with such coverage as it deems desirable.  Any insurance required herein to be maintained by a party shall name the other party as an additional insured, as their respective interests may appear.  Tenant agrees to pay, as Additional Rent, its allocable portion, according to the Allocation Percentage, of any premium rates of insurance carried by Landlord on the Building.

Each party hereby releases the other from liability it may have on account of any loss to the Leased Premises or Property or contents of either due to fire or any peril included in the coverage of any applicable fire and extended coverage and material damage insurance, however caused, including such losses as may be due to the negligence of the other party, its agents or employees, but only to the extent of any amount recovered by reason of such insurance, and each party hereby waives any right of subrogation which might otherwise exist in or accrue to such party on account thereof, provided that such release of liability and waiver of the right of subrogation shall not be operative in any case where the effect thereof is to invalidate such insurance coverage under applicable state law (or increase the cost thereof, unless the other party reimburses the insured for any cost increase, or in the case of a cost increase to Landlord, the Tenant’s Allocation Percentage of the cost increase).  If either party fails to maintain in force any insurance required by this Lease to be carried by it, then for purposes of this waiver of subrogation it shall be deemed to have been fully insured and to have recovered the entire amount of its loss.  All property insurance required to be maintained under this sub-paragraph shall include a waiver of subrogation clause.

 

  

- 4 -

  

 

(d)           Common Area Maintenance and General Administrative Expense.  Tenant shall pay to Landlord, as Additional Rent, its allocable portion, as determined by the Allocation Percentage, of all costs and expenses incurred by Landlord in operating and maintaining the “Common Areas,” which term shall include the parking areas, driveways, sidewalks, walkways, and all other areas and facilities which are available for use by Property occupants, their customers, invitees and employees.  Such costs and expenses shall include, but not be limited to snow removal, landscaping, janitorial service, parking lot and walkway lighting, security patrol services, and fire protection system maintenance with respect to the Common Areas.  Such expenses shall also include the cost of keeping all portions of the Common Areas in good repair and condition, excluding those structural repairs which are described in this Lease as Landlord’s specific responsibility.

Tenant further agrees to pay to Landlord, as Additional Rent, a General Administrative Expense equal to five percent (5%) of Tenant’s proportionate share of the foregoing Common Area Maintenance costs.

Notwithstanding the foregoing, the following expenses shall not be reimbursable by Tenant to Landlord in connection with Landlord’s maintenance of the Common Areas:  (i) costs of capital improvements to the Leased Premises or the Building or Property;  (ii) any cost or expenditure (or portion thereof) for which Landlord is directly reimbursed, whether by insurance proceeds (or which would have been paid if Landlord carried the insurance required herein, or for which Landlord would have been paid but for Landlord’s failure to file a claim against the insurance required herein to be carried by Landlord) or otherwise; (iii) costs of correcting any violations of applicable governmental laws and regulations (including, without limitation, the Americans with Disabilities Act) with respect to the Building other than the Leased Premises; (iv) any costs incurred due to the negligent acts or omissions or willful or intentional misconduct of the Landlord, its agents, or their respective employees; (v) any amounts paid to Landlord or to subsidiaries or affiliates of Landlord for goods supplied to the Property or services in the Property to the extent the same exceed the costs of such goods or services rendered by unaffiliated third parties on a competitive basis; (vi) expenditures for repairs or maintenance which are covered by warranties, guarantees or service contracts; (vii) structural repairs and replacements of the Building that are in the nature of capital improvements (including the roof, the foundation, and the exterior of the Building); or (viii) any items of expense commonly known and understood to be carrying charges.

 

  

- 5 -

  

 

9.            Alterations.

(a)           Tenant’s Work.  Tenant shall, at its own cost, provide the build-out of the Leased Premises beyond the Landlord’s Work (“Tenant’s Work”).  Tenant shall provide Landlord with plans for the alterations, additions and improvements that constitute Tenant’s Work and obtain Landlord’s approval thereof, which approval shall not be unreasonably withheld, conditioned or delayed, prior to commencing the construction and/or installation of such alterations, additions and improvements.

(b)           Landlord’s Work.  Landlord shall be responsible for constructing and finishing the Leased Premises so as to put the Leased Premises in a “white-box” condition pursuant to the specifications agreed to by the parties and described in Exhibit D, attached hereto and made a part hereof (“Landlord’s Work”).  Landlord’s Work shall be completed on or before August 31, 2007.  In addition, Landlord shall provide Tenant with a credit toward the cost of Tenant’s Work by either promptly reimbursing Tenant, or directly paying to Tenant’s contractor, the initial Forty Six Thousand One Hundred Seventy Dollars ($46,170) of Tenant’s expenses that are part of Tenant’s Work.

(c)           Additional Improvements.  Tenant may, after the Rent Commencement Date and at its own cost, make additional improvements to or remodel the existing improvements of the Leased Premises, provided that Landlord gives written consent to such work, which consent Landlord shall not unreasonably withhold, condition or delay.

10.           Roof Rights.  At no cost to Tenant, Tenant shall have the right to use the roof for installation of its own communications devices.  Tenant, at Tenant’s sole cost, shall repair any damage caused by any roof penetration at the installation or removal of such devices.  Tenant shall obtain Landlord’s reasonable approval in advance of such installation of any communication devices.

11.           Removal of Improvements.  All trade fixtures (including built-in fixtures that are removable), equipment, furniture and furnishings installed in or brought upon the Leased Premises by Tenant (including, without limitation, any radioactive materials isolator installed by Tenant), whether or not affixed to the Property, and paid for by Tenant, shall remain the property of Tenant and may be removed by Tenant upon expiration of this Lease or its earlier termination provided that Tenant shall repair any and all damage caused by such removal.  Any trade fixtures, equipment, furniture and furnishings not so removed at or prior to the expiration or earlier termination of this Lease shall become the property of Landlord unless Landlord elects to require their removal, in which case Tenant shall promptly remove such items and restore the Leased Premises to its prior condition.  Within a one month period after the expiration of this Lease or its earlier termination, Tenant shall, at Tenant’s cost, remove all alterations, additions, and improvements to the Leased Premises described on Exhibit E and shall further install or cause to be retained in the Leased Premises those items of improvements and equipment described on Exhibit E, provided, however, that Tenant’s cost, at commercially reasonable rates,  to provide and have a contractor perform the foregoing shall not exceed Fifty-five Thousand Dollars ($55,000) (the “Capped Amount”), and to the extent that the cost to perform the foregoing exceeds the Capped Amount, and Landlord desires that work at a cost beyond the Capped Amount be performed, then Landlord shall pay any additional amounts.  In the event that Tenant continues to occupy the Leased Premises for the purpose of removing alterations, improvements and additions and installing improvements and equipment as provided for in the preceding sentence, Tenant shall be deemed to be occupying the Leased Premises under a month-to-month tenancy (and not as a hold-over Tenant under paragraph 24 of this Lease) for such additional period for the limited purpose of effecting such removal and installation, and shall continue to have all of the obligations under this Lease, including payment of rent, during such period.  For the purpose of securing Tenant’s performance of its obligation to remove alterations, improvements and additions and to install improvements and equipment as provided for in this paragraph, Tenant shall, by the Rent Commencement Date, either deposit the Capped Amount into an escrow account to be administered pursuant to an escrow agreement acceptable to Landlord and Tenant or provide other collateral reasonably acceptable to Landlord in the form of a cash deposit, a letter of credit or a cash equivalent of the Capped Amount.

 

  

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12.           Space Planning.  Landlord shall provide, at its cost and expense, the basic space planning services set forth on Exhibit F.  If Tenant retains its own space planner, Tenant will be responsible for the expense of such services.

13.           Signage.  On or before December 1, 2007, Landlord shall provide shared exterior monument signage.  Tenant agrees to pay all costs associated with the application, replacement and upkeep of Tenant’s business name on the shared exterior monument signage.  The exterior monument signage will be subject to Landlord’s reasonable approval.  Tenant agrees that no other signs or advertising will be attached to or erected upon the Building or Property without City of Madison approval and the written approval of Landlord, which approval will not unreasonably be withheld, conditioned or delayed.

14.           Keyed Lock.  Upon the Rent Commencement Date, Landlord shall provide a newly keyed lock for the Leased Premises.  This lock will be set up for the Landlord’s system and must not be changed.  Should Tenant require a change to the keying system, Landlord will arrange to make such change, at Tenant’s own expense.

15.           Prior Access.  At Tenant’s own risk, Landlord shall provide Tenant with prior access to the Leased Premises during construction of Landlord’s Work for installation of those portions of Tenant’s Work that can be made or completed prior to or concurrently with completion of Landlord’s Work, provided that Tenant’s access shall not interfere with timely completion of Landlord’s Work.

16.           Permeation of Offensive Odors and Liquids.  Tenant shall maintain the Leased Premises in such a manner that odors of an offensive nature and/or liquids from the Leased Premises will not, in any manner, permeate to other areas of the Building or Property.  Tenant shall at its own expense install and maintain exhaust, filtration, or other air management systems as are necessary to prevent permeation of offensive odors and/or liquids from the Leased Premises.

17.           Noise.  Tenant shall not cause upon the Leased Premises, unreasonable levels of noise which may disturb neighbors or other tenants, taking into consideration the commercial nature of the Building and the surrounding area.  Further, Tenant agrees to comply with all City of Madison noise level ordinances.

 

  

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18.           Hazardous Materials.  Tenant agrees and covenants that any treatment, storage, or disposal of Environmentally Hazardous Materials by Tenant or its agents on or about the Leased Premises shall fully comply with all laws, regulations, ordinances, and requirements concerning Environmentally Hazardous Materials.  For the Purposes hereof, the term “Environmentally Hazardous Materials” shall include, without limitation, any material, waste or substance which is included within the definitions of “hazardous substances,” “hazardous materials,” “toxic substances,” or “hazardous wastes” in or pursuant to any Environmental Laws, or subject to regulation under any Environmental Laws.  The term “Environmental Laws” shall include all Laws pertaining to Hazardous Materials or the environment, including, but not limited to each of the following, as enacted as of the date hereof or as hereafter amended:  the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. §9601 et seq.; the Resource Conservation and Recovery Act of 1976, 42 U.S.C. §9601 et seq.; the Toxic Substance Control Act, 15 U.S.C. §2601 et seq.; the Water Pollution Control Act (also known as the Clean Water Act), 33 U.S.C. §1251 et seq.; the Clean Air Act, 42 U.S.C. §7401 et seq.; and the Hazardous Materials Transportation Act of 1994, 49 U.S.C. §5101 et seq.

Landlord shall indemnify Tenant from any claims, liabilities or damages arising out of Environmentally Hazardous Materials existing in, on, around or below the Leased Premises, Building and Property, except for claims, liabilities or damages arising out of Environmentally Hazardous Materials introduced by Tenant.  Tenant shall indemnify Landlord from any claims arising from Tenant’s use of such materials that is not in compliance with all governmental codes and restrictions.  Tenant shall also provide for insurance or other method to cover the cost of any cleanup of radiation or other hazardous material upon termination of the Lease.

18.5           Radioactive Materials.  Landlord acknowledges that Tenant will use radioactive materials in connection with its occupancy and use of the Leased Premises.  Tenant agrees that:

(a)           any radioactive materials (other than sealed calibration sources of radioactive materials used to calibrate instruments) used or brought into the Leased Premises by Tenant shall have a half-life of seventy-five (75) days or less;

(b)           Tenant shall confine all manufacturing activities involving radioactive materials to a radioactive materials isolator that it shall install and maintain within the Leased Premises;

(c)           Tenant shall comply with all applicable laws and regulations (the “Regulations”) of the State of Wisconsin that would govern Tenant’s possession, use and disposal of radioactive materials on the Leased Premises, and shall obtain all licensing required in connection therewith;

(d)           Tenant shall make available to Landlord, prior to the Rent Commencement Date, a copy of its radiation plan required by the Regulations; and Landlord understands and agrees that such plan shall only be available for inspection (but not copying) by it, and Landlord further agrees that it shall keep the contents of the plan confidential;

 

  

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(e)           Tenant shall make available to Landlord upon Landlord’s request, but no more frequently than once every six (6) months, copies of all reports, surveys, monitoring results and other information that Tenant is required to maintain in its possession or deliver to any regulatory agency pursuant to the Regulations; and Landlord understands and agrees that such information shall only be available for inspection (but not copying) by it, and Landlord further agrees that it shall keep all such information made available to it confidential, except to the extent that disclosure of such information is required in connection with the enforcement of any provisions of this Lease; and

(f)           Prior to the expiration of the term of this Lease, or upon any termination of this Lease by Landlord as a result of a default by Tenant, Tenant shall decommission the Leased Premises, in accordance with the Regulations.  If Tenant is unable to complete the decommissioning process prior to expiration of the term of the Lease, Tenant shall be deemed to be occupying the Leased Premises under a month-to-month tenancy (and not as a hold-over Tenant under paragraph 24 of this Lease) for such additional time period as may be necessary to complete the process, and shall continue to have all of the obligations under this Lease, including payment of rent, during such period.

19.           Use of Premises.  Tenant covenants and agrees that it will comply with all lawful requirements of any governmental health or safety agency or authority, police and fire departments and all other governmental authorities, respecting the use of the Leased Premises and the business activities conducted therein.  Tenant agrees that it will not permit anything to be done, used or suffered in or upon the Leased Premises which shall invalidate any insurance or materially increase the premium of any insurance carried by Landlord on the Building.  In the event that Landlord’s premiums for any insurance coverage on the Building are increased over and above the normal rates based on the location and type of the Building solely by reason of Tenant’s operations, Tenant agrees to pay the full amount of such increases(s), in addition to any other payments required herein.

20.           Landlord’s Right to View Premises and Install “For Sale” Signs.  Landlord has the right to enter the Leased Premises at any reasonable time upon reasonable advance notice to inspect the condition of the Leased Premises and/or make repairs, or to exhibit the Leased Premises to prospective purchasers, mortgagors, or lessees, provided that Landlord does not unreasonably interfere with the orderly business of Tenant.  Landlord may during the last six (6) months of the Lease term (unless Tenant has exercised its option to extend) place on the Property a sign advertising the Leased Premises for sale or for lease.

21.           Unavoidable Delays.  Neither Landlord nor Tenant shall be liable for any delay in performance of any covenant or term of this Lease, except the payment of rent or any other sum to be paid hereunder, caused by strikes, riots, acts of God, national emergencies, acts of a public enemy, civil insurrection, difficulty in obtaining materials, or any other causes beyond its control.

22.           Condition Upon Termination.  Upon expiration or termination of this Lease, for any reason, Tenant shall peacefully return the Leased Premises to Landlord in the same condition as the Leased Premises was in upon completion of the Landlord’s Work and Tenant’s Work, reasonable wear and tear excepted, provided that the removal of any improvements by Tenant shall be governed by the provisions of paragraph 11 of this Lease.  In the event Tenant fails to return the Leased Premises to the required condition upon termination of this Lease, Tenant shall fully indemnify and hold harmless Landlord from all losses, costs, damages, and expenses incurred or suffered by Landlord as a result of any undertaking by Landlord to return the Leased Premises to the required condition.

 

  

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23.           Zoning and Regulatory Compliance.  Landlord warrants to Tenant that the property on which the Leased Premises is located is zoned for Tenant’s use as administrative offices and a laboratory and manufacturing facility that involves the use of radioactive materials.  Landlord further warrants that at the time of the Rent Commencement Date, the Building and its current and anticipated use is in compliance with all applicable governmental laws and regulations (including without limitation, the Americans with Disabilities Act).

24.           Holdover.  If Tenant remains in possession of the Leased Premises after the termination of this Lease, Tenant shall be deemed to be occupying the Leased Premises as a lessee on a month-to-month basis.  Except as otherwise provided in this Lease, (a) the month-to-month tenancy arising under this paragraph shall be on the same terms and conditions as those described in this Lease except that the Base Rent to be paid by Tenant to Landlord shall be One Hundred Twenty-five percent (125%) of the monthly Base Rent payable by Tenant for the last month of the term of this Lease, and (b) nothing in this paragraph shall operate to prevent Landlord from removing Tenant from the Leased Premises upon expiration of this Lease.

25.           Security Deposit.  Tenant shall deposit with Landlord upon execution of this Lease a Security Deposit equal to the first month’s Base Rent and estimated Shared Expenses ($11,872), to be held as security for the performance by Tenant of its obligations under this Lease.  If Tenant defaults in the performance of any of its obligations under this Lease (subject to any applicable notice and cure periods), Landlord may, without prejudice to any other remedy, use the Security Deposit to the extent necessary to make good any arrearages in rent and any other sum for which Tenant is in default and any other damage, injury, expense, or liability caused to Landlord by the default.  Landlord shall return the remaining balance of the Security Deposit to Tenant within sixty (60) days after the later to occur of (1) the termination or expiration of this Lease or (2) surrender by Tenant of possession of the Leased Premises to Landlord in accordance with this Lease.

26.           Bankruptcy or Default.  Tenant agrees that:

(a)           if an execution or other process shall be levied against the interest of the Tenant in this Lease, or if a petition in bankruptcy is filed by or against Tenant in any court of competent jurisdiction (and such petition is not dismissed or discharged within ninety (90) days after the date it was filed), or if Tenant makes an assignment for the benefit of creditors, or

(b)           if Tenant shall fail to pay the rent, or any other amounts due from Tenant to Landlord under this Lease, at the times above stated, or shall use the Leased Premises or any part thereof contrary to the conditions hereof or shall willfully or maliciously do injury to the Leased Premises, and if Tenant shall fail to cure such default, breach or violation within ten (10) days in the case of a monetary default or thirty (30) days in the case of any other default, breach or violation (or such longer period of time as shall be reasonably required to cure a non-monetary default provided Tenant is diligently pursuing such cure) after receiving written notice thereof from Landlord,

 

  

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Landlord shall have the right, at its option, to re-enter the Leased Premises, but without prejudice to any remedies which Landlord might otherwise have for arrears of rent or any breach of Tenant’s covenants herein contained,  and Landlord may, as agent for Tenant re-let the Leased Premises and hold Tenant liable for the difference between rents and payments that would have been payable during the remainder of the term of this Lease, excluding unexercised extension terms, less any replacement rent Landlord may have received as a result of re-letting the Leased Premises.  No re-entry or taking possession of the Leased Premises by Landlord shall be construed as an election on Landlord’s part to terminate this Lease unless a written notice of such intention be given to Tenant or unless the termination of this Lease be decreed by a court of competent jurisdiction.  Landlord agrees that if Tenant defaults, Landlord shall use good faith, reasonable efforts to mitigate its damages arising out of such default.

27.           Legal Costs.  If any action or proceeding is brought by Landlord or Tenant to interpret the provisions hereof or to enforce either party’s respective rights under this Lease, the prevailing party shall be entitled to recover from the unsuccessful party therein, in addition to all other remedies, all costs incurred by the prevailing party in such action or proceeding, including reasonable attorneys’ fees.

28.           Delinquent Amounts to Bear Interest.  Any rent or such other sums, if any, required to be paid by Tenant to Landlord, or by Landlord to Tenant, pursuant to the terms of this Lease, which are not paid within five (5) days of their becoming due and owing, shall bear interest at the rate of eighteen percent (18%) per annum commencing on the fifth day after such amount is due and continuing until such amount is paid.  The payment of such interest shall not excuse or cure any default by either party under this Lease.

29.           Subordination.  Tenant agrees to subordinate its leasehold interest to the lien of any mortgage Landlord desires to grant in respect to the Leased Premises or the Building, provided that each mortgagee shall agree in writing at the time such subordination is given that so long as Tenant pays the Base Rent and its other financial obligations under this Lease and otherwise performs its duties and obligations under this Lease, or shall rectify any failure within the time and the manner provided in this Lease, then Tenant shall be entitled to the full use and enjoyment of the Leased Premises pursuant to the terms and conditions of this Lease for the initial term of this Lease and each renewal term, as applicable.  Tenant shall, upon request by Landlord, execute, acknowledge and deliver to Landlord’s mortgagee any instrument which may be necessary to effect Tenant’s subordination in accordance and upon the terms provided herein.

30.           Casualty.  In the event that the Building is damaged by fire or other casualty, the same shall be restored by Landlord, at its own expense, with reasonable dispatch.  In the event the cost of repairs and restoration exceeds fifty percent (50%) of the full insurable value of the Leased Premises, then either party may terminate this Lease as of the date of destruction or damage by providing written notice to the other party within fifteen (15) days after the date of destruction or damage.  Upon the giving of such notice, this Lease shall be terminated and cancelled and the Leased Premises surrendered by Tenant, and any advance rentals which may have been paid by Tenant shall be re-paid to Tenant from and after the date of such damage.  If this Lease is not so terminated, Landlord shall restore the structure and exterior of the Building and the Leased Premises and the interior of the Leased Premises (to the extent of the additions, alterations and improvements that would be required to be surrendered to Landlord upon termination of this Lease or that would be required to be removed by Tenant, as described on Exhibit E), at its own expense, within a reasonable time after such destruction or damage.  All rents payable to Landlord shall abate during the period of any restoration in proportion to the area of the Leased Premises rendered unusable by reason of such casualty.  In the event that the damage or loss to the Leased Premises is a result of Tenant’s negligence, Tenant shall be responsible for the deductible portion of any insurance proceeds and the rent hereunder shall not abate.

 

  

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In the event that any restoration of the Leased Premises required to be performed by Landlord under this paragraph 30 is not complete within one hundred twenty (120) days from the date of destruction or damage, Tenant may, at its option and upon ten (10) days’ written notice to Landlord, terminate this Lease.  Landlord shall not be liable or responsible, and the one hundred twenty (120)-day period mentioned in the preceding sentence shall be extended, for any delays in repairing or rebuilding due to war, strikes, labor unrest or activities, riots, government action, acts of God, inclement weather or any other cause beyond Landlord’s control.

31.           Condemnation.  In the event the Leased Premises or any part thereof or any portion of the Property shall be taken or condemned for public use by public authorities or conveyed in lieu thereof, so that after such taking, condemnation or conveyance, Tenant’s operations shall be substantially impaired, or, if the Leased Premises shall be structurally altered and cannot be rebuilt by Landlord within one hundred twenty (120) days from the date of the taking, condemnation or conveyance, then Tenant shall have the right to terminate this Lease upon ten (10) days’ written notice, which notice must be given within sixty (60) days after such taking, condemnation or conveyance in case of substantial impairment of Tenant’s operations.  In the event any part of the Leased Premises shall be taken or condemned for public use by public authorities or conveyed in lieu thereof, but after such taking, condemnation or conveyance, Tenant’s operations are not substantially impaired, then this Lease shall continue in full force and effect, except that Tenant shall be entitled to equitable adjustment of rent to reflect the reduction of the Leased Premises due to such taking, condemnation or conveyance.  Any award for the Leased Premises shall belong to Landlord except Tenant shall not be precluded from receiving a separate leasehold award for the value of the leasehold interest, its leasehold improvements, fixtures and relocation expenses.

32.           Hold Harmless.  Landlord agrees to and hereby does indemnify and hold harmless Tenant from and against any loss, damage or liability occasioned by or resulting from any default hereunder, or any tortious or negligent act on the part of Landlord, its agents or employees on or about the Property.  Tenant agrees to and hereby does indemnify and hold harmless Landlord from and against any loss, damage or liability occasioned by or resulting from any default hereunder, or any tortious or negligent act on the part of Tenant, its agents or employees on or about the Property.  These provisions shall have no effect to the extent the indemnitee is reimbursed or indemnified for such loss, damage or liability by an insurance recovery, or to the extent the indemnitee would have been reimbursed or indemnified for such loss, damage or liability by an insurance recovery if the indemnitee had maintained in place such insurance coverage as is required by this Lease.

 

  

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33.           Right of Tenant to Quiet Enjoyment.  Landlord covenants that Tenant, upon performing all of the covenants and observing all of the conditions herein contained, shall and may peacefully and quietly have, hold and enjoy the Leased Premises during the term hereof and any extended term.  Landlord represents and warrants that, as of the date hereof, Landlord holds title to the Property and the Leased Premises in fee simple absolute, free and clear of any lien or encumbrance whatsoever.

34.           Notice.  Whenever notice is permitted or required to be given hereunder by any party to any other party, the same shall be in writing and shall be deemed given and received when delivered personally or when deposited postage prepaid in the United States mails, Certified Mail, Return Receipt requested, addressed to the following:

 

	
IF TO LANDLORD:

	  
	
Name

	
McAllen Properties, LLC

	
Address

	
2695 Gaston Rd.

	
Address

	
Cottage Grove, WI 53527

	
Phone

	
608 345-4470

	
Fax

	
608 839-8501

	
E-mail

	
kerry@mcallenproperties.com

	
Fed. ID

	
39-1948522

	  	  
	
IF TO TENANT:

	  
	
Name

	
Cellectar, LLC

	
Address

	
545 Science Drive

	
Address

	
Madison, WI  53711

	
Phone

	
608 441-8120

	
Fax

	
608 441-8121

	
E-mail

	
bclarke@cellectar.com

	
Fed. ID

	
39-1997327

 

or such other name and address as Landlord or Tenant may hereafter notify the other in writing.

35.           Assignment.  Tenant shall not, either voluntarily or by operation of law, sell, assign, hypothecate or transfer this Lease or sublet the Leased Premises or any part thereof or permit the Leased Premises or any portion thereof to be used or occupied by any other person, firm or corporation, without first obtaining the written consent of Landlord, in each instance, which consent shall not unreasonably be withheld, conditioned or delayed.  In the event such consent is given, Tenant shall remain liable to Landlord for the payment of rent and the performance of all other obligations of Tenant hereunder for the remainder of the term of this Lease, but not including any renewal term.  Tenant shall have the right, with notification to Landlord, to sublease any portion of the premises to an Affiliate under the same terms of this Lease and any such sublease shall not relieve Tenant from any liability of this Lease.

 

  

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Any transfer of this Lease by merger, reorganization, recapitalization, consolidation, acquisition of Tenant or Tenant’s assets by another entity, conversion of Tenant to a corporate entity form, liquidation, or any change of the ownership of its outstanding voting equity, shall constitute an assignment for the purposes of the foregoing paragraph unless the collective holders of Tenant’s voting equity prior to such event control at least a majority of the voting equity of Tenant or its successor after such event.  Landlord’s consent shall not unreasonably be withheld, conditioned or delayed following any such event that constitutes an assignment, provided the net worth and creditworthiness of the surviving successor entity shall, in Landlord’s reasonable opinion, be at least as favorable as Tenant’s net worth and creditworthiness at the time of the proposed assignment and the nature of the surviving successor entity’s business history, conditions and prospects, type of business and the compatibility of all the foregoing with the other lessees shall be reasonably acceptable to Landlord.

So long as no default shall exist on the part of Tenant, any net rentals collected by Tenant by virtue of an assignment or subletting consented to by Landlord over and above the rentals due from Tenant under the provisions of this Lease shall be shared equally between Tenant and Landlord.

36.           Estoppel Certificates.  At any time from time to time, Landlord or Tenant within twenty (20) days of the date specified in a request by either party, shall execute, acknowledge and deliver to the requesting entity, or to any other person or entity specified by the other, a certificate that this Lease is in full force and effect; that this Lease has not been amended or modified in any way, or identifying any such amendments or modifications; that there are then existing no known set-offs or defenses against the enforcement of any terms or conditions contained herein, or if such set-offs or defenses are known, specifying the same; that there are no existing defaults hereunder to the knowledge of the party executing such certificate, or specifying the nature of known defaults, if any; and the date to which the rental and other charges hereunder have been paid, and the amounts of each.

37.           Governing Law.  This Lease shall be governed by and construed in accordance with the laws of the State of Wisconsin.

38.           Assigns.  This Lease shall bind and inure to the benefit of the parties hereto, their respective heirs, representatives and assigns.

39.           No Waiver.  Failure of either party to exercise its rights in connection with any breach or violation of any term, covenant or condition herein stated shall not be deemed to be a waiver of such term, covenant or condition or any subsequent breach of the same or any other term, covenant or condition contained in this Lease.

 

  

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IN WITNESS WHEREOF, the parties hereto set their hands and seals on the day and year first above written.

 

	 	 	 	LANDLORD:	 
	 	 	 	 	 	 
	WITNESS:	 	McALLEN PROPERTIES, LLC	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	By: 	
/s/ Jamey Weichert  

	 	By:	
/s/ Kerry McAllen

	 
	Print:	
Jamey Weichert

	 	Print:	Kerry McAllen	 
	 	
 

	 	Title: 	
Member

	 

 

 

	 	 	 	TENANT:	 
	 	 	 	 	 	 
	WITNESS:	 	CELLECTAR, LLC	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	By: 	
/s/ Jamey Weichert  

	 	By:	
/s/ William R. Clarke 

	 
	Print:	
Jamey Weichert

	 	Print:	William R. Clarke	 
	 	
 

	 	Title: 	
Chief Executive Officer

	 

 

 

- 15 -

 

 

EXHIBIT A

See attached.

 

  

- 16 -

  

 

 

  

- 17 -

  

 

EXHIBIT B

See attached.

 

  

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EXHIBIT C

“White-Box” Specifications for the Leased Premises

1.           5” thick concrete slab.

2.           Insulation, vapor barrier, and fire-taped drywall on exterior walls and demising walls.

3.           All utility lines necessary to provide services to the Leased Premises.

 

  

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EXHIBIT D

“White-Box Specifications for the Adjacent Space”

1.           One 200 amp 120/208 volt electrical panel with a 75 KVA transformer.

2.           5” thick concrete slab.

3.           Six (6) 400 watt high-bay light fixtures (Tenant will receive a credit of $350 each for lights that are not wanted).

4.           One gas-fired unit heater with associated gas piping (metered from Tenant’s main space gas meter).

5.           Insulation, vapor barrier, and fire-taped drywall on exterior walls and demising walls.

6.           Two ceiling fans with speed controls.

7.           10 duplex receptacles around perimeter walls.

8.           All utility lines necessary to provide services to the Adjacent Space.

 

  

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EXHIBIT E

Alteration, Additions and Improvements

Tenant shall remove all interior walls in the cross-hatched area shown on Exhibit E-1 and the surface of all damaged concrete flooring shown in such cross-hatched area and shall replace all such concrete flooring that is removed with new concrete flooring of equivalent thickness to the flooring that was removed.

In addition, Tenant shall install the following in such cross-hatched area:

1.           One 400 watt high-bay light fixture per 600 square feet of space in the Leased Premises.

2.           One gas-fired unit heater.

 

  

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EXHIBIT E-1

See attached.

 

  

- 23 -

  

 

 

  

- 24 -

  

 

EXHIBIT F

Planning Services

Landlord shall provide Tenant with basic office/warehouse space planning services consisting of ten (10) hours of architectural/engineering drafting time at $85.00 per hour.

 

  

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LEASE EXTENSION AGREEMENT

This Agreement is entered into between McAllen Properties, LLC (“Landlord”) and Cellectar, Inc., formerly Cellectar, LLC (“Tenant”).

WHEREAS, Landlord and Tenant are parties to a certain Lease entered into as of September 5, 2007 (the “Lease”) for the premises described therein; and

WHEREAS, Tenant holds a Certificate of Deposit in the original principal amount of Fifty-Five Thousand Dollars ($55,000) (the “CD”), acquired for the purpose of securing Tenant’s performance of certain work upon termination of the Lease, as provided for in paragraph 11 of the Lease; and

WHEREAS, Tenant has not exercised its option to extend the term of the Lease, and but for this Agreement, the Lease would otherwise expire on September 14, 2010;

NOW, THEREFORE, for good and valuable consideration, the parties agree as follows:

1.           Capitalized terms used in this Agreement shall, unless otherwise defined herein, have the respective meanings ascribed to them in the Lease.

2.           The term of the Lease shall be extended through December 31, 2010.  All of the terms and provisions of the Lease shall apply throughout such extended term, except as otherwise set forth herein.

3.           Each monthly installment of the total of the Base Rent, the additional rent for the “expandable square feet” pursuant to paragraph 5 of the Lease, and the Shared Expenses (collectively, the “Rent”) for the period from June 1, 2010 through December 31, 2010 shall be one-half of the amount of the monthly installment of Rent in effect for May, 2010.

4.           During the extended term of the Lease, Tenant may terminate the Lease as of the end of any calendar month upon at least ten (10) days advance written notice.

5.           Provided that Tenant has not terminated the Lease as provided for in paragraph 4, above, and further provided that Tenant is not then in default under the Lease, as extended and amended hereby, Tenant may elect to extend the term of the Lease for the remainder of the initial two-year extended term that would have been in effect had Tenant timely exercised its initial right to extend the term of the Lease.  Tenant shall make such an election by giving Landlord written notice thereof not later than December 15, 2010.  At the time that Tenant makes such an election and as a condition thereof, Tenant will be required to pay to Landlord the difference between (a) the aggregate amount of Rent that would have been payable for the period from June 1, 2010 through December 31, 2010 had Tenant timely exercised its initial right to extend the term of the Lease and had this Agreement not been in effect and (b) the amount of Rent actually paid by Tenant for that same period, together with interest at the rate of 10% per annum on the accruing amount of such difference over such period.  If Tenant makes the election set forth in this paragraph to further extend the term of the Lease for the balance of the initial two-year extended term, then the amount of Rent for the period from January 1, 2011 and thereafter shall be as set forth in the Lease, calculated without regard to the effect of this Agreement, and all other terms and provisions of the Lease shall continue in full force and effect, without regard to the effect of this Agreement.

 

  

- 26 -

  

 

6.           In the event that Tenant either terminates the Lease as provided for in paragraph 4, above, or fails to extend the term of the Lease as provided for in paragraph 5, above, then (a) Tenant shall deliver to Landlord the CD, together with such duly executed documents of assignment as are necessary to transfer to Landlord the CD and all of Tenant’s rights thereunder, and upon such delivery, Tenant shall be relieved of all of its obligations to perform the removal of the alterations, improvements and additions and the installation of the improvements and equipment to the Leased Premises, as provided for in paragraph 11 of the Lease, and (b) Landlord may retain as additional rent any remaining balance of the security deposit provided for in paragraph 25 of the Lease, after reducing the same for any rent arrearages or other damages resulting from a default by Tenant.

7.           Tenant’s obligation to “decommission” the Leased Premises in accordance with sub-paragraph 18.5(f) of the Lease upon any termination or expiration of the Lease shall continue to apply to any termination or expiration occurring on or before December 31, 2010, and Tenant shall in good faith attempt to comply with such obligation prior to the effective date of any such termination or expiration; provided, however, that in the event of a termination or expiration of the Lease on or before December 31, 2010, if Tenant cannot complete the decommissioning process prior to the effective date of such termination or expiration of the Lease, Tenant’s occupancy of the Leased Premises solely for the purpose of completing the decommissioning process shall not give rise to a month-to-month tenancy or any further obligations for the payment of rent to Landlord.

8.           In the event that Tenant either terminates the Lease as provided for in paragraph 4, above, or fails to extend the term of the Lease as provided for in paragraph 5, above, then that portion of paragraph 8 of the Lease that provides for a reconciliation, within ninety (90) days of the end of each calendar year, of the actual Shared Expenses against the estimated Shared Expenses, and a payment from or to Tenant for the difference, shall not be effective for the 2010 calendar year.

Executed August 4, 2010, but effective as of June 1, 2010.

 

	 	McAllen Properties, LLC	 
	 	 	 	 
	
 

	
By: 

	/s/ Kerry McAllen	 
	 	 	Kerry McAllen, Member	 
	 	 	 	 
	 	 	 	 
	 	Cellectar, Inc.	 
	 	 	 	 
	 	By:	/s/ William R. Clarke	 
	 	 	William R. Clarke, Chief Executive Officer	 

 

  

- 27 -

  

 

AMENDMENT TO LEASE EXTENSION AGREEMENT

This Agreement is entered into between McAllen Properties, LLC (“Landlord”) and Cellectar, Inc. (“Tenant”).

WHEREAS, Landlord and Tenant are parties to a certain Lease entered into as of September 5, 2007 (the “Lease”) for the premises described therein and a certain Lease Extension Agreement (the “Extension Agreement”) entered into as of June 1, 2010; and

WHEREAS, Landlord and Tenant desire to amend the Extension Agreement as provided herein;

NOW, THEREFORE, for good and valuable consideration, the parties agree as follows:

1.           Paragraph 2 of the Extension Agreement shall be amended as follows:

The reference to December 31, 2010 therein shall be changed to March 31, 2011.

2.           Paragraph 3 of the Extension Agreement shall be amended as follows:

The reference to December 31, 2010 therein shall be changed to March 31, 2011.

3.           Paragraph 5 of the Extension Agreement shall be amended as follows:

The reference to December 15, 2010 in the second sentence thereof shall be changed to March 15, 2011; the reference to December 31, 2010 in the third sentence thereof shall be changed to March 31, 2011; and the reference to January 1, 2011 in the last sentence thereof shall be changed to April 1, 2011.

4.           Paragraph 7 of the Extension Agreement shall be amended as follows:

The two references to December 31, 2010 therein shall be changed to March 31, 2011.

5.           Paragraph 8 of the Extension Agreement shall be amended as follows:

The reference to the 2010 calendar year therein shall be changed to the 2010 and 2011 calendar years.

6.           All terms and provisions of the Extension Agreement that are not amended as provided herein shall continue in full force and effect.

7.           This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same document.  Any counterpart may be delivered by facsimile or other form of electronic transmission and the delivery of a copy or digital image of an executed original or counterpart of this Agreement shall have the same force and effect as the delivery of an executed original.

  

- 28 -

  

 

Dated as of December 13, 2010.

 

	 	McAllen Properties, LLC	 
	 	 	 	 
	
 

	
By: 

	/s/ Kerry McAllen	 
	 	 	Kerry McAllen, Member	 
	 	 	 	 
	 	 	 	 
	 	Cellectar, Inc.	 
	 	 	 	 
	 	By: 	/s/ Jamey P. Weichert	 
	 	 	Jamey P. Weichert, Interim President and Chief Executive Officer

 

  

- 29 -

  

 

SECOND AMENDMENT TO LEASE EXTENSION AGREEMENT

This Agreement is entered into between McAllen Properties, LLC (“Landlord”) and Cellectar, Inc. (“Tenant”).

WHEREAS, Landlord and Tenant are parties to a certain Lease entered into as of September 5, 2007 (the “Lease”) for the premises described therein, a certain Lease Extension Agreement (the “Extension Agreement”) entered into as of June 1, 2010, and a certain Amendment to Lease Extension Agreement (the “First Amendment”) entered into as of December 13, 2010; and

WHEREAS, Landlord and Tenant desire to further amend the Extension Agreement as provided herein;

NOW, THEREFORE, for good and valuable consideration, the parties agree as follows:

1.           The references to March 31, 2011 in Paragraphs 1, 2, 3 and 4 of the First Amendment shall be changed to May 31, 2011.

2.           The reference to March 15, 2011 in Paragraph 3 of the First Amendment shall be changed to May 15, 2011; and the reference to April 1, 2011 in Paragraph 3 of the First Amendment shall be changed to June 1, 2011.

3.           All terms and provisions of the First Amendment that are not amended as provided herein shall continue in full force and effect.

4.           This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same document.  Any counterpart may be delivered by facsimile or other form of electronic transmission and the delivery of a copy or digital image of an executed original or counterpart of this Agreement shall have the same force and effect as the delivery of an executed original.

Dated as of March 4, 2011.

 

 

	 	McAllen Properties, LLC	 
	 	 	 	 
	
 

	
By: 

	/s/ Kerry McAllen	 
	 	 	Kerry McAllen, Member	 
	 	 	 	 
	 	 	 	 
	 	Cellectar, Inc.	 
	 	 	 	 
	 	By: 	/s/ Jamey P. Weichert 	 
	 	 	Jamey P. Weichert, Interim President and Chief Executive Officer

 

  

- 30 -

  

 

ELECTION TO EXTEND TERM OF LEASE

McAllen Properties, LLC

2695 Gaston Rd.

Cottage Grove, WI 53527

This Election is made pursuant to the Lease between McAllen Properties, LLC (“Landlord”) and Cellectar, LLC, dated September 5, 2007 and modified by a Lease Extension Agreement dated as of June 1, 2010, an Amendment to Lease Extension Agreement dated as of December 13, 2010, and a Second Amendment to Lease Extension Agreement dated as of March 4, 2011 (collectively, the “Lease”).

Since the date that the Lease was entered into, Cellectar, LLC, the original tenant under the Lease, (i) converted into a corporation and changed its name to Cellectar, Inc., and (ii) merged with and into Cell Acquisition Corp.  As a result of the merger, the rights of Cellectar, Inc. as tenant under the Lease were assigned to Cell Acquisition Corp., which assignment was consented to by Landlord as of April 1, 2011.  Since the date of that assignment, Cell Acquisition Corp. has changed its name to Cellectar, Inc., which is currently the “Tenant” under the Lease.

Pursuant to the terms of the Lease, Tenant hereby elects to extend the term of the Lease for the remainder of the initial two-year extended term that commenced September 15, 2010 and that continues through September 14, 2012.  Tenant has delivered to Landlord, concurrent with the making of this election, the amount of Rent deferred under the Lease for the months of June, 2010 through April, 2011, together with interest thereon, and will pay Rent for the period commencing May 1, 2011 as set forth in the Lease, calculated without regard to the Lease Extension Agreement or the Amendments thereto referred to above.

Effective as of April 15, 2011.

Cellectar, Inc.

 

  

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ACCEPTANCE AND ACKNOWLEDGEMENT

McAllen Properties, LLC hereby (i) accepts in all respects the above Election to Extend Term of Lease; (ii) acknowledges receipt of Tenant’s payment referred to above; and (iii) accepts this payment in satisfaction of the condition in the Lease that a specified payment of  Rent, together with interest thereon, be made at the time of Tenant’s election to extend the term of the Lease.

 

McAllen Properties, LLC hereby also acknowledges that the Lease is in full force and effect in accordance with its terms, including but not limited to Tenant’s options to further extend the term of the Lease pursuant to paragraph 4 thereof (captioned “Options to Extend”).

Effective as of April 15, 2011.

 

	 	 	McAllen Properties, LLC	 
	 	 	 	 
	 	 	 	 
	
 

	
 

	/s/ Kerry McAllen  	 
	 	 	By:  Kerry McAllen, Member	 

 

  

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