Patent Option Agreement - Massachusetts Institute of Technology and Cerebrotec Inc.
PATENT OPTION AGREEMENT
Offer of this agreement is open until June 8, 2001
This Agreement is made as of the date set forth above the signatures of the
parties below (the "EFFECTIVE DATE"), by and between the Massachusetts Institute
of Technology, a Massachusetts corporation having its principal office at 77
Massachusetts Avenue, Cambridge, Massachusetts 02139 ("M.I.T.") and Cerebrotec,
Inc., a corporation having its principal office at 308A Hunnewell St., Needham,
Massachusetts 02494 ("COMPANY").
WHEREAS, M.I.T. is the owner of certain PATENT RIGHTS (as later defined
herein) relating to M.I.T. Case No. [*] and has the right to grant licenses
under said PATENT RIGHTS, subject only to a royalty-free, nonexclusive
nontransferable license to practice the PATENT RIGHTS reserved by 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; and
WHEREAS, COMPANY desires a period of time in which to internally
evaluate the PATENT RIGHTS, potential products and markets therefor, and in
which to elect to negotiate a license.
NOW, THEREFORE, in consideration of the promises and mutual covenants
contained herein, the parties hereto agree as follows:
1. Definition of PATENT RIGHTS. "PATENT RIGHTS" means the United
States and foreign patents, patent applications, and
provisional applications set forth on Appendix A.
2. Grant of Option Right. M.I.T. hereby grants COMPANY an option
to negotiate a worldwide, royalty-bearing, limited-term
exclusive license under the PATENT RIGHTS in the following
field: Stroke recovery (the "Option Right"). COMPANY may
exercise the Option Right upon written notice to M.I.T.
received by M.I.T. within six months after the EFFECTIVE DATE
(the "Option Period"). If COMPANY does not elect to exercise
the Option Right, or fails to exercise the Option Right during
the Option Period, M.I.T. shall be free to license its rights
under the relevant PATENT RIGHTS to any third party and this
Agreement shall terminate. If COMPANY does elect to exercise
the Option Right, M.I.T. and COMPANY shall negotiate in good
faith a license agreement containing commercially reasonable
terms and conditions. If M.I.T. and COMPANY are unable to
reach agreement within ninety (90) days after COMPANY has
exercised the Option Right, this Agreement shall terminate.
Thereafter, M.I.T. may offer its rights in the PATENT RIGHTS
to any third parties.
3. Limited License. M.I.T. hereby grants COMPANY an internal use
license during the Option Period to practice the PATENT RIGHTS
solely for the purpose of
* Confidential treatment has been requested with respect to certain portions of
this exhibit. Such portions are marked with a "[*]" in place of the redacted
language. Omitted portions are filed separately with the Securities and Exchange
Commission.
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COMPANY's internal evaluation of the PATENT RIGHTS in
furtherance of this Agreement. During the Option Period,
COMPANY shall use commercially reasonable efforts to evaluate
the PATENT RIGHTS with a view toward creating a commercial
product or process that will be covered by the PATENT RIGHTS.
In addition, M.I.T. hereby grants COMPANY an internal
use license during the Option Period to use, solely for the
purpose of COMPANY's internal evaluation, the materials
described and given to COMPANY under the terms of the Material
Transfer Agreement ("TANGIBLE PROPERTY") attached herein as
Appendix B.
4. Option Fee. In consideration of the rights granted COMPANY
under this Agreement, COMPANY shall pay to M.I.T. a
nonrefundable option fee of Five Thousand Dollars ($5,000) on
the EFFECTIVE DATE.
5. Payment of Patent Expenses. Within thirty (30) days after
M.I.T. invoices COMPANY, COMPANY shall reimburse M.I.T. for
all patent-related expenses (including attorneys' fees)
incurred by M.I.T. during the term of this Agreement in
connection with obtaining or maintaining the PATENT RIGHTS.
During the Option Period, M.I.T. will notify COMPANY
in writing of any pending action on the U.S. patent
applications corresponding to the PATENT RIGHTS that may
result in such patent-related expenses exceeding Five Thousand
Dollars ($5,000). Should COMPANY refuse to pay for such
action, and if such action is necessary to retain U.S. patent
rights, this agreement will terminate immediately.
During the Option Period, COMPANY may elect to have
M.I.T. file foreign patent applications corresponding to the
PATENT RIGHTS in such countries as COMPANY may select by
written notice on or before May 31, 2001, and such foreign
filings shall be added to Appendix A and shall be included in
the definition of PATENT RIGHTS. COMPANY shall reimburse
M.I.T. for all patent-related expenses (including attorneys'
fees) incurred by M.I.T. during the term of this Agreement in
connection with obtaining or maintaining such foreign PATENT
RIGHTS.
6. Extension of Option Period. COMPANY shall have the right to
extend the Option Period for an additional six (6) month
period by giving M.I.T. written notice of such extension one
month prior to the expiration of the Option Period. If COMPANY
elects to extend the Option Period, then an option fee of Five
Thousand Dollars ($5,000) shall be due and payable to M.I.T.
at the time written notice of such extension is provided to
M.I.T.
7. Survival. Sections 4, 5, 6 (to the extent payments are due),
7, and 9 shall survive the expiration or termination of this
Agreement.
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* Confidential treatment has been requested with respect to certain portions of
this exhibit. Such portions are marked with a "[*]" in place of the redacted
language. Omitted portions are filed separately with the Securities and Exchange
Commission.
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8. Termination for Default. In the event COMPANY commits a
material breach of its obligations under this Agreement and
fails to cure that breach within thirty (30) days after
receiving written notice thereof, M.I.T. may terminate this
Agreement immediately upon written notice to COMPANY.
9. Termination by COMPANY. COMPANY shall have the right to
terminate this Agreement, for any reason upon at least sixty
(60) days prior written notice to M.I.T., such notice to state
the date at least sixty (60) days in the future upon which
termination is to be effective, and (ii) upon payment of all
amounts due to M.I.T. through such termination effective date.
COMPANY shall not be responsible for patent-related expenses
(including attorneys' fees) incurred by M.I.T. in connection
with obtaining or maintaining PATENT RIGHTS after such
terminate date.
10. Miscellaneous.
(a) Representations, Warranties and Damages Disclaimers. EXCEPT AS
EXPRESSLY STATED HEREIN, M.I.T. MAKES NO REPRESENTATIONS OR
WARRANTIES OF ANY KIND CONCERNING THE PATENT RIGHTS AND
TANGIBLE PROPERTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT
LIMITATION WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, NONINFRINGEMENT, VALIDITY OF PATENT RIGHTS
CLAIMS, WHETHER ISSUED OR PENDING, AND THE ABSENCE OF LATENT
OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE. NOTWITHSTANDING
THE FOREGOING, M.I.T. HEREBY REPRESENTS TO THE COMPANY THAT IT
HAS THE FULL RIGHT POWER, CAPACITY AND AUTHORITY TO LICENSE
AND DELIVER THE PATENT RIGHTS IN ACCORDANCE WITH THE TERMS OF
THIS AGREEMENT.
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 DAMAGES
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 THE FOREGOING.
(b) Assignment. This Agreement is personal to COMPANY and no
rights or obligations may be assigned by COMPANY, without the
prior written consent of M.I.T.; provided, however, COMPANY
may assign this Agreement, with written notice to M.I.T., in
connection with a merger, consolidation or sale of all or
substantially all of the assets of COMPANY, so long as the
assignee shall agree in writing to be bound by all the terms
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* Confidential treatment has been requested with respect to certain portions of
this exhibit. Such portions are marked with a "[*]" in place of the redacted
language. Omitted portions are filed separately with the Securities and Exchange
Commission.
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and conditions hereof prior to such assignment. Failure of
such assignee to so agree shall be grounds for termination by
M.I.T.
(c) Governing Law. This Agreement, and any disputes arising in
connection herewith, shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts,
irrespective of any conflicts of law principles.
(d) Entire Agreement. This Agreement and the Material Transfer
Agreement constitute the entire agreement between the parties
with respect to the subject matter herein and supersedes all
prior agreements or understanding between the parties relating
to such subject matter.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed under seal by their duly authorized representative.
THE EFFECTIVE DATE OF THIS AGREEMENT IS MAY 21, 2001.
MASSACHUSETTS INSTITUTE OF CEREBROTEC, INC.
TECHNOLOGY
By: Signature of File By: /s/ Seth Finklestein
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Name: Name: Seth Finklestein
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Title: Director Technology Licensing Office Title: President
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* Confidential treatment has been requested with respect to certain portions of
this exhibit. Such portions are marked with a "[*]" in place of the redacted
language. Omitted portions are filed separately with the Securities and Exchange
Commission.
<PAGE>
APPENDIX A
LIST OF PATENT RIGHTS
M.I.T. Case No. [*]
* Confidential treatment has been requested with respect to certain portions of
this exhibit. Such portions are marked with a "[*]" in place of the redacted
language. Omitted portions are filed separately with the Securities and Exchange
Commission.
<PAGE>
APPENDIX B
MASSACHUSETTS INSTITUTE OF TECHNOLOGY
CEREBROTEC, INC.
MATERIAL TRANSFER AGREEMENT
The Massachusetts Institute of Technology (hereinafter "M.I.T.") and Dr. Ram
Sasisekharan (hereinafter "PROVIDER SCIENTIST") agree to provide Dr. Seth
Finklestein (hereinafter "RECIPIENT SCIENTIST") OF Cerebrotec, Inc. (hereinafter
"RECIPIENT") with material as described below subject to the terms and
conditions set forth in this Agreement.
I. DEFINITIONS
1. ORIGINAL MATERIAL: shall be the [*]
2. MATERIAL; ORIGINAL MATERIAL, PROGENY, and UNMODIFIED DERIVATIVES. The
MATERIAL shall not include: (a) MODIFICATIONS, or (b) other substances created
by the RECIPIENT through the use of the MATERIAL which are not MODIFICATIONS,
PROGENY, or UNMODIFIED DERIVATIVES.
3. PROGENY: Unmodified descendant from the MATERIAL, such as virus from virus,
cell from cell, or organism from organism.
4. UNMODIFIED DERIVATIVES: Substances created by the RECIPIENT which constitute
an unmodified functional subunit or product expressed by the ORIGINAL MATERIAL.
Some examples include subclones of unmodified cell lines, purified or
fractionated subsets of the ORIGINAL MATERIAL, proteins expressed by DNA/RNA
supplied by M.I.T., or monoclonal antibodies secreted by a hybridoma cell line.
5. MODIFICATIONS: Substances created by the RECIPIENT which contain/incorporate
the MATERIAL.
6. COMMERCIAL PURPOSES: Shall mean the sale, lease, license, or other transfer
of the MATERIAL or MODIFICATIONS. COMMERCIAL PURPOSES shall also include uses of
the MATERIAL or MODIFICATIONS by the organization, including RECIPIENT, to
perform contract research, to screen compound libraries, to produce or
manufacture products for general sale, or to conduct research activities that
result in any sale, lease, license, or transfer of the MATERIAL or
MODIFICATIONS.
II. TERMS AND CONDITIONS OF THIS AGREEMENT
1. M.I.T. retains ownership of the MATERIAL, including any MATERIAL contained or
incorporated in MODIFICATIONS.
2. The RECIPIENT retains ownership of: (a) MODIFICATIONS (except that, M.I.T.
retains ownership rights to the MATERIAL (included therein), and (b) those
substances created
* Confidential treatment has been requested with respect to certain portions of
this exhibit. Such portions are marked with a "[*]" in place of the redacted
language. Omitted portions are filed separately with the Securities and Exchange
Commission.
<PAGE>
through the use of the MATERIAL or MODIFICATIONS, but which are not PROGENY,
UNMODIFIED DERIVATIVES or MODIFICATIONS (i.e., do not contain the ORIGINAL
MATERIAL, PROGENY, UNMODIFIED DERIVATIVES). If either 2(a) or 2(b) results from
the collaborative efforts of M.I.T. and the RECIPIENT, joint ownership may be
negotiated.
3. The RECIPIENT and the RECIPIENT SCIENTIST agree that the MATERIAL:
(a) is to be used solely for the purpose defined in Attachment A
(the "PURPOSE");
(b) will not be used in human subjects, in clinical trials, or for
diagnostic purposes involving human subjects;
(c) is to be used only at the RECIPIENT organization and only in
the RECIPIENT SCIENTIST's laboratory under the direction of
the RECIPIENT SCIENTIST or others working under his/her direct
supervision; and (d) will not be transferred to anyone else
within the RECIPIENT organization without the prior written
consent of M.I.T.
4. This Agreement is not assignable, whether by operation of law or otherwise,
other than in connection with a merger, consolidation, or sale of substantially
all of the assets of RECIPIENT. RECIPIENT may not transfer the MATERIAL to third
parties, except that MATERIAL may be transferred to a third party with which
RECIPIENT is MERGED, consolidated or sold.
5. The RECIPIENT acknowledges that the MATERIAL is or may be the subject of a
patent application. Except as provided in this Agreement, no express or implied
licenses or other rights are provided to the RECIPIENT under any patents, patent
applications, trade secrets or other proprietary rights of M.I.T., including any
altered forms of the MATERIAL made by M.I.T. In particular, no express or
implied licenses or other rights are provided to use the MATERIAL,
MODIFICATIONS, or any related patents of M.I.T. for COMMERCIAL PURPOSES.
6. If the RECIPIENT desires to use or license the MATERIAL or MODIFICATIONS for
COMMERCIAL PURPOSES, the RECIPIENT agrees, in advance of such use, to negotiate
in good faith with the PROVIDER to establish the terms of a commercial license.
It is understood by the RECIPIENT that the PROVIDER shall have no obligation to
grant such a license to the RECIPIENT, and may grant exclusive or non-exclusive
commercial licenses to others, or sell or assign all or part of the rights in
the MATERIAL to any third party(ies), subject to any pre-existing rights held by
others and obligations to the Federal Government.
7. The RECIPIENT is free to file patent application(s) claiming inventions made
by the RECIPIENT through the use of the MATERIAL but agrees to notify M.I.T.
upon filing a patent application claiming MODIFICATIONS or method(s) of
manufacture or use(s) of the MATERIAL.
8. Any MATERIAL delivered pursuant to this Agreement is understood to be
experimental in name and may have hazardous properties. M.I.T. MAKES NO
REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESSED OR
IMPLIED. THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE, OR THAT THE USE OF THE MATERIAL
* Confidential treatment has been requested with respect to certain portions of
this exhibit. Such portions are marked with a "[*]" in place of the redacted
language. Omitted portions are filed separately with the Securities and Exchange
Commission.
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WILL NOT INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK, OR OTHER PROPRIETARY RIGHTS.
9. Except to the extent prohibited by law, the RECIPIENT assumes all liability
for damages which may arise from its use, storage or disposal of the MATERIAL.
M.I.T. will not be liable to the RECIPIENT for any loss, claim or demand made by
the RECIPIENT, or made against the RECIPIENT by any other party, due to or
arising from the use of the MATERIAL by the RECIPIENT, except to the extent
permitted by law when caused by the gross negligence or willful misconduct of
M.I.T.
10. This agreement shall not be interpreted to prevent or delay publication of
research findings resulting from the use of the MATERIAL or the MODIFICATIONS.
The RECIPIENT SCIENTIST agrees to provide appropriate acknowledgement of the
source of the MATERIAL in all publications.
11. The RECIPIENT agrees to use the MATERIAL in compliance with all applicable
statutes and regulations, including Public Health Service and National Institute
of Health regulations and guidelines such as, for example, [illegible] relating
to research involving the use of animals or recombinant DNA.
12. This Agreement will terminate on the earliest of the following dates: (a)
when the MATERIAL becomes generally available from third parties, for example,
though reagent catalogs or public depositories or (b) the completion of the
PURPOSE with the MATERIAL, or (c) on thirty (30) days written notice by either
party to the other, or (d) upon the termination of the Option Agreement
effective May __, 2001, by and between the PROVIDER and RECIPIENT, provided
that:
(a) if termination should occur under 13(a), the RECIPIENT shall
be bound to the PROVIDER by the least restrictive terms
applicable to the MATERIAL obtained from the then-available
resources; and
(b) if termination should occur under 13(b), (c), or (d) above,
the RECIPIENT will discontinue its use of the MATERIAL and
will, upon direction of the PROVIDER, return or destroy any
remaining MATERIAL. The RECIPIENT, at its discretion, will
also either destroy the MODIFICATIONS or remain bound by the
terms of this agreement, as the apply to MODIFICATIONS.
13. Paragraphs 5, 8 and 9 shall survive termination.
If you agree to accept the MATERIAL under the above conditions, please have two
(2) original copies of this Agreement signed by an authorized representative of
RECIPIENT and RECIPIENT SCIENTIST and either PROVIDER SCIENTIST or an authorized
representative of M.I.T. and return one original to:
* Confidential treatment has been requested with respect to certain portions of
this exhibit. Such portions are marked with a "[*]" in place of the redacted
language. Omitted portions are filed separately with the Securities and Exchange
Commission.
<PAGE>
Material Transfer Coordinator
Technology Licensing Office
Massachusetts Institute of Technology
77 Massachusetts Ave., Room NE25-230
Cambridge, MA 02139
The MATERIAL will be sent to you as soon as possible after receipt of the signed
Agreement.
MASSACHUSETTS INSTITUTE OF CEREBROTEC, INC.
TECHNOLOGY
By: Signature on File By: /s/ Seth Finklestein
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Name: Name: Seth Finklestein
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Title: Director Technology Licensing Office Title: President
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Date: May 8, 2001 Date: 5/23/01
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DR. RAM SASISEKHARAN DR. SETH FINKLESTEIN
By: /s/ Ram Sasisekharan By: /s/ Seth Finklestein
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Name: Ram Sasisekharan Name: Seth Finklestein
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Title: Assoc. Prof. MIT Title: President, Cerebrotec
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Date: May 24, 01 Date: 5/23/01
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* Confidential treatment has been requested with respect to certain portions of
this exhibit. Such portions are marked with a "[*]" in place of the redacted
language. Omitted portions are filed separately with the Securities and Exchange
Commission.
<PAGE>
ATTACHMENT A
THE PURPOSE
Cerebrotec, Inc. plans to evaluate the MATERIAL in rat models of stroke recovery
as a potential therapeutic to reduce neurological disability following stroke.
* Confidential treatment has been requested with respect to certain portions of
this exhibit. Such portions are marked with a "[*]" in place of the redacted
language. Omitted portions are filed separately with the Securities and Exchange
Commission.