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 Securities Exchange
Act of 1934.
Exhibit
10.1
LICENSE
AGREEMENT
This License Agreement (the
“Agreement”) takes effect as of March 29, 2007 (the
“Effective Date”) between Immunocept LLC
(“Licensor”), with offices at 6530 Clearhaven Circle,
Dallas, TX 75248, and Arbios Systems, Inc. (“Arbios” or
“Licensee”), with offices at 1050 Winter Street, Suite
1000, Waltham, MA 02451.
BACKGROUND
A. WHEREAS, Arbios wishes to obtain a license from
Licensor under certain Patent Rights (as defined below) owned by
Licensor and of which James R. Matson M.D. (“Dr.
Matson”) is a co-inventor.
B. WHEREAS, Licensor is willing to grant a license
to Arbios under the Patent Rights on the terms and conditions set
forth below.
NOW, THEREFORE, in consideration of the
foregoing and the covenants and premises contained herein, the
parties therefore agree as follows:
ARTICLE 1
DEFINITIONS
As used in this Agreement, the following terms
have the meaning set forth in this Article 1.
1.1 “ Affiliate ” means any
corporation or other entity that is directly or indirectly
controlling, controlled by or under the common control with a party
hereto. For the purpose of this Agreement, “control”
includes the direct or indirect ownership of at least fifty percent
(50%) of the outstanding shares or other voting rights of the
subject entity to elect directors or, in the case of an entity that
is not a corporation, for the election of the corresponding
managing authority.
1.2 “ Arms Length Royalty ”
means a patent royalty paid to an unrelated party. Specifically, a
royalty is not an “Arms Length Royalty” if it is paid
by a Licensed Party (which for purposes of this definition,
includes a Sublicensee) to either (a) another Licensed Party, or to
any person who is (or was, at the time the transaction was
arranged, negotiated, or agreed, or was at the time of the
invention of the relevant patent) an officer, director, employee,
or owner of more than 5% of the equity ownership of a Licensed
Party; or (b) an Affiliate of any party described in clause (a); or
(c) a party with which the Licensed Party or any party described in
clauses (a) or (b) has some other relationship relevant to the
development or commercialization of Products or Other Products,
whether family or commercial, such as joint venture
partners.
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 Securities Exchange
Act of 1934.
1.3 “ Arms Length Sale ” means a
sale of a Product or an Other Product to an unrelated party.
Leasing or renting a Product or an Other Product shall be deemed a
sale for purpose of this definition and for determining royalties
payable under this Agreement. Any Recovery for carrying out a
method covered by a Valid Claim shall be deemed a sale for purpose
of this definition and for determining royalties payable under this
Agreement. Specifically, a sale, including leasing or renting, is
not an “Arms Length Sale” if it is a sale by a Licensed
Party (which, for purposes of this definition, includes a
Sublicensee) to either (a) another Licensed Party, or to any person
who is (or was, at the time the transaction was arranged,
negotiated, or agreed) an officer, director, employee, or owner of
more than 5% of the equity ownership of a Licensed Party, (b) an
Affiliate of any party described in clause (a), or (c) a party with
which the Licensed Party or any party described in clauses (a) or
(b) has some other relationship relevant to the development or
commercialization of Products or Other Products, whether family or
commercial, such as joint venture partners and including without
limitation any Affiliate or Sublicensee, unless in any such event
it is consumed by such transferee.
1.4 “ Data ” shall have the
meaning set forth in Section 2.2.
1.5 “ Net Sales ” means gross
invoiced amounts due to Arbios, its Affiliates or Sublicensees as
Recovery on Arms Length Sales of Products or Other Products less:
(1) ordinary and customary trade discounts actually allowed;
(2) credits, rebates, allowances for uncollectible amounts and
adjustments for rejections, recalls and returns (including, but not
limited to, wholesaler and retailer returns); (3) freight,
postage, insurance and duties paid for and separately identified on
the invoice or other documentation maintained in the ordinary
course of business, (4) excise taxes, other consumption taxes,
customs duties and compulsory payments to governmental authorities
actually paid and separately identified on the invoice or other
documentation maintained in the ordinary course of business, and
(5) allowances for actual uncollectible accounts determined in
accordance with U.S. generally accepted accounting
practices.
1.6 “ Licensed Party ” means
Arbios and Arbios Affiliates.
1.7 “ Other Product ” means any
unit of product which, if manufactured, used or sold in the United
States, would meet the definition of Product at the time of such
manufacture, use, or sale, but which does not meet such definition
in a country where actually manufactured, used or sold due to the
fact that Patent Rights were not pursued or have not issued in such
country(ies). For the avoidance of doubt by the way of example (a)
a unit of Product manufactured in a country in which Patent Rights
were not pursued or have not issued, but sold in a country in which
Patent Rights covering such sale are issued (whether or not used in
such country) would be a Product and not an Other Product; (b) a
unit of Product manufactured in a country in which Patent Rights
were not pursued or have not issued, but sold in a country in which
Patent Rights covering such Product’s use or sale are issued
would be a Product and not an Other Product; and (c) a unit of
Product manufactured in a country in which Patent Rights covering
such manufacture were pursued or have issued, but sold and used in
a country in which Patent Rights were not pursued or issued would
be a Product and not an Other Product.
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 Securities Exchange
Act of 1934.
1.8 “ Patent Rights ” means all
of Licensor’s right, title and interest in:
1.8.1
all patents and patent applications
covering inventions relating to blood therapy devices and systems
for treatment of toxic and inflammatory mediator related diseases
or organ failures which are owned or controlled by Licensor as of
the Effective Date or within one year thereafter, including without
limitation those listed in Exhibit A hereto (the
“Patents”);
1.8.2
all divisionals, continuations,
continuations-in-part (CIPs), and foreign counterparts of the
Patents, and
1.8.3
all patents issuing on any
preceding applications, and any re-issues, re-examinations or
extensions of any kind and supplementary protection certificates
with respect to any of the foregoing.
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For the
avoidance of doubt, continuations-in-part shall include any
continuations-in-part resulting from or relating to the services to
be performed under that certain Service Advisory Agreement to be
entered into by and between Arbios and James R. Matson, MD of even
date herewith (the “Matson Service
Agreement”).
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1.9 “ Product ” means a product
the manufacture, sale or use of which would, but for the license
granted hereunder, infringe a Valid Claim of a Patent Right in a
country where either its manufacture, sale or use
occurs.
1.10 “ Recovery ” means any and
all consideration received by a Licensed Party or a Sublicensee for
an Arms Length Sale of a Product or an Other Product or for
carrying out a method covered by a Valid Claim, including cash,
revenue, and non-cash consideration.
1.11 “ Sublicensee ” means any
third party who is not an Affiliate and to whom Arbios, or an
Affiliate of Arbios, grants a sublicense under the Patent Rights to
make, have made, use, have used, sell, offer for sale, have sold,
import or have imported Products and/or Other Products.
1.12 “ Valid Claim ” means a
claim of an issued and unexpired patent included within the Patent
Rights which has not been held invalid in a final decision of a
court or forum of competent jurisdiction from which no appeal may
be taken, and which has not been disclaimed or admitted to be
invalid or unenforceable through reissue or disclaimer or
otherwise.
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 Securities Exchange
Act of 1934.
ARTICLE 2
LICENSE
2.1 Grant . (a) Licensor hereby grants Arbios an exclusive
worldwide license under the Patent Rights and any and all related
proprietary information, to research, develop, make, import, have
made, use, offer for sale, sell and have sold Products and Other
Products, including a license to research, develop, make, import,
have made, use, offer for sale, sell and have sold Products and
Other Products that if used together with other products in a
hemofiltration system, a blood filtration circuit, or method of
treating patients under those systems that would infringe the
Patent Rights but for this license.
(b) The license
granted under Section 2.1 includes the right to grant sublicenses
consistent with the terms of this Agreement, specifically requiring
the payment by the Sublicensee of royalties at least as great as
the royalties that will be payable to Licensor hereunder on account
of sales by the Sublicensee. Provided that, such sublicenses must
(a) expressly permit such sublicense to either terminate (without
notice or further action) or to be assigned to Licensor or its
assigns (without notice or further action) in the event of
termination of this Agreement; and (c) expressly permit Licensor to
inspect Sublicensee's books and records in accordance with the
terms of Section 4.4. The right to grant sublicenses is also
conditioned on Arbios’ provision of a copy of any such
sublicense to Licensor within ten (10) days of its
execution.
(c) The license
granted herein includes a fully paid, perpetual, irrevocable
license under the Patent Rights with respect to all actions of
Arbios occurring prior to the Effective Date of this Agreement.
This Section 2.1(c) shall survive any termination of this
Agreement.
2.2 Related Information . Within thirty (30) days of the Effective
Date, Licensor shall also provide to Arbios copies of all data and
information in its possession relating to large pore hemofiltration
for use in critical care (“Data”), including all data
and information relating to preclinical studies performed by
Licensor. Arbios shall be entitled to use such information in
connection with the research, development, regulatory approval,
clinical development and commercialization of Products and related
projects.
2.3 Additional Research . In consideration of the rights granted
hereunder, Arbios agrees to perform, or have performed, certain
product development and clinical research relating to sepsis
applications of hemofiltration products as follows: (a) the work
shall be conducted by Arbios in accordance with a research plan,
timeline, budget, and clinical protocol as mutually agreed by Dr.
Matson and Arbios promptly following the Effective Date, (b) the
research plan may include the development of clinical grade filters
having mutually agreed specifications, (c) the total budget for
such product development and clinical research efforts shall not be
required to exceed [*] unless otherwise agreed by Arbios, which
amount shall not include any amounts paid to Dr. Matson pursuant to
the Matson Service Agreement nor the cost of up to fifty (50)
clinical grade filters which shall be provided by Arbios at
Arbios’ expense for use with up to twenty (20) patients to be
enrolled in the mutually agreed clinical study. Arbios shall own
all results of any such work, provided that Dr. Matson shall be
permitted to use such results in pursuing further clinical studies
as reasonably agreed in writing by Arbios. Dr. Matson’s
efforts related to such research shall be provided pursuant to a
Service Advisory Agreement between Dr. Matson and Arbios of even
date herewith.
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 Securities Exchange
Act of 1934.
2.4 Fair Dealing . Arbios agrees to act in good faith in the
manufacture, distribution and pricing of Products and Other
Products and any related systems or components sold by Arbios or
its Affiliates in conjunction with Products or Other Products so as
to not intentionally seek to reduce royalties payable to Licensor
hereunder.
ARTICLE 3
CONSIDERATION
3.1 License Fees . On the Effective Date, Arbios shall pay
Licensor an initial non-refundable license fee of [*]. In addition,
on the Effective Date Arbios shall grant warrants to Licensor for
the purchase of 225,000 shares of Arbios Common Stock according to
the form of warrant attached as Exhibit B hereto.
Additionally, Arbios shall make the following
cash payments to Licensor during the term of this
Agreement:
3.1.1
[*] on or before January 1,
2008;
3.1.2
[*] on or before January 1,
2009;
3.1.3
[*] on or before January 1,
2010;
3.1.4
[*] within thirty (30) days of the
issuance of the first European patent [*];
3.1.5
[*] within thirty (30) days of the
issuance of the first European patent included in the Patent Rights
[*];
3.1.6
[*] within thirty (30) days of the
first issuance following the Effective Date of a U. S. patent
[*];
3.1.7
[*] within thirty (30) days of the
first issuance following the Effective Date of a U. S. patent
included in the Patent Rights[*].
Each such payment shall be due only once and
only if the relevant event occurs during the term of this
Agreement.
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 Securities Exchange
Act of 1934.
3.2 Royalties .
3.2.1
Percentage
. During the relevant royalty term
as defined in Section 3.2.5 below, Arbios shall pay Licensor a
royalty of [*%)] on Net Sales of Products and [*%]) on Net Sales of
Other Products.
3.2.2
One Royalty
. No more than one royalty payment
shall be due with respect to Net Sales of a particular Product or
Other Product. No multiple royalties shall be payable because a
Product or Other Product, or its manufacture, sale or use, is
covered by more than one Valid Claim.
3.2.3
Reductions
. If Arbios is also required to pay
any Arms Length Royalties with respect to Net Sales of a Product
under agreements for rights to patent rights covering the relevant
Product, Arbios shall be entitled to credit 50% of any such
payments against royalties due hereunder, subject to a maximum
reduction of [*]% of the royalties otherwise due (i.e., a minimum
royalty of [*]% on Net Sales of Products shall apply). If Arbios is
also required to pay Arms Length Royalties with respect to Net
Sales of an Other Product under agreements for rights to patent
rights covering the relevant Other Product, Arbios shall be
entitled to credit 50% of any such payments against royalties due
hereunder, with no maximum reduction of the royalties otherwise
due.
3.2.4
Non-commercial
Transactions . In the
event that a Product or Other Product is provided by a Licensed
Party and actually used for medical purposes, but no Arms Length
Sale has taken place, then Net Sales with respect to such Product
or Other Product shall be determined based upon the price generally
charged the trade in Arms Length Sales by the Licensee, its
Affiliates or Sublicensees, as relevant, at that time. As used
herein “price generally charged the trade” shall be
determined by obtaining the average of the net sales price in Arms
Length Sales over the prior twelve (12) months (or so long as sales
have been made, if fewer than twelve (12) months’ information
is then unavailable); provided that if no such comparable net sales
price is available, it shall be based upon a commercially
reasonable price determined by mutual written agreement of the
parties. For clarity and notwithstanding the foregoing, provision
of Products or Other Products at no cost for use in development
activities, including clinical trials, or at no cost for
promotional purposes in a manner reasonably consistent with
industry practices, shall not be subject to the foregoing
provision. Arbios agrees that it will not sell Products or Other
Products in any manner other than to Affiliates or Sublicensees, or
in an Arms Length Sale, unless otherwise agreed by Licensor, such
agreement to not be unreasonably withheld.
3.2.5
Royalty Term
. Royalties due under this Article 3
shall be payable on a country-by-country and product-by-product
basis for Products until the expiration of the last-to-expire Valid
Claim covering such Product in such country and, with respect to
Other Products, until the expiration of the last-to-expire Valid
Claim of relevant Patent Rights in the United States.
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 Securities Exchange
Act of 1934.
ARTICLE 4
PAYMENTS; REPORTS AND
RECORDS
4.1 Payments; Currency . Arbios shall make all payments due under this
Agreement by wire transfer in United States dollars in immediately
available funds to an account designated by Licensor. If any
currency conversion is required in connection with the payment of
any royalties under this Agreement, the conversion shall be made by
using the exchange rate for the purchase of U.S. dollars reported
by The Wall Street Journal on the last business day of the calendar
quarter to which such royalty payments relate.
4.2 Taxes . Royalty amounts required to be paid to
Licensor pursuant to this Agreement may be paid with deduction for
withholding for or on account of any taxes (other than taxes
imposed on or measured by net income) or similar governmental
charge imposed by a jurisdiction other than the United States
(“Withholding Taxes”); provided that, Arbios provides
Licensor with advance notice of any expected Withholding Taxes
which may reduce the amounts actually received by Licensor
hereunder. At Licensor’s request, Arbios shall provide
Licensor a certificate evidencing payment of any Withholding Taxes
hereunder and shall reasonably assist Licensor to obtain the
benefit of any applicable tax treaty or law.
4.3 Royalty Reports and Payments
. After the first commercial sale of
a Product or Other Product, Arbios shall make quarterly written
reports to Licensor within forty-five (45) days after the end of
each calendar quarter, stating in each such report, by country, the
number, description, and aggregate Net Sales of each Product and
Other Product sold (whether by Arbios, its Affiliates, or its
Sublicensees) and sublicensing royalties received during the
calendar quarter, including detail reasonably necessary to
substantiate the calculation of royalties. Such information shall
permit Licensor to calculate royalties based upon direct sales by
Arbios and each of its Affiliates and Sublicensees, and any
distributors and resellers to whom sales that are not Arms Length
Sales are made. Concurrently with the making of such reports,
Arbios shall pay Licensor the payments specified in
Section 3.2.
4.4 Records; Inspection . Arbios shall keep complete, true and accurate
books of account and records for the purpose of determining the
royalty amounts payable under this Agreement. Such books and
records shall be kept at the principal place of business of Arbios
for at least three (3) years following the end of the calendar
quarter to which they pertain and will be open for inspection
during such period by a representative of Licensor for the purpose
of verifying the royalty reports and payments. Such inspections
shall be made during ordinary business hours. The representative
may be obliged to execute a reasonable confidentiality agreement
prior to commencing any such inspection. Inspections conducted
under this Section 4.4 shall be at Licensor’s expense,
unless an underpayment exceeding five percent (5%) of the amount
stated for the period covered by the inspection is identified, in
which case all costs relating to the inspection and any unpaid
amounts will be paid by Arbios. Any amounts not paid when due (for
any reason) shall bear interest at the lesser of one percent (1%)
per month or the maximum interest allowable under the
law.
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 Securities Exchange
Act of 1934.
ARTICLE 5
DUE
DILIGENCE
5.1 Diligence Efforts . Arbios shall use commercially reasonable
efforts to develop and bring one or more Products to market through
a diligent program for the exploitation of the Patent Rights. In
addition, Arbios shall:
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a.
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Submit to the
United States Food and Drug Administration (“FDA”) by
[*] plans for a pivotal clinical study designed for a Product
covered by the ‘040 family of Patents for liver failure (an
“[*] Study”) and, within thirty (30) days of such
submission, deliver to Licensor a certificate stating the product
and/or method that is the subject of the study is a Product covered
by this License;
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b.
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Within 90 days
after receiving FDA permission to begin an [*] Study, recruit at
least 4 sites for such study, defined as Principal Investigators
having been identified and contracts being under
negotiation;
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c.
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Bring a
commercial Product to market no later than [*]; and
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d.
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Obtain
aggregate cash equity or debt investments, funding from corporate
partners, sale of assets, or grants, of at least the following
amounts on or before the designated dates (amounts are cumulative,
not additive):
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Material failure by Arbios to meet any of the
above milestones shall be deemed a material breach of this
Agreement and shall give Licensor the right to terminate this
Agreement pursuant to the provisions of Section 9.3 hereof. The
certificate delivered by Arbios in satisfaction of the requirement
stated in Section 5.1(a) shall be irrevocably binding on Arbios,
Licensed Parties, and Sublicensees for all purposes of this
Agreement.
5.2 Information . As Licensor may reasonably request from time
to time, no more than twice per calendar year, Arbios shall keep
Licensor informed as to Arbios’ progress in developing,
marketing and selling the Products under this Agreement.
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 Securities Exchange
Act of 1934.
ARTICLE 6
CONFIDENTIAL
INFORMATION
6.1 Definition . “Confidential
Information” shall mean trade secrets, know-how, technical,
business and market information, patent disclosures, patent
applications, structures, models, techniques, formula processes,
compositions, compounds, antigens, antibodies, hybridomas,
apparatus, designs, sketches, photographs, plans, drawings,
specifications, samples, reports, customer lists, price lists,
studies, findings, inventions, business and financial plans,
clinical development and clinical trial plans/status, and results,
devices, device designs, absorbents, materials, membranes, intended
uses, and ideas) disclosed by one Party to the other hereunder, but
only to the extent that such information is either marked as
“CONFIDENTIAL” or that, due to
the nature of the information, the receiving party should
reasonably know is confidential.
6.2 Limitations . Each party shall:
6.2.1
use reasonable commercial efforts
to maintain the confidentiality of all Confidential
Information;
6.2.2
not use or permit the use of any
Confidential Information, except as reasonably required to
accomplish the purpose of the disclosure of the Confidential
Information or to exercise rights hereunder; and
6.2.3
not disclose any Confidential
Information, other than to employees or agents who reasonably
require knowledge of such Confidential Information to accomplish
the purpose of the disclosure of the Confidential Information, and
who are bound by substantially similar written obligations of
confidentiality.
6.3 Property of Disclosing Party; Return of
Information .
Confidential Information and all embodiments and expressions of
such Confidential Information, including, without limitation, all
reports, notes, reprints, descriptions, copies and summaries
thereof, shall be and remain the property of the disclosing party
at all times, and, to the extent in the disclosing party’s
possession and control, and not subject to any continuing licenses
hereunder, shall be returned to the disclosing party upon request,
except for a single copy that may be retained in the receiving
party’s legal files for record keeping purposes
only.
6.4 Exclusion . Neither party shall be liable for the
disclosure or use of any Confidential Information which
was:
6.4.1
at the time of disclosure, in the
possession of receiving party on a non-confidential basis as shown
by contemporaneous written records, and not as a result of any
unauthorized act or omission on the part of the receiving party or
any third party;
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 Securities Exchange
Act of 1934.
6.4.2
independently developed by the
receiving party; or
6.4.3
required to be disclosed by law so
long as the disclosing party is promptly given prior written notice
of the required disclosure.
6.5 Publicity . Neither party shall,
without the prior written consent of the other party, which consent
shall not be unreasonably withheld or delayed, disclose to third
parties, other than its attorneys and accountants and other
advisors on a need to know basis, nor originate any publicity, news
release or public announcement, written or oral, whether to the
public, the press, stockholders or otherwise, referring to this
Agreement, including its existence, the subject matter to which it
relates, including without limitation the patent numbers, the
performance under it or any of its specific terms and conditions,
except such announcements or disclosures as, in the opinion of the
counsel for the party making such announcement, are required by
law, including United States securities laws, food, drug and
cosmetic laws, or patent marking laws. If a party determines that
it is required by law to make an announcement with respect to this
Agreement, it will give the other party such notice as is
reasonably practicable and an opportunity to comment upon the
announcement and will limit any such announcement to the facts that
it is advised by counsel are required to be disclosed.
ARTICLE 7
REPRESENTATIONS AND
WARRANTIES
7.1 Representations and Warranties
. Licensor represents and warrants
that: (i) it has the full right and authority to enter into this
Agreement, (ii) it owns the Patent Rights without lien or other
encumbrance; (iii) it knows of no other party having any claim to
ownership of any of the Patent Rights or of any prior act or any
fact which causes it to conclude that any of the Patents identified
on Exhibit A is invalid or unenforceable in whole or in part; (iv)
it is current in the payment of all maintenance fees (however
denominated) with respect to the Patent Rights; and (v) it has not
previously granted and will not grant any rights or licenses in
conflict with the rights and licenses granted to Arbios in this
Agreement.
7.2 Disclaimer . Nothing in this Agreement is or shall be
construed as:
7.2.1
A warranty or representation by
Licensor as to the validity or scope of any claim within the Patent
Rights;
7.2.2
A warranty or representation that
anything made, used, sold, or otherwise disposed of under any
license granted in this Agreement is or will be free from
infringement of any patent rights of any third party;
7.2.3
An obligation to bring or prosecute
actions or suits against third parties for infringement of any of
the Patent Rights, subject to reasonable assistance pursuant to
Section 8.2; 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 Securities Exchange
Act of 1934.
7.2.4
Granting by implication, estoppel,
or otherwise any licenses or rights under patents or other rights
of Licensor or third parties, regardless of whether such patents or
other rights are dominant or subordinate to any patent within the
Patent Rights.
7.3 Additional Representations and
Warranties . Arbios
represents and warrants that: (a) the clinical trial being
conducted at the time of execution of this Agreement, identified as
the SEPET™ Feasibility Trial, involves the use of a blood
filtration device with an albumin sieving coefficient of
approximately [*]%,; (b) each product for which it requests
permission from the FDA for purposes of a clinical study and/or
commercial marketing in satisfaction of Section 5.1 of this
Agreement shall be a Product; and (c) prior to the execution of
this Agreement, it has not engaged in any negotiations for the
sublicensing or assignment of this license. Upon written request of
Licensor, Arbios shall certify that the representation of clause
(b) above applies in connection with any relevant milestone which
has been met as specified in Section 5.1.
7.4 No Other Warranties, Liability
. EXCEPT AS EXPRESSLY SET FORTH IN
SECTION 7.1, LICENSOR GRANTS NO WARRANTIES WITH RESPECT TO THE
PATENT RIGHTS, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION
OF LAW, BY STATUE OR OTHERWISE, AND LICENSOR SPECIFICALLY DISCLAIMS
ANY EXPRESS OR IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, VALIDITY OR SCOPE OF THE PATENT RIGHTS, OR
NON-INFRINGEMENT OF THE INTELLECTUAL-PROPERTY RIGHTS OF ANY THIRD
PARTY. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY
FOR ECONOMIC DAMAGES OF AN INDIRECT, SPECIAL, INCIDENTAL, OR
CONSEQUENTIAL NATURE, INCLUDING WITHOUT LIMITATION LOSS OF PROFITS,
LOSS OF USE, OR OTHER ECONOMIC LOSS.
ARTICLE 8
INTELLECTUAL
PROPERTY
8.1 Patent Prosecution . From and after the Effective Date, Arbios, at
its sole expense and using patent counsel selected by Arbios,
shall diligently pursue in a commercially
reasonable manner the filing, prosecution, maintenance, defense and
enforcement of all applications for patents and all patents
included in Patent Rights. Arbios will provide Licensor a quarterly
report on the status of all efforts to prosecute, maintain, defend
and enforce all applications for patent and all patents included in
Patent Rights, and shall respond to all reasonable requests by
Licensor for information regarding the status of Patent Rights.
Arbios shall keep Licensor regularly informed of all prosecution
activities and the parties shall confer in advance on actions to be
taken in connection with the prosecution of applications for all
Patent Rights. Licensor shall, and shall use reasonable efforts
(without being required to incur any cost or expense) to cause its
representatives who are inventors of the Patent Rights to, fully
cooperate at the expense of Arbios, and as reasonably requested by
Arbios, in efforts relating to the filing, prosecution,
maintenance, defense and/or enforcement of all Patent Rights.
Arbios agrees to execute a letter agreement with David Radunsky in
the form attached as Exhibit C
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 Securities Exchange
Act of 1934.
8.2 Patent Enforcement . If either party becomes aware that any Patent
Rights are being or have been infringed by any third party, such
party shall promptly notify the other
