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EXHIBIT 10.3
EXECUTION COPY
AMENDED AND RESTATED LICENSE AGREEMENT
This Amended and Restated License Agreement (this "Agreement")
is
made effective as of May 20, 2004 (the "Restated Effective
Date") by and between
Ramot at Tel Aviv University Ltd., Company Registration No.
51-066714-0, a
corporation duly organized and existing under the laws of the
State of Israel
("Ramot") and Predix Pharmaceuticals Holdings, Inc. a
corporation duly organized
and existing under the laws of the State of Delaware
(hereinafter
"Predix")(Ramot and Predix are each hereafter referred to
individually as a
"Party" and together as the "Parties").
WHEREAS, Ramot is a company formed by Tel-Aviv University
("TAU") for
applied research and industrial development of know-how and
inventions developed
or arrived at by scientists of TAU; and
WHEREAS, by operation of law or under the terms of such
scientists'
employment or other relationships with TAU or Ramot, and
according to agreement
between TAU and Ramot, all rights, title and interest in and to
such know-how
and inventions are owned by Ramot; and
WHEREAS, Ramot has the right and authority to enter into
agreements
relating to such know-how and inventions; and
WHEREAS, Ramot (formerly Ramot University Authority For Applied
Research
and Industrial Development Ltd.) and Predix (by assignment from
a predecessor
corporation) are Parties to that certain License Agreement dated
September 18,
2000 (the "Effective Date"), pursuant to which Ramot granted to
Predix an
exclusive license under intellectual property rights controlled
by Ramot and
pertaining to certain drug discovery and development technology
(the "Original
Agreement"); and
WHEREAS, Ramot and Predix now desire to amend and restate the
Original
Agreement in its entirety as set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein,
and for other good and valuable consideration, the receipt and
adequacy of which
are hereby acknowledged, the Parties hereby agree as
follows:
1. DEFINITIONS
Whenever used in the Agreement with an initial capital letter,
the terms
defined in this Article 1 shall have the meanings specified.
1.1 "AFFILIATE" shall mean, with respect to either Party, any
other
person, corporation, company, partnership, joint venture and/or
firm which
controls, is controlled by or is under common control with such
Party. As used
in this Section 1.1 only, "control" of another person,
corporation, company,
partnership, joint venture and/or firm shall mean the
possession, directly or
indirectly, of the power to direct or cause the direction of the
activities,
management or policies of such person, organization or entity,
whether through
the ownership of voting securities, by contract or otherwise.
Without limiting
the foregoing, control shall be presumed to
PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED
SEPARATELY WITH THE
SECRETARY OF THE COMMISSION PURSUANT TO THE COMPANY'S
APPLICATION REQUESTING
CONFIDENTIAL TREATMENT UNDER RULE 24b-2 OF THE EXCHANGE ACT; [*]
DENOTES
OMISSIONS.
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exist when a person, corporation, company, partnership, joint
venture and/or
firm (a) in the case of corporate entities, directly or
indirectly owns at least
twenty percent (20%) of the stock or shares having the right to
vote for the
election of directors, and (b) in the case of non-corporate
entities, holds the
direct or indirect power to manage, direct or cause the
direction of the
management and policies of the non-corporate entity or the power
to elect at
least twenty percent (20%) of the members of the governing body
of such
non-corporate entity, any corporation, firm, limited liability
company,
partnership or other entity that directly controls or is
controlled by or is
under common control with a Party to this Agreement.
1.2 "CONFIDENTIAL INFORMATION" shall mean any confidential
scientific, technical, trade or business information relating to
the subject
matter of this Agreement disclosed by or on behalf of one party
to the other
that is either marked as confidential or if disclosed orally is
reduced to a
written summary marked as confidential and delivered to the
receiving party
within 30 days of disclosure. Confidential Information does not
include
information that (i) is in possession of the receiving Party at
the time of
disclosure, as reasonably demonstrated by written records; (ii)
is or later
becomes part of the public domain through no fault of the
receiving Party; (iii)
is received by a receiving Party from a third Party having no
obligation of
confidentiality to the disclosing Party; or (iv) is developed
independently by a
receiving Party without use of the disclosing Party's
Confidential Information.
1.3 "CONTROL" or "CONTROLLED" shall mean, with respect to
any intellectual property rights, the right and authority of a
Party to grant
the rights, licenses and options provided for herein without
breaching any
written agreement with any third Party by virtue of such
grant.
1.4 "DEVELOPMENT" and "DEVELOP" shall mean, with respect to
any Licensed Product, all activities with respect to such
Licensed
Product relating to research and development and in connection
with seeking,
obtaining and/or maintaining any Regulatory Approval for such
Licensed Product
in the Field in the Territory, including without limitation, all
pre-clinical
research and development activities, all human clinical studies,
all activities
relating to developing the ability to manufacture any Licensed
Product or any
component thereof (including, without limitation, process
development work), and
all other activities relating to seeking, obtaining and/or
maintaining any
Regulatory Approvals from the FDA and/or any Foreign Regulatory
Authority.
1.5 "DERIVATIVE WORK" means any software that is derived
from the Licensed Technology, including without limitation,
software that is a
translation (including any translation into other computer
languages),
portation, modification, correction, extension, upgrade,
improvement,
compilation, abridgment, adaptation or other form of the
Licensed Technology.
Derivative Works shall include without limitation any software
that would
infringe any of Ramot's copyrights in the Licensed
Technology.
1.6 "DERIVED PRODUCT" shall mean a product, compound or
drug candidate that is identified, characterized or developed
through the Use of
Licensed Technology and/or a Derivative Work, which is not a
Discovered Product,
and that is commercialized by Predix, an Affiliate of Predix or
a Sublicensee.
"Derived Products" include, without limitation, those compounds
listed on
Exhibit 1.6 attached hereto.
1.7 "DISCOVERED PRODUCT" shall mean a product, compound or
drug candidate that is identified from an in silico library
through the Use of
the Licensed Technology and/or a
PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED
SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO
THE COMPANY'S APPLICATION REQUESTING CONFIDENTIAL TREATMENT
UNDER RULE 24b-2 OF THE EXCHANGE ACT; [*] DENOTES OMISSIONS.
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Derivative Work, which is commercialized by Predix, an Affiliate
of Predix or a
Sublicensee, without Modification and which had not been
Modified by Predix
prior to such identification. For purposes of this Section 1.7,
"Modification"
and "Modified" shall mean modification or optimization that
increases the
likelihood that the product, compound or drug candidate can be
successfully
developed into a drug product, including without limitation, by
making
modifications to such product, compound or drug candidate to
alter the
pharmacokinetics, bioavailability, toxicity, or efficacy, to
improve stability,
to solve or avoid manufacturing issues or to avoid the
intellectual property
rights of a Third Party.
1.8 "DISPUTE" shall have the definition set forth in
Section 10.1.
1.9 "DRUG APPROVAL APPLICATION" shall mean any application
for Regulatory Approval (including pricing and reimbursement
approvals) required
prior to any commercial sale or use of a Licensed Product in any
country or
jurisdiction in the Territory.
1.10 "FIELD" shall mean and include all uses, including
without limitation, all uses relating to the diagnosis,
prevention and treatment
of any and all diseases or conditions in humans or animals.
1.11 "FIRST COMMERCIAL SALE" shall mean, on a
country-by-country basis, the date of the first arm's length
transaction,
transfer or disposition for value to a Third Party of a Licensed
Product by or
on behalf of Predix or any Affiliate of Predix in such country
after Regulatory
Approval has been achieved in the country in which such Licensed
Product is
sold. Sales for test marketing, sampling and promotional uses,
clinical trial
purposes or compassionate or similar use shall not be considered
to constitute a
First Commercial Sale.
1.12 "FDA" shall mean the United States Food and Drug
Administration and any successor agency or authority
thereto.
1.13 "FOREIGN REGULATORY AUTHORITIES" shall mean any
applicable supranational, national, federal, state or local
regulatory agency,
department, bureau or other governmental entity of any country
or jurisdiction
in the Territory (other than the FDA in the United States),
having
responsibility in such country or jurisdiction for any
Regulatory Approvals of
any kind in such country or jurisdiction, and any successor
agency or authority
thereto.
1.14 "LICENSED PATENT RIGHTS" shall mean all Patent Rights
owned by Ramot that claim Licensed Technology.
1.15 "LICENSED PRODUCT" shall mean any and all Derived
Products and Discovered Products, taken collectively.
1.16 "LICENSED TECHNOLOGY" shall mean: (a) the inventions
disclosed in Israeli Patent Application IL 137885, including
without limitation,
the novel computational method for modeling the three (3)
dimensional structure
of G-protein coupled receptors from their one (1) dimensional
sequence, (b) the
inventions disclosed in Israeli Patent Application IL 137886,
including without
limitation, the novel automated protein design algorithm based
on the physical
properties that determine the protein structure stability and
that is useful for
predicting protein sequences likely to achieve a desired folding
pattern in a
very high computational efficiency.
PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED
SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO
THE COMPANY'S APPLICATION REQUESTING CONFIDENTIAL TREATMENT
UNDER RULE 24b-2 OF THE EXCHANGE ACT; [*] DENOTES OMISSIONS.
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1.17 "LICENSED TECHNOLOGY EXCLUSIVITY TERM" shall mean that
period commencing on the Effective Date and continuing until the
later of: (a)
the expiration or termination of the last [************] within
the Licensed
Patent Rights and (b) the [*******] anniversary of the Effective
Date.
1.18 "NET SALES" shall mean the gross invoiced sales price
for all Licensed Products sold by Predix and its Affiliates to
Third Parties
throughout the Territory during each calendar quarter, less the
following
amounts incurred or paid by Predix or its Affiliates during such
calendar
quarter with respect to sales of Licensed Products regardless of
the calendar
quarter in which such sales were made:
(a) trade, cash and quantity discounts or rebates actually
allowed or taken, including discounts or rebates to
governmental or managed care organizations;
(b) credits or allowances actually given or made for
rejection of, and for uncollectible amounts on, or return
of previously sold Licensed Products (including Medicare
and similar types of rebates);
(c) any charges for insurance, freight, and other
transportation costs directly related to the delivery of
Licensed Product to the extent included in the gross
invoiced sales price;
(d) any tax, tariff, duty or governmental charge levied on
the sales, transfer, transportation or delivery of a
Licensed Product (including any tax such as a value added
or similar tax or government charge) borne by the seller
thereof, other than franchise or income tax of any kind
whatsoever; and
(e) any import or export duties or their equivalent borne
by the seller;
provided that:
(i) In any transfers of Licensed Products between Predix
and an Affiliate of Predix or between an Affiliate of Predix and
an Affiliate of
such Affiliate, Net Sales (subject to the deductions listed
above) shall be
equal to the higher of: (x) the fair market value of the
Licensed Products so
transferred, assuming an arm's length transaction made in the
ordinary course of
business and (y) the total amount invoiced by such Affiliate on
resale to an
independent third party purchaser; and
(ii) In the event that Predix, or an Affiliate of Predix,
receives non-monetary consideration for any Licensed Products or
in the case of
transactions not at arm's length with a non-Affiliate of Predix
or its
Affiliate, Net Sales (subject to the deductions listed above)
shall be
calculated based on the fair market value of such consideration
or transaction,
assuming an arm's length transaction made in the ordinary course
of business.
PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED
SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO
THE COMPANY'S APPLICATION REQUESTING CONFIDENTIAL TREATMENT
UNDER RULE 24b-2 OF THE EXCHANGE ACT; [*] DENOTES OMISSIONS.
4
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Notwithstanding the foregoing, "Net Sales" shall not include
sales or transfers
between Predix and its Affiliates, if the Licensed Product is
resold by the
Affiliate.
In the event that a Licensed Product under this Agreement is
sold in combination
with another active ingredient or component having independent
therapeutic
effect or diagnostic utility, then "Net Sales," for purposes of
determining
royalty payments on the combination, shall be calculated by
multiplying the Net
Sales of the combination by the fraction A/A+B, where A is the
gross selling
price, during the royalty paying period in question, of the
Licensed Product
sold separately, and B is the gross selling price, during the
royalty period in
question, of the other active ingredients or components sold
separately.
1.19 "PATENT RIGHTS" shall mean all patent applications and
patents, including Israeli and foreign applications, divisions,
continuations,
and continuations-in-part, applications for certificates of
invention and
priority rights, certificates of invention, reissues,
re-examination
certificates, extensions or other governmental acts that
effectively extend the
period of exclusivity by the patent holder, substitutions,
renewals,
supplementary protection certificates, confirmations,
registrations, validations
and additions.
1.20 "REGULATORY APPROVAL" shall mean any and all final
approvals (including pricing and reimbursement approvals),
product and
establishment licenses, registrations or authorizations of any
kind of the FDA
or any Foreign Regulatory Authority permitting the commercial
sale of a Licensed
Product (or any component thereof) for use in the Field in any
country or other
jurisdiction in the Territory.
1.21 "ROYALTY TERM" shall mean with respect to each
Licensed Product, on a country-by-country basis, a period of
twelve (12) years
commencing on the First Commercial Sale of such Licensed Product
in such
country.
1.22 "SERVICE INCOME" shall mean all amounts and other
consideration received by Predix, or an Affiliate of Predix, for
or in
connection with the performance of Services; provided that in
the event that
Predix or an Affiliate of Predix receives non-monetary
consideration in
connection with any such services or in the case of transactions
not at arm's
length, Service Income shall be calculated based on the fair
market value of
such consideration or transaction, assuming an arm's length
transaction made in
the ordinary course of business.
1.23 "SERVICES" shall mean services performed by Predix, or
an Affiliate of Predix, for the benefit of (a) a Third Party or
(b) for the
benefit of a Third Party and Predix and/or an Affiliate of
Predix, using the
Licensed Technology.
1.24 "SOFTWARE PRODUCT" shall mean a software product that
incorporates Licensed Technology. Notwithstanding the foregoing,
Software
Products that are also within the definition of "Discovered
Product" or "Derived
Product" are hereby deemed to be Software Products only.
1.25 "SUBLICENSE" shall mean a sublicense, assignment or
other grant of rights by Predix or an Affiliate of Predix to a
Third Party
(regardless of whether such grant of rights is or is referred to
as a
sublicense) of or with respect to: (a) some or all of the rights
granted to
Predix under this Agreement; (b) a Software Product; or (c) the
right to
Develop, have Developed, make, have made, use, have used, sell,
offer for sale,
have sold, import or have imported Licensed Product(s). For
avoidance of doubt,
an assignment completed in accordance
PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED
SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO
THE COMPANY'S APPLICATION REQUESTING CONFIDENTIAL TREATMENT
UNDER RULE 24b-2 OF THE EXCHANGE ACT; [*] DENOTES OMISSIONS.
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with Section 11.3 shall not be included within the term
"Sublicense".
1.26 "SUBLICENSE INCOME" shall mean all amounts and other
consideration received by Predix or an Affiliate of Predix, in
connection with a
Sublicense, excluding loans given at prevailing market
conditions, research
funding specifically committed to cover costs actually incurred
by Predix in the
research and development of Licensed Products under and in
accordance with
detailed budgets and workplans included in bona-fide sublicense
agreements with
Sublicensees solely to the extent such funding does not exceed
the actual cost
of performing the research (if reimbursement exceeds such costs
only the excess
amount will be "Sublicense Income") and equity investments in
Predix to the
extent made at fair market value (if the investment exceeds the
fair market
value, only the excess amount will be "Sublicense Income");
provided that in the
event that Predix or an Affiliate of Predix receives
non-monetary consideration
in connection with any such Sublicense or in the case of
transactions not at
arm's length, Sublicense Income shall be calculated based on the
fair market
value of such consideration or transaction, assuming an arm's
length transaction
made in the ordinary course of business. For purposes of this
definition, the
term "fair market value" with respect to Predix equity means the
value of Predix
equity as determined in good faith by the Board of Directors of
Predix taking
into consideration the value most recently paid by a Third Party
for shares of
such equity and any material events that have occurred
subsequent to such
purchase.
1.27 "SUBLICENSEE" shall mean any Third Party to whom
Predix grants a Sublicense.
1.28 "TECHNOLOGY" shall mean any and all technical data,
information, processes, designs, ideas, know-how, methods,
procedures, trade
secrets, formulae and all other technology, whether tangible or
intangible and
whether patented, patentable or otherwise.
1.29 "TERM" shall have the definition set forth in Section
9.1.
1.30 "TERRITORY" shall mean all countries and jurisdictions
of the world.
1.31 "THIRD PARTY" shall mean any person or entity other
than Predix, Ramot and their respective Affiliates.
1.32 "USE" shall mean the use of the Licensed Technology or
a Derivative Work in any stage of the characterization,
optimization or
development of a Licensed Product or the characterization of the
protein
targeted by the Licensed Product; provided that such use either
was made prior
to the Effective Date or is made during the Licensed Technology
Exclusivity
Term.
1.33 "VALID CLAIM" shall mean a claim in an unexpired
patent or patent application that: (a) has not been finally
cancelled,
withdrawn, abandoned or rejected by any administrative agency or
other body of
competent jurisdiction in a final non-appealable or unappealable
decision, and
(b) has not been revoked, held invalid, or declared unpatentable
in a decision
of a court or other body of competent jurisdiction that is
unappealable or
unappealed within the time allowed for appeal.
2. GRANT OF RIGHTS
2.1 LICENSE TO PREDIX.
PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED
SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO
THE COMPANY'S APPLICATION REQUESTING CONFIDENTIAL TREATMENT
UNDER RULE 24b-2 OF THE EXCHANGE ACT; [*] DENOTES OMISSIONS.
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2.1.1 Grant of License. Ramot hereby grants to
Predix an exclusive, royalty-bearing license, including the
right to grant
sublicenses in accordance with Section 2.1.2, under the Licensed
Patent Rights
and Licensed Technology, during the Term, to Develop, have
Developed, make, have
made, use, have used, sell, offer for sale, have sold, import
and have imported,
Licensed Products in the Territory, for any and all uses within
the Field,
subject to the terms and conditions of this Agreement.
2.1.2 Right to Sublicense. Predix shall have the
right to grant sublicenses to any Sublicensee to all or any
portion of its
rights under the license granted pursuant to this Article 2,
including without
limitation as part of a license to a Software Product; provided,
however, that
any and all such sublicenses shall be made for consideration and
in arm's length
transactions. Predix shall promptly deliver to Ramot a copy of
all sublicenses
and all sublicenses shall be consistent with the material terms
and conditions
of this Agreement that impact Ramot.
3. DEVELOPMENT AND COMMERCIALIZATION OF LICENSED PRODUCTS.
3.1 COMMERCIALIZATION.
3.1.1 Responsibility. From and after the
Effective Date, Predix shall have full control and authority
over the
Development and commercialization of Licensed Products. All
activities relating
to Development and commercialization under this Agreement shall
be undertaken at
Predix's sole cost and expense.
3.1.2 Diligence. Predix will exercise
commercially reasonable efforts and diligence in developing and
commercializing
Licensed Products in the Field in the Territory, such reasonable
efforts and
diligence to be in accordance with the efforts and resources
Predix would use
for a product candidate owned by it or to which it has rights,
which is of
similar market potential as the applicable Licensed Product,
taking into account
the competitiveness of the marketplace, the proprietary position
of the Licensed
Product, the relative potential safety and efficacy of the
Licensed Product, the
cost of goods and availability of capacity to manufacture and
supply the
Licensed Product at commercial scale, the profitability of the
applicable
Licensed Product, and other relevant factors including, without
limitation,
technical, legal, scientific or medical factors. The collective
annual
expenditure by Predix, its Affiliates and Sublicensees of not
less than
[*****************] dollars ($[*******]) on the Development of
Licensed Products
shall be deemed to satisfy Predix's obligations under this
Section 3.1.2 for
such year.
4. PAYMENTS AND ROYALTIES
4.1 LICENSE FEE. In consideration of the grant of the
license described in Section 2.1 hereof, Predix agrees to the
payment to Ramot
of an upfront license fee in the amount of forty thousand
dollars ($40,000).
Ramot hereby acknowledges the receipt of such payment prior to
the Restated
Effective Date.
4.2 SHARING OF SUBLICENSE INCOME. In further consideration
of the grant of the license by Ramot hereunder, and subject to
the other terms
of this Agreement (including the remainder of this Article 4),
Predix agrees to
pay to Ramot, within thirty (30) days of receipt of any
Sublicense Income, an
amount equal to: (a) ten percent (10%) of such Sublicense Income
if such
Sublicense Income is attributable to a Sublicense with respect
to Discovered
Products or
PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED
SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO
THE COMPANY'S APPLICATION REQUESTING CONFIDENTIAL TREATMENT
UNDER RULE 24b-2 OF THE EXCHANGE ACT; [*] DENOTES OMISSIONS.
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Software Products and (b) five percent (5%) of any and all other
Sublicense
Income.
4.3 SERVICE INCOME. In further consideration of the grant
of the license by Ramot hereunder, and subject to the other
terms of this
Agreement (including the remainder of this Article 4), Predix
agrees to pay to
Ramot, within thirty (30) days of receipt of any Service Income,
an amount equal
to: (a) 4% of all cumulative Service Income from $[********]
to
$[***************]; (b) [*]% of all cumulative Service Income
from $[********]
to $[***********]; and (c) an amount equal to 2% of all
cumulative Service
Income above $[***********]. Predix shall not be required to pay
Ramot any
amount on the first $[*******] in cumulative Service Income.
4.4 PAYMENT OF ROYALTIES; ROYALTY RATES; MINIMUM AND
MAXIMUM ANNUAL ROYALTIES.
4.4.1 Royalty Payments In further consideration
of the grant of the license by Ramot hereunder, and subject to
the other terms
of this Agreement (including the remainder of this Article 4),
commencing on the
date of the First Commercial Sale of each Licensed Product and
continuing during
the Royalty Term for such Licensed Product, Predix shall pay to
Ramot a royalty,
calculated on a Licensed Product-by-Licensed Product basis, and
equal to a
percentage of cumulative annual Net Sales of each such Licensed
Product sold by
Predix and/or its Affiliates in the Territory, as set forth
below:
<TABLE>
<CAPTION>
LICENSED PRODUCT TYPE ANNUAL NET SALES PERCENTAGE OF NET SALES
PAYABLE AS ROYALTY
--------------------- ----------------
------------------------------------------
<S> <C> <C>
Discovered Products Up to $[***********] 2.5%
From $[*********] to [**]%
$[*******]
Above $[**********] [**]%
Derived Products Up to $[***********] 1.5%
From $[*********] to [**]%
$[*******]
Above $[**********] [**]%
</TABLE>
4.4.2 Minimum Royalties. In further consideration
of the grant of the license by Ramot hereunder, and subject to
the other terms
of this Agreement (including the remainder of this Article 4),
Predix agrees to
pay to Ramot an annual minimum royalty of ten thousand dollars
($10,000),
payable on December 31, 2005, and on the each subsequent
anniversary of that
date during the term of this Agreement. All amounts paid by
Predix under Section
4.4.1 shall be fully credited against its obligations under this
Section 4.4.2.
PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED
SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO
THE COMPANY'S APPLICATION REQUESTING CONFIDENTIAL TREATMENT
UNDER RULE 24b-2 OF THE EXCHANGE ACT; [*] DENOTES OMISSIONS.
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4.4.3 Maximum Annual Royalties. Anything herein
to the contrary notwithstanding, the maximum amount Predix shall
be obligated to
pay to Ramot under Section 4.4.1 as royalties on Net Sales
generated during any
calendar year shall be [**********] dollars ($[*********]).
4.5 PAYMENT TERMS.
4.5.1 Payment. Predix shall make any payments
under Section 4.4 to Ramot in arrears within ninety (90) days
from the end of
each quarter in which such payment accrues. Each royalty payment
shall be
accompanied by a report for each country in the Territory in
which sales of
Licensed Products occurred in the calendar quarter covered by
such statement,
specifying: the gross sales and Net Sales in each country's
currency; the
applicable royalty rate under this Agreement; the royalties
payable in each
country's currency, including an accounting of deductions taken
in the
calculation of Net Sales; the applicable exchange rate to
convert from each
country's currency to United States Dollars under this Section
4.4; and the
royalties payable in United States Dollars. An officer of Predix
shall sign each
such report, on behalf of Predix, certifying its completeness
and accuracy.
4.5.2 Accounting. All payments hereunder shall be
made in United States dollars by wire transfer to a bank account
designated by
Ramot. Conversion of foreign currency to United States dollars
shall be made at
the conversion rate existing in the United States (as reported
in The Wall
Street Journal) on the last business day of the applicable
calendar quarter. If
The Wall Street Journal ceases to be published, then the rate of
exchange to be
used shall be that reported in such other business publication
of national
circulation in the United States as the Parties reasonably
agree. Such payments
shall be without deduction of exchange, collection, or other
charges.
4.5.3 Tax Withholding; Restrictions on Payment.
All payments hereunder shall be made free and clear of any
taxes, duties,
levies, fees or charges, except for withholding taxes (to the
extent
applicable). If applicable law requires that taxes be withheld
from any amounts
due Ramot under this Agreement, Predix shall make any applicable
withholding
payments due on behalf of Ramot and shall promptly provide Ramot
with a
statement including the amount of tax withheld and justification
therefore, and
such other written documentation regarding any such payment as
available to
Predix relating to an application by Ramot for a foreign tax
credit for such
payment. If by law, regulations or fiscal policy of a particular
country in the
Territory, remittance of royalties in United States Dollars is
restricted or
forbidden, written notice thereof shall promptly be given to
Ramot, and payment
of the royalty shall be made by the deposit thereof in local
currency to the
credit of Ramot in a recognized banking institution reasonably
designated by
Ramot by written notice to Predix. Ramot shall be responsible
for paying all
income taxes attributable to Ramot as a result of its receipt of
funds
hereunder, to the extent applicable.
4.5.4 Late Payments. Any payments to be paid
under this Agreement that are not paid on or before the date
such payments are
due under this Agreement shall bear interest at an annual
interest, compounded
monthly, equal to [*****] percent ([*]%) above the London
Interbank Offer Rate
(LIBOR) as determined for each month on the last business day of
that month,
assessed from the day payment was initially due until the date
of payment.
PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED
SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO
THE COMPANY'S APPLICATION REQUESTING CONFIDENTIAL TREATMENT
UNDER RULE 24b-2 OF THE EXCHANGE ACT; [*] DENOTES OMISSIONS.
9
<PAGE>
4.6 REPORTS; RECORDS RETENTION; REVIEW.
4.6.1 Reporting. Predix undertakes to notify
Ramot promptly following the grant of a Sublicense or the
execution of an
agreement for the provision of Services. Each such notification
shall include a
brief summary of the financial terms of such transaction.
4.6.2 Reports. In addition to the reports under
Section 4.5.1, commencing with the receipt of the first
Sublicense Income or
Service Income, Predix shall provide Ramot with quarterly
reports setting forth
all Sublicense Income and Service Income received by Predix and
its Affiliates.
In addition, within sixty (60) days after the end of each
calendar year, Predix
shall furnish Ramot with a written report on the progress of
its, its
Affiliate's and Sublicensees' efforts during the prior year to
develop and
commercialize Licensed Products, including without limitation
research and
development efforts, efforts to obtain Regulatory Approval and
marketing
efforts. All reports provided by Predix under Section 4.6.1 and
Section 4.6.2
shall be signed by the chief financial officer or chief business
officer of
Predix certifying on behalf of Predix the accuracy and
completeness of the
information provided therein.
4.6.3 Records. Commencing as of the date of the
receipt of the first Net Sales, Sublicense Income or Service
Income hereunder,
Predix and its Affiliates shall keep for at least three (3)
years from the end
of the calendar year to which they pertain complete and accurate
records of
sales by Predix or its Affiliates, as the case may be, of each
Licensed Product
and of Sublicense Income and Service Income received, in
sufficient detail to
allow the accuracy of the payments hereunder to be
confirmed.
4.6.4 Review. Subject to the other terms of this
Section 4.6.4, at the request of Ramot, which shall not be made
more frequently
than [*****************] during the Term, upon reasonable prior
notice from
Ramot, and at the expense of Ramot, except as otherwise provided
herein, Predix
and its Affiliates shall permit an independent certified public
accountant
selected by Ramot and reasonably acceptable to Predix to
inspect, during regular
business hours, the relevant records required to be maintained
by Predix and its
Affiliates under this Section 4.6. In every case the accountant
must have
previously entered into a confidentiality agreement with both
Parties
substantially similar to the provisions of Article 5 and
limiting the disclosure
and use of such information by such accountant to authorized
representatives of
the Parties and the purposes germane to this Section 4.6.
Results of any such
review shall be binding on both Parties absent manifest error.
Ramot agrees to
treat the results of any such accountant's review as
Confidential Information of
Predix subject to the terms of Article 5. If any review reveals
a deficiency in
the calculation and/or payment of royalties by Predix, then
Predix shall
promptly pay Ramot the amount remaining to be paid, and if such
underpayment is
by [*****] percent ([*]%) or more of the amount payable during
the period under
audit, Predix shall
[**********************************************************]
in connection with the review.
5. TREATMENT OF CONFIDENTIAL INFORMATION; PUBLICATION
5.1 Confidentiality. Commencing on the Effective Date and
continuing until the [*****************] of the expiration or
earlier
termination hereof, each Party shall maintain in confidence the
Confidential
Information of the other Party, shall not use or grant the use
of the
Confidential Information of the other Party except as expressly
permitted
hereby, and
PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED
SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO
THE COMPANY'S APPLICATION REQUESTING CONFIDENTIAL TREATMENT
UNDER RULE 24b-2 OF THE EXCHANGE ACT; [*] DENOTES OMISSIONS.
10
<PAGE>
shall not disclose the Confidential Information of the other
Party except on a
need-to-know basis to such Party's directors, officers and
employees, and to
such Party's consultants, to the extent such disclosure is
necessary in
connection with such Party's activities as expressly authorized
by this
Agreement. In addition to the foregoing, Predix may disclose
Confidential
Information of Ramot to any Sublicensees that are bound by
restrictions on
disclosure that are at least as stringent as those set forth
herein. To the
extent that disclosure to any person is authorized by this
Agreement, prior to
disclosure, a Party shall obtain, or shall have obtained prior
to the date of
this Agreement, written agreement of such person pursuant to
which such person
is bound to hold in confidence and not disclose, use or grant
the use of the
Confidential Information of the other Party except as expressly
permitted under
this Agreement. Each Party shall notify the other Party promptly
upon discovery
of any unauthorized use or disclosure of the other Party's
Confidential
Information.
5.2 Terms of Agreement. Neither Party shall disclose any
terms or conditions of this Agreement to any Third Party without
the prior
consent of the other Party; provided, however, that a Party may
disclose the
terms or conditions of this Agreement: (a) on a need-to-know
basis to its legal
and financial advisors to the extent such disclosure is
reasonably necessary in
connection with such Party's activities as expressly permitted
by this
Agreement, and (b) to a Third Party who is subject to
confidentiality
obligations similar to those set forth herein in connection
with: (i) an equity
investment in or by such Party, (ii) a merger, consolidation or
similar
transaction involving such Party, (iii) the negotiation of a
sublicense of
rights granted hereunder or (iv) the sale of all or
substantially all of the
assets of such Party. Notwithstanding the foregoing, prior to
execution of this
Agreement, the Parties have agreed upon the text of one or more
press releases
that describe the terms and conditions of this transaction, and
each Party may
disclose such information, as modified by mutual written
agreement the Parties,
without the consent of the other Party.
5.3 Permitted Disclosures. The confidentiality obligations
under this Article 5 shall not apply to the extent that a Party
is required to
disclose information by applicable law, regulation or order of a
governmental
agency or a court of competent jurisdiction; provided, however,
that such Party
shall provide written notice thereof to the other Party, consult
with the other
Party with respect to such disclosure and provide the other
Party sufficient
opportunity to object to any such disclosure or to request
confidential
treatment thereof.
6. OWNERSHIP OF TECHNOLOGY AND INVENTIONS; FILING, PROSECUTION
AND
MAINTENANCE OF PATENT RIGHTS
6.1 OWNERSHIP OF TECHNOLOGY. Subject to the terms and
conditions set forth herein, including without limitation the
license granted in
Section 2.1, Ramot shall own all right, title and interest in
and to any and all
Licensed Technology. No rights or licenses in or to any
Technology are conveyed
hereunder by implication or estoppel or by any means other than
express grant.
6.2 OWNERSHIP OF LICENSED PRODUCTS. Predix shall own all
right, title and interest in and to any and all Licensed
Products, subject to
Ramot's ownership of the underlying Licensed Technology, the
terms of the
license granted herein and Predix's obligations herein,
including the obligation
to pay royalties as set forth above.
6.3 PATENT FILING, PROSECUTION AND MAINTENANCE.
PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED
SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO
THE COMPANY'S APPLICATION REQUESTING CONFIDENTIAL TREATMENT
UNDER RULE 24b-2 OF THE EXCHANGE ACT; [*] DENOTES OMISSIONS.
11
<PAGE>
6.3.1 Licensed Patent Rights. Ramot and Predix
shall consult each other regarding the preparation, filing and
prosecution of
all patent applications, and the maintenance of all patents,
included within the
Licensed Patent Rights, including, without limitation, the
content, timing and
jurisdiction of the filing of such patent applications and their
prosecution,
and other details. Predix shall be responsible for preparing,
filing,
prosecuting, obtaining and maintaining, at its sole cost and
expense, using
patent counsel reasonably acceptable to Ramot, all Licensed
Patent Rights, in
the name of Ramot, with the goal of obtaining and maintaining
the Licensed
Patents in a manner that will provide the maximum economic
advantage and return
to the Parties under this Agreement. Predix: (i) will provide
Ramot with a copy
of any proposed patent application within such Licensed Patent
Rights for review
and comment reasonably in advance of filing, and (ii) will keep
Ramot informed
of the status of such filing, prosecution and maintenance,
including, without
limitation, by providing Ramot with copies of all communications
received from
or filed in patent office(s) with respect to such filing, and by
providing
Ramot, a reasonable time prior to taking or failing to take any
action that
would affect the scope or validity of any such filing (including
the
substantially narrowing, cancellation or abandonment of any
claim(s) without
retaining the right to pursue such subject matter in a separate
application, or
the failure to file or perfect the filing of any claim(s) in any
country), with
prior written notice of such proposed action or inaction so that
Ramot has a
reasonable opportunity to review and comment. Predix shall not
take any such
action that would affect the scope of validity or any such
filing without the
prior written consent of Ramot. If Predix fails to undertake the
filing(s),
prosecution, protection and/or maintenance of any patent
application, patent or
submission within the Licensed Patent Rights, without the prior
consent of
Ramot, all claims included in such patent applications, patents
and/or
submissions shall be deemed Valid Claims within the Licensed
Patent Rights for
purposes of Section 1.17 until such times as the relevant
patents would have
expired had they continued to their fullest term.
6.3.2 Other Patent Rights. Except as set forth in
Section 6.3.1, each Party shall be responsible for preparing,
filing,
prosecuting, obtaining and maintaining, at its sole cost,
expense and
discretion, all of its own Patent Rights. Predix undertakes to
notify Ramot, on
an annual basis, of the filing by or on behalf of Predix or any
of its
Affiliates of any priority patent application relating to or
covering an actual
or potential Licensed Product. Each such notification shall
include a brief
summary of the invention disclosed in such application.
6.4 NOTICE OF INFRINGEMENT. If, during the Term, either
Party learns of any actual, alleged or threatened infringement
by a Third Party
of any Licensed Patent Rights, such Party shall promptly notify
the other Party
and shall provide such other Party with available evidence of
such infringement.
6.5 INFRINGEMENT OF PATENT RIGHTS. Predix, after
consultation with Ramot, shall have the first right, but not the
obligation and
with legal counsel of its own choice, to bring suit, or take
other appropriate
legal action, against any actual, alleged or threatened
infringement of the
Licensed Patent Rights. If Ramot is joined as a party plaintiff
in any such
suit, Ramot shall have the right to approve or disapprove of the
counsel
selected by Predix to represent Predix and Ramot, such approval
not to be
unreasonably withheld. The expenses of such suit or suits that
Predix elects to
bring, including any expenses of Ramot incurred in conjunction
with the
prosecution of such suits or the settlement thereof, shall be
paid for entirely
by Predix and Predix shall hold Ramot free, clear and harmless
from and against
any and all costs of such litigation, including attorney's fees.
Predix shall
not compromise or settle such litigation without
PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED
SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO
THE COMPANY'S APPLICATION REQUESTING CONFIDENTIAL TREATMENT
UNDER RULE 24b-2 OF THE EXCHANGE ACT; [*] DENOTES OMISSIONS.
12
<PAGE>
the prior written consent of Ramot, which consent shall not be
unreasonably
withheld or delayed. Ramot shall have the right, at its own
expense, to be
represented in any such action by Predix by counsel of Ramot's
own choice. If
Predix does not file any action or proceeding against any such
infringement
within three (3) months after the earlier of: (i) Predix's
notice to Ramot under
Section 6.4 above, (ii) Ramot's notice to Predix under Section
6.2 above, or
(iii) a written request from Ramot to take action with respect
to such
infringement, then Ramot shall have the right, but not the
obligation, at its
own expense, to bring suit, or take other appropriate legal
action, against such
actual, alleged or threatened infringement, with legal counsel
of its own
choice, but shall not be permitted to settle any such suit
without the prior
consent of Predix, which consent shall not be unreasonably
withheld. Any
damages, monetary awards or other amounts recovered, whether by
judgment or
settlement, pursuant to any suit, proceeding or other legal
action taken under
this Section 6.3, shall be applied as follows:
(a) First, to reimburse the Parties for their
respective costs and expenses (including reasonable attorneys'
fees and costs)
incurred in prosecuting such enforcement action; and
(b) Second, any amounts remaining shall be
allocated as follows: (a) if Ramot is the Party bringing such
suit or proceeding
or taking such other legal action, [***********] percent
([****]%)
[*********************], (b) if Predix is the Party bringing
such suit or
proceeding or taking such other legal action, [**********]
percent ([****]%)
[******************], and (c) if the suit is brought jointly,
[*****] percent
([***]%) [********************].
If a Party brings any such action or proceeding hereunder, the
other Party
agrees to be joined as Party plaintiff if necessary to prosecute
such action or
proceeding, and to give the Party bringing such action or
proceeding reasonable
assistance and authority to file and prosecute the suit;
provided, however, that
neither Party shall be required to transfer any right, title or
interest in or
to any property to the other Party or any Third Party to confer
standing on a
Party hereunder.
7. REPRESENTATIONS AND WARRANTIES
7.1 RAMOT REPRESENTATIONS. Ramot represents and warrants to
Predix that:
(a) the execution and delivery of this Agreement and the
performance of the transactions contemplated hereby have been
duly authorized by
all appropriate Ramot corporate action;
(b) this Agreement is a legal and valid obligation binding
upon Ramot and enforceable in accordance with its terms, and the
execution,
delivery and performance of this Agreement by the Parties does
not conflict with
any agreement, instrument or understanding to which Ramot is a
Party or by which
it is bound;
(c) Ramot has the full right and legal capacity to grant
the rights granted to Predix hereunder;
(d) To the best of Ramot's knowledge, the Licensed Patent
Rights have been properly filed and prosecuted and Ramot is the
sole owner of
the Licensed Patent Rights;
PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED
SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO
THE COMPANY'S APPLICATION REQUESTING CONFIDENTIAL TREATMENT
UNDER RULE 24b-2 OF THE EXCHANGE ACT; [*] DENOTES OMISSIONS.
13
<PAGE>
(e) Ramot has no actual knowledge as of the date hereof of
any legal suit or proceeding by a third party (whether
threatened or filed)
against Ramot or TAU contesting the ownership or validity of the
Licensed Patent
Rights, or claiming that the practice of the Licensed Patent
Rights in the
manner contemplated by this Agreement would infringe the rights
of such third
party;
(f) Ramot will not grant or convey any rights or licenses
to the Licensed Technology that may limit Predix's ability to
exercise the
rights and licenses granted herein to their fullest extent;
and
(g) No member of Ramot's legal staff has received notice of
any infringement or misappropriation by a Third Party of the
Licensed
Technology.
7.2 PREDIX REPRESENTATIONS. Predix represents and warrants
to Ramot that:
(a) the execution and delivery of this Agreement and the
performance of the transactions contemplated hereby have been
duly authorized by
all appropriate Predix corporate action; and
(b) this Agreement is a legal and valid obligation binding
upon Predix and enforceable in accordance with its terms, and
the execution,
delivery and performance of this Agreement by the Parties does
not conflict with
any agreement, instrument or understanding to which Predix is a
Party of or by
which it is bound.
(c) Predix will comply with, and shall ensure that its
Affiliates and Sublicensees undertake to comply with, all local,
state, federal,
and international laws and regulations relating to the use of
the Licensed
Technology and the development, manufacture, use, license and
sale of Licensed
Products.
7.3 NO WARRANTIES.
7.3.1 Nothing in this Agreement is or shall be
construed as:
(a) a warranty or representation by
either Party as to the validity or scope of any patent
application or patent
licensed hereunder;
(b) a warranty or representation that
the Licensed Technology or anything made, used, sold or
otherwise disposed of
under any license granted pursuant to this Agreement is or will
be free from
infringement of patents, copyrights, and other rights of third
Parties.
7.3.2 Except as expressly set forth in this
Agreement, NEITHER PARTY MAKES ANY REPRESENTATION OR EXTENDS ANY
WARRANTIES OF
ANY KIND, EITHER EXPRESS OR IMPLIED. THERE ARE NO EXPRESS OR
IMPLIED WARRANTIES
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR OF
NON-INFRINGEMENT
OF ANY PATENT, COPYRIGHT, TRADEMARK, OR OTHER RIGHTS OF THIRD
PARTIES, OR ANY
OTHER EXPRESS OR IMPLIED WARRANTIES.
8. INDEMNIFICATION; INSURANCE
PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE BEEN FILED
SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT TO
THE COMPANY'S APPLICATION REQUESTING CONFIDENTIAL TREATMENT
UNDER RULE 24b-2 OF THE EXCHANGE ACT; [*] DENOTES OMISSIONS.
14
<PAGE>
8.1 INDEMNIFICATION. Predix shall indemnify, defend and
hold harmless Ramot, its Affiliates and their respective
governors, directors,
officers, employees, stockholders and agents and their
respective successors,
heirs and assigns (the "Ramot Indemnitees") from and against any
liability,
damage, loss or expense (including reasonable attorneys' fees
and expenses of
litigation) incurred by or imposed upon such Ramot Indemnitees,
or any of them,
in connection with any Third Party claims, suits, actions,
demands or judgments,
including, without limitation, personal injury and product
liability matters, to
the extent arising out of: (a) the development, testing,
production,
manufacture, supply, promotion, import, sale or use by any
person of any
Software Product or Licensed Product (or any component thereof)
manufactured or
sold by Predix or any Affiliate or Sublicensee under this
Agreement, (b) the use
of the Licensed Technology or practice of the Licensed Patent
Rights by Predix,
any of its Affiliates or any Sublicensees, (c) any material
breach of this
Agreement by Predix, (d) any breach by a Sublicensee of a
Sublicense, or (e) the
gross negligence or willful misconduct on the part of Predix or
any Affiliate or
Sublicensee, in any such case under this Section 8.1.1, except
to the extent any
of the foregoing is caused by the negligence or willful
misconduct of Ramot or a
breach of this Agreement by Ramot.
8.2 INDEMNIFICATION PROCEDURES. In the event that any
Indemnitee is seeking indemnification under Section 8.1 above
from Predix, Ramot
shall notify Predix of such claim with respect to such
Indemnitee as soon as
reasonably practicable after the Ramot Indemnitee receives
notice of the claim,
and Ramot (on behalf of itself and such Ramot Indemnitee) shall
permit the
Predix to assume direction and control of the defense of the
claim (including
the right to settle the claim solely for monetary consideration,
provided that
no settlement shall be made without the consent of Ramot, which
consent shall
not be unreasonably withheld) and shall cooperate as requested
(at the expense
of Predix) in the defense of the claim. The indemnification
obligations under
Article 8 shall not apply to any harm suffered as a direct
result of any delay
in notice to Predix hereunder or to amounts paid in settlement
of any claim,
demand, action or other proceeding if such settlement is
effected without the
consent of Predix, which consent shall not be withheld or
delayed unreasonably.
The Indemnitee, its employees and agents, shall reasonably
cooperate with Predix
and its legal representatives in the investigation of any claim,
demand, action
or other proceeding covered by Section 8.1.
8.3 INSURANCE. Predix shall, at its sole cost and expense,
procure and maintain product liability insurance with respect to
Licensed
Products commencing upon the First Commercial Sale of the first
Licensed Product
and continuing until the termination of this Agreement. Such
insurance coverage
shall be on terms that are in keeping with industry standards
within the
bio-pharmaceutical industry. The insurance shall be underwritten
by a reputable
insurance carrier. Ramot shall be named
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