License Agreement

You are currently viewing:

This License Agreement involves

MDRNA, INC. | BioMedical Research, Inc

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.

Title: License Agreement
Governing Law: New York Date: 8/19/2009
Industry: Biotechnology and Drugs Law Firm: Sills Cummis Sector: Healthcare

License Agreement, Parties: mdrna inc. , biomedical research inc

Exhibit 10.3

[*CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS DOCUMENT. EACH SUCH PORTION, WHICH HAS BEEN OMITTED HEREIN AND REPLACED WITH AN ASTERISK [***], HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]

License Agreement

By And Between

Novartis Institutes for BioMedical Research, Inc.

And

MD RNA, Inc.


1.	DEFINITIONS AND INTERPRETATION	1

2.	LICENSES	6

3.	DISCLOSURE AND TRANSFER OF MDRNA KNOW-HOW AND COOPERATION	7

4.	FINANCIAL PROVISIONS	7

5.	PAYMENT TERMS	8

6.	CONFIDENTIALITY	8

7.	EVENT OF DEFAULT	10

8.	TERM; RIGHTS IN BANKRUPTCY	10

9.	REPRESENTATIONS, WARRANTIES AND COVENANTS	11

10.	INDEMNIFICATION; LIABILITY	15

11.	PUBLICATIONS AND PUBLICITY	19

12.	GENERAL PROVISIONS	20

EXHIBIT A – MD RNA PATENTS

EXHIBIT B – MICHIGAN PATENTS

EXHIBIT C – SAMPLE INVOICE

EXHIBIT D – MICHIGAN LICENSE

EXHIBIT E – GECC AGREEMENT

EXHIBIT F – PAYMENT INSTRUCTIONS

LICENSE AGREEMENT

This LICENSE AGREEMENT (“ Agreement ”) is made as of this 20th day of March, 2009 (“ Effective Date ”), by and between Novartis Institutes for BioMedical Research, Inc., a Delaware corporation (“ Novartis ”) and MD RNA, Inc., a Delaware corporation (“ MD RNA ”). Novartis and MD RNA are each referred to individually as a “ Party ” and together as the “ Parties .”

RECITALS

WHEREAS, MD RNA has developed a proprietary platform for creating novel liposomes from dialkyl-amino acids for delivery of siRNA and owns or Controls (as defined below) certain intellectual property relating thereto;

WHEREAS, Novartis wishes to obtain, and MD RNA wishes to grant, a license to such intellectual property on the terms and conditions set forth herein;

WHEREAS, MD RNA Controls certain intellectual property pursuant to the Michigan License (as defined below); and

WHEREAS, Novartis wishes to obtain, and MD RNA wishes to grant, a sublicense under the Michigan License on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the Parties agree as follows.

1.	DEFINITIONS AND INTERPRETATION

1.1

Definitions. Unless the context otherwise requires, the terms in this Agreement with initial letters capitalized, shall have the meanings set forth below, or the meaning as designated in the indicated places throughout this Agreement.

“Affiliate” means, with respect to a Party, any Person that controls, is controlled by, or is under common control with that Party. For the purpose of this definition, “control” shall mean, direct or indirect, ownership of fifty percent (50%) or more of the shares of stock entitled to vote for the election of directors, in the case of a corporation, or fifty percent (50%) or more of the equity interest in the case of any other type of legal entity, status as a general partner in any partnership, or any other arrangement whereby the entity or person controls or has the right to control the board of directors or equivalent governing body of a corporation or other entity, or the ability to cause the direction of the management or policies of a corporation or other entity. In the case of entities organized under the laws of certain countries, the maximum percentage ownership permitted by law

for a foreign investor may be less than fifty percent (50%), and in such case such lower percentage shall be substituted in the preceding sentence, provided , that such foreign investor has the power to direct the management and policies of such entity. In the case of Novartis, “Affiliates” shall also be deemed to include [***] (also known as [***]), [***], and their respective Affiliates.

“Agreement” shall have the meaning set forth in the preamble.

“Business Day” means any day that is not a Saturday, a Sunday, or other day (i) which is a public holiday in Cambridge, Massachusetts, or (ii) which is a recognized Federal holiday in the United States of America.

“Claims” means all Third Party demands, claims, actions, proceedings and liabilities (whether criminal or civil, in contract, tort or otherwise) for losses, damages, reasonable legal costs and other reasonable expenses of any nature whatsoever.

“Code” shall have the meaning set forth in Section 8.2(a).

“Confidential Information” means all Know-How and other proprietary information and data of a financial, commercial or technical nature which the disclosing Party or any of its Affiliates has supplied or otherwise made available to the other Party or its Affiliates, whether made available orally, in writing or in electronic form, including information comprising or relating to concepts, discoveries, inventions, data, designs or formulae in relation to this Agreement. For purposes hereof, this Agreement and the terms hereof shall not be Confidential Information of either Party.

“ Confidentiality Agreement ” means that certain Confidentiality Agreement dated as of February 10, 2009 between mdRNA and Novartis, as amended by an Amendment to Confidentiality Agreement dated February 17, 2009.

“Control” or “Controlled” means, with respect to any Know How, Patents, other intellectual property rights, or any proprietary or trade secret information, the legal authority or right (whether by ownership, license or otherwise) of a Party to grant a license or a sublicense of or under such Know How, Patents, or intellectual property rights to another Person, or to otherwise disclose such proprietary or trade secret information to another Person, without breaching the terms of any agreement with a Third Party, or misappropriating the proprietary or trade secret information of a Third Party.

“DiLA ² Data” means all data and information Controlled by MD RNA relating to the structure, activity and/or other characteristics of the lipids within the DiLA ² Platform Technology.

“DiLA ² Platform Technology” means compounds containing an amino acid core, including one or more amino acids or a peptide of two to twenty amino acid residues, and

one or more lipophilic tails linked at either the N-terminus or the C-terminus of an amino acid, or at both termini for use in delivery and administration of drug agents and in drug delivery systems, as in existence as of the Effective Date.

“Effective Date” shall have the meaning set forth in the first paragraph of this Agreement.

“Encumbrance” means any claim, charge, equitable interest, hypothecation, lien, mortgage, pledge, option, license, assignment, power of sale, retention of title, right of pre-emption, right of first refusal or security interest of any kind.

“Event of Default” shall have the meaning set forth in Section 7.1.

“Field” shall mean all uses and purposes.

“Field of Use” shall have the meaning set forth in the Michigan License.

“Force Majeure Event” shall have the meaning set forth in Section 12.5.

“Indemnification Claim Notice” shall have the meaning set forth in Section 10.3(b).

“Indemnified Party” shall have the meaning set forth in Section 10.3(b).

“Indemnifying Party” shall have the meaning set forth in Section 10.3(b).

“Know-How” means all technical information, know-how and data, including inventions (whether patentable or not), discoveries, trade secrets, specifications, instructions, processes, formulae, materials, expertise and other technology applicable to compounds, biologics, formulations, compositions, products or to their manufacture, development, registration, use or commercialization or methods of assaying or testing them or processes for their manufacture, formulations containing them, compositions incorporating or comprising them and including all biological, chemical, pharmacological, biochemical, toxicological, pharmaceutical, physical and analytical, safety, quality control, manufacturing, preclinical and clinical data, instructions, processes, formulae, expertise and information, regulatory filings and copies thereof, relevant to the development, manufacture, use or commercialization of and/or which may be useful in studying, testing, development, production or formulation of products, or intermediates for the synthesis thereof.

“Licensed Products” shall have the meaning set forth in the Michigan License.

“Licensed Processes” shall have the meaning set forth in the Michigan License.

“ MAA ” means an application for the authorization to market a product in any country or group of countries outside the United States, as defined in the applicable laws and

regulations and filed with the Regulatory Authority of a given country or group of countries.

“ MD RNA Know-How ” means the Know-How owned or Controlled by MD RNA or its Affiliates as of the Effective Date relating to the DiLA ² Platform Technology and condensing peptide technology. The MD RNA Know-How shall also include the DiLA ² Data. For the avoidance of doubt, “ MD RNA Know-How” shall not include any Know-How owned or Controlled by the University of Michigan.

“ MD RNA Patents ” means the Patents identified in Exhibit A and any other Patents owned or Controlled by MD RNA or its Affiliates as of the Effective Date that have claims covering the DiLA ² Platform Technology. For the avoidance of doubt, “ MD RNA Patents” shall not include any Patents owned or Controlled by the University of Michigan.

“ MD RNA Technology ” means MD RNA Patents and MD RNA Know-How.

“ MD RNA Indemnitees” shall have the meaning set forth in Section 10.2.

“Michigan” means the Regents of the University of Michigan.

“Michigan License” means the License Agreement, dated as of May 7, 2008, between the Regents of the University of Michigan and MD RNA (f/k/a Nastech Pharmaceutical Company Incorporated).

“Michigan Patents” shall have the meaning given to the term PATENT RIGHTS in the Michigan License.

“ Novartis Indemnitees ” shall have the meaning set forth in Section 10.1.

“Party” shall have the meaning set forth in the preamble.

“Patents” means all patents and patent applications, author certificates, inventor certificates, utility certificates, improvement patents and models and certificates of addition and all foreign counterparts of them and including all divisionals, continuations, substitutions, continuations-in-part, re-examinations, reissues, additions, renewals, extensions, registrations, and supplemental protection certificates and the like of any of the foregoing.

“Person” means any individual, partnership, limited liability company, firm, corporation, association, trust, unincorporated organization or other entity.

“Regulatory Authority” means any governmental agency or authority responsible for granting regulatory approvals for products, including the United States Food and Drug Administration, the European Medicines Agency, or any successor entities thereto and any corresponding national or regional regulatory authorities.

“Regulatory Filings” means any submission to a Regulatory Authority of any appropriate regulatory application, and shall include, without limitation, any submission to a regulatory advisory board, marketing authorization application, and any supplement or amendment thereto. For the avoidance of doubt, Regulatory Filings shall include any Investigational New Drug (IND), New Drug Application (NDA) or the corresponding application in any other country or group of countries.

“ Sublicensee ” shall have the meaning set forth in the Michigan License.

“Term” means the term of this Agreement as set forth in Section 8.1.

“Territory” means all countries of the world.

“Third Party” means any Person other than a Party or an Affiliate of a Party.

“United States” or “US” means the United States of America, its territories and possessions.

“USD” or “US$” means the lawful currency of the United States.

1.2

Interpretation. In this agreement unless otherwise specified:

(a)

“includes” and “including” shall mean respectively includes and including without limitation;

(b)

a Party includes its permitted assignees and/or their respective permitted successors in title to substantially the whole of its undertaking;

(c)

a statute or statutory instrument or any of their provisions is to be construed as a reference to that statute or statutory instrument or such provision as the same may have been or may from time to time hereafter be amended or re-enacted;

(d)

words denoting the singular shall include the plural and vice versa and words denoting any gender shall include all genders;

(e)

the Exhibits and other attachments form part of the operative provision of this Agreement and references to this Agreement shall, unless the context otherwise requires, include references to the Exhibits and attachments;

(f)

the headings in this Agreement are for information only and shall not be considered in the interpretation of this Agreement;

(g)

general words shall not be given a restrictive interpretation by reason of their being preceded or followed by words indicating a particular class of acts, matters or things; and

(h)

the Parties agree that the terms and conditions of this Agreement are the result of negotiations between the Parties and that this Agreement shall not be construed in favor of or against any Party by reason of the extent to which any Party participated in the preparation of this Agreement.

2.	LICENSES

2.1

License Grant. Subject to the terms and conditions of this Agreement, MD RNA hereby grants to Novartis and its Affiliates a non-exclusive, irrevocable, perpetual, royalty-free, fully paid-up license, with the right to grant sublicenses as permitted in Section 2.3 of this Agreement, under the MD RNA Technology to research, develop, make, have made, use, import, offer for sale, sell, have sold, commercialize and otherwise exploit any product and/or process in the Field in the Territory.

2.2

Michigan Sublicense Grant.

(a)

Subject to the terms and conditions of this Agreement, MD RNA hereby grants to Novartis and its Affiliates a non-exclusive license under the Michigan Patents, with the right to grant sublicenses, in each case subject to the terms and conditions of the Michigan License, in the Field of Use and the Territory, to make, have made, import, use, market, offer for sale, sell and have sold Licensed Products and to practice Licensed Processes.

( b)

In connection with the sublicense granted pursuant to this Section 2.2 Novartis agrees to comply, as and to the extent applicable to a Sublicensee, with the following Sections of the Michigan License: [***].

(c)

For the avoidance of doubt, other than as specified in Section 2.2(b) above, Novartis shall not be bound by any provision of the Michigan License, including Article 5 (Diligence).

(d)

Novartis acknowledges, pursuant to clause (1) of Section 6.4 of the Michigan License the disclaimer of warranties and limitations on Michigan’s liability, as provided in Article 9 of the Michigan License.

2.3

Sublicense Rights.

(a)

Novartis may sublicense to a Third Party the rights granted to it by MD RNA under Section 2.1 of this Agreement at any time at its sole discretion, but only in connection with [***]. A “ Novartis Product ” means any product with respect to which Novartis or any of its Affiliates has conducted research, manufacturing, development and /or commercialization activities that are material to such product.

(b)

Novartis may sublicense the rights granted to it by MD RNA under Section 2.2 of this Agreement as and to the extent provided in the Michigan License.

3.	DISCLOSURE AND TRANSFER OF MDRNA KNOW-HOW AND COOPERATION

3.1

Disclosure and Transfer of MD RNA Know-How. As soon as reasonably possible after the Effective Date (and in any event within [***] days after the Effective Date), MD RNA, without additional consideration, shall disclose to Novartis or its designated Affiliate all MD RNA Know-How in existence as of the Effective Date and provide copies of any existing tangible embodiment thereof in written or electronic form as reasonably requested by Novartis, including delivery of an electronic copy of the DiLA ² Data in a commonly usable format. Such disclosures shall include all MD RNA Know-How and any other data, information and documents known to and Controlled by MD RNA as of the Effective Date which may be necessary or useful to Novartis to practice the licenses granted hereunder efficiently.

3.2

Cooperation. Upon request by Novartis within a reasonable period after disclosure by MD RNA of the MD RNA Know-How and other data, information and documents pursuant to Section 3.1 of this Agreement, MD RNA will provide reasonable assistance to Novartis or its designated Affiliate in connection with understanding and using the MD RNA Know-How for purposes consistent with licenses and rights granted to Novartis hereunder; provided , that Novartis shall promptly pay or reimburse MD RNA for any travel or other out-of-pocket expenses incurred by MD RNA in connection with providing such assistance requested by Novartis.

4.	FINANCIAL PROVISIONS

4.1

Upfront Payment. In consideration of the licenses and rights granted to Novartis hereunder, Novartis shall pay to MD RNA a one-time upfront payment of Seven Million Two Hundred and Fifty Thousand Dollars ($7,250,000). Such upfront payment shall be paid in accordance with the instructions set forth Exhibit F within [***] Business Days after receipt by Novartis of an invoice in the form of Exhibit C , which invoice shall be issued no earlier than the Effective Date.

4.2

Third Party Obligations. MD RNA shall remain responsible for the payment of all royalty, milestone and other payment obligations, if any, due to Third Parties under any Patents or Know-How which have been licensed to MD RNA and are sublicensed to Novartis under this Agreement. All such payments shall be made promptly by MD RNA in accordance with the terms of its license agreement.

5.	PAYMENT TERMS

5.1

Payment Terms. All payments from Novartis to MD RNA shall be made by wire transfer to the credit of such bank account as may be designated by MD RNA in this Agreement or in writing to Novartis. Any payment which falls due on a date which is not a Business Day in Cambridge, Massachusetts may be made on the next succeeding Business Day in Cambridge, Massachusetts.

5.2

Currency. All payments under this Agreement shall be payable in US dollars.

5.3

Taxes. MD RNA will pay any and all taxes levied on account of any payments made to it under this Agreement. If any taxes are required to be withheld by Novartis, Novartis will: (a) deduct such taxes from the payment made to MD RNA; (b) timely pay the taxes to the proper taxing authority; (c) send proof of payment to MD RNA; and (d) reasonably assist MD RNA in its efforts to obtain a credit for such tax payment. Each Party agrees to reasonably assist the other Party in lawfully claiming exemptions from and/or minimizing such deductions or withholdings under double taxation laws or similar circumstances.

6.	CONFIDENTIALITY

6.1

Duty of Confidence. Subject to the other provisions of this Section 6, all Confidential Information disclosed by a Party or its Affiliates under this Agreement will be maintained in confidence and otherwise safeguarded by the recipient Party. The recipient Party may only use the Confidential Information for the purposes of this Agreement and pursuant to the rights granted to the recipient Party under this Agreement. Subject to the other provisions of this Section 6, each Party shall hold as confidential such Confidential Information of the other Party or its Affiliates in the same manner and with the same protection as such recipient Party maintains its own confidential information. Subject to the other provisions of this Section 6, a recipient Party may only disclose Confidential Information of the other Party to employees, agents, contractors, consultants and advisers of the Party and its Affiliates and sublicensees and to Third Parties to the extent reasonably necessary for the purposes of, and for those matters undertaken pursuant to, this Agreement; provided , that such Persons are bound to maintain the confidentiality of the Confidential Information in a manner consistent with the confidentiality provisions of this Agreement.

6.2

Exceptions. The obligations under this Section 6 shall not apply to any information to the extent the recipient Party can demonstrate by competent evidence that such information:

(a)

is (at the time of disclosure) or becomes (after the time of disclosure) known to the public or part of the public domain through no breach of this Agreement by the recipient Party or its Affiliates;

(b)

was known to, or was otherwise in the possession of, the recipient Party or its Affiliates prior to the time of disclosure by the disclosing Party or any of its Affiliates;

(c)

is disclosed to the recipient Party or an Affiliate on a non-confidential basis by a Third Party who is entitled to disclose it without breaching any confidentiality obligation to the disclosing Party or any of its Affiliates; or

(d)

is independently developed by or on behalf of the recipient Party or its Affiliates, as evidenced by its written records, without reference to the Confidential Information disclosed by the disclosing Party or its Affiliates under this Agreement.

Specific aspects or details of Confidential Information shall not be deemed to be within the public domain or in the possession of the recipient Party merely because the Confidential Information is embraced by more general information in the public domain or in the possession of the recipient Party. Further, any combination of Confidential Information shall not be considered in the public domain or in the possession of the recipient Party merely because individual elements of such Confidential Information are in the public domain or in the possession of the recipient Party unless the combination and its principles are in the public domain or in the possession of the recipient Party.

6.3

Authorized Disclosures.

(a)

In addition to disclosures allowed under Section 6.2, Novartis may disclose Confidential Information belonging to MD RNA or its Affiliates to the extent such disclosure is necessary in the following instances: (i) filing or prosecuting Patents as permitted by this Agreement; and (ii) in connection with Regulatory Filings for products. In addition, Novartis may disclose Confidential Information belonging to MD RNA or its Affiliates to the extent such disclosure is necessary in connection with prosecuting or defending litigation as permitted by this Agreement; provided , that Novartis (A) informs MD RNA as soon as reasonably practicable of the proposed disclosure; and (B) shall use commercially reasonable efforts (but in no event less than the efforts used by Novartis with respect to its own similar confidential information) to limit the disclosure for the required purpose and to obtain protections to maintain the confidentiality of such MDRNA Confidential Information.

(b)

In addition, Novartis and its Affiliates and sublicensees may disclose Confidential Information of MD RNA to Third Parties as may be necessary or useful in connection with the development, manufacture or commercialization of products and/or processes; provided , that such Third Parties are bound to maintain the confidentiality of such Confidential Information in a manner consistent with the confidentiality provisions of this Agreement.

(c)

In the event the recipient Party is required to disclose Confidential Information of the disclosing Party by law or in connection with bona fide legal process, such disclosure shall not be a breach of this Agreement; provided , that the recipient Party (i) informs the disclosing Party as soon as reasonably practicable of the required disclosure; (ii) limits the disclosure to the required purpose; and (iii) at the disclosing Party’s request and expense, assists in an attempt to object to or limit the required disclosure.

(d)

Notwithstanding anything to the contrary contained in this Article 6 or Article 11 of this Agreement, MD RNA shall be permitted to disclose a copy of this Agreement to (a) MD RNA’s current or prospective banks, financial institutions, investors or other Third Parties for the purpose of raising capital or borrowing money or maintaining compliance with agreements, arrangements and understandings relating thereto, and (b) to any Person who proposes to be an assignee or to purchase or otherwise succeed (by merger, operation of law or otherwise) to all of MD RNA’s right, title and interest in, to and under this Agreement, if (1) such Person agrees to maintain the confidentiality of this Agreement pursuant to a written agreement at least as protective as the terms set forth in this Article 6 (with the exception of the term of the obligation of confidentiality, which may be for a specified term of years) and (2) any such assignment, purchase or succession would be permitted under Section 12.1 hereof.

7.	EVENT OF DEFAULT

7.1

Event of Default. The rejection of this Agreement under section 365 of the Code by MD RNA shall constitute an event of default (an “Event of Default”) by MD RNA under this Agreement.

8.	TERM; RIGHTS IN BANKRUPTCY

8.1

Term. Subject to Section 8.2, the term of this Agreement (the “Term”) is perpetual and shall continue indefinitely following the Effective Date.

8.2

Termination for Event of Default. Novartis may terminate this Agreement immediately upon written notice to MD RNA upon the occurrence of an Event of Default.

8.3

Rights in Bankruptcy.

(a)

The Parties agree that this Agreement constitutes an executory contract under Section 365 of the US Bankruptcy Code (the “ Code ”) for the license of “intellectual property” as defined under Section 101 of the Code and constitutes a license of “intellectual property” for purposes of any similar laws in any other

country in the Territory. The Parties further agree that Novartis, as licensee of such rights under this Agreement, will retain and may fully exercise all of its protections, rights, and elections under the Code, including, but not limited to, Section 365(n) of the Code, and any similar laws in any other country in the Territory. The Parties further agree that, in the event of the commencement of a bankruptcy proceeding by or against any MD RNA under the Code and any similar laws in any other country in the Territory, Novartis will be entitled to a complete duplicate of (or complete access to, as appropriate) any such intellectual property and all embodiments of such intellectual property, and the same, if not already in its possession, will be promptly delivered to it (i) upon any such commencement of a bankruptcy proceeding upon its written request therefor, unless MD RNA elects to continue to perform all of its obligations under this Agreement, or (ii) if not delivered under (i) above, following the rejection of this Agreement by or on behalf of MD RNA upon written request therefor by Novartis.

(b)

All rights, powers and remedies of Novartis provided for in this Section 8.3 are in addition to and not in substitution for any and all other rights, powers and remedies now or hereafter existing at law or in equity (including, without limitation, under the Code and any similar laws in any other country in the Territory). In the event of the bankruptcy of MD RNA, Novartis, in addition to the rights, power and remedies expressly provided herein, shall be entitled to exercise all other such rights and powers and resort to all other such remedies as may now or hereafter exist at law or in equity (including, without limitation, under the Code). The Parties agree that they intend the following Novartis rights to extend to the maximum extent permitted by law, including, without limitation, for purposes of the Code: (i) the right of access to any such intellectual property (including all embodiments thereof) of MD RNA licensed or sublicensed to Novartis pursuant to this Agreement, or any Third Party with whom MD RNA contracts to perform an obligation of MD RNA under Section 3.1 of this Agreement which is necessary for the development, registration, manufacture and/or commercialization of products in the Territory; (ii) the right to contract directly with any Third Party described in (i) to complete the contracted work, and (iii) the right to cure any breach of or default under any such agreement with a Third Party and set off the costs thereof against amounts payable to MD RNA under this Agreement.

9.	REPRESENTATIONS, WARRANTIES AND COVENANTS

9.1

Representations and Warranties by Each Party. Each Party represents and warrants to the other as of the Effective Date that:

(a)

it is a corporation duly organized, validly existing, and in good standing under the laws of its jurisdiction of formation;

(b)

it has full corporate power and authority to execute, deliver, and perform this Agreement, and has taken all corporate action required by law and its organizational documents to authorize the execution and delivery of this Agreement and the consummation of the transactions contemplated by this Agreement;

(c)

this Agreement constitutes a valid and binding agreement enforceable against it in accordance with its terms;

(d)

all consents, approvals and authorizations from all governmental authorities or other Third Parties required to be obtained by such Party in connection with this Agreement have been obtained; and

(e)

the execution and delivery of this Agreement and all other instruments and documents required to be executed pursuant to this Agreement, and the consummation of the transactions contemplated hereby do not and shall not (i) conflict with or result in a breach of any provision of its organizational documents, (ii) result in a breach of any agreement to which it is a party; or (iii) violate any law.

9.2

Representations and Warranties by MD RNA. MD RNA represents and warrants to Novartis as of the Effective Date that:

(a)

Exhibit A sets forth a complete and accurate list of (i) all MD RNA Patents in existence as of the Effective Date, indicating the owner, MD RNA and/or co-owner(s) thereof if such MD RNA Patents or MD RNA Know-How is not solely owned by MD RNA and (ii) all license, assignment, distribution or other agreements relating to the MD RNA Patents and MD RNA Know-How;

(b)

Exhibit B sets forth a complete and accurate list of all Michigan Patents in existence as of the Effective Date, indicating the owner or co-owners thereof;

(c)

MD RNA (i) is the sole and exclusive owner, or exclusive licensee of all of the MD RNA Patents and is the exclusive licensee of the Michigan Patents free from Encumbrances, except (A) in the case of the Michigan Patents, which are subject to the terms and conditions of the Michigan License and Michigan’s rights with a respect thereto, and (B) for Encumbrances in favor of General Electric Capital Corporation pursuant to that certain Loan and Security Agreement, dated as of January 23, 2009,which shall be made subordinate to Novartis’ rights under this Agreement pursuant to Exhibit E , and (ii) except for the Michigan Patents, is listed in the records of the appropriate governmental agencies as the sole and exclusive owner of record or exclusive licensee for each registration, grant and application included in the MD RNA Patents;

(d)

MD RNA has obtained from all individuals who participated in any respect in the invention or authorship of any MD RNA Technology effective assignments of all ownership rights of such individuals in such MD RNA Technology, either pursuant to written agreement or by operation of law;

(e)

all of its employees, officers, and consultants have executed agreements or have existing obligations under applicable laws requiring assignment to MD RNA of all inventions made during the course of and as the result of their association with MD RNA and obligating the individual to maintain as confidential MD RNA’s Confidential Information as well as confidential information of other parties (including Novartis and its Affiliates, although they may not be specifically referenced by name) which such individual may receive, to the extent required to support MD RNA’s obligations under this Agreement;

(f)

MD RNA has the right to grant to Novartis the licenses under the MD RNA Technology that it purports to grant hereunder;

(g)

MD RNA has the right to use and disclose and to enable Novartis to use and disclose (in each case under appropriate conditions of confidentiality) the MD RNA Know-How free from Encumbrances;

(h)

MD RNA has the right to grant to Novartis the sublicense under the Michigan License that it purports to grant hereunder;

(i)

to the knowledge of MD RNA, the issued patents in the MD RNA Patents and the Michigan Patents are valid and enforceable without any claims, challenges, oppositions, interference or other proceedings pending or, to MD RNA’s knowledge threatened and MD RNA has filed and prosecuted patent applications within the MD RNA Patents in good faith and, to MD RNA’s knowledge complied with all duties of disclosure with respect thereto;

(j)

to MD RNA’s knowledge, MD RNA has not committed any act, or omitted to commit any act, that may cause the MD RNA Patents to expire prematurely or be declared invalid or unenforceable;

(k)

all application, registration, maintenance and renewal fees in respect of the MD RNA Patents as of the Effective Date have been paid and all necessary documents and certificates have been filed with the relevant agencies for the purpose of maintaining the MD RNA Patents;

(l)

MD RNA has complied in all material respects with its obligations required to be complied with by it to date under the Michigan License and it is not (with or without the lapse of time or the giving of notice, or both) in breach or default in any respect thereunder and, to MD RNA’s knowledge, no other party to the Michigan License is (with or without the lapse of time or the giving of notice, or

both) in breach or default in any respect thereunder. Following the Effective Date, Novartis will be permitted to exercise all rights of a Sublicensee under the Michigan License. MD RNA has delivered to Novartis a complete and correct copy of the Michigan License, together with all modifications and amendments thereto, which is attached as Exhibit D ;

(m)

to MD RNA’s knowledge, the practice of the MD RNA Technology and Michigan Patents do not infringe the Patents or misappropriate the Know-How of any Third Party, nor has MD RNA received any written notice alleging such infringement or misappropriation;

(n)

MD RNA has not initiated or been involved in any proceedings or claims in which it alleges that any Third Party is or was infringing or misappropriating any MD RNA Technology or Michigan Patent Rights, nor have any such proceedings been threatened by MD RNA, nor does MD RNA know of any valid basis for any such proceedings;

(o)

MD RNA has taken all reasonable precautions to preserve the confidentiality of the MD RNA Know-How;

(p)

except as disclosed in Article 2 of the Michigan License, MD RNA has not entered into a government funding relationship that would result in rights to any products residing in the US Government, National Institutes of Health, National Institute for Drug Abuse or other agency, and the licenses granted hereunder are not subject to overriding obligations to the US Government as set forth in Public Law 96-517 (35 U.S.C. 200-204), as amended, or any similar obligations under the laws of any other country;

(q)

MD RNA has not granted any Third Party rights that would otherwise interfere or be inconsistent with Novartis’ rights hereunder, and there are no agreements or arrangements to which MD RNA or any of its Affiliates is a party relating to the products, MD RNA Patents, MD RNA Know-How or, except as set forth in the Michigan License, the Michigan Patents that would limit the rights granted to Novartis under this Agreement or that restrict or will result in a restriction on Novartis’ ability to develop, manufacture, register, use or commercialize the products in the Territory;

(r)

The rights granted hereunder to Novartis and its Affiliates under this Agreement have been granted in the ordinary course of business; and

(s)

Notwithstanding anything to the contrary contained in this Agreement, the representations and warranties of MD RNA contained in this Agreement do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Notwithstanding anything to the

contrary contained in this Agreement, MD RNA has not failed to disclose to Novartis any fact or circumstance known to MD RNA and relating to any of the MD RNA Technology or the Michigan License or Michigan Patents that would be reasonably material to Novartis in connection with this Agreement or the transactions contemplated herein.

9.3

Covenants of MD RNA. MD RNA covenants and agrees that:

(a)

it will not grant any interest in the MD RNA Technology which is inconsistent with the terms and conditions of this Agreement;

(b)

if, at any time after execution of this Agreement, it becomes aware that it or any employee, agent or subcontractor of MD RNA who participated, or is participating, in the performance of any activities hereunder is on, or is being added to the FDA Debarment List or any of the three (3) FDA Clinical Investigator Restriction Lists referenced in Section 14.1(f), it will provide written notice of this to Novartis within two (2) Business Days of its becoming aware of this fact;

(c)

it shall comply with the terms of, and shall not terminate, and it shall not take any action or omit to take action that would constitute a breach, default or event of default (with or without notice or the lapse of time or both) or terminate or give rise to the right of Michigan to terminate the Michigan License;

(d)

it shall not modify, amend or waive any rights under the Michigan License in any manner that would adversely affect the license or other rights of Novartis under this Agreement, without the prior written consent of Novartis; and

(e)

it shall maintain insurance with respect to its activities and obligations under this Agreement in such amounts as are commercially reasonable in the industry for companies conducting similar business and shall require any of its Affiliates undertaking activities under this Agreement to do the same.

9.4

No Other Warranties. EXCEPT AS EXPRESSLY STATED IN THIS SECTION 9, (A) NO REPRESENTATION, CONDITION OR WARRANTY WHATSOEVER IS MADE OR GIVEN BY OR ON BEHALF OF NOVARTIS OR MD RNA; AND (B) ALL OTHER CONDITIONS AND WARRANTIES WHETHER ARISING BY OPERATION OF LAW OR OTHERWISE ARE HEREBY EXPRESSLY EXCLUDED, INCLUDING ANY CONDITIONS AND WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT.

10.

INDEMNIFICATION; LIABILITY

10.1

Indemnification by MD RNA. MD RNA shall defend, indemnify, and hold Novartis, its Affiliates, and their respective officers, directors, employees and agents, and all

successors and assigns of any of the foregoing (“Novartis Indemnitees”) harmless from and against any Claims against them to the extent arising or resulting from:

(a)

the negligence or willful misconduct of MD RNA or any of its Affiliates; or

(b)

the breach of any of the covenants, representations or warranties made by MD RNA to Novartis under this Agreement;

provided, however , that MD RNA shall not be obliged to so indemnify, defend and hold harmless the Novartis Indemnitees for any Claims to the extent that Novartis has an obligation to indemnify MD RNA Indemnitees pursuant to Section 10.2 or to the extent that such Claims arise from the breach, negligence or willful misconduct of Novartis or a Novartis Indemnitee.

10.2

Indemnification by Novartis. Novartis shall defend, indemnify, and hold MD RNA, its Affiliates, and their respective officers, directors, employees and agents, and all successors and assigns of any of the foregoing (“ MD RNA Indemnitees”) harmless from and against any Claims against them to the extent arising or resulting from:

(a)

the negligence or willful misconduct of Novartis or any of its Affiliates or sublicensees;

(b)

the breach of any of the covenants, representations or warranties made by Novartis to MD RNA under this Agreement; or

(c)

any product liability Claim relating to any product or process covered by the MD RNA Technology and/or the Michigan Patents (whether such Claim is based upon negligence, strict liability or other theory of liability), which is made or sold by Novartis, its Affiliates or sublicensees of the license or sublicense granted under this Agreement.

provided, however , that Novartis shall not be obliged to so indemnify, defend and hold harmless the MD RNA Indemnitees for any Claims to the extent that MD RNA has an obligation to indemnify Novartis Indemnitees pursuant to Section 10.1 or to the extent that such Claims arise from the breach, negligence or willful misconduct of MD RNA or the MD RNA Indemnitee.

10.3

Indemnification Procedure.

(a)

For the avoidance of doubt, all indemnification claims in respect of a Novartis Indemnitee or MD RNA Indemnitee shall be made solely by Novartis or mdRNA, respectively, on behalf of the Novartis Indemnitee or MD RNA Indemnitee, as the case may be.

(b)

A Party seeking indemnification hereunder ( “Indemnified Party” ) shall notify the other Party ( “Indemnifying Party” ) in writing reasonably promptly after the

assertion against the Indemnified Party of any Claim or fact in respect of which the Indemnified Party intends to base a claim for indemnification hereunder ( “Indemnification Claim Notice” ), but the failure or delay to so notify the Indemnifying Party shall not relieve the Indemnifying Party of any obligation or liability that it may have to the Indemnified Party, except to the extent that the Indemnifying Party demonstrates that its ability to defend or resolve such Claim is adversely affected thereby. The Indemnification Claim Notice shall contain a description of the claim and the nature and amount of the Claim (to the extent that the nature and amount of such Claim is known at such time). Upon the request of the Indemnifying Party, the Indemnified Party shall furnish promptly to the Indemnifying Party copies of all correspondence, communications and official documents (including court documents) received or sent in respect of such Claim.

(c)

Subject to the provisions of sub-Section (d) below, the Indemnifying Party shall, within [***] days after receipt of the Indemnification Claim Notice assume the defense and handling of such Claim, at the Indemnifying Party’s sole expense. The assumption of the defense of a Claim by the Indemnifying Party shall not be construed as acknowledgement that the Indemnifying Party is liable to indemnify any indemnitee in respect of the Claim, nor shall it constitute a waiver by the Indemnifying Party of any defenses it may assert against any Indemnified Party’s claim for indemnification. In the event that it is ultimately decided that the Indemnifying Party is not obligated to indemnify or hold an indemnitee harmless from and against the Claim, the Indemnified Party shall reimburse the Indemnifying Party for any and all reasonable costs and expenses (including attorneys’ fees and costs of suit) incurred by the Indemnifying Party in its defense of the Claim.

(d)

Upon assumption of the defense of a Claim by the Indemnifying Party: (i) the Indemnifying Party shall have the right to and shall assume sole control and responsibility for dealing with the Claim; (ii) the Indemnifying Party may, at its own cost, appoint as counsel in connection with conducting the defense and handling of such Claim any law firm or counsel reasonably selected by the Indemnifying Party and reasonably satisfactory to the Indemnified Party (such consent not to be unreasonably withheld or delayed); (iii) the Indemnifying Party shall keep the Indemnified Party informed of the status of such Claim; and (iv) the Indemnifying Party shall have the right to settle the Claim on any terms the Indemnifying Party chooses; provided, however , that it shall not, without the prior written consent of the Indemnified Party, agree to a settlement of any Claim which could lead to liability or create any financial or other obligation on the part of the Indemnified Party for which the Indemnified Party is not entitled to indemnification hereunder or which admits any wrongdoing or responsibility for the claim on behalf of the Indemnified Party. The Indemnified Party shall cooperate with the Indemnifying Party at the Indemnifying Party’s expense. In particular, the Indemnified Party shall furnish such records, information and

testimony, provide witnesses and attend such conferences, discovery proceedings, hearings, trials and appeals as may be reasonably requested in connection therewith; subject to the right of the Indemnified Party to obtain reasonable confidentiality protection in connection therewith. Such cooperation shall include access during normal business hours by the Indemnifying Party to, and reasonable retention by the Indemnified Party of, records and information that are reasonably relevant to such Claim, and making the Indemnified Party, the Novartis Indemnitees or mdRNA Indemnitees, as the case may be, and its and their employees and agents available on a mutually convenient basis to provide additional information and explanation of any records or information provided. The Indemnified Party shall be entitled to participate in, but not control, the defense of such Claim with its own counsel and at its own expense; provided, however , that if the litigants in any such action include both the Indemnified Party and the Indemnifying Party and legal counsel for the Indemnified Party shall have reasonably concluded in a written legal opinion delivered to the Indemnifying Party that, by reason of certain bona fide defenses available to the Indemnified Party which are different from or additional to those available to the Indemnifying Party, the interests of the Indemnified Party materially conflict with the interests of the Indemnifying Party such that it would be unethical under applicable rules relating to attorney conflicts of interest for the Indemnifying Party and such Indemnified Party to be represented by the same counsel with respect to such defense, the Indemnified Party shall have the right to select one separate counsel and to assume such legal defenses, with the reasonable expenses and fees of such separate counsel to be reimbursed by the Indemnifying Party as and when incurred.

(e)

If the Indemnifying Party fails to assume or conduct the defense and handling of any Claim in good faith as provided in Section 10.3(d) above, the Indemnified Party may, at the Indemnifying Party’s expense, select counsel reasonably acceptable to the Indemnified Party in connection with conducting the defense and handling of such Claim and defend or handle such Claim in such manner as it may deem appropriate; provided , that the foregoing shall not be construed as a limitation on the Indemnified Party’s right to claim that the Indemnifying Party has breached its obligations pursuant to this Section 10. In such event, the Indemnified Party shall keep the Indemnifying Party timely apprised of the status of such Claim and the Indemnified Party shall have the right to settle the Claim on any terms the Indemnified Party chooses; provided, however , that the Indemnified Party shall not, without the prior written consent of the Indemnifying Party, agree to a settlement of any Claim which could lead to liability or create any financial or other obligation on the part of the Indemnifying Party, other than its liability for indemnification of the Indemnified Party as provided in this Article 10, or which admits any wrongdoing or responsibility for the claim on behalf of the Indemnifying Party.

10.4

Mitigation of Loss. Each Indemnified Party will take and will procure that its Affiliates take all such reasonable steps and action as are necessary or as the Indemnifying Party may reasonably require in order to mitigate any Claims (or potential losses or damages) under this Section 10. Nothing in this Agreement shall or shall be deemed to relieve any Party of any common law or other duty to mitigate any losses incurred by it.

10.5

Special, Indirect and Other Losses. NEITHER PARTY NOR ANY OF ITS AFFILIATES SHALL BE LIABLE IN CONTRACT, TORT, NEGLIGENCE BREACH OF STATUTORY DUTY OR OTHERWISE FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR PUNITIVE DAMAGES OR FOR ANY ECONOMIC LOSS OR LOSS OF PROFITS SUFFERED BY THE OTHER PARTY, EXCEPT TO THE EXTENT ANY SUCH DAMAGES ARE REQUIRED TO BE PAID TO A THIRD PARTY AS PART OF A CLAIM FOR WHICH A PARTY PROVIDES INDEMNIFICATION UNDER THIS SECTION 10.

10.6

No Exclusion. Neither Party excludes any liability for death or personal bodily injury caused by its or its Affiliate’s (or, in the case of Novartis, its sublicensee’s) negligence or that of their respective employees, agents or sub-contractors.

11.

PUBLICATIONS AND PUBLICITY

11.1

Publications

(a)

For a period of [***] days after the Effective Date (which [***] day period shall be extended for an additional [***] days at Novartis’ option), any proposed public disclosure (whether written, electronic, oral or otherwise) by MD RNA relating to any products and/or processes relating to the MD RNA Technology or Licensed Products shall require the prior written consent of Novartis (such consent not to be unreasonably withheld or delayed); provided, that the foregoing shall not apply to information which is in the public domain or any public disclosure required by law or governmental regulation or by the rules of any recognized stock exchange

(b)

For the avoidance of doubt, Novartis or any of its Affiliates may, without any required consents from MD RNA but subject to its confidentiality obligations under Article 6 of this Agreement with respect to the Confidentiality Information of MD RNA, (i) issue press releases and other public statements as it deems appropriate in connection with the development and commercialization of the products and/or processes under this Agreement; and (ii) publish or have published information about clinical trials related to the products, including the results of such clinical trials

11.2

Publicity

(a)

Neither Party shall use the name, symbol, trademark, trade name or logo of the other Party or its Affiliates in any press release, publication or other form of public disclosure without the prior written consent of the other Party in each instance (such consent not to be unreasonably withheld or delayed), except for those disclosures for which consent has already been obtained. Notwithstanding the foregoing, Novartis shall be entitled, upon reasonable prior notice to MD RNA, to use the name of MD RNA to the extent necessary or useful in connection with the development or commercialization of the products, including in connection with sublicensing and subcontracting transactions.

(b)

Each Party agrees not to issue any press release or other public statement, whether oral or written, disclosing the existence of this Agreement, the terms hereof or any information relating to this Agreement without the prior written consent of the other Party; provided, however , that Novartis may issue press releases and other public statements as it deems appropriate in connection with the development and commercialization of products under this Agreement.

(c)

Notwithstanding the foregoing, each Party may make any disclosures required of it to comply with any duty of disclosure it may have pursuant to law or governmental regulation or pursuant to the rules of any recognized stock exchange. In the event of a disclosure required by law, governmental regulation or the rules of any recognized stock exchange, the Parties shall coordinate with each other with respect to the timing, form and content of such required disclosure. If so requested by the other Party, the Party subject to such obligation shall use commercially reasonable efforts to obtain an order, agreement or other governmental or Third Party action protecting to the maximum extent possible the confidentiality of such provisions of this Agreement as reasonably requested by the other Party. If the Parties are unable to agree on the form or content of any required disclosure, such disclosure shall be limited to the minimum required as determined by the disclosing Party in consultation with its legal counsel. Without limiting the foregoing, each Party shall consult with the other Party on the provisions of this Agreement, together with exhibits or other attachments attached hereto, to be redacted in any filings made by MD RNA or Novartis with the Securities and Exchange Commission (or other regulatory body) or as otherwise required by law. MD RNA also may file or submit such redacted version of this Agreement with NASDAQ in connection with maintaining its NASDAQ listing.

12.

GENERAL PROVISIONS

12.1

Assignment. Neither Party may assign its rights and obligations under this Agreement without the other Party’s prior written consent, except that (a) a Party may assign its rights and obligations under this Agreement or any part hereof to one or more of its Affiliates without the consent of the other Party; and (b) either Party may assign this

Agreement in its entirety to a successor to all or substantially all of its business or assets to which this Agreement relates. The assigning Party shall provide the other Party with prompt written notice of any such assignment pursuant to clause (b) above. Any permitted assignee shall assume all obligations of its assignor under this Agreement (or related to the assigned portion in case of a partial assignment to an Affiliate), and no permitted assignment shall relieve the assignor of liability hereunder. Any attempted assignment in contravention of the foregoing shall be void. Subject to the terms of this Agreement, this Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns.

12.2

Extension to Affiliates; Subcontractors. Novartis shall have the right to extend the rights, immunities and obligations granted in this Agreement to one or more of its Affiliates. All applicable terms and provisions of this Agreement shall apply to any such Affiliate to which this Agreement has been extended to the same extent as such terms and provisions apply to Novartis. Novartis shall remain primarily liable for any acts or omissions of its Affiliates. In addition, Novartis may subcontract to Third Parties the performance of any tasks and obligations relating to its exercise of the license and other rights under this Agreement as Novartis deems appropriate, subject to its confidentiality obligations pursuant to Article 6 of this Agreement.

12.3

Severability. Should one or more of the provisions of this Agreement become void or unenforceable as a matter of law, then this Agreement shall be construed as if such provision were not contained herein and the remainder of this Agreement shall be in full force and effect, and the Parties will use their commercially reasonable efforts to substitute for the invalid or unenforceable provision a valid and enforceable provision which conforms as nearly as possible with the original intent of the Parties.

12.4

Governing Law and Jurisdiction. This Agreement shall be governed by and construed under the laws of New York, without giving effect to the conflicts of laws provision thereof. Any disputes between the Parties relating to this Agreement shall be subject to the exclusive jurisdiction and venue of the federal courts located in the Southern District of New York (without restricting any right of appeal), and the Parties hereby waive any objection which they may have now or hereafter to the laying of venue of any proceedings in such courts and to any claim that such proceedings have been brought in an inconvenient forum, and further agree that a judgment or order in any such proceedings shall be binding upon each of them and may be enforced in the courts of any other jurisdiction.

12.5

Force Majeure. Neither Party shall be responsible to the other for any failure or delay in performing any of its obligations under this Agreement or for other nonperformance hereunder if such delay or nonperformance is caused by strike, stoppage of labor, lockout or other labor trouble, fire, flood, accident, war, act of terrorism, act of God or of the government of any country or of any local government, or by other cause unavoidable or beyond the reasonable control of any Party hereto (a “Force Majeure Event”).

Notwithstanding the foregoing, in no event shall a Party’s inability to obtain funding for its obligation hereunder constitute a Force Majeure Event.

12.6

Waivers and Amendments. The failure of any Party to assert a right hereunder or to insist upon compliance with any term or condition of this Agreement shall not constitute a waiver of that right or excuse a similar subsequent failure to perform any such term or condition by the other Party. No waiver shall be effective unless it has been given in writing and signed by the Party giving such waiver. No provision of this Agreement may be amended or modified other than by a written document signed by authorized representatives of each Party.

12.7

Relationship of the Parties. Nothing contained in this Agreement shall be deemed to constitute a partnership, joint venture, or legal entity of any type between MD RNA and Novartis, or to constitute one as the agent of the other. Moreover, each Party agrees not to construe this Agreement, or any of the transactions contemplated hereby, as a partnership for any tax purposes. Each Party shall act solely as an independent contractor, and nothing in this Agreement shall be construed to give any Party the power or authority to act for, bind, or commit the other.

12.8

Notices. All notices, consents, waivers, and other communications under this Agreement must be in writing and will be deemed to have been duly given when: (a) delivered by hand (with written confirmation of receipt); (b) sent by fax (with written confirmation of receipt), provided , that a copy is immediately sent by an internationally recognized overnight delivery service (receipt requested); or (c) when received by the addressee, if sent by an internationally recognized overnight delivery service (receipt requested), in each case to the appropriate addresses and fax numbers set forth below (or to such other addresses and fax numbers as a Party may designate by notice):

If to MD RNA:

MD RNA, Inc.

3830 Monte Villa Parkway

Bothell, WA 98021

Attn: Mr. J. Michael French, President and CEO

Fax: (425) 908-3101

with a copy to:

Sills Cummis & Gross

One Riverfront Plaza

Newark, NJ 07102

Attn: Ira A. Rosenberg, Esq.

Fax: (973) 643-6500

If to Novartis:

Novartis Institutes for BioMedical Research, Inc.

220 Massachusetts Avenue

Cambridge, Massachusetts 02139

Attn: General Counsel

Fax: (617) 871-3354

12.9

Further Assurances. Novartis and MD RNA hereby covenant and agree without the necessity of any further consideration, to execute, acknowledge and deliver any and all such other documents and take any such other action as may be reasonably necessary to carry out the intent and purposes of this Agreement.

12.10

Compliance with Law. Each Party shall perform its obligations under this Agreement in accordance with all applicable laws. No Party shall, or shall be required to, undertake any activity under or in connection with this Agreement which violates, or which it believes, in good faith, may violate, any applicable law.

12.11

No Third Party Beneficiary Rights. The provisions of this Agreement are for the sole benefit of the Parties and their successors and permitted assigns, and they shall not be construed as conferring any rights to any Third Party (including any third party beneficiary rights).

12.12

English Language. This Agreement is written and executed in the English language. Any translation into any other language shall not be an official version of this Agreement and in the event of any conflict in interpretation between the English version and such translation, the English version shall prevail.

12.13

Expenses. Except as otherwise expressly provided in this Agreement, each Party shall pay the fees and expenses of its respective lawyers and other experts and all other expenses and costs incurred by such Party incidental to the negotiation, preparation, execution and delivery of this Agreement.

12.14

Entire Agreement. This Agreement, together with its Exhibits, sets forth the entire agreement and understanding of the Parties as to the subject matter hereof and supersedes all proposals, oral or written, and all other prior communications between the Parties, including the Confidentiality Agreement, with respect to such subject matter. In the event of any conflict between a substantive provision of this Agreement and any Exhibit hereto, the substantive provisions of this Agreement shall prevail.

12.15

Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

12.16

Cumulative Remedies. No remedy referred to in this Agreement is intended to be exclusive, but each shall be cumulative and in addition to any other remedy referred to in this Agreement or otherwise available under law.

IN WITNESS WHEREOF, the Parties intending to be bound have caused this Agreement to be executed by their duly authorized representatives.


NOVARTIS INSTITUTES FOR BIOMEDICAL RESEARCH, INC.		MD RNA, INC.

By:	/s/ Mark C. Fishman	By:	/s/ J. Michael French
Name:	Mark C. Fishman	Name:	J. Michael French
Title:	President and CEO	Title:	President and CEO

EXHIBIT A

MD RNA PATENTS


07-10US	U.S. 12/114,284 FD: 5/2/200 EPD: 5/4/2007	U.S. 60/972,653 U.S. 60/952,667 U.S. 60/947,282 U.S. 60/916,131 U.S. 60/972,590 U.S. 61/022,571	AMINO ACID LIPIDS AND USES THEREOF

07-15P1	U.S. 60/972,590 FD: 9/14/2007 EPD: N/A	N/A	EMULSION COMPOSITIONS FOR INTERFERING RNA AND USES THEREOF

07-21P1	U.S. 61/022,571 FD: 1/22/2008 EPD: N/A	N/A	DISPERSION COMPOSITIONS FOR INTERFERING RNA AND USES THEREOF

07-23P1	U.S. 60/976,894 FD: 10/2/2007 EPD: N/A	N/A	LIPOPEPTIDES FOR DELIVERY OF INTERFERING RNA AGENTS

07-23PCT	PCT/US2008/078627 FD: 10/2/2008 EPD: 10/2/2007	U.S. 60/976,894	LIPOPEPTIDES FOR DELIVERY OF NUCLEIC ACIDS

[***]	[***]	[***]	[***]

07-10P1	U.S. 60/916,131 FD: 5/4/2007 EPD: N/A	N/A	AMINO ACID LIPID COMPOSITIONS AND METHODS FOR DELIVERING RNA THERAPEUTICS

07-10P2	U.S. 60/947,282 FD: 6/29/2007 EPD: N/A	N/A	AMINO ACID LIPID COMPOSITIONS AND METHODS FOR DELIVERING RNA THERAPEUTICS

07-10P3	U.S. 60/953,667 FD: 8/2/2007 EPD: N/A	N/A	AMINO ACID LIPID COMPOSITIONS AND METHODS FOR DELIVERING RNA THERAPEUTICS

07-10P4	U.S. 60/972,653 FD: 9/14/2007 EPD: N/A	N/A	AMINO ACID LIPIDS AND USES FOR RNA THERAPEUTICS

07-10-PCT	PCT/US2008/62526 FD: 5/2/200 EPD: 5/4/2007	U.S. 60/972,653 U.S. 60/953,667 U.S. 60/947,282 U.S. 60/916,131 U.S. 60/972,590 U.S. 61/022,571	AMINO ACID LIPIDS AND USES THEREOF

08-17-P1	U.S. 61/116,258	N/A	COMPOSITIONS AND METHODS FOR TRIGGERED RELEASE THERAPEUTICS

08-18P1	U.S. 61/141,080	N/A	COMPOSITIONS AND METHODS FOR EFFICIENT DELIVERY OF GENE SILENCING THERAPEUTICS

EXHIBIT B

MICHIGAN PATENTS


University of Michigan	[***]	[***]	[***]
University of Michigan	[***]	[***]	[***]
University of Michigan	[***]	[***]	[***]

EXHIBIT C

SAMPLE INVOICE


Sender’s Logo		INVOICE

		INVOICE DATE:
Street		200
Town, Country
Phone and Fax Nr.		INVOICE No.: XXXX

Bill To:	For:


And via fax to no. +1 441 296 5083
DESCRIPTION [ Please specify the event for which the invoice is due]		AMOUNT (USD)

		US$ 000,000.00

Novartis Contract Code

Please remit by wire transfer within 60 days to:

Receiving Bank -
Swift Code -
ABA Number -
Credit Account -
Beneficiary -

TOTAL		US$ 000,000.00

If you have any questions concerning this invoice, contact

or e-mail to

VAT -Reg. No. Xxxxxxxxxx (if applicable)

EXHIBIT D

MICHIGAN LICENSE

LICENSE AGREEMENT

This Agreement is effective as of May 7, 2008 (the “Effective Date”), between Nastech Pharmaceutical Company Incorporated (“LICENSEE”) having the address in Article 13 below, and the Regents of the University of Michigan, a constitutional corporation of the State of Michigan (“MICHIGAN”). LICENSEE and MICHIGAN agree as follows:

ARTICLE 1 - DEFINITIONS

1.1 “COMBINATION PRODUCT” means a LICENSED PRODUCT which incorporates two or more molecules, one of which is (or incorporates) an RNA sequence which is pharmacologically active (an “RNA ACTIVE”) and the other(s) of which are also pharmacologically active but have a mechanism of action different from such RNA sequence (“OTHER ACTIVE”).

1.2 “FIELD OF USE” means the research, development, manufacture, use or sale of LICENSED PRODUCTS for the treatment of human and veterinary disease.

1.3 “FIRST COMMERCIAL SALE” means the first sale of any LICENSED PRODUCT by LICENSEE or a SUBLICENSEE, other than sale of a LICENSED PRODUCT for use in trials, such as field trials or clinical trials, being conducted to obtain FDA or other governmental approvals to market LICENSED PRODUCTS to use LICENSED PROCESSES.

1.4 “LICENSED PROCESS(ES)” means any process or method that, but for this Agreement, comprises an infringement (including contributory or inducement) of a VALID CLAIM.

1.5 “LICENSED PRODUCT(S)” means any pharmaceutical formulation which incorporates a component that, but for this Agreement, comprises an infringement (including contributory or inducement) of a VALID CLAIM contained within PATENT RIGHTS in the country in which any such product or product part is made, used, imported, offered for sale or sold or is manufactured by using a LICENSED PROCESS.

1.6 “NET SALES” means the gross amount invoiced by or on behalf of LICENSEE or SUBLICENSEE on account of the sale, use, transfer or other disposition of a LICENSED PRODUCT, less reasonable, customary and documented deductions for any of the following:

(a) rebates, allowances, or discounts (including, without limitation, contractual discounts and allowances for Medicaid, Medicare, Medi-Cal and the like), to the extent actually granted;

(b) allowances or credits actually granted to customers on account of recall, rejection, charge-backs or return of LICENSED PRODUCTS;

(d) to the extent actually paid by seller, custom duties and charges for shipping and insuring the shipment of LICENSED PRODUCT;

(e) trade and quantity discounts and early payment cash discounts;

(f) retroactive price reductions that are actually allowed or granted;

Where LICENSEE receives any consideration other than cash for such transactions, an amount equal to the fair market value of such consideration, to be agreed upon in good faith by the parties hereto, shall be included in NET SALES.

With respect to COMBINATION PRODUCTs, the invoice price of such COMBINATION PRODUCT shall be set by LICENSEE in good faith and in a commercially reasonable manner, after taking account of the potential market for such COMBINATION PRODUCT and potential competitive products, applying a standard of fair and honest dealing with MICHIGAN. For purposes of calculating Running Royalties payable to MICHIGAN hereunder, the amount of the invoice price of the COMBINATION PRODUCT to be included in NET SALES shall be determined by multiplying (1) the invoice price of such COMBINATION PRODUCT by (2) a percentage equal to the percentage of such invoice price that is reasonably attributable to the RNA ACTIVE incorporated in the LICENSED PRODUCT. After discussion with MICHIGAN, but not less than 90 days prior to commencing sales of such COMBINATION PRODUCT, LICENSEE shall notify MICHIGAN in writing of such proposed percentage. Unless LICENSEE receives written objection from MICHIGAN to such proposal within 90 days following MICHIGAN’s receipt of such proposal, then the percentage so proposed shall be used to calculate the NET SALES of such COMBINATION PRODUCT for the purposes of computing royalties under this Agreement. In the event MICHIGAN objects to LICENSEE’s proposal, MICHIGAN and LICENSEE agree to negotiate in good faith to reach a mutually acceptable determination within 90 days. Where such dispute cannot be resolved within such 90 day period, the Parties agree to submit to mediation pursuant to Article 15 hereof. LICENSEE shall incorporate in the terms of any sublicense permitted hereunder terms, which obligate the SUBLICENSEE to comply in good faith with the obligations of this paragraph.

1.7 “OTHER ACTIVE” shall have the meaning specified in Section 1.1.

1.8 “PATENT RIGHTS” means MICHIGAN’S legal rights under the patent laws of the United States or relevant foreign countries for the following United States patent(s):

U.S. Patent [***]

1.9 “RNA ACTIVE” shall have the meaning specified in Section 1.1.

1.10 “ROYALTY PERIOD(S)” means the six-month periods ending on the last days of June and December each year.

1.11 “SUBLICENSEE(s)” means any person or entity sublicensed, or granted an option for a sublicense, by LICENSEE under this Agreement.

1.12 “TERRITORY” means all the countries of the world.

1.13 “VALID CLAIM” means (as to whether a molecule, formulation, method of use or other activity is covered) any claim set forth in an issued and unexpired patent that (i) has not been revoked or held unenforceable, unpatentable or invalid by a final decision of a court or a governmental agency of competent jurisdiction (including without limitation any competent patent office), from which decision no further appeal is possible and/or (ii) has not been withdrawn, disclaimed, denied or admitted by MICHIGAN to be invalid or unenforceable .

ARTICLE 2 - GRANT OF LICENSE

2.1 MICHIGAN hereby grants to LICENSEE an exclusive license under the PATENT RIGHTS, with the right to grant sublicenses, in each case subject to the terms and conditions of this Agreement, in the FIELD OF USE and the TERRITORY to make, have made, import, use, market, offer for sale and sell LICENSED PRODUCTS and to practice LICENSED PROCESSES.

2.2 Without limiting any other rights it may have, MICHIGAN specifically reserves the right to practice the PATENT RIGHTS for research, public service, internal (including clinical) and/or educational purposes, and the right to grant the same limited rights to other non-profit research institutions.

2.3 This Agreement shall extend until expiration of the last to expire of the PATENT RIGHTS, unless sooner terminated as provided in another specific article of this Agreement.

2.4 LICENSEE agrees that LICENSED PRODUCTS used, leased or sold in the United States shall be manufactured substantially in the United States.

2.5 Any and all licenses granted hereunder are subject to the rights, conditions and limitations imposed by U.S. law for PATENT RIGHTS supported by federal funding (see 35 U.S.C § 202 et seq. and regulations pertaining thereto).

ARTICLE 3 - CONSIDERATION

3.1 LICENSEE shall pay royalties to MICHIGAN until the expiration date of the last to expire of PATENT RIGHTS or until this Agreement is terminated. Royalties shall include:

(a) A License Issue Fee equal to [***] U.S. dollars ($[***]), payable in three equal installments in accordance with the following schedule:

(i) [***] dollars ($[***]) within fourteen (14) days following the complete execution of this Agreement (the “First Installment”);

(ii) An second installment of [***] dollars ($[***]) no later than six months after payment of the First Installment; and

(iii) A third installment of [***] dollars ($[***]) no later than the first anniversary of the payment of the First Installment.

All payments of the License Issue Fee shall be nonrefundable. LICENSEE will pay further fees in the form of reimbursement of certain costs pursuant to Article 7 hereof. If LICENSEE terminates the Agreement prior to the first anniversary of the First Installment, the total License Issue Fee shall still be due upon termination.

(b) Running Royalties equal to [***] percent ([***]%) of NET SALES by LICENSEE of LICENSED PRODUCTS or [***] percent ([***]%) of NET SALES by a SUBLICENSEE of LICENSED PRODUCTS. If LICENSEE makes any NET SALES to any party in any way directly or indirectly controlling, controlled by or under the common control with LICENSEE, at a price less than the regular price charged to unaffiliated third parties, the Running Royalties payable to MICHIGAN shall be computed on the basis of the regular price charged to such unaffiliated third parties

(c) In the event it is necessary for LICENSEE to obtain one or more licenses from third parties in order to make, have made, use, import, sell or offer for sale a LICENSED PRODUCT, royalty stacking provisions will reduce the Running Royalties payable by LICENSEE to MICHIGAN for any ROYALTY PERIOD in an amount equal to royalties paid pursuant to such licenses during such ROYALTY PERIOD. In no case shall MICHIGAN’S Running Royalties for such ROYALTY PERIOD be reduced to less than [***] percent ([***]%) of NET SALES by LICENSEE of LICENSED PRODUCTS or to less than [***] percent ([***]%) of NET SALES by SUBLICENSEE(S) of LICENSED PRODUCTS. These royalty-stacking provisions defined in this paragraph do not apply to COMBINATION PRODUCTS.

(d) [***] percent ([***]%) of all payments which are not based upon NET SALES received by LICENSEE from SUBLICENSEES or assignees in consideration for LICENSED PRODUCTS (e.g., license issue fees, maintenance fees, milestone payments, other non–sales based payments) (such payments, collectively, “Non-Sales Sublicense Revenue”). With respect to Non-Sales Sublicense Revenue received for the achievement of specific development, regulatory or commercialization milestones similar to those described in the Milestone Payments below, MICHIGAN shall be entitled to receive the greater of (i) MICHIGAN’s share of Non-Sales Sublicense Revenue for the milestone, or (ii) the amount of the corresponding Milestone Payment, but not both. For clarity,

payments for the sale of substantially all of the business or assets of LICENSEE or its affiliate (whether by merger, sale of stock, sale of assets or otherwise) are not Non-Sales Sublicense Revenues.

(e) Reimbursement of patent prosecution costs of $[***] incurred by MICHIGAN through October 28, 2007. No later than three (3) days following the complete execution of this Agreement, MICHIGAN shall invoice LICENSEE for such costs and provide reasonable supporting documentation therefor, and such invoice shall be due and payable simultaneously with the payment of the First Installment of the License Issue Fee, and in any event no later than fourteen (14) days after receipt of such invoice and the supporting documentation.

(f) LICENSEE shall pay to MICHIGAN minimum annual royalties (“Annual Fee”) of [***] U.S. dollars ($[***]). This Annual Fee is accrued January 1 ^st beginning in 2009 and continuing in each year thereafter during the term of this agreement. The Annual Fee is payable with the semiannual report which is required under Article 4 to be delivered to MICHIGAN on or prior to July 31 for the ROYALTY PERIOD in which the Annual Fee accrues. LICENSEE may credit each Annual Fee in full against all royalties under subparagraphs (b) and (d) above otherwise due MICHIGAN for such ROYALTY PERIOD or the next succeeding ROYALTY PERIOD. Should this Agreement terminate or expire other than on a December 31, the Annual Fee for such portion of a year shall be determined by multiplying the amount set forth above for the given year by a fraction, the numerator of which shall be the number of days since the prior January 1 during which the Agreement is in effect and the denominator of which shall be three hundred and sixty-five.

(g) For each LICENSED PRODUCT which is directed at either (i) a gene target that has not been a target of a previous LICENSED PRODUCT (each, a “NEW TARGET”) or (ii) a gene target that has been the target of a previous LICENSED PRODUCT but the disease indication of the later LICENSED PRODUCT differs from such previous LICENSED PRODUCT (a “NEW TARGET INDICATION”), LICENSEE shall pay to MICHIGAN each Milestone Payment specified below which has not previously been paid for a LICENSED PRODUCT directed at such NEW TARGET or at such NEW TARGET INDICATION:

1) $[***] upon [***]

2) $[***] upon [***]

3) $[***] upon [***]

4) $[***] upon [***]

For clarification, a new formulation of a LICENSED PRODUCT for which Milestone Payments have previously been made shall not be deemed a new LICENSED PRODUCT for purposes of this paragraph g if it is directed at the same gene target as a prior formulation and is differentiated from such prior formulation solely because such new formulation is designed to permit a new method of administration (e.g., oral, buccal,

transdermal, etc.) or because its pharmacodynamic or pharmacokinetic profile differs from that of the prior formulation.

Milestone payments are non-refundable and non-creditable against future royalties with the exception of situations as outlined within paragraph 3.1 (d) i and ii.

3.2 LICENSEE shall be responsible for the payment of all taxes, duties, levies, and other charges (other than income taxes, if any) imposed by any taxing authority with respect to the royalties payable to MICHIGAN under this Agreement. Should LICENSEE be required under any law or regulation of any government entity authority to withhold or deduct in connection with such charges any portion of the payments on royalties due to MICHIGAN, then the sum payable to MICHIGAN shall be increased by the amount necessary to yield to MICHIGAN an amount equal to the sum it would have received had no withholdings or deductions been made. MICHIGAN shall cooperate reasonably with LICENSEE in the event LICENSEE elects to assert, at its own expense, MICHIGAN’s exemption from any such tax or deduction.

3.3 LICENSEE is only obligated to pay Running Royalties once on any sale or transfer of a unit of LICENSED PRODUCT resulting in NET SALES, regardless of how many VALID CLAIMS cover such sale or transfer.

3.4 Royalty payments shall be made to “The Regents of the University of Michigan” in United States dollars. Payments drawn directly on a U.S. bank may be made by either check to the address in Article 13 or by wire transfer. Any payment drawn on a foreign bank or foreign branch of a U.S. bank shall be made only by wire transfer. Wire transfers shall be made in accordance with the following or any other instructions as may be specified in writing by MICHIGAN: [***]. In reporting NET SALES and other revenue in any report required under Article 4, LICENSEE shall convert any revenues it receives in foreign currency into its equivalent in United States Dollars at the most recent exchange rate published in The Wall Street Journal on the last business day of the ROYALTY PERIOD during which such payments were received by LICENSEE, or at such other exchange rate as the parties may agree to in writing.

3.5 Except as otherwise specified herein, all payments which become due during any ROYALTY PERIOD shall be made simultaneously with submission of the reports required by Article 4 for such ROYALTY PERIOD. All amounts due under this Agreement, including amounts due for the payment of patent expenses, shall, if overdue, be subject either (a) to a charge of interest compounded monthly until payment, at a per annum rate of five percent (5%) above the prime rate in effect at the JP Morgan Chase Bank, N.A. or its successor bank on the due date (or at the highest allowed rate if a lower rate is required by law) or (b) to a charge of $250, whichever is greater. The payment of such interest shall not foreclose MICHIGAN from exercising any other rights it may have resulting from any late payment. LICENSEE shall reimburse MICHIGAN for the costs and expenses, including reasonable attorney fees, paid in order to collect any amounts overdue more than 120 days.

ARTICLE 4 - REPORTS

4.1 Until the FIRST COMMERCIAL SALE, LICENSEE shall provide to MICHIGAN a written annual report on or before July 31 of each year beginning in 2009. The annual report shall include: reports of progress on research and development, regulatory approvals, manufacturing, sublicensing, marketing and sales activity during the preceding twelve (12) months, and plans for the coming year. LICENSEE also shall report to MICHIGAN the date of First Commercial Sale of each LICENSED PRODUCT in each country within thirty (30) days of occurrence.

4.2 After the FIRST COMMERCIAL SALE, LICENSEE shall provide semi-annual reports to MICHIGAN. By each July 31 and January 31 (i.e., within one month after each ROYALTY PERIOD closes, including the close of the ROYALTY PERIOD immediately following any termination of this Agreement), LICENSEE shall report to MICHIGAN, subject to commercially reasonable terms of confidentiality with SUBLICENSEES(S) for that ROYALTY PERIOD:

(a) the number of LICENSED PRODUCTS sold or otherwise distributed by LICENSEE and each SUBLICENSEE.

(b) NET SALES of LICENSED PRODUCTS sold or otherwise distributed by LICENSEE and all SUBLICENSEES, including an accounting of all revenues received and deductions taken in determining NET SALES.

(d) royalties due on additional payments from SUBLICENSEES under Paragraph 3.1 above, including supporting figures.

(e) foreign currency conversion rate and calculations (if applicable).

(f) total royalties due.

(g) names, addresses, and U.S.P.T.O. Entity Status (as discussed in Paragraph 4.5) of all SUBLICENSEES having a sublicense or option therefor any time during the particular ROYALTY PERIOD.

(h) for each sublicense or amendment thereto completed in the particular ROYALTY PERIOD (including agreements under which LICENSEE will have LICENSED PRODUCTS made by a third party), the date of each agreement and amendment, the territory of the sublicense, the scope of the sublicense, and the nature, timing and amounts of all fees and royalties to be paid thereunder.

(i) notwithstanding any other report previously given hereunder, any milestone (under Article 3 or Article 5) that has been achieved, and any milestone that was due during the ROYALTY PERIOD but not achieved, specifying each milestone and whether or not it was achieved.

LICENSEE shall include the amount of all payments due, and the various calculations used to arrive at those amounts, including the quantity, description (nomenclature and type designation as described in Paragraph 4.3 below), country of manufacture and country of sale or use of LICENSED PRODUCTS and LICENSED PROCESSES. LICENSEE shall direct its authorized representative to certify that reports required hereunder are correct to the best of LICENSEE’s

knowledge and information. Failure to provide reports as required under this Article 4 shall be a material breach of this Agreement.

If no payment is due, LICENSEE shall so report to MICHIGAN that no payment is due.

4.3 LICENSEE shall promptly establish and consistently employ a system of specific nomenclature and type designations for LICENSED PRODUCTS to permit identification and segregation of various types where necessary. LICENSEE shall consistently employ, and shall require SUBLICENSEES to consistently and reasonably employ the system when rendering invoices thereon and shall inform MICHIGAN, or its auditors, when requested, as to the details concerning such nomenclature system, all additions thereto and changes therein.

4.4 LICENSEE shall keep, and shall require SUBLICENSEES to keep, true and accurate records containing data reasonably required for the computation and verification of payments due under this Agreement. LICENSEE shall, and it shall require each SUBLICENSEE and those making LICENSED PRODUCTS to: (a) open such records for inspection upon reasonable notice during business hours, and no more than once per year, by an independent certified accountant selected by MICHIGAN and reasonably acceptable to LICENSEE or such SUBLICENSEE, for the purpose of verifying the amount of payments due; and (b) retain such records for six (6) years from date of origination.

The terms of this Article shall survive any termination of this Agreement. MICHIGAN is responsible for all expenses of such inspection, except that if any inspection reveals an underpayment greater than five percent (5%) of royalties due MICHIGAN, then LICENSEE shall pay within twenty-one (21) days of written notice thereof all expenses of that inspection and the amount of the underpayment and interest to MICHIGAN at the rate specified in Section 3.5 from the date on which the unpaid amount was due until the date such amount is paid. LICENSEE shall also reimburse MICHIGAN for reasonable third party expenses, if any, required to collect the amount underpaid.

4.5 So that MICHIGAN may pay the proper U.S. Patent and Trademark Office fees relating to the PATENT RIGHTS, if LICENSEE, any company related to LICENSEE or SUBLICENSEE (including optionees) does not qualify as a “Small Entity” under U.S. patent laws, LICENSEE shall notify MICHIGAN immediately. The parties understand that the changes to LICENSEE’s, SUBLICENSEE’s, or optionees’ businesses that might affect entity status include: acquisitions, mergers, hiring of a total of more than 500 total employees, sublicense agreements, and sublicense options.

ARTICLE 5 - DILIGENCE

5.1 LICENSEE shall use diligent and commercially reasonable efforts to (a) develop a program for exploiting the PATENT RIGHTS, (b) bring LICENSED PRODUCTS to market and (c) to market throughout the life of this Agreement any and all LICENSED PRODUCTS so developed and brought to market. LICENSEE has the responsibility to use diligent and

commercially reasonable efforts to obtain and retain any governmental approvals necessary to manufacture, have manufactured, use, import, distribute and/or sell LICENSED PRODUCTS.

5.2 As part of the diligence required by Paragraph 5.1, LICENSEE agrees to reach the following commercialization and research and development milestones for the LICENSED PRODUCTS (together the “MILESTONES”) by the following dates:

By [***] LICENSEE will have [***].

5.3 LICENSEE must achieve each MILESTONE on or before the deadline dates indicated and MICHIGAN shall have the sole right to determine that a MILESTONE has been reached, such determination not to be unreasonably withheld, conditioned or delayed. LICENSEE shall notify MICHIGAN within ten (10) days after each such deadline as to whether or not such MILESTONE was met. Should LICENSEE fail to achieve the above MILESTONES, LICENSEE will have the option to extend the MILESTONE timelines by supplementing the Annual Fees by an additional 50% and by meeting with MICHIGAN to revise the list and timelines for MILESTONES (“MODIFIED MILESTONES”). If LICENSEE cannot meet MODIFIED MILESTONES, LICENSEE will be deemed to be in material breach of this Agreement, and MICHIGAN may terminate the Agreement effective on thirty (30) days notice, unless LICENSEE achieves the MILESTONE within this thirty-day period. Notwithstanding, MICHIGAN may terminate this Agreement immediately if LICENSEE fails to achieve a MILESTONE by the indicated date and does not provide the notice to MICHIGAN referred to above.

5.4 MICHIGAN may terminate this license upon written notice if the FIRST COMMERCIAL SALE does not occur on or before the date nine (9) years after the Effective Date.

ARTICLE 6 - SUBLICENSING

6.1 LICENSEE shall notify MICHIGAN in writing of every sublicense agreement and each amendment thereto within thirty (30) days after its execution, and indicate the name of the SUBLICENSEE, the territory of the sublicense, the scope of the sublicense, and the nature and timing of all fees and royalties to be paid thereunder. Upon request, LICENSEE shall provide MICHIGAN with a copy of sublicense agreements in a form acceptable to LICENSEE and SUBLICENSEE so as to protect both parties’ confidentiality.

6.2 LICENSEE shall not receive from SUBLICENSEES anything of value other than cash payments in consideration for any sublicense under this Agreement, without the express prior written permission of MICHIGAN.

6.3 Upon any termination of this Agreement, (a) each sublicense granted by LICENSEE under this Agreement shall provide for its termination upon termination of this Agreement; and (b) each sublicense shall terminate upon termination of this Agreement unless LICENSEE has previously assigned its rights under the agreement to MICHIGAN in accordance with Section 14.11. Provided that, notwithstanding the foregoing, for a period of 90 days after termination of this Agreement, MICHIGAN agrees to negotiate in good faith with each SUBLICENSEE that (a) is not under common control or ownership with LICENSEE and (b) is not in material breach of its sublicense with LICENSEE at the time of the termination, to provide such SUBLICENSEE a license of the PATENT RIGHTS on similar financial terms contained in this Agreement with respect to the rights granted by LICENSEE to such SUBLICENSEE.

6.4 LICENSEE shall require that all sublicenses:

(1) be consistent with the terms and conditions of this Agreement;

(2) contain the SUBLICENSEE’S acknowledgment of the disclaimer of warranty and limitation on MICHIGAN’s liability, as provided by Article 9 below; and

(3) contain provisions under which the SUBLICENSEE accepts duties at least equivalent to those accepted by the LICENSEE in the following Paragraphs: [***].

ARTICLE 7 - PATENT APPLICATIONS AND MAINTENANCE

7.1 MICHIGAN has the right to control all aspects of filing, prosecuting, and maintaining all of the patents and patent applications that form the basis for the PATENT RIGHTS, interferences, and disputes (including litigation) regarding inventorship. LICENSEE shall fully cooperate in such activities.

7.2 MICHIGAN shall notify LICENSEE of all information received by MICHIGAN relating to the filing, prosecution and maintenance of the patents and patent applications which form the basis of the PATENT RIGHTS, and shall make reasonable efforts to allow LICENSEE to review, comment, and advise upon such information. If any of the licensed patents are involved in a proceeding in the U.S. patent office, including inter alia a reexamination or an interference, MICHIGAN shall also give LICENSEE an opportunity to review the strategy pursuant to the proceeding and the text of each document before filing in the proceeding, shall consult with LICENSEE in good faith with respect to such document, and shall reasonably consider LICENSEE’s comments and proposals with respect to such document and a strategy involving the proceeding. LICENSEE agrees to hold all such information confidential and to use the information provided by MICHIGAN only for the purpose of advancing MICHIGAN’s PATENT RIGHTS.

7.3 LICENSEE shall reimburse MICHIGAN for all fees and costs relating to the activities described in this Article. Such reimbursement shall be made within thirty (30) days of receipt of MICHIGAN’s invoice and shall be subject to the interest and other requirements specified in

Paragraph 3.5 above. Should MICHIGAN license the PATENT RIGHTS to one or more third parties in connection with products that do not incorporate an RNA ACTIVE sequence, then LICENSEE’S reimbursement shall be reduced by an amount proportionate to the total number of such licensees. For example if MICHIGAN executes two further licenses to use PATENT RIGHTS for products that do not incorporate an RNA ACTIVE sequence , then LICENSEE’s reimbursement of fees and costs described in this Article shall be reduced by two-thirds (2/3); if MICHIGAN executes only one such further license then LICENSEE’S costs shall be reduced by fifty percent (50%). MICHIGAN agrees to notify LICENSEE within thirty (30) days of the execution of any such other license to PATENT RIGHTS.

ARTICLE 8 - ENFORCEMENT

8.1 (a) Each party shall promptly advise the other in writing of any known acts of potential infringement of the PATENT RIGHTS by another party. LICENSEE has the first option to take action to enforce the PATENT RIGHTS against infringement by other parties within the TERRITORY and the FIELD OF USE, but LICENSEE shall notify MICHIGAN in writing thirty (30) days before filing any suit. LICENSEE shall not file any suit without a diligent investigation of the merits of such suit by its counsel, including with respect to PATENT RIGHTS. Licensee will have the right to join MICHIGAN as a co-plaintiff and MICHIGAN will consent to being named as such. Subject to Section 8.1(d) below, this right to take action includes defending any action for declaratory judgment of noninfringement or invalidity; and prosecuting, defending or settling all infringement and declaratory judgment actions at its expense and through counsel of its selection, except that LICENSEE shall make any such settlement only with the advice and consent of MICHIGAN, such consent not to be unreasonably withheld, conditioned or delayed.

(b) If LICENSEE determines to file suit or take other actions, MICHIGAN shall provide reasonable assistance to LICENSEE with respect to such actions, but only if LICENSEE reimburses MICHIGAN for out-of-pocket expenses incurred in connection with any such assistance rendered at LICENSEE’S request and if LICENSEE notifies MICHIGAN in writing thirty (30) days before filing any suit. If MICHIGAN is named as a party, MICHIGAN agrees to representation by LICENSEE’s counsel as joint clients unless and until, in the reasonable opinion of MICHIGAN’s counsel or LICENSEE’s counsel, representation of MICHIGAN and LICENSEE by a single counsel would present a conflict of interest, in which case MICHIGAN shall be entitled to counsel of its own choice at LICENSEE’s expense. In such case the Parties shall cooperate so as to reasonably limit the expenses of such litigation. LICENSEE shall reimburse or pay for MICHIGAN’s attorney’s fees and expenses incurred with respect to such litigation. If MICHIGAN is not named as a party, MICHIGAN retains the right to participate, with counsel of its own choosing and at its own expense, in any action under this Section 8.1.

(c) Except as may be provided in paragraph (d) below, LICENSEE shall defend, indemnify and hold harmless MICHIGAN with respect to any counterclaims asserted by an alleged infringer reasonably related to the enforcement of the PATENT RIGHTS in the FIELD OF USE under this Section 8.1, including but not limited to antitrust counterclaims and claims for recovery of attorney fees.

(d) If an action is brought by any third party claiming that any of the PATENT RIGHTS is invalid or unenforceable, the parties agree to promptly consult with each other concerning the defense of such action. If either party notifies the other that such defense should be undertaken, then LICENSEE shall control such defense and bear the expenses, including attorneys’ fees, associated with such defense. Allocation and reimbursement of expenses shall be controlled by Section 8.1(b) above,. If the parties disagree, then MICHIGAN, at its sole option, shall have the right to intervene and assume control over the defense of such claim and LICENSEE shall provide reasonable cooperation in the defense of such claim. Notwithstanding, if (a) a third party asserts such claim solely based on alleged acts of MICHIGAN and (b) MICHIGAN exercises its right to control, then MICHIGAN shall be responsible for the reasonable costs and fees of defending such claim.

8.2 If LICENSEE demonstrates to MICHIGAN that it has a reasonable basis to believe that a third party infringes the PATENT RIGHTS and undertakes to enforce and/or defend the PATENT RIGHTS by litigation in the United States, LICENSEE may temporarily withhold during the course of such litigation up to fifty percent (50%) of the payments otherwise thereafter due to MICHIGAN under Article 3 under the following terms: LICENSEE may apply the amounts withheld to pay up to one-half of LICENSEE’s out-of-pocket litigation expenses, including reasonable attorneys’ fees, but not including salaries of LICENSEE’s employees. If LICENSEE receives any payments as a result of any judgment rendered in litigation relating to the PATENT RIGHTS or any settlement thereof (“THIRD PARTY PAYMENTS”), such THIRD PARTY PAYMENTS shall be applied first to satisfy either Party’s unreimbursed expenses and legal fees for the litigation, next to reimburse MICHIGAN for any payments under Article 3 which are past due or were withheld pursuant to this Article 8. Any THIRD PARTY PAYMENTS received in excess of such reimbursements (“excess THIRD PARTY PAYMENTS”) shall be divided such that if (a) only PATENT RIGHTS or (b) the settlement award is broken down to distinguish as between damages for (i) PATENT RIGHTS and (ii) other patent rights, then LICENSEE shall pay MICHIGAN 40% of such excess THIRD PARTY PAYMENTS within 5 business days of the receipt thereof. If neither (a) nor (b) in the prior sentence applies, then the excess THIRD PARTY PAYMENTS shall be treated as Non-Sales Sublicense Revenue, as defined above. This provision shall control the division of excess THIRD PARTY PAYMENTS as to be received pursuant to a license granted as part of a settlement of such enforcement.

8.3 If LICENSEE fails to take action to abate any alleged infringement of patents which form the basis for the PATENT RIGHTS within sixty (60) days of a request by MICHIGAN to do so (or within a shorter period if required to preserve the legal rights of MICHIGAN under any applicable laws), then MICHIGAN has the right to take such action (including prosecution of a suit) at its expense and LICENSEE shall use reasonable efforts to cooperate in such action, at LICENSEE’s expense. During such action LICENSEE shall not have the right to grant sublicenses without MICHIGAN’s permission, and MICHIGAN has full authority to settle on such terms as MICHIGAN reasonably determines. If MICHIGAN receives any THIRD PARTY PAYMENTS as a result of any judgment rendered in litigation relating to the PATENT RIGHTS or any settlement thereof, such THIRD PARTY PAYMENTS shall be applied first to satisfy MICHIGAN’S unreimbursed expenses and legal fees for the litigation, next to reimburse

MICHIGAN for any payments which are past due or were withheld pursuant to this Article 8, and then to reimburse LICENSEE for any reasonable unreimbursed expenses and legal fees for the litigation (such reimbursements not to exceed the THIRD PARTY PAYMENTS which MICHIGAN actually receives). Any THIRD PARTY PAYMENTS received in excess of such reimbursements shall be divided equally between LICENSEE and MICHIGAN. This provision shall control the division of THIRD PARTY PAYMENTS received pursuant to a license granted as part of a settlement of such enforcement.

ARTICLE 9 - NO WARRANTIES; LIMITATION ON MICHIGAN’S LIABILITY

9.1 MICHIGAN, including its Regents, fellows, officers, employees and agents, makes no representations or warranties that PATENT RIGHTS are or will be held valid or enforceable, or that the manufacture, importation, use, offer for sale, sale or other distribution of any LICENSED PRODUCTS or LICENSED PROCESSES will not infringe any patent or other rights.

9.2 MICHIGAN, INCLUDING ITS REGENTS, FELLOWS, OFFICERS, EMPLOYEES AND AGENTS, MAKES NO REPRESENTATIONS, EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND ASSUMES NO RESPONSIBILITIES WHATEVER WITH RESPECT TO DESIGN, DEVELOPMENT, MANUFACTURE, USE, SALE OR OTHER DISPOSITION BY LICENSEE OR SUBLICENSEES OF LICENSED PRODUCTS OR LICENSED PROCESSES.

9.3 LICENSEE AND SUBLICENSEES ASSUME THE ENTIRE RISK AS TO PERFORMANCE OF LICENSED PRODUCTS AND LICENSED PROCESSES. In no event shall MICHIGAN, including its Regents, fellows, officers, employees and agents, be responsible or liable to LICENSEE, SUBLICENSEES or any other individual or entity for any direct, indirect, special, incidental, or consequential damages or lost profits or other economic l

SITE SEARCH

AGREEMENTS / CONTRACTS

CLAUSES

Search Contract Clauses >>

Browse Contract Clause Library>>

Get Email Updates