-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JP0P9DYT0sda+7wEQ/5SCT3IF5bUIocYOGjtqdSdzIzvOQIUjFd+emoI52vSlyGG euO00YdQvqk5IL1JFHrqYQ== 0001021408-02-011558.txt : 20020903 0001021408-02-011558.hdr.sgml : 20020903 20020903161202 ACCESSION NUMBER: 0001021408-02-011558 CONFORMED SUBMISSION TYPE: S-3/A PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20020903 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BOSTON LIFE SCIENCES INC /DE CENTRAL INDEX KEY: 0000094784 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 870277826 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-88726 FILM NUMBER: 02755440 BUSINESS ADDRESS: STREET 1: 137 NEWBURY STREET STREET 2: 8TH FLOOR CITY: BOSTON STATE: MA ZIP: 02116 BUSINESS PHONE: 6174250200 MAIL ADDRESS: STREET 1: 137 NEWBURY STREET STREET 2: 8TH FLOOR CITY: BOSTON STATE: MA ZIP: 02116 FORMER COMPANY: FORMER CONFORMED NAME: STRATEGIC MEDICAL RESEARCH CORP /DE DATE OF NAME CHANGE: 19790521 FORMER COMPANY: FORMER CONFORMED NAME: GREENWICH PHARMACEUTICALS INC DATE OF NAME CHANGE: 19920703 S-3/A 1 ds3a.txt AMENDMENT NO. 2 TO FORM S-3 As filed with the Securities and Exchange Commission on September 3, 2002 Registration No. 333-88726 SECURITIES AND EXCHANGE COMMISSION Amendment No. 2 to FORM S-3 REGISTRATION STATEMENT Under THE SECURITIES ACT OF 1933 BOSTON LIFE SCIENCES, INC. (Exact name of registrant as specified in its charter) Delaware 87-0277826 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 20 Newbury Street 5/th/ Floor Boston, Massachusetts 02116 (617) 425-0200 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) S. David Hillson President and Chief Executive Officer Boston Life Sciences, Inc. 20 Newbury Street 5/th/ Floor Boston, Massachusetts 02116 (617) 425-0200 (Name, address, including zip code, and telephone number, including area code, of agent for service) Copies to: Steven A. Wilcox Ropes & Gray One International Place Boston, MA 02110-2624 (617) 951-7000 Approximate date of commencement of proposed sale to the public: From time to time after this Registration Statement is declared effective. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] Calculation of Registration Fee
- ----------------------------------------------------------------------------------------------------------- Amount Proposed maximum Proposed maximum Amount of Title of each class of to be offering price aggregate registration Securities to be registered registered (1) per unit offering price fee - ----------------------------------------------------------------------------------------------------------- Common Stock $.01 par value 2,367,773 $1.56 (2) $3,693,726 (2) $ 340 (4) 163,110 $1.06 (3) $ 172,897 (3) $ 16 (5) - ------------------------------------------------------------------------------------------------------------
(1) Shares of Common Stock which may be offered pursuant to this Registration Statement include 931,315 shares issuable upon the exercise of certain warrants (the "Warrants"). (2) In accordance with Rule 457(c), the price shown is estimated solely for the purposes of calculating the registration fee, and is based upon the average of the reported high and low sales price of the Common Stock as reported on the Nasdaq National Market on May 16, 2002. (3) In accordance with Rule 457(c), the price shown is estimated solely for the purpose of calculating the registration fee, and is based upon the average of the reported high and low sales price of the Common Stock as reported on on the Nasdaq National Market on August 30, 2002. (4) Previously paid by the Registrant. (5) Pursuant to Rule 457(a), an additional $16 in registration fees will be paid by the Registrant for the addition of 163,110 shares. The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this registration statement shall become effective on such date as the Commission, acting pursuant to Section 8(a), may determine. The information in this prospectus is not complete and may be changed. These securities may not be sold and an offer to buy these securities may not be accepted until the registration statement filed with the Security and Exchange Commission is effective. This prospectus is not an offer to sell these securities, and offers to buy these securities are not being so solicited in any state where the offer or sale is not permitted. SUBJECT TO COMPLETION, September 3, 2002 PROSPECTUS 2,530,883 Shares Boston Life Sciences, Inc. Common Stock These shares are being offered for sale by the selling stockholders listed on page 16. The selling stockholders may sell the common stock at prices and on terms determined by the market, in negotiated transactions or through underwriters. The selling stockholders may also sell the common stock under Rule 144 of the Securities Act of 1933. The common stock is traded on the Nasdaq National Market under the symbol "BLSI". On August 30, 2002, the reported closing price of the common stock was $1.07 per share. An investment in the shares offered hereby involves a high degree of risk. See "Risk Factors" beginning on page 2 of this Prospectus. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense. The date of this prospectus is 2002. TABLE OF CONTENTS PAGE SUMMARY 1 RISK FACTORS............................................................ 2 USE OF PROCEEDS......................................................... 17 ISSUANCE OF COMMON STOCK AND WARRANTS TO SELLING STOCKHOLDERS........... 17 SELLING STOCKHOLDERS.................................................... 18 PLAN OF DISTRIBUTION.................................................... 20 LEGAL MATTERS........................................................... 22 EXPERTS................................................................. 22 AVAILABLE INFORMATION................................................... 22 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE......................... 23 SUMMARY We are a development stage biotechnology company engaged in the research and development of biopharmaceutical products for the diagnosis and treatment of central nervous system diseases and for the treatment of some cancers and autoimmune diseases. Our products currently in development include: . ALTROPANE(TM), an imaging agent for the diagnosis of Parkinson's Disease, which we refer to as PD, and Attention Deficit Hyperactivity Disorder, which we refer to as ADHD; . Troponin I for the treatment of cancer; . Inosine and Axogenesis Factor 1, which we refer to as AF-1, for the treatment of stroke and spinal cord injury; . Compounds for the treatment of PD and other central nervous system disorders; . C-MAF for the treatment of autoimmune disease and allergies; . FLOURATEC(TM), a "second-generation" imaging agent for the diagnosis of PD and ADHD. All of the technologies currently under development were invented or discovered by researchers working at Harvard University and its affiliated hospitals, which we refer to as Harvard and its affiliates and have been licensed to us. Our principal executive offices are located at 20 Newbury St. 5th Floor, Boston, Massachusetts 02116, and the telephone number is (617) 425-0200. Our overall corporate strategy is as follows: . Obtain the licensing rights to recently discovered or previously under-developed technologies from academic research centers, predominately Harvard and its affiliates; . Work with the scientist who discovered the technology at their laboratory, usually within their university research lab or an affiliated hospital to validate the scientific basis for the technology and achieve the necessary "proof of principle" to merit further research and development. . Contract with qualified outside service providers, including research facilities and clinical research organizations, to complete the necessary pre-clinical studies and programs necessary to file an Investigational New Drug ("IND") and initiate early stage clinical trials in humans. . Establish partnership and collaborative relationships with established pharmaceutical and biotechnology companies to conduct and fund the more expensive later stage clinical trials and market any approved products. We currently outsource all of our research and development, preclinical and clinical activities for all of our products, with the exception of limited manufacturing capability for the quantities of Troponin needed for early stage clinical trials. We expect to continue to outsource these activities in the future. We do not rely significantly on any particular company or third party service provider in the outsourcing of our research and development, preclinical and clinical activities. Under the terms of our agreements with these outside service providers, we are usually required to make an initial down payment when the contract is signed. Subsequent payments are usually made based on the completion of various stages of the contract such as competition of a study and delivery of a final report. Our principal executive offices are located at 20 Newbury Street, 5th Floor, Boston, Massachusetts 02116, and the telephone number is (617) 425-0200. 1 RISK FACTORS Investing in our common stock is very risky. You should be able to bear a complete loss of your investment. This prospectus, including the documents incorporated by reference, contains forward-looking statements that involve risks or uncertainties. Actual events or results may differ materially from those discussed in this prospectus. Factors that could cause or contribute to such differences include the factors discussed below as well as those discussed elsewhere in this prospectus and in our filings with the Securities and Exchange Commission, or SEC. We are a development stage company, we have always had losses from our operations and we expect future losses. We will never be profitable unless we develop, and obtain regulatory approval and market acceptance of, our product candidates. Biotechnology companies that have no approved products or other sources of revenue are generally referred to as development stage companies. The majority of biotechnology companies are development stage companies, have no approved products or other sources of revenue, and have generated significant net losses. As of March 31, 2002, we have incurred cumulative net losses of approximately $78 million since inception. We have never generated revenues from product sales. We do not currently expect to generate revenues from product sales for at least the next twelve months, and probably longer. If we do generate revenues and operating profits in the future, our ability to continue to do so in the long term could be affected by the introduction of competitors' products and other market factors. We expect to incur significant operating losses for at least the next eighteen months, and probably longer. The level of our operating losses may increase in the future if more of our product candidates begin human clinical trials. We will never generate revenues or achieve profitability unless we develop, and obtain regulatory approval and market acceptance of, our product candidates. We will likely require additional funding in the future in order to continue our business and operations as currently conducted. If we are unable to secure such funding on acceptable terms, we may need to significantly reduce or even cease one or more of our research or development programs, or we may be 2 required to obtain funds through arrangements with others that may require us to surrender rights to some or all of our technologies. We spend a significant amount for research and development, including pre-clinical studies and clinical trials of our technologies. We believe that the cash, cash equivalents, and investments available at June 30, 2002 will provide sufficient working capital to meet our anticipated expenditures for the next twelve months. Thereafter, we may need to raise substantial additional capital if we are unable to generate sufficient revenue from product sales or through collaborative arrangements with third parties. To date, we have always experienced negative cash flows from operations and have funded our operations primarily from equity financings. If adequate funds are not readily available, we may need to significantly reduce or even cease one or more of our research or development programs. Alternatively, to secure such funds, we may be required to enter financing arrangements with others that may require us to surrender rights to some or all of our technologies. If the results of our current or future clinical trials are not favorable, it may negatively affect our ability to raise additional funds. If we are successful in obtaining additional equity financing, the terms of such financing will have the effect of diluting the holdings and the rights of our stockholders. Estimates about how much funding will be required are based on a number of assumptions, all of which are subject to change based on the results and progress of our research and development activities. Our success depends on our ability to successfully develop our product candidates into commercial products. To date, we have not marketed, distributed or sold any products and, with the exception of the ALTROPANE(TM) imaging agent, all of our technologies and early-stage product candidates are in pre-clinical development. The success of our business depends primarily upon our ability to successfully develop and commercialize our product candidates. Successful research and product development in the biotechnology industry is highly uncertain, and very few research and development projects produce a commercial product. In the biotechnology industry, it has been estimated that less than five percent of the technologies for which research and development efforts are initiated ultimately result in an approved product. If our preclinical testing and clinical trials are not successful, we will not obtain regulatory approval for commercial sale of our product candidates. We will be required to demonstrate, through pre-clinical testing and clinical trials, that our drug candidates are safe and effective before we can obtain regulatory approval for the commercial sale of our drug candidates. Pre-clinical testing and clinical trials are lengthy and expensive and the historical rate of failure for drug candidates is high. Product candidates that appear promising in the early phases of development, such as in pre-clinical study or in early human clinical trials, may fail to demonstrate safety and efficacy in pivotal clinical trials. 3 Except for the ALTROPANE(TM) imaging agent, we have not yet submitted INDs for our other product candidates which will be required before we can begin clinical trials in the United States. We may not submit INDs for these product candidates if we are unable to accumulate the necessary pre-clinical data for the filing of an IND. The FDA may request additional pre-clinical data before allowing us to commerce clinical trials. The FDA or other applicable regulatory authorities may suspend clinical trials of a drug candidate at any time if we or they believe the subjects or patients participating in such trials are being exposed to unacceptable health risks or for other reasons. Adverse side effects of a drug candidate on subjects or patients in a clinical trial could result in the FDA or foreign regulatory authorities refusing to approve a particular drug candidate for any or all indications of use. Clinical trials require sufficient patient enrollment which is a function of many factors, including the size of the potential patient population, the nature of the protocol, the availability of existing treatments for the indicated disease and the eligibility criteria for enrolling in the clinical trial. Delays or difficulties in completing patient enrollment can result in increased costs and longer development times. 4 We cannot predict whether we will encounter problems with any of our completed, ongoing or planned clinical trials that will cause us or regulatory authorities to delay or suspend those trials, or delay the analysis of data from our completed or ongoing clinical trials. Any of the following could delay the initiation or the completion of our ongoing and planned clinical trials: . ongoing discussions with the FDA or comparable foreign authorities regarding the scope or design of our clinical trials; . delays in enrolling patients and volunteers into clinical trials; . lower than anticipated retention rate of patients and volunteers in clinical trials; . negative results of clinical trials; . insufficient supply or deficient quality of drug candidate materials or other materials necessary for the conduct of our clinical trials; or . serious and unexpected drug-related side-effects experienced by participants in our clinical trials. Our product candidates are subject to rigorous regulatory review and, even if approved, remain subject to extensive regulation. Our technologies must undergo a rigorous regulatory approval process which includes extensive pre-clinical and clinical testing to demonstrate safety and efficacy before any resulting product can be marketed. Our research and development activities are regulated by a number of government authorities in the United States and other countries, including the FDA pursuant to the Federal Food, Drug, and Cosmetic Act. The clinical trial and regulatory approval process usually requires many years and substantial cost. To date, neither the FDA nor any of its international equivalents has approved any of our technologies for marketing. The FDA regulates pharmaceutical products in the United States, including their testing, manufacturing and marketing. Data obtained from testing is subject to varying interpretations which can delay, limit or prevent FDA approval. The FDA has stringent laboratory and manufacturing standards which must be complied with before we can test our product candidates in people or make them commercially available. Examples of these standards include Good Laboratory Practices, or GLP, and Good Manufacturing Practices, or GMP. Our compliance with these standards are subject to initial certification by independent inspectors and continuing audits after that. Obtaining FDA approval to sell our product candidates is time-consuming and expensive. The FDA usually takes at least 12 to 18 months to review a New Drug Application, or NDA, which must be submitted before the FDA will consider granting approval to sell a product. If the FDA requests additional information, it may take even longer for them to make a decision especially if the additional information that they request requires us to complete additional studies. We may encounter similar delays in foreign countries. After reviewing any NDA we submit, the FDA or its foreign equivalents may decide not to approve our products; Other risks associated with the regulatory approval process include: . Regulatory clearances may impose significant limitations on the uses for which any approved products may be marketed; 5 . Any marketed product and its manufacturer are subject to periodic reviews and audits, and any discovery of previously unrecognized problems with a product or manufacturer could result in suspension or limitation of approvals; and . Changes in existing regulatory requirements could prevent or affect the timing of our ability to achieve regulatory compliance. Federal and state laws, regulations and policies may be changed with possible retroactive effect, and how these rules actually operate can depend heavily on administrative policies and interpretation over which we have no control or inadequate experience to asses their full impact upon our business. If we are unable to secure adequate patent protection for our technologies, then we may not be able to compete effectively as a biotechnology company. At the present time, we do not have patent protection for all uses of our technologies. There is significant competition in our primary scientific areas of research and development including CNS disorders, cancer, and certain autoimmune diseases. Such competitors will seek patent protection for their technologies, and such patent applications or rights might conflict with the patent protection that we are seeking for our technologies. If we do not obtain patent protection for our technologies, or if others obtain patent rights that block our ability to develop and market our technologies, our business prospects may be significantly and negatively affected. Further, even if patents can be obtained, these patents may not provide us with any competitive advantage if our competitors have stronger patent positions or if their product candidates work better in clinical trials than our product candidates. Our patent strategy is to obtain broad patent protection, in the U.S. and in major developed countries, for our technologies and their related medical indications. The patent application and issuance process generally takes at least several years and is usually very expensive without any guarantee that a patent will be issued. In many cases, our know-how and technology may not be patentable. Risks associated with protecting our patent and proprietary rights include the following: . Our ability to protect our technologies could be delayed or negatively affected if the United States Patent and Trademark Office (The "USPTO") requires additional experimental evidence that our technologies work; . Our competitors may develop similar technologies or products, or duplicate any technology developed by us; 6 . Our competitors may develop products which are similar to ours but which do not infringe on our patents or products, or a third party may successfully challenge one or more of our patents in an interference or litigation proceeding; . Our patents may infringe on the patents or rights of other parties which may decided not to grant a license to us. We may have the change our products or processes, pay licensing fees or stop certain activities because of the patent rights of third parties which could cause additional unexpected costs and delays; . Patent law in the fields of healthcare and biotechnology is still evolving and future changes in such laws might conflict with our existing and future patent rights, or the rights of others; . Our collaborators, employees and consultants may breach the confidentiality agreements that we enter into to protect our trade secrets and propriety know-how. We may not have adequate remedies for such breach; and . There may be disputes as to the ownership of technological information developed by consultants, scientific advisors or other third parties which may not be resolved in our favor. We are dependent on expert advisors and our collaborations with research and development service providers. Most biotechnology and pharmaceutical companies have established internal research and development programs, including their own facilities and employees which are under their direct control. By contrast, until recently, when we initiated limited internal research capability, we have always outsourced all of our research and development, pre-clinical and clinical activities. As a result, we are dependent upon our network of expert advisors and our collaborations with other research and development service providers for the development of our technologies and product candidates. These expert advisors are not our employees but provide us with important information and knowledge that may enhance our product development strategies and plans. Our collaborations with other research and development service providers are important for the testing and evaluation of our technologies, in both the pre-clinical and clinical stages. Many of our expert advisors are employed by, or have their own collaborative relationship with Harvard and its affiliates. A 7 summary of the key scientific, research and development professionals with whom we work, and a composite of their professional background and affiliations is as follows: . Larry I. Benowitz, Ph. D., Director, Laboratories for Neuroscience Research in Neurosurgery, Children's Hospital, Boston; Associate Professor of Neuroscience, Department of Surgery, Harvard Medical School. . Alan J. Fischman, M.D., Ph. D., Chief, Department of Nuclear Medicine, Massachusetts General Hospital; Professor of Radiology, Harvard Medical School. . Robert S. Langer, Sc. D., Germeshausen Professor of Chemical and Biomedical Engineering, Massachusetts Institute of Technology. . Bertha K. Madras, Ph.D., Professor of Psychobiology, Department of Psychiatry, Harvard Medical School. . Peter Meltzer, Ph. D., President, Organix, Inc., Woburn, MA. Dr. Benowitz, Dr. Langer, and Dr. Madras provide scientific consultative services to the Company under agreements renewed annually by mutual agreement of the parties, which generally provide for payments of less than $100,000 per year. Dr. Benowitz provides scientific consultative services primarily related to the research and development of Inosine and AF-1. Dr. Langer provides scientific consultative services primarily related to the research and development of Troponin. Dr. Madras provides scientific consultative services primarily related to the research and development of Altropane. Dr. Fischman provides scientific consultative services primarily related to the research and development of Altropane. Dr. Fischman's services, are not covered under a formal agreement but are billed to the Company as incurred and which have approximated $100,000 annually. The Company does not have a formal agreement with Dr. Meltzer individually but does enter into research and development contracts from time to time with Organix, Inc., of which Dr. Meltzer is president. Many of our institutional collaborations also are with Harvard and its affiliates. Those institutions with which we have collaborative relationships include: . Massachusetts General Hospital in Boston where certain of our collaborating scientists perform their research efforts; . Children's Hospital in Boston where certain of our collaborating scientists perform their research efforts; . Organix in Woburn, Massachusetts which manufactures our compounds for the treatment of PD and provides non-radioactive Altropane for FDA mandated studies; . Harvard Medical School where certain of our collaborating scientists perform their research efforts; . MDS Nordion in Vancouver, British Colombia which manufactures the Altropane imaging agent; . Chemic Laboratories in Canton, Massachusetts which provides Altropane raw material and performs certain analytic services for our pre-clinical programs; . Charles River Laboratories in Worcester, Massachusetts which completes pre-clinical toxicology and efficacy studies for us. 8 We generally have a number of collaborations with research and development service providers ongoing at any point in time. These agreements generally cover a specific project or study, are usually for a duration between one month to one year, and expire upon completion of the project. Under these agreements, we are usually required to make an initial payment upon execution of the agreement with the remaining payments based upon the completion of certain specified milestones such as completion of a study or delivery of a report. We cannot control the amount and timing of resources our advisors and collaborators devote to our programs or technologies. Our advisors and collaborators may have employment commitments to, or consulting or advisory contracts with, other entities that may limit their availability to us. If any of our advisors or collaborators were to breach or terminate their agreement with us or otherwise fail to conduct their activities successfully and in a timely manner, the pre-clinical or clinical development or commercialization of our technologies and product candidates or our research programs could be delayed or terminated. Any such delay or termination could have a material adverse effect on our business, financial condition or results of operations. Disputes may arise in the future with respect to the ownership of rights to any technology developed with our advisors or collaborators. These and other possible disagreements could lead to delays in the collaborative research, development or commercialization of our technologies, or could require or result in litigation to resolve. Any such event could have a material adverse effect on our business, financial condition or results of operations. Our advisors and collaborators sign agreements that provide for confidentiality of our proprietary information. Nonetheless, they may not maintain the confidentiality of our technology and other confidential information in connection with every advisory or collaboration arrangement, and any unauthorized dissemination of our confidential information could have a material adverse effect on our business, financial condition or results of operations. If we are unable to maintain our key working relationships with Harvard and its affiliates, we may not be successful since substantially all of our current technologies were licensed from, and most of our research and development activities were performed by, Harvard and its affiliates. Historically, we have been heavily dependent on our relationship with Harvard and its affiliates because substantially all of our technologies were licensed from, and most of our research and development activities were performed by, Harvard and its affiliates. Now that a portion of our early-stage research at Harvard and its affiliates has yielded an identified product in each area of research, we have begun and expect to continue to conduct much of our later stage development work and all of our formal pre-clinical and clinical programs outside of Harvard and its affiliates. Nevertheless, the originating scientists still play important advisory roles. Each of our collaborative research agreements is managed by a sponsoring scientist and/or researcher who has his or her own independent affiliation with Harvard and its affiliates. 9 Under the terms of our license agreements with Harvard and its affiliates, we acquire the exclusive, worldwide license to make, use, and sell the technology covered by each respective license agreement. Among other things, the technologies licensed under these agreements include: a) Troponin I compositions and methods of medical use b) Altropane(TM) imaging agent compositions and methods of use; and c) Inosine compositions and methods of use. Generally, each license agreement is effective until the patent relating to the technology expire. The patents on Altropane(TM) imaging agent expire beginning in February 2013, with the last issued U.S. patent expiring in October 2013. The Troponin composition and method patents expire in February 2016, and the issued U.S. patent on Inosine expires in September 2017. We are required to make certain licensing and related payments to Harvard which generally include: . An initial licensing fee payment upon the execution of the agreement. . Reimbursement payments for all patents related costs incurred by Harvard. . Milestone payments as licensed technology progresses through each stage of development (filing of IND, completion of one or more clinical stages and submission and approval of an NDA). . Royalty payments on the sales of any products based on the licensed technology. In aggregate, the Company has paid Harvard and its affiliates $155,000 in initial licensing fees and reimbursed 100% of patent costs. In addition, the Company has paid an aggregate of $420,000 in milestone payments. Under the terms of the Company's licensing agreements with Harvard, the Company may become obligated to pay up to an aggregage of $1.4 million in milestone payments in the future. We have entered into a small number of sponsored research agreements with Harvard and its affiliates. Under these agreements, we provide funding so that the sponsoring scientist can continue their research efforts. These payments are generally made in equal quarterly installments over the term of agreement which is usually for one year. Universities and other not-for-profit research institutions are becoming increasingly aware of the commercial value of their findings and are becoming more active in seeking patent protection and licensing arrangements to collect royalties for the use of technology that they have developed. While this increased awareness will not impact our rights to previously licensed technologies, it may make it more costly of difficult for us to obtain the licensing rights to new scientific discoveries at Harvard and its affiliates. If we are unable to retain our key personnel and/or recruit additional key personnel in the future, then we may not be able to operate effectively. Our success depends significantly upon our ability to attract and retain highly qualified scientific and management personnel who are able to formulate, implement and maintain the operations of a biotechnology company such as ours. The loss of the service of any of the key members of our senior management may significantly delay or prevent the achievement of product development and other business objectives. As an example, Dr. Marc E. Lanser, our Chief Scientific Officer, was formerly on the staff of, and maintains close affiliations with Harvard Medical School and its affiliates. Substantially all of our technologies were licensed from Harvard and its affiliates. Our past ability to secure these licenses and to enter into sponsored research and development agreements with Harvard was enhanced by Dr. Lanser's affiliations and familiarity with the Harvard Medical School and its affiliates. Other key members of our senior management team include David Hillson, our Chairman and Chief Executive Officer, Dr. Robert Rosenthal, our President and Chief Operating Officer, Joseph Hernon, our Chief Financial Officer, Jeanne Marie Varga, our Senior Vice President, Regulatory Affairs, Dr. Richard Thorn, our Senior Vice President of Manufacturing, and Dr. Irene Gonzalez, our Senior Vice President of Protein Development. None of these key executives, other than Mr. Hillson and Dr. Rosenthal, has agreed not to compete with us following any termination of their employment. We do not presently carry key person life insurance on any of our scientific or management personnel. We currently outsource most of our research and development, pre-clinical and clinical activities. If we decide to increase our internal research and development capabilities for any of our technologies, we may need to hire additional key management and scientific personnel to assist the limited number of employees that we currently employ. There is significant competition for such personnel from other companies, research and academic institutions, government entities and other organizations. If we fail to attract such personnel, it could have a significant negative effect on our ability to develop our technologies. If we are unable to establish, maintain and rely on new collaborative relationships, then we may not be able to successfully develop and commercialize our technologies. To date, our operations have primarily focused on the pre-clinical development of most of our technologies, as well as conducting clinical trials for certain of our technologies. During the next eighteen months, we currently expect that the continued development of our technologies will result in the initiation of additional clinical trials, and the market introduction of any 10 product for which regulatory approval is obtained. We expect that these developments will require us to establish, maintain and rely on new collaborative relationships in order to successfully develop and commercialize our technologies. There is no certainty that: . We will be able to enter into such collaborations on economically feasible and otherwise acceptable terms and conditions; . That such collaborations will not require us to undertake substantial additional obligations or require us to devote additional resources beyond those we have identified at present; . That any of our collaborators will not breach or terminate their agreement with us or otherwise fail to conduct their activities on time, thereby delaying the development or commercialization of the technology for which the parties are collaborating; and . The parties will not dispute the ownership rights to any technologies developed under such collaborations. If we are not able to establish or maintain the necessary collaborative arrangements, we will need more money to research and develop technologies on our own and we may encounter delays in introducing our products. The biotechnology and pharmaceutical industries are highly competitive and are dominated by larger, more experienced and better capitalized companies. Such greater experience and financial strength may enable them to bring their products to market sooner than us, thereby gaining the competitive advantage of being the first to market. Research on the causes of, and possible treatments for diseases for which we are trying to develop therapeutic or diagnostic products, are developing rapidly and there is a potential for extensive technological innovation in relatively short periods of time. Factors affecting our ability to successfully manage the technological changes occurring in the biotechnology and pharmaceutical industries as well as our ability to successfully compete include: . Many of our potential competitors have significantly greater experience than we do in completing pre-clinical and clinical testing of new pharmaceutical products and obtaining FDA and other regulatory approvals of products. . Many of our potential competitors are in a stronger financial position than us, and are thus better able to finance the significant cost of developing new products. . Companies with established positions and prior experience in the pharmaceutical industry may be better able to develop and market products for the treatment of those diseases for which we are trying to develop products. 11 Many of the largest biotechnology and pharmaceutical companies in the world are trying to develop products in the same product markets as us. There are presently more than sixty companies developing cancer products using an anti-angiogenic or similar approach, and there are hundreds of other companies utilizing different approaches in developing cancer products. To our knowledge, there is only one company, Nycomed Amersham, that has successfully developed a diagnostic for Parkinson's Disease which is the medical purpose for which our most advanced product candidate, the ALTROPANE(TM) imaging agent, is being developed. To date, Nycomed has obtained marketing approval only in Europe, and to the best of our knowledge, is not presently seeking approval in the United States. However, Nycomed has significantly greater financial resources than us, and their decision to seek approval in the United States could significantly adversely affect our competitive position. The established market presence, and greater financial strength, of Nycomed in the European market will make it difficult for us to successfully market the ALTROPANE(TM) imaging agent in Europe. If we are unable to obtain adequate insurance coverage and reimbursement levels for any of our products which are approved and enter the market, then they may not be accepted by physicians and patients. Substantially all biotechnology products are distributed to patients by physicians and hospitals, and in most cases, such patients rely on insurance coverage and reimbursement to pay for some or all of the cost of the product. In recent years, the continuing efforts of government and third party payers to contain or reduce health care costs have limited, and in certain cases prevented, physicians and patients from receiving insurance coverage and reimbursement for medical products, especially newer technologies. Our ability to generate adequate revenues and operating profits could be adversely affected if such limitations or restrictions are placed on the sale of our products. Specific risks associated with medical insurance coverage and reimbursement include: . Significant uncertainty exists as to the reimbursement status of newly approved health care products, and third-party payers are increasingly challenging the prices charged for medical products and services; . Adequate insurance coverage may not be available to allow us to charge prices for products which are adequate for us to realize an appropriate return on our development costs. If adequate coverage and reimbursement are not provided for use of our products, the market acceptance of these products will be negatively affected; . Health maintenance organizations and other managed care companies may seek to negotiate substantial volume discounts for the sale of our products to their members thereby reducing our profit margins; . In recent years, bills proposing comprehensive health care reform have been introduced in Congress that would potentially limit pharmaceutical prices and establish mandatory or voluntary refunds. It is uncertain if any legislative proposals will be adopted and how federal, state or private payers for health care goods and services will respond to any health care reforms. We have limited manufacturing capacity and marketing experience and expect to be heavily dependent upon third parties to manufacture and market approved products. We currently have limited manufacturing facilities for either clinical trial or commercial quantities of any of our technologies and currently have no plans to obtain additional facilities. To date, we have obtained the limited amount of quantities required for pre-clinical and clinical trials from contract manufacturing companies. We intend to continue using contract manufacturing arrangements with experienced firms for the supply of material for both clinical trials and any eventual commercial sale, with the 12 exception of Troponin, which we presently plan to produce in our facility in Baltimore, Maryland. We will depend upon third parties to produce and deliver products in accordance with all FDA and other governmental regulations. We may not be able to contract with manufacturers who can fulfill our requirements for quality, quantity and timeliness, or be able to find substitute manufacturers, if necessary. The failure by any third party to perform their obligations in a timely fashion and in accordance with the applicable regulations may delay clinical trials, the commercialization of products, and the ability to supply product for sale. With respect to our most advanced product candidate, the ALTROPANE(TM) imaging agent, we have entered into an agreement with, and are highly dependent upon, MDS Nordion. Under the terms of the agreement, which currently expires on December 31, 2002, we paid Nordion a one-time fee of $300,000 in connection with its commitment to designate certain of its faculties exclusively for the production of the Altropane imaging agent. We also paid Nordion approximately $900,000 to establish a GMP certified manufacturing process for the production of the Altropane imaging agent. Finally, we have agreed to minimum monthly purchases of the Altropane imaging agent of at least $20,000 through December 31,2002. The agreement provides for MDS Nordion to manufacture the ALTROPANE(TM) imaging agent for our future clinical trials and, if the drug is approved, for commercial supply. The agreement 13 also provides that MDS Nordion will compile and prepare the information regarding manufacturing that will be a required component of any NDA we file for the ALTROPANE(TM) imaging agent in the future. We do not presently have arrangements with any other suppliers in the event that Nordion is unable to manufacture ALTROPANE(TM) for us. We could encounter a significant delay before another supplier could manufacture ALTROPANE(TM) for us due to the time required to establish a GMP manufacturing process for the ALTROPANE(TM) imaging agent. We do not have any experience in marketing pharmaceutical products. In order to earn a profit on any future product, we will be required to either enter into arrangements with third parties with respect to marketing the products or internally develop such marketing capability. We may encounter difficulty in negotiating sales and marketing arrangements with third parties on favorable terms for us. Most of the companies who can provide such services are financially stronger and more experienced in selling pharmaceutical products than we are. As a result, they may be in a position to negotiate an arrangement that is more favorable to them. We could experience significant delays in marketing any of our products if we are required to internally develop a sales and marketing organization. We have no experience in performing such activities and could incur significant costs in developing such a capability. We have options and warrants outstanding which, when exercised or converted, may cause dilution to our stockholders. As of June 30, 2002, options and warrants to purchase approximately 9.6 million shares of our common stock were outstanding at exercise prices ranging from $0.63-$15.00 per share. Approximately one million of these previously granted options and warrants have exercise prices of $2.00 per share and below, and approximately 8.6 million have exercise prices above $2.00 per share. Approximately 1.9 million warrants contain anti-dilution provisions that will decrease the exercise price of these instruments if we sell common stock at a price below the exercise price of these warrants (which is currently $2.15), with some limited exceptions. These warrants also contain additional provisions that could result in us issuing additional warrants to these warrant holders if we sell common stock at a price below the exercise price of these warrants. Approximately 200,000 other warrants contain anti-dilution provisions that will decrease the exercise price of these instruments if we sell common stock at a price below the exercise price of these warrants which presently range from $5.06 to $6.81. The Company is also obligated, to the Pictet Global Sector Fund-Biotech, to issue additional warrants in an amount equal to 9.9% of the increase in common stock outstanding from June 25, 2001 through June 30, 2004, provided that the total number of such additional warrants cannot exceed 240,000. In accordance with this agreement, the Company issued an additional 163,110 warrants, exercisable at $1.27 per share, based on the increase in common stock outstanding from June 25, 2001 through June 30, 2002. The remaining obligation of up to 76,890 additional warrants may become issuable based on the increase in common stock outstanding from July 1, 2002 through June 30, 2004. Any additional warrants issued will be exercisable at the market price of our common stock on the date of issuance. Any of the foregoing provisions could motivate the holders of these instruments, to sell our common stock short in the public market, which could negatively affect our stock price. The exercise of our options and warrants will dilute the percentage ownership interest of our current stockholders. In addition, the terms upon which we would be able to obtain additional money through the sale of our stock may be negatively affected by the existence of these warrants and options, because new investors may be concerned about the impact upon the future market price of the stock if these warrants and options were consistently exercised and the underlying stock sold. Our stock price may continue to be volatile and can be effected by factors unrelated to our business and operating performance. The market prices for securities of biotechnology and emerging pharmaceutical companies in general have been highly volatile and may continue to be highly volatile in the future. The stock market has from time to time experienced extreme price and volume fluctuations that have affected the market prices for biotechnology and emerging pharmaceutical companies. These price and volume fluctuations have often been unrelated to the operating performance of such companies. These broad market fluctuations may adversely affect the market price of our common stock. The table below sets forth the highest and lowest closing prices for our stock during each quarter since January 1, 2000 and demonstrates the volatility of our stock price: 14
High Low ------- ------ YEAR ENDED DECEMBER 31, 2002 Quarter ended March 31, 2002........................................... $ 3.71 $ 1.98 Quarter ended June 30, 2002............................................ 2.44 1.21 YEAR ENDED DECEMBER 31, 2001 Quarter ended March 31, 2001........................................... $ 5.25 3.50 Quarter ended June 30, 2001............................................ 4.08 2.50 Quarter ended September 30, 2001....................................... 3.68 1.55 Quarter ended December 31, 2001........................................ 3.50 1.65 YEAR ENDED DECEMBER 31, 2000 Quarter ended March 31, 2000........................................... $ 16.13 $ 3.50 Quarter ended June 30, 2000............................................ 10.19 5.00 Quarter ended September 30, 2000....................................... 12.13 6.75 Quarter ended December 31, 2000........................................ 7.94 2.56
The following factors, in addition to other risk factors described in this section, may have a significant impact on the market price of our common stock: . Announcements of technological innovations or new commercial products by our competitors or us; . Announcements in the scientific and research community; . Developments concerning proprietary rights, including patents; . Delay or failure in initiating, conducting, completing or analyzing clinical trials or problems relating to the design, conduct or results of these trials; . Developments concerning our collaborations; . Publicity regarding actual or potential medical results relating to products under development by our competitors or us; . Conditions and publicity regarding the life sciences industry generally; . Regulatory developments in the U.S. and foreign countries; . Period-to-period fluctuations in our financial results; 15 . Differences in actual financial results versus financial estimates by securities analysts and changes in those estimates; and . Litigation. Securities class action litigation is often initiated against companies following periods of volatility in the market price of the companies' securities. Engaging in securities litigation could result in substantial costs for us and divert management's attention and resources, potentially resulting in serious harm to our business. If securities litigation against us is successful, we could incur significant costs or damages. We have implemented anti-takeover provisions which could discourage or prevent a takeover, even if an acquisition would be beneficial to our stockholders. Provisions of our shareholder rights plan, our amended and restated certificate of incorporation and our bylaws, as well as provisions of Delaware law, could make it more difficult for a third party to acquire us, even if doing so would be beneficial to our stockholders. These provisions may also make it more difficult for our stockholders to remove members of our board of directors or management. If a change of control is delayed or prevented the market price of our common stock could suffer. 16 USE OF PROCEEDS The net proceeds from the sale of the securities will be received by the selling stockholders. We will not receive any proceeds from the sale of the securities by the selling stockholders. ISSUANCE OF COMMON STOCK AND WARRANTS TO SELLING STOCKHOLDERS The following is a summary description of our issuance of the common stock and warrants which are exercisable by the selling stockholders for common stock being offered pursuant to this prospectus. In April 2002, the Company entered into a consulting agreement with Alexandros Partners LLC under which Alexandros will provide investor relations-related services. Under the terms of the agreement, as partial consideration for the services to be provided by Alexandros, the Company issued warrants to purchase 25,000 shares of common stock, which are exercisable in April 2002 at an exercise price of $2.00 per share, as partial compensation for the services to be provided by Alexandros Partners LLC. The warrants expire in April 2007. The common stock underlying the warrants will be issued pursuant to exemptions afforded by Section 4(2) of the Securities Act. In March 2002, the Company issued an aggregate of 1,599,568 shares of common stock and warrants to purchase a total of 399,892 shares of our common stock to certain selling stockholders in exchange for $3,439,071 in gross proceeds. The following individuals and entities purchased common stock and warrants in the March 2002 financing: Gerald & Mona Levine, Gainesborough LLC, Garret G. Thunen & Carol Thunen, Anthony Low - Beer IRA, Paris Nikolaides, Aeolian Investment Fund, Konstantine Papatheodorou, GDH Partners, LP, Kurt A. Dasse, John N. Hatsopoulos, Paul Potamianos, Christos Ioannides, Anthony S. Loumidis, Costas Markides, KSH Strategic Investment Fund I, LP, Peter S. Lynch and Carolyn A. Lynch JROS, The Lynch Foundation, Peter and Carolyn Lynch Charitable Remainder Trust, Thomas F. and Evelyn S. Widmer, Boston Private Bank & Trust Company FBO E. Christopher Palmer IRA, Robert Gipson, Thomas Gipson and Nikos Monoyios. The warrants are exercisable to purchase 399,892 shares of common stock at an exercise price of $2.75 per share. The warrants are currently exercisable and expire in March 2007. The common stock was issued, and the common stock underlying the warrants will be issued, pursuant to exemptions afforded by Section 4(2) of the Securities Act and Rule 506 of Regulation D thereunder. On March 12, 2002, the Company issued 157,557 warrants to purchase common stock at $2.75 per share to Brimberg & Co., L.P. who acted as Placement Agent in connection with the March 2002 financing. The Company also issued 15,576 warrants to purchase common stock at $2.75 per share to Celia Kupferberg, who secured investors for the March 2002 financing. The warrants were issued to each party as partial consideration for their services, are currently exercisable, and expire in March 2007. The common stock underlying the warrants will be issued pursuant to exemptions afforded by Section 4(2) of the Securities Act and Rule 506 of Regulation D thereunder. In June 2001, the Company entered into an agreement with Pictet Global Sector Fund-Biotech, or Pictet whereby Pictet agreed to defer the effective date of the reset provision contained in its existing 500,000 warrants (300,000 exercisable at $8.00 per share and 200,000 exercisable at $10.00 per share) until June 30, 2002, at which time the exercise price was reset to $3.00 per share. In return, the Company issued 160,000 additional new warrants exercisable at $3.40 per share to Pictet. The Company is also obligated to issue additional warrants in an amount equal to 9.9% of the increase in common stock outstanding from June 25, 2001 through June 30, 2004, provided that the total number of such additional warrants cannot exceed 240,000. In accordance with this agreement, the Company issued an additional 163,110 warrants, exercisable at $1.27 per share, based on the increase in common stock outstanding from June 25, 2001 through June 30, 2002. The remaining obligation of up to 76,890 warrants may become issuable based on the increase in common stock outstanding from July 1, 2002 through June 30, 2004. The common stock underlying the warrants will be issued pursuant to exemptions afforded by Section 4(2) of the Securities Act and Rule 506 of Regulation D thereunder. In October 2001, the Company entered into a consulting agreement with Dr. Robert Licho. Dr. Licho is an expert in SPECT imaging and will be assisting the Company in its ALTROPANE(TM) Phase II clinical trials. Under the terms of the agreement, as partial compensation for the services to be provided by Dr. Robert Licho, the Company issued warrants to purchase 10,000 shares of common stock, which are exercisable in October 2002, at an exercise price of $1.90 per share. 17 The warrants expire in October 2011. The common stock underlying the warrants will be issued pursuant to exemptions afforded by Section 4(2) of the Securities Act. Subject to certain exceptions, the exercise price of all of the warrants described above will be reduced if the Company issues to the holders of its common stock certain dividends. In such event, the exercise price of the warrants is adjusted so that the warrantholder is entitled to receive, upon exercise of the warrant, an additional number of shares of common stock equal to the number of additional shares that the warrantholder would have received if it had exercised the warrant prior to payment of the dividend. SELLING STOCKHOLDERS The number of shares registered in the registration statement of which this prospectus is a part and the number of shares offered in this prospectus represents our bona fide estimate of the number of shares issuable upon exercise of the warrants. The number of shares that will ultimately be issued to the selling stockholders cannot be determined at this time because it depends on (1) whether the holders of the warrants exercise their warrants, (2) the exercise price of the warrants at the time of exercise of the warrants. The table below sets forth information regarding ownership of our common stock by the selling stockholders and the number of shares that may be sold by them, or their permitted pledges, donees, transferees or other permitted successors in interest, under this prospectus. To the Company's knowledge, all of the selling stockholders purchased or received their securities in the ordinary course of business and, at the time of such purchase or receipt, had no agreements or understandings, directly or indirectly, with any person to distribute the securities. The number of shares set forth in the table as being held by the selling stockholders includes the number of shares of common stock that are issuable upon exercise of the warrants described above as of March 12, 2002 with the exception of the warrants issued to Pictet Global Sector Fund - Biotech in June 2002 (as described above and set forth in footnote 6 to the table below). Because the selling stockholders may offer all or some portion of the common stock listed in the table pursuant to this prospectus or otherwise, no estimate can be given as to the amount or percentage of common stock that will be held by the selling stockholders upon termination of the offering. The selling stockholders may sell all, part, or none of the shares listed. Except as noted in the table, none of the selling stockholders has had any position, office or other material relationship with the Company, other than as a security holder, during the past three years.
Securities Owned Securities Owned Prior to Offering After Offering(1) ---------------------------------- ----------------- Shares of Shares of Common Stock Percent of Number of Name of Selling Common Offered Common Shares of Percent of Shareholder Stock (3) Hereby (3) Stock (1) Common Stock Common Stock --------------- --------- ------------ ---------- ------------ ------------ Gerald & Mona Levine 58,140 58,140 * 0 * Gainesborough LLC (11) 290,700 290,700 1.30% 0 * Garret G. Thunen & Carol Thunen 87,500 87,500 * 0 * Anthony Low-Beer IRA 31,250 31,250 * 0 * Paris Nikolaides 25,000 25,000 * 0 * Aeolian Investment Fund 125,000 125,000 * 0 * Konstantine Papatheodorou 25,000 25,000 * 0 * GDH Partners, LP 195,375(9) 145,375 * 50,000 * Kurt A. Dasse 11,625 11,625 * 0 * John N. Hatsopoulos 145,375 145,375 * 0 * Paul Potamianos 29,070 29,070 * 0 * Christos Ioannides 31,965 31,965 * 0 * Anthony S. Loumidis 20,000 20,000 * 0 * Costas Markides 29,070 29,070 * 0 * KSH Strategic Investment Fund I, LP 58,140 58,140 * 0 * Peter S. Lynch and Carolyn A. Lynch JROS 62,500 62,500 * 0 * The Lynch Foundation 112,500 112,500 * 0 *
18 Peter and Carolyn Lynch Charitable Remainder Trust 43,750 43,750 * 0 * Thomas F. and Evelyn S. Widmer 12,500 12,500 * 0 * Boston Private Bank & Trust Company FBO E. Christopher Palmer IRA ** 232,216(5) 30,000 1.03% 202,216(7) * Alexandros Partners LLC 25,000(4) 25,000(4) * 0 * Celia Kupferberg 15,756(4) 15,756(4) * 0 * Brimberg & Co., L. P. (10) 157,557(4) 157,557(4) * 0 * Pictet Global Sector Fund-Biotech (12) 2,179,066(6) 323,110(4) 9.39%(2) 1,855,956(8) 8.11%(2) Robert Licho 10,000(4) 10,000(4) * 0 * Robert Gipson 250,000 250,000 1.12% 0 * Thomas Gipson 250,000 250,000 1.12% 0 * Nitros Manuyios 125,000 125,000 * 0 *
* Less than one percent. ** E. Christopher Palmer is a member of the Company's Board of Directors (1) Except as otherwise indicated, the number of shares beneficially owned is determined by rules promulgated by the SEC and the information is not necessarily indicative of beneficial ownership for any other purpose. The percentage of beneficial ownership is based on 22,374,210 shares of common stock issued and outstanding on June 30, 2002. (2) The percentage of beneficial ownership is based on 22,374,210 shares of common stock issued and outstanding on June 30, 2002. (3) Except as otherwise indicated, the number of shares of common stock includes shares that are issuable upon the exercise of certain warrants in an amount equal to 20% of the total number of shares. (4) Represents shares issuable upon the exercise of certain warrants. (5) Includes 179,716 shares of common stock issuable upon the exercise of certain stock options and 6,000 shares of common stock issuable upon the exercise of certain warrants. (6) Includes 823,110 shares of common stock issuable upon the exercise of certain warrants. These shares include the 163,110 warrants issued to Pictet for the period from June 25, 2001 through June 30, 2002, but do not include the 76,890 warrants which may become issuable in the future. (7) Includes 179,716 shares of common stock issuable upon the exercise of certain stock options. (8) Includes 500,000 shares of common stock issuable upon the exercise of certain warrants. (9) Includes 29,075 shares of common stock issuable upon the exercise of certain warrants. (10) The selling stockholder is a broker-dealer and may be deemed to be an underwriter. (11) The natural person who has voting or investment power for Gainesborough, LLC is Arthur G. Koumantzelis. (12) The natural persons who have voting or investment power for Pictet Global Sector Fund Biotech and Patrick Schott and Jerry Hilger. 19 PLAN OF DISTRIBUTION BLSI is registering the shares of common stock on behalf of the selling stockholders. The selling stockholders will act independently of BLSI in making decisions with respect to the timing, manner and size of each sale. All costs, expenses and fees in connection with the registration of the shares offered by this prospectus will be borne by BLSI, other than brokerage commissions and similar selling expenses, if any, attributable to the sale of shares which will be borne by the selling stockholders. Sales of shares may be effected by selling stockholders from time to time in one or more types of transactions (which may include block transactions) on the Nasdaq National Market, in the over-the-counter market, in negotiated transactions, through put or call options transactions relating to the shares, or a combination of such methods of sale, at market prices prevailing at the time of sale, or at negotiated prices. Such transactions may or may not involve brokers or dealers. The selling stockholders have advised BLSI that they have not entered into any agreements, understandings or arrangements with any underwriters or broker-dealers regarding the sale of their securities, nor is there an underwriter or coordinated broker acting in connection with the proposed sale of shares by the selling stockholders. The selling stockholders may enter into hedging transactions with broker-dealers or other financial institutions. In connection with such transactions and subject to the restrictions noted above, broker-dealers or other financial institutions may engage in short sales of the shares or of securities convertible into or exchangeable for the shares in the course of hedging positions 20 they assume with selling stockholders. The selling stockholders may also enter into options or other transactions with broker-dealers or other financial institutions which require the delivery to such broker-dealers or other financial institutions of shares offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as amended or supplemented to reflect such transaction). The selling stockholders may make these transactions by selling shares directly to purchasers or to or through broker-dealers, which may act as agents or principals. Such broker-dealers may receive compensation in the form of discounts, concessions or commissions from selling stockholders and/or the purchasers of shares for whom such broker-dealers may act as agents or to whom they sell as principal, or both (which compensation as to a particular broker-dealer might be in excess of customary commissions). The selling stockholders may from time to time pledge or grant a security interest in some or all of the shares owned by them. If the selling stockholders default in the performance of their secured obligations, the pledgees or secured parties may offer and sell their shares from time to time under a supplement to this prospectus or a post-effective amendment to the registration statement of which this prospectus is a part, as applicable law may require, amending the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus. The selling stockholders also may transfer the shares in other circumstances, in which case the transferees, pledges or other successors in interest will be the selling beneficial owners for purposes of this prospectus subject to filing any supplement to this prospectus or post-effective amendment to the registration statement required by applicable law. The selling stockholders and any broker-dealers that act in connection with the sale of shares may be deemed to be "underwriters" within the meaning of Section 2(11) of the Securities Act, and any commissions received by such broker-dealers or any profit on the resale of the shares sold by them while acting as principals may be deemed to be underwriting discounts or commissions under the Securities Act. The selling stockholders may agree to indemnify any agent, dealer or broker-dealer that participates in transactions involving sales of the shares against certain liabilities, including liabilities arising under the Securities Act. Because selling stockholders may be deemed to be "underwriters" within the meaning of Section 2(11) of the Securities Act, the selling stockholders may be subject to the prospectus delivery requirements of the Securities Act. We have informed the selling stockholders that the anti-manipulative provisions of Regulation M promulgated under the Exchange Act may apply to their sales in the market. Selling stockholders also may resell all or a portion of the shares in open market transactions in reliance upon Rule 144 under the Securities Act, provided they meet the criteria and conform to the requirements of Rule 144. Upon BLSI being notified by a selling stockholder that any material arrangement has been entered into with a broker-dealer for the sale of shares through a block trade, special offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, a supplement to this prospectus will be filed, if required, pursuant to Rule 424(b) under the Securities Act, disclosing: . the name of each such selling stockholder and of the participating broker-dealer(s); . the number of shares involved; . the initial price at which such shares were sold; 21 . the commissions paid or discounts or concessions allowed to such broker-dealer(s), where applicable; . that such broker-dealer(s) did not conduct any investigation to verify the information set out or incorporated by reference in this prospectus; and . other facts material to the transactions. We have agreed to indemnify the selling stockholders in certain circumstances against some liabilities, including liabilities that could arise under the Securities Act. The selling stockholders have agreed to indemnify us, our directors and our officers who sign the registration statement against some liabilities, including liabilities that could arise under the Securities Act. We have agreed to maintain the effectiveness of this registration statement until the earlier of the sale of all the shares offered by this prospectus or the date that each holder of such shares can sell all of the shares it holds in any three-month period in compliance with Rule 144(k) promulgated under the Securities Act, but in no event for more than five years following the effectiveness of the registration statement of which this prospectus is a part. No sales may be made pursuant to this prospectus after the expiration date unless we amend or supplement this prospectus to indicate that we have agreed to extend the period of effectiveness. The selling stockholders may sell all, some or none of the shares offered by this prospectus. LEGAL MATTERS The validity of the shares of Common Stock offered hereby will be passed upon for BLSI by Ropes & Gray, Boston, Massachusetts. EXPERTS The consolidated financial statements incorporated in this Prospectus by reference to the Annual Report on Form 10-K, as amended on April 30, 2002, for the year ended December 31, 2001 have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting. AVAILABLE INFORMATION This prospectus, which constitutes a part of a registration statement on Form S-3 (the "registration statement") filed by us with the Securities and Exchange Commission (the "Commission") under the Securities Act, omits certain of the information set forth in the registration statement. Reference is hereby made to the registration statement and to the exhibits thereto for further information with respect to us and the securities offered hereby. Copies of the registration statement and the exhibits thereto are on file at the offices of the Commission and may be obtained upon payment of the prescribed fee or may be examined without charge at the public reference facilities of the Commission described below or via the Commission's web site described below. Statements contained herein concerning the provisions of documents are necessarily summaries of such documents, and each statement is qualified in its entirety by reference to the copy of the applicable document filed with the Commission. 22 We are subject to the informational requirements of the Exchange Act, and, accordingly, files reports, proxy statements and other information with the Commission. Such reports, proxy statements and other information can be inspected and copied at the public reference facilities maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, NW, Washington, D.C. 20549, and at the Commission's Regional Offices located at Seven World Trade Center, Suite 1300, New York, New York 10048 and Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such documents may also be obtained from the Public Reference Room of the Commission at Judiciary Plaza, 450 Fifth Street, NW, Washington, D.C. 20549, at prescribed rates. Information regarding the operation the Public Reference Room may be obtained by calling the Commission at 1-800-SEC-0330. The Commission maintains a web site (http://www.sec.gov) that contains material regarding issuers that file electronically with the Commission. In addition, our common stock is traded on the Nasdaq National Market and reports and proxy statements concerning us can be inspected at the offices of the National Association of Securities Dealers, Inc., 1735 K Street, NW, Washington, D.C. 20006. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents or portions of documents filed by the Company (File No. 0-6533) with the Commission are incorporated herein by reference: (a) Annual Report on Form 10-K, as amended on April 30, 2002 and August 9, 2002 for the fiscal year ended December 31, 2001. (b) Quarterly Reports on Form 10-Q for the periods ended March 31, 2002 and June 30, 2002. (c) Our Definitive Proxy Statement dated May 1, 2002 for the Company's 2002 Annual Meeting of Stockholders. (d) Current Reports on Form 8-K dated March 11, 2002 (as amended on Form 8-K/A dated March 12, 2002), July 10, 2002 and July 25, 2002. (e) The description of our common stock contained in our registration statement on Form 8-A filed under the Exchange Act, including any amendment or reports filed for the purpose of updating such description. All reports and other documents subsequently filed by us pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the filing of a post-effective amendment that indicates that all securities offered hereby have been sold or which deregisters all securities remaining unsold, shall be deemed to be incorporated by reference into this Prospectus and to be a part hereof from the date of the filing of such reports or documents. Any statement contained in a document, all or a portion of which is incorporated by reference herein, shall be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained or incorporated by reference herein modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus. Upon written or oral request, we will provide without charge to each person, including any beneficial owner, to whom this prospectus is delivered a copy of any or all of such documents which are incorporated herein by reference (other than exhibits to such documents unless such exhibits are specifically incorporated by reference into the documents that this Prospectus incorporates). Written or oral requests for copies should be directed to Joseph P. Hernon, Executive Vice President and Chief Financial Officer, 20 Newbury Street, Boston, Massachusetts 02116, telephone number (617) 425-0200. 23 We have not authorized any dealer, salesperson or other person to give any information or represent anything not contained in this prospectus. You must not rely on any unauthorized information. If anyone provides you with different or inconsistent information, you should not rely on it. This prospectus does not offer to sell any shares in any jurisdiction where it is unlawful. The information in this prospectus is current as of the date shown on the cover page. Boston Life Sciences, Inc 2,530,883 Shares of Common Stock PROSPECTUS , 2002 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION The following table sets forth the estimated costs and expenses of the sale and distribution of the securities being registered, all of which are being borne by us. Securities and Exchange Commission filing fee............. $ 500 Printing expenses......................................... 2,500 Legal, accounting and other professional services......... 30,000 Miscellaneous............................................. 2,000 -------- Total..................................................... $ 35,000 ======== ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS The Delaware General Corporation Law authorizes us to grant indemnities to directors and officers in terms sufficiently broad to permit indemnification of such persons under certain circumstances for liabilities (including reimbursement for expenses incurred) arising under the Securities Act of 1933. In addition, we have obtained Directors' and Officers' Liability Insurance, which insures its officers and directors against certain liabilities such persons may incur in their capacities as our officers or directors. II-1 Article 6 of the our certificate of incorporation provides as follows: SIXTH: No director of the Corporation shall be personally liable to the Corporation or any of its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, as the same exists or hereafter may be amended, or (iv) for any transaction from which the director derived an improper personal benefit. If the Delaware General Corporation Law hereafter is amended to authorize the further elimination or limitation of the liability of directors, then the liability of a director of the Corporation, in addition to the limitation on personal liability provided herein, shall be limited to the fullest extent permitted by the amended Delaware General Corporation Law. Any repeal or modification of this paragraph by the stockholders of the Corporation shall be prospective only, and shall not adversely affect any limitation on the personal liability of a director of the Corporation existing at the time of such repeal or modification. Article VI of the our by-laws provides in relevant part as follows: SECTION 1. The corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalents, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. SECTION 2. The corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, officer, employee or agent of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper. II-2 ITEM 16. EXHIBITS The following is a list of exhibits filed as part of this registration statement. Exhibit Number Description and Method of Filing ------- -------------------------------- 4.1 Specimen Common Stock Certificate (1) 4.2 Form of Common Stock Purchase Warrant received by the Investors to the March 2002 Private Placement (2) 4.3 Form of Common Stock Purchase Warrant received by Pictet (3); as amended on March 27, 2001 and June 25, 2001 (4) 4.4 Form of Common Stock Purchase Warrant (8) 5 Opinion of Ropes & Gray (8) 10.1 Form of Subscription Agreement by and among the Company and each investor in the private placement (2) 10.2 Registration Rights Agreement by and among the Company and the Investors named therein (2) 10.3 Securities Purchase Agreement dated June 1, 2000 between the Pictet and the Company (5) 10.4 Registration Rights Agreement dated June 1, 2000 between Pictet and the Company (5) 10.5 Consulting agreement by and among the Company and Alexandros Partners LLC (8) 10.6 License Agreement between HARVARD and NeuroBiologics, Inc. (a subsidiary of the Company) dated as of December 10, 1993. (relating to Altropane) (6) 10.7 License Agreement between Children's Medical Center Corporation and ProCell Pharmaceuticals, Inc. (a subsidiary of the Company) dated as of March 15, 1993. (relating to Troponin) (6) 10.8 Amendment, dated March 18, 1996, to License Agreement between Children's Medical Center Corporation and ProCell Pharmaceuticals, Inc. (a subsidiary of the Company) dated as March 15, 1993. (9) 10.9 Manufacturing Agreement dated August 9, 2000 between Boston Life Sciences, Inc. and MDS Nordion, Inc. (7) 10.10 Amendment dated August 23, 2001 to Manufacturing Agreement dated August 9, 2000 between Boston Life Sciences, Inc. and MDS Nordion, Inc. (7) 10.11 License Agreement between President and Fellows of Harvard College and Boston Life Sciences, Inc. dated as of March 15, 2000. (relating to Altropane) (9) 10.12 Exclusive License Agreement between Children's Medical Center Corporation and Boston Life Sciences, Inc. dated as of December 15, 1998. (relating to Inosine) (9) 23.1 Consent of Ropes & Gray (8) 23.2 Consent of PricewaterhouseCoopers LLP (9) 24 Power of Attorney (8) (1) Incorporated by reference to Boston Life Sciences, Inc.'s Registration Statement on Form S-3 filed with the Securities and Exchange Commission, Registration No. 33-25955 (2) Incorporated by reference to BLSI's Report on Form 8-K dated March 11, 2002 (3) Incorporated by reference to BLSI's Report on Form 8-K dated June 1, 2000 (4) Incorporated by reference to BLSI's Quarterly Report on Form 10-Q for the quarter ended June 30, 2001 (5) Incorporated by reference to BLSI's Registration Statement on Form S-3 (No. 333-44298) (6) Incorporated by reference to Greenwich Pharmaceuticals, Inc.'s Registration Statement on Form S-4 (No. 33-91106) (Greenwich Pharmaceuticals is the former name of the Company. The Company acquired the license II-3 agreements described above in connection with its June 1995 merger with Boston Life Sciences. The entities indicated above were subsidiaries of Boston Life Sciences). (7) Incorporated by reference to Boston Life Science's Annual Report on Form 10-K for the year ended December 31, 2001. (8) Previously filed (9) Filed herewith II-4 ITEM 17. UNDERTAKINGS A. Rule 415 Offering The undersigned registrant hereby undertakes: (1) to file, during any period in which offers or sales; are being made, a post- effective amendment to this registration statement: (i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement. (iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; Provided, however, that paragraphs (1)(i) and (1)(ii) above do not apply if the registration statement is on Form S-3 or Form S-8, and the information required to be, included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. B. Filings Incorporating Subsequent Exchange Act Documents by Reference The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-5 C. Request for Acceleration of Effective Date Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. II-6 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Boston, Commonwealth of Massachusetts, on September 3, 2002. BOSTON LIFE SCIENCES, INC. By: /s/ S. DAVID HILLSON -------------------- S. David Hillson, Esq. Chairman and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, this Registration Statement on Form S-3 has been signed by the following persons in the capacities and on the dates indicated.
Signature Title Date --------- ----- ---- /s/ S. DAVID HILLSON Chairman, and Chief Executive September 3, 2002 -------------------- Officer (Principal Executive S. David Hillson, Esq. Officer) /s/ ROBERT J. ROSENTHAL Director, President, and September 3, 2002 ----------------------- Chief Operating Officer Robert J. Rosenthal /s/ MARC E. LANSER* Director, Executive Vice President September 3, 2002 ------------------- and Chief Scientific Officer Marc E. Lanser, M.D. /s/ JOSEPH P. HERNON* Executive Vice President, Chief September 3, 2002 --------------------- Financial Officer and Secretary Joseph P. Hernon, CPA (Principal Financial and Accounting Officer) /s/ COLIN B. BIER* Director September 3, 2002 ------------------ Colin B. Bier, Ph.D. /s/ SCOTT WEISMAN* Director September 3, 2002 ------------------ Scott Weisman, Esq. /s/ ROBERT LANGER* Director September 3, 2002 ------------------ Robert Langer, Sc.D. /s/ IRA W. LIEBERMAN* Director September 3, 2002 --------------------- Ira W. Lieberman Ph.D. /s/ E. CHRISTOPHER PALMER* Director September 3, 2002 -------------------------- E. Christopher Palmer, CPA
* By: /s/ JOSEPH P. HERNON* --------------------- Joseph P. Hernon Attorney-in-fact EXHIBIT INDEX Exhibit Number Description and Method of Filing - ------ -------------------------------- 4.1 Specimen Common Stock Certificate (1) 4.2 Form of Common Stock Purchase Warrant received by the Investors to the March 2002 Private Placement (2) 4.3 Form of Common Stock Purchase Warrant received by Pictet (3); as amended on March 27, 2001 and June 25, 2001 (4) 4.4 Form of Common Stock Purchase Warrant (8) 5 Opinion of Ropes & Gray (8) 10.1 Form of Subscription Agreement by and among the Company and each investor in the private placement (2) 10.2 Registration Rights Agreement by and among the Company and the Investors named therein (2) 10.3 Securities Purchase Agreement dated June 1, 2000 between the Pictet and the Company (5) 10.4 Registration Rights Agreement dated June 1, 2000 between Pictet and the Company (5) 10.5 Consulting agreement by and among the Company and Alexandros Partners LLC (8) 10.6 License Agreement between HARVARD and NeuroBiologics, Inc. (a subsidiary of the Company) dated as of December 10, 1993. (relating to Altropane) (6) 10.7 License Agreement between Children's Medical Center Corporation and ProCell Pharmaceuticals, Inc. (a subsidiary of the Company) dated as of March 15, 1993. (relating to Troponin) (6) 10.8 Amendment, dated March 18, 1996, to License Agreement between Children's Medical Center Corporation and ProCell Pharmaceuticals, Inc. (a subsidiary of the Company) dated as March 15, 1993. (9) 10.9 Manufacturing Agreement dated August 9, 2000 between Boston Life Sciences, Inc. and MDS Nordion, Inc. (7) 10.10 Amendment dated August 23, 2001 to Manufacturing Agreement dated August 9, 2000 between Boston Life Sciences, Inc. and MDS Nordion, Inc. (7) 10.11 License Agreement between President and Fellows of Harvard College and Boston Life Sciences, Inc. dated as of March 15, 2000. (relating to Altropane) (9) 10.12 Exclusive License Agreement between Children's Medical Center Corporation and Boston Life Sciences, Inc. dated as of December 15, 1998. (relating to Inosine) (9) 23.1 Consent of Ropes & Gray (8) 23.2 Consent of PricewaterhouseCoopers LLP (9) 24 Power of Attorney (8) (1) Incorporated by reference to Boston Life Sciences, Inc.'s Registration Statement on Form S-3 filed with the Securities and Exchange Commission, Registration No. 33-25955 (2) Incorporated by reference to BLSI's Report on Form 8-K dated March 11, 2002 (3) Incorporated by reference to BLSI's Report on Form 8-K dated June 1, 2000 (4) Incorporated by reference to BLSI's Quarterly Report on Form 10-Q for the quarter ended June 30, 2001 (5) Incorporated by reference to BLSI's Registration Statement on Form S-3 (No. 333-44298) (6) Incorporated by reference to Greenwich Pharmaceuticals, Inc.'s Registration Statement on Form S-4 (No.33-91106) (Greenwich Pharmaceuticals is the former name of the Company. The Company acquired the license agreements described above in connection with its June 1995 merger with Boston Life Sciences. The entities indicated above were subsidiaries of Boston Life Sciences). (7) Incorporated by reference to Boston Life Science's Annual Report on Form 10-K for the year ended December 31, 2001. (8) Previously filed (9) Filed herewith EX-10.8 3 dex108.txt LICENSE AGREEMENT DATED 3/15/93 Exhibit 10.8 March 18, 1996 Marc Lanser, M.D. Boston Life Sciences Reservoir Place 1601 Trapelo Road Waltham, MA 02154 RE: License Agreement Dated 3/15/93 Amendment to Add Patent Application to Appendix B Dear Marc, In accordance with Paragraph 8.3 of the Sponsored Research Agreement between Procell Pharmaceuticals, Inc. and Children's Medical Center Corporation dated 3/15/93, the Appendix B of the License Agreement between the same parties and of even date is hereby amended to include the following patent application: CMCC 518 "Pharmaceutical Compositions Comprising Troponin Subunits, Fragments and Analogs Thereof and Methods of Their Use to Inhibit Angiogenesis" by Marsha A. Moses, Robert S. Langer, Dimitri Weidershain, Inmin Wu, and Arthus Sytkowski, filed February 16, 1996. Sincerely, /s/ William New - ------------------------------ William New Vice President for Research Administration Agreed for ProCell Pharmaceuticals, Inc. /s/ Marc Lanser - ------------------------------ Marc Lanser EX-10.11 4 dex1011.txt LICENSE AGREEMENT Exhibit 10.11 LICENSE AGREEMENT BETWEEN PRESIDENT AND FELLOWS OF HARVARD COLLEGE AND BOSTON LIFE SCIENCES INC. - -------------------------------------------------------------------------------- EFFECTIVE DATE is, March 15, 2000 Re: Harvard Case No. 1615-99 "Imaging the Dopamine Transporter to Determine AD-HD" In consideration of the mutual promises and covenants set forth below, the parties hereto agree as follows: ARTICLE I DEFINITIONS As used in this Agreement, the following terms shall have the following meanings: 1.1 AFFILIATE: any company, corporation, or business in which LICENSEE owns or controls at least fifty percent (50%) of the voting stock or other ownership. Unless otherwise specified, the term LICENSEE includes AFFILIATES. 1.2 BIOLOGICAL MATERIALS: the materials supplied by HARVARD. (identified in Appendix B) together with any progeny, mutants, or derivatives thereof supplied by HARVARD or created by LICENSEE. 1.3 FIELD: Detection and Treatment of Attention Deficit Hyperactivity Disorder 1.4 GENERAL: The General Hospital Corporation, a nonprofit Massachusetts corporation doing business as Massachusetts General Hospital, and having offices at the Office of Corporate Sponsored Research and Licensing, Massachusetts General Hospital, Bldg. 149, 13th Street, Suite 1101, Charlestown, MA 02129. 1.5 HARVARD: President and Fellows of Harvard College, a nonprofit Massachusetts educational corporation having offices at the Office of Technology Licensing, Harvard Medical School, Building A - Room 414, 25 Shattuck Street, Boston, Massachusetts 02115. 1 1.6 LICENSED PROCESSES: the processes covered by PATENT RIGHTS or processes utilizing BIOLOGICAL MATERIALS or some portion thereof. 1.7 LICENSED PRODUCTS: products covered by PATENT RIGHTS or products made or services provided in accordance with or by means of LICENSED PROCESSES or products made or services provided utilizing BIOLOGICAL MATERIALS or incorporating some portion of BIOLOGICAL MATERIALS. 1.8 LICENSEE: Boston Life Sciences Inc., a corporation organized under the laws of Massachusetts having its principal offices at 137 Newbury St., 8th Floor, Boston, MA 02116. 1.9 ORGANIX: Organix Inc., a corporation organized under the laws of Massachusetts having its principal offices at 240 Salem Street, Woburn, MA, 01801. 1.10 NET SALES: the amount billed, invoiced, or received (whichever occurs first) for sales, leases, or other transfers of LICENSED PRODUCTS, less: (a) customary trade, quantity or cash discounts and non-affiliated brokers' or agents' commissions actually allowed and taken; (b) amounts repaid or credited by reason of rejection or return; and (c) to the extent separately stated on purchase orders, invoices, or other documents of sale, taxes levied on and/or other governmental charges made as to production, sale, transportation, delivery or use and paid by or on behalf of LICENSEE or sublicensees; (d) reasonable charges for delivery or transportation provided by third parties, if separately stated. NET SALES also includes the fair market value of any non-cash consideration received by LICENSEE or sublicensees for the sale, lease, or transfer of LICENSED PRODUCTS. 1.11 NON-COMMERCIAL RESEARCH PURPOSES: use of PATENT RIGHTS and/or BIOLOGICAL MATERIALS for academic research or other not-for-profit scholarly purposes which are undertaken at a non-profit or governmental institution that does not use the PATENT RIGHTS and/or BIOLOGICAL MATERIALS in the production or manufacture of products for sale or the performance of services for a fee. 1.12 NON-COMMERCIAL CLINICAL PURPOSES: use of PATENT RIGHTS and/or BIOLOGICAL MATERIALS for any purpose related to patient care at GENERAL, HARVARD, or any not-for-profit hospital affiliated with GENERAL that does not use the PATENT RIGHTS and/or BIOLOGICAL MATERIALS in the production or manufacture of products for sale. 1.13 NON-ROYALTY SUBLICENSE INCOME: Sublicense issue fees, sublicense maintenance fees, sublicense milestone payments, and similar non-royalty payments 2 made by sublicensees to LICENSEE on account of sublicenses pursuant to this Agreement. 1.14 OTHER HARVARD TECHNOLOGIES: Technology licensed by HARVARD to LICENSEE under existing license agreements dated November 16, 1992 (Harvard Case No. 788-91), December 10, 1993 (Harvard Case No. 919-93), and October 15, 1996 (Harvard Case No. 1194-95) the particular use of which falls under PATENT RIGHTS in the FIELD. 1.15 PATENT RIGHTS: United States provisional application Serial No. 60/141,540 filed June 28, 1999, the inventions described and claimed therein, and any divisions, continuations, continuations-in-part to the extent the claims are directed to subject matter specifically described in provisional application 60/141,540 and are dominated by the claims of the existing PATENT RIGHTS, patents issuing thereon or reissues thereof, and any and all foreign patents and patent applications corresponding thereto, all to the extent owned or controlled by HARVARD. 1.16 TERRITORY: Worldwide 1.17 The terms "Public Law 96-517" and "Public Law 98-620" include all amendments to those statutes. 1.18 The terms "sold" and "sell" include, without limitation, leases and other transfers and similar transactions. ARTICLE II REPRESENTATIONS 2.1 HARVARD is owner by assignment from Dr. Bertha Madras; and ORGANIX is owner by assignment from Dr. Peter Meltzer; and GENERAL is owner by assignment from Dr. Alan Fischman, of their entire right, title and interest in United States Provisional Patent Application Serial No. 60/141,540, filed June 28, 1999 entitled "Imaging the Dopamine Transporter to Determine AD-HD", (H.U. Case #1615-99), in the foreign patent applications corresponding thereto, and in the inventions described and claimed therein. 2.2 In an Invention and License Agreement effective February 15, 2000, GENERAL and ORGANIX have appointed HARVARD their sole and exclusive agent to license United States Provisional Patent Application Serial No. 60/141,540 on their behalf. HARVARD therefore has the authority to issue licenses under PATENT RIGHTS. 2.3 HARVARD is committed to the policy that ideas or creative works produced at HARVARD should be used for the greatest possible public benefit, and believes that every reasonable incentive should be provided for the prompt introduction of such ideas into public use, all in a manner consistent with the public interest. 2.4 HARVARD and LICENSEE have entered in and are parties to existing license agreements dated November 16, 1992 (Harvard Case No. 788-91), December 10, 1993 3 (Harvard Case No. 919-93), and October 15, 1996 (Harvard Case No. 1194-95) which confers to LICENSEE commercial rights to technology that may used in conjunction with subject matter of PATENT RIGHTS. 2.5 LICENSEE is prepared and intends to diligently develop the invention and to bring products to market which are subject to this Agreement. 2.6 LICENSEE is desirous of obtaining an exclusive license in the TERRITORY in order to practice the above-referenced invention covered by PATENT RIGHTS in the United States and in certain foreign countries, and to manufacture, use and sell in the commercial market the products made in accordance therewith, and HARVARD is desirous of granting such a license to LICENSEE in accordance with the terms of this Agreement. ARTICLE III GRANT OF RIGHTS 3.1 HARVARD hereby grants to LICENSEE and LICENSEE accepts, subject to the terms and conditions hereof, in the TERRITORY and in the FIELD: (a) an exclusive commercial license under PATENT RIGHTS, and (b) a license to use BIOLOGICAL MATERIALS to make and have made, to use and have used, to sell and have sold the LICENSED PRODUCTS, and to practice the LICENSED PROCESSES, for the life of the PATENT RIGHTS. Such licenses shall include the right to grant sublicenses, subject to HARVARD's approval, which approval shall not be unreasonably withheld. In order to provide LICENSEE with commercial exclusivity for so long as the license under PATENT RIGHTS remains exclusive, HARVARD agrees that it will not grant licenses under PATENT RIGHTS to others except as required by HARVARD's obligations in paragraph 3.2(a) or as permitted in paragraph 3.2(b) and that it will not provide BIOLOGICAL MATERIALS to others for any commercial purpose. 3.2 The granting and exercise of this license is subject to the following conditions: (a) HARVARD's "Statement of Policy in Regard to Inventions, Patents and Copyrights," dated August 10, 1998, Public Law 96-517, Public Law 98-620, and HARVARD's obligations under agreements with other sponsors of research. Any right granted in this Agreement greater than that permitted under Public Law 96-517, or Public Law 98-620, shall be subject to modification as may be required to conform to the provisions of those statutes. (b) HARVARD, ORGANIX, and GENERAL reserve the right to (i) make, use, and provide the BIOLOGICAL MATERIALS to others on a non-exclusive basis, and grant others non-exclusive licenses to make and 4 use the BIOLOGICAL MATERIALS, all for NON-COMMERCIAL RESEARCH PURPOSES; and (ii) make and use, and grant to others non-exclusive licenses to make and use for NON-COMMERCIAL RESEARCH PURPOSES the subject matter described and claimed in PATENT RIGHTS; and (iii) to use the subject matter described and claimed in PATENT RIGHTS for NON-COMMERCIAL CLINICAL PURPOSES. (c) LICENSEE shall use diligent efforts to effect introduction of the LICENSED PRODUCTS into the commercial market as soon as practicable, consistent with sound and reasonable business practice and judgment; thereafter, until the expiration of this Agreement, LICENSEE shall endeavor to keep LICENSED PRODUCTS reasonably available to the public. (d) At any time after three (3) years from the effective date of this Agreement, HARVARD may terminate or render this license non-exclusive if, in HARVARD's reasonable judgment, the Progress Reports furnished by LICENSEE do not demonstrate that LICENSEE: (i) has put the licensed subject matter into commercial use in the country or countries hereby licensed, directly or through a sublicense, and is keeping the licensed subject matter reasonably available to the public, or (ii) is engaged in research, development, manufacturing, marketing or sublicensing activity appropriate to achieving 3.2(d)(i). Additional, specific performance milestones: (e) In all sublicenses granted by LICENSEE hereunder, LICENSEE shall include a requirement that the sublicensee use its best efforts to bring the subject matter of the sublicense into commercial use as quickly as is reasonably possible. LICENSEE shall further provide in such sublicenses. that, such sublicenses are subject and subordinate to the terms and conditions of this Agreement, except: (i) the sublicensee may not further sublicense; and (ii) the rate of royalty on NET SALES paid by the sublicensee to the LICENSEE. Copies of all sublicense agreements shall be provided promptly to HARVARD. (f) If LICENSEE is unable or unwilling to grant sublicenses, either as suggested by HARVARD or by a potential sublicensee or otherwise, then HARVARD may directly license such potential sublicensee unless, in Harvard's reasonable judgment, such license would be contrary to sound and reasonable business practice and the granting of such license would not materially increase the availability to the public of LICENSED PRODUCTS. (g) A license in any other territory or field of use in addition to the TERRITORY and/or FIELD shall be the subject of a separate agreement and shall require 5 LICENSEE's submission of evidence, satisfactory to HARVARD, demonstrating LICENSEE's willingness and ability to develop and commercialize in such other territory and/or field of use the kinds of products or processes likely to be encompassed in such other territory and/or field. (h) During the period of exclusivity of this license in the United States, LICENSEE shall cause any LICENSED PRODUCT produced for sale in the United States to be manufactured substantially in the United States. 3.3 All rights reserved to the United States Government and others under Public Law 96-517, and Public Law 98-620, shall remain and shall in no way be affected by this Agreement. ARTICLE IV ROYALTIES 4.1 LICENSEE shall pay to HARVARD a non-refundable license royalty fee in the sum of One Hundred Thousand Dollars ($100,000) within ten (10) days of the Effective Date of this Agreement, and the sum of Fifty Thousand Dollars ($50,000) upon issuance of the first U.S. patent in PATENT RIGHTS. The first one hundred thousand dollars of the license execution fee is fully creditable toward milestone payments for filing a new or supplemental IND (as appropriate). 4.2 (a) LICENSEE shall pay to HARVARD during the term of this Agreement: (i) a royalty of one percent (1%) of NET SALES by LICENSEE and sublicensees on LICENSED PRODUCTS which are OTHER HARVARD TECHNOLOGIES; (ii) a royalty of five percent (5%) of NET SALES by LICENSEE and sublicensees on all LICENSED PRODUCTS which are not OTHER HARVARD TECHNOLOGIES. (b) In the case of sublicenses, LICENSEE shall also pay to HARVARD: (i) a royalty of five percent (5%) of NON-ROYALTY SUBLICENSE INCOME derived from OTHER HARVARD TECHNOLOGIES; (ii) a royalty of twenty-five percent (25%) of NON-ROYALTY SUBLICENSE INCOME on all LICENSED PRODUCTS which are not OTHER HARVARD TECHNOLOGIES. (c) If the license pursuant to this Agreement is converted to a non-exclusive one and if other non-exclusive licenses in the same field and territory are granted, the above royalties shall not exceed the royalty rate to be paid by other licensees in the same field and territory during the term of the non-exclusive license. 6 (d) On sales between LICENSEE and its AFFILIATES or sublicensees for resale, the royalty shall be paid on the NET SALES of the AFFILIATE or sublicensee. 4.3 LICENSEE shall pay to HARVARD the following amounts in license milestone payments for each LICENSED PRODUCTS: Upon filing a new or supplemental IND (as appropriate) $100,000 Upon successful completion of a Phase II or Phase II/III clinical trial (as appropriate) $250,000 Upon NDA Approval $500,000 Milestone fees paid to HARVARD on OTHER HARVARD TECHNOLOGIES achieved in the FIELD are fully creditable toward these fees. 4.4 No later than January 1 of each calendar year after the effective date of this Agreement, LICENSEE shall pay to HARVARD the following non-refundable license maintenance royalty and/or advance on royalties. Such payments may be credited against running royalties due for that calendar year and Royalty Reports shall reflect such a credit. --------------------------------------------------- January 1, 2001 $15,000 --------------------------------------------------- each year thereafter $25,000 --------------------------------------------------- 4.5 There shall be a fee of $10,000 for each continuation-in-part application (CIP) added under Patent Rights pursuant to this Agreement. LICENSEE shall have 60 days following notice from HARVARD of the filing of such CIP's to determine if they wish to pay such fees and include the CIP's under the Agreement. ARTICLE V REPORTING 5.1 Prior to signing this Agreement, LICENSEE has provided to HARVARD a written research and development plan under which LICENSEE intends to bring the subject matter of the licenses granted hereunder into commercial use upon execution of this Agreement. 5.2 No later than sixty (60) days after June 30 of each calendar year, LICENSEE shall provide to HARVARD a written annual Progress Report describing progress on research and development, regulatory approvals, manufacturing, sublicensing, marketing and sales during the most recent twelve (12) month period ending June 30 and plans for the forthcoming year. If multiple technologies are covered by the license granted hereunder, the Progress Report shall provide the information set forth above for each technology. If progress differs from that anticipated in the plan required under Paragraph 5.1, LICENSEE shall explain the reasons for the difference and propose a modified research and development plan for HARVARD's review and approval. LICENSEE shall also provide any reasonable additional data HARVARD requires to evaluate LICENSEE's performance. 7 5.3 LICENSEE shall report to HARVARD the date of first sale of LICENSED PRODUCTS (or results of LICENSED PROCESSES) in each country within thirty (30) days of occurrence. 5.4 (a) LICENSEE shall submit to HARVARD within sixty (60) days after each calendar half year ending June 30 and December 31, a Royalty Report setting forth for such half year at least the following information: (i) the number of LICENSED PRODUCTS sold by LICENSEE, its AFFILIATES and sublicensees in each country; (ii) total billings for such LICENSED PRODUCTS; (iii) an accounting for all LICENSED PROCESSES used or sold; (iv) deductions applicable to determine the NET SALES thereof; (v) the amount of NON-ROYALTY SUBLICENSE INCOME received by LICENSEE; and (vi) the amount of royalty due thereon, or, if no royalties are due to HARVARD for any reporting period, the statement that no royalties are due. Such report shall be certified as correct by an officer of LICENSEE and shall include a detailed listing of all deductions from royalties. (b) LICENSEE shall pay to HARVARD with each such Royalty Report the amount of royalty due with respect to such half year. If multiple technologies are covered by the license granted hereunder, LICENSEE shall specify which PATENT RIGHTS and BIOLOGICAL MATERIALS are utilized for each LICENSED PRODUCT and LICENSED PROCESS included in the Royalty Report. (c) All payments due hereunder shall be deemed received when funds are credited to Harvard's bank account and shall be payable by check or wire transfer in United States dollars. Conversion of foreign currency to U.S. dollars shall be made at the conversion rate existing in the United States (as reported in the New York Times or the Wall Street Journal) on the last working day of each royalty period. No transfer, exchange, collection or other charges shall be deducted from such payments. (d) All such reports shall be maintained in confidence by HARVARD except as required by law; however, HARVARD may include in its usual reports annual amounts of royalties paid. (e) Late payments shall be subject to a charge of one and one half percent (1 1/2%) per month, or $250, whichever is greater. 8 ARTICLE VI RECORD KEEPING 6.1 LICENSEE shall keep, and shall require its AFFILIATES and sublicensees to keep, accurate records (together with supporting documentation) of LICENSED PRODUCTS made, used or sold under this Agreement, appropriate to determine the amount of royalties due to HARVARD hereunder. Such records shall be retained for at least three (3) years following the end of the reporting period to which they relate. They shall be available during normal business hours for examination by an accountant selected by HARVARD, for the sole purpose of verifying reports and payments hereunder. In conducting examinations pursuant to this paragraph, HARVARD's accountant shall have access to all records which HARVARD reasonably believes to be relevant to the calculation of royalties under Article IV. 6.2 HARVARD's accountant shall not disclose to HARVARD any information other than information relating to the accuracy of reports and payments made hereunder. 6.3 Such examination by HARVARD's accountant shall be at HARVARD's expense, except that if such examination shows an underreporting or underpayment in excess of five percent (5%) for any twelve (12) month period, then LICENSEE shall pay the cost of such examination as well as any additional sum that would have been payable to HARVARD had the LICENSEE reported correctly, plus interest on said sum at the rate of one and one half per cent (1 1/2%) per month. ARTICLE VII DOMESTIC AND FOREIGN PATENT FILING AND MAINTENANCE 7.1 Upon execution of this Agreement, LICENSEE shall reimburse HARVARD for all reasonable expenses HARVARD has incurred for the preparation, filing, prosecution and maintenance of PATENT RIGHTS. Thereafter, LICENSEE shall reimburse HARVARD for all such future expenses upon receipt of invoices from HARVARD. Late payment of these invoices shall be subject to interest charges of one and one-half percent (1 1/2%) per month. HARVARD shall, in its sole discretion, be responsible for the preparation, filing, prosecution and maintenance of any and all patent applications and patents included in PATENT RIGHTS. HARVARD shall consult with LICENSEE as to the preparation, filing, prosecution and maintenance of such patent applications and patents and shall furnish to LICENSEE copies of documents relevant to any such preparation, filing, prosecution or maintenance. 7.2 HARVARD and LICENSEE shall cooperate fully in the preparation, filing, prosecution and maintenance of PATENT RIGHTS and of all patents and patent applications licensed to LICENSEE hereunder, executing all papers and instruments or requiring members of HARVARD to execute such papers and instruments so as to enable HARVARD to apply for, to prosecute and to maintain patent applications and patents in HARVARD's name in any country. Each party shall provide to the other prompt notice 9 as to all matters which come to its attention and which may affect the preparation, filing, prosecution or maintenance of any such patent applications or patents. 7.3 LICENSEE may elect to surrender its PATENT RIGHTS in any country upon sixty (60) days written notice to HARVARD. Such notice shall not relieve LICENSEE from responsibility to reimburse HARVARD for patent-related expenses incurred prior to the expiration of the (60)-day notice period (or such longer period specified in LICENSEE's notice). ARTICLE VIII INFRINGEMENT 8.1 With respect to any PATENT RIGHTS that are exclusively licensed to LICENSEE pursuant to this Agreement, LICENSEE shall have the right to prosecute in its own name and at its own expense any infringement of such patent, so long as such license is exclusive at the time of the commencement of such action. HARVARD agrees to notify LICENSEE promptly of each infringement of such patents of which HARVARD is or becomes aware. Before LICENSEE commences an action with respect to any infringement of such patents, LICENSEE shall give careful consideration to the views of HARVARD and to potential effects on the public interest in making its decision whether or not to sue. 8.2 (a) If LICENSEE elects to commence an action as described above, Harvard may, to the extent permitted by law, elect to join as a party in that action. Regardless of whether HARVARD elects to join as a party, HARVARD shall cooperate fully with LICENSEE in connection with any such action. (b) If HARVARD elects to join as a party pursuant to subparagraph (a), HARVARD shall jointly control the action with LICENSEE. (c) LICENSEE shall reimburse HARVARD for any costs HARVARD incurs, including reasonable attorneys' fees, as part of an action brought by LICENSEE, irrespective of whether HARVARD becomes a co-plaintiff. 8.3 If LICENSEE elects to commence an action as described above, LICENSEE may deduct from its royalty payments to HARVARD with respect to the patent(s) subject to suit an amount not exceeding fifty percent (50%) of LICENSEE's expenses and costs of such action, including reasonable attorneys' fees; provided, however, that such reduction shall not exceed fifty percent (50%) of the total royalty due to HARVARD with respect to the patent(s) subject to suit for each calendar year. If such fifty percent (50%) of LICENSEE's expenses and costs exceeds the amount of royalties deducted by LICENSEE for any calendar year, LICENSEE may to that extent reduce the royalties due to HARVARD from LICENSEE in succeeding calendar years, but never by more than fifty percent (50%) of the total royalty due in any one year with respect to the patent(s) subject to suit. 10 8.4 No settlement, consent judgment or other voluntary final disposition of the suit may be entered into without the prior written consent of -HARVARD, which consent shall not be unreasonably withheld. 8.5 Recoveries or reimbursements from actions commenced pursuant to this Article shall first be applied to reimburse LICENSEE and HARVARD for litigation costs not paid from royalties and then to reimburse HARVARD for royalties deducted by LICENSEE pursuant to paragraph 8.3. LICENSEE and HARVARD shall share any remaining recoveries or reimbursements equally. 8.6 If LICENSEE elects not to exercise its right to prosecute an infringement of the PATENT RIGHTS pursuant to this Article, HARVARD may do so at its own expense, controlling such action and retaining all recoveries therefrom. LICENSEE shall cooperate fully with HARVARD in connection with any such action. 8.7 Without limiting the generality of paragraph 8.6, HARVARD may, at its election and by notice to LICENSEE, establish a time limit of sixty (60) days for LICENSEE to decide whether to prosecute any infringement of which HARVARD is or becomes aware. If, by the end of such sixty (60)-day period, LICENSEE has not commenced such an action, HARVARD may prosecute such an infringement at its own expense, controlling such action and retaining all recoveries therefrom. With respect to any such infringement action prosecuted by HARVARD in good faith, LICENSEE shall pay over to Harvard any payments (whether or not designated as "royalties") made by the alleged infringer to LICENSEE under any existing or future sublicense authorizing LICENSED PRODUCTS, up to the amount of HARVARD's unreimbursed litigation expenses (including, but not limited to, reasonable attorneys' fees). 8.8 If a declaratory judgment action is brought naming LICENSEE as a defendant and alleging invalidity of any of the PATENT RIGHTS, HARVARD may elect to take over the sole defense of the action at its own expense. LICENSEE shall cooperate fully with HARVARD in connection with any such action. ARTICLE IX TERMINATION OF AGREEMENT 9.1 This Agreement, unless terminated as provided herein, shall remain in effect until the last patent or patent application in PATENT RIGHTS has expired or been abandoned. 9.2 HARVARD may terminate this Agreement as follows: (a) If LICENSEE does not make a payment due hereunder and fails to cure such non-payment (including the payment of interest in accordance with paragraph 54(e)) within forty-five (45) days after the date of notice in writing of such non-payment by HARVARD. (b) If LICENSEE defaults in its obligations under paragraph 10.4(c) and (d) to procure and maintain insurance. 11 (c) If, at any time after three years from the date of this Agreement, HARVARD determines that the Agreement should be terminated pursuant to paragraph 3.2(d). (d) If LICENSEE shall become insolvent, shall make an assignment for the benefit of creditors, or shall have a petition in bankruptcy filed for or against it. Such termination shall be effective immediately upon HARVARD giving written to LICENSEE. (e) If an examination by Harvard's accountant pursuant to Article VI shows an underreporting or underpayment by LICENSEE in excess of 20% for any twelve (12) month period. (f) If LICENSEE is convicted of a felony relating to the manufacture, use, or sale of LICENSED PRODUCTS. (g) Except as provided in subparagraphs (a), (b), (c), (d), (e) and (f) above, if LICENSEE defaults in the performance of any obligations under this Agreement and the default has not been remedied within ninety (90) days after the date of notice in writing of such default by HARVARD. 9.3 LICENSEE shall provide, in all sublicenses granted by it under this Agreement, that LICENSEE's interest in such sublicenses shall at HARVARD's option terminate or be assigned to HARVARD upon termination of this Agreement. 9.4 LICENSEE may terminate this Agreement by giving ninety (90) days advance written notice of termination to HARVARD and paying a termination fee of twenty thousand dollars ($20,000). Upon termination, LICENSEE shall submit a final Royalty Report to HARVARD and any royalty payments and unreimbursed patent expenses invoiced by HARVARD shall become immediately payable. 9.5 Upon termination pursuant to Paragraph 9.2, whether by HARVARD or by LICENSEE, LICENSEE shall cease all use of the BIOLOGICAL MATERIALS and shall, upon request, return or destroy (at Harvard's option) all BIOLOGICAL MATERIALS under its control or in its possession. 9.6 Paragraphs 6.1, 6.2, 6.3, 7.1, 8.5, 9.4, 9.5, 9.6, 10.2, 10.4, 10.5, 10.8 and 10.9 of this Agreement shall survive termination. ARTICLE X GENERAL 10.1 HARVARD does not warrant the validity of the PATENT RIGHTS licensed hereunder and makes no representations whatsoever with regard to the scope of the licensed PATENT RIGHTS or that such PATENT RIGHTS or BIOLOGICAL MATERIALS may be exploited by LICENSEE, an AFFILIATE, or sublicensee without infringing other patents. 12 10.2 HARVARD EXPRESSLY DISCLAIMS ANY AND ALL IMPLIED OR EXPRESS WARRANTIES AND MAKES NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF THE PATENT RIGHTS, BIOLOGICAL MATERIALS, OR INFORMATION SUPPLIED BY HARVARD, LICENSED PROCESSES OR LICENSED PRODUCTS CONTEMPLATED BY THIS AGREEMENT. Further HARVARD has made no investigation and makes no representation that the BIOLOGICAL MATERIALS supplied by it or the methods used in making or using such materials are free from liability for patent infringement. 10.3 LICENSEE shall not distribute or release the BIOLOGICAL MATERIALS to others except to further the purposes of this Agreement. LICENSEE shall protect the BIOLOGICAL MATERIALS at least as well as it protects its own valuable tangible personal property and shall take measures to protect the BIOLOGICAL MATERIALS from any claims by third parties including creditors and trustees in bankruptcy. 10.4 (a) LICENSEE shall indemnify, defend and hold harmless HARVARD, ORGANIX, GENERAL and their current or former directors, governing board members, trustees, officers, faculty, medical and professional staff, employees, students, and agents and their respective successors, heirs and assigns (collectively, the "Indemnitees"), against any liability, damage, loss or expenses (including reasonable attorneys' fees and expenses of litigation) incurred by or imposed upon the Indemnitees or any of them in connection with any claims, suits, actions, demands or judgments arising out of any theory of product liability (including, but not limited to, actions in the form of tort, warranty, or strict liability) concerning any product, process or service made, used or sold pursuant to any right or license granted under this Agreement. (b) LICENSEE shall, at its own expense, provide attorneys reasonably acceptable to HARVARD to defend against any actions brought or filed against any Indemnitee hereunder with respect to the subject of indemnity contained herein, whether or not such actions are rightfully brought. (c) Beginning at the time any such product, process or service is being commercially distributed or sold (other than for the purpose of obtaining regulatory approvals) by LICENSEE or by a sublicensee, AFFILIATE or agent of LICENSEE, LICENSEE shall, at its sole cost and expense, procure and maintain commercial general liability insurance in amounts not less than $2,000,000 per incident and $2,000,000 annual aggregate and naming the Indemnitees as additional insureds. During clinical trials of any such product, process or service, LICENSEE shall, at its sole cost and expense, procure and maintain commercial general liability insurance in such equal or lesser amount as HARVARD shall require, naming the Indemnitees as additional insureds. Such commercial general liability insurance shall provide (i) product liability coverage and (ii) broad form contractual liability coverage for LICENSEE's indemnification under this Agreement. If LICENSEE elects to self-insure all or part of the limits described above (including deductibles or retentions which are in excess of $250,000 annual aggregate) such self 13 insurance program must be acceptable to HARVARD and the Risk Management Foundation of the Harvard Medical Institutions, Inc. in their sole discretion. The minimum amounts of insurance coverage required shall not be construed to create a limit of LICENSEE's liability with respect to its indemnification under this Agreement. (d) LICENSEE shall provide HARVARD with written evidence of such insurance upon request of HARVARD. LICENSEE shall provide HARVARD with written notice at least fifteen (15) days prior to the cancellation, non-renewal or material change in such insurance; if LICENSEE does not obtain replacement insurance providing comparable coverage within such fifteen (15) day period, HARVARD shall have the right to terminate this Agreement effective at the end of such fifteen (15) day period without notice or any additional waiting periods. (d) LICENSEE shall maintain such commercial general liability insurance beyond the expiration or termination of this Agreement during (1) the period that any product, process, or service, relating to, or developed pursuant to, this Agreement is being commercially distributed or sold by LICENSEE or by a sublicensee, AFFILIATE or agent of LICENSEE and (ii) a reasonable period after the period referred to in (e)(i) above which in no event shall be less than fifteen (15) years. 10.5 LICENSEE shall not use HARVARD's, ORGANIX's, or GENERAL's name or insignia, or any adaptation of them, or the name of any of HARVARD's, ORGANIX's or GENERAL's inventors or other investigators in any advertising, promotional or sales literature without the prior written approval of HARVARD, ORGANIX, or GENERAL, as the case may be. 10.6 Without the prior written approval of HARVARD in each instance, neither this Agreement nor the rights granted hereunder shall be transferred or assigned in whole or in part by LICENSEE to any person whether voluntarily or involuntarily, by operation of law or otherwise. This Agreement shall be binding upon the respective successors, legal representatives and assignees of HARVARD and LICENSEE. 10.7 The interpretation and application of the provisions of this Agreement shall be governed by the laws of the Commonwealth of Massachusetts. 10.8 LICENSEE shall comply with all applicable laws and regulations. In particular, it is understood and acknowledged that the transfer of certain commodities and technical data is subject to United States laws and regulations controlling the export of such commodities and technical data, including all Export Administration Regulations of the United States Department of Commerce. These laws and regulations among other things, prohibit or require a license for the export of certain types of technical data to certain specified countries. LICENSEE hereby agrees and gives written assurance that it will comply with all United States laws and regulations controlling the export of commodities and technical data, that it will be solely responsible for any violation of such by LICENSEE or its AFFILIATES or sublicensees, and that it will defend and hold 14 HARVARD harmless in the event of any legal action of any nature occasioned by such violation. 10.9 LICENSEE agrees (i) to obtain all regulatory approvals required for the manufacture and sale of LICENSED PRODUCTS and LICENSED PROCESSES and (ii) to utilize appropriate patent marking on such LICENSED PRODUCTS. LICENSEE also agrees to register or record this Agreement as is required by law or regulation in any country where the license is in effect. 10.10 Any notices to be given hereunder shall be sufficient if signed by the party (or party's attorney) giving same and either (a) delivered in person, or (b) mailed certified mail return receipt requested, or (c) faxed to other party if the sender has evidence of successful transmission and if the sender promptly sends the original by ordinary mail, in any event to the following addresses: If to LICENSEE: Boston Life Sciences Inc. 137 Newbury Street, 8th Floor Boston, MA 02116 Fax No.: (617) 425-0996 If to HARVARD to: Office of Technology Licensing Harvard Medical School Building A - Room 414 25 Shattuck Street Boston, MA 02115 Fax No.: (617) 432-2788 with copies to: Office for Technology and Trademark Licensing Harvard University 1350 Massachusetts Avenue, Suite 727 Cambridge, MA 02138 Fax No.: (617) 495-9568 By such notice either party may change their address for future notices. Notices delivered in person shall be deemed given on the date delivered. Notices sent by fax shall be deemed given on the date faxed. Notices mailed shall be deemed given on the date postmarked on the envelope. 10.11 Should a court of competent jurisdiction later hold any provision of this Agreement to be invalid, illegal, or unenforceable, and such holding is not reversed on appeal, it shall be considered severed from this Agreement. All other provisions, rights and obligations 15 shall continue without regard to the severed provision, provided that the remaining provisions of this Agreement are in accordance with the intention of the parties. 10.12 In the event of any controversy or claim arising out of or relating to any provision of this Agreement or the breach thereof, the parties shall try to settle such conflict amicably between themselves. Subject to the limitation stated in the final sentence of this section, any such conflict which the parties are unable to resolve promptly shall be settled through arbitration conducted in accordance with the rules of the American Arbitration Association. The demand for arbitration shall be filed within a reasonable time after the controversy or claim has arisen, and in no event after the date upon which institution of legal proceedings based on such controversy or claim would be barred by the applicable statute of limitation. Such arbitration shall be held in Boston, Massachusetts. The award through arbitration shall` be final and binding. Either party may enter any such award in a court having jurisdiction or may make application to such court for judicial acceptance of the award and an order of enforcement, as the case may be. Notwithstanding the foregoing, either party may, without recourse to arbitration, assert against the other party a third-party claim or cross-claim in any action brought by a third party, to which the subject matter of this Agreement may be relevant. 10.13 This Agreement constitutes the entire understanding between the parties and neither party shall be obligated by any condition or representation other than those expressly stated herein or as may be subsequently agreed to by the parties hereto in writing. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives. PRESIDENT AND FELLOWS LICENSEE OF HARVARD COLLEGE /s/ Jeffrey Labovitz /s/ Marc Lanser - --------------------------- --------------------------------- Jeffrey Labovitz, Ph.D., Director Signature Office of Technology Licensing Marc Lanser --------------------------------- Name Executive VP --------------------------------- Title 16 Appendix A The following comprise PATENT RIGHTS: U.S. Provisional Application Serial No. 60/141,540, filed June 28, 1999 entitled "Imaging the Dopamine Transporter to Determine AD-HD" 17 Appendix B The following comprise BIOLOGICAL MATERIALS: None 18 EX-10.12 5 dex1012.txt LICENSE AGREEMENT Exhibit 10.12 EXCLUSIVE LICENSE AGREEMENT BETWEEN CHILDREN'S MEDICAL CENTER CORPORATION AND BOSTON LIFE SCIENCES INC. TABLE OF CONTENTS ----------------- PAGE ---- ARTICLE I. DEFINITIONS .................................................... 1 ARTICLE II. GRANT ......................................................... 3 ARTICLE III. DUE DILIGENCE ................................................ 5 ARTICLE IV. ROYALTIES AND OTHER PAYMENTS .................................. 6 ARTICLE V. REPORTS AND RECORDS ............................................ 8 ARTICLE VI. PATENT PROSECUTION ............................................ 9 ARTICLE VII. INFRINGEMENT ................................................. 10 ARTICLE VIII. UNIFORM INDEMNIFICATION AND INSURANCE PROVISIONS ............ 11 ARTICLE IX. EXPORT CONTROLS ............................................... 12 ARTICLE X. ARBITRATION .................................................... 12 ARTICLE XI. NON-USE OF NAMES .............................................. 13 ARTICLE XII. ASSIGNMENT ................................................... 13 ARTICLE XIII. TERM AND TERMINATION ........................................ 14 ARTICLE XIV. PAYMENTS, NOTICES, AND OTHER COMMUNICATIONS .................. 15 ARTICLE XV. CONFIDENTIALITY ............................................... 15 ARTICLE XVI. GENERAL PROVISIONS ........................................... 16 i EXCLUSIVE LICENSE AGREEMENT This Agreement is made and entered into as of the date last written below (the Effective Date), by and between CHILDREN'S MEDICAL CENTER CORPORATION, a charitable corporation duly organized and existing under the laws of the Commonwealth of Massachusetts and having its principal office at 300 Longwood Avenue, Boston, Massachusetts, 02115, U.S.A. (hereinafter referred to as "CMCC"), and Boston Life Sciences, Inc., a business corporation organized and existing under the laws of the State of Delaware and having its principal office at 31 Newbury Street, Suite 300, Boston, MA 02116 (hereinafter referred to as "LICENSEE"). WHEREAS, CMCC is the owner of certain Patent Rights (as that term shall be defined hereafter) that have been developed as set forth in U.S. Patent Application Serial No. 08/921,902, filed September 2, 1997, entitled "Methods for Modulating the Axonal Outgrowth of Central Nervous System Neurons (CMCC 600) by Larry Benowitz, and has the right to grant exclusive licenses under said Patent Rights, subject only to a royalty-free, nonexclusive license heretofore granted to the United States Government for those patents developed with U.S. Government funding; WHEREAS, CMCC desires to have the Patent Rights utilized in the public interest and is willing to grant a license thereunder on the terms and conditions described herein; WHEREAS, LICENSEE has represented to CMCC that LICENSEE is ready, willing and able to engage in the commercial development, production, manufacture, marketing and sale of Licensed Products (as that term shall be defined hereafter) and/or the use of Licensed Processes (as that term shall be defined hereafter) and that it shall commit itself to a thorough, vigorous and diligent program of exploiting the Patent Rights in accordance with the terms and conditions described herein so that public utilization shall result therefrom; and WHEREAS, LICENSEE desires to obtain an exclusive license under the Patent Rights on the terms and conditions of this Agreement. NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the parties hereto agree as follows: ARTICLE I. DEFINITIONS For the purpose of this Agreement, the following words and phrases shall have the meanings set forth below: A. "Affiliate shall mean any company or other legal entity controlling, controlled by or under common control with LICENSEE. For purposes of the definition of "Affiliate" the term "control" shall mean: (i) in the case of a corporate entity, the direct or indirect ownership of at least a majority of the stock or participating shares entitled to vote for the election of directors of that entity; (ii) in the case of a partnership, the power customarily held by a general partner to direct the management and policies of such partnership; or (iii) in the case of a joint venture, whether in corporate, partnership or other legal form, a more than nominal economic interest and managerial role. 1 B. "Combination Product(s) or Process(es)" shall mean a product or process that includes a Licensed Product or Licensed Process sold in combination with another component(s) whose manufacture, use or sale by an unlicensed party would not constitute an infringement of the Patent Rights. C. "Field of Use" shall mean the diagnosis, prevention or treatment of central nervous system disease or condition in humans or animals. D. "First Commercial Sale" shall mean with respect to each country: (i) the first sale of any Licensed Product or Licensed Process by LICENSEE, following approval of such Licensed Product's or Licensed Process's marketing by the appropriate governmental agency, if any such approval is necessary, for the country in which the sale is to be made; or (ii) when governmental approval is not required, the first sale in that country of the Licensed Product or Licensed Process. E. "Licensed Product" shall mean any product or part thereof: 1. The manufacture, use or sale of which would infringe any one of the issued, valid, enforceable, unexpired claim(s) or any one of the pending claim(s) contained in the Patent Rights in any country. 2. The manufacture of which uses a "Licensed Process" as that term shall be defined hereafter. F. "Licensed Process" shall mean any process that would infringe any one of the issued, valid, enforceable, unexpired claim(s) or any one of the pending claim(s) contained in the Patent Rights in any country. G. "LICENSEE" shall mean LICENSEE and/or its successor(s) or assignee(s) and/or its Affiliates. H. "Net Sales" shall mean gross receipts received by LICENSEE, LICENSEE's SUBLICENSEE's or LICENSEE's Affiliates for Licensed Products and Licensed Processes produced hereunder, less the sum of the following: 1. Discounts allowed in amounts customary in the trade. 2. Sales taxes, tariff duties and/or use taxes directly imposed and with reference to particular sales. 3. Outbound transportation and delivery charges (including insurance premiums related to transportation and delivery) prepaid or allowed. 4. Amounts allowed or credited on returns. No deductions shall be made for commissions paid to individuals whether they are with independent sales agencies or regularly employed by LICENSEE and on its payroll or for the cost of collections. Licensed Products and Licensed Processes shall be considered "sold" when 2 billed out or invoiced. Notwithstanding anything herein to the contrary, the following shall not be considered a sale of a Licensed Product or Licensed Process under this Agreement: (i) the transfer of a Licensed Product or Licensed Process to an Affiliate for sale by the Affiliate in a transaction that will be royalty bearing; (ii) the transfer of a Licensed Product or Licensed Process to a third party without consideration to LICENSEE in connection with the development or testing of a Licensed Product or Licensed Process; or (iii) the transfer of a Licensed Product or Licensed Process to a third party without consideration in connection with the marketing or promotion of the Licensed Product or Licensed Process. I. "Patent Rights" shall mean all of the following intellectual property which CMCC owns or has rights to during the term of this Agreement: 1. The United States and foreign patents and/or application listed in Appendix 1 attached hereto and incorporated herein by reference and divisionals and continuations thereof. 2. The United States and foreign patents issued from the applications listed in Appendix 1 and from divisionals and continuations of those applications. 3. Claims of United States and foreign continuation-in-part applications, and of the resulting patents, which relate to subject matter specifically described in the United States and foreign patent applications described in Appendix 1. 4. Claims of all later filed foreign patent applications, and of the resulting patents, which relate to subject matter specifically described in the United States patent and/or patent applications described in subparagraphs 1, 2 or 3 of this Article I, Paragraph I. 5. Any reissues, divisions, amendments or extensions of the United States or foreign patents described in subparagraphs 1, 2, 3 or 4 of this Article I, Paragraph I. J. "SUBLICENSEE" shall mean a person or entity unaffiliated with LICENSEE to whom LICENSEE has granted a sublicense under this Agreement. ARTICLE II. GRANT A. CMCC hereby grants to LICENSEE the worldwide right and exclusive license to make, have made, use, lease and sell the Licensed Products and to practice the Licensed Processes for the Field of Use to the end of the term for which the Patent Rights are granted, unless sooner terminated as provided in this Agreement. B. Notwithstanding anything above to the contrary, CMCC shall retain a royalty-free, nonexclusive, irrevocable license to practice, and to sublicense other non-profit research organizations to practice, the Patent Rights for noncommercial research purposes only. 3 C. Notwithstanding anything above to the contrary, the license granted hereunder shall be subject to the rights of the United States government, if any, under Public Laws 96-517, 97-226, and 98-620, codified at 35 U.S.C. sec. 200-212 and any regulations promulgated thereunder. D. LICENSEE agrees that Licensed Products leased or sold in the United States shall be manufactured substantially in the United States. E. In order to establish exclusivity for LICENSEE, CMCC hereby agrees that it shall not, without LICENSEE's prior written consent, grant to any other commercial party a license to make, have made, use, lease and/or sell Licensed Products or to use the Licensed Processes in the Field of Use during the period of time in which this Agreement is in effect, except as otherwise specified in this Agreement or as required by law to grant rights to the United States Government. F. LICENSEE shall have the right to enter into sublicensing agreements with respect to any of the rights, privileges, and licenses granted hereunder, subject to the terms and conditions hereof. Such sublicenses will terminate upon the termination of LICENSEE's rights granted herein unless events of default are cured by LICENSEE or SUBLICENSEE within thirty (30) days of notification by CMCC of default and/or as provided by the terms of this Agreement. G. LICENSEE agrees that any sublicense granted by it shall provide that the obligations to CMCC of Articles II (Grant), V (Reports and Records), VII (Infringement), VIII (Insurance and Indemnification), IX (Export Controls), X (Non-Use of Names), XI (Assignment), XII (Dispute Resolution), XIII (Term and Termination) and XV (Miscellaneous Provisions) of this Agreement shall be binding upon the SUBLICENSEE as if it were a party to this Agreement. LICENSEE further agrees to attach a copy of this Agreement to all sublicense agreements, deleting economic terms when and as appropriate. H. LICENSEE agrees to provide to CMCC notice of any sublicense granted hereunder and to forward to CMCC a copy of any and all fully executed sublicense agreements. LICENSEE further agrees to forward to CMCC annually a copy of such reports received by LICENSEE from its SUBLICENSEES during the preceding twelve (12) month period as shall be pertinent to a royalty accounting under the applicable sublicense. I. LICENSEE shall advise CMCC in writing of any consideration received from SUBLICENSEES. LICENSEE shall not accept from any SUBLICENSEE anything of value in lieu of cash payments to discharge SUBLICENSEE's payment obligations under any sublicense granted under this Agreement, without the express written permission of CMCC, which permission shall not be unreasonably withheld. J. The license granted hereunder shall not be construed to confer any rights upon LICENSEE by implication, estoppels or otherwise as to any technology not described in the Patent Rights. 4 ARTICLE III. DUE DILIGENCE A. Licensee shall use its good faith and diligent efforts to bring one or more Licensed Products and/or Licensed Processes to market as soon as reasonably practicable, consistent with sound and reasonable business practices and judgment, through a thorough, vigorous and aggressive development program. Thereafter, Licensee agrees that until expiration or termination of this Agreement, Licensee shall continue active and diligent efforts to keep Licensed Products and/or Licensed Processes reasonably available to the public. In the event Licensee decides not to exploit a licensed Patent Right, it shall promptly inform CMCC in writing and shall surrender to CMCC its license to that Patent Right. B. The parties acknowledge that LICENSEE has provided to CMCC prig to the date of execution of this Agreement a written commercialization development plan ("Development Plan"), setting forth the initial indications and markets for Licensed Products and Licensed Processes, including to the extent practicable: (i) time-delimited targets for pre-clinical development, clinical trials, regulatory approval, manufacturing and marketing that represent reasonable efforts, consistent with industry norms for similar technology and applications, to bring Licensed Products and Licensed Processes to the marketplace; and (ii) actual or projected . financial resources and/or strategic alliances that will be required to implement the Development Plan. The Development Plan is attached hereto as Appendix 2 and is hereby incorporated herein by reference. C. LICENSEE shall use good faith and diligent efforts to accomplish the following milestones, as set forth in the Development Plan, and to manufacture and distribute Licensed Products and Licensed Processes: 3.C.1. within 18 months of Effective Date, the filing of an IND (Investigational New Drug Application) in the U.S. for a Licensed Product by LICENSEE 3.C.2. within 2 years of Effective Date, the sublicensing of Patent Rights to a Development partner 3.C.3. upon sublicensing of Patent Rights to a Development Partner, provision of sponsored research monies to Dr. Larry Benowitz's laboratory to fund two years of work on projects relating to subject matter specifically described in Patent Rights 3.C.4. within 2 years of Effective Date, the initiation of Phase I or Phase I/II clinical trials of a Licensed Product 3.C.5. within 4 years of Effective Date, the initiation of Phase III Clinical Trials of a Licensed Product 3.C.6. within 6 years of Effective Date the filing of an BLA in the U.S. for a Licensed Product by Licensee D. Notwithstanding anything above to the contrary, CMCC shall not unreasonably withhold its assent to any revision of the objective(s) set forth in the Development Plan when requested in writing by LICENSEE and supported by evidence reasonably acceptable to CMCC: (i) of technical difficulties or delays in the clinical studies or regulatory process that LICENSEE could not have reasonably avoided; or (ii) that LICENSEE, its Affiliates and/or 5 SUBLICENSEES have expended good faith and diligent efforts and adequate resources to meet said objective. E. In the event CMCC reasonably believes that LICENSEE is not diligently seeking to achieve the objectives set forth in the Development Plan in a timely manner, CMCC shall so notify LICENSEE in writing. LICENSEE shall have the option, exercisable by written notice to CMCC provided within ten (10) days after receipt of any such notice, to either: (i) receive a three (3) months grace period to establish to CMCC's reasonable satisfaction that LICENSEE is expending its good faith and diligent efforts and adequate resources to achieve said objectives; or (ii) agree to CMCC's termination of this Agreement as provided hereafter. In the event LICENSEE agrees to termination of this Agreement, CMCC shall immediately terminate the license granted to LICENSEE under this Agreement. In the event LICENSEE fails to establish its diligence to CMCC's reasonable satisfaction as provided above prior to expiration of the three (3) months grace period, CMCC shall have the right to terminate the license granted to LICENSEE under this Agreement. F. In the event LICENSEE fails to meet the objective(s) set forth in 3.C above in a timely manner, CMCC shall notify LICENSEE thereof in writing, and LICENSEE shall have thirty (30) days following such notification to establish to the reasonable satisfaction of CMCC that (i) it has met such objective(s); or (ii) a revision to 3.C is necessary and appropriate as contemplated above. In the event LICENSEE fails to establish the same to CMCC's reasonable satisfaction; CMCC shall have the right in its discretion to terminate the license granted to LICENSEE under this Agreement or to convert the license granted to LICENSEE hereunder to a non-exclusive license on financial terms and conditions mutually agreed to by CMCC and LICENSEE. ARTICLE IV. ROYALTIES AND OTHER PAYMENTS A. For the rights, privileges and exclusive licenses granted hereunder, LICENSEE shall pay to CMCC the following amounts in the manner hereinafter provided until the end of the term of the last to expire Patent Right, unless this Agreement shall be sooner terminated as hereinafter provided: 1. A license issue fee of $25,000 which license issue fee shall be deemed earned and due immediately upon the execution of this Agreement. 2. LICENSEE shall make the following milestone payments to CMCC upon the occurrence of the following events ("Milestones"): (a) $50,000 at the filing of an IND (b) $75,000 at the completion of Phase I clinical Trials for any indication (c) $100,000 at the initiation of Phase III Clinical Trials (d) $200,000 at the filing of an NDA 6 3. Running Royalties in an amount equal to six percent (6%) of Net Sales of Licensed Products or Licensed Processes used, leased or sold by and/or for LICENSEE and/or its Affiliates. 4. In the event LICENSEE has granted sublicenses under this Agreement, twenty percent (20%) of any and all payments received by LICENSEE from said SUBLICENSEES in consideration of permitting the SUBLICENSEE to practice the Patent Rights, including but not limited to sublicense issue fees, any lump sum payments, milestone payments; technology transfer payments or other similar fees, and royalties; provided that with respect to running royalties in connection with a SUBLICENSEE's sales of Licensed Products or Licensed Processes, LICENSEE shall pay to CMCC hereunder an amount equal to the royalty CMCC would have received from LICENSEE if such sales had been made by LICENSEE. B. No multiple royalties shall be payable because any Licensed Product or Licensed Process, its manufacture, use, lease or sale are or shall be covered by more than one Patent Rights patent application or Patent Rights patent licensed under this Agreement. C. To the extent that LICENSEE obtains subsequent to the date of this Agreement licenses to third party patents or other intellectual property that are necessary to produce or sell Licensed Products or Licensed Processes; LICENSEE may deduct from the royalty due to CMCC fifty percent (50%) of the royalties due on such third party patents or intellectual property up to an amount equal to fifty percent (50010) of royalties hereunder. D. For purposes of calculating royalties, in the event that a Licensed Product or Licensed Process includes both component(s) covered by a valid claim of a Patent Right ("Patented Component") and a component which is diagnostically useable or therapeutically active alone or in a combination which does not require the Patented Component, and such component is not covered by a valid claim of a Patent Right ("Unpatented Component"), then Net Sales of the Combination Product or Combination Process shall be calculated using one of the following methods; provided that in no event shall royalties payable to CMCC hereunder be reduced to less than fifty percent (50%) of those otherwise due hereunder: 1. By multiplying the Net Sales of the Combination Product or Combination Process during the applicable royalty accounting period ("accounting period") by a fraction, the numerator of which is the aggregate gross selling price of the Patented Component(s) contained in the Combination Product or Combination Process if sold separately, and the denominator of which is the sum of the gross selling price of both the Patented Component(s) and the Unpatented Component(s) contained in the Combination Product or Combination Process if sold separately; or 2. In the event that no such separate sales are made of the Patented Component(s) or the Unpatented Components during the applicable accounting period, Net Sales for purposes of determining royalties payable 7 hereunder shall be calculated by multiplying the Net Sales of the Combination Product or Combination Process by a fraction, the numerator of which is the fully allocated production cost of the Patented Component(s) and the denominator of which is the sum of the fully allocated production costs of the Patented Component(s).and the Unpatented Component(s) contained in the Combination Product or Combination Process. Such fully allocated costs shall be determined by using LICENSEE's standard accounting procedures, which procedures must conform to standard cost accounting procedures. E. Royalty payments shall be paid in United States dollars in Boston, Massachusetts, or at such other place as CMCC may reasonably designate consistent with the laws and regulations controlling in any foreign country. If the currency conversion shall be required in connection with the payments of royalties or other amounts hereunder, the conversion shall be made by using the exchange rate prevailing at the Bank of Boston on the last business day of the calendar quarterly reporting period to which such royalty payments relate. F. The royalty payments set forth in this Agreement shall, if overdue, bear interest until payment at a per annum rate of four percent (4%) above the prime rate in effect at the Bank of Boston on the due date. The payment of such interest shall not foreclose CMCC from. exercising any other rights it may have as a consequence of the lateness of any payment. ARTICLE V. REPORTS AND RECORDS A. LICENSEE shall keep, and shall require its Affiliates and SUBLICENSEES to keep, full, true and accurate books of account in accordance with generally accepted accounting principles and containing sufficient detail to enable CMCC to determine the royalty and other amounts payable to CMCC under this Agreement. Said books of account shall be kept at LICENSEE's principal place of business or the principal place of business of the appropriate division of LICENSEE to which this Agreement relates. Said books and the supporting data shall be retained for at least five (5) years following the end of the calendar year to which they pertain. B. CMCC shall have the right to audit the books of account described above from time to time to the extent necessary to verify the reports provided for herein or compliance in other respects with this Agreement. CMCC or its agents shall perform these audits at CMCC's expense during LICENSEE's regular business hours. C. LICENSEE shall deliver to CMCC true and accurate reports by March 31st, for the period July 1 through December 31 of the previous year, and on September 30th, for the period January 1st through June 30th of the current year, giving such particulars of the business conducted by LICENSEE, its Affiliates and its SUBLICENSEES under this Agreement as shall be pertinent to a royalty accounting hereunder. These reports shall include at least the following: 1. Number of Licensed Products and Licensed Processes manufactured and. sold. 8 2. Aggregate billings for Licensed Products and Licensed Processes sold. 3. Accounting for all Licensed Products and Licensed Processes sold. 4. Applicable deductions. 5. Total royalties due based on Net Sales by or for LICENSEE. 6. Names and addresses of all SUBLICENSEES of LICENSEE. 7. Payments received by LICENSEE from Affiliates and SUBLICENSEES: 8. Licensed Products manufactured and sold to the U.S. Government. No royalty obligations shall arise from sales or use by, for or on behalf of the U.S. Government in view of a royalty-free, nonexclusive license that may heretofore have been granted to the U.S. Government. 9. Royalties and Fees received from SUBLICENSEES. D. Until the First Commercial Sale of a Licensed Product or Licensed Process, LICENSEE shall provide to CMCC at least annually reasonable detail regarding the activities of LICENSEE and LICENSEE's Affiliates and SUBLICENSEES relative to achieving the objectives set forth in the Development Plan in a timely manner, including but not limited to, reports of financial expenditures to achieve said objectives, research and development activities, regulatory approvals, strategic alliances and manufacturing, sublicensing and marketing efforts. E. With each such report submitted, LICENSEE shall pay to CMCC the royalties due and payable under this Agreement. If no royalties shall be due, LICENSEE shall so report. F. On or before the ninetieth (90th) day following the close of LICENSEE's fiscal year, LICENSEE shall provide CMCC with LICENSEE's certified financial statements for the preceding fiscal year, including at a minimum a balance sheet and an operating statement. ARTICLE VI. PATENT PROSECUTION A. LICENSEE, at its own expense and utilizing the Patent Attorneys of its choice, shall have the sole right and responsibility, after consultation with CMCC, for the filing, prosecution and maintenance during the term of this Agreement of any patent application and patents contained in the Patent Rights set forth in Appendix 1; provided, however, that CMCC shall have the right to approve LICENSEE's choice of patent attorneys, such approval not to be unreasonably withheld LICENSEE or its patent counsel shall provide CMCC with copies of all correspondence and documents filed with, or received from the United States Patent and Trademark Office or any foreign patent office or patent agent. In addition, LICENSEE agrees that , where permitted, any patent applications shall be filed, and/or issued in the name of CMCC, and that any and all official or `ribbon' copies of issued patents shall be forwarded to, and retained by, CMCC. 9 B. In the event LICENSEE elects not to file, prosecute, and/or maintain any patent applications and/or patents contained in the Patent Rights LICENSEE shall so notify CMCC at least thirty (30) days prior to taking, or not taking, any action which would result in abandonment, withdrawal or lapse of such patent or patent application. In such event, LICENSEE shall provide to CMCC any authorization necessary to permit CMCC to file, prosecute and/or maintain said patent applications and/or patents, at its own expense utilizing counsel of its choice, and,. further, CMCC shall be free to license such patent applications and/or patents to any other party. LICENSEE shall have no further royalty obligations under this Agreement with respect to any such Patent Right. ARTICLE VII. INFRINGEMENT A. LICENSEE and CMCC shall each inform the other promptly in writing of any alleged infringement by a third party of the Patent Rights in the Field of Use and of any available evidence thereof. B. During the term of this License Agreement, LICENSEE shall have the right, but not the obligation, to prosecute and/or defend, at its own expense and utilizing counsel of its choice, any infringement of, and/or challenge to, the Patent Rights; provided, however that CMCC shall have the right to approve LICENSEE's choice of counsel, such approval not to be unreasonably withheld. In furtherance of such right, CMCC hereby agrees that LICENSEE may join CMCC as a party in any such suit, without expense to CMCC. No settlement, consent,,, judgment or other voluntary final disposition of any such suit may be entered into without the consent of CMCC which consent shall not unreasonably be withheld. LICENSEE shall indemnify CMCC against any order for costs that may be made against CMCC in any such suit. C. In the event that LICENSEE shall undertake the enforcement and/or defense of the Patent Rights, as provided in Paragraph 7.2, LICENSEE may withhold up to fifty percent (50%) of the royalties otherwise thereafter due CMCC in Article *** and apply such amount toward reimbursement of LICENSEE's expenses, including attorneys' fees, in connection therewith. Any recovery of damages by LICENSEE, in any such suit, shall be applied first in satisfaction of any unreimbursed expenses and legal fees of LICENSEE relating to the suit, and next toward reimbursement of CMCC for any royalties past due or withheld and applied pursuant to this paragraph. Any balance remaining from any such recovery shall be apportioned 50% to LICENSEE and 50% to CMCC. D. If within six (6) months after receiving notice of any alleged infringement, LICENSEE shall have been unsuccessful in persuading the alleged infringement to desist, or shall not have brought and shall not be diligently prosecuting an infringement action, or if LICENSEE shall notify CMCC, at any time prior thereto, of its intention not to bring suit against the alleged infringer, then, and in those events only, CMCC shall have the right, but not the obligation, to prosecute, at its own expense and utilizing counsel of its choice, any cost of any such infringement action commenced solely by CMCC shall be borne by CMCC and CMCC shall keep any recovery or damages for past infringement derived therefrom. CMCC shall indemnify LICENSEE against any order for costs that may be made against LICENSEE in any such suit. 10 E. In any suit to enforce and/or defend the Patent Rights pursuant to this License Agreement, the party not in control of such suit shall, at the request and expense of the controlling party, cooperate in all respects and, to the extent possible, have its employees testify when requested and make available relevant records, papers, information, samples, specimens, and the like. F. LICENSEE during the period of this License Agreement, shall have the- sole right, in accordance with the terms and conditions herein, to sublicense any alleged infringer for future use of the Patent Rights. ARTICLE VIII. UNIFORM INDEMNIFICATION AND INSURANCE PROVISIONS A. LICENSEE shall indemnify, defend and hold harmless CMCC, its corporate affiliates, current or future directors, trustees, officers, faculty, medical and professional staff, employees, students and agents and their respective successors, heirs and assigns (the "Indemnitees"), against any liability, damage, loss or expense (including reasonable attorney's fees and expenses of litigation) incurred by or imposed upon the Indemnitees or any one of them in connection with any claims, suits, actions, demands or judgments arising out of any theory of product liability (including, but not limited to, actions in the form of tort, warranty, or strict liability) concerning any product, process or service made, used or sold pursuant to any right or license -ranted under this Agreement. B. LICENSEE's indemnification under Article VIII, Paragraph A above shall not apply to any liability, damage, loss or expense to the extent that it is directly attributable to the negligent activities, reckless misconduct or intentional misconduct of the Indemnitees. C. LICENSEE agrees, at its own expense, to provide attorneys reasonably acceptable to CMCC to defend against any actions brought or filed against any party indemnified hereunder with respect to the subject of indemnity contained herein, whether or not such actions are rightfully brought. D. Beginning at the time as any such product, process or service is being commercially distributed or sold (other than for the purpose of obtaining regulatory approvals) by LICENSEE or by a SUBLICENSEE, Affiliate or agent of LICENSEE, LICENSEE shall, at its sole cost and expense, procure and maintain commercial general liability insurance in amounts not less than $2,000,000 per incident and $2,000,000 annual aggregate and naming the Indemnitees as additional insureds. Such commercial general liability insurance shall provide (i) product liability coverage and (ii) contractual liability coverage for LICENSEE's indemnification under Article VIII, Paragraphs A through C of this Agreement. If LICENSEE elects to self-insure all or part of the limits described above (including deductibles or retentions which are in excess of $250,000 annual aggregate), such self-insurance program must be acceptable to CMCC and the Risk Management Foundation of the Harvard Medical Institutions, Inc. The minimum amount of insurance coverage required under this Article VIII, Paragraph E. shall not be construed to create a limit of LICENSEE's liability with respect to its indemnification under Article VIII, Paragraphs A through C of this Agreement. 11 E. LICENSEE shall provide CMCC with written evidence of such insurance upon request of CMCC. LICENSEE shall provide CMCC with written notice at least fifteen (15) days prior to the cancellation, non-renewal or material change in such insurance. If LICENSEE does not obtain replacement insurance providing comparable coverage within such fifteen (15) day period, CMCC shall have the right to terminate this Agreement effective at the end of such fifteen (15) day period without notice of any additional waiting periods. F. LICENSEE shall maintain such commercial general liability insurance during (i) the period that any such product, process or service is being commercially distributed or sold (other than for the purpose of obtaining regulatory approvals) by LICENSEE or by a SUBLICENSEE, Affiliate or agent of LICENSEE and (ii) a reasonable period after the period referred to above, which in no event shall be less than fifteen (15) years. G. Article VIII, Paragraphs A through F shall survive expiration or termination of this Agreement. H. OTHER THAN WARRANTIES SET FORTH HEREIN, CMCC MAKES NO WARRANTY, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR ANY IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO ANY PATENT, TRADEMARK, SOFTWARE, TRADE SECRET, TANGIBLE RESEARCH PROPERTY, INFORMATION OR DATA LICENSED OR OTHERWISE PROVIDED TO LICENSEE HEREUNDER AND HEREBY DISCLAIMS THE SAME. ARTICLE IX. EXPORT CONTROLS It is understood that CMCC is subject to United States laws and regulations controlling the export of technical data, computer software, laboratory prototypes and other commodities (including the Arms Export Control Act, as amended and the Export Administration Act of 1979), and that its obligations hereunder are contingent on compliance with applicable United States export laws and regulations. The transfer of certain technical data and commodities may require a license from the cognizant agency of the United States Government and/or written assurances by LICENSEE that LICENSEE shall not export data or commodities to certain foreign countries without prior approval of such agency. CMCC neither represents that a license shall not be required, nor that if required, it shall be issued. ARTICLE X. ARBITRATION A. Any and all claims, disputes or controversies arising under, out of, or in connection with this Agreement, which have not been resolved by good faith negotiations between the parties within three (3) months following the initiation of said negotiations will be resolved in accordance with this paragraph. (a) Either party may give the other written notice of any dispute arising out of or relating to this Research Agreement which is not resolved in the ordinary course of business within said three (3) month period. Within fifteen (15) days of receipt of said notice, the parties shall meet at a mutually acceptable time and place, and thereafter as often as they reasonably 12 deem necessary, to exchange relevant information and to attempt to settle the dispute. If the matter has not been resolved within thirty (30) days of receipt of the notice prided above, or in the event the parties fail to meet within twenty (20) days of the receipt of said notice, either party may request in writing that the matter be submitted to mediation in accordance with, subparagraph (b) below. (b) Within fifteen (15) days of receipt of a request for medication as described above, the parties agree to commence mediation as described above, the parties agree to commence mediation in the City of Boston, Commonwealth of Massachusetts in accordance with the policies and procedures of Endispute, Inc. ("Endispute"). The parties shall select a mediator acceptable to both CMCC and LICENSEE from a list prided by Endispute. The parties agree to cooperate in good faith in said mediator's efforts to assist the parties to resolve the dispute. Each party agrees to pay fifty percent (50%) of the costs of said mediation. If the matter has not been resolved within thirty (30) days of the commencement of mediation, either party may request in writing that the matter be submitted to arbitration in accordance with subparagraph (c) below. (c) Any dispute arising under this License Agreement which is not resolved in accordance with either subparagraph (a) or (b), shall be determined by arbitration in the City of Boston, Commonwealth of Massachusetts, in accordance with the rules and regulations of the American Arbitration Association ("AAA"). Any such arbitration shall be conducted before a single arbitrator agreed upon by the parties, or, if the parties are unable to agree upon a mutually acceptable arbitrator, an arbitrator shall be chosen in accordance with AAA rules and regulations. The arbitrators determination may be filed with the clerk of the court of competent jurisdiction as a final adjudication of the matter at issue, or application may be made to such court for judicial acceptance of the award and an order of enforcement, as the case may be. (d) Nothing herein shall restrict the right of either party to institute legal proceeding to enable such party to obtain provisional injunctive relief while any arbitration is still pending. B. Notwithstanding the foregoing, nothing in this Article shall be construed to waive any rights or timely performance of any obligations existing under this Agreement. ARTICLE XI. NON-USE OF NAMES LICENSEE shall not use the name of Children's Medical Center Corporation nor the name of any of its corporate affiliates or employees, nor any adaptation thereof, in any advertising, promotional or sales literature without prior written consent obtained from CMCC in each case, except that LICENSEE may state that it is licensed by CMCC under one or more of the patents and/or applications comprising the Patent Rights, and LICENSEE may comply with disclosure requirements of all applicable laws relating to its business. including United States and state security laws. ARTICLE XII. ASSIGNMENT 13 A. Except as otherwise provided herein, this Agreement is not assignable in whole or in part, and any attempt to do so shall be void and of no effect. B. CMCC may assign this Agreement at any time to any corporate affiliate of CMCC without the prior consent of LICENSEE. C. Except as provided in Article XI, Paragraph D below. LICENSEE may assign this Agreement to another entity only with the prior written consent of CMCC, which consent shall not be unreasonably withheld or delayed. D. Notwithstanding anything herein to the contrary, in the event LICENSEE merges with another entity, is acquired by another entity; or sells all or substantially all of its assets to another entity, LICENSEE may assign its rights and obligations hereunder to, in the event of a merger or acquisition, the surviving entity, and in the event of a sale, the acquiring entity, without CMCC's consent so long as: (i) LICENSEE is not then in breach of this Agreement; (ii) the proposed assignee has a net worth at least equivalent to the net worth LICENSEE had as of the date of this Agreement; (iii) the proposed assignee has available resources and sufficient scientific, business and other expertise comparable to LICENSEE in order to satisfy its obligations hereunder; (iv) LICENSEE provides written notice of the assignment to CMCC, together with documentation sufficient to demonstrate the requirements set forth in subparagraphs (i) through (iii) above, at least thirty (30) days prior to the effective date of the assignment; and (v) CMCC receives from the assignee, in writing, at least thirty (30) days prior to the effective date of the assignment: (a) reaffirmation of the terms of this Agreement; (b) an agreement to be bound by the terms of this Agreement; and (c) an agreement to perform the obligations of LICENSEE under this Agreement. ARTICLE XIII. TERM AND TERMINATION A. The term of this Agreement shall be not less than fifteen (15) years or the life of the last expiring Patent Right, whichever period is the longer term. B. CMCC may terminate this Agreement immediately upon the bankruptcy, insolvency, liquidation, dissolution or cessation of operations of LICENSEE: or the filing of any voluntary petition for bankruptcy, dissolution, liquidation or winding-up of the affairs of LICENSEE: or any assignment by LICENSEE' for the benefit of creditors; or the filing of any involuntary petition for bankruptcy, dissolution, liquidation or winding-up of the affairs of LICENSEE which is not dismissed within ninety (90) days of the date on which it is filed or commenced. C. CMCC may terminate this Agreement upon thirty (30) days prior written notice in the event of LICENSEE's failure to pay to CMCC royalties due and payable hereunder in a timely manner, unless LICENSEE shall make all such payments to CMCC within said thirty (30) day period. Upon the expiration of the thirty (30) day period, if LICENSEE shall not have made all such payments to CMCC, the rights, privileges and licenses ;ranted hereunder shall terminate. D. Except as otherwise provided in Paragraph C above, CMCC may terminate this Agreement upon sixty (60) days prior written notice in the event of LICENSEE's breach or 14 default of any material term or condition or warranty contained in this Agreement, unless LICENSEE shall cure such breach to CMCC's reasonable satisfaction within said sixty (60) day period. Upon the expiration of the sixty (60) day period, if LICENSEE shall not have cured said breach to the reasonable satisfaction of CMCC, the rights, privileges and license granted hereunder shall terminate. E. LICENSEE shall have the right. to terminate- this Agreement at any time upon six (6) months' prior written notice to CMCC, and upon payment by LICENSEE of all amounts due CMCC through the effective date of termination. F. Upon termination of this Agreement for any reason, nothing herein shall be construed to release either party from any obligation that matured prior to the effective date of such termination. LICENSEE and any SUBLICENSEE thereof may, however, after the effective date of such termination, sell all Licensed Products and complete Licensed Products in the process of manufacture at the time of such termination and sell the same, provided that LICENSEE shall pay to CMCC the royalties thereon as required under this Agreement and shall submit the reports required under this Agreement on the sales of Licensed Products. ARTICLE XIV. PAYMENTS, NOTICES, AND OTHER COMMUNICATIONS A. All payments, notices, reports and/or other communications made in accordance with this Agreement, shall be sufficiently made or given on the date of the mailing if delivered by hand, by facsimile or sent by first class mail postage prepaid and addressed as follows: In the case of CMCC: Director, Technology Transfer Office of Research Administration Children's Hospital 300 Longwood Avenue Boston. MA 02115 In the case of LICENSEE: Marc E. Lanser M.D. Executive VP Boston Life Sciences, Inc. 31 Newbury Street, Suite 300 Boston, MA 02116 or such other address as either party shall notify the other in writing. ARTICLE XV. CONFIDENTIALITY A. The parties agree to limit access to CMCC/LICENSEE Material that is marked as "Confidential," to exercise at least reasonable care to prevent disclosure of such Material to any third party, and to use such Material for research purposes only. These obligations of confidentiality shall not apply to information which can be demonstrated by written records to be 15 previously known to the party receiving information or to information or material which is available to or becomes available from a public source or which is required to be disclosed to comply with a governmental law or regulation. This obligation shall continue for three (3) years following the date of termination of this Agreement, but may be modified by written agreement. B. Notwithstanding anything herein to the contrary, LICENSEE further acknowledges and agrees that Licensee Confidential Information shall not include data generated by CMCC or CMCC's employees, his/her associates, co-workers or staff in connection with the work done relating to the subject matter described in Patent Rights. LICENSEE and CMCC acknowledge that such data is subject to the disclosure limitation included in Article X of this Agreement. C. LICENSEE agrees that CMCC shall not be liable to LICENSEE or to any third party claiming by or through LICENSEE for any unauthorized disclosure or use of Licensee Confidential Material which occurs despite CMCC's compliance with its obligations under Article 15.A above. ARTICLE XVI. GENERAL PROVISIONS A. All rights and remedies hereunder will be cumulative and not alternative, and this Agreement shall be construed and governed by the laws of the Commonwealth of Massachusetts. B. This Agreement may be amended only by written agreement signed by the parties. C. It is expressly agreed by the parties hereto that CMCC and LICENSEE are independent contractors and nothing in this Agreement is intended to create an employer relationship, joint venture, or partnership between the parties. No party has the authority to bind the other. D. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all proposals, negotiations and other communications between the parties, whether written or oral, with respect to the subject matter hereof. E. If any provisions of this Agreement shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions of this Agreement shall not be impaired thereby. F. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original as against the party whose signature appears thereon, but all of which taken together shall constitute but one and the same instrument. G. The failure of either party to assert a right to which it is entitled 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. H. LICENSEE agrees to mark any Licensed Products sold in the United States with all applicable United States patent numbers. All Licensed Products shipped to or sold in other 16 countries shall be marked in such a manner as to conform with the patent laws and practices of the country of manufacture or sale. I. Each party hereto agrees to execute, acknowledge and deliver such further instruments and do all such further acts as may be necessary or appropriate to carry out the purposes and intent of this Agreement. J. The paragraph headings contained in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.: IN WITNESS WHEREOF, the parties have executed this Agreement as of the date last written below. CHILDREN'S MEDICAL CENTER BOSTON LIFE SCIENCES, INC. CORPORATION By: /s/ William New By: /s/ Marc Lanser, M.D. ----------------------------- ---------------------------- Name: William New Name: Marc E. Lanser, M.D. Title: VP, Research Administration Title: Executive VP Acknowledged by: /s/ Larry Benowitz - -------------------------------- Larry Benowitz 17 Appendix 1 U.S. Patent Applications: Serial No. Filing Date: 08/921,902 September 2, 1997 18 Appendix 2 Development Plan for Inosine: 19 EX-23.2 6 dex232.txt CONSENT Exhibit 23.2 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in this Amendment No. 2 to the Registration Statement on Form S-3 of our report dated March 22, 2002 relating to the consolidated financial statements, which appears in Boston Life Sciences, Inc.'s Annual Report on Form 10-K, as amended, for the year ended December 31, 2001. We also consent to the reference to us under the heading "Experts" in such Registration Statement. /s/ PricewaterhouseCoopers LLP Boston, Massachusetts September 3, 2002 -----END PRIVACY-ENHANCED MESSAGE-----