EXHIBIT 10.2
SECOND AMENDMENT TO LICENSE AGREEMENT
This Second Amendment to License Agreement ("Second Amendment") is
effective as of this 30th day of August, 2002 (the "Effective Date"), by and
among Triangle Pharmaceuticals, Inc., a for-profit Delaware corporation with
principal offices located at 0 Xxxxxxxxxx Xxxxx, 0000 Xxxxxxxxxx Xxxxx, Xxxxxx,
Xxxxx Xxxxxxxx 00000 ("COMPANY") and Emory University, a not-for-profit Georgia
corporation with offices at 0000 Xxxxx Xxxxxx Xxxx, X.X., Xxxxxxx, Xxxxxxx 00000
and the University of Georgia Research Foundation, Inc., a not-for-profit
Georgia corporation with offices at 000 Xxxx Xxxxxxxx Xxxxxxx Xxxxxxxx, Xxxxxx,
Xxxxxxx 00000-0000 ("UGARF") (EMORY and UGARF being collectively referred to as
the "LICENSORS"), and amends certain terms of that certain License Agreement,
dated as of March 31, 1996, between LICENSORS and COMPANY, as amended by the
First Amendment to License Agreement, dated July 10, 2000 ("First Amendment")
(such License Agreement as amended by the First Amendment is referred to herein
as the "Agreement").
RECITALS:
A. LICENSORS and COMPANY have previously entered into the Agreement,
pursuant to which LICENSORS have licensed certain patent rights
and know-how owned or controlled by LICENSORS to COMPANY relating
to certain a-D-dioxolanyl purines for use in treating or
preventing HIV and HBV infections;
B. LICENSORS and COMPANY are, effective on the same date as the
Effective Date of this Second Amendment, entering a license
agreement with Shire Biochem Inc. ("SHIRE BIOCHEM") and Shire
Pharmaceuticals Group plc ("SHIRE PHARMACEUTICALS") ("SHIRE
BIOCHEM and SHIRE PHARMACEUTICALS" being collectively referred to
herein as "SHIRE") (the "SHIRE DAPD License"), pursuant to which
SHIRE has licensed to LICENSORS, with the right to sublicense to
COMPANY, certain patents and patent applications owned by SHIRE;
C. LICENSORS and COMPANY are, effective on the same date as the
Effective Date of this Second Amendment, entering a license
agreement with SHIRE (the "SHIRE BCH-13520 License") pursuant to
which LICENSORS and COMPANY have licensed to SHIRE certain patents
and patent applications owned by LICENSORS and COMPANY;
D. LICENSORS and COMPANY desire to amend the Agreement to provide
terms and conditions for the sublicensing by LICENSORS to COMPANY
of the patents and patent applications licensed to LICENSORS by
SHIRE pursuant to the SHIRE DAPD License and to provide terms and
conditions to permit the licenses and rights granted to SHIRE
pursuant to the SHIRE BCH-13520 License; and
E. This Second Amendment is referred to in the SHIRE DAPD License and
in the SHIRE BCH-13520 License as the "2002 Amendment."
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NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are acknowledged by all parties, COMPANY and LICENSORS
hereby agree as follows:
1. Definitions.
1.1 USE OF EXISTING DEFINITIONS. All terms used in this Second
Amendment and not otherwise defined herein shall have the
same meanings ascribed to them in the Agreement.
1.2 AMENDMENT OF DEFINITIONS. The Agreement is hereby amended
to provide that:
1.2.1 The term "SHIRE" shall mean collectively Shire
Biochem Inc. and Shire Pharmaceuticals Group plc;
1.2.2 The term "SHIRE DAPD License" shall mean the license
agreement effective on the same date as the
Effective Date of this Second Amendment between and
among Shire Biochem Inc., Shire Pharmaceuticals
Group plc, Emory University, University of Georgia
Research Foundation, Inc. and Triangle
Pharmaceuticals, Inc. pursuant to which SHIRE has
licensed to LICENSORS, with the right to sublicense
to COMPANY, certain patents and patent applications
owned by SHIRE;
1.2.3 The term "SHIRE BCH-13520 License" shall mean the
license agreement effective on the same date as the
Effective Date of this Second Amendment between and
among Shire Biochem Inc., Shire Pharmaceuticals
Group plc, Emory University, University of Georgia
Research Foundation, Inc. and Triangle
Pharmaceuticals, Inc. pursuant to which LICENSORS
and COMPANY have licensed to SHIRE certain patents
and patent applications owned by LICENSORS and
COMPANY;
1.2.4 The term "Licensed Compound" shall mean all of the
compounds included within Licensed Compounds, as
defined in Section 1.8 of the Agreement and, with
respect to rights granted by LICENSORS to COMPANY
under the SHIRE DAPD License, shall also include
those compounds included within Licensed DAPD
Compound.
1.2.5 The term "Licensed DAPD Compound" shall have the
same meaning as the term "Licensed Compound" in the
SHIRE DAPD License;
1.2.6 The term "Licensed BCH-13520 Compound" shall have
the same meaning as the term "Licensed Compound" in
the SHIRE BCH-13520 License;
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1.2.7 The term "Licensed BCH-13520 Products" shall have
the same meaning as the term "Licensed Products" in
the SHIRE BCH-13520 License;
1.2.8 The terms "Affiliate," "Field of Use," "Net Selling
Price," "Sale," "Sold," "Authorized Third Party,"
"SHIRE Patents" and "Patent Prosecution Activities"
shall have the same meanings ascribed to them in the
SHIRE DAPD License.
1.2.9 The term "Licensed Patents" shall mean all of the
patents and patent applications included within
"Licensed Patents," as defined in the Agreement
before this Second Amendment, together with all of
the patents and patent applications included within
"SHIRE Patents," as defined in the SHIRE DAPD
License.
2. AMENDMENT OF OTHER PROVISIONS OF THE AGREEMENT. The provisions of
the Agreement, other than definitions, are hereby amended as
follows:
2.1 AMENDMENT OF SECTION 2.1. Section 2.1 is amended by
inserting the after the words "exclusive right and license"
the following language: ", except for the rights granted by
LICENSORS to SHIRE pursuant to Articles 2 and 6 of the
SHIRE BCH-13520 License,"
2.2 AMENDMENT OF SECTION 3.4.
2.2.1 The title, the first sentence of Section 3.4
and subsections 3.4(a) and 3.4(b) are deleted
in their entireties and replaced with the
following:
"3.4 RUNNING ROYALTIES.
(a) HIV ROYALTY RATE. COMPANY shall pay
LICENSORS a royalty of *** of the
Net Selling Price of all Licensed
Products Sold in the Territory by
COMPANY and its Affiliates, Authorized
Third Parties and Sublicensees for HIV
indications.
(b) HBV ROYALTY RATE. COMPANY shall pay
LICENSORS a royalty of *** of the
Net Selling Price of all Licensed
Products Sold in the Territory by
COMPANY and its
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Affiliates, Authorized Third Parties
and Sublicensees for HBV indications."
2.2.2 Section 3.4(c) is amended by changing the
second sentence to read:
"Thereafter, royalties shall be paid only so
long as the manufacture, use, offer for sale,
sale or importation of such Licensed Product
in such country would, in the absence of a
license, infringe a Valid Claim of an issued
and unexpired patent within the Licensed
Patents, other than a SHIRE Patent, as
defined in the SHIRE DAPD License"
2.3 NEW SECTION 3.13. The following new Section 3.13 is added
to Article 3:
(a) "3.13 ROYALTIES RECEIVED FROM SHIRE. Royalties
paid by SHIRE to LICENSORS pursuant to Article 3
of the SHIRE BCH-13520 License shall be retained
by LICENSORS.
2.4 AMENDMENT OF SECTION 3.9 OF THE AGREEMENT. Section 3.9 of
the Agreement is amended as follows:
2.4.1 Section 3.9 is amended by changing " *** " to
" *** ".
2.4.2 Section 3.9 is further amended by adding the
following sentences to the end of the section:
"It is understood that royalties payable by COMPANY
to SHIRE pursuant to Article 3 of the SHIRE DAPD
License shall be considered "third party royalties,"
under this Section 3.9. With respect to Section 3.3
of the SHIRE DAPD License, LICENSORS and COMPANY
agree that they shall consult with each other
concerning whether either or both of them are
required to pay royalties or other fees to a Third
Party that are deductible from royalties payable to
SHIRE; however, such determination shall be at
COMPANY's discretion."
2.5 AMENDMENT OF SECTION 4.2. Section 4.2 is deleted in its
entirety and replaced with the following:
"4.2 RIGHT TO AUDIT. LICENSORS shall have the right, upon
prior notice to COMPANY, not more than once in each COMPANY
fiscal year nor more than once in respect of any fiscal
year, through an independent
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certified public accountant selected by LICENSORS and
acceptable to COMPANY, which acceptance shall not be
unreasonably refused, to have access during normal business
hours to those records of COMPANY as may be reasonably
necessary to verify the accuracy of the royalty reports
required to be furnished by COMPANY pursuant to Section 4.1
of the Agreement. COMPANY also shall keep and maintain
records of COMPANY as may be reasonably necessary to verify
the accuracy of the royalty reports made to SHIRE pursuant
to Section 4.1 of the SHIRE DAPD License and to grant
access to such records to SHIRE's independent certified
public accountant. COMPANY shall include in any sublicenses
granted pursuant to this Agreement a provision requiring
the sublicensee to keep and maintain records of Sales made
pursuant to such sublicense and to grant access to such
records by LICENSORS' independent certified public
accountant and, in the case of reports made to SHIRE
pursuant to Section 4.1 of the SHIRE DAPD License, by
SHIRE's independent certified public accountant. Any
underpayments or overpayments made to SHIRE shall be
reported and dealt with according to the terms of Section
4.2 of the SHIRE DAPD License. If LICENSOR's independent
certified public accountant's report shows any underpayment
of royalties by COMPANY, its Affiliates or sublicensees to
LICENSORS, within thirty (30) days after COMPANY's receipt
of such report, COMPANY shall remit or shall cause its
sublicensees to remit to LICENSORS:
(a) the amount of such underpayment; and
(b) if such underpayment exceeds *** of the total
royalties owed for the fiscal year then being reviewed, the
reasonably necessary fees and expenses of such independent
certified public accountant performing the audit.
Otherwise, LICENSOR's accountant's fees and expenses shall
be borne by LICENSORS. Any overpayment of royalties shall
be fully creditable against future royalties payable in any
subsequent royalty periods. Upon the expiration of ***
months following the end of any fiscal year, the
calculation of royalties payable with respect to such
fiscal year shall be binding and conclusive on LICENSORS
and COMPANY, unless an audit is initiated before expiration
of such *** months."
2.6 AMENDMENT OF SECTION 6.2. Section 6.2 of the Agreement is
amended to extend the date for COMPANY to *** by an
additional *** months. Therefore, subsection 6.2(a)(ii)
is deleted in its entirety and replaced with the following:
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"(ii) ***; and"
2.7 AMENDMENT OF ARTICLE 7 OF THE AGREEMENT. Article 7 of the
Agreement is amended by adding the following new
subsections 7.1(d) and 7.1(e):
"(d) With respect to Article 7 of the SHIRE DAPD License,
in the event that SHIRE decides to allow a patent or
patent application to lapse or become abandoned, or
in the event that SHIRE declines to file a SHIRE
Patent continuation or divisional application or
other SHIRE Patent as provided by such Article 7,
then LICENSORS shall have the first right, but not
the obligation, to undertake such Patent Prosecution
Activities that SHIRE declines to perform. COMPANY
shall pay the costs of such reasonable,
out-of-pocket Patent Prosecution Activities in
connection with SHIRE Patents in the same manner and
subject to the same conditions set forth in Section
7.1(b), to the extent that such costs are deductible
by COMPANY from royalties payable to SHIRE. If
LICENSORS decline to undertake any such Patent
Prosecution Activities, then COMPANY shall have the
right, but not the obligation, to do so, in which
event COMPANY shall have the right to deduct such
costs from royalties payable to SHIRE.
(e) LICENSORS and COMPANY agree that their respective
rights with respect to Patent Prosecution Activities
under this Article 7 shall be subject to SHIRE's
rights in connection with the patent protection of
Licensed BCH-13520 Compound under Article 7 of the
SHIRE BCH-13520 License."
2.8 AMENDMENT OF ARTICLE 8 OF THE AGREEMENT. Article 8 of the
Agreement is hereby amended by adding the following new
Sections 8.3, 8.4 and 8.5:
"8.3 THIRD-PARTY INFRINGEMENT OF SHIRE PATENTS. With
respect to Article 8 of the SHIRE DAPD License, in
the event that SHIRE declines to take action against
a Third Party infringer of a SHIRE Patent, and
COMPANY and UNIVERSITY have the right to do so under
Section 8.3 of the SHIRE DAPD License, the COMPANY
shall have the right, but not the obligation, to
take action against such Third Party infringer and
retain all damages awards or settlement payments
after deducting expenses of such action and making
required payments to SHIRE. If COMPANY declines to
take such action under such Section 8.3, then
LICENSORS shall have the right, but not the
obligation, to take such actions and to
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retain all damages awards or settlement payments
after deducting expenses of such action and making
required payments to SHIRE. Neither COMPANY nor
LICENSORS shall settle any such action in a manner
that would impose on the other party any material
obligation or burden without the written consent of
such other party.
8.4 LICENSORS and COMPANY agree that their respective
rights to take actions against third-party
infringers under this Article 8 shall be subject to
SHIRE's rights to pursue third-party infringements
with respect to Licensed BCH-13520 Compound,
Licensed BCH-13520 Products and metabolites of
Licensed BCH-13520 Compound under Article 8 of the
SHIRE BCH-13520 License.
8.5 In the event that LICENSORS and COMPANY have the
right to take action to xxxxx a third-party
infringement pursuant to Section 8.4 of the SHIRE
BCH-13520 License, then LICENSORS shall have the
first right and option, but not the obligation, to
take such action at their own expense. In such
event, if a damage award or aggregate settlement
payments exceed LICENSORS' expenses of such action,
then the share of such excess damage award or
settlement payments provided to LICENSORS and
COMPANY pursuant to such Section 8.4 shall be paid
to LICENSORS. If LICENSORS decline to take such
action, then COMPANY shall have the right, but not
the obligation, to do so at its own expense. In such
event, if a damage award or aggregate settlement
payments exceed COMPANY's expenses of such action,
then the share of such excess damage award or
settlement payments provided to LICENSORS and
COMPANY pursuant to such Section 8.4 shall be paid
to COMPANY."
2.9 AMENDMENT OF ARTICLE 11 OF THE AGREEMENT. Article 11 of the
Agreement is hereby as follows:
2.9.1 Section 11.1 is amended to read:
"11.1 TERM. Unless sooner terminated as otherwise
provided in this Agreement, the term of this
Agreement shall commence on the date of this
Agreement and shall continue in full force
and effect until the expiration of the last
to expire Valid Claim or the last to expire
of the SHIRE Patents, whichever is later."
2.9.2 The following new Section 11.8 is added to the
Agreement:
"11.8 TERMINATION OF SHIRE LICENSE.
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(a) In the event that COMPANY or LICENSORS
receive a notice of election to
terminate the SHIRE DAPD License
pursuant to Section 11.3 thereof, the
party receiving such notice shall
promptly provide a copy of such notice
to the other party. The party whose
conduct resulted in such notice (the
"Alleged Breaching Party") shall work
in good faith to cure any breach
giving rise to such notice or, if it
has a good faith belief that it has
not breached and that such notice is
improper, it shall fully explain the
bases for such belief to the other
party. If the other party elects to
take steps to cure such alleged
breach, the Alleged Breaching Party
shall cooperate in good faith in such
efforts, without prejudice to any
cause of action or remedies in law or
equity that it may have against SHIRE
for wrongful termination. Such other
party's efforts to cure shall be
without prejudice to any cause of
action or remedies in law or equity
that it may have against the Alleged
Breaching Party, including an action
for recovery of its costs, expenses
and damages resulting from its efforts
to cure the breach.
(b) LICENSORS shall not terminate the
SHIRE DAPD License pursuant to Section
11.5 thereof without COMPANY's prior
written consent."
2.9.3 The following new Section 11.9 is added to the
Agreement:
"11.9 LIABILITY FOR BREACH RESULTING IN TERMINATION
OF THE SHIRE DAPD LICENSE. In the event that
COMPANY or LICENSORS breach the SHIRE DAPD
License and fail to cure such breach in a
timely way and such breach results in SHIRE's
termination of the SHIRE DAPD License
pursuant to Section 11.3 thereof, the
breaching party shall be liable to the other
party for all actual and consequential
damages resulting from such breach and
termination. Such other party may pursue all
such remedies that it may have in law or
equity, including specific performance, to
prevent or cure such breach or to recover
damages as a result thereof."
3. GENERAL TERMS.
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3.1 UNAMENDED TERMS OF AGREEMENT REMAIN IN EFFECT. Except as
expressly amended hereby, the remaining terms of the
Agreement shall remain in full force and effect.
3.2 COOPERATION REGARDING RIGHTS AND OBLIGATIONS UNDER SHIRE
DAPD LICENSE AND SHIRE BCH-13520 LICENSE. To the extent not
expressly addressed in this Second Amendment, in those
situations in which LICENSORS and COMPANY have rights or
obligations under a provision of the SHIRE DAPD License or
the SHIRE BCH-13520 License, they agree reasonably to
inform each other of all facts relevant to the exercise of
such rights and obligations and to cooperate reasonably in
determining the manner in which to exercise or to share in
the benefits or costs of such rights or obligations. Should
the parties be unable to agree, after good faith efforts,
then they shall resolve such disagreement in accordance
with the procedures set forth in Section 16.1 of the
Agreement.
3.3 ENTIRE AGREEMENT. The Agreement, as amended by this Second
Amendment, the SHIRE DAPD License and the SHIRE BCH-13520
License constitute the entire agreement between LICENSORS
and COMPANY regarding the subject matters contained therein
and herein and specifically supersedes the BINDING MATERIAL
TERMS AGREEMENT entered by LICENSORS and COMPANY on July
26, 2002.
3.4 CONFLICTS. In the event of any conflict between the
provisions of the Agreement and this Second Amendment, the
provisions of this Second Amendment shall govern and
control.
3.5 GOVERNING LAW. This Second Amendment shall be governed by,
and construed in accordance with, the laws of the State of
Georgia without regard to its conflicts of laws principles.
3.6 COUNTERPARTS. This Second Amendment may be executed in any
number of counterparts, each of which shall be deemed an
original and all of which shall constitute one and the same
instrument.
3.7 SURVIVAL OF PROVISIONS. If any provision of this Second
Amendment is for any reason held to be ineffective,
unenforceable or illegal, such condition shall not affect
the validity or enforceability of any of the remaining
portions hereof; provided, further, that the parties shall
negotiate in good faith to replace any ineffective,
unenforceable or illegal provision with an effective
replacement as soon as is practical.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, LICENSORS and COMPANY have each executed this Second
Amendment through an authorized officer as of the date first written above.
EMORY UNIVERSTIY
By: /s/ Xxxx X. Xxxxxxxx, Ph.D, JD
-----------------------------------
Its: ASSISTANT VICE PRESIDENT & DIRECTOR
OFFICE OF TECHNOLOGY TRANSFER
UNIVERSITY OF GEORGIA RESEARCH
FOUNDATION, INC.
By: /s/ Gordham X. Xxxxx, Ph.D
-----------------------------------
Its: Executive Vice President
-----------------------------------
TRIANGLE PHARMACEUTICALS, INC.
By: R. Xxxxxx Xxxxxx
-----------------------------------
Its: Executive Vice President
-----------------------------------
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