Provision Language
1. Sublicense
1.1 Sublicense Grant. Cellscript hereby grants to Company and Company hereby accepts from Cellscript a worldwide, non–exclusive sublicense under the Patent Rights during the Term to make, have made, import, use, offer for sale, sell and/or have sold Licensed Products according to the terms and conditions herein: (1) in Field of Use B for all uses in the In Vivo Field of Use, including: (a) all therapeutic and prophylactic uses in humans; (b) all non–therapeutic and non–prophylactic uses in humans; and (c) all uses, including therapeutic and prophylactic uses (e.g., Veterinary Products), in non–human animals; and (2) in Field of Use A for: research and screening uses, including pre–clinical research and screening comprising ex vivo uses inhuman or non–human animal cells and in vivo uses in animals that pertain to and support research, development, manufacture, regulatory approval and commercialization of Licensed Products for use in humans and non–human animals in the In Vivo Field of Use in (1)(a) through (1)(c), as all Fields of Use in (1) and (2) (collectively, the “Sublicensed Fields of Use”) and as said other terms which are not defined in this Section 1.1 are defined inSections1.2 and 6.1 herein (the “Sublicense”). The Sublicense includes the right for Company to grant sublicenses to its affiliates and Third Parties for all or any part of the rights and fields of use granted to Company, under terms that are consistent with this Agreement. No other rights or licenses are granted to Company hereunder by Cellscript. [***]
1.2 Related Definitions
“Exhibit A–1 Patent Rights” means [***]
“Exhibit A–2 Patent Rights” means [***]
“Patent Rights” means Exhibit A–1 Patent Rights and/or Exhibit A–2 Patent Rights.
“Exhibit D Patents” means all of Penn’s patent rights represented by or issuing from: (a) the United States patents and patent applications listed in Exhibit D; (b) any continuation, divisional, reexamination, and re–issue applications of (a); and(c) any extensions (a) or (b).
“Field of Use A” means and is limited to internal laboratory research or screening [***] For clarity, Field of Use A includes laboratory research use in animals or human or animal cells, living or dead, from any source, including for pre–clinical laboratory research in laboratory animals or cultured human or non–human animal cells for the purpose of generating data and information prior to use in clinical trials for a use that requires approval by the FDA or another regulatory organization. For further clarity, a party that has a sublicense in Field of Use A pertaining to a sublicensed therapeutic or prophylactic or diagnostic or prognostic use in Field of Use B shall have the right to perform pre–clinical research in Field of Use A comprising in vivo uses in non–human animals or ex vivo uses in human or non–human animal cells in order to obtain data and information to support pre–clinical development of such therapeutic, prophylactic, diagnostic or prognostic products.
“Field of Use B” means the field other than Field of Use A and includes but is not limited to therapeutic, prophylactic, diagnostic, prognostic and cosmetic uses in humans and agricultural, animal improvement and veterinary uses in animals. For clarity, Field of Use B includes any and all fields of use, including the In Vivo Field of Use and Ex Vivo Field of Use, other than for Field of Use A.
“Ex Vivo Field of Use” is a subfield of Field of Use A or Field of Use B wherein a product or method that is covered by Patent Rights (or Exhibit D Patents) is used in cells, tissues or organs that are ex vivo or outside of a living human or animal body or organism, whether those cells, tissues or organs are subsequently used only ex vivo, such as in culture, or are subsequently introduced into, used in or administered or applied to or on a living body or organism. [***]
“In Vivo Field of Use” is a subfield of Field of Use A or Field of Use B wherein a product or method that is covered by Patent Rights (or ExhibitD Patents) is used in vivo, [***]
“Diagnostic and Prognostic Field of Use” is a subfield of use within Field of Use B wherein a product or service covered by Patent Rights (or Exhibit D Patents) is used for diagnosis, prognosis or testing of a human or non–human animal or a sample therefrom in order to detect, identify, determine a cause, evaluate, analyze, understand, predict, rule in, or rule out a medical condition or disease or to predict an effect or response to treatment, and/or to monitor the effect of a treatment of such medical condition or disease. For clarity, a party that has a sublicense to make, have made, import, use, offer to sell and/or sell a Licensed Product for the Diagnostic and Prognostic Field of Use in conjunction with or pertaining to a product covered by Patent Rights (or Exhibit D Patents) for the In Vivo Field of Use in Field of Use B shall have the right to use said Licensed Product for diagnosis, prognosis or testing of a human or non–human animal or a sample therefrom, whether said diagnosis, prognosis or testing is performed in vitro, in vivo and/or ex vivo.
1.3 Reservation of Rights by Penn. Penn reserves the right to use, and to permit other non–commercial entities to use, the Patent Rights for educational and non–commercial research purposes.
1.4 U.S. Government Rights. The Parties acknowledge that the United States government retains rights in intellectual property funded under any grant or similar contract with a Federal agency. The License is expressly subject to all applicable United States government rights, including, but not limited to, any applicable requirement that products, which result from such intellectual property and are sold in the United States, must be substantially manufactured in the United States. To the extent any such U.S. manufacturing requirements apply, Cellscript shall, upon request of Company, use commercially reasonable efforts to cause Penn to seek a waiver from the United States government for Company in respect of such U.S. manufacturing requirements.
1.5 Sublicense Conditions. Company’s right to extend any or all of the rights granted to Company by Cellscript via a sublicense to affiliates or Third Parties is subject to each of the following conditions:
1.5.1 Company will have the right to grant further sublicenses to its affiliates and to Third Parties (“sub–sublicensees”) that permit multiple levels of sublicensing, including in Third Party sub–sublicenses that permit further levels of sublicensing (e.g., to “sub–sub–sublicensees”). In each further sub–sublicense agreement to an affiliate or Third Party, Company will require the sub–sublicensee to comply with terms and conditions that are consistent with this Agreement, and in each agreement for further sublicensing (e.g., by a sub–sublicensee of Company to a sub–sub–sublicensee), the party granting the further sublicense will require the party receiving the further sublicense to comply with terms and conditions that are consistent with its sub–sublicense agreement from Company. Except when used to clarify the meaning of the different terms in this Section 1.5.1, the term sublicense in this Agreement includes any permitted sub–sublicense, sub–sub–sublicense, etc. and the term sublicensee includes any permitted sub–sublicensee, sub–sub–sublicensee, etc.
1.5.2 Within [***] days after Company enters into a sublicense agreement, Company will deliver to Cellscript a complete and accurate copy of the entire sublicense agreement written in the English language, provided that Company will have the right to redact the terms and conditions of such sublicense agreement that are not necessary for Cellscript to confirm compliance with all terms and conditions required under this Sublicense, including Section 1.5 hereof. Cellscript’s receipt of the sublicense agreement will not constitute a waiver of any right or obligation of Cellscript or of Company under this Agreement.
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1.5.5 A sublicense granted by the Company or a further sublicensee thereof will not be assignable or transferable by said sublicensee or further sublicensee thereof without the prior written consent of Cellscript, except to an affiliate of the sublicensee of Company or an affiliate of said further sublicensee thereof, or to a Third Party company that: (i) can demonstrate based on reliable financial information that it has all technical knowledge, capabilities and/or financial resources needed to perform in all respects in the place and stead of said sublicensee or further sublicensee thereof;(ii) agrees to assume all duties and responsibilities under the sublicense; (iii) warrants that it will invest an amount of money that Company agrees is sufficient to develop and/or commercialize the sublicensed Licensed Product(s); (iv) purchases more than fifty percent (50%) of all of the sublicensee’s or the further sublicensee’s shares or assets to which the sublicense pertains; and (v) agrees in writing to be bound by all of the terms and conditions of the sublicense and a copy of such written undertaking is promptly provided to Company, which will provide a copy to Cellscript, which, in turn, will provide a copy to mRNA RiboTherapeutics.
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1.7 License to the Exhibit D Patents. Whereas Cellscript has an exclusive license from Penn for certain other U.S. patents and patent applications listed in Exhibit D attached hereto, including any continuation, divisional, reexamination, and re–issue applications and any patents or extensions of any of the foregoing (collectively referred to as “Exhibit D Patents” herein), which Exhibit D Patents are not included in Patent Rights herein; and whereas, Company desires a sublicense to Exhibit D Patents in the Sublicensed Fields of Use during the Term and Cellscript is willing to grant such a sublicense in the Sublicensed Fields of Use according to the terms and conditions herein, now, therefore, Cellscript hereby grants to Company and Company hereby accepts from Cellscript a limited worldwide, non–exclusive sublicense under Exhibit D Patents during the Term to make, have made, import, use, offer for sale, sell and/or have sold products comprising mRNA containing pseudouridine solely in the Sublicensed Fields of Use, and according to the terms and conditions herein. The sublicense includes the right for Company to grant sublicenses to its Affiliates and Third Parties for all or any part of the rights granted to Company in the Sublicensed Fields of Use, under terms that are consistent with this Agreement.
No other rights or licenses pertaining to Exhibit D Patents are granted by Cellscript to Company under this Agreement. For clarity, no rights or licenses are granted by Cellscript to Company: (x) in Field of Use A for the Research Products Field of Use; or (y) in Field of Use B for any use in humans or non–human animals for (i) the Ex Vivo Field of Use, or (ii) the Diagnostic and Prognostic Field of Use, or (iii) to make, have made, import, use, offer forsale, sell and/or have sold any product covered by Exhibit D Patents which does not comprise or use mRNA comprising pseudouridine. Company understands and agrees that, since the products sublicensed to Company pursuant to this Section 1.7 comprise or use mRNA comprising pseudouridine (which products are also covered by Patent Rights), Company shall pay to Cellscript the same milestone and other fees and royalties owed by Company pursuant to Article 3 of this Agreement; however, Company shall not owe any additional milestone or other fees or royalties for products covered by Exhibit D Patents in addition to the amounts owed by Company pursuant to Article 3 of this Agreement.
1.8 Relation of this Agreement to mRNA Ribo Therapeutics Sublicense Agreement. Concurrent with the execution of this Agreement, Company is entering into a separate sublicense agreement with mRNA RiboTherapeutics (the “mRNA RiboTherapeutics Sublicense Agreement”), pursuant to which mRNA RiboTherapeutics is granting Company a sublicense under Patent Rights with respect to certain fields of use that are different from and are not included within the scope of the Sublicense granted to Company in this Agreement.
2. Diligence
2.2 Company’s Efforts. Company will use commercially reasonable efforts to develop, commercialize, market and sell Licensed Products in the Sublicensed Fields of Use in a manner consistent with the Development Plan. In addition to Company’s own efforts to develop, commercialize, market and sell Licensed Products, the efforts of other parties, including Affiliates,Third Party sublicensees, contractors, Third Parties funded by Company under a research or service agreement, and distributors, will also be deemed as efforts of Company.
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2.4 Diligence Resources. Until the first Sale of the first Licensed Product in Field of Use B, Company will expend financial resources for the development and commercialization of the Licensed Products in amounts not less than the diligence minimums specified in the table below (“Development Expenditures”) in each [***] month period following the Effective Date. Development Expenditures shall include all research and development expenditures directly relating to Licensed Products, including salaries, overhead, sponsored research payments, contract research, regulatory expenses, and documented external consulting payments. Company’s expenditures of financial resources for the development and commercialization of Licensed Products in Field of Use B in amounts not less than the specified Development Expenditures will be deemed commercially reasonable efforts to develop, commercialize, market and sell Licensed Products in Field of Use B. If Company’s total expenditures for development and commercialization of Licensed Products in any [***] month period ending on an anniversary of the Effective Date do not meet or exceed the applicable diligence minimum, then Company will pay to Cellscript the amount of the shortfall. Company will make any payments of the shortfall to Cellscript together with the next Development Plan due to Cellscript under Section 2.1.
2.3 Diligence Events. Company, whether itself, or through its Affiliates, Third Party sublicensees, contractors, or Third Parties funded by Company under a research or service agreement, will use commercially reasonable efforts to achieve each of the milestone diligence events by the applicable completion date listed in the table below for the first Licensed Product for human therapeutic or prophylactic use in Field of Use B. Company will provide Cellscript with written notice within [***] days of first completion of each milestone diligence event for a Licensed Product for human therapeutic or prophylactic use in Field of Use B by Company or an Affiliate or Third Party sublicensee.
10. Additional Terms Regarding Sublicensing
10.1 Purpose of this Article. This Article 10 sets forth terms and conditions for further sublicensing by Primary Sublicensors in the Human In Vivo Therapeutics Field, wherein, for the purposes of this Article 10:
(a) “sublicensing” herein means any grant of a sublicense, covenant not to sue, or option for current or future rights under Patent Rights, and the noun “sublicense” herein means a document that grants such sublicense, covenant not to sue, or option for current or future rights under Patent Rights;
(b) “Primary Sublicensors” herein means (i) mRNA RiboTherapeutics, (ii) Cellscript, and (iii) any affiliate of (i) or (ii) that is granted a sublicense in the Human In Vivo Therapeutics Field; and
(c) “Human In Vivo Therapeutics Field” herein means any or all therapeutic and prophylactic use(s) in humans in the In Vivo Field of Use in Field of Use B.
For clarity and the absence of doubt, Article 10 shall not be interpreted in any way so as to limit, restrict or impose any terms or conditions on Primary Sublicensors’ rights to grant sublicenses under Patent Rights to any party at any time for any Field of Use other than the Human In Vivo Therapeutics Field
10.2 Human In Vivo Therapeutics Field Sublicenses. Subject to the rights of the Primary Sublicensors and their respective owners under Section 10.4, Cellscript, mRNA RiboTherapeutics and Company agree that, from the Effective Date [***], mRNA RiboTherapeutics and Cellscript wil lnot grant and will ensure that other Primary Sublicensors will not grant Human In Vivo Therapeutics Field Sublicenses, including this Sublicense, to [***]
“Human In Vivo Therapeutics Field Sublicense” means a sublicense to make, have made, use, import, offer for sale, sell and/or have sold any number of products covered by Patent Rights comprising or incorporating modified RNA for the Human In Vivo Therapeutics Field, but excluding Product Sublicenses.
10.3 Product Sublicenses. Subject to the rights of the Primary Sublicensors and their respective owners under Section 10.4, Cellscript, mRNA RiboTherapeutics and Company agree that, from the Effective Date until [***], Cellscript and mRNA RiboTherapeutics will (and will ensure that the other Primary Sublicensors will):
(a) grant Product Sublicenses only to [***],
wherein “Product Sublicenses” herein mean sublicenses under Patent Rights to research, develop, manufacture and/or commercialize specific products [***], for a therapeutic or prophylactic use in humans in the In Vivo Field of Use, and
wherein [***]
(b) only grant Product Sublicenses for a total of [***] products in the aggregate by all of the Primary Sublicensors across all such Product Sublicenses, [***]
(c) except as set forth in Sections 10.2 and 10.3, not otherwise grant sublicenses under the Patent Rights to research, develop, manufacture and/or commercialize products comprising or incorporating [***].
10.4 Sale of a Primary Sublicensor. Company understands and agrees that the owners of each of mRNA RiboTherapeutics and Cellscript shall have the right to sell all or any part of the outstanding stock or ownership interest or the business or the assets thereof, as applicable, of mRNA RiboTherapeutics and/or Cellscript and/or any of their respective affiliates that [***] at any time and without any conditions pursuant to this Agreement other than the requirements under Section 15.5,
except that, as a condition to any such sale occurring prior to April 1, 2020:
(a) the owners of each of mRNA RiboTherapeutics and Cellscript will sell mRNA RiboTherapeutics or Cellscript to only one (1) Third Party purchaser, [***]; and
(b) without in any way negating or ceding or giving up any of their current rights to sell all or any part of the stock, ownership interest, business or assets of mRNA RiboTherapeutics and/or Cellscript or to discuss any such sale with any potential purchaser at any time, including from the Effective Date of this Agreement until [***], the owners of mRNA RiboTherapeutics and Cellscript agree not to conduct Active Marketing of such sale of a Primary Sublicensor prior to [***],
wherein “[***]” herein means [***]; and
for the avoidance of doubt, Company agrees that this Section 10.4(a) shall not be interpreted so as to prohibit the owners of mRNA RiboTherapeutics and/or Cellscript from proposing or discussing [***];
(c) the purchaser of mRNA RiboTherapeutics or Cellscript, respectively, will pay [***];
(d) on the effective date of any such sale of [***] and the purchaser and their assignees and successors in ownership thereof shall have all the same rights as are held by Company under this Agreement to: (i) grant Human In Vivo Therapeutics Field Sublicenses to affiliates and Third Parties without being subject to any restrictions, limitations, or terms and conditions that apply to the Primary Sublicensors under Sections 10.2, and (ii) grant Product Sublicenses to affiliates and any Third Parties to research, develop, manufacture and/or commercialize any number of products comprising modified RNA covered by Patent Rights for any therapeutic or prophylactic use in humans in the In Vivo Field of Use without being subject to any of the restrictions, limitations or requirements that the sublicensee is a Small Biotech Company as is required of the Primary Sublicensors in Section 10.3; and
(e) on the effective date of any such sale of more than fifty percent (50%) of the outstanding stock or ownership interest or all of the business or assets of mRNA RiboTherapeutics or Cellscript, all of the rights of the Primary Sublicensors to grant Product Sublicenses pursuant to Section 10.3 shall remain only with the Primary Sublicensors for which their stock, ownership interest, business and assets were not sold.
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10.5 From [***], Primary Sublicensors and any owners, assignees or successors in ownership thereof shall have the right to grant any number of Human In Vivo Therapeutics Field Sublicense(s) to any parties without any conditions (other than those imposed by the Penn License Agreement or the Cellscript Sublicense Agreement) and to grant any number of Product Sublicenses or any other sublicenses of any kind under Patent Rights to any parties without any limitations or restrictions or requirements whatsoever under this Article 10.