Document:

Exhibit 10.12

 

INDEMNIFICATION AGREEMENT

 

This Indemnification Agreement (“Agreement”) is made as of            , 20   by and between Syros Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and                (“Indemnitee”).

 

RECITALS

 

WHEREAS, highly competent persons have become more reluctant to serve publicly-held corporations as directors or officers or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;

 

WHEREAS, the Board of Directors of the Company (the “Board”) has determined that, in order to attract and retain qualified individuals, the Company will attempt to maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving the Company and its subsidiaries from certain liabilities.  Although the furnishing of such insurance has been a customary and widespread practice among United States-based corporations and other business enterprises, the Company believes that, given current market conditions and trends, such insurance may be available to it in the future only at higher premiums and with more exclusions.  At the same time, directors, officers, and other persons in service to corporations or business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the Company or business enterprise itself.  The Certificate of Incorporation of the Company (the “Certificate of Incorporation”) requires indemnification of the officers and directors of the Company.  Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (the “DGCL”).  The Certificate of Incorporation and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the board of directors, officers and other persons with respect to indemnification;

 

WHEREAS, the uncertainties relating to such insurance and to indemnification have increased the difficulty of attracting and retaining such persons;

 

WHEREAS, the Board has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company and its stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;

 

WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified;

 

 

WHEREAS, this Agreement is a supplement to and in furtherance of the Certificate of Incorporation and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder; and

 

WHEREAS, Indemnitee does not regard the protection available under the Certificate of Incorporation and insurance as adequate in the present circumstances, and may not be willing to serve as an officer or director without adequate protection, and the Company desires Indemnitee to serve in such capacity.  Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company on the condition that he be so indemnified.

 

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

 

Section 1.                                           Services to the Company.  Indemnitee agrees to serve as a [director] [officer] of the Company.  Indemnitee may at any time and for any reason resign from such position (subject to any other contractual obligation or any obligation imposed by operation of law), in which event the Company shall have no obligation under this Agreement to continue Indemnitee in such position.  This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any Enterprise) and Indemnitee.  Indemnitee specifically acknowledges that Indemnitee’s employment with the Company (or any of its subsidiaries or any Enterprise), if any, is at will, and the Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a director or officer of the Company, by the Certificate of Incorporation, the Company’s By-laws, and the DGCL.  The foregoing notwithstanding, this Agreement shall continue in force after Indemnitee has ceased to serve as an [officer] [director] of the Company, as provided in Section 16 hereof.

 

Section 2.                                           Definitions.   As used in this Agreement:

 

(a)                                 References to “agent” shall mean any person who is or was a director, officer, or employee of the Company or a subsidiary of the Company or other person authorized by the Company to act for the Company, to include such person serving in such capacity as a director, officer, employee, fiduciary or other official of another corporation, partnership, limited liability company, joint venture, trust or other enterprise at the request of, for the convenience of, or to represent the interests of the Company or a subsidiary of the Company.

 

(b)                                 A “Change in Control” shall be deemed to occur upon the earliest to occur after the date of this Agreement of any of the following events:

 

i.                                          Acquisition of Stock by Third Party.  Any Person (as defined below) is or becomes the Beneficial Owner (as defined below), directly or indirectly, of securities of the Company representing fifty (50%) or more of the combined voting power of the Company’s then outstanding securities unless the change in relative Beneficial Ownership of the Company’s securities by any Person results solely from a reduction in the aggregate number of outstanding shares of securities entitled to vote generally in the election of directors;

 

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ii.                                       Change in Board of Directors.  During any period of two (2) consecutive years (not including any period prior to the execution of this Agreement), individuals who at the beginning of such period constitute the Board, and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in Sections 2(b)(i), 2(b)(iii) or 2(b)(iv)) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority of the members of the Board;

 

iii.                                    Corporate Transactions.  The effective date of a merger or consolidation of the Company with any other entity, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 51% of the combined voting power of the voting securities of the surviving entity outstanding immediately after such merger or consolidation and with the power to elect at least a majority of the board of directors or other governing body of such surviving entity;

 

iv.                                   Liquidation.  The approval by the stockholders of the Company of a complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets; and

 

v.                                      Other Events.  There occurs any other event of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or a response to any similar item on any similar schedule or form) promulgated under the Exchange Act (as defined below), whether or not the Company is then subject to such reporting requirement.

 

For purposes of this Section 2(b), the following terms shall have the following meanings:

 

(A)                               “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.

 

(B)                               “Person” shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange Act; provided, however, that Person shall exclude (i) the Company, (ii) any trustee or other fiduciary holding securities under an employee benefit plan of the Company, and (iii) any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.

 

(C)                               “Beneficial Owner” shall have the meaning given to such term in Rule 13d-3 under the Exchange Act; provided, however, that Beneficial Owner shall exclude any Person otherwise becoming a Beneficial Owner by reason of the stockholders of the Company approving a merger of the Company with another entity.

 

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(c)                                  “Corporate Status” describes the status of a person who is or was a director, officer, employee or agent of the Company or of any other corporation, limited liability company, partnership or joint venture, trust or other enterprise which such person is or was serving at the request of the Company.

 

(d)                                 “Disinterested Director” shall mean a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

 

(e)                                  “Enterprise” shall mean the Company and any other corporation, limited liability company, partnership, joint venture, trust or other enterprise of which Indemnitee is or was serving at the request of the Company as a director, officer, trustee, partner, managing member, employee, agent or fiduciary.

 

(f)                                   “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of experts and other professionals, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, ERISA excise taxes and penalties, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding.  Expenses also shall include (i) Expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent, and (ii) for purposes of Section 14(d) only, Expenses incurred by Indemnitee in connection with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement, by litigation or otherwise.  The parties agree that for the purposes of any advancement of Expenses for which Indemnitee has made written demand to the Company in accordance with this Agreement, all Expenses included in such demand that are certified by affidavit of Indemnitee’s counsel as being reasonable shall be presumed conclusively to be reasonable.  Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.

 

(g)                                  “Independent Counsel” shall mean a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent:  (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning the Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder.  Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement.  The Company agrees to pay the reasonable fees and expenses of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

 

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(h)                                 The term “Proceeding” shall include any threatened, pending or completed action, suit, claim, counterclaim, cross claim, arbitration, mediation, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise and whether of a civil, criminal, administrative, legislative, or investigative (formal or informal) nature, including any appeal therefrom, in which Indemnitee was, is or will be involved as a party, potential party, non-party witness or otherwise by reason of the fact that Indemnitee is or was a director or officer of the Company, by reason of any action taken by him (or a failure to take action by him) or of any action (or failure to act) on his part while acting pursuant to his Corporate Status, in each case whether or not serving in such capacity at the time any liability or Expense is incurred for which indemnification, reimbursement, or advancement of Expenses can be provided under this Agreement.  If the Indemnitee believes in good faith that a given situation may lead to or culminate in the institution of a Proceeding, this shall be considered a Proceeding under this paragraph.

 

(i)                                     Reference to “other enterprise” shall include employee benefit plans; references to “fines” shall include any excise tax assessed with respect to any employee benefit plan; references to “serving at the request of the Company” shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in manner “not opposed to the best interests of the Company” as referred to in this Agreement.

 

Section 3.                                           Indemnity in Third-Party Proceedings.  The Company shall indemnify Indemnitee in accordance with the provisions of this Section 3 if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding, other than a Proceeding by or in the right of the Company to procure a judgment in its favor.  Pursuant to this Section 3, Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all Expenses, judgments, fines and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of such Expenses, judgments, fines and amounts paid in settlement) actually and reasonably incurred by Indemnitee or on his behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company and, in the case of a criminal Proceeding had no reasonable cause to believe that his conduct was unlawful.  The parties hereto intend that this Agreement shall provide to the fullest extent permitted by law for indemnification in excess of that expressly permitted by statute, including, without limitation, any indemnification provided by the Certificate of Incorporation, the By-laws, vote of its stockholders or disinterested directors or applicable law.

 

Section 4.                                           Indemnity in Proceedings by or in the Right of the Company.   The Company shall indemnify Indemnitee in accordance with the provisions of this Section 4 if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding by or in the right of the Company to procure a judgment in its favor.  Pursuant to this Section 4, Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all Expenses actually and reasonably incurred by him or on his behalf in connection with such 

 

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Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company.  No indemnification for Expenses shall be made under this Section 4 in respect of any claim, issue or matter as to which Indemnitee  shall have been finally adjudged by a court to be liable to the Company, unless and only to the extent that the Delaware Court (as hereinafter defined) or any court in which the Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification.

 

Section 5.                                           Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provisions of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is a party to (or a participant in) and is successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or matter therein, in whole or in part, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him in connection therewith.  If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with or related to each successfully resolved claim, issue or matter to the fullest extent permitted by law.  For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

 

Section 6.                                           Indemnification For Expenses of a Witness.  Notwithstanding any other provision of this Agreement, to the fullest extent permitted by applicable law and to the extent that Indemnitee is, by reason of his Corporate Status, a witness or otherwise asked to participate in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.

 

Section 7.                                           Partial Indemnification.  If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Expenses, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled.

 

Section 8.                                           Additional Indemnification.

 

(a)                                 Notwithstanding any limitation in Sections 3, 4, or 5, the Company shall indemnify Indemnitee to the fullest extent permitted by applicable law if Indemnitee is a party to or threatened to be made a party to any Proceeding (including a Proceeding by or in the right of the Company to procure a judgment in its favor) against all Expenses, judgments, fines and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of such Expenses, judgments, fines and amounts paid in settlement) actually and reasonably incurred by Indemnitee in connection with the Proceeding.

 

(b)                                 For purposes of Section 8(a), the meaning of the phrase “to the fullest extent permitted by applicable law” shall include, but not be limited to:

 

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i.                                          to the fullest extent permitted by the provision of the DGCL that authorizes or contemplates additional indemnification by agreement, or the corresponding provision of any amendment to or replacement of the DGCL, and

 

ii.                                       to the fullest extent authorized or permitted by any amendments to or replacements of the DGCL adopted after the date of this Agreement that increase the extent to which a corporation may indemnify its officers and directors.

 

Section 9.                                           Exclusions.   Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnification payment in connection with any claim made against Indemnitee:

 

(a)                                 for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision; or

 

(b)                                 for (i) an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Exchange Act (as defined in Section 2(b) hereof) or similar provisions of state statutory law or common law, or (ii) any reimbursement of the Company by the Indemnitee of any bonus or other incentive-based or equity-based compensation or of any profits realized by the Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act (including any such reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), or the payment to the Company of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act); or

 

(c)                                  except as provided in Section 14(d) of this Agreement, in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law.

 

Section 10.                                    Advances of Expenses.   Notwithstanding any provision of this Agreement to the contrary (other than Section 14(d)), the Company shall advance, to the extent not prohibited by law, the Expenses incurred by Indemnitee in connection with any Proceeding (or any part of any Proceeding) not initiated by Indemnitee, and such advancement shall be made within thirty (30) days after the receipt by the Company of a statement or statements requesting such advances from time to time, whether prior to or after final disposition of any Proceeding.  Advances shall be unsecured and interest free.  Advances shall be made without regard to Indemnitee’s ability to repay the Expenses and without regard to Indemnitee’s ultimate entitlement to indemnification under the other provisions of this Agreement.  In accordance with Section 14(d), advances shall include any and all reasonable Expenses incurred pursuing an action to enforce this right of advancement, including Expenses incurred preparing and forwarding statements to the Company to support the advances claimed.  The Indemnitee shall 

 

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qualify for advances upon the execution and delivery to the Company of this Agreement, which shall constitute an undertaking providing that the Indemnitee undertakes to repay the amounts advanced (without interest) to the extent that it is ultimately determined that Indemnitee is not entitled to be indemnified by the Company.  No other form of undertaking shall be required other than the execution of this Agreement.  This  Section 10 shall not apply to any claim made by Indemnitee for which indemnity is excluded pursuant to Section 9.

 

Section 11.                                    Procedure for Notification and Defense of Claim.

 

(a)                                 Indemnitee shall notify the Company in writing of any matter with respect to which Indemnitee intends to seek indemnification or advancement of Expenses hereunder as soon as reasonably practicable following the receipt by Indemnitee of written notice thereof.  The written notification to the Company shall include a description of the nature of the Proceeding and the facts underlying the Proceeding.  To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of such Proceeding.  The omission by Indemnitee to notify the Company hereunder will not relieve the Company from any liability which it may have to Indemnitee hereunder or otherwise than under this Agreement, and any delay in so notifying the Company shall not constitute a waiver by Indemnitee of any rights under this Agreement.  The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification.

 

(b)                                 The Company will be entitled to participate in the Proceeding at its own expense.

 

Section 12.                                    Procedure Upon Application for Indemnification.

 

(a)                                 Upon written request by Indemnitee for indemnification pursuant to Section 11(a), a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall be made in the specific case:  (i) if a Change in Control shall have occurred, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee; or (ii) if a Change in Control shall not have occurred, (A) by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (B) by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (C) if there are no such Disinterested Directors or, if such Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee or (D) if so directed by the Board, by the stockholders of the Company; and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination.  Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination.  Any costs or Expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in so

 

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cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.  The Company promptly will advise Indemnitee in writing with respect to any determination that Indemnitee is or is not entitled to indemnification, including a description of any reason or basis for which indemnification has been denied.

 

(b)                                 In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) hereof, the Independent Counsel shall be selected as provided in this Section 12(b).  If a Change in Control shall not have occurred, the Independent Counsel shall be selected by the Board, and the Company shall give written notice to Indemnitee advising him of the identity of the Independent Counsel so selected.  If a Change in Control shall have occurred, the Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall request that such selection be made by the Board, in which event the preceding sentence shall apply), and Indemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so selected.  In either event, Indemnitee or the Company, as the case may be, may, within ten (10) days after such written notice of selection shall have been given, deliver to the Company or to Indemnitee, as the case may be, a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 2 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion.  Absent a proper and timely objection, the person so selected shall act as Independent Counsel.  If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or the Delaware Court has determined that such objection is without merit.  If, within twenty (20) days after the later of submission by Indemnitee of a written request for indemnification pursuant to Section 11(a) hereof and the final disposition of the Proceeding, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition the Delaware Court for resolution of any objection which shall have been made by the Company or Indemnitee to the other’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by such court or by such other person as such court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 12(a) hereof.  Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 14(a) of this Agreement, Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).

 

Section 13.                                    Presumptions and Effect of Certain Proceedings.

 

(a)                                 In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall, to the fullest extent not prohibited by law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 11(a) of this Agreement, and the Company shall, to the fullest extent not prohibited by law, have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption.  Neither the failure of the 

 

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Company (including by its directors or Independent Counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or Independent Counsel) that Indemnitee has not met such  applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

 

(b)                                 Subject to Section 14(e), if the person, persons or entity empowered or selected under Section 12 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall, to the fullest extent not prohibited by law, be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 60-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 13(b) shall not apply (i) if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 12(a) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for such determination the Board has resolved to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held within seventy-five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat, or (ii) if the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 12(a) of this Agreement.

 

(c)                                  The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.

 

(d)                                 For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the directors or officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with the reasonable care by  the Enterprise.  The provisions of this Section 13(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the 

 

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Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.

 

(e)                                  The knowledge and/or actions, or failure to act, of any director, officer, trustee, partner, managing member, fiduciary, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.

 

Section 14.                                    Remedies of Indemnitee.

 

(a)                                 Subject to Section 14(e), in the event that (i) a determination is made pursuant to Section 12 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 10 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 12(a) of this Agreement within ninety (90) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 5, 6 or 7 or the last sentence of Section 12(a) of this Agreement within ten (10) days after receipt by the Company of a written request therefor, (v) payment of indemnification pursuant to Section 3, 4 or 8 of this Agreement is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification, or (vi) in the event that the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or Proceeding designed to deny, or to recover from, the Indemnitee the benefits provided or intended to be provided to the Indemnitee hereunder, Indemnitee shall be entitled to an adjudication by a court of his entitlement to such indemnification or advancement of Expenses.  Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association.  Indemnitee shall commence such proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 14(a); provided, however, that the foregoing clause shall not apply in respect of a proceeding brought by Indemnitee to enforce his rights under Section 5 of this Agreement.  The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.

 

(b)                                 In the event that a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 14 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination.  In any judicial proceeding or arbitration commenced pursuant to this Section 14 the Company shall have the burden of proving Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.

 

(c)                                  If a determination shall have been made pursuant to Section 12(a) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 14, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact 

 

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necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.

 

(d)                                 The Company shall, to the fullest extent not prohibited by law, be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 14 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement.  It is the intent of the Company that, to the fullest extent permitted by law, the Indemnitee not be required to incur legal fees or other Expenses associated with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement by litigation or otherwise because the cost and expense thereof would substantially detract from the benefits intended to be extended to the Indemnitee hereunder.  The Company shall, to the fullest extent permitted by law, indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefor) advance, to the extent not prohibited by law, such Expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from the Company under this Agreement or under any directors’ and officers’ liability insurance policies maintained by the Company if, in the case of indemnification, Indemnitee is wholly successful on the underlying claims; if Indemnitee is not wholly successful on the underlying claims, then such indemnification shall be only to the extent Indemnitee is successful on such underlying claims or otherwise as permitted by law, whichever is greater.

 

(e)                                  Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement of Indemnitee to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.

 

Section 15.                                    Non-exclusivity; Survival of Rights; Insurance; Subrogation.

 

(a)                                 The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Certificate of Incorporation, the By-laws, any agreement, a vote of stockholders or a resolution of directors, or otherwise.  No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal.  To the extent that a change in Delaware law, whether by statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded currently under the Certificate of Incorporation and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change.  No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

 

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(b)                                 To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents of the Enterprise, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee or agent under such policy or policies.  If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of such claim or of the commencement of a Proceeding, as the case may be, to the insurers in accordance with the procedures set forth in the respective policies.  The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies.

 

(c)                                  In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

 

(d)                                 The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable (or for which advancement is provided hereunder) hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

 

(e)                                  The Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, trustee, partner, managing member, fiduciary, employee or agent of any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of Expenses from such other corporation, limited liability company, partnership, joint venture, trust or other enterprise.

 

Section 16.                                    Duration of Agreement.  This Agreement shall continue until and terminate upon the later of: (a) ten (10) years after the date that Indemnitee shall have ceased to serve as a [director] [officer] of the Company or (b) one (1) year after the final termination of any Proceeding then pending in respect of which Indemnitee is granted rights of indemnification or advancement of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Section 14 of this Agreement relating thereto.  The indemnification and advancement of expenses rights provided by or granted pursuant to this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), shall continue as to an Indemnitee who has ceased to be a director, officer, employee or agent of the Company or of any other Enterprise, and shall inure to the benefit of Indemnitee and his or her spouse, assigns, heirs, devisees, executors and administrators and other legal representatives.

 

Section 17.                                    Severability.  If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality 

 

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and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

 

Section 18.                                    Enforcement.

 

(a)                                 The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a director or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director or officer of the Company.

 

(b)                                 This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes and replaces all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof, including any indemnification agreement previously entered into between the Company and the Indemnitee; provided, however, that this Agreement is a supplement to and in furtherance of the Certificate of Incorporation, the By-laws and applicable law, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.

 

Section 19.                                    Modification and Waiver.  No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by the parties hereto.  No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver.

 

Section 20.                                    Notice by Indemnitee.  Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder.  The failure of Indemnitee to so notify the Company shall not relieve the Company of any obligation which it may have to the Indemnitee under this Agreement or otherwise.

 

Section 21.                                    Notices.   All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, (c) mailed by reputable overnight courier and receipted for by the party to whom said notice or other communication shall have been directed or (d) sent by facsimile transmission, with receipt of oral confirmation that such transmission has been received:

 

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(a)                                 If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide to the Company.

 

(b)                                 If to the Company to

 

Syros Pharmaceuticals, Inc.
 620 Memorial Drive, Suite 300
 Cambridge, MA 02139

 

or to any other address as may have been furnished to Indemnitee by the Company.

 

Section 22.                                    Contribution.  To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).

 

Section 23.                                    Applicable Law and Consent to Jurisdiction.  This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules.  Except with respect to any arbitration commenced by Indemnitee pursuant to Section 14(a) of this Agreement, the Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the “Delaware Court”), and not in any other state or federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) appoint, to the extent such party is not otherwise subject to service of process in the State of Delaware, irrevocably RL&F Service Corp., 920 North King Street, 2nd Floor, Wilmington, New Castle County, Delaware 19801 as its agent in the State of Delaware as such party’s agent for acceptance of legal process in connection with any such action or proceeding against such party with the same legal force and validity as if served upon such party personally within the State of Delaware, (iv) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (v) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.

 

Section 24.                                    Identical Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement.  Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.

 

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Section 25.                                    Miscellaneous.    Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate.  The headings of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.

 

	
SYROS   PHARMACEUTICALS, INC.
    	
INDEMNITEE
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
Name:
    	
 
    	
Name:
    
	
Title:
    	
 
    	
Address:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    

 

16Exhibit 10.13

 

Confidential Materials omitted and filed separately with the Securities and Exchange Commission. Double asterisks denote omissions.

 

DANA-FARBER CANCER INSTITUTE, INC.

 

and

 

SYROS PHARMACEUTICALS, INC.

 

LICENSE AGREEMENT

 

 

TABLE OF CONTENTS

 

	
RECITALS
    	
1
    
	
 
    	
 
    
	
1. DEFINITIONS
    	
1
    
	
 
    	
 
    
	
2. GRANT OF RIGHTS
    	
7
    
	
 
    	
 
    
	
3. COMPANY DILIGENCE OBLIGATIONS
    	
11
    
	
 
    	
 
    
	
4. ROYALTIES AND PAYMENT TERMS
    	
13
    
	
 
    	
 
    
	
5. REPORTS AND RECORD KEEPING
    	
20
    
	
 
    	
 
    
	
6. PATENT PROSECUTION
    	
22
    
	
 
    	
 
    
	
7. INFRINGEMENT
    	
24
    
	
 
    	
 
    
	
8. INDEMNIFICATION AND INSURANCE
    	
26
    
	
 
    	
 
    
	
9. REPRESENTATIONS OR WARRANTIES
    	
29
    
	
 
    	
 
    
	
10. ASSIGNMENT
    	
30
    
	
 
    	
 
    
	
11. GENERAL COMPLIANCE WITH LAWS
    	
31
    
	
 
    	
 
    
	
12. TERMINATION
    	
32
    
	
 
    	
 
    
	
13. DISPUTE RESOLUTION
    	
33
    
	
 
    	
 
    
	
14. CONFIDENTIALITY
    	
35
    
	
 
    	
 
    
	
15. MISCELLANEOUS
    	
37
    
	
 
    	
 
    
	
APPENDIX A
    	
40
    
	
 
    	
 
    
	
APPENDIX B
    	
41
    

 

i

 

EXCLUSIVE LICENSE AGREEMENT

 

This Agreement, effective as of February 22, 2013 (the “EFFECTIVE DATE”), is between the Dana-Farber Cancer Institute, Inc. (“DFCI”), a Massachusetts non-profit organization having a principal place of business at 450 Brookline Ave., Boston, MA 02215 and Syros Pharmaceuticals, Inc. (“COMPANY”), a Delaware corporation, having a principal place of business at 1 Memorial Drive, Seventh Floor, Cambridge MA 02142.

 

R E C I T A L S

 

WHEREAS, DFCI is the owner of certain PATENT RIGHTS (as later defined herein) relating to [**], and DFCI has the right to giant licenses under said PATENT RIGHTS;

 

WHEREAS, DFCI has the exclusive right to grant licenses under said PATENT RIGHTS, subject only to a royalty-free, nonexclusive, non-transferable license to practice the PATENT RIGHTS granted to the United States Government for government purposes;

 

WHEREAS, DFCI desires to have the PATENT RIGHTS developed and commercialized to benefit the public by granting a license;

 

COMPANY has represented to DFCI that it has the financial capacity and the strategic commitment to facilitate the transfer of the technology for the public interest using commercially reasonable efforts; and

 

COMPANY desires to obtain a license to DFCI’s rights under the PATENT RIGHTS and to use the DFCI MATERIALS and DFCI is willing to grant a license upon the terms and conditions of this Agreement.

 

NOW, THEREFORE, DFCI, and COMPANY hereby agree as follows:

 

1.  DEFINITIONS

 

1.1                               “AFFILIATE” will mean any legal entity (such as a corporation, partnership, or limited liability company) that directly or indirectly controls, or is controlled by, or is under common control with, COMPANY.  For the purposes of this definition, the term “control” means (i) beneficial ownership of at least fifty percent (50%) of the voting securities of a corporation or other business organization with voting securities or (ii) a fifty percent (50%) or greater interest in the net assets or profits of a partnership or other business organization without voting securities, or (iii) the power to direct the management and policies of such entities.  The

 

1

 

parties acknowledge that in the case of certain entities organized under the laws of certain countries outside of the United States, the maximum percentage ownership permitted by law for a foreign investor may be less than fifty percent (50%), and that in such cases such lower percentage will be substituted in the preceding sentence.

 

1.2                               “COMBINATION PRODUCT” will mean any PRODUCT or LICENSED PROCESS sold or used in combination with one or more other products or processes which are not PRODUCTS or LICENSED PROCESSES.

 

1.3                               “FIELD” will mean all fields.

 

1.4                               “IMPROVEMENTS” will mean any new inventions and/or technology created after the EFFECTIVE DATE and up until thirty six months (36) from the EFFECTIVE DATE and no longer: (i) which DFCI owns or has sufficient rights to license hereunder; that are (ii) from the activities of Dr. Nathanael Gray, and/or others working under their supervision; (iii) not included in the PATENT RIGHTS; and (iv) is dominated by one or more claims of the PATENT RIGHTS and whose practice infringes one or more claims of the PATENT RIGHTS.

 

1.5                               “IND” will mean, with respect to a particular PRODUCT, an Investigational New Drug application submitted to the FDA, or a corresponding application filed with any other regulatory agency, seeking approval to begin tests of a new drug in human subjects.

 

1.6                               “LICENSED PROCESS” will mean any process that, absent the license granted hereunder, would infringe one or more claims of the PATENT RIGHTS.

 

1.7                               “DFCI MATERIALS” will mean those materials disclosed in the PATENT RIGHTS and improvements thereto set forth on Appendix C as of the EFFECTIVE DATE.

 

1.8                               “NDA” will mean a New Drug Application submitted to the FDA seeking approval to market and sell a PRODUCT in the United States of America, or a corresponding application filed with any other regulatory agency seeking approval to market and sell a PRODUCT in a country in the TERRITORY.

 

1.9                               “NET SALES” will mean the gross amount invoiced by COMPANY and its AFFILIATES and SUBLICENSEES for PRODUCTS sold to independent third party customers in bona-fide arms-length transactions, less the following deductions to the extent applicable, which may not exceed amounts which COMPANY, AFFILIATES and SUBLICENSEES in good faith believe are reasonable and customary in the country in which the transaction occurs

 

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and which are consistent with similar deductions applied by COMPANY or the relevant AFFILIATE or SUBLICENSEE to sales of its other products:

 

(i)                                     customary trade, quantity, or cash discounts to the extent actually allowed and taken;

 

(ii)                                  amounts repaid or credited by reason of rejection or return which are specifically identifiable to PRODUCTS;

 

(iii)                               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 PRODUCT which is paid by or on behalf of COMPANY or AFFILIATES OR SUBLICENSEES;

 

(iv)                              outbound fulfillment and transportation costs prepaid or allowed and costs of insurance in transit, and documented customs duties actually paid;

 

(v)                                 amounts written off for bad debts in accordance with customary accounting practices, provided that any such amounts subsequently paid shall be counted as NET SALES;

 

(vi)                              charge back payments and rebates granted to (1) managed healthcare organizations, (2) federal, state and/or provincial and/or local governments or other agencies, (3) purchasers and reimbursers, or (4) trade customers, including wholesalers and chain and pharmacy buying groups, all only to the extent permitted by applicable law and regulations; and

 

(vii)                           PRODUCTS provided at or below cost for (i) indigent care or patient assistance programs and/or humanitarian purposes, (ii) provided for promotional activities without payment, or (iii) provided to be administered in clinical trials.

 

COMPANY’S AFFILIATE’S or SUBLICENSEES’ transfer of PRODUCT between each other will not result in any NET SALES.  NET SALES includes the fair market value of any non-cash consideration from sale of PRODUCTS received by COMPANY, AFFILIATES or SUBLICENSEES.  PRODUCTS are considered “Sold” when invoiced or payment is received, whichever occurs first.

 

3

 

In the event that a PRODUCT or LICENSED PROCESS is sold as a COMBINATION PRODUCT, NET SALES, for the purposes of determining royalty payments on the COMBINATION PRODUCT, shall mean the gross amount collected for the COMBINATION PRODUCT less the deductions set forth above, multiplied by a proration factor that is determined as follows:

 

(1)                                 If all components of the COMBINATION PRODUCT were sold separately during the same or immediately preceding year, the proration factor shall be determined by the formula [A / (A+B)], where A is the average gross sales price of all PRODUCT or LICENSED PROCESS components (as applicable) during such period when sold separately from the other component(s), and B is the average gross sales price of the other component(s) during such period when sold separately from the PRODUCT or LICENSED PROCESS components (as applicable); or

 

(2)                                 If all components of the COMBINATION PRODUCT were not sold or provided separately during the same or immediately preceding year, the proration factor shall be determined by the Parties in good faith negotiations based on the relative value contributed by each component.

 

1.10                        “OTHER LICENSE AGREEMENTS” will mean the one (1) other license agreement entered into on the EFFECTIVE DATE by the parties hereto and the Whitehead Institute for Biomedical Research, and the one (1) license agreement entered into on the EFFECTIVE DATE by the Company and the Whitehead Institute for Biomedical Research, as such license agreements are amended or restated.

 

1.11                        “PATENT CHALLENGE” will mean a challenge to the validity or enforceability of any of the PATENT RIGHTS, and includes acts that institute, or cause counsel to institute, any interference, opposition, re-examination or similar proceeding with respect to any of the PATENT RIGHTS with the U.S. Patent and Trademark Office or any foreign patent office.

 

1.12                        “PATENT RIGHTS” will mean:

 

(i)                                     the United States and international patents listed on Appendix A;

 

4

 

(ii)                                  the United States and international patent applications and/or provisional applications listed on Appendix A and/or additional provisional patent applications filed claiming priority to the provisional applications listed on Appendix A, and the resulting patents;

 

(iii)                               any patent applications resulting from the provisional applications and invention disclosures listed on Appendix A, and any conversions, divisionals, continuations, continuation-in-part applications, and continued prosecution applications (and their relevant international equivalents) of the patent applications listed on Appendix A and of such patent applications that claim priority from or result from the provisional applications listed on Appendix A (including, without limitation, any related provisional patent applications filed during the one-year pendency of such provisional applications listed on Appendix A), to the extent the claims are directed to subject matter specifically described in the patent applications listed on Appendix A, and the resulting patents;

 

(iv)                              any patents resulting from reissues, reexaminations, or extensions (and their relevant international equivalents) of the patents described in (i), (ii), and (iii) above; and

 

(v)                                 international (non-United States) patent applications and provisional applications filed after the EFFECTIVE DATE and the relevant international equivalents to divisionals, continuations, continuation-in-part applications and continued prosecution applications of the patent applications to the extent the claims are directed to subject matter specifically described in the patents or patent applications referred to in (i), (ii), (iii), and (iv) above, and the resulting patents.

 

Notwithstanding the above, PATENT RIGHTS with respect to JNK application DFCI #[**] shall include only subject matter related to cyclin dependent kinases and recited in Appendix D.

 

5

 

1.13                        “PHASE I TRIAL” will mean a clinical study of the first introduction of a PRODUCT into a human subject.  In the United States, “PHASE I TRIAL” will mean a human clinical study that satisfies the requirements of 21 C.F.R. § 312.21(a).

 

1.14                        “PHASE II TRIAL” will mean a clinical study of a PRODUCT conducted to obtain preliminary data on its effectiveness for a particular indication(s) in human subjects with the disease or condition and its possible short-term side effects and risks.  In the United States, “PHASE II TRIAL” will mean a human clinical study that satisfies the requirements of 21 C.F.R. § 312.21 (b).

 

1.15                        “PHASE III TRIAL” will mean a clinical study of a PRODUCT in human subjects for the purpose of gathering the definitive information about efficacy, dosage, and safety in the proposed therapeutic indication to demonstrate that the PRODUCT is safe and effective in order for the FDA or other appropriate regulatory agency to approve an NDA to market the PRODUCT for the proposed indication.  In the United States, “PHASE III TRIAL” will mean a human clinical study that satisfies the requirements of 21 C.F.R. § 312.21 (c).

 

1.16                        “PRODUCT” will mean any product that in whole or in part:

 

(i)                                     absent the license granted hereunder, would infringe one or more claims of the PATENT RIGHTS; or

 

(ii)                                  is manufactured using a LICENSED PROCESS or that, when used, practices a LICENSED PROCESS.

 

1.17                        “REPORTING PERIOD” will begin on the first day of each calendar quarter and end on the last day of such calendar quarter.

 

1.18                        “SUBLICENSE INCOME” will mean any payments that COMPANY receives from a SUBLICENSEE in consideration of the sublicense of rights granted COMPANY under Section 2.1 with respect to PRODUCTS, including without limitation upfront fees, license fees, milestone payments, annual license maintenance fees, distribution or joint marketing fees, and premiums above the fair market value on bona fide equity investments, debt or other types of investments in the COMPANY.  Notwithstanding the foregoing, SUBLICENSE INCOME shall not include: (i) payments received for bona fide security investments, debt or other types of investments in the COMPANY, including the right to acquire COMPANY securities in the future, such as warrants, convertible debt and the like (other than premiums above the fair market value of such investments, debt or other types of investments as of the date of receipt of

 

6

 

such payments), (ii) amounts received by COMPANY directly based on PRODUCTS sold by third parties, including without limitation earned royalties, profit sharing payments and the like; (iii) reimbursements for out-of-pocket patent prosecution, maintenance, defense and enforcement costs for the PATENT RIGHTS; or (iv) reimbursement of bona fide research, development and commercialization costs actually incurred (including, without limitation, payments for FTEs).

 

1.19                        “SUBLICENSEE” will mean any non-AFFILIATE sublicensee of the rights granted COMPANY under Section 2.1.

 

1.20                        “SUBLICENSE AGREEMENT” will mean a written contractual agreement between COMPANY and a SUBLICENSEE granting a sublicense of the rights granted COMPANY under Section 2.1.

 

1.21                        “TERM” will mean the term of this Agreement, which shall commence on the EFFECTIVE DATE and shall remain in effect until the expiration or abandonment of the PATENT RIGHTS, unless earlier terminated in accordance with the provisions of this Agreement.

 

1.22                        “TERRITORY” will mean worldwide.

 

1.23                        “VALID CLAIM” will mean (i) any claim of an issued and unexpired PATENT RIGHT that (a) has not been held permanently revoked, unenforceable or invalid by a decision of a court or governmental agency of competent jurisdiction, which decision is unappealable or unappealed within the time allowed for appeal and (b) has not been abandoned, disclaimed, denied or admitted to be invalid or unenforceable through reissue or disclaimer or otherwise, or (ii) a claim of a pending PATENT RIGHT application that has not been pending for more than [**] years from the date of first action on the merits, which claim has not been abandoned or finally disallowed without the possibility of appeal or re-filing of the application.

 

2.  GRANT OF RIGHTS

 

2.1                               License Grants.  Subject to the terms of this Agreement, DFCI hereby grants to COMPANY and its AFFILIATES for the TERM a royalty-bearing license under the PATENT RIGHTS to make, have made, use, sell, offer to sell, and import PRODUCTS in the FIELD in the TERRITORY and to perform and have performed LICENSED PROCESSES in the FIELD in the TERRITORY.  Further, DFCI hereby grants to COMPANY and its AFFILIATES for the TERM a license under the DFCI MATERIALS.  As COMPANY may reasonably request.  DFCI

 

7

 

will provide DFCI MATERIALS in its possession and subject to availability within [**] days of such request.

 

2.2                               Exclusivity.  DFCI agrees that it shall not grant any other license or other rights under the PATENT RIGHTS to make, have made, use, sell, offer for sale or import PRODUCTS in all fields in the TERRITORY or to perform of have performed LICENSED PROCESSES in the FIELD in the TERRITORY during the TERM nor shall DFCI practice the PATENT RIGHTS, except as expressly permitted in Section 2.5.

 

2.3                               Sublicenses.  COMPANY will have the right to grant SUBLICENSE AGREEMENTS and other rights under Section 2.1 and this AGREEMENT and through multiple tiers; provided, however, that such multiple tier SUBLICENSE AGREEMENTS shall be consistent with the provisions herein with respect to SUBLICENSE AGREEMENTS and limited to SUBLICENSE AGREEMENTS where COMPANY has granted material COMPANY intellectual property rights and a SUBLICENSE AGREEMENT under this Agreement.  For the purpose of clarity, Sublicensees do not have the right to grant further SUBLICENSE AGREEMENTS except provided under this Section 2.3.  COMPANY shall incorporate terms and conditions into its SUBLICENSE AGREEMENTS sufficient to enable COMPANY to comply with this Agreement.  Upon termination of this Agreement for any reason, any SUBLICENSEE not then in default shall have the right to take a direct license from DFCI on substantially identical terms as this AGREEMENT.  DFCI agrees to execute such direct license and any non-identical terms will be negotiated between SUBLICENSEE and DFCI in good faith under reasonable terms and conditions in a timely manner.  COMPANY remains responsible for the operations of any SUBLICENSEE under this Agreement, as if the operations were carried out by COMPANY.

 

2.3.1                     Form and Content of Sublicenses.  COMPANY shall issue any sublicense(s) granted by it under this Agreement in writing and COMPANY shall include the equivalent of at least the following provisions with COMPANY in all sublicenses.

 

(a)                                 Sublicensees shall report [**] to COMPANY on its operations under the sublicense.

 

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(b)                                 Sublicensees shall make payments due to COMPANY in relation to NET SALES of PRODUCTS in a timely manner, so that COMPANY may comply with its obligations to make payments to DFCI as set forth in Section 4.

 

(c)                                  The terms and conditions of Section 2.4 (U.S. Manufacturing), Section 2.5 (Retained Rights), Section 5.3 (Record keeping), Section 11.3 (Non-Use of Name), Section 11.4 (Patent Marking), and Section 11.5 (Export Control) are binding on the sublicensee through the applicable SUBLICENSE AGREEMENT.

 

(d)                                 A section substantially the same as Section 8 (Indemnification and Insurance) shall be included which also will state that the Indemnitees (as defined in Section 8) are intended third party beneficiaries of such SUBLICENSE AGREEMENT solely for the purpose of enforcing such indemnification and insurance provisions.

 

2.3.2                     COMPANY shall forward to DFCI copies of any and all fully executed sublicenses promptly after execution, which copies may be reasonably redacted except for matters relevant to COMPANY’S obligations and DFCI’s rights under this Agreement, provided that sufficient information remains unredacted to allow DFCI to reasonably assess whether COMPANY is in compliance with its obligations under this Agreement and to verify amounts payable hereunder in connection with such sublicense agreement.  DFCI shall keep any such copies of sublicense agreements in their confidential files and shall use them solely for the purpose of monitoring COMPANY’S and SUBLICENSEES’ compliance with their obligations hereunder and enforcing DFCI’s rights under this Agreement.  Such copy shall be postmarked within [**] days of the execution of the sublicense.

 

2.3.3                     COMPANY’S Continuing Obligations.  Nothing in Section 2.3 may be construed to relieve COMPANY of its obligations to DFCI under this Agreement, including but not limited to COMPANY’S obligations under Section 8.

 

2.4                               U.S. Manufacturing.  COMPANY agrees that any PRODUCTS used or sold in the United States will be manufactured substantially in the United States as required by 35 U.S.C. 204 and 37 C.F.R. 401 et. seq., as amended.

 

9

 

2.5                               Retained Rights.

 

(a)                                 DFCI.  DFCI retains the right on behalf of itself, the right to practice the PATENT RIGHTS and use the DFCI MATERIALS for internal research, leaching and other educational purposes only, such internal research lo not include any commercial third party sponsored research or any industry sponsored clinical trials, and not for the purpose of commercial development, production, manufacture, distribution or sale of products or provision of services for a fee.

 

(b)                                 Academic and Not-For-Profit Research Institutes.  DFCI retains the right to grant non-exclusive licenses to other nonprofit or academic institutions to practice the PATENT RIGHTS and use DFCI MATERIALS in performing internal research or for education purposes (but in no case when sponsored or otherwise funded in any way by any for-profit entity); provided, however, that in no event shall any such license permit the practice or use of the PATENT RIGHTS for commercial activities of any kind or for commercial third party sponsored research.  DFCI may distribute DFCI MATERIALS to other nonprofit or academic institutions for the uses expressly permitted above (and not others), but only on the basis of a Material Transfer Agreement with such institution, substantially in the form attached hereto as Exhibit C (an “MTA”).  DFCI shall notify COMPANY when it enters into an MTA or distributes or otherwise provides any DFCI MATERIALS pursuant to this Section on a [**] basis.  DFCI shall not provide any DFCI MATERIALS to any for-profit third party.  DFCI shall refer any DFCI MATERIALS request from a for-profit third party to COMPANY.

 

(c)                                  Federal Government.  COMPANY acknowledges that the U.S. federal government retains a royalty-free, non-exclusive, non-transferable license to practice any government-funded invention claimed in any PATENT RIGHTS as set forth in 35 U.S.C. §§ 201-211, and the regulations promulgated thereunder, as amended, or any successor statutes or regulations.

 

2.6                               IMPROVEMENTS.  Provided that COMPANY is not then in default or breach of this Agreement, and subject to DFCI’s obligations under conflict of interest regulations or

 

10

 

guidelines from the federal government or policies of DFCI or subject to DFCIs obligations under third party corporate sponsorship or any obligations existing as of the Effective Date associated with third party materials, which determination shall be made in DFCIs reasonable discretion, DFCI hereby grants to COMPANY an exclusive option to receive an exclusive commercial license to all IMPROVEMENTS (“OPTION”).  The OPTION must be exercised within [**] days from the date of disclosure of any such IMPROVEMENT to COMPANY and the resulting license shall be incorporated into this Agreement as an amendment to the PATENT RIGHTS definition.  COMPANY shall agree with DFCI on terms which are reasonable and appropriate in licenses between industry and academic institutions, to be negotiated in good faith within [**] days of exercising the OPTION, which will be added to the COMPANY’S diligence obligations under Section 3 with respect to such IMPROVEMENTS, and DFCI shall timely amend APPENDIX A to include all relevant information for such IMPROVEMENT.  Should no license result from this process, DFCI shall be free to license IMPROVEMENTS to any third party, but DFCI, for a period of [**] shall not offer the IMPROVEMENT to a third party on lesser terms than offered to COMPANY.

 

2.7                               No Additional Rights.  Nothing in this Agreement shall be construed to confer any rights upon COMPANY by implication, estoppel, or otherwise as to any technology or patent rights of DFCI or any other entity other than the PATENT RIGHTS (save for patent rights on IMPROVEMENTS as provided above), regardless of whether such technology or patent rights shall be dominant or subordinate to any PATENT RIGHTS, and DFCI agrees to notify COMPANY in writing upon the determination that such dominant patent rights owned by DFCI exist.

 

3.  COMPANY DILIGENCE OBLIGATIONS

 

3.1                               COMPANY shall use commercially reasonable efforts, or shall cause one or more of its AFFILIATES and SUBLICENSEES to use commercially reasonable efforts, to develop one or more PRODUCTS or LICENSED PROCESSES and to introduce PRODUCTS or LICENSED PROCESSES into the commercial market; thereafter, COMPANY or its AFFILIATES or SUBLICENSEES shall make one or more PRODUCTS or LICENSED PROCESSES reasonably available to the public.  Specifically, COMPANY or AFFILIATE or SUBLICENSEE shall fulfill the following obligations:

 

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(i)                                     Within [**] months after the EFFECTIVE DATE, COMPANY shall furnish DFCI with a written research and development plan describing the major tasks to be achieved in order to bring to market a PRODUCT, specifying the number of staff and other resources to be devoted to such development effort.

 

(ii)                                  Within [**] days after the end of each calendar year, COMPANY shall furnish DFCI with a written report (consistent with Section 5.1 (a)) on the progress of its efforts during the immediately preceding calendar year to develop and commercialize a PRODUCT.  The report shall also contain a discussion of intended efforts for the year in which the report is submitted.

 

3.2                               Diligence Requirements.  If, in any full calendar year, COMPANY or any one or more AFFILIATES or SUBLICENSEES, alone or together, has performed any one of the following with respect to a PRODUCT or a LICENSED PROCESS, then COMPANY shall be deemed to have complied with COMPANY’S obligations under this Section 3 for such calendar year:

 

(i)                                     is actively researching or developing one or more PRODUCTS as evidenced by the commitment to such work of [**] or more full-time equivalent staff;

 

(ii)                                  has expended a minimum of [**] dollars ($[**]) for development of one or more PRODUCTS annually, not including all amounts paid under this AGREEMENT;

 

[**].

 

COMPANY shall be actively conducting a trial during the process of activating sites and/or screening or enrolling patients.  In the event that COMPANY or any of its AFFILIATES or SUBLICENSEES, alone or together, has not performed at least one of Sections 3.2(i) through (x) during such full calendar year with respect to at least one PRODUCT, then DFCI may treat such failure as a material breach in accordance with Section 12.3(b) (it being understood that performance of at least one of Sections 3.2(i) through (x) during the [**]-day cure period and as applicable during the [**] months thereafter shall cure such breach).

 

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4.  ROYALTIES AND PAYMENT TERMS

 

4.1                               Consideration for Grant of Rights.

 

(a)                                 License Issue Fee, Patent Cost Reimbursement, Ongoing Patent Costs and FUNDING MILESTONE PAYMENTS.  COMPANY shall pay to DFCI on the EFFECTIVE DATE a license issue fee of fifty thousand dollars ($50,000), and, such amounts required as reimbursement in accordance with Section 6.3, relating to actual expenses incurred as of the EFFECTIVE DATE in connection with obtaining the PATENT RIGHTS (or [         ] Dollars ($[              ])).  In addition, in accordance with Section 6.3, COMPANY shall pay all such reasonable, direct, out-of-pocket, ongoing expenses in connection with obtaining the PATENT RIGHTS incurred after the EFFECTIVE DATE.

 

COMPANY shall pay to DFCI one FUNDING MILESTONE PAYMENT as follows: one hundred twenty-five thousand dollars ($125,000) upon the earlier of (1) [**] years after the EFFECTIVE DATE or (2) COMPANY raising [**] Dollars ($[**]) in one or more rounds of equity financing.  This payment is nonrefundable and is due within [**] months of equity financing closing.

 

(b)                                 License Maintenance Fees.  COMPANY shall pay to DFCI the following license maintenance fees on January 1 of each year set forth below:

 

	
Year(s)
    	
 
    	
License
   Maintenance Fee
    
	
[**]
    	
 
    	
[**]
    
	
[**]
    	
 
    	
[**]
    
	
[**]
    	
 
    	
[**]
    
	
[**]
    	
 
    	
[**]
    
	
[**]
    	
 
    	
[**]
    

 

This license maintenance fee is nonrefundable; however, the license maintenance fee may be credited to all payments due during the same calendar year, if any except patent cost reimbursements as provided in Section 6.3.  License maintenance fees paid in excess of such payments due in such calendar year shall not be creditable to amounts due for future years.

 

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(c)                                  Milestone Payments.  COMPANY shall pay to DFCI the following milestone payments upon first achievement of the following milestones whether by COMPANY, its AFFILIATE, or a SUBLICENSEE (in DOLLARS) for the first PRODUCT and the second PRODUCT only, wherein the first PRODUCT and the second PRODUCT are distinct and separate chemical entities requiring separate regulatory approvals:

 

[**]

 

A “MAJOR COUNTRY” will mean Germany, France, Italy, Spain or the United Kingdom.

 

COMPANY shall provide DFCI with written notice and such milestone payment within [**] days after achieving each milestone.  Each such milestone payment shall be payable only once for each of the first PRODUCT and the second PRODUCT.  These milestone payments are nonrefundable.

 

(d)                                 Running Royalties on PRODUCTS.  COMPANY shall pay to DFCI:

 

(i)                                     a running royalty of [**] percent ([**]%) of NET SALES on an annualized basis up to $[**] in Net Sales of PRODUCTS, by COMPANY, AFFILIATES and SUBLICENSEES in those countries where such sale infringes one or more VALID CLAIMS;

 

(ii)                                  a running royalty of [**] percent ([**]%) of NET SALES on an annualized basis between $[**] and $ [**] in Net Sales of PRODUCTS by COMPANY, AFFILIATES and SUBLICENSEES in those countries where such sale infringes one or more VALID CLAIMS; or

 

(iii)                               a running royalty of [**] percent ([**]%) of NET SALES on an annualized basis in excess of $[**] in Net Sales of PRODUCTS by COMPANY, AFFILIATES and SUBLICENSEES in those countries where such sale infringes one or more VALID CLAIMS.

 

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(e)                                  Adjustments.  The provisions of Section 4.1(d) will be adjusted as follows:

 

(1)                                 If the PRODUCT for a given therapeutic area (e.g. cancer, cardiovascular, and autoimmune disease) is the [**] from the EFFECTIVE DATE the applicable royalty rate for all PRODUCTS in that therapeutic area will be: (a) if there is a SUBLICENSEE, the lesser of: (1) the royalty rates as provided above for that PRODUCT or (2) [**]% of the royalty payments made to COMPANY by a SUBLICENSEE of that PRODUCT if sublicensed; or (b) if there is not a SUBLICENSEE, then the royalty rate as provided above for that PRODUCT.

 

(2)                                 If the PRODUCT for a given therapeutic area becomes [**] from the EFFECTIVE DATE, the applicable royalty rate for all PRODUCTS in that therapeutic area will be: (a) if there is a SUBLICENSEE, the lesser of (1) [**]% of the royalty rates as provided above for that PRODUCT or (2) [**]% of the royalty payments made to COMPANY by a SUBLICENSEE of that PRODUCT if sublicensed; or (b) if there is not a SUBLICENSEE, then [**]% of the royalty rate as provided above for that PRODUCT.

 

(3)                                 If the PRODUCT for a given therapeutic area becomes the [**] from the EFFECTIVE DATE, the applicable royalty rate for all PRODUCTS in that therapeutic area will be: (a) if there is a SUBLICENSEE, the lesser of (1) [**]% of the royalty rates as provided above for that PRODUCT or (2) [**]% of the royalty payments made to COMPANY by a SUBLICENSEE of that PRODUCT if sublicensed; or (b) if there is not a SUBLICENSEE, then [**]% of the royalty rate as provided above for that PRODUCT.

 

(4)                                 For clarity, the above adjustments apply for a single therapeutic area.  PRODUCTS developed for a second or third (or further) therapeutic area(s) will be subject anew to the adjustments provided for above under Section 4.1(e) 1-3.

 

Upon expiration of the AGREEMENT or completion of all of COMPANY’S royalty obligations with respect to all PRODUCTS, the license grants contained herein shall become fully paid-up, royalty-free, perpetual and irrevocable.

 

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Royalty Stacking.  To the extent that COMPANY acquires or obtains licenses to third party patent rights or other intellectual property necessary for manufacture, use and sale of a PRODUCT, COMPANY may deduct from any royalties due to DFCI hereunder for such PRODUCT and no others, a maximum of [**] percent ([**]%) of the amounts due and/or paid to such third parties that exceed [**]% of NET SALES of such PRODUCT.  As an example for purposes of illustration, if such third party royalty owed by COMPANY is [**] percent of Net Sales, only [**] percent (i.e. [**] percent) would be creditable to the amount owed DFCI.  Any such credit shall not reduce the amounts owed DFCI by more than [**]% of what was otherwise owed for such PRODUCT.

 

Royalty Minimums.  The adjustments provided for above or elsewhere in this AGREEMENT will not reduce the running royalty rate COMPANY shall pay to DFCI below the following levels:

 

[**] percent ([**]%) of NET SALES by COMPANY, AFFILIATES and SUBLICENSEES in those countries where such sale infringes one or more VALID CLAIMS for annualized NET SALES of less than $[**];

 

[**] percent ([**]%) of NET SALES by COMPANY, AFFILIATES and SUBLICENSEES in those countries where such sale infringes one or more VALID CLAIMS for annualized NET SALES between $[**] to $[**];

 

[**] percent ([**]%) of NET SALES, by COMPANY, AFFILIATES and SUBLICENSEES in those countries where such sale infringes one or more VALID CLAIMS for annualized NET SALES of more than $[**].

 

(f)                                   Sharing of NON-ROYALTY SUBLICENSE INCOME.  COMPANY shall pay DFCI the following percentage of SUBLICENSE INCOME:

 

(i)                                     [**]% of SUBLICENSE INCOME received by COMPANY from the EFFECTIVE DATE until the earliest of (1) [**] months from the EFFECTIVE DATE; (2) [**]; or (3) the aggregate payment of [**] Dollars ($[**]) to

 

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DFCI under this Section 4.1 (f) (the earliest of (1), (2), and (3), the “FIRST STEPDOWN”);

 

(ii)                                  From the FIRST STEPDOWN, [**]% of SUBLICENSE INCOME received by COMPANY until the earliest of (1) [**] months from the EFFECTIVE DATE; (2) [**], or (3) an aggregate payment of [**] Dollars ($[**]) to DFCI under this Section 4.1(f)(ii) (the earliest of (1), (2), and (3), the “SECOND STEPDOWN”);

 

(iii)                               From the SECOND STEPDOWN, [**]% of SUBLICENSE INCOME received by COMPANY until the earliest of (1) [**] months from the EFFECTIVE DATE; (2) [**]; or (3) an aggregate payment of [**] Dollars ($[**]) to DFCI under this Section 4.1 (f)(iii) (the earliest of (1), (2), and (3) the “THIRD STEPDOWN”); and

 

(iv)                              from the THIRD STEPDOWN, [**]% of SUBLICENSE INCOME received by COMPANY thereafter.

 

For clarity, any of the foregoing STEPDOWNS specified above may apply to a single payment from a SUBLICENSEE if such payment triggers the payment thresholds specified above (so that such payment will be subject to different sharing percentages).

 

Such amounts shall be payable for each REPORTING PERIOD and shall be due to DFCI within [**] days of the end of each REPORTING PERIOD.  Further, if COMPANY pays to DFCI a milestone payment under Section 4.1(c) for achieving a milestone for which COMPANY receives from a Sublicensee a payment for achieving the same or substantially same milestone with respect to the same Product and indication, as relevant, subject to this Section 4.1(f), then the amount of COMPANY’S payment to DFCI under Section 4.1 (c) shall be deducted from such SUBLICENSEE’S payment for purposes of this Section 4.1(f) and shall not be subject to such percentage share.  To the extent that patent rights, other intellectual property rights or other rights or obligations other than PATENT RIGHTS for PRODUCTS are sublicensed hereunder by COMPANY, that portion of the consideration received by COMPANY and subject to this Section 4.1(f)

 

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shall be equitably apportioned between those PATENT RIGHTS and those other rights and obligations, and such apportionment shall be reasonable and in accordance with customary standards in the industry.

 

For clarity, (A) those other rights and obligations include, without limitation, other patent rights sublicensed under any OTHER LICENSE AGREEMENTS, and (B) there shall not be sharing of any specific SUBLICENSE INCOME among this Agreement and the OTHER LICENSE AGREEMENTS, since this AGREEMENT and the OTHER LICENSE AGREEMENTS apply to different patent rights.

 

COMPANY shall promptly deliver to DFCI a written report setting forth such apportionment.  In the event DFCI disagrees with the determination made by COMPANY, DFCI shall so notify COMPANY within [**] days of receipt of COMPANY’S report and the parties shall meet to discuss and resolve such disagreement in good faith.  If the parties are unable to agree in good faith as to such fair market values within [**] days, then the matter shall be submitted in accordance with the dispute resolution process set forth in Section 13.1, and if COMPANY owes additional monies to DFCI after the conclusion of such process COMPANY shall have [**] days after the completion of such process to make such payment to DFCI.

 

(g)                                  No Multiple Royalties.  If the manufacture, use, offer for sale, import, or sale of any PRODUCT or the performance of any LICENSED PROCESS is covered by more than one of the PATENT RIGHTS, multiple royalties shall not be due.

 

(h)                                 OTHER LICENSE AGREEMENTS.  As provided above for running royalties under Section 4.1(d) by reason of crediting, no more than one such running royalty shall be payable under this Agreement and the OTHER LICENSE AGREEMENTS when taken together with respect to the same or substantially same product, respectively, provided the higher amount will be due under any of those three (3) agreements with respect thereto.  Likewise, as provided above for SUBLICENSE INCOME under Section 4.1(f), any SUBLICENSE INCOME or CORPORATE PARTNERSHIP INCOME shall be

 

18

 

apportioned among those three (3) agreements so any portion of any SUBLICENSE INCOME shall be shared only once under one (1) of those three (3) agreements.

 

4.2                               Payments.

 

(a)                                 Method of Payment.  All payments under this Agreement should be made payable to Dana-Farber Cancer Institute and sent to DFCIs address identified below.

 

Each payment should reference this Agreement and identify the obligation under this Agreement that the payment satisfies.  Payments by check should be sent to:

 

Fiscal Manager
 Office of Research and Technology Ventures 
 Dana Farber Cancer Institute 
 450 Brookline Ave. 
 Boston, MA 02215

 

or if by wire transfer, using the following information:

 

Bank: [**]
 Bank Address: [**]
 Account#[**]
 ABA# [**]
 Reference: [**]

 

(b)                                 Payments in U.S. Dollars.  All payments due under this Agreement shall be drawn on a United States bank and 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 of the applicable REPORTING PERIOD.  Such payments shall be without deduction of exchange, collection, or other charges, and, specifically, without deduction of withholding or similar taxes or other government imposed fees or taxes, except as permitted in the definition of NET SALES.  To the extent it has the legal right to do so and at the reasonable request of COMPANY, DFCI will assist COMPANY in reclaiming or seeking reimbursement any amounts withheld under this Section 4.2(b) from the appropriate government, agency or taxing authority.  For tax

 

19

 

withholding purposes that arise with respect to such payments, COMPANY shall treat DFCI as a 501(c)(3) tax-exempt charitable organization, to the extent DFCI remains a tax-exempt charitable organization.

 

(c)                                  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.  The interest will be calculated at the annual rate of the sum of (a) [**] percent ([**]%) plus (b), the prime interest rate quoted by Bank of America on the date the payment is due, the interest being compounded on the last day of each calendar quarter.  However, the annual rate may not exceed the maximum legal interest rate allowed in Massachusetts.  The payment of interest as required by this Section does not foreclose DFCI from exercising any other rights or remedies it has as a consequence of the lateness of any payment.

 

5.  REPORTS AND RECORD KEEPING

 

5.1                               Frequency of Reports.

 

(a)                                 Before First Commercial Sale.  Prior to the first commercial sale of any PRODUCT or first commercial performance of any LICENSED PROCESS, COMPANY shall deliver reports to DFCI [**], within [**] days of the end of each [**], containing information concerning the immediately preceding [**], as further described in Section 5.2.

 

(b)                                 Upon First Commercial Sale of a PRODUCT or Commercial Performance of a LICENSED PROCESS.  COMPANY shall report to DFCI the date of first commercial sale of a PRODUCT and the date of first commercial performance of a LICENSED PROCESS within [**] days of occurrence in each country.

 

(c)                                  After First Commercial Sale.  After the first commercial sale of a PRODUCT or first commercial performance of a LICENSED PROCESS, COMPANY shall deliver reports to DFCI within [**] days of the end of each REPORTING PERIOD, containing information concerning the immediately preceding REPORTING PERIOD, as further described in Section 5.2.

 

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5.2                               Content of Reports and Payments.  Each report delivered by COMPANY to DFCI shall contain at least the following information for the immediately preceding REPORTING PERIOD:

 

(i)                                     the number of PRODUCTS manufactured, sold, leased or distributed by COMPANY, its AFFILIATES and SUBLICENSEES to independent third parties in each country, and, if applicable, the number of PRODUCTS used by COMPANY, its AFFILIATES and SUBLICENSEES in the provision of services in each country;

 

(ii)                                  a description of LICENSED PROCESSES performed by COMPANY, its AFFILIATES and SUBLICENSEES in each country as may be pertinent to a royalty accounting hereunder;

 

(iii)                               the gross price charged by COMPANY, its AFFILIATES and SUBLICENSEES for each PRODUCT and, if applicable, the gross price charged for each PRODUCT used to provide services in each country; and the gross price charged for each LICENSED PROCESS performed by COMPANY, its AFFILIATES and SUBLICENSEES in each country;

 

(iv)                              calculation of NET SALES for the applicable REPORTING PERIOD in each country, including a listing of applicable deductions;

 

(v)                                 total royalty payable on NET SALES in U.S. dollars, together with the exchange rates used for conversion;

 

(vi)                              the amount of SUBLICENSE INCOME received by COMPANY from each SUBLICENSEE and the amount deliverable to DFCI from such SUBLICENSE INCOME, including an itemized breakdown of the sources of income comprising the SUBLICENSE INCOME; and

 

(vii)                           the number of sublicenses entered into for the PATENT RIGHTS, PRODUCTS and/or LICENSED PROCESSES.

 

If no amounts are due for any REPORTING PERIOD, the report shall so state.  COMPANY shall use commercially reasonable efforts to enter into a SUBLICENSE AGREEMENT whereby the applicable SUBLICENSEE provides the information necessary for the foregoing, but if despite such commercially reasonable efforts, COMPANY is unable to obtain all such information from such SUBLICENSEE, then COMPANY shall be in compliance

 

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with this Section 5 by providing such relevant information as COMPANY is able to obtain from such SUBLICENSEE.

 

5.3                               Record keeping.  COMPANY shall maintain, and shall cause its AFFILIATES and SUBLICENSEES to maintain, complete and accurate records relating to the rights and obligations under this Agreement and any amounts payable to DFCI in relation to this Agreement, which records shall contain sufficient information to permit DFCI to confirm the accuracy of any reports delivered to DFCI and compliance in other respects with this Agreement.  COMPANY shall keep it records at its principal place of business or the principal place of business of the appropriate division of COMPANY to which this Agreement relates and shall require its AFFILIATES to keep their books and records in the same manner.

 

The relevant party shall retain such records for at least [**] years following the end of the calendar year to which they pertain, during which lime DFCI or DFCIs appointed agents, shall have the right, at DFCIs expense, to inspect such records during normal business hours to verify any reports and payments made or compliance in other respects under this Agreement. In the event that any audit performed under this Section reveals an underpayment in excess of [**] percent ([**]%), COMPANY shall bear the full out-of-pocket cost of such audit and shall remit any amounts due to DFCI, plus interest as set forth in Section 4.2(c) above within [**] days of receiving notice thereof from DFCI.  Any over-payments may be taken as a credit under this Agreement.

 

6.  PATENT PROSECUTION

 

6.1                               Responsibility for PATENT RIGHTS.  DFCI, in its sole discretion, shall prepare, file, prosecute, and maintain all of the PATENT RIGHTS.  For purposes of this Agreement, patent prosecution includes ex parte prosecution, interference proceedings, reissues, reexaminations and oppositions.  As long as the license remains exclusive, DFCI shall provide, or cause its agent to provide, on a timely basis copies of relevant correspondence between DFCI and the United States Patent Office or the various foreign patent offices and give COMPANY reasonable opportunity to advise DFCI or DFCIs counsel on such matters.  COMPANY shall designate an individual or department for receiving the patent-related correspondence.

 

COMPANY shall have reasonable opportunities to consult with and advise DFCI.  DFCI shall consider the legitimate interests of COMPANY in performing its responsibility under this

 

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Section 6.1 and consider all reasonable comments from COMPANY regarding same COMPANY shall cooperate with DFCI in such filing, prosecution and maintenance.  To the extent that DFCI uses outside patent counsel for the foregoing activities, COMPANY (and its outside patent counsel) will have direct access to such patent counsel for DFCI in coordination with the following individual or department, who will have primary responsibility for such requests by COMPANY.

 

Attorney for Intellectual Property 
 Office of General Counsel 
 Dana-Farber Cancer Institute, Inc. 
 450 Brookline Ave. 
 Boston, MA 02215

 

(i)                                     COMPANY shall cooperate with DFCI in preparing, filing, prosecuting and maintaining the patent applications and patents within PATENT RIGHTS.  COMPANY shall provide prompt notice to DFCI of any non-privileged, public information that comes to its attention that may affect the patentability, validity or enforceability of any patent application or patent within PATENT RIGHTS.

 

(ii)                                  COMPANY may surrender its licenses under any, of the patents or patent applications within PATENT RIGHTS in any country of the licensed Territory by giving [**] days advance written notice to DFCI.  If COMPANY so surrenders its rights, it will remain responsible for all patent-related expenses incurred by DFCI and not reimbursed by a third party during the applicable notice period, but DFCI shall take reasonable steps to minimize such expenses.  Thereafter, COMPANY will have no further obligation to pay any patent expenses for the patents or patent applications that it surrendered.  Notwithstanding the foregoing, if such surrender results in termination of all rights under this Agreement, then the termination notice provision in Section 12, below, shall apply.

 

6.2                               International (non-United States) Filings.  Appendix B is a list of countries in which patent applications corresponding to the United States patent applications listed in

 

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Appendix A shall be filed, prosecuted, and maintained.  Appendix B may be amended by mutual agreement of DFCI and COMPANY.

 

6.3                               Payment of Expenses.  Payment of all reasonable, direct, out-of-pocket fees and costs, including reasonable attorneys’ fees, relating to the filing, prosecution and maintenance of the PATENT RIGHTS, will be the responsibility of COMPANY following receipt of invoices for such fees and costs from DFCI, whether such amounts were incurred before or after the EFFECTIVE DATE.  As of the EFFECTIVE DATE such amount is [    ].  COMPANY shall reimburse [**] percent ([**]%) of such amount due pursuant to this Section 6.3 within [**] days of the EFFECTIVE DATE and/or receipt of invoices from DFCI, whichever is the earlier to occur, and make [**] additional payments in successive [**] month periods thereafter equal to [**] percent ([**]%) each.  As of the EFFECTIVE DATE COMPANY shall pay one hundred percent (100%) of all such fees and costs accrued after the EFFECTIVE DATE, until such time as there is another one or more licensees under the PATENT RIGHTS, in which event COMPANY shall only be required to pay its pro rata share of all such fees and costs based on the number of licensees (including COMPANY); late payments shall accrue interest pursuant to Section 4.2(c).  In all instances, the fees prescribed for correct entities shall be paid to the United States Patent and Trademark Office.  COMPANY shall pay up to $[**] in patent expenses incurred for DFCI Case #[**].

 

7.  INFRINGEMENT

 

7.1                               Notification of Infringement.  Each party agrees to provide written notice to the other parties promptly after becoming aware of infringement of the PATENT RIGHTS in the FIELD.

 

7.2                               Right to Prosecute Infringements.

 

(a)                                 COMPANY Right to Prosecute.  So long as COMPANY remains the exclusive licensee of the PATENT RIGHTS in the FIELD in the TERRITORY, COMPANY, to the extent permitted by law, 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 in the TERRITORY, subject to Sections 7.4 and 7.5.  If required by law, DFCI shall permit any action under this Section 7.2 to be brought in its name, including being joined as a party-

 

24

 

plaintiff, provided that COMPANY shall hold DFCI harmless from, and indemnify DFCI against, any costs, expenses, or liability that DFCI incur in connection with such action.

 

Prior to commencing any such action, COMPANY shall consult with DFCI and shall consider the views of DFCI 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 Section 7.2 that results in an obligation or responsibility of DFCI without the prior written consent of DFCI, such consent not to be unreasonably withheld, delayed or conditioned.

 

(b)                                 DFCI Right to Prosecute.  In the event that COMPANY is unsuccessful in persuading the alleged infringer to desist or fails to have initiated an infringement action within a reasonable time after COMPANY first becomes aware of the basis for such action, DFCI shall have the right, at its sole discretion, to prosecute such infringement under its sole control and at its sole expense.

 

7.3                               Declaratory Judgment Actions.  In the event that a PATENT CHALLENGE or any suit or action alleging that the PATENT RIGHTS are not infringed or unpatentable is brought against DFCI or COMPANY or any AFFILIATES or SUBLICENSEES by a third party, the subject party shall promptly notify the other parties in writing, and COMPANY, at its option and upon written notice to DFCI, shall have the right, but shall not be obligated, within [**] days after commencement of such action to take over the sole defense of the action at its own expense.  If COMPANY does not exercise this right, DFCI may take over the sole defense of the action at DFCIs sole expense, but shall not be obligated to do so, subject to Sections 7.4 and 7.5.

 

7.4                               Offsets.  COMPANY may offset a total of [**] percent ([**]%) of any expenses incurred under Sections 7.2 and 7.3 against any payments due to DFCI under Section 4, provided that in no event shall such payments under Section 4, when aggregated with any other offsets and credits allowed under this Agreement, be reduced by more than [**] percent ([**]%) in any REPORTING PERIOD.

 

7.5                               Recovery.  In the event that any party exercises the rights conferred in this Section 7 and recovers any damages or other sums in such action, such damages or other sums recovered shall first be applied to all out-of-pocket costs and expenses incurred by the parties in connection therewith (including, without limitation, attorney’s fees).  If such recovery is

 

25

 

insufficient to cover all such costs and expenses of the parties, the controlling party’s costs shall be paid in full first before any of the other party’s costs.  If after such reimbursement any funds shall remain from such damages or other sums recovered, such funds shall be retained by the party that controlled the action or proceeding under this Section 7; provided, however, that (a) if COMPANY is the party that controlled such action or proceeding.  DFCI shall receive out of any such remaining recovery received by COMPANY an amount equal to royalties payable hereunder by treating such remaining recovery as “Net Sales” hereunder and (b) if DFCI is the party that controlled such action or proceeding, the remaining recovery received by DFCI shall be shared equally between COMPANY and DFCI.

 

7.6                               Cooperation.  Each party agrees to cooperate in any action under this Section 7 which is controlled by any other party, provided that the controlling party reimburses the cooperating parties promptly for any reasonable costs and expenses incurred by the cooperating parties in connection with providing such assistance.

 

7.7                               Right to Sublicense.  So long as COMPANY remains the exclusive licensee of the PATENT RIGHTS in the FIELD in the TERRITORY, COMPANY shall have the sole right to sublicense any alleged infringer in the FIELD in the TERRITORY for future use of the PATENT RIGHTS in accordance with the terms and conditions of this Agreement relating to sublicenses as set forth in Section 2.3.

 

7.8                               Patent Certifications.  DFCI shall notify and provide COMPANY with copies of any allegations of alleged patent invalidity, unenforceability or non-infringement of any PATENT RIGHT pursuant to a Paragraph IV Patent Certification by a Third party filing an Abbreviated New Drug Application, an application under §505(b)(2) or any other similar patent certification by a third party, and any foreign equivalent thereof.  Such notification and copies shall be provided to COMPANY within [**] business days after DFCI receives such certification.

 

8.  INDEMNIFICATION AND INSURANCE

 

8.1                               Indemnification.

 

(a)                                 Indemnity.  COMPANY shall indemnify, defend, and hold harmless DFCI and their trustees, officers, faculty, students, medical and professional staff, employees, and agents and their respective successors, heirs

 

26

 

and assigns (the “Indemnitees”), against any liability, damage, loss, or expense (including reasonable attorneys’ fees and expenses) incurred by or imposed upon the Indemnitees or any one of them, in connection with any claims, suits, investigations, actions, demands or judgments (i) arising out of the design, production, manufacture, sale, use in commerce, lease, or promotion by COMPANY or by a SUBLICENSEE, AFFILIATE or agent of COMPANY, or any product, process or service relating to, or developed pursuant to, this Agreement or (ii) arising out of any other activities to be carried out pursuant to this Agreement or (iii) related to the exercise of any rights granted to COMPANY under this Agreement or (iv) any breach of this Agreement by COMPANY.

 

COMPANY’S indemnification under Section 8.1 (a)(i) applies to any liability, damage, loss or expense whether or not it is attributable to the negligent activities of the Indemnitees.  COMPANY’S indemnification under Sections 8.1 (a)(ii) through 8.1 (a)(iv) does not apply to any liability, damage, loss or expense to the extent that it is attributable to the negligent activities of the Indemnitees, or the intentional wrongdoing or intentional misconduct of the Indemnitees.

 

(b)                                 Procedures.  If any such action is commenced or claim made or threatened against DFCI or other Indemnitees as to which COMPANY is obligated to indemnify it (them) or hold it (them) harmless, DFCI or the other Indemnitees agree to provide COMPANY with prompt written notice of any commenced or threatened 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 DFCI to defend against any actions brought or filed against any party indemnified hereunder with respect to the subject of the indemnity contained herein, whether or not such actions arc rightfully brought.  The Indemnitees shall cooperate 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 lo 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

 

27

 

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 DFCI informed of the progress in the defense and disposition of such claim and to consult with DFCI with regard to any proposed settlement.

 

The right of COMPANY to assume the defense of any action is limited to that part of the action commenced against DFCI and/or Indemnitees that relates to COMPANY’S obligation of indemnification and holding harmless.

 

COMPANY shall require any AFFILIATE(S) or SUBLICENSEE(S) to indemnify, hold harmless and defend DFCI under the same terms set forth in this Section 8.1.

 

8.2                               Insurance.  At such time as any product, process or service relating to, or developed pursuant to, this Agreement is being commercially distributed or sold (other than for the purpose of obtaining regulatory approvals) by COMPANY or by a SUBLICENSEE(S), AFFILATE(S) or agent of COMPANY, COMPANY shall obtain and carry in full force and effect commercial general liability insurance, including product liability insurance which shall protect COMPANY and Indemnitees with respect to events covered by Section 8.1.  Such insurance (i) shall be issued by an insurer licensed to practice in the Commonwealth of Massachusetts or an insurer pre-approved by DFCI, such approval not to be unreasonably withheld, (ii) shall list DFCI as additional insured thereunder, (iii) shall be endorsed to include product liability coverage, and (iv) shall require [**] days written notice to be given to DFCI prior to any cancellation or material change thereof.  The limits of such insurance shall not be less than [**] Dollars ($[**]) per occurrence with an aggregate of [**] Dollars ($[**]) for bodily injury including death; [**] Dollars ($[**]) per occurrence with an aggregate of [**] Dollars ($[**]) for property damage; and [**] Dollars ($[**]) per occurrence with an aggregate of [**] Dollars ($[**]) for errors and omissions.

 

In the alternative, if COMPANY elects to self insure all or part of the limits described above (including deductibles or retentions which are in excess of $[**] annual aggregate), such self-insurance program must be acceptable to and receive prior approval from DFCI, and the DFCIs associated Risk Management Foundation.  COMPANY shall provide DFCI with Certificates of Insurance evidencing compliance with this Section upon request of DFCI.

 

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COMPANY shall provide DFCI with written notice at least [**] days prior to the cancellation, non renewal or material change in such insurance; if COMPANY does not obtain replacement insurance providing comparable coverage within such [**]day period, DFCI has the right to terminate this Agreement effective at the end of such [**]day period without any notice or additional waiting periods.

 

The minimum amounts of insurance coverage required under these provisions may not be construed to create a limit of COMPANY’S liability with respect to its indemnification obligation under Section 8.1.

 

COMPANY shall maintain such comprehensive general liability insurance beyond the expiration or termination of this Agreement during (a) the period that any product, process, or service, relating to, or developed pursuant to, this Agreement is being commercially distributed or sold (other than for the purpose of obtaining regulatory approvals) by COMPANY or by a SUBLICENSEE, AFFILIATE or agent of COMPANY and (b) a reasonable period alter such lime as any product, process or service relating to, or developed pursuant to, this Agreement is being commercially distributed or sold (other than for the purpose of obtaining regulatory approvals), which in no event shall be less than [**] years.

 

9.  REPRESENTATIONS OR WARRANTIES

 

9.1                               Representations and Warranties.  To its knowledge, as of the Effective Date, DFCI represents and warrants that: (a) it solely and exclusively owns the patents and applications included within the PATENT RIGHTS; (b) it has the power and authority to grant the licenses provided for herein to COMPANY, and that it has not earlier granted, or assumed any obligation to grant, any rights in the PATENT RIGHTS to any third party that would conflict with the rights granted to COMPANY herein; (c) this Agreement constitutes the legal, valid and binding obligation of DFCI, enforceable against such DFCI in accordance with its terms; and (d) there is no infringement of the PATENT RIGHTS by any third party.

 

9.2                               Limitation on Representations and Warranties.  EXCEPT AS MAY OTHERWISE BE EXPRESSLY SET FORTH IN THIS AGREEMENT, DFCI MAKE NO REPRESENTATIONS OR WARRANTIES OF ANY KIND CONCERNING THE PATENT RIGHTS, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION WARRANTIES

 

29

 

OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT, VALIDITY OF PATENT RIGHTS CLAIMS, WHETHER ISSUED OR PENDING AND THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE.  Specifically, and not to limit the foregoing, DFCI make no warranty or representation (i) regarding the validity or scope of the PATENT RIGHTS, and (ii) that the exploitation of the PATENT RIGHTS or any PRODUCT or LICENSED PROCESS will not infringe any patents or other intellectual property rights of DFCI or of a third party.

 

EXCEPT FOR COMPANY’S INDEMNITY OBLIGATIONS UNDER SECTION 8.1.  IN NO EVENT SHALL EITHER PARTY, THEIR TRUSTEES, DIRECTORS, OFFICERS, EMPLOYEES FACULTY, STUDENTS, MEDICAL AND PROFESSIONAL STAFF, AGENTS AND AFFILIATES BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING ECONOMIC DAMAGES OR INJURY TO PROPERTY AND LOST PROFITS, REGARDLESS OF WHETHER DFCI SHALL BE ADVISED, SHALL HAVE OTHER REASON TO KNOW, OR IN FACT SHALL KNOW OF THE POSSIBILITY OF THE FOREGOING.

 

10.  ASSIGNMENT

 

This Agreement is personal to COMPANY and no rights or obligations may be assigned by COMPANY without the prior written consent of DFCI.  Any such assignment shall be void.  The foregoing notwithstanding, COMPANY may assign its rights and obligations under this Agreement 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 (however such transaction is structured); provided, however, that if this Agreement is assigned upon such merger, consolidation, or sale, (a) COMPANY shall pay to DFCI an Assignment Fee of [**] Dollars ($[**]), due within [**] days of the closing date of such transaction and (ii) this Agreement will immediately terminate if the proposed assignee has not agreed in writing to be bound by the terms and conditions of this Agreement within [**] days after the effective date of the assignment.

 

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11.  GENERAL COMPLIANCE WITH LAWS

 

11.1                        Compliance with Laws.  COMPANY shall use reasonable commercial efforts to comply with all commercially material local, state, federal, and international laws and regulations relating to the development, manufacture, use, and sale of PRODUCTS and LICENSED PROCESSES.

 

11.2                        Export Control.  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 DFCI harmless (in accordance with Section 8.1) for the consequences of any such violation.

 

11.3                        Non-Use of Name.  COMPANY and its AFFILIATES and SUBLICENSEES shall not use the name of “Dana-Farber Cancer Institute,” or any variation, adaptation, or abbreviation thereof, or of any of their trustees, officers, faculty, students, employees, or agents, or any trademark owned by DFCI, or any terms of this Agreement in any promotional material or other public announcement or disclosure without the prior written consent of the relevant party, which consent such party may withhold in its sole discretion.  DFCI shall not use the name of “Syros Pharmaceuticals, Inc.,” or any variation, adaptation, or abbreviation thereof, or of any of their directors, officers, employees, or agents, or any trademark owned by COMPANY, or any terms of this Agreement in any promotional material or other public announcement or disclosure without the prior written consent of the COMPANY, which consent such party may withhold in its sole discretion.  The foregoing notwithstanding, without the consent of DFCI, COMPANY may make factual statements during the term of this Agreement that COMPANY has a license from DFCI under one or more of the patents and/or patent applications comprising the PATENT RIGHTS and to use the DFCI MATERIALS.

 

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11.4                        Marking of PRODUCTS.  To the extent commercially feasible and consistent with prevailing business practices, COMPANY shall mark, and shall cause its AFFILIATES and shall use commercially reasonable efforts to cause its SUBLICENSEES to mark, all PRODUCTS that are manufactured or sold under this Agreement with the number of each issued patent under the PATENT RIGHTS that applies to such PRODUCT.

 

12.  TERMINATION

 

12.1                        Voluntary Termination by COMPANY.  COMPANY will have the right to terminate this Agreement, for any reason, (i) upon at least three (3) months prior written notice to DFCI, such notice to state die date at least three (3) months in the future upon which termination is to be effective, and (ii) upon payment of all undisputed amounts due to DFCI through such termination effective date.

 

12.2                        Cessation of Business.  If COMPANY ceases to carry on its business, DFCI will have the right to terminate this Agreement immediately upon written notice to COMPANY.

 

12.3                        Termination for Default.

 

(a)                                 Nonpayment.  In the event COMPANY fails to pay any amounts due and payable to DFCI hereunder, and fails to make such payments within [**] days after receiving written notice of such failure, DFCI may terminate this Agreement immediately upon written notice to COMPANY.

 

(b)                                 Material Breach.  In the event COMPANY commits a material breach of its obligations under this Agreement, except for breach as described in Section 12.3(a) and fails to cure that breach within [**] days after receiving written notice thereof, DFCI may terminate this Agreement immediately upon written notice to COMPANY subject to completion of the dispute resolution process set forth in Section 13 and the subsequent opportunity to cure.

 

12.4                        Effect of Termination.

 

(a)                                 Survival.  The following provisions shall survive the expiration or termination of this Agreement: Sections 1, the second sentence of Section 2.3, 5.2 (only for obligation to provide final report and payment), 8, 9, 10,12.4,13,14 and 15.

 

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(b)                                 Inventor.  Upon the early termination of this Agreement, COMPANY and its AFFILIATES and SUBLICENSEES may complete and sell any work-in-progress and inventory of PRODUCTS that exist as of the effective date of termination, provided that:

 

(i)                                     COMPANY pays DFCI the applicable running royalty or other amounts due on such sales of PRODUCTS in accordance with the terms and conditions of this Agreement; and

 

(ii)                                  COMPANY and its AFFILIATES and SUBLICENSEES shall complete and sell all work-in-progress and inventory of PRODUCTS within [**] months after the effective date of termination.

 

(c)                                  Pre-termination Obligations.  In no event shall termination of this Agreement release COMPANY, AFFILIATES, or SUBLICENSEES from the obligation to pay any amounts that became due on or before the effective date of termination.

 

13.  DISPUTE RESOLUTION

 

13.1                        Mandatory Procedures.  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 Section 13, and that such procedures constitute legally binding obligations that are an essential provision of this Agreement.  If any party fails to observe the procedures of this Section 13, as may be modified by their written agreement, the other parties may bring an action for specific performance of these procedures in any court of competent jurisdiction.

 

13.2                        Equitable Remedies.  Although the procedures specified in this Section 13 are the sole and exclusive procedures for the resolution of disputes arising out of or relating to this Agreement, any 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.

 

33

 

13.3                        Dispute Resolution Procedures.

 

(a)                                 Mediation.  In the event any dispute arising out of or relating to this Agreement remains unresolved within [**] days from the dale the affected party informed the other parties of such dispute, any party may initiate mediation upon written notice to the other party (“Notice Date’”), whereupon all 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 (http://www.cpradr.org) except that specific provisions of this Section 13 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 [**] business days after the Notice Date, then upon the request of any party, the CPR shall appoint the mediator.  The parties shall attempt to resolve the dispute through mediation until the first 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 [**] days after the Notice Date.

 

(b)                                 Other Remedies.  If the parties fail to resolve the dispute through mediation, or if no party elects to initiate mediation, each party shall have the right to pursue any other remedies legally available to resolve the dispute.

 

13.4                        Performance to Continue.  Each party shall continue to perform its undisputed obligations under this Agreement pending final resolution of any dispute arising out of or relating to this Agreement; provided, however, that a party may suspend performance of its undisputed obligations during any period in which any other party fails or refuses to perform its undisputed obligations.  Nothing in this Section 13 is intended to relieve COMPANY from its obligation to make undisputed payments pursuant to Sections 4 and 6.

 

13.5                        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

 

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forth in Section 13.3(a) are pending.  The parties shall cooperate in taking any actions necessary to achieve this result.

 

14.  CONFIDENTIALITY

 

14.1                        Non-disclosure and Non-use.

 

(a)                                 All information disclosed by one party to the other party hereunder shall be maintained in confidence by the receiving party and shall not be disclosed to any third party or used for any purpose except as set forth herein without the prior written consent of the disclosing party, for a period of [**] years from disclosure of such information, except to the extent that such information:

 

(i)                                     is known by receiving party at the time of its receipt, and not through a prior disclosure by the disclosing party, as documented by the receiving party’s business records;

 

(ii)                                  is or becomes part of the public domain through no fault of the receiving party;

 

(iii)                               is subsequently disclosed to the receiving party by a third party who may lawfully do so and is not under an obligation of confidentiality to the disclosing party;

 

(iv)                              is developed by the receiving party independently of Information received from the disclosing party, as documented by the receiving party’s business records;

 

(b)                                 Notwithstanding the foregoing, a party may disclose Information:

 

(i)                                     to governmental or other regulatory agencies in order to obtain patents or to gain or maintain approval to conduct clinical trials or to market PRODUCTS or LICENSED PROCESSES, provided however that such disclosure may be only to the extent reasonably necessary to obtain patents or authorizations.

 

(ii)                                  deemed necessary by COMPANY to be disclosed to SUBLICENSEES, agents, consultants, and/or other third parties for the development and/or commercialization of

 

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PRODUCTS, LICENSED PROCESSES and/or in connection with a licensing/sublicensing transaction and/or a permitted assignment under this Agreement, and/or loan, financing or investment and/or acquisition, merger, consolidation or similar transaction (or for such entities to determine their interest in performing such activities) in each case on the condition that any third party to whom such disclosures are made agree to be bound by a confidentiality agreement.

 

Information that is disclosed under 14.1 (b)(i) or 14.1(b)(ii) shall remain otherwise subject to the confidentiality and non-use provisions hereof.

 

14.2                        Judicial or Administrative Process.  If a party is required by judicial or administrative process to disclose Information that is subject to the non-disclosure provisions of this Section 14, such party shall promptly inform the other party of the disclosure that is being sought in order to provide the other party an opportunity to challenge or limit the disclosure obligations.

 

Information that is disclosed by judicial or administrative process shall remain otherwise subject to the confidentiality and non-use provisions hereof, and the disclosing party, pursuant to law or court order, shall take all steps reasonably necessary, including without limitation obtaining an order of confidentiality, to ensure the continued confidential treatment of such Information.

 

14.3                        SEC Filings.  Either party may publicly disclose the terms of this Agreement to the extent required, in the reasonable opinion of such party’s legal counsel, to comply with applicable laws, including without limitation the rules and regulations promulgated by the United States Securities and Exchange Commission (the “SEC”).  Notwithstanding the foregoing, before disclosing this Agreement or any of the terms hereof pursuant to this Section 14.3, the parties will consult with one another on the terms of this Agreement to be redacted in making any such disclosure.  If a party discloses this Agreement or any of the terms hereof in accordance with this Section 14.3, such party agrees, at its own expense, to seek confidential treatment of portions of this Agreement or such terms, as may be reasonably requested by the other party.

 

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14.4                        Notices.  DFCI will timely notify COMPANY if it receives any notices from third parties regarding this AGREEMENT or the PATENT RIGHTS.

 

15.  MISCELLANEOUS

 

15.1                        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 DFCI:
    	
Chief   Research Business Development Officer
    
	
 
    	
Dana-Farber   Cancer Institute, Inc.
    
	
 
    	
450   Brookline Avenue, BP304E
    
	
 
    	
Boston,   MA 02215
    
	
 
    	
 
    
	
If   to COMPANY:
    	
Syros   Pharmaceuticals, Inc.
    
	
 
    	
480   Arsenal Street, Suite 130
    
	
 
    	
Watertown,   MA 02472
    
	
 
    	
ATTN:   CEO
    
	
 
    	
617-744-1340
    
	
 
    	
617-744-1377
    

 

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 parties in the manner provided in this Section 15.1.

 

15.2                        Governing Law. This Agreement and all disputes arising out of or related to this Agreement, or the performance, enforcement, breach or termination hereof, and any remedies relating thereto, shall be construed, governed, interpreted and applied in accordance with the laws of the Commonwealth of Massachusetts, U.S.A., without regard to conflict of laws principles, except that questions affecting the construction and effect of any patent shall be determined by the law of the country in which the patent shall have been granted. The state and federal courts having jurisdiction over Boston, MA, USA, provide the exclusive forum for any court action between the parties relating to this Agreement. COMPANY and DFCI submit to the jurisdiction of such courts and waive any claim that such court lacks jurisdiction over DFCI, COMPANY or its AFFILIATES or constitutes an inconvenient or improper forum.

 

37

 

15.3                        Force Majeure. No 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.

 

15.4                        Amendment and Waiver. This Agreement may be amended, supplemented, or otherwise modified only by means of a written instrument signed by all 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.

 

15.5                        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 [**] days after the relevant provision is held invalid or unenforceable, then the dispute shall be resolved in accordance with the procedures set forth in Section 13. While the dispute is pending resolution, this Agreement shall be construed as if such provision were deleted by agreement of the parties.

 

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

 

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

 

15.8                        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.

 

Signatures follow on the next page.

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives.

 

	
For   DFCI:
    	
For   COMPANY:
    
	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:   
    	
/s/   O. Prem Das, Ph.D.
    	
 
    	
By:   
    	
/s/   Nancy Simonian
    
	
 
    	
 
    
	
Name:   O. Prem Das, Ph.D.
    	
Name:   Nancy Simonian
    
	
 
    	
 
    
	
Title:   Chief Research Business
    	
 
    
	
 
    	
 
    
	
Development   Officer, Dana-Farber
    	
 
    
	
 
    	
 
    
	
Cancer   Institute
    	
Title:  CEO
    
	
 
    	
 
    
	
Date:   2-22-2013
    	
Date: 4/9/2013
    

 

39

 

APPENDIX A

 

List of Patent Applications and Patents

 

[**]

 

40

 

APPENDIX B

 

List of Countries (excluding United States) for which 
 PATENT RIGHTS Applications Will Be Filed, Prosecuted and Maintained

 

[**].

 

41

 

APPENDIX C

 

LIST OF MATERIALS

 

[**]

 

42

 

APPENDIX D

 

(Compounds in DFCI #[**] related to cyclin dependent kinases)

 

[**]

 

43

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