Analog Agreement - Children's Medical Center Corp. and EntreMed Inc.
ANALOG AGREEMENT
This Analog Agreement (the "Agreement") dated as of August 6, 2001 (the
"Effective Date"), is entered into by and between CHILDREN'S MEDICAL CENTER
CORPORATION, a corporation duly organized and existing under the laws of the
Commonwealth of Massachusetts and having its principal office at 300 Longwood
Avenue, Boston, Massachusetts 02115, U.S.A. (hereinafter referred to as "CMCC"),
and ENTREMED, INC., a corporation duly organized under the laws of Delaware and
having its principal office at 9640 Medical Center Drive, Rockville, MD 20850
(hereinafter referred to as "ENTREMED").
WITNESSETH
WHEREAS, CMCC is the owner of certain "Patent Rights" (as later defined
herein), and has the right to grant licenses under said Patent Rights;
WHEREAS, the Patent Rights were originally licensed by CMCC to ENTREMED
pursuant to that certain License Agreement made and entered into May 26, 1994,
by and between CMCC and ENTREMED, as amended on August 23, 1995, December 2,
1997, December 3, 1998 and September 24, 1999 (as so amended, the "Original
License Agreement");
WHEREAS, ENTREMED sublicensed the Patent Rights relating to Thalidomide
to Celgene Corporation, a corporation duly organized under the laws of Delaware
and having its principal office at 6 Powder Horn Drive, Warren, New Jersey 07059
("CELGENE"), pursuant to that certain Agreement dated as of December 9, 1998 by
and between ENTREMED and CELGENE (the "Celgene Agreement");
WHEREAS, pursuant to that certain Purchase Agreement dated as of June
15, 2001 (the "Purchase Agreement") by and between ENTREMED and Bioventure
Investments kft, a company organized under the laws of Hungary ("BIOVENTURE"),
ENTREMED has agreed to sell, transfer and assign to BIOVENTURE all of its right,
title and interest relating to the Net Celgene Payments, as defined in the
Purchase Agreement, under the Celgene Agreement;
WHEREAS, the Original License Agreement will be terminated, and CMCC
and ENTREMED will enter into this Agreement, pursuant to which CMCC will grant a
license to ENTREMED to the Patent Rights for use in the Non-Thalidomide Field
(as defined below).
[*] = CERTAIN INFORMATION CONTAINED IN THIS EXHIBIT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS. OMITTED TEXT IS INDICATED BY A "*".
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WHEREAS, CMCC desires to have the Patent Rights utilized in the public
interest and is willing to grant a license thereunder;
WHEREAS, CMCC has consented to the Purchase Agreement pursuant to the
CMCC Acknowledgment and Consent (the "CMCC Consent");
WHEREAS, ENTREMED desires to obtain a license under the Patent Rights
upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein, the parties hereto agree as follows:
ARTICLE I - DEFINITIONS
For the purpose of this Agreement, the following words and phrases
shall have the following meanings:
1.1 "LICENSEE" shall mean ENTREMED and any Subsidiary or joint venture of
ENTREMED.
1.2 "Sublicensee" shall mean any corporation, partnership or business
organization which is not controlled directly or indirectly by LICENSEE
but to whom LICENSEE transfers know-how, rights or products to enable
said party to sell Licensed Products and/or Licensed Processes.
1.3 "Subsidiary" shall mean any corporation, company or other entity more
than fifty percent (50%) of whose voting stock is owned or controlled
directly or indirectly by ENTREMED.
1.4 "Patent Rights" shall mean all of the following CMCC intellectual
property:
1.4.1 United States and foreign patents and/or patent applications
listed in Appendix A;
1.4.2 United States and foreign patents issued from the applications
listed in Appendix A and from divisionals and continuations of
these applications;
1.4.3 Claims of U.S. and foreign continuation-in-part applications,
and of the resulting patents, which are directed to subject
matter that is described in the U.S. and foreign applications
listed in Appendix A in a manner that meets the requirements
of 35 U.S.C. Section 112;
1.4.4 Claims of all later filed foreign patent applications, and of
the resulting patents, which are directed to subject matter
that is described in the United States patent and/or patent
applications listed in Appendix A in a manner that meets the
requirements of 35 U.S.C. Section 112; and
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1.4.5 Any reissues of United States patents described in Sections
1.4.1, 1.4.2 and 1.4.3 above.
1.5 A "Licensed Product" shall mean any product or part thereof which does
not contain Thalidomide, alone or in combination, and which:
1.5.1 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 Product is made, used, or sold;
1.5.2 Is manufactured by using 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 the Licensed Product is
used or sold.
1.6 A "Licensed Process" shall mean any process with application solely in
the Non-Thalidomide Field and which is covered in whole or in part by
an issued, unexpired claim or a pending claim contained in the Patent
Rights.
1.7 "Net Sales" shall mean the gross amount invoiced for all sales of
Licensed Products by LICENSEE or its Sublicensees or for any practice
of the Licensed Processes by LICENSEE or its Sublicensees less:
1.7.1 trade, quantity and cash discounts, allowed, incurred or
actually taken;
1.7.2 sales taxes directly related to the sale to the extent
included in the gross invoice price;
1.7.3 the portion of freight, postage and shipping insurance
expenses paid by LICENSEE;
1.7.4 value added tax, sales or turnover tax, or excise taxes or
duties which are included in said invoiced amount;
1.7.5 rebates accrued, incurred or paid to Federal Medicaid or State
Medicare and amounts exactly repaid or credited by reason of
rejections or the return of Licensed Products (due to recalls,
dating or other reasons) and retroactive deductions; and
1.7.6 cost of export licenses and any taxes, fees or other charges
associated with the exportation or importation of Licensed
Products.
1.7.7 No deductions shall be made for commissions paid to
individuals whether they be with independent sales agencies or
regularly employed by LICENSEE and on its payroll, or for the
cost of collections.
1.7.8 Licensed Products shall be considered "sold" when billed out
or invoiced.
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1.8 "New Thalidomide Agreement" shall mean that certain Agreement of even
date herewith by and among CMCC, BIOVENTURE, CELGENE, and, for limited
purposes thereof, LICENSEE.
1.9 "Non-Thalidomide Field" shall mean the use of any compound other than
Thalidomide, alone or in combination, in humans or animals, including
without limitation any and all diagnostic, prophylactic, therapeutic,
and research and development uses.
1.10 "Thalidomide" shall mean a compound with the chemical structure
described as 2-(2,6-Dioxo-3-piperidinyl)-1H-isoindole-1,3(2H)-dione, or
as otherwise defined in the Merck Index, entry 9390, 12th ed., and
pharmaceutically acceptable salts thereof.
ARTICLE II - GRANT OF LICENSE
2.1 CMCC hereby grants to LICENSEE an exclusive worldwide right and license
in the Non-Thalidomide Field, subject to the provisions of Articles 2.3
and 2.9 herein, to make, have made, use, lease, and sell the Licensed
Products and to practice the Licensed Processes under the Patent
Rights. CMCC shall retain a royalty-free, nonexclusive, irrevocable
license to practice the Patent Rights for research purposes only.
2.2 LICENSEE agrees that it will use its best efforts to manufacture
substantially in the United States the Licensed Products leased or sold
in the United States.
2.3 The license granted in Article 2.1 is subject to a reserved
nonexclusive right in CMCC to license the Patent Rights, including
Licensed Products and Licensed Processes, to non-profit, non-commercial
institutions for research purposes only. CMCC agrees to notify ENTREMED
in writing of any such license grant. Subject only to this Article 2.3
and Article 2.9 herein, CMCC hereby agrees that it shall not grant any
other licenses, to make, have made, use, lease and/or sell Licensed
Products or to utilize Licensed Processes during the period of time in
which this Agreement is in effect.
2.4 LICENSEE shall have the right to enter into sublicensing agreements for
the rights, privileges, and licenses granted hereunder. Such
sublicenses will expire upon the expiration of LICENSEE's rights
granted herein except as provided in Section 13.7.
2.5 LICENSEE agrees that any sublicense granted by it shall provide that
the obligations to CMCC of Articles II, V, VII, VIII, IX, X, XII, XIII,
and XV 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 such Articles to sublicense agreements. Further, LICENSEE
hereby agrees that every
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sublicensing agreement to which it shall be a party and which shall
relate to the rights, privileges and license granted hereunder shall
contain a statement setting forth the event or date upon which
LICENSEE'S exclusive rights, privileges and license hereunder shall
terminate.
2.6 LICENSEE agrees to forward to CMCC a copy of any and all fully executed
sublicense agreements, and further agrees to forward to CMCC annually a
copy of such reports received by LICENSEE from its Sublicensees during
the preceding twelve (12) month period under the sublicenses as shall
be pertinent to a royalty accounting under said sublicense agreements.
2.7 LICENSEE shall not receive from Sublicensees anything of value in lieu
of cash payments based upon payment obligations of any sublicense under
this Agreement, without the express prior written permission of CMCC.
2.8 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. Without
limiting the generality of the foregoing, LICENSEE may not use the
Patent Rights outside the Non-Thalidomide Field. Any use by LICENSEE of
the Patent Rights outside the Non-Thalidomide Field shall constitute a
breach of this Agreement and grounds for termination of this Agreement.
2.9 The license granted in Article 2.1 is subject to, and expressly limited
by, any rights the United States government may have pursuant to Public
Laws 96-517 and 98-620.
ARTICLE III - DUE DILIGENCE
3.1 LICENSEE shall use its best efforts to bring one or more Licensed
Products or Licensed Processes to market through a thorough, vigorous
and diligent program for exploitation of the Patent Rights. CMCC agrees
that LICENSEE shall have complete control over all regulatory
submissions of Licensed Products to the appropriate regulatory agencies
worldwide. For each Licensed Product which LICENSEE intends to
commercialize, LICENSEE shall provide CMCC with written notice of
LICENSEE's interest in such commercialization (each such notice, a
"Notice of Intent to Commercialize" and the date of each such notice, a
"Product Notice Date"). LICENSEE shall provide CMCC with a Notice of
Intent to Commercialize the first Licensed Product ("First Licensed
Product") upon the Effective Date. Due diligence shall be demonstrated
by LICENSEE or its Sublicensee attaining the following milestones for
each Licensed Product:
3.1.1 within * of the applicable Product Notice Date, the filing of
an IND (Investigational New Drug application) in the U.S. for
such Licensed Product;
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3.1.2 within * of the applicable Product Notice Date, the initiation
of Phase II trials of such Licensed Product;
3.1.3 within * of the applicable Product Notice Date, the initiation
of Phase III trials of such Licensed Product; and
3.1.4 within * of the applicable Product Notice Date, the submission
of an NDA (New Drug Application) or similar application to
gain regulatory approval for the marketing of such Licensed
Product.
3.2 LICENSEE acknowledges that the primary objective of CMCC with respect
to the Licenses granted hereby is to promote the development and
marketing of Licensed Products and Licensed Processes for the public
good. To this end, CMCC shall have the right to terminate this
Agreement pursuant to Section 13.4 if LICENSEE fails to attain any of
the above milestones with respect to the First Licensed Product or if
it suspends diligence in meeting any of the above milestones for more
than three (3) months with respect to the First Licensed Product
because of business circumstances such as lack of funds, merger
acquisition, or the like ("Business Circumstances"). CMCC shall have
the right to terminate this Agreement pursuant to Section 13.4 with
respect to one or more Licensed Products except the First Licensed
Product ("Other Licensed Product(s)"), if LICENSEE fails to attain any
of the above milestones with respect to such Other Licensed Product(s)
or if it suspends its diligence in meeting of any of the above
milestones for more than three (3) months with respect to such Other
Licensed Product(s) because of Business Circumstances. In the event of
any such termination, LICENSEE shall grant to CMCC, to the extent not
prohibited by the United States government or by prior contractual
obligations to any third party, solely to the extent necessary to
permit CMCC to exercise its rights under such terminated Patent Rights,
immunity from suit for any causes of action LICENSEE may have arising
out of or in connection with any intellectual property controlled by
LICENSEE. However, if LICENSEE can demonstrate to the satisfaction of
CMCC, at CMCC's sole discretion, that circumstances beyond LICENSEE's
control precluded LICENSEE from fulfilling its diligence obligations
with respect to the First Licensed Product or an Other Licensed
Product, and that it is unlikely that any third party could overcome
these circumstances better than LICENSEE, then CMCC shall not exercise
its termination rights under this Section for one (1) year from the
date on which CMCC gives notice of termination and, if LICENSEE
reestablishes diligence towards it objectives during such one year
period, any prior lack of diligence will be deemed cured with respect
to the First Licensed Product or such Other Licensed Product(s), as
applicable.
3.3 If (a) CMCC provides LICENSEE with written notice of research results
that CMCC believes reasonably indicate that a compound covered under
the Patent Rights has commercial potential but for which compound
LICENSEE has not yet submitted to CMCC a Notice of Intent to
Commercialize ("Compound Notice");
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or (b) CMCC provides written notice to LICENSEE of a third party having
approached CMCC seeking a right to commercialize any compound covered
under the Patent Rights for which LICENSEE has not yet submitted to
CMCC a Notice of Intent to Commercialize ("Sublicensee Notice"), then
LICENSEE must within ninety (90) days after receipt of such notice
either submit to CMCC a Notice of Intent to Commercialize with respect
to such compound and comply with the obligations of Sections 3.1 and
3.2, or identify and enter into a sublicensing arrangement with a
sublicensee to commercialize such compound. If LICENSEE does not submit
a Notice of Intent to Commercialize to CMCC or fails to identify and
enter into a sublicensing arrangement with such a sublicensee candidate
as required above, CMCC shall have the right to terminate this
Agreement pursuant to Section 13.4 with respect to such compound. In
the event of such termination, LICENSEE shall grant to CMCC, to the
extent not prohibited by the United States government or by prior
contractual obligations to any third party, solely to the extent
necessary to permit CMCC to exercise its rights under such terminated
Patent Rights, immunity from suit for any causes of action LICENSEE may
have arising out of or in connection with any intellectual property
controlled by LICENSEE.
ARTICLE IV - PAYMENTS AND ROYALTIES
4.1 For the rights, privileges and license granted hereunder, LICENSEE
shall pay to CMCC in the manner hereinafter provided to the end of the
term of the Patent Rights or until this Agreement shall be terminated
as hereinafter provided, whether the milestones are achieved under the
sponsorship of CMCC, LICENSEE or a Sublicensee, the following milestone
payments totaling $* (* dollars) for each Licensed Product:
4.1.1 $* (* dollars) due * the applicable Product Notice Date for
such Licensed Product;
4.1.2 $* (* dollars) due *submission of the first Phase I/II IND
(Investigational New Drug application) for any indication for
such Licensed Product;
4.1.3 $* (* dollars) due * completion of a Phase II clinical trials
for any indication for such Licensed Product; and
4.1.4 $* (* dollars) due * submission of a PLA (Product License
Application) or an NDA (New Drug Application) for any
indication for such Licensed Product.
4.2 LICENSEE shall pay to CMCC a royalty based on the Net Sales with
respect to the Licensed Products or Licensed Processes used, leased or
sold by LICENSEE, which said royalty shall be *% (* percent), or such
lower rate as may be agreed upon in writing by the parties, of such Net
Sales.
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4.3 Where sublicenses have been granted, or strategic partnerships entered
into, LICENSEE shall pay to CMCC *% (* percent) of any and all
sublicensing payments, or such lower percentage as may be agreed upon
in writing by the parties. Sublicensing payments are defined as any and
all payments made to LICENSEE by the Sublicensee or strategic partner
except for payments to support research and development conducted by
LICENSEE, for purchases of equity, for payments for goods and services
or for royalties based on the Net Sales with respect to the Licensed
Product or Licensed Process. LICENSEE shall pay to CMCC *% of the
royalty income paid to LICENSEE up to $* of cumulative Net Sales with
respect to the Licensed Product or Licensed Process. After $* of
cumulative Net Sales, LICENSEE shall pay to CMCC *% of royalty income
to LICENSEE from the Sublicensee with a minimum payment of *% of Net
Sales for sales of the Licensed Product made or the practice of the
Licensed Process by the Sublicensee. If the royalty rate paid by the
Sublicensee is reduced because of third party, non-infringing sales of
a Thalidomide analog, the minimum payment of at least *% of Net Sales
of the Licensed Product will be reduced proportional to the reduction
of the royalty rate paid to LICENSEE by the Sublicensee. Milestone
payments from LICENSEE to CMCC shall be credited against CMCC's share
of milestone payments made to LICENSEE by Sublicensee.
4.4 [Intentionally Omitted.]
4.5 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 of the Patent Rights licensed under this Agreement.
4.6 Royalty payments shall be paid in United States dollars in Boston,
Massachusetts, or at such other place as CMCC 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 exchange rate prevailing at the Fleet Bank of Boston on
the last business day of the calendar quarterly reporting period to
which such royalty payments relate.
ARTICLE V - 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 CMCC 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 CMCC or its
agents for the purpose of verifying LICENSEE's royalty statement or
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compliance in other respects with this Agreement. CMCC can request
auditing of said books and supporting data no more than once each
calendar year.
5.2 LICENSEE, within thirty (30) days after March 31, June 30, September 30
and December 31, of each year, shall deliver to CMCC true and accurate
reports, giving such particulars of the business conducted by LICENSEE
and its Sublicensees during the preceding three-month period under this
Agreement as shall be pertinent to a royalty accounting hereunder.
These shall include at least the following:
5.2.1 Number of Licensed Products manufactured and sold.
5.2.2 Total billings for Licensed Products sold and Licensed
Processes practiced.
5.2.3 Accounting for all Licensed Products used or sold and Licensed
Processes practiced.
5.2.4 Deductions applicable as provided in Section 1.7.
5.2.5 Total royalties due.
5.2.6 Names and addresses of all Sublicensees of LICENSEE.
5.3 With each such report submitted, LICENSEE shall pay to CMCC the
royalties due and payable under this Agreement. If no royalties shall
be due, LICENSEE shall so report. On or before the ninetieth (90th) day
following the close of LICENSEE's fiscal year, LICENSEE shall provide
CMCC with LICENSEE's certified financial statements for the preceding
fiscal-year including at a minimum, a Balance Sheet and an Operating
Statement.
5.4 The royalty payments set forth in this Agreement shall, if overdue,
bear interest until payment at a per annum rate of two percent (2%)
above the prime rate in effect at the Fleet Bank of Boston on the due
date. The payment of such interest shall not foreclose CMCC from
exercising any other rights it may have as a consequence of the
lateness of any payment.
ARTICLE VI - PATENT PROSECUTION
The rights and obligations of the parties with respect to the
prosecution of the Patent Rights during the term of this Agreement
shall be governed by the applicable provisions of Section 7 of the New
Thalidomide Agreement, and such provisions of Section 7 shall survive
and remain in effect during the term of this Agreement with respect to
the parties' rights to the Patent Rights after a termination of the New
Thalidomide Agreement prior to termination or expiration of this
Agreement.
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ARTICLE VII - INFRINGEMENT
The rights and obligations of the parties with respect to infringement
of the Patent Rights during the term of this Agreement shall be
governed by the applicable provisions of Section 7 of the New
Thalidomide Agreement, and such provisions of Section 7 shall survive
and remain in effect during the term of this Agreement with respect to
the parties' rights to the Patent Rights after a termination of the New
Thalidomide Agreement prior to termination or expiration of this
Agreement.
ARTICLE VIII - INDEMNIFICATION, PRODUCT LIABILITY AND INSURANCE
8.1 Indemnification
8.1.1 LICENSEE shall indemnify, defend and hold harmless CMCC and
its trustees, officers, medical and professional staff,
employees, and agents and their respective successors, heirs
and assigns (the "Indemnitees"), against any liability,
damage, loss or expense (including reasonable attorney's fees
and expenses of litigation) incurred by or imposed upon the
Indemnitees or any one of them in connection with any claims,
suits, actions, demands or judgments arising out of any theory
of product liability (including, but not limited to, actions
in the form of tort, warranty, or strict liability) concerning
any product, process or service made, used or sold pursuant to
any right or license granted under this Agreement.
8.1.2 LICENSEE's indemnification under Section 8.1.1 shall not apply
to any liability, damage, loss or expense to the extent that
it is directly attributable to the negligent activities,
reckless misconduct or intentional misconduct of the
Indemnitees.
8.1.3 LICENSEE agrees, at its own expense, to provide attorneys
reasonably acceptable to CMCC to defend against any actions
brought or filed against any party indemnified hereunder with
respect to the subject of indemnity contained herein, whether
or not such actions are rightfully brought.
8.1.4 This Section 8.1 shall survive expiration or termination of
this Agreement.
8.2 Insurance
8.2.1 Beginning at the time as any such product, process or service
is being commercially distributed or sold (other than for the
purpose of obtaining regulatory approvals) by LICENSEE or by a
Sublicensee or agent of LICENSEE, LICENSEE shall, at its sole
cost and expense, procure and maintain comprehensive general
liability insurance in amounts not less than $2,000,000 per
incident and $2,000,000 annual aggregate and naming
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the Indemnitees as additional insureds. Such comprehensive
general liability insurance shall provide (i) product
liability coverage and (ii) broad form contractual liability
coverage for LICENSEE's indemnification under Section 8.1. If
LICENSEE elects to self-insure all or part of the limits
described above (including deductibles or retentions which are
in excess of $250,000 annual aggregate) such self-insurance
program must be acceptable to the CMCC and the Risk Management
Foundation of the Harvard Medical Institutions, Inc. The
minimum amount of insurance coverage required under this
Section 8.2 shall not be construed to create a limit of
LICENSEE's liability with respect to its indemnification under
Section 8.1.
8.2.2 LICENSEE shall provide CMCC with written evidence of such
insurance upon request of CMCC. LICENSEE shall provide CMCC
with written notice at lease fifteen (15) days prior to the
cancellation, non-renewal or material change in such
insurance; if LICENSEE does not obtain replacement insurance
providing comparable coverage within such fifteen (15) day
period, CMCC shall have the right to terminate this Agreement
effective at the end of such fifteen (15) day period without
notice of any additional waiting periods.
8.2.3 LICENSEE shall maintain such comprehensive general liability
insurance during (i) the period that any such product, process
or service is being commercially distributed or sold (other
than for the purpose of obtaining regulatory approvals) by
LICENSEE or by a Sublicensee or agent of LICENSEE and (ii) a
reasonable period after the period referred to above, which in
no event shall be less than fifteen (15) years.
8.2.4 This Section 8.2 shall survive expiration or termination of
this Agreement.
ARTICLE IX - EXPORT CONTROLS
It is understood that CMCC 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 Export Administration Act of 1979) and that its obligations
hereunder are contingent on compliance with applicable United States export laws
and regulations. The transfer of certain technical data and commodities 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.
CMCC neither represents that a license shall not be required nor that, if
required, it shall be issued.
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ARTICLE X - NON-USE OF NAMES
LICENSEE shall not use the names of the Children's Medical Center Corporation
nor of any of its employees, nor any adaptation thereof, in any advertising,
promotional or sales literature without prior written consent obtained from CMCC
in each case except that LICENSEE may state that it is licensed by CMCC under
one or more of the patents and/or applications comprising the Patent Rights, and
LICENSEE may comply with disclosure requirements of all applicable laws relating
to its business, including United States and state security laws.
ARTICLE XI - ASSIGNMENT
Subject to the restrictions set forth herein, this Agreement, and each and every
provision hereof, shall be binding upon and shall inure to the benefit of the
parties, their respective successors, successors-in-title, heirs and assigns,
and each and every successor-in-interest to any party, whether such successor
acquires such interest by way of gift, inheritance, purchase, foreclosure, or by
any other method, shall hold such interest subject to all the terms and
provisions of this Agreement; provided however that LICENSEE shall not assign or
transfer the whole or any part of this Agreement or its rights hereunder without
the express written agreement of CMCC which agreement shall not be unreasonably
withheld except that LICENSEE may assign this Agreement in connection with the
transfer or sale of all or substantially all of its assets or business or its
merger or consolidation with another organization.
ARTICLE XII - ARBITRATION
12.1 Any and all claims, disputes or controversies arising under, out of, or
in connection with this Agreement, which have not been resolved by good
faith negotiations between the parties, shall be resolved by final and
binding arbitration in Boston, Massachusetts, under patent arbitration
rules of the American Arbitration Association then obtaining. The
arbitrators shall have no power to add to, subtract from or modify any
of the terms or conditions of this Agreement. 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 CMCC and LICENSEE each hereby irrevocably consents and
submits.
12.2 Notwithstanding the foregoing, nothing in this Article shall be
construed (i) to waive any rights or timely performance of any
obligations existing under this Agreement or (ii) to apply to the
provisions of Section 7.3 (Infringement Actions) (other than the fourth
sentence of Section 7.3(a)) or Section 7.4 (Declaratory Judgment
Actions) of the New Thalidomide Agreement.
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ARTICLE XIII - TERM AND TERMINATION
13.1 Unless earlier terminated as hereinafter provided, this Agreement shall
remain in full force and effect for the life of the last to expire
patent issued under the Patent Rights.
13.2 Pursuant to Section 8.2.2, or if LICENSEE shall cease to carry on its
business, this Agreement shall terminate upon notice by CMCC.
13.3 Should LICENSEE fail to pay CMCC royalties due and payable hereunder,
CMCC shall have the right to terminate this Agreement on sixty (60)
days' notice, unless LICENSEE shall pay CMCC within the sixty (60) day
period, all such royalties and interest due and payable. Upon the
expiration of the sixty (60) day period, if LICENSEE shall not have
paid all such royalties and interest due and payable, the rights,
privileges and license granted hereunder shall terminate.
13.4 Upon any material breach or default of this Agreement by LICENSEE,
other than those occurrences set out in Sections 13.2 and 13.3, which
shall always take precedence in that order over any material breach or
default referred to in this Section 13.4, CMCC shall have the right to
terminate this Agreement (or, in the case of a breach with respect to
Other Licensed Products and/or compounds as set forth in Sections 3.2
and 3.3, respectively, terminate the Agreement with respect to such
Other Licensed Products and/or compounds) and the rights, privileges
and license granted hereunder by ninety (90) days' notice to LICENSEE.
Such termination shall become effective unless LICENSEE shall have
cured any such breach or default prior to the expiration of the ninety
(90) day period.
13.5 LICENSEE shall have the right to terminate this Agreement at any time
on six (6) months' notice to CMCC, and upon payment of all amounts due
CMCC through the effective date of termination.
13.6 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. 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 pay to CMCC the royalties
thereon as required by Article IV of this Agreement and shall submit
the reports required by Article V hereof on the sales of Licensed
Products.
13.7 CMCC agrees that if LICENSEE has provided to CMCC notice that LICENSEE
has granted a sublicense to a Sublicensee under this Agreement, then in
the event CMCC terminates this Agreement for any reason, CMCC shall
provide to such Sublicensee no less than thirty (30) days prior to the
effective date of said termination, written notice of said termination
at the address specified by LICENSEE to CMCC in LICENSEE's notice to
CMCC under Article XIV.
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CMCC agrees that upon the Sublicensee's notice as described below and
provided the Sublicensee is not in breach of its sublicense, CMCC shall
grant to such Sublicensee license rights and terms equivalent to the
sublicense rights and terms which the sublicense shall have granted to
said Sublicensee; provided that the Sublicensee shall remain a
Sublicensee under this Agreement for a period of at least sixty (60)
days following receipt of notice from CMCC. Sublicensees shall during
said sixty (60) day period provide to CMCC notice wherein the
Sublicensee: (i) reaffirms the terms and conditions of this Agreement
as it relates to the rights the Sublicensee has been granted under the
sublicense; (ii) agrees to abide by all of the terms and conditions of
this Agreement applicable to Sublicensees and to discharge directly all
pertinent obligations of LICENSEE which LICENSEE is obligated hereunder
to discharge, excluding any financial obligations; and (iii)
acknowledges that CMCC shall have no obligations to the Sublicensee
other than its obligations set forth in this Agreement with regard to
LICENSEE.
13.8 The following provisions shall survive the expiration or termination of
this Agreement: Article I, Sections 5.1 and 5.4, Articles VIII, X and
XII, Sections 13.6, 13.7, 13.8 and 13.9, and Articles XIV and XV.
13.9 Termination shall be in addition to, and shall not prejudice, any of
the parties' remedies at law or in equity.
ARTICLE XIV - PAYMENTS, NOTICES, AND OTHER COMMUNICATIONS
Any payment, notice or other communication pursuant to this Agreement shall be
sufficiently made or given on the date of the mailing if sent to a 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 CMCC:
Chief Intellectual Property Officer
Intellectual Property Office
CHILDREN'S HOSPITAL BOSTON
300 Longwood Avenue
Boston, MA 02115
Fax: (617) 232-7485
With a copy to:
Hale and Dorr LLP
60 State Street
Boston, MA 02109
Attn: Steven D. Singer, Esq.
Fax: (617) 526-5000
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<PAGE> 15
In the case of LICENSEE:
Chief Executive Officer
ENTREMED, INC.
9640 Medical Center Drive, Suite 200
Rockville, MD 20850
Fax: (302) 217-9594
With a copy to:
Kilpatrick Stockton LLP
37th Floor
191 Peachtree Street
Atlanta, GA 30303
Attn: James Dean Johnson, Ph.D.
Fax: 404-949-2499
ARTICLE XV - MISCELLANEOUS PROVISIONS
15.1 This Agreement shall be construed, governed, interpreted and applied in
accordance with the laws of the Commonwealth of Massachusetts, U.S.A.
excluding its conflicts of laws provisions, except that questions
affecting the construction and effect of any patent shall be determined
by the law of the country in which the patent was granted.
15.2 The parties hereto acknowledge that this Agreement, the CMCC Consent
and the applicable provisions of Section 7 of the New Thalidomide
Agreement set 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 subscribed to by the parties hereto.
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 law, such invalidity or
unenforceability shall not in any way affect the validity or
enforceability of the remaining provisions hereof.
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 patent 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
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right or excuse a similar subsequent failure to perform any such term
or condition by the other party.
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IN WITNESS WHEREOF, the parties have hereunto set their hands and seals and duly
executed this Agreement the day and year set forth below.
CHILDREN'S MEDICAL CENTER CORPORATION
By /s/ Stuart J. Novick
--------------------------------------------
Name Stuart J. Novick
--------------------------------------------
Title S.R. V.P. / General Counsel
--------------------------------------------
Date
--------------------------------------------
ENTREMED, INC.
By /s/ John W. Holaday
--------------------------------------------
Name John W. Holaday
--------------------------------------------
Title CHM & CEO
--------------------------------------------
Date July 28, 2001
--------------------------------------------
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