Patent License Agreement - Massachusetts Institute of Technology and Cheung Laboratories Inc.
MASSACHUSETTS INSTITUTE OF TECHNOLOGY
and
CHEUNG LABORATORIES, INC.
PATENT LICENSE AGREEMENT
M.I.T.'S OFFER TO CHEUNG LABORATORIES, INC. TO
ENTER INTO THIS LICENSE AGREEMENT SHALL EXTEND UNTIL
NO LATER THAN OCTOBER 31, 1997
----------------
(EXCLUSIVE)
i
<PAGE>
S.
11-7-94
Patent Exclusive
TABLE OF CONTENTS
-----------------
table of contents........................................................ii
WITNESSETH ...............................................................3
1 DEFINITIONS ........................................................4
2 GRANT.............................................................7
3 DUE DILIGENCE.....................................................9
4 ROYALTIES........................................................11
5 REPORTS AND RECORDS ...............................................13
6 PATENT PROSECUTION ................................................14
7 IINFRINGEMENT......................................................15
8 PRODUCT LIABILITY .................................................16
9 EXPORT CONTROLS ...................................................17
10 NON-USE OF NAMES ..................................................17
11 ASSIGNMENT.........................................................18
12 DISPUTE RESOLUTION ................................................18
13 TERMINATION........................................................18
14 PAYMENTS, NOTICES..................................................20
15 MISCELLANEOUS
PROVISIONS.........................................................20
APPENDIX A............................................................22
APPENDIX B............................................................23
APPENDIX C............................................................24
ADDENDUM A ...........................................................25
ATTACHMENT A .........................................................28
ii
<PAGE>
MASSACHUSETTS INSTITUTE OF TECHNOLOGY
and
CHEUNG LABORATORIES, INC.
PATENT LICENSE AGREEMENT
------------------------
This Agreement is made and entered into this 24th day of October 1997,
(the "EFFECTIVE DATE") by and between MASSACHUSETTS INSTITUTE OF TECHNOLOGY, a
corporation duly organized and existing under the laws of the Commonwealth of
Massachusetts and having its principal office at 77 Massachusetts Avenue,
Cambridge, Massachusetts 02139, U.S.A. (hereinafter referred to as "M.I.T."),
and CHEUNG LABORATORIES, INC., a corporation duly organized under the laws of
Maryland and having its principal office at 10220-I Old Columbia Road, Columbia,
MD 21046-1705 (hereinafter referred to as "LICENSEE"), and cancels, supersedes
and replaces a previous Agreement by and between M.I.T. and LICENSEE for M.I.T.
Case No.'s 5493L, 5672L, and 6512L dated June 12, 1996.
WITNESSETH
----------
WHEREAS, M.I.T. is the owner of certain PATENT RIGHTS (as later
defined herein) relating to M.I.T. Case No. 5493L, U.S. Patent No. 5,251,645,
"Adaptive Hyperthermia System," by Alan J. Fenn; M.I.T. Case No. 5672L,
"Non-Invasive Monopole Hyperthermia, Array for Brain Tumor Heating by Alan J.
Fenn; M.I.T. Case No. 6572L, U.S. Patent No. 5,540,737, "Minimally Invasive
Monopole Phased Array Hyperthermia Applicators for Treating Carcinoma," by Alan
J. Fenn; and M.I.T. Case No. 7615L, "Adaptive Nulling And Focusing Hyperthermia
Phased Arrays For Activating Thermosensitive Liposomes For Targeted Delivery Of
Drugs To Deep Human Tissues," by Alan J. Fenn and has the right to grant
licencses under said PATENT RIGHTS (as later defined herein), subject only to
royalty-free,nonexclusive license heretofore granted to the United States
Government;
WHEREAS, M.I.T. desires to have the PATENT RIGHTS developed and
commercialized to benefit the public and is willing to grant a license
thereunder,
WHEREAS, M.I.T. is the owner of certain rights, tite and interest in
the PROGRAM (as later defined herein) relating to M.I.T. Case No. 7299LS,
"NULLGSC," by Alan J. Fenn and M.I.T. Case No. 7298LS, "FOCUSGSC," by Alan J.
Fenn subject only to the royalty-free, nonexclusive license rights of the United
States Government pursuant to 48 CFR 52.227-14 (Civilian Agencies) and DFARS
252.227-7013 (Defense Agencies), and has the right to grant licenses thereunder;
WHEREAS, M.I.T. desires to have the PROGRAM developed and
commercialized to benefit the public and is willing to grant a license
thereunder;
1
<PAGE>
WHEREAS, M.I.T. and LICENSEE had entered into a License Agreement for
M.I.T. Case No.'s 5493L, 5672L, 6512L, 7298LS and 7299LS dated June 12, 1996,
and now wish to terminate that Agreement and replace it with this Agreement; and
WHEREAS, LICENSEE has represented to M.I.T., to induce M.I.T. to enter
into this Agreement, that LICENSEE is experienced in the development,
production, manufacture, marketing and sale of products similar to the LICENSED
PRODUCT(s) (as later defined herein) and/or the use of the LICENSED PROCESS(es)
(as later defined herein) and that it shall commit itself to a thorough,
vigorous and diligent program of exploiting the PATENT RIGHTS, and to a
thorough, vigorous and diligent program of exploiting the PROGRAM, so that
public utilization shall result therefrom, all in the manner provided herein;
and
WHEREAS, LICENSEE desires to obtain a license under the PATENT RIGHTS
and also desires to obtain a license to the PROGRAM, upon the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual terms,
conditions and covenants contained herein, the parties hereto agree as follows
I - DEFINITIONS
---------------
For the purposes of this Agreement, the following words and phrases
shall have the following meanings:
1.1 "ADAPTATIONS" shall mean the PROGRAM as it maybe adapted by
LICENSEE for hardware other than the original M.I.T. Cray computer.
1.2 "COPYRIGHT" shall mean M.I.T.'s copyrights in the PROGRAM.
1.3 "DERIVATIVE WORKS" shall mean a program that uses the M.I.T'.
COPYRIGHTED PROGRAM and/or and ADAPTATION, but which has enhanced and new
features or fewer features. LICENSEE shall be entitled to establish all
proprietary rights for itself in the intellectual property represented by
LICENSEE-created enhancements and new features, whether in the nature of trade
secrets, copyrights or patent rights or other rights M.I.T. shall be entitled to
establish all proprietary rights for itself in the intellectual property
represented M.I.T.-created enhancements and new features, whether in the nature
of copyrights or patent rights or other rights.
1.4 "END USER" shall mean a customer licensed or otherwise authorized
by LICENSEE to use a single copy of the PROGRAM for internal purposes only and
not for further distribution.
1.5 On the EFFECTIVE DATE, "EXCLUSIVE FIELDS OF USE" shall mean FIELD
OF USE ONE, FIELD OF USE TWO, and FIELD OF USE THREE. This definition may be
modified according to paragraphs 3.6, 3.7 and 3.8.
1.6 "FIELD OF USE ONE" shall mean Breast Hyperthermia.
2
<PAGE>
I
1.7 "FIELD OF USE TWO" shall mean Prostate Hyperthermia.
1.8 "FIELD OF USE THREE" shall mean all other medical applications.
1.9 "INTELLECTUAL PROPERTY RIGHTS" shall mean all of the PATENT RIGHTS
and COPYRIGHT.
1.10 "LICENSED PROCESS" shall mean any process which is covered in
whole or in part by an issued, unexpired claim or a pending claim contained in
the PATENT RIGHTS, or by the COPYRIGHT,
1.11 "LICENSED PRODUCT" shall mean LICENSEE's hyperthermia machine or
part thereof, and accessories, including, but not limited to disposable
accessories such as temperature probes and needles, which:
(a) is covered in whole or in part by an issued, unexpired
claim or a pending claim contained in the PATENT RIGHTS
in the country in which any such LICENSED PRODUCT or
part thereof is made, used or sold; or
(b) is manufactured by using a process or is employed to
practice a process which is covered in whole or in part
by an issued, unexpired claim or a pending claim
contained in the PATENT RIGHTS in the country in which
any LICENSED PROCESS is used or in which such product or
put thereof is used or sold.
(c) is covered in whole or in part by the COPYRIGHT.
1.12 "LICENSED SERVICE" shall mean any fee-bearing service performed
by LICENSEE or any SU13LICENSEE or any MEDICAL SERVICE PROVIDER which uses a
LICENSED PRODUCT or practices a LICENSED PROCESS.
1.13 "LICENSEE" shall mean Cheung Laboratories, Inc., and shall
include a related company of Cheung Laboratories, Inc., the voting stock of
which is directly or indirectly at least fifty percent (50%) owned or controlled
by Cheung Laboratories, Inc.
1.14. "MEDICAL SERVICE PROVIDER" shall mean a customer or user of a
LICENSED PRODUCT, at a clinical site, licensed or otherwise authorized to
practice a LICENSED PROCESS and/or perform a LICENSED SERVICE by LICENSEE, which
customer or user has explicitly' not been granted rights by LICENSEE to make,
sell, or lease LICENSED PRODUCTS.
1.15 "MILESTONE PAYMENT" shall mean a payment to LICENSEE from any
third party due upon achievement of an agreed upon technical, regulatory, or
business milestone related to LICENSED PRODUCTS, LICENSED PROCESSES, or LICENSED
SERVICES. Illustrative examples of such milestones include, but are not limited
to, achieving a technical result, obtaining FDA approval, and meeting sales
targets.
MILESTONE PAYMENTS shall not include (i) any payments to LICENSEE
which are subject to royalties under paragraphs 4.1 (h), (i) or (j), (ii) any
advances to LICENSEE pursuant to bank loans or other bona fide credit
arrangements, and (iii) any payments to LICENSEE to acquire LICENSEE's capital
stock at a price not exceeding the fair market value thereof.
3
<PAGE>
1. 16 "NET SALES" shall mean the sum of the following:
a) LICENSEE's and its SUBLICENSEE'S billings for LICENSED PRODUCTS
(including, explicitly, the PROGRAM), LICENSED PROCESSES, and LICENSED SERVICES,
less the sum of the following items, providing that these items are payable by
LICENSEE (or by its SUBLICENSEE ) or deductible from LICENSEE's billings (or
from SUBLICENSEE'S billings) within sixty (60) days of receiving payments from
LICENSEE's (or SUBLICENSEE'S) customer(s):
i. discounts allowed in amounts customary in the trade for
quantity purchases, cash payments, prompt payments,
wholesalers and distributors;
ii. sales, tariff duties and/or use taxes directly imposed
and with reference to particular sales;
iii. outbound transportation prepaid or allowed;
iv. amounts allowed or credited on returns or refunds; and
V. allowance for bad debt, not to exceed Five Percent (5%)
of NET SALES per calendar year.
No other deductions shall be made for commissions paid to individual
whether they be with independent sales agencies or regularly employed by
LICENSEE and on its payroll, or for the cost of collections. LICENSED PRODUCTS,
LICENSED PROCESSES, or LICENSED SERVICES shall be considered, "sold" ninety (90)
days after billing, or invoicing, or upon receipt of payment, whichever comes
first, provided, however-that LICENSED PRODUCTS are actually shipped to
customers; plus
b) LICENSEE's gross receipts from MEDICAL SERVICE PROVIDERS,
other than gross receipts from MEDICAL SERVICE PROVIDERS, other than receipts
counted in paragraph 1. 16 (a) above.
1.17 "OTHER REVENUE" shall mean LICENSEE's gross revenues from the
sale of its own services for consulting, research and development, and training,
in connection with:
a. the sublicensing of the INTELLECTUAL PROPERTY RIGHTS;
and/or
b the use or sale, lease or other transfer of LICENSED
PRODUCTS, LICENSED PROCESSES and LICENSED SERVICES.
1.18 "PATENT RIGHTS" shall mean all of the following M.I.T.
intellectual property:
a. the United States patents listed in Appendix A;
b. the United States patent applications listed in Appendix
A, and divisionals, continuations and claims of
continuation-in-part applications which shall be directed
to subject matter specifically described in such patent
applications, and the resulting patents;'
c. any patents resulting from reissues or reexaminations of
the United States patents described in a. and b. above;
4
<PAGE>
d. the Foreign patents listed in Appendix A;
e. the Foreign parent applications listed in Appendix A, and
divisionals, continuations and claims of
continuation-in-part applications which shall be directed
to subject matter specifically described in such Foreign
patent applications, and the resulting patents;
f. Foreign patent applications filed after the EFFECTIVE
DATE in the countries listed in Appendix B and
divisionals, continuations and claims of continuation
in-part applications which shall be directed to subject
matter specifically described in such patent
applications, and the resulting patents; and
9. any Foreign patents, resulting from equivalent Foreign
procedures to United States reissues and reexaminations
of the Foreign patents described in d., e. and f. above.
1.19 "PROGRAM" shall mean the computer program(s), "NULLGSC" and
"FOCUSGSC" and related documentation, if any described in Appendix C
(hereinafter the "M.I.T. COPYRIGHTED PROGRAM"), and shall also include
ADAPTATIONS, DERIVATIVE WORKS and TRANSLATIONS. PROGRAM may be protected by both
PATENT RIGHTS and COPYRIGHTS,
1.20 "SUBLICENSEE" shall mean an entity which has the right to i) make
or have made and sell LICENSED PRODUCTS or ii) make or have made and lease
LICENSED PRODUCTS.
1.21 "TRANSLATION" shall mean a translation of the PROGRAM into
another language.
2-GRANT
-------
2.1 M.I.T. hereby grants to LICENSEE the right and license for FIELD
OF USE ONE, FIELD OF USE TWO, and FIELD OF USE THREE to practice under the
PATENT RIGHTS and, to the extent not prohibited by. other patents, to make, Lave
made, use, lease, sell and import LICENSED PRODUCTS and to practice the LICENSED
PROCESSES, and to perform LICENSED SERVICES until the expiration of the last to
expire of the, PATENT RIGHTS, unless this Agreement shall be sooner terminated
according to the terms hereof.
2.2 M.I.T. hereby grants to LICENSEE the following rights and licenses
for FIELD OF USE ONE, FIELD OF USE TWO, and FIELD OF USE THREE to the end of the
term for which the COPYRIGHT shall be granted, unless this Agreement shall be
sooner terminated:
a. to use and reproduce the PROGRAM;
b. to create DERIVATIVE WORKS; and
c. to lease, transfer and sublicense the PROGRAM to
END-USERS through the normal channels of distribution;
and
2.3 In order to establish a period of exclusivity for LICENSEE, M.I.T.
hereby agrees that it shall not grant any other license to the PATENT RIGHTS for
5
<PAGE>
the EXCLUSIVE FIELDS OF USE, and also that it shall not grant any other license
to the COPYRIGHT for the EXCLUSIVE FIELDS OF USE, subject only to Paragraphs 2.5
and 2.6 and to the royalty-free, nonexclusive license rights of the United
States Government pursuant to 48 CFR 52.227-14 (Civilian Agencies) and DFARS
252.227-7013 (Defense Agencies) during the period of time commencing with the
EFFECTIVE DATE and terminating with the first to occur of:
(a) the expiration of ten (10) years after the first
commercial sale of a LICENSED PRODUCT or first
commercial use of a LICENSED PROCESS or the first
commercial performance of a LICENSED SERVICE; or
(b) the expiration of twelve (12) years after the EFFECTIVE
DATE of this Agreement.
2.4 At the end of the exclusive period, the license granted hereunder
shall become nonexclusive and shall extend to the end of the term or terms for
which any PATENT RIGHTS or COPYRIGHT are granted, unless sooner terminated as
hereinafter provided. The period of exclusivity may be extended with the written
consent of M.I.T., on a field of use basis, which consent shall not unreasonably
be withheld, provided that LICENSEE is a licensee in good standing, owing no
fees, royalties or any other monies to M.I.T., and having met all the diligence
milestones pertaining to the particular field of use in which an extension of
the period of exclusivity is under consideration.
2.5 M.I.T, reserves the right to practice under the PATENT RIGHTS for
its own noncommercial research purposes.
2.6 M.I.T. reserves the right to use the PROGRAM, to use and create
DERIVATIVE WORKS of the PROGRAM and to distribute the PROGRAM and M.I.T.-created
DERIVATIVE WORKS to third parties for noncommercial research purposes.
2.7 LICENSEE agrees that LICENSED PRODUCTS leased or sold in the
United States shall be manufactured substantially in the United States.
2.8 In order to encourage and facilitate the development of LICENSED
PRODUCTS, LICENSED PROCESSES, and LICENSED SIERVICES M.I.T. agrees to perform
the work described in the Technology Transfer Agreement attached to this license
as ADDENDUM A.
2.9 LICENSEE shall have the right to enter into sublicensing
agreements for the rights, privileges and licenses granted hereunder only during
the exclusive period of this Agreement, and with the following restrictions:
a) Such sublicenses may extend past the expiration date of
the exclusive period of this Agreement, or upon the
termination of LICENSEE's exclusive rights in a
particular field of use, pursuant to paragraphs 3.6,
3.7, and 3.8, but any exclusivity of such sublicenses
shall expire upon the expiration of LICENSEE's
exclusivity,
b) Upon any termination of this Agreement, sublicensees'
rights shall also terminate, subject to Paragraph 13.6
hereof.
6
<PAGE>
c) LICENSEE may not grant sublicenses which perrmit further
sublicensing of the INTELLECTUAL PROPERTY RIGHTS without
the express written permission of M.I.T.,
d) LICENSEE may not grant the rights to make, lease or sell
LICENSED PRODUCTS to MEDICAL SERVICES PROVIDERS.
2.10 LICENSEE agrees that any sublicenses granted by it shall provide
that the obligations to M.I.T. of Articles 2, 5, 7, 8, 9, 10, 12, 13, and 15 of
this Agreement shall be binding upon the sublicensee as if it were a party to
this Agreement. LICENSEE further agrees to attach copies of these Articles to
sublicense agreements.
2.11 LICENSEE agrees to forward to M.I.T. a copy of any and all
sublicense agreements promptly upon execution by the parties.
2.12 LICENSEE shall not receive from SUBLICENSEES anything of value in
lieu of cash payments in consideration for any sublicense under this Agreement,
without the express prior written permission of M.I.T.
2.13 The license granted hereunder shall not be construed to confer
any rights upon LICENSEE by implication, estoppel or otherwise as to any
technology not specifically set forth in Appendix A hereof
3 - DUE DILIGENCE
-----------------
3.1 LICENSEE shall use its best efforts to bring one or more LICENSED
PRODUCTS, LICENSED PROCESSES, or LICENSED SERVICES to market through a thorough,
vigorous and diligent program for exploitation of the INTELLECTUAL PROPERTY
RIGHTS and to continue active, diligent marketing efforts for one or more
LICENSED PRODUCTS, LICENSED PROCESSES or LICENSED SERVICES throughout the. life
of this Agreement.
3.2 LICENSEE shall raise a minimum of (Confidential Treatment
Requested) Dollars toward the development of LICENSED PRODUCTS, LICENSED
PROCESSES or LICENSED SERVICES according to the following schedule:
(a) (Confidential Treatment Requested) Dollars on or before
January 1, 1998.
(b) An additional(Confidential Treatment Requested) Dollars
on or before June 30, 1998.
(c) An additional(Confidential Treatment Requested) Dollars
on or before January 1, 2000.
3.3 (a) In addition, pertaining to FIELD OF USE ONE, LICENSEE shall
adhere to the following milestone:
As soon as possible, but in all events on or before
June 30, 1999 LICENSEE shall apply for FDA approval for
commercial sale of a LICENSED PRODUCT in FIELD OF USE
ONE, and/or for FDA approval for the commercial use of
7
<PAGE>
a LICENSED PROCESS or commercial performance of a
LICENSED SERVICE in FIELD OF USE ONE.
(b) In addition, pertaining to FIELD OF USE TWO, LICENSEE
shall adhere to the following milestone:
As soon as possible, but in all events on or before June
30, 2001 LICENSEE shall apply for FDA approval for
commercial sale of a LICENSED PRODUCT in FIELD OF USE
TWO, and/or for FDA approval for the commercial use of a
LICENSED PROCESS or commercial performance of a LICENSED
SERVICE in FIELD OF USE TWO.
(c) In addition, pertaining to FIELD OF USE THREE, LICENSEE
shall adhere to the following milestone:
As soon as possible, but in all events on or before June
30, 2002 LICENSEE shall apply for FDA approval for
commercial sale of a LICENSED PRODUCT in FIELD OF USE
THREE, and/or for FDA approval for the commercial use of
a LICENSED PROCESS or commercial performance of a
LICENSED SERVICE in FIELD OF USE THREE.
3.4 LICENSEE shall make sales of LICENSED PRODUCTS in FIELD OF USE ONE
according to the following schedule:
1998 at least I unit
1999 at least 5 units
2000 at least (Confidential
Treatment Requested)
units
2001 and each year there after at least (Confidential
Treatment Requested)
units
3.5 Failure to comply with any of paragraphs 3.2 (a), (b) or (c) shall
be grounds for for M.I.T. to terminate this license pursuant to paragraph 13.3
hereof, M.I.T. to terminate this license pursuant to paragraph 13.3 hereof,
3.6 Failure to comply with paragraph 3.3 (a) or paragraph 3.4 shall be
grounds to remove FIELD OF USE ONE from the definition of "EXCLUSIVE FIELDS OF
USE", thereby terminating LICENSEE's exclusive rights to FIELD OF USE ONE. Under
these circumstances, LICENSEE explicitly retains non-exclusive rights to FIELD
OF USE ONE.
3.7 Failure to comply with paragraph 3.3 (b) shall be grounds to
remove FIELD OF USE TWO from the definition of "EXCLUSIVE FIELDS OF USE",
thereby terminating LICENSEE's exclusive rights to FIELD OF USE TWO. Under these
circumstances, LICENSEE explicitly retains non-exclusive rights to FIELD OF USE
TWO.
3.8 Failure to comply with paragraph 3.3 (c) shall be grounds to
remove FIELD OF USE THREE from the definition of "EXCLUSIVE FIELDS OF USE",
thereby terminating LICENSEE's exclusive rights to FIELD OF USE THREE. Under
these circumstances, LICENSEE explicitly retains non-exclusive rights to FIELD
OF USE THREE.
8
<PAGE>
4 - ROYALTIES
-------------
4.1 For the rights, privileges and license granted hereunder, LICENSEE
shall pay royalties to M.I.T. in the manner hereinafter provided to
the end of the term of the PATENT RIGHTS or until this Agreement shall
be terminated:
(a) License Maintenance Fees of (Confidential Treatment
Requested) Dollars per year payable on January 1, 1998
and on January 1, 1999; provided, however, that Running
Royalties subsequently due on NET SALES for each said
year, if any, shall be creditable against the License
Maintenance Fee for said year. License Maintenance Fees
paid in excess of Running, Royalties shall not be
creditable to Running Royalties for future years.
(b) License Maintenance Fees of (Confidential Treatment
Requested) Dollars per year payable on January 1, 2000
and on January 1, 2001 provided, however, that Running
Royalties subsequently due on NET SALES for each said
year, if any, shall be creditable against the License
Maintenance Fee for said year, License Maintenance Fees
paid in excess of Running Royalties shall not be
creditable to Running Royalties for future years.
(c) License Maintenance Fees of (Confidential Treatment
Requested) Dollars per year payable on January 1, 2002
and on January 1 of each year thereafter; provided,
however," License Maintenance Fees may be credited to
Running Royalties subsequently due on NET SALES for each
said year, if any. License Maintenance Fees paid in
excess of Running Royalties shall not be creditable to
Running Royalties for future years.
(d) (i) Running Royalties in an amount equal to (Confidential
Treatment Requested) percent of NET SALES of the LICENSED
PRODUCTS, leased or sold by and/or for LICENSEE and/or
its SUBLICENSEES for LICENSED PRODUCTS which are either
made or leased or sold in a country in which there is a
valid, issued claim of a patent described in either
APPENDICES A or B.
(ii) Running Royalties in an amount equal to
(Confidential Treatment Requested) percent of NET SALES
of LICENSED SERVICES performed by and/or for LICENSEE
and/or its SUBLICENSEES and/or 'authorized MEDICAL
SERVICE PROVIDERS, utilizing LICENSED PRODUCTS which are
either made or leased or sold in a country in which there
is a valid, issued claim of. a patent described in either
APPENDICES A,or B.
(e) (i) Running Royalties in an amount equal to (Confidential
Treatment Requested) percent of NET SALES of the LICENSED
PRODUCTS, leased or sold by and/or for LICENSEE and/or
its SUBLICENSEES for LICENSED PRODUCTS which are neither
made nor leased nor sold in a country in which there is a
valid, issued claim of a patent described in either
APPENDICES A or B, but which utilize the COPYRIGHT and/or
practice or ran the PROGRAM, as described in APPENDIX C.
(ii) Running Royalties in an amount equal to
(Confidential Treatment Requested) percent of NET SALES
of LICENSED SERVICES performed by and/or for LICENSEE
and/or its SUBLICENSEES and/or authorized MEDICAL SERVICE
PROVIDERS, Utilizing LICENSED PRODUCTS which are neither
made nor leased nor sold in a country in which there is a
valid, issued claim of a patent described in either
APPENDICES A or B, but which utilize the COPYRIGHT and/or
practice or run the PROGRAM, as described in APPENDIX C.
9
<PAGE>
(f) Running Royalties in an amount equal to (Confidential
Treatment Requested) percent of NET SALES of the PROGRAM
delivered to END-USERS if the PROGRAM is sold separately
from the LICENSED PRODUCTS.
(g) (Confidential Treatment Requested) Percent of MILESTONE
PAYMENTS received by LICENSEE.
(h) (Confidential Treatment Requested) Percent of lump sum
type payments received by LICENSEE from its SUBLICENSEES
in consideration for a grant by LICENSEE to a SUBLICENSEE
to practice under the INTELLECTUAL PROPERTY RIGHTS,
including, explicitly, the right to make, sell, and lease
LICENSED PRODUCTS, without a substantial and essentially
simultaneous grant by LICENSEE to the SUBLICENSEE of
LICENSEE-owned technology.
(i) (Confidential Treatment Requested) Percent of lump sum
type payments received by LICENSEE from its SUBLICENSEES
in consideration for a grant by LICENSEE to a SUBLICENSEE
to practice under the INTELLECTUAL PROPERTY RIGHTS,
including, explicitly, the right to make, sell, and lease
LICENSED PRODUCTS, with a substantial and essentially
simultaneous grant by LICENSEE to the SUBLICENSEE of
LICENSEE-owned technology.
(j) (Confidential Treatment Requested) Percent of lump sum
type payments received by LICENSEE from its MEDICAL
SERVICE PROVIDERS in consideration for a fully paid up
license and/or authorization to practice LICENSED
PROCESSES and perform LICENSED SERVICES, with no further
reporting required from the MEDICAL SERVICE PROVIDER to
LICENSEE concerning its practice of LICENSED PROCESSES or
performance of LICENSED SERVICES.
(k) If OTHER REVENUE is greater than NET SALES, then Running
Royalties in an amount equal to (Confidential Treatment
Requested) percent of OTHER REVENUE.
(l) If OTHER REVENUE is less than NET SALES, then Running
Royalties in an amount equal to (Confidential Treatment
Requested) percent of OTHER REVENUE.
4.2 All payments due hereunder shall be paid in full, without
deduction of taxes or other fees which may be imposed by any governrnent and
which shall be paid by LICENSEE.
4.3 No multiple royalties shall be payable because any LICENSED
PRODUCT, its manufacture, use, lease or sale are or shall be covered by more
than one PATENT RIGHTS patent application or COPYRIGHT or PATENT RIGHTS patent
licensed under this Agreement.
4.4 No multiple royalties shall be payable because any LICENSED
PROCESS of LICENSED SERVICE, its use, practice, or performance is covered by
more than one PATENT RIGHTS patent application or COPYRIGHT or PATENT RIGHTS
patent licensed under this Agreement.
4.5 Royalty payments shall be paid in United States dollars in
Cambridge, Massachusetts, or at such other place as M.I.T. may reasonably
designate consistent with the laws and regulations controlling in any foreign
country. If any currency conversion shall be required in connection with the
payment of royalties hereunder, such conversion shall be made by using the
10
<PAGE>
I
exchange rate prevailing at the Chase Manhattan Bank (N.A.) on the last business
day of the calendar quarterly reporting period to which such royalty payments
relate.
5 - REPORTS AND RECORDS
-----------------------
5.1 LICENSEE shall keep full, true and accurate books of account
containing all particulars that may be necessary for the purpose of showing the
amounts payable to M.I.T. hereunder. Said books of account shall be kept at
LICENSEE's principal place of business or the principal place of business of
the appropriate division of LICENSEE to which this Agreement relates. Said books
and the supporting data shall be open at all reasonable times for five (5) years
following the end of the calendar year to which they pertain, to the inspection
of M.I.T. or its agents for the purpose of verifying LICENSEE's royalty
statement or compliance in other respects with this Agreement, Should such
inspection lead to the discovery of a greater than Ten Perceric (107o)
discrepancy in reporting to M.I.T.'s detriment, LICENSEE agrees to pay die
reasonable cost of such inspection.
5.2 LICENSEE shall deliver to M.I.T. true and accurate reports, giving
such particulars of the business conducted by LICENSEE and its sublicensees
under this Agreement as shall be pertinent to diligence under Article 3 and
royalty accounting hereunder.
a. before the first commercial sale of a LICENSED PRODUCT or
LICENSED SERVICE, annually, on January 31 of each year;
and
b. after the first commercial sale of a LICENSED PRODUCT or
LICENSED SERVICE, quarterly, within sixty (60) days after
March 31, June 30, September 30 and December 31, of each
year.
These reports shall include at least the following
a. money raised pursuant to paragraph 3.2.
b. number of LICENSED PRODUCTS manufactured, leased and sold
by and/or for LICENSEE and all SUBLICENSEES;
c accounting for all LICENSED SERVICES sold by and/or for
LICENSEE and all SUBLICENSEES and all MEDICAL SERVICE
PROVIDERS;
d accounting for NET SALES, noting the deductions and
credits applicable as provided in Paragraphs 1.16 and
6.3, accounting for OTHER REVENUE;
e Running Royalties due under Paragraph 4.1 (d), (e), and
(f);
f. payments on MILESTONE PAYMENTS due under Paragraph 4.1
(g);
g. Share of lump sum type payment received from SUBLICENSEES
and from MEDICAL SERVICE PROVIDERS due under Paragraph
4.1 (h), (i) and (j);
h payments on OTHER REVENUE due under paragraphs 4.1 (k)
and (1);
11
<PAGE>
i. total royalties due; and
j. names and addresses of all SUBLICENSEES of LICENSEE and
of all authorized MEDICAL SERVICE PROVIDERS.
5.3 With each such report submitted, LICENSEE shall pay to M.I.T. the
royalties due and payable under this Agreement. If no royalties shall be due,
LICENSEE shall so report.
5.4 On or before the ninetieth (90th) day following the close of
LICENSEE's fiscal year, LICENSEE shall provide M.I.T. with LICENSEE's certified
financial statements for the preceding fiscal year including, at a minimum, a
Balance Sheet and an Operating Statement.
5.5 The royalty payments set forth in this Agreement and amounts due
under Article 6 shall, if overdue, bear interest until payment at a per annum
rate two percent (2%) above the prime rate in effect at the Chase Manhattan Bank
(N.A.) on the due date. The payment of such interest shall not foreclose M.I.T.
from exercising any other rights it may have as a consequence of the lateness of
any payment.
6 - PATENT PROSECUTION
----------------------
6.1 M.I.T. have the administrative responsibility to apply for, seek
prompt issuance of, and maintain during the term of this Agreement the PATENT
RIGHTS in the United States and in the foreign countries listed in Appendices A
and B hereto. Appendix B may be amended by verbal agreement of both parties,
such agreement to be confirmed in writing within ten (10) days. The prosecution,
filing and maintenance of all PATENT RIGHTS patents and applications shall be
the primary responsibility of M.I.T.; provided, however, LICENSEE shall have
reasonable opportunities to advise M.I.T. and shall cooperate with M.I.T. in
such prosecution, filing and maintenance. ng and maintenance.
6.2 Payment of all fees and costs relating to the filing, prosecution,
and maintenance of the PATENT RIGHTS incurred after the date of this Agreement
shall be the responsibility of LICENSEE. M.I.T. is not financially obliged to
maintain and prosecute patents.
6.3 M.I.T. agrees that LICENSEE may take a cumulative life of license
credit for expenditures on the PATENT RIGHTS, such credit not to exceed
(Confidential Treatment Requested) Dollars and to be taken according to the
following schedule:
a) LICENSEE may credit their above referenced patent
prosecution and maintenance expenditures incurred in a
given calendar year against up to one half of License
Maintenance Fees due the following January 1 under
paragraphs, 4.1 (a), (b), and (c).
b) In the event that Running Royalties exceed the License
Maintenance Fee for a given year, and LICENSEE owes
M.I.T. Running Royalties in addition to the License
Maintenance Fee already paid, then LICENSEE may use
their patent prosecution and maintenance credit against
up to one half of the Running Royalties due paragraphs
4.1 (d), (e) and (f).
12
<PAGE>
7 - INFRINGEMENT
----------------
7.1 LICENSEE shall inform M.I.T. promptly in writing of any alleged
infringement of the INTELLECTUAL PROPERTY RIGHTS by a third party of which it
becomes aware and of any available evidence thereof. M.I.T. shall inform
LICENSEE promptly in writing of any alleged infringement of the INTELLECTUAL
PROPERTY RIGHTS by a third party of which it becomes aware and of any available
evidence thereof. Within ten (10) business days of such notice the parties shall
confer to determine how best to proceed.
7.2 During the term of this Agreement, M.I.T. shall have the right,
but shall not be obligated, to prosecute at its own expense all infringementsof
the INTTELLECTUAL PROPERTY RIGHTS and, in furtherance of such right, LICENSEE
hereby agrees that M.I.T. may include LICENSEE as a party plaintiff in any such
suit, without expense to LICENSEE. The total cost of any such infringement
action commenced or defended solely by M.I.T. shall be borne by M.I.T. and
M.I.T. shall keep any recovery or damages for past infringement derived
therefrom.
7.3 If within six (6) months after having been notified of any alleged
infringement, M.I.T. shall have been unsuccessful in persuading the alleged
infringer to desist and shall not have brought and shall not be diligently
prosecuting an infringement action, or if M.I.T. shall notify LICENSEE at any
time prior thereto of its intention not to bring suit against any alleged
infringer for the EXCLUSIVE FIELDS OF USE, then, and in those events only,
LICENSEE shall have the right, but shall not be obligated, to prosecute at its
own expense any infringement of the INTELLECTUAL PROPERTY RIGHTS for the
EXCLUSIVE FIELDS OF USE, and LICENSEE may, for such purposes, use the name of
M.I.T. as party plaintiff; provided, however, that such right to bring such an
infringement action shall remain in effect only for so long as the license
granted herein remains exclusive. No settlement, consent judgment or other
voluntary final disposition of the suit may be entered into without the consent
of M.I.T., which consent shall not unreasonably be withheld. LICENSEE shall
indemnify M.I.T. against any order for costs that may be made against M.I.T. in
such proceedings.
7.4 In the event that LICENSEE shall undertake the enforcement and/or
defense of the INTELLECTUAL PROPERTY RIGHTS by litigation, LICENSEE may withhold
up to (Confidential Treatment Requested) percent of the payments otherwise
thereafter due M.I.T. under Article 4 hereunder and apply the same toward
reimbursement of up to half of LICENSEE's expenses, including reasonable
attorneys' fees, in connection therewith. Any recovery of damages by LICENSEE
for each such suit shall be applied first in satisfaction of any unreimbursed
expenses and legal fees of LICENSEE relating to such suit, and next toward
reimbursement of M.I.T. for any payments under Article 4 past due or withheld
and applied pursuant to this Article 7. The balance remaining from any such
recovery shall be divided so that the percentage of the recovery due M.I.T. is
calculated by creating a fraction,
13
<PAGE>
the numerator of witch is the amount of royalties withheld, and denominator of
which is the cost of litigation paid by LICENSEE, but in no event shall such sum
be less than (Confidential Treatment Requested) Percent of the net recovery.
7.5 In the event that a declaratory judgment action alleging
invalidity or noninfringement of any of the INTELLECTUAL PROPERTY RIGHTS shall
be brought against LICENSEE, M.I.T., at its option, shall have the right, within
thirty (30) days after commencement of such action, to intervene and take over
the sole defense of the action at its own expense.
7.6 1n any infringement suit as either party may institute to enforce
the PATENT RIGHTS pursuant to this Agreement, the other party hereto shall, at
the request and expense of the party initiating, such suit, cooperate in all
respects and, to the extent possible, have its employees testify when requested
and make available relevant records, papers, information, samples, specimens,
and the like.
7.7 LICENSEE, during the exclusive period of this Agreement, shall
have the sole right in accordance with the terms and conditions herein to
sublicense any alleged infringer for the EXCLUSIVE FIELDS OF USE for future use
of the INTELLECTUAL PROPERTY RIGHTS. Any upfront fees as part of such a
sublicense shall be shared equally between LICENSEE and M.I.T.; other royalties
shall be treated per Article 4.
PRODUCT LIABILITY
-----------------
8.1 LICENSEE shall at all times during the term of this Agreement and
thereafter, indemnify, defend and hold M.I.T., its trustees, directors,
officers, employees and affiliates, harmless against all clairns, proceedings,
demands and abilities of any kind whatsoever, including legal expenses and
reasonable attoneys' fees, arising out of the death of or injury to any person
or persons or out of any damage to property, resulting from the production,
manufacture, sale, use, lease, consumption or advertisement of the LICENSED
PRODUCT(s) and/or LICENSED PROCESS (es) or arising from any obligation of
LICENSEE hereunder.
8.2 LICENSEE shall obtain and carry in full force and effect.
commercial general liability insurance which shall protect LICENSEE and M.I.T.
with respect to events covered by Paragraph 8.1 above. Such insurance shall be
written by a reputable insurance company authorized to do business in the
Commonwealth of Massachusetts, shall list M.I.T. as an additional named inssured
thereunder, shall be endorsed to include product liability coverage and shall
require thirty (30) days written notice to be given to M.I.T. prior to any
cancellation or al change thereof. The limits of such insurance shall not be
less than (Confidential Treatment Requested) Dollars per occurrence with an
aggregate of (Confidential Treatment Requested) Dollars for personal injury or
death, and (Confidential Treatment Requested) Dollars per occurrence with an
aggregate of (Confidential Treatment Requested) Dollars for property damage.
LICENSEE shall provide M.I.T. with Certificates of Insurance evidencing the
same.
14
<PAGE>
8.3 EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, M.I.T.,
ITS TRUSTEES, DIRECTORS, OFFICERS, EMPLOYEES, AND AFFILIATES MAKE NO
REPRESENTATIONS AND EXTEND NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED,
INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, VALIDITY OF PATENT RIGHTS CLAIMS, ISSUED OR PENDING, AND TO
THE COPYRIGHT AND THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT
DISCOVERABLE. NOTHING IN THIS AGREEMENT SHALL BE CONSTRUED AS A REPRESENTATION
MADE OR WARRANTY GIVEN BY M.I.T. THAT THE PRACTICE BY LICENSEE OF THE LICENSE
GRANTED HEREUNDER SHALL NOT INFRINGE THE PATENT RIGHTS OR THE COPYRIGHT OF ANY
THIRD PARTY. IN NO EVENT SHALL M.I.T., ITS TRUSTEES, DIRECTORS, OFFICERS,
EMPLOYEES AND AFFILIATES BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES OF
ANY KIND, INCLUDING ECONOMIC DAMAGE OR INJURY TO PROPERTY AND LOST PROFITS,
REGARDLESS OF WHETHER M.I.T. SHALL BE ADVISED, SHALL HAVE OTHER REASON TO KNOW,
OR IN FACT SHALL KNOW OF THE POSSIBILITY OF TIM FOREGOING.
9 - EXPORT CONTROL
------------------
LICENSEE acknowledges that it is subject to United States laws and
regulations controlling the export of technical data, computer software,
laboratory prototypes and other commodities (including the Arms Export Control
Act, as amended and the United States Department of Commerce Export
Administration Regulations). The transfer of such items may require a license
from the cognizant agency of the United States Government and/or written
assurances by LICENSEE that LICENSEE shall not export data or commodities to
certain foreign countries without prior approval of such agency. M.I.T. neither
represents that a license shall riot be required nor that, if required, it shall
be issued.
10 - NON-USE OF NAMES.
----------------------
LICENSEE shall not use the names or trademarks of the Massachusetts
Institute of Technology or Lincoln Laboratory, nor any adaptation thereof, nor
the names of any of their employees, in any advertising, promotional or sales
literature without prior written consent obtained from M.I.T., or said employee,
in each case, except that LICENSEE may state that it is licensed by M.I.T. under
one or more of the patents and/or applications comprising the PATENT RIGHTS, and
that is has a license to the COPYRIGHT.
15
<PAGE>
11 - ASSIGNMENT
---------------
This Agreement is not assignable and any attempt to do so shall be
void.
12 - DISPUTE RESOLUTION
-----------------------
12.1 Except for the right of either party to apply to a court of
competent jurisdiction for a temporary restraining order, a preliminary
injunction, or other equitable relief to preserve the status quo or prevent
irreparable harm, any and all claims, disputes or controversies arising under,
out of, or in connection with the Agreement, including any dispute relating to
patent validity or infringement, which the parties shall be unable to resolve
within sixty (60) days shall be mediated in good faith. The party raising such
dispute shall promptly advise the other party of such claim, dispute or
controversy in a writing which describes in reasonable detail the nature of such
dispute. By not later than five (5) business days after the recipient has
received such notice of dispute, each party shall have selected for itself a
representative who shall have the authority to bind such party, and shall
additionally have advised the other party in writing of the name and title of
such representative. By not later than ten (10) business days after the date of
such notice of dispute, the parry against whom harm the dispute shall be
raised shall select a mediation firm in the Boston area and such representatives
shall schedule a date with such firm for a mediation hearing, The parties shall
enter into good faith mediation and shall share the costs equally. If the
representatives of the parties have not been able to resolve the dispute within
fifteen (15) business days after such mediation hearing, then any and all
claims, disputes or controversies arising, under, out of, or in connection with
this Agreement, including any dispute relating to patent validity or
infringement, shall be resolved by final and binding arbitration in Boston,
Massachusetts under the rules of the American Arbitration Association, or the
Patent Arbitration Rules if applicable, then obtaining. The arbitrators shall
have no power to add to, subtract from or modify any of the terms or conditions
of this Agreement, nor to award punitive damages. Any award rendered in such
arbitration may be enforced by either party in either the courts of the
Commonwealth of Massachusetts or in the United States District Court for the
District of Massachusetts, to whose jurisdiction for such purposes M.I.T. and
LICENSEE each hereby irrevocably consents and submits.
12.2 Notwithstanding the foregoing, nothing in this Article shall be
construed to waive any rights or timely performance of any obligations existing
under this Agreement.
13 - TERMINATION
----------------
13.1 If LICENSEE shall cease to carry on its business, this Agreement
shall terminate upon notice by M.I.T.
16
<PAGE>
13.2 Should LICENSEE fail to make any payment whatsoever due and
payable to M.I.T. hereunder, M.I.T, shall have the right to terminate this
Agreement effective on thirty (30) days' notice, unless LICENSEE shall make all
such payments to M.I.T. within said thirty (30) day period. Upon the expiration
of the thirty (30) day period, if LICENSEE shall not have made all such payments
to M.I.T., the rights, privileges and license granted hereunder shall
automatically terminate.
13.3 Upon any material breach or default of this Agreement by LICENSEE
(including, but not limited to, breach or default under Paragraph 3.3), other
than those occurrences set out in Paragraphs 13.1 and 13.2 hereinabove, which
shall always take precedence in that order over any material breach or default
referred to in this Paragraph 13.3, M.I.T. shall have the right to terminate
this Agreement and the rights, privileges and license granted hereunder
effective on ninety (90) days' notice to LICENSEE. Such termination shall become
automatically effective unless LICENSEE shall have cured any such material
breach or default prior to the expiration of the ninety (90) day period.
13.4 LICENSEE shall have the right to terminate this Agreement at any
time on six (6) months' notice to M.I.T., and upon payment of all amounts due
M.I.T. through the effective date of the termination.
13.5 Upon termination of this Agreement for any reason, nothing herein
shall be construed to release either party from any obligation that matured
prior to the effective date of such termination; and Articles 1, 8, 9, 10, 12,
13.5, 13.6, and 15 shall survive any such termination. LICENSEE and any
SUBLICENSEE thereof may, however, after the effective date of such termination,
sell all LICENSED PRODUCTS, and complete LICENSED PRODUCTS in the process of
manufacture at the time of such termination and sell the same, provided that
LICENSEE shall make the payments to M.I.T. as required by Article 4 of this
Agreement and shall submit the reports required by Article 5 hereof.
13.6 Upon termination of this agreement for any reason:
a. LICENSEE shall provide M.I.T. with written assurance that
the original and all copies of the PROGRAM and
DERIVATIVE, WORKS in its possession or control have been
destroyed, except that, upon prior written authorization
from M.I.T., LICENSEE may retain a copy for archival
purposes; and
b. the rights of END-USERS to use the PROGRAM shall
continue, provided that any END-USER leasing or
sublicensing the PROGRAM and not then in default shall
obtain a lease or sublicense directly from M.I.T. under
reasonable terms and conditions, which shall, at a
minimum, include, indemnification of M.I.T. and proof of
adequate insurance.
13.7 Upon termination of this Agreement for any reason, any
SUBLICENSEE not then in default shall have the right to seek a license from
M.I.T. M.I.T. agrees to negotiate such licenses in good faith under reasonable
terms and conditions, which, shall, at a minimum, include indemnification of
M.I.T and proof of adequate insurance.
17
<PAGE>
13.8 Upon termination of this Agreement for any reason, any MEDICAL
SERVICE PROVIDER shall have the right to seek a license from M.I.T. to continue
practicing the LICENSED PROCESSES and or performing the LICENSED SERVICES.
M.I.T. agrees to negotiate such licenses in good faith under reasonable terms
and conditions, which shall, at a minimum, include indemnification of M.I.T. and
proof of adequate insurance.
14 - PAYMENTS, NOTICES
----------------------
& OTHER COMMUNICATIONS
----------------------
Any payment, notice or other communication pursuant to this Agreement
shall be sufficiently made or given on the date of mailing if sent to such party
by certified first class mail, return receipt requested, postage prepaid,
addressed to it at its address below or as it shall designate, by written notice
given to the other party:
In the case of M.I.T.:
Director
Technology Licensing Office
Massachusetts Institute of Technology
Room E32-300
Cambridge, Massachusetts 02139
In the case of LICENSEE:
John Mon
General Manager
Cheung Laboratories
10220-1 Old Columbia Road
Columbia, NO 21046-1705
15-MISCELLANEOUS PROVISIONS
---------------------------
15.1 All disputes arising out of or related to this Agreement, or the
performance, enforcement, breach or termination hereof, and any remedies
relating thereato, shall be construed, governed, interpreted and applied in
accordance with the laws of the Commonwealth of Massachusetts,U.S.A., except
that questions affecting the construction and effect or any patent shall be
determined by the law of the country in which the patent shall have been
granted.
15.2 The parties hereto acknowledge that this Agreement sets forth the
entire Agreement, and understanding of the parties hereto as to the subject
matter hereof, and shall not be subject to any change or modification except by
the execution of a written instrument signed by the parties.
15.3 The provisions of this Agreement are severable, and in the event
that any provisions Of this Agreement shall be determined to be invalid or
unenforceable under any controlling body of the law, such invalidity or
unenforceability shall not in any way affect the validity or enforceability of
the remaining provisions hereof.
18
<PAGE>
15.4 LICENSEE agrees to mark the LICENSED PRODUCTS sold in the United
States with all applicable United States patent numbers. All LICENSED PRODUCTS
shipped to or sold in other countries shall be marked in such a manner as to
conform with the parent laws and practice of the country of manufacture or sale.
15.5 The failure of either party to assert a right hereunder or to
insist upon compliance with any term or condition of this Agreement shall not
constitute a waiver of that right or excuse a similar subsequent failure to
perform any such term or condition by the other party.
IN WITNESS WHEREOF, the parties have duly executed this Agreement the
day and year Set forth below.
MASSACHUSETTS INSTITUTE OF CHEUNG LABORATORIES, INC.
TECHNOLOGY
By /s/Lita Nelsen By /s/Augustine Y. Cheung
---------------------------- ----------------------------
Name Lita L. Nelsen Name Augustine Y. Cheung
Title Director Technology Title Chairman
Licensing Office
Date October 17, 1997 Date October 24,1997
19
<PAGE>
APPENDIX A
----------
PATENT RIGHTS ON THE EFFECTIVE DATE
------------------------------------
UNITED STATES PATENT RIGHTS
---------------------------
M.I.T. Case No. 5493L
U.S. Patent No. 5,251,645, Issued October 12, 1993
"Adaptive Nulling Hyperthermia Array"
By Alan Fenn
M.I.T. Case No. 5672L
U.S. Patent Number 5,441,532, Issued August 15, 1995
"Adaptive Focusing and Nulling Hyperthermia Annular and Monopole Phased Array
Applicators"
By Alan Fenn
M.I.T. Case No. 6512L
U.S.P.N. 5,540,737, Issued July 30, 1996
"Minimally Invasive Monopole Phased Array Hyperthemia Applicators For Treating
Breast Carcinomas"
By Alan Fenn
M.I.T. Case No. 7615L
"Adaptive Nulling And Focusing, Hyperthermia Phased Arrays
For Activating Thermosensitive, Liposomes For Targeted Delivery Of Drugs To Deep
Human Tissues"
by Alan J. Fenn
FOREIGN PATENT RIGHT5
---------------------
M.I.T. CaseNo. 7615L
Pending Applications in Great Britain, Germany and Canada
"Minimally Invasive Monopole Phased Array Hyperthermia Applicators For Treating
Breast Carcinomas
By Alan Fenn
20
<PAGE>
APPENDIX C
----------
M.I.T. COPYRIGHTED SOFTWARE
-------------------------
MIT. Case No. 7299LS
"NULLGSC"
By Alan Fenn
MIT. Case No. 7298LS
"FOCUSGSC"
By Alan Fenn
21
<PAGE>
ADDENDUM A
----------
MASSACHUSETTS INSTITUTE OF TECHNOLOGY
-------------------------------------
TECHNOLOGY TRANSFER AGREEMENT
-----------------------------
This Agreement is made and entered into this 24th day of October,
1997, (the "Effective Date") by and between CHEUNG LABORATORIES, INC., a
corporation duly organized under the laws of Maryland and having its principal
office at 10220-I Old Columbia Road, Columbia, MD 21046-1705 (hereinafter
referred to as "LICENSEE") and the MASSACHUSETTS INSTITUE OF TECHNOLOGY, a
corporation duly organized and existing under the laws of the Commonwealth of
Massachusetts and having its principal office at 77 Massachusetts Avenue,
Cambridge, Massachusetts 02139, U.S.A. (hereinafter referred to as "M.I.T."),
and relates to the transfer of existing technology in conjunction with a license
granted by M.I.T. to LICENSEE on the 24th day of October, 1997 for the Patent
Rights to M.I.T. Case No. 5493L, "Adaptive Hyperthermia System," by Alan J.
Penn, and M.I.T. Case No, 5672L, "Non-Invasive Monopole Hyperthermia Array for
Brain Tumor Heating," by Alan J. Fenn, and M.I.T. Case No. 6512L "Minimally
Invasive Monopole Phased Array Hyperthermia Applicators for Treating Carcinoma,"
by Alan J. Fenn and M.I.T. Case No. 7615L, "Adaptive Nulling And Focusing
Hyperthermia Phased Arrays For Activating Thermosensitive Liposomes For Targeted
Delivery Of Drugs To Deep Human Tissues," by Alan 1. Fenn (hereinafter the
"Rights Granted").
WHEREAS, M.I.T. and LICENSEE recognize that the effective development
of the licensed Rights Granted requires the INVENTOR (as later defined herein)
to provide technical assistance to the LICENSEE to facilitate the transfer of
existing licensed technology; and
WHEREAS, this Agreement defines the terms and conditions under which
Alan J. Fenn (hereinafter referred to as the "INVENTOR"), a researcher employed
by M.I.T. and the INVENTOR of M.I.T. Case Numbers 5493L, 5672L, 6512L, and
M.I.T. Case No. 7615L, shall provide technical assistance to LICENSEE relating
to said M.I.T. Cases (hereinafter referred to as the "TRANSFER PROGRAM").
NOW, THEREFORE, the parties hereto agree as follows:
1. FIELD AND SCOPE OF THE TRANSFER PROGRAM:
-------------------------------------------
The field of the TRANSFER PROGRAM is defined by the Work
Statement attached hereto as Attachment A. The TRANSFER
PROGRAM may include site visits to LICENSEE's facilities, and
consultation by telephone. M.I.T. agrees to use reasonable
efforts to make available to the LICENSEE technical
assistance by the INVENTOR.
22
<PAGE>
2. DURATION
---------
The TRANSFER PROGRAM shall begin on the Effective Date and
terminate one (1) year later on _______ unless sooner
terminated at will by LICENSEE notifying M.I.T. in writing
Thirty (30) days before it wishes to terminate the TRANSFER
PROGRAM. M.I.T. may terminate the TRANSFER PROGRAM if
circumstances beyond M.I.T.'s control shall preclude
continuation. The TRANSFER PROGRAM may be extended by mutual
written consent. The scheduling of days shall be by mutual
agreement between LICENSEE and the INVENTOR with the schedule
designed to minimize impact on other Lincoln Laboratory
commitments. The total number of days shall be at LICENSEE's
request, within the limits for each INVENTOR listed below.
INVENTOR SCHEDULED TIME AVAILABLE
-------- ------------------------
Alan Fenn Not more than Ten (10) days within Twelve (12) months from
the Effective Date.
3. REIMBURSEMENT:
--------------
The LICENSEE agrees to reimburse M.I.T. for:
(a) each work day or part thereof spent traveling to or from or
working on the TRANSFER PROGRAM either at M.I.T Lincoln
Laboratory or at LICENSEE's facilities, in accordance with
the following per them schedule:
INVENTOR PER DIEM THEREAFTER
-------- -------- ----------
Alan Fenn (Confidential Treatment Increased by amount of
Requested) all pay raises and
subject to change overhead increases.
(b) the traveling expense of the INVENTOR in accordance with
normal M.I.T. Lincoln Laboratory Travel rules; and
(c) an administrative fee of (Confidential Treatment Requested)
percent of the above reimbursable costs.
4, PAYMENT:
--------
Payments shall be made to M.I.T. within thirty (30) days of LICENSEE's
receipt of invoice.
5. NON-USE OF NAMES
----------------
LICENSEE shall not use the names or trademarks of the Massachusetts
Institute of Technology, nor any adaptation thereof, nor the names of
any of its employees, in any advertising, promotional or sales
literature without prior written consent obtained from M.I.T., and
said employee, in each case, except that LICENSE may state that it is
licensed by M.I.T. under one or more of the patents and/or
applications comprising the PATENT RIGHTS.
6. LIMITATION OF LIABILITY
-----------------------
LICENSEE AGREES THAT ALL TECHNICAL ASSISTANCE PROVIDED UNDER THE
TRANSFER PROGRAM IS MADE WITHOUT WARRANTY OF ANY KIND EXPRESS OR
IMPLIED. Neither M.I.T. nor any INVENTOR shall have any liability
whatsoever to LICENSEE or any third party in regard to the TRANSFER
PROGRAM, including, but not limited to, technical assistance, and
know- how, and LICENSEE shall indemnify M.I.T. for any and all
liability of any kind which M.I.T. may incur in regard thereto.
23
<PAGE>
7. NOTICES:
--------
Any payment, notice or other communication pursuant to this Agreement
shall be sufficiently made or given on the date of mailing if sent to
such party by certified first class mail, postage prepaid, addressed
to it at its address below or as it shall designate by written notice
given to the other party:
In the case of M.I.T,:
Director
Technology Licensing Office
Massachusetts Institute of Technology
Room E32-300
Cambridge, Massachusetts 02139
In the case of LICENSEE: John Mon
Cheung Laboratories, Inc.
please advise 10220-1 Old Columbia Road
Columbia, ,41D 21046-1705
Agreed to for;
MASSACHUSETTS INSTITUTE CHEUNG LABORATORIES, INC.
OF TECHNOLOGY
By: /s/Lita L. Nelsen By: /s/Augustine Y. Cheung
--------------------------- ----------------------
Name: LITA L. NELSEN. DIRECTOR Name: Augustine Y. Cheung
Title: TECHNOLOGY LICENSING OFFICE Title: Chairman
Date: Oct. 17, 1997 Date: Oct. 24, 1997
24
<PAGE>
ATTACHMENT A
------------
WORK STATEMENT
Alan Fenn will assist Cheung Laboratories with technical questions and assist in
any engineering aspects of clinical trials including visits to sites where
clinical trials are being conducted.
Agreed to for;
MASSACHUSETTS INSTITUTE CHEUNG LABORATORIES, INC.
OF TECHNOLOGY
By: /s/Lita L. Nelsen By: /s/Augustine Y. Cheung
----------------- ----------------------
Name: LITA L. NELSEN. DIRECTOR Name: Augustine Y. Cheung
Title: TECHNOLOGY LICENSING OFFICE Title: Chairman
Date: Oct. 17, 1997 Date: Oct. 24, 1997
25