Cooperative Research And Development Agreement

PUBLIC HEALTH SERVICE


COOPERATIVE RESEARCH AND DEVELOPMENT AGREEMENT


This Cooperative Research and Development Agreement, hereinafter referred to as the "CRADA," consists of this Cover Page, an attached Agreement, and various Appendices referenced in the Agreement. This Cover Page serves to identify the Parties to this CRADA:


(1) the following Bureau(s), Institute(s), Center(s) or Division(s) of the National Institutes of Health ("NIH"), the Food and Drug Administration ("FDA"), and the Centers for Disease Control and Prevention ("CDC"):


THE NATIONAL CANCER INSTITUTE,


hereinafter singly or collectively referred to as the Public Health Service ("PHS"); and


(2) NEOPHARM, INC., which has offices at 100 Corporate North, Bannockburn, IL 60015 hereinafter referred to as the "Collaborator."


COOPERATIVE RESEARCH AND DEVELOPMENT AGREEMENT


ARTICLE 1. INTRODUCTION


This Cooperative Research and Development Agreement (CRADA) between PHS and the Collaborator will be effective when signed by all Parties. The research and development activities which will be undertaken by each of the Parties in the course of this CRADA are detailed in the Research Plan (RP) which is attached as Appendix A. The funding and staffing commitments of the Parties are set forth in Appendix B. Any exceptions or changes to the CRADA are set forth in Appendix C. This CRADA is made under the authority of the Federal Technology Transfer Act, 15 U.S.C. Section 3710a ET SEQ. and is governed by its terms.


ARTICLE 2. DEFINITIONS


As used in this CRADA, the following terms shall have the indicated meanings:


2.1 "AFFILIATE" means any corporation or other business entity controlled
by, controlling or under common control with Collaborator. For this
purpose, "control" means direct or indirect beneficial ownership of at
least fifty (50) percent of the voting stock or at least fifty (50)
percent interest in the income of such corporation or other business.


2.2 "COOPERATIVE RESEARCH AND DEVELOPMENT AGREEMENT" or "CRADA" means this
Agreement, entered into by PHS pursuant to the Federal Technology
Transfer Act of 1986, as amended, 15 U.S.C. 3710a ET SEQ. and
Executive Order 12591 of October 10, 1987.


2.3 "GOVERNMENT" means the Government of the United States as represented
through the PHS agency that is a Party to this agreement.


2.4 "IP" means intellectual property.


2.5 "INVENTION" means any invention or discovery which is or may be
patentable or otherwise protected under title 35, United States Code,
or any novel variety or plant which is or may be protectable under the
Plant Variety Protection Act (7U.S.C. 2321 ET SEQ.).


2.6 "PRINCIPAL INVESTIGATOR(S)" OR "PIs" means the persons designated
respectively by the Parties to this CRADA who will be responsible for
the scientific and technical conduct of the RP.


2.7 "PROPRIETARY/CONFIDENTIAL INFORMATION" means confidential scientific,
business, or financial information provided that such information does
not include:


2.7.1 information that is publicly known or available from
other sources who are not under a confidentiality
obligation to the source of the information;


2.7.2 information which has been made available by its owners to
others without a confidentiality obligation;


2.7.3 information which is already known by or available to the
receiving Party without a confidentiality obligation; or


2.7.4 information which relates to potential hazards or
cautionary warnings associated with the production,
handling or use of the subject matter of the Research
Plan of this CRADA.


2.8 "RESEARCH MATERIALS" means all tangible materials other than Subject
Data first produced in the performance of this CRADA.


2.9 "RESEARCH PLAN" or "RP" means the statement in Appendix A of the
respective research and development commitments of the Parties to this
CRADA.


2.10 "SUBJECT INVENTION" means any Invention of the Parties, conceived or
first actually reduced to practice in the performance of the Research
Plan of this CRADA.


2.11 "SUBJECT DATA" means all recorded information first produced in the
performance of this CRADA by the Parties.


ARTICLE 3. COOPERATIVE RESEARCH


3.1 PRINCIPAL INVESTIGATORS. PHS research work under this CRADA will be
performed by the PHS laboratory identified in the RP, and the PHS
Principal Investigator (PI) designated in the RP will be responsible
for the scientific and technical conduct of this project on behalf of
PHS. Also designated in the RP is the Collaborator PI who will be
responsible for the scientific and technical conduct of this project on
behalf of the Collaborator.


3.2 RESEARCH PLAN CHANGE. The RP may be modified by mutual written consent
of the Principal Investigators. Substantial changes in the scope of the
RP will be treated as amendments under Article 13.6.


ARTICLE 4. REPORTS


4.1 INTERIM REPORTS. The Parties shall exchange formal written interim
progress reports on a schedule agreed to by the PIs, but at least
within twelve (12) months after this CRADA becomes effective and at
least within every twelve (12) months thereafter. Such reports shall
set forth the technical progress made, identifying such problems as may
have ben encountered and establishing goals and objectives requiring
further effort, any modifications to the Research Plan pursuant to
Article 3.2, and all CRADA-related patent applications filed.


4.2 FINAL REPORTS. The Parties shall exchange final reports of their
results within four (4) months after completing the projects described
in the RP or after the expiration or termination of this CRADA.


ARTICLE 5. FINANCIAL AND STAFFING OBLIGATIONS


5.1 PHS AND COLLABORATOR CONTRIBUTIONS. The contributions of the Parties,
including payment schedules, if applicable, are set forth in Appendix
B. PHS shall not be obligated to perform any of the research specified
herein or to take any other action required by this CRADA if the
funding is not provided as set forth in Appendix B. PHS shall return
excess funds to the Collaborator when it sends its final fiscal report
pursuant to Article 5.2, except for staffing support pursuant to
Article 10.3. Collaborator acknowledges that the U.S. Government will


have the authority to retain and expend any excess funds for up to one
(1) year subsequent to the expiration or termination of the CRADA to
cover any costs incurred during the term of the CRADA in undertaking
the work set forth in the RP.


5.2 ACCOUNTING RECORDS. PHS shall maintain separate and distinct current
accounts, records, and other evidence supporting all its obligations
under this CRADA, and shall provide the Collaborator, a final fiscal
report pursuant to Article 4.2.


5.3 CAPITAL EQUIPMENT. Equipment purchased by PHS with funds provided by
the Collaborator shall be the property of PHS. All capital equipment
provided under this CRADA by one party for the use of another Party
remains the property of the providing Party unless other disposition is
mutually agreed upon in writing by the Parties. If title to this
equipment remains with the providing Party, that Party is responsible
for maintenance of the equipment and the costs of its transportation to
and from the site where it will be used.


ARTICLE 6. INTELLECTUAL PROPERTY RIGHTS AND PATENT APPLICATIONS


6.1 REPORTING. The Parties shall promptly report to each other in writing
each Subject Invention resulting from the research conducted under this
CRADA that is reported to them by their respective employees. Each
Party shall report all Subject Inventions to the other Party in
sufficient detail to determine inventorship. Such reports shall be
treated as Proprietary/Confidential Information in accordance with
Article 8.4.


6.2 COLLABORATOR EMPLOYEE INVENTIONS. If the Collaborator does not elect to
retain its IP rights, the Collaborator shall offer to assign these IP
rights to the Subject Invention to PHS pursuant to Article 6.5. If the
Collaborator declines such assignment, PHS may release IP rights in
such Subject Invention to its employee inventors pursuant to Article
6.6.


6.3 PHS EMPLOYEE INVENTIONS. PHS on behalf of the U.S. Government may elect
to retain IP rights to each Subject Invention made solely by PHS
employees. If PHS does not elect to retain IP rights, PHS shall offer
to assign these IP rights to such Subject Invention to the Collaborator
pursuant to Article 6.5. If the Collaborator declines such assignment,
PHS may release IP rights in such Subject Invention to its employee
inventors pursuant to Article 6.6.


6.4 JOINT INVENTIONS. Each Subject Invention made jointly by PHS and
Collaborator employees shall be jointly owned by PHS and the
Collaborator. The Collaborator may elect to file the joint patent or
other IP application(s) thereon and shall notify PHS promptly upon
making this election. If the Collaborator decides to file such
applications, it shall do so in a timely manner and at its own expense.
If the Collaborator does not elect to file such application(s), PHS on
behalf of the U.S. Government shall have the right to file the joint
application(s) in a timely manner and at its own expense. If either
Party decides not to retain its IP rights to a jointly owned Subject
Invention, it shall offer to assign such rights to the other Party
pursuant to Article 6.5. If the other Party declines such assignment,
the offering Party may release its IP rights as provided in Articles
6.2, 6.3, and 6.6.


6.5 FILING OF PATENT APPLICATIONS. With respect to Subject Inventions made
by the Collaborator as described in Article 6.2, or by PHS as
described in Article 6.3, a Party exercising its right to elect to
retain IP rights to a Subject Invention agrees to file patent or other
IP applications in a timely manner and at its own expense and after
consultation with the other Party. The Party


shall notify the other Party of its decision regarding filing in
countries other than the United States in a timely manner. The Party
may elect not to file a patent or other IP application thereon in any
particular country or countries provided it so advises the other Party
ninety (90) days prior to the expiration of any applicable filing
deadline, priority period or statutory bar date, and hereby agrees to
assign its IP right, title and interest in such country or countries to
the Subject Invention to the other Party and to cooperate in the
preparation and filing of a patent or other IP applications. In any
countries in which title to patent or other IP rights is transferred to
the Collaborator, the Collaborator agrees that PHS inventors will share
in any royalty distribution that the Collaborator pays to its own
inventors.


6.6 RELEASE TO INVENTORS. In the event neither of the Parties to this CRADA
elects to file a patent or other IP application on a Subject Invention,
either or both (if a joint invention) may retain or release their IP
rights in accordance with their respective policies and procedures.
However, the Government shall retain a nonexclusive, non-transferable,
irrevocable, royalty-free license to practice any such Subject
Invention or have it practiced throughout the world by or on behalf of
the Government.


6.7 PATENT EXPENSES. The expenses attendant to the filing of patent or
other IP applications generally shall be paid by the Party filing such
application. If an exclusive license to any Subject Invention is
granted to the Collaborator, the Collaborator shall be responsible for
all past and future out-of-pocket expenses in connection with the
preparation, filing, prosecution and maintenance of any applications
claiming such exclusively-licensed inventions and any patents or other
IP grants that may issue on such application. The Collaborator may
waive its exclusive license rights on any application, patent or other
IP grant at any time, and incur no subsequent compensation obligation
for that application, patent or IP grant.


6.8 PROSECUTION OF INTELLECTUAL PROPERTY APPLICATIONS. Within one month of
receipt or filing, each Party shall provide the other Party with copies
of the applications and all documents received from or filed with the
relevant patent or other IP office in connection with the prosecution
of such applications. Each party shall also provide the other Party
with the power to inspect and make copies of all documents retained in
the patent or other IP application files by the applicable patent or
other IP office. Where licensing is contemplated by collaborator, the
Parties agree to consult with each other with respect to the
prosecution of applications for PHS Subject Inventions described in
Article 6.3 and joint subject Inventions described in Article 6.4. If
the Collaborator elects to file and prosecute IP applications on joint
Subject Inventions pursuant to Article, PHS will be granted an
associate power of attorney (or its equivalent) on such IP
applications.


ARTICLE 7. LICENSING


7.1 OPTION FOR COMMERCIALIZATION LICENSE. With respect to Government IP
rights to any Subject Invention not made solely by the Collaborator's
employees for which a patent or other IP application is filed, PHS
hereby grants to the Collaborator an exclusive option to elect an
exclusive or nonexclusive commercialization license, which is
substantially in the form of the appropriate model PHS license
agreement. This option does not apply to Subject Inventions conceived
prior to the effective date of this CRADA that are reduced to practice
under this CRADA, if prior to that reduction to practice, PHS has filed
a patent application on the invention and has licensed it or offered to
license it to a third party. The terms of the license will fairly
reflect the nature of the invention, the relative contributions of the
Parties to the


invention and the CRADA, the risks incurred by the Collaborator and the
costs of subsequent research and development needed to bring the
invention to the marketplace. The field of use of the license will be
commensurate with the scope of the RP.


7.2 EXERCISE OF LICENSE OPTION. The option of Article 7.1 must be exercised
by written notice mailed within three (3) months after either (i)
Collaborator receives written notice from PHS that the patent or other
IP application has been filed; or (ii) the date Collaborator files such
IP application. Exercise of this option by the Collaborator initiates a
negotiation period that expires nine (9) months after the exercise of
the option. If the last proposal by the Collaborator has not been
responded to in writing by PHS within this nine (9) month period, the
negotiation period shall be extended to expire one (1) month after PHS
so responds, during which month the Collaborator may accept in writing
the final license proposal of PHS. In the absence of such acceptance,
or an extension of the time limits by PHS, PHS will be free to license
such IP rights to others. In the event that the Collaborator elects the
option for an exclusive license, but no such license is executed during
the negotiation period, PHS agrees not to make an offer for an
exclusive license on more favorable terms to a third party for a period
of six (6) months without first offering Collaborator those more
favorable terms. These times may be extended at the sole discretion of
PHS upon good cause shown in writing by the Collaborator.


7.3 LICENSE FOR PHS EMPLOYEE INVENTIONS AND JOINT INVENTIONS. Pursuant to
15 U.S.C. Section 3710a(b)(1)(A), for Subject Inventions made under
this CRADA by a PHS employee(s) or jointly by such employee(s) and
employees of the Collaborator pursuant to Articles 6.3 and 7.4 and
licensed pursuant to the option of Article 7.1, the Collaborator
grants to the Government a nonexclusive, nontransferable, irrevocable,
paid-up license to practice the invention or have the invention
practiced throughout the world by or on behalf of the Government.
In the exercise of such license, the Government shall not publicly
disclose trade secrets or commercial or financial information that
is privileged or confidential within the meaning of 5 U.S.C.
552(b)(4) or which would be considered as such if it had been obtained
from a non-Federal party.


7.4 LICENSE IN COLLABORATOR INVENTIONS. Pursuant to 15 U.S.C. Section
3710a(b)(2), for inventions made solely by Collaborator employees under
this CRADA pursuant to Article 6.2, the Collaborator grants to the
Government a nonexclusive, nontransferable, irrevocable, paid-up
license to practice the invention or have the invention practiced
throughout the world by or on behalf of the Government for research or
other Government purposes.


7.5 THIRD PARTY LICENSE. Pursuant to 15 U.S.C. Section 3710a(b)(1)(B), if
PHS grants an exclusive license to a Subject Invention made wholly by
PHS employees or jointly with a Collaborator under this CRADA, pursuant
to Articles 6.3 and 6.4, the Government shall retain the right to
require the Collaborator to grant to a responsible applicant a
nonexclusive, partially exclusive, or exclusive sublicense to use the
invention in Collaborator's licensed field of use on terms that are
reasonable under the circumstances; or if the Collaborator fails to
grant such a license, to grant the license itself. The exercise of
such rights by the Government shall only be in exceptional
circumstances and only if the Government determines (i) the action
is necessary to meet health or safety needs that are not reasonably
satisfied by Collaborator, (ii) the action is necessary to meet
requirements for public use specified by Federal regulations, and
such requirements are not reasonably satisfied by the Collaborator;
or (iii) the Collaborator has failed to comply with an agreement
containing provisions described in 15 U.S.C. 3710a(c)(4)(B). The
determination made by the Government under this Article is subject
to administrative appeal and judicial review under 35 U.S.C.203(2).


7.6 JOINT INVENTIONS NOT EXCLUSIVELY LICENSED. In the event that the
Collaborator does not acquire an exclusive commercialization license to
IP rights in all fields in joint Subject Inventions described in
Article 6.4, then each Party shall have the right to use the joint
Subject Invention and to license its use to others in all fields not
exclusively licensed to Collaborator. The Parties may agree to a joint
licensing approach for such IP rights.


ARTICLE 8. PROPRIETARY RIGHTS AND PUBLICATION


8.1 RIGHTS OF ACCESS. PHS and the Collaborator agree to exchange all
Subject Data produced in the course of research under this CRADA.
Research Materials will be shared equally by the Parties to the CRADA
unless other disposition is agreed to by the Parties. All parties to
this CRADA will be free to utilize Subject Data and Research Materials
for their own purposes, consistent with their obligations under this
CRADA.


8.2 OWNERSHIP OF SUBJECT DATA AND RESEARCH MATERIALS. Subject to the
sharing requirements of paragraph 8.1 and the regulatory filing
requirements of Paragraph 8.3, the producing Party will retain
ownership of and title to all Subject Inventions, all Subject Data and
all Research Materials produced solely by their investigators. Jointly
developed Subject Inventions, Subject Data and Research Materials will
be jointly owned.


8.3 DISSEMINATION OF SUBJECT DATA AND RESEARCH MATERIALS. To the extend
permitted by law, the Collaborator and PHS agree to use reasonable
efforts to keep subject Data and Research Materials confidential until
published or until corresponding patent applications are filed. Any
information that would identify human subjects of research or patients
will always be maintained confidentially. To the extent permitted by
law, the Collaborator shall have the exclusive right to use any and all
CRADA Subject Data in and for any regulatory filing by or on behalf of
Collaborator, except that PHS shall have the exclusive right to use
Subject Data for that purpose, and authorize others to do so, if the
CRADA is terminated or if Collaborator abandons its commercialization
efforts.


8.4 PROPRIETARY/CONFIDENTIAL INFORMATION. Each Party agrees to limit its
disclosure of Proprietary/Confidential Information to the amount
necessary to carry out the Research Plan of this CRADA, and shall place
a confidentiality notice on all such information. Confidential oral
communications shall be reduced to writing within 30 days by the
disclosing Party. Each Party receiving Proprietary/Confidential
Information agrees that any information so designated shall be used by
it only for the purposes described in the attached Research Plan. Any
Party may object to the designation of information as
Proprietary/Confidential Information by another Party. Subject Data and
Research Materials developed solely by the Collaborator may be
designated as Proprietary/Confidential Information when they are wholly
separable from the Subject Data and Research Materials developed
jointly with PHS investigators, and advance designation of such data
and material categories is set forth in the RP. The exchange of other
confidential information, e.g., patient-identifying data, should be
similarly limited and treated. Jointly developed Subject Data and
Research Material derived from the Research Plan may be disclosed by
Collaborator to a third party under a confidentiality agreement for the
purpose of possible sublicensing pursuant to the Licensing Agreement
and subject to Article 8.7.


8.5 PROTECTION OF PROPRIETARY/CONFIDENTIAL INFORMATION.
Proprietary/Confidential Information shall not be disclosed, copied,
reproduced or otherwise made available to any other person or entity
without the consent of the owning Party except as required under court
order or the


Freedom of Information Act (5 U.S.C. 552). Each Party agrees to use its
best efforts to maintain the confidentiality of
Proprietary/Confidential Information. Each Party agrees that the other
Party is not liable for the disclosure of Proprietary/Confidential
Information which, after notice to and consultation with the concerned
Party, the other Party in possession of the Proprietary/Confidential
Information determines may not be lawfully withheld, provided the
concerned Party has been given an opportunity to seek a court order to
enjoin disclosure.


8.6 DURATION OF CONFIDENTIALITY OBLIGATION. The obligation to maintain the
confidentiality of Proprietary/Confidential Information shall expire at
the earlier of the date when the information is no longer Proprietary
Information as defined in Article 2.5 or three (3) years after the
expiration or termination date of this CRADA. The Collaborator may
request an extension to this term when necessary to protect
Proprietary/Confidential Information relating to products not yet
commercialized.


8.7 PUBLICATION. The Parties are encouraged to make publicly available the
results of their research. Before either Party submits a paper or
abstract for publication or otherwise intends to publicly disclose
information about a Subject Invention, Subject Data or Research
Materials, the other Party shall be provided thirty (30) days to review
the proposed publication or disclosure to assure that
Proprietary/Confidential Information is protected. The publication or
other disclosure shall be delayed for up to thirty (30) additional days
upon written request by any Party as necessary to preserve U.S. or
foreign patent or other IP rights.


ARTICLE 9. REPRESENTATIONS AND WARRANTIES


9.1 REPRESENTATIONS AND WARRANTIES OF PHS. PHS hereby represents and
warrants to the Collaborator that the official signing this CRADA has
authority to do so.


9.2 REPRESENTATIONS AND WARRANTIES OF THE COLLABORATOR.


(a) The Collaborator hereby represents and warrants to PHS that the
Collaborator has the requisite power and authority to enter into this
CRADA and to perform according to its terms, and that the
Collaborator's official signing this CRADA has authority to do so. The
Collaborator further represents that it is financially able to satisfy
any funding commitments made in Appendix B.


(b) The Collaborator certifies that the statements herein are true,
complete, and accurate to the best of its knowledge. The Collaborator
is aware that any false, fictitious, or fraudulent statements or claims
may subject it to criminal, civil, or administrative penalties.


ARTICLE 10. TERMINA ...