Document:

exv10w9

 

Exhibit 10.9

EXCLUSIVE LICENSE AGREEMENT

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

R E C I T A L S

     WHEREAS, Medical School is owner by assignment of the invention claimed in the United States
Patent Application listed in Exhibit A pertaining to the Medical School’s invention disclosure
number UMMC 02-01 entitled In Vivo Production of Small Interfering RNAs.

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

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

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

1. Definitions.

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

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

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

 

 

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

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

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

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

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

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

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

 

 

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

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

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

     1.8. “Patent Rights” means the U.S. patent applications listed on Exhibit A,
and any divisional, continuation, or continuation-in-part of such patent applications to the extent
the claims are directed to subject matter specifically described therein, as well as any patent
issued thereon and any reissue or reexamination of such patent, and any foreign counterparts to
such patents and patent applications. Exhibit A shall be periodically amended to include
any additional Patent Rights that may arise. “Medical School Patent Rights” means Patent
Rights assigned solely to Medical School (and other academic institutions, if any). “Joint
Patent Rights” means Patent Rights assigned to both Medical School and Company.

     1.9. “Related Technology” means any know-how, technical information, research and
development information, test results, and data necessary for the effective exercise of the Patent
Rights which has been developed by Philip Zamore, Craig Mello, Gyorgy Hutvagner, Juanita McLachlan,
and Alla Grishok as of the Effective Date and which is owned by Medical School.

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

     1.11. “Sublicense Income” means any payments that Company receives from a Sublicensee
in consideration of the sublicense of the rights granted Company under Section 2.1.,
including without limitation license fees, royalties, milestone payments, and license maintenance

 

 

fees, but excluding the following payments: (a) payments made in consideration for the issuance of
equity or debt securities of Company at fair market value, and (b) payments specifically committed
to the development of Licensed Products.

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

2. Grant of Rights.

     2.1. License Grants.

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

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

          (c) Subject to applicable law or the rights of research sponsors, the Medical School shall use
its best efforts to make any improvements to the Patent Rights available to Company.

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

     2.3. Retained Rights.

          (a) Medical School. Medical School retains the right to make and use Licensed
Products for academic research, teaching, and non-commercial patient care, without payment of
compensation to Company. Medical School may license its retained rights under this Section to
research collaborators of Medical School faculty members, post-doctoral fellows, and students.

          (b) Federal Government. To the extent that any invention claimed in the Patent Rights
has been partially funded by the federal government, this Agreement and the grant of any
rights in such Patent Rights are subject to and governed by federal law as set forth in 35 U.S.C.
§§ 201-211, and the regulations promulgated thereunder, as amended, or any successor statutes

 

 

or
regulations. Company acknowledges that these statutes and regulations reserve to the federal
government a royalty-free, non-exclusive, non-transferrable license to practice any
government-funded invention claimed in any Patent Rights. If any term of this Agreement fails to
conform with such laws and regulations, the relevant term shall be deemed an invalid provision and
modified in accordance with Section 10.11. Upon execution of this Agreement, the Medical School
shall disclose in writing to Company any funding that would be subject to this Section 2.3(b).

          (c) Other Organizations. To the extent that any invention claimed in the Patent
Rights has been partially funded by a non-profit organization or state or local agency, this
Agreement and the grant of any rights in such Patent Rights are subject to and governed by the
terms and conditions of the applicable research grant. If any term of this Agreement fails to
conform with such terms and conditions, the relevant term shall be deemed an invalid provision and
modified by the parties pursuant to Section 10.11. Upon execution of this Agreement, the Medical
School shall disclose in writing to Company any funding that would be subject to this Section
2.3(c).

3. Company Obligations Relating to Commercialization.

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

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

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

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

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

 

 

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

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

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

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

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

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

     3.2. Indemnification.

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

 

 

liability, damage, loss, or expense to the extent directly attributable to (i) the negligent
activities or intentional misconduct of the Indemnitees or (ii) the settlement of a claim, suit,
action, or demand by Indemnitees without the prior written approval of Company.

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

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

     3.3. Use of Medical School Name. In accordance with Section 7.3., Company and its
Affiliates and Sublicensees shall not use the name “University of Massachusetts Medical School” or
any variation of that name in connection with the marketing or sale of any Licensed Products.

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

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

 

 

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

     (b) Company and its Affiliates and Sublicensees shall comply with all United States
laws and regulations controlling the export of certain commodities and technical data,
including without limitation all Export Administration Regulations of the United States
Department of Commerce. Among other things, these laws and regulations prohibit, or require
a license for, the export of certain types of commodities and technical data to specified
countries. Company hereby gives written assurance that it will comply with, and will cause
its Affiliates and Sublicensees to comply with, all United States export control laws and
regulations, that it bears sole responsibility for any violation of such laws and
regulations by itself or its Affiliates or Sublicensees, and that it will indemnify, defend,
and hold Medical School harmless (in accordance with Section 3.2.) for the consequences of
any such violation.

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

4. Consideration for Grant of Rights.

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

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

     4.3. License Maintenance Fee. Beginning on the first anniversary of the Effective
Date, and on each anniversary of the Effective Date thereafter during the term of the Agreement,
Company shall pay to Medical School {***}. This annual license maintenance fee is

 

 

nonrefundable and
is not creditable against any other payments due to Medical School under this Agreement.

     4.4. Milestone Payments. Company shall pay Medical School the following milestone
payments within thirty (30) days after the occurrence of each event:

	 	 	 
	Milestone	 	Payment
	Filing of IND or equivalent for each
product

	 	${***}
	Entry into Phase I Clinical trial or 

equivalent for each Licensed Product

	 	${***} for first product and ${***}
for each subsequent product
	Entry into Phase II clinical trial 

or equivalent for each Licensed Product

	 	${***} for first product and ${***}
for each subsequent product
	Entry into Phase III clinical trial 

or equivalent for each Licensed Product

	 	${***} for first product and ${***}
for each subsequent product
	Filing for market approval (NDA or 

equivalent) in any country besides 

the United States

	 	${***} for first product and ${***}
for each subsequent product
	Commencement of product marketing in
the United States

	 	${***}
	First market approval for first 

three European countries in total

	 	${***}

These milestone payments are nonrefundable and are not creditable against any other payments due to
University under this Agreement.

     4.5. Royalties.

          (a) Base Royalty. In partial consideration of the rights granted Company under this
Agreement, Company shall pay to Medical School a royalty of {***} of Net Sales of Licensed Products
by Company and its Affiliates (but not Sublicensees).

               (i) If a particular Licensed Product is within the definition of “Licensed Product” solely
because it uses or incorporates Related Technology, the royalty rate applicable to such Licensed
Product shall be reduced by {***}.

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

               (iii) If during the Royalty Period, patents under the Patent Rights have expired or have been
abandoned in a particular country, (I) no royalty is payable by Company, if there is a competing
product in that country, and (II) if Company reduces its prices for Licensed Products in that
country, even if there is no competing product in that country, Company and

 

 

Medical School shall
negotiate in good faith a reduction in the royalty rate to reflect the reduction in Company’s gross
margins caused by the price reduction.

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

          (b) Royalty Reduction. If Medical School grants additional licenses to third parties
pursuant to Section 3.1., the royalty rates set forth in Subsection 4.5.(a) shall be adjusted, if
necessary, so as not to exceed the royalty rates charged any other licensee of the Patent Rights
during the term of the non-exclusive license.

     4.6. Minimum Royalty. At the beginning of each calendar year during the term of this
Agreement, beginning January 1, 2016, Company shall pay to Medical School a minimum royalty of
{***}. If the actual royalty payments to Medical School in any calendar year are less than the
minimum royalty payment required for that year, Company shall have the right to pay Medical School
the difference between the actual royalty payment and the minimum royalty payment in full
satisfaction of its obligations under this Section, provided such minimum payment is made to
Medical School within sixty (60) days after the conclusion of the calendar year. Waiver of any
minimum royalty payment by Medical School shall not be construed as a waiver of any subsequent
minimum royalty payment. If Company fails to make any minimum royalty payment within the sixty-day
period, such failure shall constitute a material breach of its obligations under this Agreement,
and Medical School shall have the right to terminate this Agreement in accordance with Section 8.3.

     4.7. Sublicense Income. Company shall pay Medical School {***} of all Sublicense Income.
Such amounts shall be due and payable within sixty (60) days after Company receives the relevant
payment from the Sublicensee.

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

	 	(a)	 	in the case of any payments to Medical School under Other Medical School
Licenses with respect to Licensed Products under this Agreement, the royalty payment
made by Company to Medical School under this Agreement for the applicable Royalty
Payment shall be reduced by fifty percent (50%) of the aggregate amounts payable for
the same Royalty Period under the Other Medical School Licenses (before making any
similar reduction in those payments pursuant to a corresponding reduction clause in
those agreements), with a minimum floor of {***} of Net Sales of Licensed Products or
{***} of the Sublicense Income to be paid under this Agreement; and

 

 

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

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

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

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

5. Royalty Reports; Payments; Records.

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

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

 

 

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

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

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

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

     (v) the portion of royalty-based Sublicense Income due to Medical School for the
applicable Royalty Period from each Sublicensee.

All such reports shall be considered Company Confidential Information. If no royalties are due to
Medical School for any Royalty Period, the report shall so state. Concurrent with this report,
Company shall remit to Medical School any payment due for the applicable Royalty Period.

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

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

     5.5. Records. Company shall maintain, and shall cause its Affiliates and Sublicensees
to maintain, complete and accurate records of Licensed Products that are made, used, sold, or
performed under this Agreement and any amounts payable to Medical School in relation to such
Licensed Products, which records shall contain sufficient information to permit Medical School to
confirm the accuracy of any reports delivered to Medical School under Section 5.2. The relevant
party shall retain such records relating to a given Royalty Period for at least three (3) years
after the conclusion of that Royalty Period, during which time Medical School shall have

 

 

the right,
at its expense, to cause its internal accountants or an independent, certified public accountant to
inspect such records during normal business hours for the sole purpose of verifying any reports and
payments delivered under this Agreement. Such accountant shall not disclose to Medical School any
information other than information relating to accuracy of reports and payments delivered under
this Agreement. The parties shall reconcile any underpayment or overpayment within thirty (30)
days after the accountant delivers the results of the audit. In the event that any audit performed
under this Section reveals an underpayment in excess of the greater of (a) five thousand dollars
($5,000) or (b) ten percent (10%) in any Royalty Period, Company shall bear the full cost of such
audit. Medical School may exercise its rights under this Section only once every year and only
with reasonable prior notice to Company.

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

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

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

6. Patents and Infringement.

     6.1. Responsibility for Medical School Patent Rights. Medical School shall have
primary responsibility, at the expense of Company, for the preparation, filing, prosecution, and
maintenance of all Medical School Patent Rights, using patent counsel reasonably acceptable to
Company. Medical School shall consult with Company as to the preparation, filing, prosecution, and
maintenance of all such Patent Rights reasonably prior to any deadline or action with the U.S.
Patent & Trademark Office or any foreign patent office and shall furnish Company with copies of all
relevant documents reasonably in advance of such consultation.

     6.2. Responsibility for Joint Patent Rights. Company shall have primary
responsibility, at its expense, for the preparation, filing, prosecution, and maintenance of all
Joint Patent Rights, using patent counsel reasonably acceptable to Medical School. Company shall
consult with Medical School as to the preparation, filing, prosecution, and maintenance of all such
Patent Rights reasonably prior to any deadline or action with the U.S. Patent & Trademark Office or
any foreign patent office and shall furnish Medical School with copies of all relevant documents
reasonably in advance of such consultation.

 

 

     6.3. Cooperation. Medical School and Company shall cooperate fully in the
preparation, filing, prosecution, and maintenance of all Patent Rights. Such cooperation includes,
without limitation, (a) promptly executing all papers and instruments or requiring employees of
Medical School or Company to execute such papers and instruments as reasonable and appropriate so
as to enable Medical School or Company to file, prosecute, and maintain such Patent Rights in any
country; and (b) promptly informing the other party of matters that may affect the preparation,
filing, prosecution, or maintenance of any such Patent Rights (such as becoming aware of an
additional inventor who is not listed as an inventor in a patent application).

     6.4. Payment of Expenses. Within thirty (30) days after Medical School invoices
Company, Company shall reimburse Medical School for all reasonable patent-related expenses incurred
by Medical School pursuant to Section 6.1. Company may elect, upon sixty (60) days written notice
to Medical School, to cease payment of the expenses associated with obtaining or maintaining patent
protection for one or more Patent Rights in one or more countries. In such event, Company shall
lose all rights under this Agreement with respect to such Patent Rights in such countries for which
it has elected not to pay.

     6.5. Abandonment. In the event that a party desires to abandon any patent or patent
application within the Patent Rights for which it has primary responsibility, such party shall
provide the other party with reasonable prior written notice of such intended abandonment or
decline of responsibility, and the other party shall have the right, at its expense, to prepare,
file, prosecute, and maintain the relevant Patent Rights.

     6.6. Grant back: The Company agrees that for any patent rights, as defined in the sponsored
research agreement that implements Company’s obligation to the Medical School in Section 3.1(e)
that it has not licensed, the Company grants back to the Medical School, without limiting in any
way its rights under this Agreement, a non-exclusive license to the Patent Rights in order that the
Medical School may license the patent rights from the sponsored research to third parties. Medical
School shall pay Company {***} of any revenues or other consideration received by Medical School
with respect to any patent rights granted back by Company pursuant to this Section 6.6.

     6.7. Infringement.

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

          (b) Company Right to Prosecute. So long as Company remains the only licensee of the
Patent Rights and Biological Materials in the Field, Company shall have the right, under its own
control and at its own expense, to prosecute any third party infringement of the Patent Rights in
the Field or, together with licensees of the Patent Rights in other fields (if any), to defend the
Patent Rights in any declaratory judgment action brought by a third party which alleges invalidity,
unenforceability, or non-infringement of the Patent Rights. Prior to

 

 

commencing any such action,
Company shall consult with Medical School and shall consider the views of Medical School regarding
the advisability of the proposed action and its effect on the public interest. Company shall not
enter into any settlement, consent judgment, or other voluntary final disposition of any
infringement action under this Subsection without the prior written consent of Medical School,
which consent shall not be unreasonably withheld or delayed. Any recovery obtained in an action
under this Subsection shall be distributed as follows: (i) each party shall be reimbursed for any
expenses incurred in the action (including the amount of any royalty payments withheld from Medical
School as described below), (ii) as to ordinary damages, Company shall receive an amount equal to
its lost profits or a reasonable royalty on the infringing sales (whichever measure of damages the
court shall have applied), less a reasonable approximation of the royalties that Company would have
paid to Medical School if Company had sold the infringing products and services rather than the
infringer, and (iii) as to special or punitive damages, the parties shall share equally in any
award. Company may offset a total of fifty percent (50%) of any expenses incurred under this
Subsection against any royalty payments due to Medical School under this Agreement, provided that
in no event shall the royalty payments under Section 4.5. and 4.7., when aggregated with any other
offsets and credits allowed under this Agreement, be reduced by more than fifty percent (50%) in
any Royalty Period.

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

          (d) Medical School Right to Prosecute. In the event that Company fails to initiate an
infringement action within a reasonable time after it first becomes aware of the basis for such
action, or to answer a declaratory judgment action within a reasonable time after such action is
filed, Medical School shall have the right to prosecute such infringement or answer such
declaratory judgment action, under its sole control and at its sole expense, and any recovery
obtained shall be given to Medical School.

          (e) Cooperation. Each party agrees to cooperate fully in any action under this
Section 6.6. which is controlled by the other party, provided that the controlling party reimburses
the cooperating party promptly for any costs and expenses incurred by the cooperating party in
connection with providing such assistance.

 

 

          (f) Grant Back. Company shall grant back to Medical School technology rights in UMMC
02-01 entitled “In Vivo Production of siRNAs that Mediate Gene Silencing” in order that Medical
School may license to third parties certain intellectual property that Company has declined to
license or failed to exercise option rights under terms of the sponsored research agreement
referred to in section 3.1(5).

7. Confidential Information; Publications; Publicity.

     7.1. Confidential Information.

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

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

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

 

 

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

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

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

8. Term and Termination.

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

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

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

 

 

     8.4. Effect of Termination. The following provisions shall survive the expiration or
termination of this Agreement: Articles 1 and 9; Sections 3.2., 3.5., 5.2. (obligation to provide
final report and payment), 5.5., 6.4., 7.1., 7.3., 8.4., and 10.9. Upon the early termination of
this Agreement, Company and its Affiliates and Sublicensees may complete and sell any
work-in-progress and inventory of Licensed Products that exist as of the effective date of
termination, provided that (a) Company is current in payment of all amounts due Medical School
under this Agreement, (b) Company pays Medical School the applicable royalty on such sales of
Licensed Products in accordance with the terms and conditions of this Agreement, and (c) Company
and its Affiliates and Sublicensees shall complete and sell all work-in-progress and inventory of
Licensed Products within six (6) months after the effective date of termination.

9. Dispute Resolution.

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

     9.2. Dispute Resolution Procedures.

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

          (b) Mediation. If the matter remains unresolved within sixty (60) days after the
Notice Date, or if the senior executives fail to meet within thirty (30) days after the Notice
Date, either party may initiate mediation upon written notice to the other party, whereupon both
parties shall be obligated to engage in a mediation proceeding under the then current Center for
Public Resources (“CPR”) Model Procedure for Mediation of Business Disputes, except that specific
provisions of this Section shall override inconsistent provisions of the CPR Model Procedure. The
mediator will be selected from the CPR Panels of Neutrals. If the parties cannot agree upon the
selection of a mediator within ninety (90) days after the Notice Date, then upon the request of
either party, the CPR shall appoint the mediator. The parties shall attempt to resolve the dispute
through mediation until one of the following occurs: (i) the parties reach a written settlement;
(ii) the mediator notifies the parties in writing that they have reached an impasse; (iii) the
parties agree in writing that they have reached an impasse; or (iv) the parties have not reached a
settlement within one hundred and twenty (120) days after the Notice Date.

 

 

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

     9.3. Preservation of Rights Pending Resolution.

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

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

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

     10. Miscellaneous.

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

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

 

 

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

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

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

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

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

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

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

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

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

 

 

If to Medical School:

Office of Technology Management

University of Massachusetts Medical School

365 Plantation Street, Suite 130

Worcester, MA 01605

Attention:      Joseph F.X. McGuirl

                      Executive Director

Tel: (508) 856-1626

Fax: (508) 856-1482

If to Company:

CytRx Corporation

11726 San Vicente Blvd., Suite 650

Los Angeles, CA 90049

Attention:     Steven A. Kriegsman

                     Chief Executive Officer

Tel: (310) 826-5449

Fax: (310) 826-5529

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

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

     10.12. Entire Agreement. Except for the Common Stock Purchase Agreement, this
Agreement constitutes the entire agreement between the parties with respect to its subject matter
and supersedes all prior agreements or understandings between the parties relating to its subject
matter.

 

 

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

	 	 	 	 	 	 	 	 	 
	UNIVERSITY OF MASSACHUSETTS 

MEDICAL SCHOOL	 	 	 	CYTRX CORPORATION
	 
	 	 	 	 	 	 	 	 
	By:

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

	 	 
	 	 	 	 	 	 
	 

	 	Joseph F.X. McGuirl
	 	 	 	 	 	Steven A. Kriegsman
	 

	 	Executive Director, Office of
	 	 	 	 	 	Chief Executive Officer
	 

	 	Technology Management	 	 	 	 	 	 

 

 

EXHIBIT A

List of Patent Rights 

			
	UMMC 02-01:	 	          “In Vivo Production of Small Interfering RNAs”

			
	Inventors:	 	           Phillip Zamore, Craig Mello, Gyorgy Hutvagner, Juanita McLachlan, and Alla Grishock

Provisional Patent Application filed on July 12, 2001 #60/305,185 entitled “In Vivo Production of
Small Interfering RNAs that Mediate Gene Silencing”

U.S. Patent Application filed on July 12, 2002 #10/195,034

WIPO/PCT filing on July 12, 2002

 

 

CONFIDENTIAL

[Letter amendment]

Reference is made to the Exclusive License Agreement between the University of Massachusetts
Medical School and CytRx Corporation dated April 15, 2003, for the University’s invention
disclosure UMMC 02-01 (the “License Agreement”). Capitalized terms used but not defined herein
shall have the meaning ascribed to them in the License Agreement.

Because at least one inventor of the invention covered by the Patent Rights is an investigator of
the Howard Hughes Medical Institute (“HHMI”), the parties which to amend the License Agreement to
add the following terms for the benefit of HHMI.

	1.	 	Notwithstanding anything to the contrary in the License Agreement, HHMI retains a paid-up,
non-exclusive irrevocable license to use any invention(s) claimed in the Patent Rights,
Biological materials and Related Technology for its non-commercial research purposes, but with
no right to assign or sublicense.

	2.	 	Company agrees that Section 2.1(c) of the Licensed Agreement shall not apply to any
improvements conceived or reduced to practice in the laboratory of Dr. Craig Mello, except to
the extent such improvements are within the definition of Patent Rights.

	3.	 	Payments made by Company pursuant to Section 3.1(e) of the License Agreement shall not be
used to fund research conducted in the laboratory of Dr. Craig Mello.

	4.	 	HHMI and its trustees, officers, employees, and agents (collectively, “HHMI Indemnitees”),
will be indemnified, defended by counsel acceptable to HHMI, and held harmless by Company from
and against any claim, liability, cost, expense, damage, deficiency, loss, or obligation, of
any kind or nature (including, without limitation, reasonable attorneys’ fees and other costs
and expenses of defense) (collectively, “Claims”), based upon, arising out of, or otherwise
relating to the License Agreement, including without limitation any cause of action relating
to product liability. The previous sentence will not apply to any Claim that is determined
with finality by a court o competent jurisdiction to result solely from the gross negligence
or willful misconduct of an HHMI Indemnitee. Company agrees not to settle any Claim against
an HHMI Indemnitee without HHMI’s written consent, where (a) such settlement would include any
admission of liability on the part of any HHMI Indemnitee, (b) such settlement would impose
any restriction on any HHMI Indemnitee’s conduct of any of its activities, or (c) such
settlement would not include an unconditional release of all HHMI Indemnitees from all
liability for claims that are the subject matter of the settled Claim. An HHMI Indemnitee
shall provide Licensee with prompt notice of any claim for which indemnification may be sought
pursuant hereto. Notice shall be given reasonably promptly following actual receipt of
written notice thereof by an officer or attorney of HHMI. Notwithstanding the foregoing, the
delay or failure of any HHMI Indemnitee to give reasonably prompt notice to Licensee of any
such claim shall not affect the rights of such HHMI Indemnitee unless, and then only to the
extent that, such delay or failure is
prejudicial to or otherwise adversely affects Licensee. This provision shall survive
termination hereof and of the License Agreement.

 

 

	5.	 	Company acknowledges that under HHMI policy, Company may use the name of any HHMI employee
(including Dr. Craig Mello) and, in doing so, may cite the relationship of the employee with
HHMI, including in any business plan, press release, advertisement, prospectus or other
offering document of the Company or its affiliates, so long as such usage (1) is limited to
reporting factual events or occurrences only, and (2) is made in a manner that could not
reasonably constitute a specific endorsement by HHMI or its employees of Company or its
affiliates or of any program, product or service of Company or its affiliates. However,
Company shall not use the name of HHMI or any HHMI employees in any press release, or quote
any HHMI employee in any company materials (including advertisements) or otherwise use the
name of HHMI or any HHMI employee in a manner not specifically permitted by the preceding
sentence, unless, in each case, Company obtains in advance the written consent of HHMI and, in
the case of use of the HHMI employee’s name, except to the extent such HHMI employee has
agreed otherwise in a separate agreement with the Company (for example, the Scientific
Advisory Board Agreement between Dr. Craig Mello, the Company and one of its subsidiaries),
the written consent of the HHMI employee as well. Notwithstanding the foregoing, if, in the
opinion of the Company’s counsel, Company is required by applicable law to use the HHMI
employee’s name or HHMI’s name in a press release or governmental filing and, under the
circumstances, Company is not reasonably able to obtain the advance written consent of HHMI or
the HHMI employee, as applicable to such use, then Company may proceed without obtaining the
advance consent of HHMI or the HHMI employee, as applicable.

	6.	 	HHMI is not a party to the License Agreement and has no liability to any licensee,
sublicensee, or use of any technology covered by the License Agreement, but HHMI is an
intended third-party beneficiary of the License Agreement and certain of its provisions, in
particular sections 2.3 and 3.2(c), and paragraphs 1 through 5 hereof, are for the benefit of
HHMI and are enforceable by HHMI in its own name.

This letter constitutes an amendment to the License Agreement and is effective as of April 15,
2003. Except as set forth above, all other provisions of the License Agreement, as previously
amended, remain in effect as stated in the License Agreement.

If the foregoing is acceptable, please have this document signed in duplicate and return both
copies to me. I will return a fully endorsed duplicate original to you for your files. If you
have any questions or concerns, please call me at 508-856-1626.

Sincerely,

/s/
Hemi Chopra, Ph.D.

Hemi Chopra, Ph.D.

 

 

     The parties agree to the terms and conditions set forth above.

	 	 	 
	University of Massachusetts
Medical School

	 	CytRx Corporation
	 
	 	 
	     /s/ Chester A. Bisbee, Ph.D., J.D.

	 	     /s/ Steven A. Kriegsman
	 

	 	 
	Typed Name: Chester A. Bisbee, Ph.D., J.D.

	 	Typed Name: Steven A. Kriegsman
	Title: Acting Director, OTM

	 	Title: CEO
	Date: 3/18/04

	 	Date: March 4, 2004

 

 

AMENDMENT TO EXCLUSIVE LICENSE AGREEMENT

     This Amendment, effective September 10, 2004 (the “Amendment Date”), is made between the
University of Massachusetts Medical School (“Medical School”), a public institution of higher
education of the Commonwealth of Massachusetts as represented by its Worcester campus, and CytRx
Corporation (“CytRx”), a Delaware corporation having an address at 11726 San Vicente Blvd., Suite
650, Los Angeles, CA 90049, and amends that certain Exclusive License Agreement dated April 15,
2003 between Medical School and CytRx (the “License”) pertaining to Medical School’s invention
disclosure number UMMC 02-01 entitled In Vivo Production of Small Interfering RNAs. Capitalized
terms used but not defined herein shall have the meanings set forth in the License.

     Whereas, Medical School and CytRx are each party to the License; and

     Whereas, CytRx desires to obtain Patent Rights in Israel as part of the License.

     Therefore, in consideration of the premises and terms of this agreement, the adequacy of which
is acknowledged by both parties, Medical School and CytRx agree as follows:

     1. Exhibit A of the License is hereby replaced in its entirety with Exhibit A attached
hereto.

     2. All other terms of the License remain unchanged and in full force and effect.

The parties have duly executed this Amendment as of the Amendment Date.

	 	 	 
	UNIVERSITY OF MASSACHUSETTS

	 	CYTRX CORPORATION
	 
	 	 
	By:      /s/ Chester A. Bisbee, Ph.D., J.D.

	 	By:
     /s/ Steven Kriegsman
	 

	 	 
	Name: Chester A. Bisbee, Ph.D., J.D.

	 	Name: Steven Kriegsman
	Title: Acting Executive Director

	 	Title: President & CEO
	Date: November 2, 2004

	 	Date: 9/10/04

 

 

EXHIBIT A

List of Patent Rights

			
	UMMC 02-01:	 	     “In Vivo Production of Small Interfering RNAs”

			
	Inventors:	 	     Phillip Zamore, Craig Mello, Gyorgy Hutvagner, Juanita McLaclan and Alla Grishok

Provisional Application serial number 60/305,185, filed July 12, 2001, entitled “In Vivo Production
of Small Interfering RNAs that Mediate Gene Silencing”

U.S. Application serial number 10/195,034, filed July 12, 2002

International Application serial number PCT/US02/22010, filed July 12, 2002

Israeli Application serial number 159756, filed July 12, 2002exv10w10

 

Exhibit 10.10

AMENDED AND RESTATED LICENSE AGREEMENT

     This Amended and Restated License Agreement entered into as of September 15, 2003 and
effective as of April 15, 2003 (the “Effective Date”), is between the University of Massachusetts
(“Medical School”), a public institution of higher education of the Commonwealth of Massachusetts
as represented by its Medical School at the Worcester campus, having an address of 55 Lake Avenue
North, Worcester, Massachusetts 01655 and, CytRx Corporation, (“Company”), a Delaware corporation,
having an address of 11726 San Vicente Boulevard Suite 650, Los Angeles, California 90049.

R E C I T A L S

     Whereas, Medical School and Company on April 15, 2003, entered into a license
agreement in the field of drug discovery in type 2 diabetes and/or obesity for another Medical
School technology, designated UMMC 03-05 and entitled “Inhibition of Gene Expression in Adipocytes
using Interference RNA” (the “03-05 License”);

     Whereas, Medical School is the owner by assignment of the inventions claimed in the
United States Patent Applications listed in Exhibit A pertaining to the Medical School’s invention
disclosure numbers: UMMC 00-37, entitled “Diabetes Gene Database,” 01-31 entitled “Diabetes Gene
Database,” UMMC 03-134, entitled “Use of the Endoplasmic Reticulum Stress Response pathway of
Adipose cells to enhance whole body insulin sensitivity,” and UMMC 93-09, entitled
“Receptor-Activated Reporter Systems”;

     Whereas, Medical School is the owner by assignment of the inventions claimed in
Medical School’s invention disclosure number 02-38, entitled “Database of Genes Related to Diabetes
and Obesity” also listed in Exhibit A;

     Whereas, Company desires to obtain an exclusive license in the field of drug
discovery in type 2 diabetes and/or obesity under the rights of Medical School in any patent rights claiming
the UMMC inventions 00-37, 01-31, 03-134, 93-09 and 02-38;

     Whereas, Company intends to form a company based in Massachusetts, called Araios,
Inc., for the purpose of developing, manufacturing and marketing drugs and other therapeutics in
the field of type 2 diabetes and obesity;

     Whereas, Medical School is willing to grant Company an exclusive license on the terms
set forth in this Agreement; and

     Whereas, Medical School and Company wish to amend and restate the 03-05 License to
include the grant of an exclusive license to the additional inventions identified above.

     Therefore, Medical School and Company agree to amend and restate the 03-05 License as
follows:

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

 

 

1. Definitions.

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

     1.2. “Biological Materials” means tangible biological materials that are necessary
for the effective exercise of the Patent Rights, which materials are described on Exhibit A, as
well as tangible materials that are routinely produced through use of the original materials,
including, for example, any progeny derived from a cell line, monoclonal antibodies produced by
hybridoma cells, DNA or RNA replicated from isolated DNA or RNA, recombinant proteins produced
through use of isolated DNA or RNA, and substances routinely purified from a source material
included in the original materials (such as, recombinant proteins isolated from a cell extract or
supernatant by non-proprietary affinity purification methods). Exhibit A shall be periodically
amended to include any additional Biological Materials that Medical School may furnish to Company.

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

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

     1.5. “Field” means drug discovery in type 2 diabetes and/or obesity with therapeutic,
prophylactic, or diagnostic applications and products for treatment, prevention or diagnosis of
type 2 diabetes and/or obesity.

     1.6. “Licensed Product” means any “Covered Product” or “Developed Product.”

          (a) “Covered Product” means any product that (i) cannot be manufactured, used, or sold without
infringing one or more claims under the Patent Rights, (ii) incorporates some portion of one or
more Biological Materials proprietary to Medical School, or (iii) cannot be manufactured, used, or
sold without using some portion of the Related Technology.

          (b) “Developed Product” means any product that is not a Covered Product and is developed (i)
using methods claimed in the Patent Rights or (ii) using some material portion of the Related
Technology.

     1.7. “Licensed Service” means any service that (a) cannot be developed or performed
without using at least one process that infringes one or more claims under the Patent Rights, (b)

2

 

uses some portion of one or more Biological Materials, or (c) uses some portion of the Related
Technology.

     1.8. “Net Sales” means the gross amount billed or invoiced on sales by Company and its
Affiliates and Sublicensees of Licensed Products and Licensed Services, less the following: (a)
customary trade, quantity, or cash discounts to non-affiliated brokers or agents to the extent
actually allowed and taken; (b) amounts repaid or credited by reason of rejection or return; (c) to
the extent separately stated on purchase orders, invoices, or other documents of sale, any taxes or
other governmental charges levied on the production, sale, transportation, delivery, or use of a
Licensed Product or Licensed Service which is paid by or on behalf of Company; and (d) outbound
transportation costs prepaid or allowed and costs of insurance in transit; and (e) allowance for
bad debt that is customary and reasonable for the industry and in accordance with generally
accepted accounting principles. Notwithstanding anything to the contrary in this Section 1.8, Net
Sales does not include sales of Licensed Products at or below the fully burdened cost of
manufacturing solely for research or clinical testing or for indigent or similar public support or
compassionate use programs.

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

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

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

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

3

 

     1.9. “Patent Rights” means the United States patent applications listed on Exhibit A
and any divisional, continuation, or continuation-in-part of those patent applications to the
extent the claims are directed to subject matter specifically described therein as well as any
patents issued on these patent applications and any reissues or reexaminations of those patents,
and any foreign counterparts to those patents and patent applications. Exhibit A shall be
periodically amended to include any additional Patent Rights that may arise. Patent Rights include
improvements to the Patent Rights developed by Dr. Michael Czech.

     1.10. “Related Technology” means know-how, technical information, research and
development information, test results, and data necessary for the effective exercise of the Patent
Rights which are owned by the Medical School and (a) have been developed by Dr. Michael Czech and
Dr. Silvia Corvera and their associates in their laboratories at the Medical School as of the
Effective Date or (b) are subsequently developed by Dr. Michael Czech.

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

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

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

2. Grant of Rights.

     2.1. License Grants.

          (a) Patent Rights and Biological Materials. Medical School grants to Company and its
Affiliates an exclusive, worldwide, royalty-bearing license (with the right to sublicense) under
its commercial rights in the Patent Rights and Biological Materials to develop, make, have made,
use, and sell Licensed Products in the Field and to develop and perform Licensed Services in the
Field.

          (b) Related Technology. Medical School grants to Company and its Affiliates a
non-exclusive, royalty-bearing license (with the right to sublicense) under its commercial rights
in the Related Technology to develop, make, have made, use, and sell Licensed Products in the Field
and to develop and perform Licensed Services in the Field.

     2.2. Sublicenses. Company and its Affiliates may grant sublicenses of its rights
under Section 2.1. with the consent of Medical School, which consent may not be unreasonably

4

 

withheld or delayed. All sublicense agreements executed by Company pursuant to this Article 2
shall expressly bind the Sublicensee to the terms of this Agreement. Company shall promptly
furnish Medical School with a fully executed copy of any sublicense agreement.

     2.3. Retained Rights.

          (a) Medical School. Medical School retains the right to make and use Licensed
Products and to perform Licensed Services for academic research, teaching, and non-commercial
patient care, without payment of compensation to Company. Medical School may license its retained
rights under this Section to research collaborators of Medical School faculty members,
post-doctoral fellows, and students.

          (b) Federal Government. To the extent that any invention claimed in the Patent Rights
has been funded by the federal government, this Agreement and the grant of any rights in Patent
Rights are subject to and governed by federal law as set forth in 35 U.S.C. §§ 201-211, and the
regulations promulgated thereunder, as amended, or any successor statutes or regulations. Company
acknowledges that these statutes and regulations reserve to the federal government a royalty-free,
non-exclusive, non-transferable license to practice any government-funded invention claimed in the
Patent Rights. If any term of this Agreement fails to conform with those laws and regulations, the
relevant term is an invalid provision and shall be modified by the parties pursuant to Section
10.11. Upon execution of this Agreement, Medical School shall disclose in writing to Company any
funding that would be subject to this Section 2.3(b).

          (c) Other Organizations. To the extent that any invention claimed in the Patent
Rights has been funded by a non-profit organization or state or local agency, this Agreement and
the grant of any rights in Patent Rights are subject to and governed by the terms of the applicable
research grant. If any term of this Agreement fails to conform with those terms , the relevant
term is an invalid provision and shall be modified by the parties pursuant to Section 10.11. Upon
execution of this Agreement, Medical School shall disclose in writing to Company any funding that
would be subject to this Section 2.3(c).

     2.4. Improvements. Subject to applicable law or the rights of research sponsors, the
Medical School shall use its best efforts to make any improvements to the Patent Rights available
to Company.

3. Company Obligations Relating to Commercialization.

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

          (a) Within six (6) months after the Effective Date of this Agreement, Company shall furnish
Medical School with a written research and development plan under which Company intends to develop
Licensed Products or Licensed Services.

5

 

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

          (c) Company shall obtain all necessary governmental approvals for the manufacture, use, and
sale of Licensed Products and Combination Products or the performance of Licensed Services.
Specifically, Company shall:

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

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

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

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

          (d) Within eighteen (18) months after the Effective Date, Company shall successfully undertake
a public or private offering of raising or otherwise commit at least three million dollars
($3,000,000) to the business of Araios or such other entity, division, or operation of Company
devoted to the development and commercialization of Licensed Products in the Field.

     (e) Within three months after the Effective Date, Company shall commit to fund basic research
in the laboratory of Dr. Michael Czech at an amount of at least {***} in direct Medical School
costs in the first year, {***} in direct Medical School costs in the second year, and {***} in
direct Medical School costs in the third year towards in support of licensed Patent Rights and/or
Related Technology. In addition to direct Medical School costs, Company sponsored research is
subject to indirect cost rates, currently fifty percent (50%), for basic research. Company shall
enter into a formal sponsored research agreement with Medical School in a separate agreement.
During the term of any agreement covering funding described in this Section 3.1(e), if a lower
indirect cost rate is afforded to any other industrial sponsor by the Office of Technology
Management of the Medical School or if the federal indirect cost rate is reduced, the indirect cost
rate charged to the Company shall prospectively be reduced to that lower rate.

Company is responsible for financing its obligations in this Section 3.1, and the Medical School
shall provide reasonable cooperation to the Company in this regard. If Medical School

6

 

determines that Company has not fulfilled its obligations under this Section 3.1., Medical School
shall furnish Company with written notice of the determination. Within sixty (60) days after
receipt of the notice, Company shall either (i) fulfill the relevant obligation or (ii) negotiate
with Medical School a mutually acceptable schedule of revised diligence obligations, failing which
Medical School may, immediately upon written notice to Company, terminate this Agreement or to
grant additional licenses to third parties to the Patent Rights and Biological Materials in the
Field. The Medical School may not unreasonably withhold acceptance of Company’s revised diligence
obligations.

     3.2. Indemnification.

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

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

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

7

 

     3.3. Use of Medical School Name. In accordance with Section 7.3., Company or its
Affiliates and its Sublicensees may not use the name “University of Massachusetts” or any variation
of that name in connection with the marketing or sale of any Licensed Products or Licensed
Services.

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

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

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

          (b) Company or its Affiliates and its Sublicensees shall comply with all United States laws
and regulations controlling the export of commodities and technical data, including without
limitation all Export Administration Regulations of the United States Department of Commerce.
Among other things, these laws and regulations prohibit or require a license for the export of
certain types of commodities and technical data to specified countries. Company hereby gives
written assurance that it will comply with and will cause its Sublicensees to comply with all
United States export control laws and regulations, that it bears sole responsibility for any
violation of those laws and regulations by itself or its Sublicensees, and that it will indemnify,
defend, and hold Medical School harmless (in accordance with Section 3.2.) for the consequences of
any violation.

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

4. Consideration for Grant of Rights.

     4.1. License Fee. In partial consideration of the rights granted Company under this
Agreement, Company paid Medical School on or about the Effective Date a license fee of {***}.
Company shall pay to Medical School {***} upon the signing of this Amended and Restated Agreement.
These license fee payments are nonrefundable and are not creditable against any other payments due
to Medical School under this Agreement.

8

 

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

     4.3. License Maintenance Fee. Beginning on the first anniversary of the Effective
Date, and on each anniversary of the Effective Date thereafter during the term of the Agreement,
Company shall pay to Medical School {***}, as long as Company has a funding agreement in place with
the Medical School at the levels described in Section 3.1(e), after which time the annual
maintenance fee shall be {***}. This annual license maintenance fee is nonrefundable and is not
creditable against any other payments due to Medical School under this Agreement.

     4.4. Milestone Payments. Company shall pay Medical School for Covered Products the
following milestone payments within thirty (30) days after the occurrence of each event achieved by
Company or its Affiliates but not by Sublicensees:

	 	 	 
	Milestone	 	Payment
	Filing of IND or equivalent for each
Licensed Product

	 	{***}
	Entry into Phase I Clinical trial or
equivalent for each Licensed Product

	 	{***} for first product and {***}for
each subsequent product
	Entry into Phase II clinical trial
or equivalent for each Licensed
Product

	 	{***} for first product and {***}for
each subsequent product
	Entry into Phase III clinical trial
or equivalent for each Licensed
Product

	 	{***} for first product and {***}for
each subsequent product
	Filing for market approval (NDA or
equivalent) in any country besides
the United States

	 	{***} for first product and {***}for
each subsequent product
	Commencement of product marketing in
the United States

	 	{***}
	First market approval for first
three European countries in total

	 	{***}

For Developed Products each milestone event payment above will be reduced by fifty percent (50%) of
the amount specified for Covered Products.

Company shall pay Medical School a one-time bonus of {***} in the event that cumulative gross sales
of Licensed Products by Company and its Affiliates or Sublicensees exceed {***} in one calendar
year in the United States. Company shall pay Medical School a one-time bonus of {***} in the event
that cumulative gross sales of Licensed Products by Company and its Affiliates or Sublicensees
exceed {***} in one calendar year in Japan and Europe.

These milestone payments are nonrefundable and are not creditable against any other payments due to
Medical School under this Agreement. For any one Licensed Product, if Company makes an equivalent
payment under another agreement with the Medical School with respect to that Licensed Product for a
milestone event that is specified in this Section 4.4, then payment under

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this Section is satisfied, so that the aggregate payments under all Medical School agreements with
Company for that milestone including this Agreement do not exceed the amount specified in this
Section 4.4 for any one (1) Licensed Product.

     4.5. Royalties. In partial consideration of the rights granted Company under this
Agreement, Company shall pay to Medical School the following royalties:

          (a) Covered Products. Company shall pay to Medical School a royalty of {***} of Net
Sales of Covered Products by Company or its Affiliates but not by Sublicensees.

          (b) Developed Products. Company shall pay to Medical School a royalty of {***} of Net
Sales of Developed Products by Company or its Affiliates but not by Sublicensees.

          (c) Licensed Services. Company shall pay to Medical School a royalty of {***} of Net
Sales of Licensed Services by Company or its Affiliates but not by Sublicensees.

          (d) Related Technology and Biological Materials. If a particular Licensed Product or
Licensed Service is within the definition of “Licensed Product” or “Licensed Service” solely
because it uses or incorporates Related Technology or Biological Materials, the royalty rate
applicable to such Licensed Product or Licensed Service is fifty percent (50%) of the applicable
royalty rate set forth above.

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

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

          (g) Laboratory Services. Company shall pay the Medical School {***} of Net Sales of
commercial clinical laboratory services by Company.

          (h) Royalty Reduction. If Medical School grants additional licenses to third parties
pursuant to Section 3.1., the royalty rates set forth in Subsection 4.5.(a) shall be adjusted, if
necessary, so as not to exceed the royalty rates charged any other licensee of the Patent Rights
during the term of the non-exclusive license.

     4.6. Minimum Royalty. At the beginning of each calendar year during the term of this
Agreement, beginning 2016, Company shall pay to Medical School a minimum royalty of {***}. If
actual royalty payments to Medical School in any calendar year are less than the minimum royalty
payment required for that year, Company may pay Medical School the difference between the actual
royalty payment and the minimum royalty payment in full satisfaction of its

10

 

obligations under this Section, provided the minimum payment is made to Medical School within sixty
(60) days after the conclusion of the calendar year. Waiver of any minimum royalty payment by
Medical School is not a waiver of any subsequent minimum royalty payment. If Company fails to make
any minimum royalty payment within the sixty-day period, that failure is a material breach of its
obligations under this Agreement, and Medical School may terminate this Agreement in accordance
with Section 8.3. If Company is required to pay minimum royalties for any Licensed Product under
more than one license agreement with the Medical School, only the minimum royalty in this Section
4.6 applies.

     4.7. Sublicense Income. Company shall pay Medical School {***} of all Sublicense
Income relating to Covered Products and {***} of all Sublicense Income relating to Developed
Products. Sublicense Income is due and payable within sixty (60) days after Company receives the
relevant payment from the Sublicensee.

     4.8. Third-Party Royalties. If Company is legally required to make royalty payments
to the Medical School or payments to the Medical School based on income it receives from
Sublicensees under any agreement other than this Agreement (“Other Medical School Licenses”) or to
one or more third parties in order to make, use, or sell Licensed Products or to perform Licensed
Services, Company may offset a total of fifty percent (50%) of royalty payments that are made to
the Medical School under Other Medical School Licenses or to third- parties against any payments
that are due to Medical School under Section 4.5 or 4.7 in the same Royalty Period according to the
following guidelines.

	 	(a)	 	Other Medical School Licenses. In the case of payments
under Other Medical School Licenses with respect to Licensed Products or
Licensed Services under this Agreement, Company may reduce its payment to the
Medical School under Section 4.5 of this Agreement for the applicable Royalty
Period by fifty percent (50%) of the aggregate amounts payable for the same
Royalty Period under the Other Medical School Licenses (before making any
similar reduction in those payments pursuant to a corresponding reduction
clause in the Other Medical School Licenses).
	 
	 	(b)	 	Third Party Payments. In the case of payments to one
or more third parties with respect to Licensed Products or Licensed Services
under this Agreement, Company may reduce its payment to the Medical School
under Section 4.5 or 4.7 for the applicable Royalty Period by fifty percent
(50%) of the amount actually paid to third parties for the same Royalty Period.
	 
	 	(c)	 	Calculation. In the case of both payments under the
Other Medical School Licenses and to third parties in the same Royalty Period,
the reduction described in (a) above shall first be made, and then the
reduction described in (b) above shall be made, provided that only a pro rata
amount of the reduction described in (b) above shall be made against the
payments payable under this Agreement (with the pro-ration calculated based on
the relative royalty rates under this Agreement and the Other Medical School
Licenses).

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	 	(d)	 	Minimum Payments. Notwithstanding any reductions in
payments made by the Company to the Medical School under this Section 4.8, in
no case may royalty payments under Section 4.5 be less than {***}.
	 
	 	(e)	 	Maximum Payments. In the case of payments to the
Medical School with respect to Licensed Products and Licensed Services, (i)in
no case may the total royalty payments to the Medical School under Section 4.5
of this Agreement and the Other Medical School Licenses exceed in the aggregate
the highest royalty rate that the Company has agreed to pay in any one of the
Other Medical School Licenses and this Agreement, and (ii) in no case may the
Sublicense Income payments to the Medical School under Section 4.7 of this
Agreement and the Other Medical School Licenses exceed in the aggregate the
percentage set forth in Section 4.7 of this Agreement (with the Addendum to the
03-05 License dated April 15, 2003 relating to Sublicense Income being
cancelled).
	 
	 	(f)	 	Example. By way of illustration for Section 4.5
royalty payment reductions on a Covered Product, assume a royalty of {***} of
Net Sales under the Other Medical School Licenses and a payment of {***} of Net
Sales to a third party. The reduction calculation would be as follows:

	 	(i)	 	The {***} under this Agreement would be reduced
to {***} (i.e., a reduction of 50% of the {***} payable under the Other
Medical School License, with the royalty payments under the Other
Medical School License reduced according to their terms because of the
{***} royalty in this Agreement); and
	 
	 	(ii)	 	The remaining {***} would be reduced by {***}
for a net royalty to the Medical School under this Agreement of {***}
(i.e., the reduction of 50% of the {***} of Net Sales payable to the
third party is allocated pro rata to this Agreement and the Other
Medical School Licenses, with {***} of this {***} reduction being
allocated to the royalties under this Agreement (the {***} royalty rate
under this Agreement divided by the {***} royalty rate under this
Agreement plus the {***} royalty rate under the Other Medical School
Licenses), and {***} of this {***} reduction being allocated to the
royalties under the Other Medical School Licenses).

5. Royalty Reports; Payments; Records.

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

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

12

 

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

          (b) the number of Licensed Services provided by Company in each country;

          (c) the gross sales price for each Licensed Product and the gross charge for each Licensed
Service by Company during the applicable Royalty Period in each country;

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

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

          (f) Sublicense Income due to Medical School for the applicable Royalty Period from each
Sublicensee.

If no royalties are due to Medical School for any Royalty Period, the report shall so state.
Concurrent with this report, Company shall remit to Medical School any payment due for the
applicable Royalty Period. All reports under this Section 5.2 are Company Confidential
Information.

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

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

     5.5. Records. Company shall maintain and shall cause its Sublicensees to maintain
complete and accurate records of Licensed Products and Licensed Services that are made, used, sold,
or performed under this Agreement and any amounts payable to Medical School in relation to Licensed
Products and Licensed Services, which records shall contain sufficient information to permit
Medical School to confirm the accuracy of any reports delivered to Medical School under Section
5.2. The relevant party shall retain records relating to a given Royalty Period for

13

 

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

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

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

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

6. Patents and Infringement.

     6.1. Responsibility for Medical School Patent Rights. Medical School has primary
responsibility at the expense of Company for the preparation, filing, prosecution, and maintenance
of all Medical School Patent Rights, using patent counsel reasonably acceptable to Company.
Medical School shall consult with Company as to the preparation, filing, prosecution, and
maintenance of all Patent Rights reasonably prior to any deadline or action with the United States
Patent & Trademark Office or any foreign patent office and shall furnish Company with copies of
relevant documents reasonably in advance of consultation.

     6.2. Cooperation. Company shall cooperate fully in the preparation, filing,
prosecution, and maintenance of all Patent Rights. Cooperation includes, without limitation, (a)
promptly executing all papers and instruments or requiring employees of Company to execute papers
and instruments as reasonable and appropriate to enable Medical School to file, prosecute, and
maintain Patent Rights in any country; and (b) promptly informing the Medical School of matters
that may affect the preparation, filing, prosecution, or maintenance of Patent Rights (such as,
becoming aware of an additional inventor who is not listed as an inventor in a patent application).

14

 

     6.3. Payment of Expenses. On the signing of this Amended and Restated License
Agreement, Company shall pay the Medical School Thirty-Five Thousand Nine Hundred Four Dollars
($35,904) to reimburse Medical School for its actual expenses incurred as of that date in
connection with obtaining the Patent Rights. Within thirty (30) days after Medical School invoices
Company, Company shall reimburse Medical School for all patent-related expenses incurred by Medical
School pursuant to Section 6.1., including one-half (1/2) of any amounts for patent-related
expenses repaid by Medical School to a company that previously held an option to the Patent Rights.
Company may elect, upon sixty (60) days’ written notice to Medical School, to cease payment of the
expenses associated with obtaining or maintaining patent protection for one or more Patent Rights
in one or more countries. If Company elects to cease payment of any patent expenses, Company loses
all rights under this Agreement with respect to the particular Patent Rights.

     6.4. Abandonment. If Medical School desires to abandon any patent or patent
application within the Patent Rights, Medical School shall provide Company with reasonable prior
written notice of the intended abandonment or decline of responsibility, and, in that case, Company
has the right, at its expense, to prepare, file, prosecute, and maintain the relevant Patent
Rights.

     6.5. Grant back. The Company agrees that for any patent rights, as defined in the
sponsored research agreement that implements Company’s obligation in Section 3.1(e), that it has
not licensed, the Company grants back to the Medical School, without limiting in any way its rights
under this Agreement, a non-exclusive license to the Patent Rights in order that the Medical School
may license the patent rights from the sponsored research to third parties. Medical School shall
pay Company {***} or {***} for Covered Products or Developed Products, respectively, of any
revenues or other consideration received by Medical School with respect to any patent rights
granted back by Company pursuant to this Section 6.5.

     6.6. Infringement.

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

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

15

 

measure of damages the court applied), less a reasonable approximation of the royalties that
Company would have paid to Medical School if Company had sold the infringing products and services
rather than the infringer; and (iii) as to special or punitive damages, the parties shall share
equally in any award. Company may offset a total of fifty percent (50%) of any expenses incurred
under this Subsection against any payments due to Medical School under this Agreement. However,
payments under Section 4.5 and 4.7 may never be reduced by more than fifty percent (50%) in any
Royalty Period.

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

          (d) Medical School Right to Prosecute. If Company fails to initiate an infringement
action within a reasonable time after it first becomes aware of the basis for the action, or to
answer a declaratory judgment action within a reasonable time after the action is filed, Medical
School may prosecute the infringement or answer the declaratory judgment action under its sole
control and at its sole expense, and any recovery obtained shall be given to Medical School.

          (e) Cooperation. Both parties shall to cooperate fully in any action under this
Section 6.6 which is controlled by the other party, provided that the controlling party reimburses
the cooperating party promptly for any costs and expenses incurred by the cooperating party in
connection with providing assistance.

7. Confidential Information; Publications; Publicity.

     7.1. Confidential Information.

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

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

16

 

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

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

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

     7.3. Publicity Restrictions. Company may not use the name of Medical School or any of
its trustees, officers, faculty, students, employees, or agents, or any adaptation of their names,
or any terms of this Agreement in any promotional material or other public announcement or
disclosure without the prior written consent of Medical School. The foregoing notwithstanding,
Company may disclose that information without the consent of Medical School in any prospectus,
offering memorandum, or other document or filing required by applicable securities laws or other
applicable law or regulation, provided that Company provides Medical School at least ten (10) days
prior written notice of the proposed text for the purpose of giving Medical School the opportunity
to comment on the text.

8. Term and Termination.

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

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

17

 

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

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

     8.5. Effect of Termination. The following provisions survive the expiration or
termination of this Agreement: Articles 1 and 9; Sections 3.2., 3.5., 5.2. (obligation to provide
final report and payment), 5.5., 6.3., 7.1., 7.3., 8.5., and 10.9. Upon the early termination of
this Agreement, Company and its Affiliates and Sublicensees may complete and sell any
work-in-progress and inventory of Licensed Products and Licensed Services that exist as of the
effective date of termination, provided that (a) Company is current in payment of all amounts due
Medical School under this Agreement, (b) Company pays Medical School the applicable royalty and
Sublicense Income payments on sales of Licensed Products and Licensed Services in accordance with
the terms of this Agreement, and (c) Company and its Affiliates and Sublicensees complete and sell
all work-in-progress and inventory of Licensed Products and Licensed Services within six (6) months
after the effective date of termination.

9. Dispute Resolution.

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

     9.2. Dispute Resolution Procedures.

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

18

 

          (b) Mediation. If the matter remains unresolved within sixty (60) days after the
Notice Date, or if the senior executives fail to meet within thirty (30) days after the Notice
Date, either party may initiate mediation upon written notice to the other party, whereupon both
parties shall to engage in a mediation proceeding under the then current CPR Institute for Dispute
Resolution (“CPR”) Model Procedure for Mediation of Business Disputes, except that specific
provisions of this Section override inconsistent provisions of the CPR Model Procedure. The
mediator will be selected from the CPR Panels of Neutrals. If the parties cannot agree upon the
selection of a mediator within ninety (90) days after the Notice Date, then upon the request of
either party, the CPR shall appoint the mediator. The parties shall attempt to resolve the dispute
through mediation until one of the following occurs: (i) the parties reach a written settlement;
(ii) the mediator notifies the parties in writing that they have reached an impasse; (iii) the
parties agree in writing that they have reached an impasse; or (iv) the parties have not reached a
settlement within one hundred twenty (120) days after the Notice Date.

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

     9.3. Preservation of Rights Pending Resolution.

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

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

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

10. Miscellaneous.

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

19

 

Licensed Product or Licensed Service will not infringe any patents or other intellectual property
rights of a third party, and (c) that any third party is not currently infringing or will not
infringe the Patent Rights.

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

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

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

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

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

     10.7. Assignment. Neither party may assign this Agreement without the prior written
consent of the other party, which consent may not be unreasonably withheld, except that Company may
assign this Agreement to an Affiliate or to a successor in connection with the merger,
consolidation, or sale of all or substantially all of its assets or that portion of its business to
which this Agreement relates.

     10.8. Amendment and Waiver. This Agreement may be amended, supplemented, or otherwise
modified only by means of a written instrument signed by both parties. Any waiver of any rights or
failure to act in a specific instance relates only to that instance and is not an agreement to
waive any rights or fail to act in any other instance.

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

20

 

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

	 	 	 	 	 	 	 	 	 
	If to Medical School:	 	 	 	If to Company:
	 
	 	 	 	 	 	 	 	 
	Office of Commercial Ventures and	 	 	 	CytRx Corporation
	   Intellectual Property	 	 	 	Suite 650
	University of Massachusetts	 	 	 	11726 San Vicente Blvd.
	55 Lake Avenue North	 	 	 	Los Angeles, CA 90049
	Worcester, MA 01655	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Attention:

	 	Chester A. Bisbee
	 	 	 	Attention:
	 	Steven A. Kriegsman
	 

	 	Acting Director
	 	 	 	 	 	Chief Executive Officer

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

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

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

     10.13 Acknowledgement. Company acknowledges that the Medical School invention
disclosures 00-37 and 03.31 are the subject of a sponsored research agreement with another company
that the Medical School has terminated. The Medical School considers that that company has no
further rights or options from that sponsored research agreement to those invention disclosures.
However, the Medical School makes no representation or warranty that the company does not dispute
that nor that it will not institute legal action to make claims to the invention disclosures 00-37
and 00-31 nor that such legal action will not have any adverse effect on Company’s rights to
practice the Patent Rights.

21

 

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

	 	 	 	 	 	 	 	 	 	 	 
	UNIVERSITY OF MASSACHUSETTS	 	 	 	CYTRX CORPORATION
	 
	 	 	 	 	 	 	 	 	 	 
	By:

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

	 	 
	 	 	 	 	 	 	 	 
	 

	 	Chester A. Bisbee
	 	 	 	 	 	Steven A. Kriegsman	 	 
	 

	 	Acting Director, Office of Commercial Ventures	 	 	 	 	 	Chief Executive Officer	 	 
	 

	 	and Intellectual Property	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date: 9-15-03	 	 	 	Date: 9-15-03

22

 

EXHIBIT A

List of Patent Rights and Biological Materials

Patent Rights

Docket No.: UMMC 03-05

United States Provisional Patent Application Serial number: 60/432,427, entitled: “ Method of
Introducing SI RNA into adipocytes,” filed on December 11, 2002, Michael P. Czech, Qionglin Zhou
and Zhen Jiang inventors.

Docket No.: UMMC 03-37 and UMMC 01-31

United States Provisional Patent Application No. 60/242,379, entitled: “Genes Expressed in Type II
diabetes and Uses Thereof,” filed October 20, 2000, Michael Czech, inventor and United States
Patent Application 10/021,162, PCT/US01/49451, and Europe National Phase application 01987792.7
that claim priority from the provisional application, filed October 22, 2001.

Docket No. UMMC 02-38

United States Patent Application, entitled “Database of Genes Related to Diabetes and Obesity,”
being drafted.

Docket No. UMMC 03-134

United States Patent application entitled “Methods and Compositions for Controlling Appetite and
Modulating Insulin Sensitivity,” filed June 19, 2003.

Docket No. UMMC 93-09

United States Patent 5,989,893, entitled “Receptor-Activated Reporter Systems,” filed

Biological Materials

Protein or cDNA of the following enzymes:

Fatty Acid Synthase

Malic enzyme

Acetyl CoA Carboxylase

ATP Citrate Lyase

 

 

September 17, 2003

University of Massachusetts Medical School

55 Lake Avenue North

Worcester, MA 01655

Gentlemen:

     CytRx Corporation (“CytRx”) and the University of Massachusetts (“UMMS”) are entering into an
Amended and Restated License Agreement, dated as of September 15, 2003 (the “Amended License
Agreement”), which includes an exclusive license to, among other invention disclosures, UMMC 00-37,
entitled “Diabetes Gene Database” and UMMC 01-31, entitled “Diabetes Gene Database” (collectively,
the “Additional Inventions”).

     CytRx acknowledges that the Additional Inventions are the subject of a sponsored research
agreement with another company that UMMS has terminated. UMMS considers that that company has no
further rights or options from that sponsored research agreement to those invention disclosures.
However, UMMS makes no representation or warranty that the company does not dispute that nor that
it will not institute legal action to make claims to the Additional Inventions nor that such legal
action will not have any adverse effect on CytRx’s rights to practice the Patent Rights (as defined
in the Amended License Agreement).

     UMMS will exercise its best efforts to clarify that the sponsored research agreement with the
prior company has been effectively terminated and that such prior company has no license to or
other interest in the Additional Inventions or other further rights or options under that sponsored
research agreement. UMMS will make available on a confidential basis to counsel for CytRx and
counsel for any potential licensee or strategic partner of CytRx a copy of the sponsored research
agreement with the prior company and any material correspondence between UMMS and that company
relating to that sponsored research agreement.

	 	 	 	 	 
	 	CytRx, Inc.

 	 
	 	By  	/s/ Steven A. Kriegsman
 	 
	 	 	Steven A. Kriegsman 	 
	 	 	Chief Executive Officer 	 
	 

Acknowledged and Agreed this 17th day of September, 2003

University of Massachusetts

By:  /s/ Chester A. Bisbee                    

 

 

AMENDMENT NO. 1

TO

AMENDED AND RESTATED LICENSE AGREEMENT

(UMMC 03-05)

     This Amendment No. 1, dated as of February  1, 2004 (the “Amendment”) is being made to the
Amended and Restated License Agreement relating to UMMC 03-05 (the “License Agreement”), entered
into as of September 15, 2003 and effective as of April 15, 2003, by and between the University of
Massachusetts Medical School (“Medical School”), a public institution of higher education of the
Commonwealth of Massachusetts having an address of 55 Lake Avenue North, Worcester, MA 01655, and
CytRx Corporation (“Company”), a Delaware corporation having an address of 11726 San Vicente
Boulevard, Suite 650, Los Angeles, California 90049.

R E C I T A L S

     WHEREAS, Section 4.8 of the License Agreement provided for the calculation of payments payable
to Medical School under Section 4.5 and Section 4.7 of the License Agreement in the event Company
was required to make certain other payments to Medical School or third parties; and

     WHEREAS, Medical School and Company wish to clarify the manner in which Section 4.8 of the
License Agreement shall operate;

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

1. Amendment to Section 4.8.

     Section 4.8 of the License Agreement is hereby amended to read in full as follows:

     “4.8 Third-Party and Other Payments. If Company is legally required to make royalty
or sublicense income payments to Medical School under any other license agreement, as well as this
Agreement, or to one or more third parties, as well as this Agreement, in the same Royalty Period
for which payments are due under Section 4.5 or 4.7 in order for Company to make, use or sell
Licensed Products or have its Sublicensee make, use, or sell Licensed Products:

          (a) Other Medical School Payments. In the case of payments to Medical School under
Sections 4.5 and 4.7 with respect to any Licensed Product, Company shall pay only the highest rate
among this Agreement and any other Medical School licenses, and that one payment shall be deemed to
satisfy the payment requirements for the applicable period under not only this Agreement but each
of the other Medical School licenses.

          (b) Third Party Payments. In the case of payments to one or more third parties with
respect to any Licensed Product under this Agreement, Company may reduce its payment to Medical
School under Section 4.5 or 4.7 of this Agreement for the applicable Royalty Period by fifty
percent (50%) of the amount actually paid to third parties. However, in

 

 

University of Massachusetts Medical School

September 15, 2003

Page 26

no event will the reductions made pursuant to this Section 4.8(b) result in more than a fifty
percent (50%) reduction in the payments that would otherwise be payable to Medical School under
Section 4.5 and 4.7 (after taking into account Section 4.8(a)).

          (c) Example: Royalty Reductions. By way of illustration for Section 4.5 royalty
payment reductions, for a particular Licensed Product, assume the applicable royalty rate under
this Agreement is (***) Net Sales, a royalty of (***) of Net Sales under another Medical School
license and a payment of (***) of Net Sales to a third party. The reduction calculation would be as
follows: The total (***) royalty rate in this Agreement would apply, and Company would reduce that
rate by 50% of the (***) due to the third party, resulting in a (***) royalty to Medical School
under this Agreement, and no royalties payable to the Medical School under the other Medical School
license.

          (d) Example: Sublicense Income Payments. By way of illustration for Section 4.7
Sublicense Income payment reductions, assume (i) the applicable percentage of Sublicense Income
payable to Medical School under this Agreement is (***) and total Sublicense Income received by
Company from the Sublicensee is (***), and (ii) Company paid a third party (***) in order to allow
the sublicensee to make Licensed Products. Company would then be required to pay the Medical
School under this Agreement (***) (Medical School receiving (***) of the (***) reduced by one-half
of the (***) paid to the third party). If Company also sublicensed another Medical School license
with respect to the Licensed Products, Company would not be required to make additional sublicense
income payments.”

2. Continuation of All Other Terms of Agreement.

     Except for the amendment of Section 4.8 of the License Agreement provided for in Section 1 of
this Amendment, all of the terms and conditions of the License Agreement shall continue in full
force and effect.

3. Miscellaneous.

     3.1 Dispute Resolution. The parties agree that any dispute arising out of or relating
to this Amendment shall be resolved solely by means of the procedures set forth in Article 9 of the
Agreement.

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

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

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

 

 

University of Massachusetts Medical School

September 15, 2003

Page 27

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

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

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

	 	 	 	 	 	 	 	 	 	 	 
	UNIVERSITY OF MASSACHUSETTS MEDICAL SCHOOL	 	 	 	CYTRX CORPORATION
	 
	 	 	 	 	 	 	 	 	 	 
	By:

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

	 	 
	 	 	 	 	 	 	 	 
	 

	 	Acting Executive Director
	 	 	 	 	 	Steven A. Kriegsman	 	 
	 

	 	Office of Technology Management
	 	 	 	 	 	Chief Executive Officer

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