SUBLICENSE AGREEMENT
AGREEMENT made effective this 28th day of October, 1996
BY AND BETWEEN:
XXXXXXX & XXXXXXX, a company organized under the laws of the State of New
Jersey, U.S.A., and having executive offices at Xxx Xxxxxxx & Xxxxxxx Xxxxx,
Xxx Xxxxxxxxx, Xxx Xxxxxx 00000-0000, and its wholly owned subsidiary, ORTHO
PHARMACEUTICAL CORPORATION ("ORTHO"), a company organized under Delaware law,
having its principal office at Xxxxx 000, Xxxxxxx, Xxx Xxxxxx 00000
(hereinafter collectively called "LICENSOR")
ON THE ONE HAND,
AND:
ACUTE THERAPEUTICS, INC having its executive offices at 0000 Xxxxxx Xxxxxx
Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000 (hereinafter called "LICENSEE")
ON THE OTHER HAND,
WITNESSETH:
A. WHEREAS, pursuant to Research and License Agreements dated May 1, 1982 and
January 1, 1987 (hereinafter collectively the "SCRIPPS AGREEMENTS") between
LICENSOR and SCRIPPS CLINIC AND RESEARCH FOUNDATION (hereinafter
"SCRIPPS"), SCRIPPS granted LICENSOR an exclusive option to obtain an
exclusive worldwide license (including the right to grant sublicenses) to
certain technology, including certain technology relating to the synthetic
pulmonary surfactant known as KL4 (hereinafter the "INVENTIONS"), and
LICENSOR has exercised its option thereunder;
B. WHEREAS, patent applications have been filed in the United States and
other territories in the name of SCRIPPS for the granting of letters patent
relating to the said INVENTIONS, further described in Appendix 1 hereto;
and
C. WHEREAS, LICENSOR has developed certain technology relating to the
manufacture of the INVENTIONS and has filed certain patent applications
relating thereto in the name of ORTHO, further described in Appendix 1
hereto; and
D. WHEREAS, LICENSOR desires that the INVENTIONS be developed and made
available to the public; and
E. WHEREAS, LICENSEE represents that it is presently engaged, or intends to
be engaged in the business of research, development, manufacturing and
selling products in fields related to the INVENTIONS; and
F. WHEREAS, LICENSEE wishes to make use of the INVENTIONS for the research,
development, manufacturing and selling of products and wishes to obtain
certain rights to the INVENTIONS under the terms and conditions
hereinafter set forth;
G. WHEREAS, LICENSOR is willing and able to grant such rights to LICENSEE;
H. WHEREAS, LICENSEE and LICENSOR have entered into an agreement
contemporaneously herewith for the transfer of certain common stock in
LICENSEE to LICENSOR.
NOW, THEREFORE, in consideration of the premises and the performance of the
covenants herein contained, IT IS AGREED AS FOLLOWS:
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1. DEFINITIONS
For the purposes of this agreement (hereinafter called the "SUBLICENSE
AGREEMENT"), and solely for such purposes, the terms hereinafter set forth
shall have the following respective meanings:
1.1 "AFFILIATE" or "AFFILIATES" shall mean any corporation(s) or
organization(s) which directly or indirectly CONTROLS, is CONTROLLED by
or is under common control with LICENSEE or LICENSOR.
1.2 "ARDS INDICATION" shall mean the use of LICENSED PRODUCT for the treatment
of Acute Respiratory Distress Syndrome or an equivalent indication
thereto.
1.3 "CONTROL", "CONTROL(S)" OR "CONTROLLED" shall refer to direct or indirect
beneficial ownership of at least fifty percent (50%) of the voting stock
of a corporation or other business entity, or a fifty percent (50%) or
greater interest in the income of such corporation or other business
entity, or the power to direct or cause the direction of the management
or policies of such corporation or other business entity or policies of
such corporation or other business entity whether by ownership of voting
securities by contract or otherwise, or such other relationship as, in
fact, constitutes actual control.
1.4 "EFFECTIVE DATE" shall mean the date at the head of this SUBLICENSE
AGREEMENT.
1.5 "FDA" shall mean the United States Food and Drug Administration.
1.6 "FIELD" shall mean the use of LICENSED PRODUCT for diagnosis, therapy or
preventive treatment of disease in humans or vertebrate animals.
1.7 "INVENTORS" shall mean the named inventors on the PATENT RIGHTS.
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1.8 "LICENSED KNOW-HOW" shall mean all know-how, data, information, technology
or special ability not generally known to the public, including all
experience, data, formulas, procedures, methods, models, assays and
results, and including all chemical, pharmacological, toxicological,
clinical, analytical and quality control data, on the part of the
LICENSOR which are proprietary to the LICENSOR and with respect to which
the LICENSOR has the power and right to grant the licenses provided for
herein which are useful in the development, manufacture or use of LICENSED
PRODUCT.
1.9 "LICENSED PRODUCTS" shall mean surfactant pharmaceutical compositions
defined by one or more claims under a patent contained within the SCRIPPS
PATENT RIGHTS, or made using a product or process covered by one or more
claims under the PATENT RIGHTS, for use in the FIELD, including without
limitation, a composition containing the polypeptide known as KL(4) which
has the amino acid sequence KLLLLKLLLLKLLLLKLLLLK. This definition of
"LICENSED PRODUCT" shall apply on a worldwide basis, regardless of where
SCRIPPS PATENT RIGHTS have been filed.
1.10 "NDA" shall mean a New Drug Application filed with the United States Food
and Drug Administration under 21 USC 355(b) (FDCA Section 505(b)) or its
equivalent filed with the Health Regulatory Authorities in other countries
or jurisdictions.
1.11 "NEONATAL INDICATION" shall mean the use of LICENSED PRODUCT for a
neonatal indication (i.e. Meconium Aspiration Syndrome or Infant
Respiratory Distress Syndrome).
1.12 "NET SALES VALUE" shall mean that sum determined by deducting from the
gross amount billed and collected for LICENSED PRODUCTS by the SELLER
(LICENSEE, SUBLICENSEE OR AFFILIATE) in an arms length transaction to
customers that are not AFFILIATES of the SELLER;
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(i) transportation charges or allowances, including freight
pickup allowances, and packaging costs, if any;
(ii) trade, quantity or cash discounts, service allowances and
independent broker's or agent's commissions, if any, allowed
or paid;
(iii) credits or allowances for the LICENSED PRODUCTS, if any,
given or made on account of price adjustments, returns, bad
debts, off-invoice promotional discounts, rebates,
chargebacks, any and all federal, state or local
government rebates or discounts whether in existence now or
enacted at any time during the term of this SUBLICENSE
AGREEMENT, volume reimbursements, the gross amount billed and
collected for rejected LICENSED PRODUCTS or LICENSED PRODUCTS
subject to recall or destruction (voluntarily made or
requested or made by an appropriate government agency,
sub-division or department); and
(iv) any tax, excise or other governmental charge upon or measured
by the production, sale, transportation, delivery or use of
the LICENSED PRODUCT;
in each case determined in accordance with generally accepted
accounting practices.
1.13 "ORTHO PATENTS RIGHTS" shall mean, the patents and patent applications
identified in Appendix 1(b) hereof, and in respect of such letters
patent, and patent applications, all corresponding national patents
and patent applications, European Patent Convention applications or
applications under similar administrative international conventions,
patent applications in the listed or designated countries, together
with any divisional, continuation, continuation-in-part, substitution,
reissue, extension, supplementary protection certificate or other
application based thereon;
1.14 "PATENT RIGHTS" shall mean:
(i) the SCRIPPS PATENT RIGHTS and the ORTHO PATENT RIGHTS; and
(ii) any other patent or patent applications covering the LICENSED
PRODUCTS, processes for their production, their formulation
into final product and/or the sale or
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use of LICENSED PRODUCTS, owned by LICENSOR or under which
LICENSOR has the right, at any time while this Agreement is
in effect to grant the license herein.
1.15 "PLA" shall mean a Product License Application filed with the FDA or
its equivalent filed with the Health Regulatory Authorities in other
countries or jurisdictions.
1.16 "SCRIPPS AGREEMENTS" shall mean the Research and License Agreements
between LICENSOR and Scripps Clinic and Research Foundation, the
predecessor to The Scripps Research Institute (hereinafter
"SCRIPPS") dated May 1, 1982 and January 1, 1987.
1.17 "SCRIPPS PATENTS RIGHTS" shall mean the patents and patent
applications identified in Appendix 1(a) hereof, and in respect of
such letters patent, and patent applications, all corresponding
national patents and patent applications, European Patent Convention
applications or applications under similar administrative
international conventions, patent applications in the listed or
designated countries, together with any divisional, continuation,
continuation-in-part, substitution, reissue, extension,
supplementary protection certificate or other application based
thereon.
1.18 "SELLER" shall mean one who SELLS.
1.19 "SOLD", "SALE", "SALES", "SELL", "SELLING" AND "SELLS" shall refer to
the act of selling or disposing of for value.
1.20 "SUBLICENSEE" shall mean a third party other than an AFFILIATE to
whom LICENSEE has extended a further sublicense in accordance with
Article 2.3 hereunder.
1.21 "USE", "USES" and "USED" shall refer to the act of using for any
commercial purposes whatsoever.
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1.22 "VALID CLAIM" shall mean a claim of an unexpired patent within the
PATENT RIGHTS which has matured into an issued patent or a claim being
prosecuted in a pending application within the PATENT RIGHTS. In each
case a claim shall be presumed to be valid unless and until it has
been held to be invalid by a final judgement of a court of competent
jurisdiction from which no appeal can be or is taken. [***]
1.23 "WESTERN EUROPEAN TERRITORY" shall mean the countries set forth in
Appendix 2 hereto.
2. LICENSE
2.1 LICENSOR hereby grants to LICENSEE, and LICENSEE hereby accepts from
LICENSOR, upon the terms and conditions herein specified, a worldwide
license and sublicense under the PATENT RIGHTS and LICENSED KNOW-HOW,
to make, to have made, to USE and to SELL LICENSED PRODUCTS in the
FIELD.
2.2 Subject to the terms of this LICENSE AGREEMENT, the license granted
under Article 2.1 shall remain exclusive in the FIELD (i) as to the
PATENT RIGHTS, for their respective lives on a country-by-country
basis, and (ii) as to the LICENSED KNOW-HOW, until the termination
of LICENSEE's obligation to make royalty payments under Article 4.2
hereof, at
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which time the license under the LICENSED KNOW-HOW shall
automatically become a fully paid license. Notwithstanding the
foregoing, the license granted hereunder shall be subject to:
(i) SCRIPPS' rights pursuant to the SCRIPPS AGREEMENT to use the
SCRIPPS PATENT RIGHTS for educational and research purposes;
and
(ii) the rights of the United States Government pursuant to 35
U.S.C. 202 et seq. and 37 C.F.R. 401.1 et seq. which may have
arisen or resulted from federal funding of SCRIPPS research
relating to the SCRIPPS PATENT RIGHTS, including the
non-exclusive right of the United States Government to
practice the inventions covered by the SCRIPPS PATENT RIGHTS.
Subject to the foregoing, J&J intends to grant to LICENSEE the
maximum rights allowable under 35 U.S.C. Sec. 202 et seq. and
37 C.F.R. 401.1 et seq.
2.3 The sublicenses granted hereunder shall include the right to grant
further sub-licenses to AFFILIATES or third party SUBLICENSEES,
provided that LICENSEE agrees to be responsible for the performance
hereunder by its AFFILIATES to which the license and rights shall
have been extended, provided that LICENSEE agrees to use diligent
efforts to ensure that SUBLICENSEES abide by any terms of any
licenses or rights extended to them and provided that LICENSEE
complies with the terms of Article 4 hereof.
2.4 The LICENSEE shall be responsible to the LICENSOR for the
enforcement of the terms of the sub-license and for inspecting the
accounts and records kept by the AFFILIATE or SUBLICENSEE. Each
sublicense agreement shall contain provisions with respect to the
keeping and inspection of books of account similar to the provisions
set forth in Article 4.7 hereof.
2.5 No other, further or different license or right and, except as
expressly provided in Article 2 hereof, is hereby granted or implied.
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3. LICENSE FEES
3.1 In consideration of the Licenses granted hereunder, LICENSEE shall pay
to LICENSOR non-refundable License Fees at times and amounts as
follows:
(i) Two Hundred Thousand United States Dollars ($200,000.00) within
thirty (30) days following execution and delivery of this
SUBLICENSE AGREEMENT;
(ii) Two Hundred Fifty Thousand United States Dollars ($250,000)
within thirty (30) days of filing of the first NDA or PLA for a
LICENSED PRODUCT in a NEONATAL INDICATION;
(iii) Five Hundred Thousand United States Dollars ($500,000) within
thirty (30) days of approval of the first NDA or PLA for a
LICENSED PRODUCT in a NEONATAL INDICATION;
(iv) Five Hundred Thousand United States Dollars ($500,000) within
thirty (30) days of filing of the first NDA or PLA for a LICENSED
PRODUCT in the ARDS INDICATION;
(v) Xxx Xxxxxxx Xxxx Xxxxxxx Xxxxxxxx Xxxxxx Xxxxxx Dollars
($1,500,000) within thirty (30) days of approval of the first
NDA or PLA for a LICENSED PRODUCT in the ARDS INDICATION.
4. ROYALTIES, RECORDS AND REPORTS
4.1 For the rights and privileges granted under this SUBLICENSE AGREEMENT,
LICENSEE shall pay to LICENSOR earned royalties equal to [***] of the NET
SALES VALUE of LICENSED PRODUCTS sold by LICENSEE or its AFFILIATES. With
respect to sales by SUBLICENSEES, LICENSEE shall pay to LICENSOR earned
royalties equal to [***]
[***] Confidential treatment requested.
9
4.2 Earned royalty shall be paid pursuant to Article 4.1 hereof on all LICENSED
PRODUCTS, on a country-by-country basis for [***] years from first
commercial sale of the first LICENSED PRODUCT in such country. Thereafter,
royalties shall be paid in respect of a given LICENSED PRODUCT until the
expiration of the last to expire of the PATENT RIGHTS containing a VALID
CLAIM covering the LICENSED PRODUCTS in such country. Notwithstanding the
foregoing, however, with respect to any country of the European Union,
royalties on NET SALES of LICENSED PRODUCTS which are payable only by
virtue of the LICENSED KNOW-HOW shall be payable commencing from the date
of first commercial sale of the first LICENSED PRODUCT in such country and
ending on the earlier of (i) the date on which the LICENSED KNOW-HOW
becomes published or generally known to the public through no fault on the
part of LICENSOR, its AFFILIATES or SUBLICENSEES or (ii) the [***]
anniversary of the first commercial sale of the first LICENSED PRODUCT in
any country of the European Union.
4.3 Any LICENSED PRODUCT made under a license granted pursuant to this
SUBLICENSE AGREEMENT prior to the termination or expiration of the
applicable PATENT RIGHTS and not SOLD prior to the termination or
expiration of such PATENT RIGHTS shall be subject to the payment of
royalties hereunder when SOLD, even though such SALE occurs after the
termination or expiration of all pertinent licenses or rights granted
hereunder.
4.4 The earned royalty for any particular LICENSED PRODUCT shall be due upon
the first bona fide arm's length SALE thereof by LICENSEE, an AFFILIATE or
SUBLICENSEE, and any
[***] Confidential treatment requested.
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subsequent SALE of such LICENSED PRODUCT by other than LICENSEE, AFFILIATE
or SUBLICENSEE shall be royalty free. In the case of transfers or SALES of
any LICENSED PRODUCT between LICENSEE and an AFFILIATE or between
AFFILIATES, LICENSEE and SUBLICENSEE, one and only one royalty shall be
payable thereon and such royalty shall become payable upon the final SALE
thereof to a third party other than LICENSEE, AFFILIATE or SUBLICENSEE.
4.5 For the purposes of reporting and making payments of earned royalties under
this SUBLICENSE AGREEMENT, the manufacture, SALE or USE of LICENSED
PRODUCTS by any AFFILIATE to which the license and rights shall have been
extended shall be considered the manufacture, SALE or USE of such LICENSED
PRODUCTS by LICENSEE and any such AFFILIATE may make the pertinent reports
and royalty payments specified in Article 4 hereof directly to LICENSOR on
behalf of LICENSEE; otherwise, such reports and payments on account of
SALES or USES of LICENSED PRODUCTS by each AFFILIATE shall be made by
LICENSEE; and, in any event, the SALES and USES of LICENSED PRODUCTS by
each such AFFILIATE shall be separately shown in the reports to LICENSOR if
such information is readily available to LICENSEE.
4.6 LICENSEE shall keep full, true and accurate books of account containing all
particulars which may be necessary for the purpose of showing the amount
payable to LICENSOR by way of royalty as aforesaid or by way of any other
provision hereunder. Said books of account shall be kept at LICENSEE's
principal place of business. Said books and the supporting data shall be
maintained and kept open at all reasonable times, for three (3) years
following the end of the calendar year to which they pertain (and access
shall not be denied thereafter, if reasonably available), to the inspection
of an independent accountant retained by LICENSOR for the purpose of
verifying LICENSEE's royalty statements, or LICENSEE's compliance in other
respects with this SUBLICENSE AGREEMENT. Names of customers and other
confidential information shall not be disclosed to LICENSOR by such
independent accountant. Such
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accountant shall be retained at LICENSOR's sole expense, unless during any
such inspection a deficiency in payments to LICENSOR of five percent (5%)
or more is determined to exist in which event LICENSEE shall within thirty
(30) days reimburse LICENSOR for the full expense of retaining such
accountant, including but not limited to professional and administrative
fees, travel and subsistence costs.
4.7 LICENSEE within ninety (90) days after the first day of January, April,
July and October of each year shall deliver to LICENSOR a true and accurate
report, giving such particulars of the LICENSED PRODUCTS SOLD by LICENSEE,
AFFILIATES and royalty received from SUBLICENSEES during the preceding
three (3) months ("Accounting Period") under this SUBLICENSE AGREEMENT as
are pertinent to an accounting for royalty under this SUBLICENSE AGREEMENT.
These shall include at least the following, separately stated as to the
LICENSED PRODUCTS:
(i) the quantity of LICENSED PRODUCTS invoiced by LICENSEE or
AFFILIATES during those three(3) months and the xxxxxxxx therefor;
(ii) the allowable deductions therefrom;
(iii) the calculation of royalties thereon.
Simultaneously with the delivery of each such report, LICENSEE shall pay to
LICENSOR the royalty and any other payments due under this SUBLICENSE
AGREEMENT for the period covered by such report. If no royalties are due,
it shall be so reported. Royalties shall be paid to LICENSOR in United
States Dollars at LICENSOR's office specified for the purposes of giving
notice in Article 14.2 hereof.
4.8 The remittance of royalties payable on sales outside the United States will
be payable to LICENSOR in United States Dollar equivalents at the official
rate of exchange of the currency of the country from which the royalties
are payable as quoted by The Wall Street Journal, New
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York Edition, for the day upon which the transfer of funds for the royalty
payment is made. If the transfer or the conversion into United States
Dollar equivalents in any such instance is not lawful or possible, the
payment of such part of the royalties as is necessary shall be made by the
deposit thereof, in the currency of the country where the sales were made
on which the royalty was based, to the credit and account of LICENSOR or
its nominee in any commercial bank or trust company of its choice located
in that country, prompt notice of which shall be given by LICENSEE to
LICENSOR.
4.9 In the event that any taxes, withholding or otherwise, are levied by any
taxing authority in connection with accrual or payment of any royalties
payable to LICENSOR under this SUBLICENSE AGREEMENT, LICENSEE or its
AFFILIATES and/or SUBLICENSEES shall have the right to pay such taxes to
the local tax authorities on behalf of LICENSOR (or, in the case of
SUBLICENSEE SALES, on behalf of LICENSEE), and the payment to LICENSOR of
the net amount due after reduction by the amount of such taxes, together
with evidence of payment of such taxes, shall fully satisfy LICENSEE's
royalty obligations under this SUBLICENSE AGREEMENT. LICENSEE agrees to
make a good faith effort to obtain a refund of any such taxes for LICENSOR
if LICENSOR informs LICENSEE that it believes such taxes have been
improperly levied.
4.10 In the event that any payment required under this SUBLICENSE AGREEMENT
shall be overdue, LICENSEE shall pay interest thereon at an annual rate of
TWO percent (2%) over the United States Clearing Bank Base Lending Rate
computed from the date when the payment became due; provided that if such
rate shall be in excess of that allowed by applicable law, then the highest
rate allowable shall apply. Payment shall be deemed to have been made when
received by LICENSOR.
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5 CONFIDENTIALITY, TRANSFER OF KNOW-HOW
5.1 Disclosures of confidential and proprietary information hereunder by
either party to the other shall be made in writing (or promptly confirmed
in writing if made in another form), and shall be clearly marked
"Confidential". Such confidential information shall be safeguarded by the
recipient, shall not be disclosed to third parties and shall be made
available only to recipient's employees or independent contractors who
agree in writing to equivalent conditions and who have a need to know the
information for the purposes specified under this Agreement. Subject to
the license granted under Article 2, all confidential information shall
remain the property of and be returned to the disclosing party within
thirty (30) days of receipt of a written request by the disclosing party,
or within thirty (30) days of termination of this Agreement. These mutual
obligations of confidentiality shall apply for a period of 3 (three) years
after the termination of this Agreement, but such obligations shall not
apply to any information that:
(i) is or hereafter becomes generally available to the public other
than by reason of any default with respect to a confidentiality
obligation under this Agreement; or
(ii) was already known to the recipient as evidenced by prior written
documents in its possession; or
(iii) is disclosed to the recipient by a third party who is not in
default of any confidentiality obligation to the disclosing party
hereunder; or
(iv) is developed by or on behalf of the receiving party, without
reliance on confidential information received hereunder; or
(v) is provided to third parties under appropriate terms and conditions
including confidentiality provisions equivalent to those in this
Agreement for consulting,
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manufacturing development, manufacturing, external testing and
marketing trials with respect to the products covered by this
Agreement; or
(vi) is used with the consent of the disclosing party (which consent
shall not be reasonably withheld) in applications for patents or
copyrights under the terms of this Agreement; or
(vii) has been approved in writing for publication by each of the
parties; or
(viii) is required to be disclosed in compliance with applicable laws
or regulations in connection with the manufacture or sale of products
covered by this Agreement; or
(ix) is otherwise required to be disclosed in compliance with
applicable laws or regulations or order by a court or other regulatory
body having competent jurisdiction; or
(x) is product-related information which is reasonably required to be
disclosed in connection with marketing of products covered by this
Agreement.
5.2 Within sixty (60) days of the EFFECTIVE DATE, and thereafter throughout the
term of this LICENSE AGREEMENT, LICENSOR will make reasonable efforts to
disclose to LICENSEE all LICENSED KNOW-HOW useful in the FIELD which is in
or comes into LICENSOR'possession or control or of which LICENSOR becomes
aware and which LICENSOR has a right to disclose to LICENSEE. LICENSOR will
transfer its pre-clinical, clinical, manufacturing and marketing data
relating to LICENSED PRODUCTS to LICENSEE, subject to the provisions of
this SUBLICENSE AGREEMENT, and will provide LICENSEE with appropriate
documentation and letters of reference to effectuate such transfer.
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6 DEVELOPMENT and COMMERCIALIZATION
6.1 LICENSEE shall, at its expense, use reasonable commercial efforts (i) to
conduct a research and development program to obtain regulatory approval
inside and outside the U.S. for use of the LICENSED PRODUCTS for at least
one NEONATAL INDICATION and the ARDS INDICATION generally in accordance
with the Development Plan attached hereto as Appendix 3 (the "Development
Program"); and (ii) if, in LICENSEE's opinion, the results of the
Development Program demonstrate acceptable criteria for safety and
efficacy, to file an NDA or PLA in at least the United States for such
LICENSED PRODUCTS for a NEONATAL INDICATION and the ARDS INDICATION.
LICENSOR and LICENSEE shall review the Development Plan from time to time.
With the mutual agreement of LICENSOR and LICENSEE, the Development Plan
may be modified and the milestones set forth in Article 6.2(a) below may be
extended.
6.2 (a) Without limiting the foregoing, achievement of the development
milestones set forth below shall be an objective measure of LICENESEE's use
of reasonable commercial efforts set forth in this Article 6;
[***]
[***] Confidential treatment requested.
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[***]
The time periods specified in clauses (i) and (ii) above shall be subject
to extension with LICENSOR's written consent, which shall not be withheld
if LICENSEE reasonably requires additional time due to unforeseen
regulatory or technical difficulties provided that LICENSEE is otherwise
exercising the efforts recited in the first sentence of paragraph 6.1
above. In such event, LICENSEE shall provide LICENSOR with a description of
its reasons for requesting such extension, its modified schedule and its
revised Development Plan for achieving such Milestones in accordance with
the modified schedule.
(b) Non-performance of this Article 6, including but not limited to, the
failure to meet the deadlines set forth in Article 6.2(a) above, subject to
extensions under Article 6.2(a) above if LICENSEE is using reasonable
commercial efforts, shall be a breach or default under this SUBLICENSE
AGREEMENT, entitling the LICENSOR, in addition to other remedies LICENSOR
may have, to terminate this SUBLICENSE AGREEMENT under Article 7.3
hereunder. In the event LICENSEE elects not to proceed with the Development
Plan, or otherwise abandons one of (i) any of NEONATAL INDICATIONS or (ii)
the ARDS INDICATION but is otherwise pursuing the other indication,
LICENSOR may not terminate this SUBLICENSE AGREEMENT in its entirety, but
LICENSOR shall have the right to partially terminate this SUBLICENSE
AGREEMENT under Article 7.3 for the field of use comprising the abandoned
indication only. Such termination provision shall not apply to an
indication, however, in the event that the Phase II clinical trial for such
indication, as set forth in the Development Plan, fails to demonstrate
acceptable criteria for safety and efficacy. [***]
[***] Confidential treatment requested.
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[***] LICENSEE shall give LICENSOR prompt written notice of its decision
not to proceed with, or to abandon the development of LICENSED PRODUCTS
for either indication.
6.3 Within sixty (60) days after the end of each calendar quarter prior to
first commercial sale of LICENSED PRODUCTS, LICENSEE shall submit a summary
report to LICENSOR reporting the progress it, or its SUBLICENSEES, have
made towards commercialization in that quarter. This report will include a
summary of the work done in the development of LICENSED PRODUCTS.
6.4 Promptly following health regulatory approval to market LICENSED PRODUCTS
in such countries where approval is sought, LICENSEE agrees to use diligent
efforts to promote and sell LICENSED PRODUCTS at a level which is
consistent with those marketing efforts normally used for similar products
in the pharmaceutical industry.
7. TERM; TERMINATION
7.1 Unless terminated sooner pursuant to the terms hereof, this LICENSE
AGREEMENT shall become effective as of the EFFECTIVE DATE and shall
continue in full force and effect until the expiration of LICENSEE's
obligation to pay royalties hereunder.
[***] Confidential treatment requested.
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7.2 If (i) LICENSEE files a petition in bankruptcy or for the appointment of a
receiver or trustee, (ii) LICENSEE proposes a written agreement of
composition or extension of its debts or makes an assignment for the
benefit of its creditors, or (iii) an involuntary petition against LICENSEE
is filed in any insolvency proceeding and such petition is not dismissed
within sixty (60) days after filing, LICENSOR may terminate this SUBLICENSE
AGREEMENT.
7.3 Upon any material breach of or default under this SUBLICENSE AGREEMENT by
LICENSEE, or otherwise upon the abandonment of the entire Development Plan
under Article 6(b)(2) hereof, LICENSOR may terminate this SUBLICENSE
AGREEMENT, partially or in its entirety, by forty-five (45) days written
notice to LICENSEE. Said notice shall become effective at the end of said
period, unless during said period LICENSEE shall cure such breach or
default.
7.4 Notwithstanding any contrary term or implication of this SUBLICENSE
AGREEMENT, LICENSEE may terminate this entire SUBLICENSE AGREEMENT on sixty
(60) days advance written notice to LICENSOR for any reason, whereupon
LICENSEE will not be obligated to make any further payments to LICENSOR
other than those payments accruing prior to such termination. In no event
shall LICENSEE be entitled to a refund for any payments made or accrued
prior to the date of termination.
7.5 Notwithstanding any other provision of this LICENSE AGREEMENT to the
contrary, this LICENSE AGREEMENT may be terminated in countries other than
the United States or the WESTERN EUROPEAN TERRITORY without cause, on a
country-by-country basis, by LICENSEE at any time upon six (6) months prior
written notice to LICENSOR. Upon such termination, those rights granted to
LICENSEE hereunder with respect to the countries for which this LICENSE
AGREEMENT is terminated shall revert to LICENSOR for the benefit of
LICENSOR. Further, in the event of any such termination, LICENSEE shall
comply with the provisions of paragraph 7.7 hereof with respect to the
LICENSED KNOW-HOW and
19
regulatory approvals and filings as they relate to such terminated
countries and in addition shall provide LICENSOR with access to any
regulatory filings and approvals outside the terminated countries which are
necessary or useful for LICENSOR, or its designee, to obtain health
regulatory approval to market a LICENSED PRODUCT in the terminated
countries. LICENSEE agrees to provide LICENSOR with any required
authorization letters to effectuate such access.
7.6 Upon termination of this SUBLICENSE AGREEMENT for any reason, other then by
expiry of the PATENT RIGHTS, all rights granted hereunder shall revert to
LICENSOR for the benefit of LICENSOR. Upon termination, at LICENSOR's
written request, LICENSEE agrees to assign any sublicense rights which it
may have granted under the PATENT RIGHTS to LICENSOR, or to such legal
entity specified by LICENSOR, and such sublicense shall survive termination
of this SUBLICENSE AGREEMENT, provided that the SUBLICENSEE continues to
abide by the terms of the sublicense so assigned to LICENSOR.
7.7 Upon termination of this LICENSE AGREEMENT other than by expiration in
accordance with Article 7.1, LICENSEE undertakes:
(i) to deliver to LICENSOR all copies of any LICENSED KNOW-HOW in its
possession;
(ii) not to use the LICENSED KNOW-HOW as long as it has to be kept
confidential under Article 5 hereof;
(iii) to transfer to LICENSOR, at LICENSOR's request, copies of all
KNOW-HOW developed by LICENSEE concerning LICENSED PRODUCT, and all
health regulatory approvals and regulatory filings relating to LICENSED
PRODUCTS;
(iv) to the extent requested by LICENSOR, to transfer to LICENSOR or
its designee responsibility for and control of ongoing LICENSED
PRODUCTS development work, including contracts with Third Parties for
such work, where permissible in accordance with such contracts and only
where such contracts apply solely to development work
20
for the LICENSED PRODUCTS, in an expeditious and orderly manner with
the costs for such work to be assumed by LICENSOR or its designee as of
the date of such transfer;
(v) to the extent requested by LICENSOR, to transfer to LICENSOR or its
designee all inventory of LICENSED PRODUCTS and materials and equipment
for manufacture of LICENSED PRODUCTS at a mutually agreeable price not
to exceed LICENSEE's fully amortized standard cost; and
(vi) grant to LICENSOR an irrevocable, exclusive worldwide paid-up
license under any patents or LICENSED KNOW-HOW owned or controlled by
LICENSEE, with the right to grant sublicenses, to make, have made, use
and sell LICENSED PRODUCTS.
7.8 LICENSEE's obligations to report to LICENSOR and to pay royalties to
LICENSOR as to any LICENSED PRODUCT made or USED under a license or an
immunity granted pursuant to this SUBLICENSE AGREEMENT prior to termination
or expiration of this SUBLICENSE AGREEMENT shall survive such termination
or expiration and any termination of this SUBLICENSE AGREEMENT shall be
subject to this Article 7.8.
7.9 Upon any termination of this LICENSE AGREEMENT, Articles 5.1, 7.7, 7.10, 11
and 13 survive such termination and continue in force and effect to the
extent necessary to effectuate such provisions.
7.10 Upon termination of this SUBLICENSE AGREEMENT other than by expiry of the
PATENT RIGHTS, LICENSEE shall have no right under the PATENT RIGHTS to
make, have made, USE or SELL LICENSED PRODUCTS, except that LICENSEE shall
have the right for ninety (90) days following termination to dispose of
LICENSED PRODUCTS on hand and complete any existing contracts requiring
rights under the PATENT RIGHTS which can be completed within the ninety
(90) days. LICENSEE shall comply with the provisions of Article
21
4 hereof during the ninety day period following termination exactly as
though termination had not occurred.
8. ASSIGNMENT
This Agreement or any interest herein shall not be assigned or transferred,
in whole or in part, by either party hereto without the prior written
consent of the other party hereto. However, without securing such prior
written consent, either party may assign this Agreement to an AFFILIATE or
a successor of all or substantially all of its business to which this
Agreement relates, provided that no such assignment shall be binding and
valid until and unless the assignee shall have assumed in a writing,
delivered to the non-assigning party, all of the duties and obligations of
the assignor, and, provided, further, that the assignor shall remain liable
and responsible to the non-assigning party hereto for the performance and
observance of all such duties and obligations.
9. INFRINGEMENT
9.1 LICENSOR and LICENSEE shall promptly notify the other in writing if any
infringement of the PATENT RIGHTS by a third party is discovered or comes
to its attention.
9.2 Provided LICENSEE shall have supplied LICENSOR with reasonable evidence of
infringement of the PATENT RIGHTS by a third party hereto SELLING material
quantities of products in competition with LICENSEE's, an AFFILIATE's, or
SUBLICENSEE's SALE of LICENSED PRODUCTS hereunder, [***]
[***] Confidential treatment requested.
22
[***]
9.3 In the event either party hereto shall initiate or carry on legal
proceedings to enforce the PATENT RIGHTS against an alleged infringer, as
provided herein, the other party hereto shall render reasonable assistance
to and cooperate with the party initiating or carrying on such proceedings.
9.4 In the event that either party shall institute suit or other legal
proceedings to enforce the PATENT RIGHTS, it shall have sole control of
such suit and the other party shall be entitled to be represented in any
such suit by counsel of its choosing, at its sole expense.
9.5 [***]
9.6 All damages, settlements and awards made or obtained in connection with any
suit or other legal proceeding under this Article 9 shall be shared among
the parties as follows:
[***]
[***] Confidential treatment requested.
23
[***]
10. STATUS OF THE PATENT RIGHTS
10.1 Pursuant to the SCRIPPS AGREEMENT, SCRIPPS agreed, with the advice of
LICENSOR, to diligently prepare, file and prosecute the patent applications
filed within the PATENT RIGHTS and LICENSOR agreed to reimburse SCRIPPS for
the reasonable expenses associated therewith. [***]
10.2 LICENSOR will advise, or ensure that SCRIPPS advises, LICENSEE of the
status of all patent applications and patents within the PATENT RIGHTS.
LICENSOR will provide or will ensure that SCRIPPS provides LICENSEE with
copies of any patent applications or amendments or continuations-in-part
that it or SCRIPPS proposes to file with the U.S. Patent and Trademark
Office and shall give LICENSEE the opportunity, for a period of at least
five (5) business days after receipt, to review and comment on such
applications.
[***] Confidential treatment requested.
24
10.3 [***]
10.4 LICENSOR does not represent or warrant that any patent within the PATENT
RIGHTS will be obtained or that any such patent so obtained will be valid
and enforceable. Specifically, LICENSEE acknowledges that the issuance and
enforceability of any patent application or patent within the PATENT RIGHTS
is subject to the outcome of any patent office proceeding, including any
interference or opposition proceeding involving such patent or patent
application and that LICENSOR makes no representation that any such patent
application or patent will prevail in such proceeding. In the event such
patent or patent application is not issued or upheld in such interference
or opposition proceeding, LICENSEE's sole remedy is to terminate this
SUBLICENSE AGREEMENT under Article 7.4 hereof.
10.5 The parties agree to cooperate in order to avoid loss of any rights which
may otherwise be available to the parties under the U.S. Drug Price
Competition and Patent Term Restoration Act of 1984, the Supplementary
Certificate of Protection of the Member States of the European Community
and other similar measures in any other country in the Territory. Without
limiting the foregoing, LICENSEE agrees to notify LICENSOR promptly upon
receipt of an NDA or PLA approval to market any LICENSED PRODUCT in the
United States and to timely supply LICENSOR with all information necessary
to file an application for
[***] Confidential treatment requested.
25
patent term extension within the sixty (60) day period following U.S. NDA
or PLA APPROVAL. The same shall apply with respect to the approval by the
health authorities in a country of the European Community or approval by
the appropriate authorities in any other country in the Territory.
11 NON-USE OF NAMES
11.1 LICENSEE shall not use the name of any INVENTOR, or any institution with
which he has been or is connected, or of LICENSOR, or any adaptation of any
of them, in any advertising, promotional or sales literature, without prior
written consent obtained from LICENSOR in each case. LICENSEE shall require
its AFFILIATES to comply with this Article 11 to the same extent that it
applies to LICENSEE.
11.2 LICENSOR shall not use the name of LICENSEE or its AFFILIATES or any
adaptation thereof, in any advertising, promotional or sales literature or
in any press release without prior written consent of LICENSEE in each
case.
26
12 WARRANTIES AND REPRESENTATIONS
12.1 LICENSOR represents and warrants to LICENSEE that:
(i) Except with respect to the rights of the United States Government
pursuant to 35 U.S.C. 202 et seq. and the rights retained by SCRIPPS
for educational and research purposes in the SCRIPPS PATENT RIGHTS,
LICENSOR warrants that it has exclusive rights by agreement, assignment
or license to SCRIPPS' rights to the SCRIPPS PATENT RIGHTS and to the
ORTHO PATENT RIGHTS and that it has full power and authority to
execute, deliver and perform this Agreement and the obligations
hereunder;
(ii) Other than the aforesaid rights of the United States Government,
and SCRIPPS, LICENSOR is not aware of any claims by any third parties
to an ownership interest in the PATENT RIGHTS licensed to LICENSEE
under this Agreement;
(iii) The SCRIPPS AGREEMENT is in full force and effect as of the
EFFECTIVE DATE of this SUBLICENSE AGREEMENT and LICENSOR is not in
material breach of the SCRIPPS AGREEMENT nor has LICENSOR received any
notice of default or termination from SCRIPPS under the SCRIPPS
AGREEMENT, nor is LICENSOR aware of any action or omission which, with
the giving of notice or the passage of time, would constitute a default
under the SCRIPPS AGREEMENT.
12.2 During the term of this Agreement, LICENSOR agrees to comply with the
provisions of the SCRIPPS AGREEMENT to prevent termination of LICENSOR's
rights to the SCRIPPS PATENT RIGHTS and to preserve the rights granted to
LICENSEE hereunder.
27
12.3 Each party hereby warrants that the execution, delivery and performance of
this SUBLICENSE AGREEMENT has been duly approved and authorized by all
necessary corporate actions of both parties; do not require any shareholder
approval which has not been obtained or the approval and consent of any
trustee or the holders of any indebtedness of either party; do not
contravene any law, regulation, rules or order binding on either Party, and
do not contravene the provisions of or constitute a default under any
indenture, mortgage contract or other agreement or instrument to which
either party is a signatory.
12.4 Nothing in this SUBLICENSE AGREEMENT shall be construed as a representation
or a warranty by LICENSOR as to the validity or scope of any patent within
the PATENT RIGHTS or that any process practiced or anything made, USED or
SOLD under any license or immunity granted under this SUBLICENSE AGREEMENT
is or will be free from infringement of patents of third parties.
13. INDEMNIFICATION
13.1 LICENSEE agrees to indemnify and hold harmless INVENTORS, SCRIPPS,
LICENSOR, its AFFILIATES and their respective officers, directors,
employees and agents from and against any and all claims, damages and
liabilities, including reasonable attorney's fees and expenses, asserted by
third parties, both government and private, arising from LICENSEE's, its
AFFILIATES' and SUBLICENSEE's manufacture, USE or SALE of LICENSED PRODUCTS
or the USE thereof by others including ultimate consumers. Prior to the
first use of LICENSED PRODUCT in humans, LICENSEE hereby agrees to maintain
in full force and effect general liability and product liability insurance
with a commercial insurance carrier, which policy shall have individual and
aggregate limits appropriate to the conduct of LICENSEE's business covering
the sale and distribution of LICENSED PRODUCTS. LICENSOR shall be named as
an additional insured in such insurance policy. LICENSEE shall provide
a certificate of insurance to LICENSOR evidencing such insurance policy
and providing that such
28
insurance will not be canceled, modified or subject to non-renewal without
thirty (30) days' written notice to LICENSOR. This insurance will remain in
effect until three (3) years from termination of this Agreement.
14. GENERAL
14.1 This SUBLICENSE AGREEMENT, including the Appendices hereto attached, and
the Founder Stock Purchase Agreement and Co-Sale Agreement entered into by
the parties contemporaneously herewith constitutes the entire agreement and
understanding between the parties as to the subject matter hereof. All
prior negotiations, representations, agreements, contracts, offers and
earlier understandings of whatsoever kind, whether written or oral between
LICENSOR and LICENSEE in respect of this SUBLICENSE AGREEMENT, are
superseded by, merged into, extinguished by and completely expressed by
this SUBLICENSE AGREEMENT.
No aspect, part or wording of this SUBLICENSE AGREEMENT may be modified
except by mutual agreement between the LICENSOR and LICENSEE taking the
form of an instrument in writing signed and dated by duly authorized
representatives of both LICENSOR and LICENSEE.
29
14.2 Any payment, notice or communication required or permitted to be given by
this SUBLICENSE AGREEMENT shall be given by post-paid, first class,
registered or certified mail addressed to:
General Counsel
Xxxxxxx & Xxxxxxx
Xxx Xxxxxxx & Xxxxxxx Xxxxx
Xxx Xxxxxxxxx, Xxx Xxxxxx 00000-0000
and
Chairman
X.X. Xxxxxxx Pharmaceutical Research Institute
U.S.Route #202
X.X. Xxx 000
Xxxxxxx, Xxx Xxxxxx 00000-0000
or
Acute Therapeutics, Inc.
0000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Such addresses may be altered by notice so given. If no time limit is
specified for a notice required or permitted to be given by this SUBLICENSE
AGREEMENT, the time limit therefor shall be ten (10) full business days,
not including the day of mailing. Notice shall be considered made as of the
date of deposit with the United States Post Office.
30
14.3 This SUBLICENSE AGREEMENT and its effect are subject to and shall be
construed and enforced in accordance with the laws of the State of New
Jersey, United States, except as to any issue which depends upon the
validity, scope or enforceability of any patent within the PATENT RIGHTS,
which issue shall be determined in accordance with the applicable patent
laws of the country of such patent.
14.4 Any dispute arising between the Parties under this LICENSE AGREEMENT shall
be referred to the President (or an officer designated by the President) of
each Party who shall promptly meet to discuss and resolve the dispute. If
after thirty (30) days, the designated officers of each Party are unable to
resolve the dispute, then the matter shall be fully and finally resolved in
binding arbitration as follows. Arbitration shall be conducted in
accordance with the Commercial Arbitration Rules then in effect of the
American Arbitration Association ("AAA"). Arbitration shall take place in
New York, New York, or such other city as may be agreed upon by the Parties
and shall be conducted by a panel of three (3) arbitrators, one of whom
shall be selected by each Party, and the third by the other two (2)
arbitrators, all within the time limits established by the then existing
rules of the AAA. The Arbitrators may, at their discretion, provide for
discovery by the parties not to exceed six (6) months from the date of
filing of the notice of arbitration and the arbitrators shall render a
decision within thirty (30) days of the completion of the hearing. The
decision of the arbitrators shall be final and without appeal, and may be
enforced in any court having jurisdiction over the Parties or their current
assets. The fees of the arbitrators and the expense incident to the
arbitration proceedings shall be borne equally by the Parties. All other
expenses, such as legal fees, shall be borne by the Party incurring such
expenses.
14.5 Nothing in this SUBLICENSE AGREEMENT shall be construed so as to
require the commission of any act contrary to law, and wherever
there is any conflict between any provision of this SUBLICENSE AGREEMENT
or concerning the legal right of the parties to contract and any statute,
law, ordinance or treaty, the latter shall prevail, but in such event the
31
affected provisions of this SUBLICENSE AGREEMENT shall be curtailed and limited
only to the extent necessary to bring it within the applicable legal
requirements.
14.6 LICENSEE shall take all reasonable and necessary steps to register this
SUBLICENSE AGREEMENT in any country where such is required to permit
the transfer of funds and/or payment of royalties to LICENSOR
hereunder or is otherwise required by the government or law of such
country to effectuate or carry out this SUBLICENSE AGREEMENT.
Notwithstanding anything contained herein, but subject to Article 14(e)
hereof, LICENSEE shall not be relieved of any of its obligations under
this SUBLICENSE AGREEMENT by any failure to register this SUBLICENSE
AGREEMENT in any country, and, specifically, LICENSEE shall not be
relieved of its obligation to make any payment due to LICENSOR hereunder
at LICENSOR's address specified in Article 14.2 hereof, where such
payment is blocked due to any failure to register this SUBLICENSE
AGREEMENT.
14.7 It shall be the full and sole responsibility of LICENSEE and its AFFILIATES
to use appropriate care in the practice of any process and the
manufacture and USE of any product pursuant to any license or immunity
granted hereunder and LICENSOR shall have no right to control the manner
in which or the material with which or upon which any process licensed
hereunder is practiced and LICENSOR makes no representation or warranty
whatsoever with respect to any such process or product.
14.8 As used in this SUBLICENSE AGREEMENT, singular includes the plural and
plural includes the singular, wherever so required by the context. The
headings appearing at the beginning of the numbered Articles hereof have
been inserted for convenience only and do not constitute a part of this
SUBLICENSE AGREEMENT.
14.9 Nothing herein shall be deemed to create an agency, joint venture or
partnership between the parties hereto.
32
14.10 Notwithstanding any other provisions of this SUBLICENSE AGREEMENT,
neither of the parties hereto shall be liable in damages or have the
right to terminate this SUBLICENSE AGREEMENT for any delay or default in
performing hereunder if such delay or default is caused by conditions
beyond its control including, but not limited to acts of God,
governmental restrictions, wars, or insurrections, strikes, floods,
work stoppages and/or lack of materials; provided, however, that the
party suffering such delay or default shall notify the other party in
writing of the reasons for the delay or default. If such reasons for
delay or default continuously exist for six (6) months, this SUBLICENSE
AGREEMENT may be terminated by either party.
15. GOVERNMENT RIGHTS
15.1 LICENSEE acknowledges and agrees that its respective rights and obligations
pursuant to this SUBLICENSE AGREEMENT shall be subject to SCRIPPS' rights
under the SCRIPPS AGREEMENTS and to the non-exclusive rights of the
GOVERNMENT, which arose or resulted from SCRIPPS' receipt of research
support from the GOVERNMENT.
15.2 LICENSEE shall comply in all respects with the applicable provisions of
any applicable law, requirement, regulation or determination by any
Government relating to the PATENT RIGHTS and shall provide LICENSOR with
any information or report required to comply with any such law,
requirement, regulation or determination.
15.3 Any inconsistency between this SUBLICENSE AGREEMENT and the pertinent
provisions of any law, requirement, regulation or determination by a
Government shall be resolved by conforming this SUBLICENSE AGREEMENT to
such provisions of any such law, requirement, regulation or determination.
33
15.4 Any agreement or arrangement relating to the PATENT RIGHTS between LICENSEE
and any third party hereto shall be made expressly subject to the
terms and conditions of this Article 15 and LICENSEE shall require such
other party to comply therewith to the same extent that LICENSEE is
required to comply.
15.5 Any license or other right granted or to be granted pursuant to this
SUBLICENSE AGREEMENT shall be subject to any and all applicable
governmental laws and regulations relating to compulsory licensing.
34
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and duly
executed this SUBLICENSE AGRREEMENT on the date(s) indicated below, to be
effective the day and year first above written.
For and on Behalf of LICENSOR, XXXXXXX & XXXXXXX and ORTHO PHARMACEUTICAL
CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
--------------------------------
Title: Chairman Worldwide Pharmaceutical & Diagnostic Group
------------------------------------------------------------------
Date: 10/28/96
----------------------------------
For and on Behalf of LICENSEE, ACUTE THERAPEUTICS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxxxx
-------------------------------------
Title: President /CEO
--------------------------------------
35
APPENDIX 1
PATENT RIGHTS
1(a) SCRIPPS PATENT RIGHTS
36
[***]
[***] Confidential treatment requested.
[***]
[***] Confidential treatment requested.
[***]
[***] Confidential treatment requested.
37
[***]
[***] Confidential treatment requested.
38
APPENDIX 3
DEVELOPMENT PLAN
39
Appendix 3
Acute Therapeutics, Inc.
[***]
[***] Confidential treatment requested.
40
APPENDIX 4
PATENT FILING JURISDICTIONS
[***]
[***] Confidential treatment requested.
41
