Exhibit 4.14
EXCLUSIVE AGREEMENT
BETWEEN
THE XXXXX XXXXXXX UNIVERSITY
&
PARALEX
____________________
JHU Ref: DM - 3326
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LICENSE AGREEMENT
THIS LICENSE AGREEMENT (the "Agreement") is entered into by and between THE
XXXXX XXXXXXX UNIVERSITY, a Maryland corporation having an address at 000 Xxxxxx
Xxxxx, Xxxxx 000, Xxxxxxxxx, XX 00000 ("JHU") and PARALEX, INC., a Delaware
corporation having an address of 000 Xxxxxxx Xxxxxx, 00x" Xxxxx, Xxx Xxxx, XX
00000 (Company), with respect to the following:
RECITALS
WHEREAS, as a center for research and education, JHU is interested in
licensing PATENT RIGHTS (hereinafter defined) in a manner that will benefit the
public by facilitating the distribution of useful products and the utilization
of new methods, but is without capacity to commercially develop, manufacture,
and distribute any such products or methods; and
WHEREAS, a valuable invention entitled "Xanthine Oxidase Inhibitors as
Calcium-Sensitizing Therapeutic Agents for Heart Failure" (JHU Ref. DM-3326)
was developed during the course of research conducted by Dr. Xxxxxxx Xxxxxx at
JHU (hereinafter, "Inventor"); and
WHEREAS, JHU has acquired through assignment all rights, title and interest,
with the exception of certain retained rights by the United States government,
in its interest in said valuable invention; and
WHEREAS, Company desires to commercially develop, manufacture, use and
distribute such products and processes throughout the world;
NOW THEREFORE, in consideration of the premises and the mutual promises and
covenants contained in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I DEFINITIONS
All references to particular Exhibits and Articles shall mean the Exhibits
to, and Articles of, this Agreement, unless otherwise specified. For the
purposes of this Agreement and the Exhibits hereto, the following words and
phrases shall have the following meanings:
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1.1 "AFFILIATED COMPANY" as used herein in either singular or plural shall
mean any corporation, company, partnership, joint venture or other entity, which
controls, is controlled by or is under common control with Company. For
purposes of this Paragraph 1.1, control shall mean the direct or indirect
ownership of at least fifty-percent (50%).
1.2 "EFFECTIVE DATE" of this License Agreement shall mean the date the last
party hereto has executed this Agreement.
1.3 "EXCLUSIVE LICENSE" shall mean a grant by JHU to Company of its entire
right and interest in the PATENT RIGHTS subject to rights retained the United
States government in accordance with P.L. 96-517, as amended by P.L. 98-620, and
subject to the retained right of JHU to make, have made, provide and use for its
and The Xxxxx Xxxxxxx Health Systems' non-commercial, research and education
purposes LICENSED PRODUCT, including the ability to distribute any biological
material for nonprofit academic research use to non-commercial entities as is
customary in the scientific community.
1.4 "LICENSED FIELD" shall mean therapeutic, diagnostic and commercial use
of xanthine oxidase inhibitors for cardiovascular and neuromuscular disease.
1.5 "LICENSED PRODUCT" as used herein in either singular or plural shall
mean any method or service, material, compositions, drug, or other product, the
manufacture, use or sale of which would constitute, but for the license granted
to Company pursuant to this Agreement, an infringement of an allowed claim of
PATENT RIGHTS (infringement shall include, but is not limited to, direct,
contributory, or inducement to infringe).
1.6 "NET SALES" shall mean gross sales revenues and fees billed by Company,
AFFILIATED COMPANY and SUBLICENSEE from the sale of LICENSED PRODUCT less trade
discounts allowed, refunds, returns and recalls , and sales taxes., In the event
that Company, AFFILIATED COMPANY or its SUBLICENSEE sells a LICENSED PRODUCT or
in combination with other active ingredients or components which are not
LICENSED PRODUCTS ("Other Items"), the NET SALES for purposes of royalty
payments on the combination shall be calculated as follows:
(a) If all LICENSED PRODUCTS and Other Items contained in the combination
are available separately, the NET SALES for purposes of royalty
payments will be calculated by multiplying the NET SALES of the
combination by the fraction A/A+B, where A is the separately available
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price of all LICENSED PRODUCTS in the combination, and B is the
separately available price for all Other Items in the combination.
(b) If the combination includes Other items which are not sold separately
(but all LICENSED PRODUCTS contained in the combination are available
separately), the NET SALES for purposes of royalty payments will be
calculated by multiplying the NET SALES of the combination by A/C,
where A is as defined above and C is the invoiced price of the
combination.
(c) If the LICENSED PRODUCTS and Other Items contained in the combination
are not sold separately, the NET SALES for such combination shall be
NET SALES of such combination as defined in the first sentence of this
Paragraph 1.8. However, the parties agree to negotiate a reduction in
the royalty rate to reflect the fair value that the LICENSED PRODUCTS
attributed to the overall product sold, but in no event shall the
royalty rates be reduced by greater than fifty percent (50%), and
subject to section 3.3 herein.
The term "Other Items" does not include solvents, diluents, carriers,
excipients, buffers or the like used in formulating a product.
1.7 "PATENT RIGHTS" shall mean U.S. patent application Serial No.
09/186,755 (allowed claims) and PCT application PCT/US98/23878, each filed on
11/5/98; EPO application filed 08/0212000; all assigned to JHU entitled "Methods
for Treatment of Disorders of Cardiac Contractility"; and the inventions
disclosed and claimed therein, and all continuations, divisions, continuation-
in-parts and reissues based thereof, and any corresponding foreign patent
applications, and any patents, patents of addition, or other equivalent foreign
patent rights issuing, granted or registered thereon. Continuations-in-part are
included in the definition of PATENT RIGHT(S) to the extent the new matter in a
continuation-in-part supports claims originally filed in the parent applications
(U.S. patent application Serial No. 09,186,755 and PCT application PCT/US98/
23878) or the claims in the continuations-in-part are supported by the original
disclosures of the parent applications.
1.8 "SUBLICENSEE" as used herein in either singular or plural shall mean
any person or entity other than an AFFILIATED COMPANY to which Company has
granted a sublicense under this Agreement.
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ARTICLE II
LICENSE and OPTION GRANT
2.1 Grant. Subject to the terms and conditions of this Agreement, JHU
hereby grants to Company an EXCLUSIVE LICENSE to develop, make, have made, use,
and sell the LICENSED PRODUCT in the United States and worldwide under the
PATENT RIGHTS in the LICENSED FIELD.
2.2 Sublicense. Company may sublicense the Grant under Paragraph 2.1 to
others under this Agreement, subject to JHU's approval which shall not be
unreasonably withheld, and shall provide a copy of each such sublicense
agreement to JHU promptly after it is executed. Each sublicense shall be
consistent with the terms of this Agreement.
2.3 Option. (a) JHU shall grant to the Company an exclusive Option to
JHU owned technology in the LICENSED FIELD, unencumbered by third parties, of
which Xxxxxxx Xxxxxx is a JHU inventor. JHU shall promptly notify Company of
each such technology (invention) developed under the Option and agrees to
provide such information as reasonably requested to evaluate the invention.
Technology developed later than five years after the EFFECTIVE DATE will not be
included in this Option.
(b) Company shall have sixty (60) days from the date of such
notification of an invention (Option Period) to exercise its Option. Company
shall exercise this Option by providing JHU formal written notification of its
decision and a written statement, reasonably satisfactory to JHU, of its intent
and ability to develop at least one product or process utilizing the invention
for the public good as soon as practical, consistent with sound business
practices and judgement. Failure to provide the above notification and statement
during the Option Period will result in the Option to the invention being
terminated.
(c) Upon exercise of the Option and for a period not to exceed three (3)
months, JHU and Company agree to negotiate in good faith to reach agreement and
enter into a license agreement at substantially the same terms and conditions as
set forth in this License Agreement. If after three months, JHU and Company are
unable to reach agreement on the terms of a license agreement, then, for a
period of ninety (90) days thereafter, before JHU may offer to a third party the
opportunity to obtain a license with respect to such invention on terms more
favorable than those offered to Company, JHU must first offer each such license
opportunity to Company on the more favorable terms. Company shall have sixty
(60) days within which to accept or reject each such offer.
(d) JHU is under no obligation to pursue any rights, including but not
limited to patent rights, for any invention.
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ARTICLE III
FEES, ROYALTIES, & PAYMENTS
3.1 License Fee. Company shall pay to JHU within thirty (30) days of
the EFFECTIVE DATE of this Agreement a license fee as set forth in Exhibit A.
---------
JHU will not submit an invoice for the license fee, which is nonrefundable and
shall not be credited against royalties or other fees.
3.2 Minimum Annual Royalties. Company shall pay to JHU minimum annual
royalties as set forth in Exhibit A. These minimum annual royalties shall be due
---------
within thirty (30) days each anniversary of the EFFECTIVE DATE beginning with
the first anniversary. In any year where there are sales of LICENSED PRODUCT the
minimum annual royalties shall be credited against running royalties due in that
year.
3.3 Royalties. Company shall pay to JHU, a running royalty as set forth
in Exhibit A, for each LICENSED PRODUCT by Company, AFFILIATED COMPANIES and
----------
SUBLICENSEE, based on NET SALES of ex-factory finished goods for the term of
this Agreement. Such payments shall be made quarterly.
In order to insure JHU the full royalty payments contemplated hereunder,
Company agrees that in the event any LICENSED PRODUCT shall be sold to an
AFFILIATED COMPANY or SUBLICENSEE or to a corporation, firm or association with
which Company shall have any agreement, understanding or arrangement with
respect to consideration (such as, among other things, an option to purchase
stock or actual stock ownership, or an arrangement involving division of profits
or special rebates or allowances) the royalties to be paid hereunder for such
LICENSED PRODUCT shall be that which would have been received in an arms-length
transaction, based on sales of like quantity and quality products at or about
the time of such transaction.
Under no circumstances shall the running royalty rate as set forth in Exhibit
A be reduced by greater than 50%, regardless of any applicable provisions
contained herein.
3.4 Equity. Within thirty (30) days of the EFFECTIVE DATE, Company
shall issue a number of shares of common stock, par value $.001 per share (the
"Common Stock") to JHU and/or its designees representing fifteen percent (15%)
of the initial outstanding Common Stock of the Company. The initial outstanding
Common Stock of the Company is currently contemplated to be 5,000,000 shares.
The Company shall agree that any financing conducted by it shall be done at a
pre-money valuation equal to or greater then $3,000,000. JHU shall be entitled
to receive piggy-back registration rights and information rights to be set forth
in a definitive stockholders agreement.
3.5. Legal Reimbursement. Company shall reimburse JHU, within thirty (30)
days of the receipt of an invoice from JHU, for reasonable legal costs
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associated with the review of this Agreement, corporate and equity documents,
such costs not to exceed $7,500.
3.6 Patent Reimbursement. Company will reimburse JHU up to sixty thousand
dollars ($60,000) within thirty (30) days of the receipt of an invoice(s) and
copy(ies) of xxxxxxxx from JHU, for all costs associated with the preparation,
filing, maintenance, and prosecution of PATENT RIGHTS incurred by JHU on or
before the EFFECTIVE DATE of this Agreement. In accordance with Paragraph 4.1
below, Company will reimburse JHU, within thirty (30) days of the receipt of an
invoice from JHU, for all reasonable costs, without limitation, associated with
the preparation, filing, maintenance, prosecution and extension of term of
PATENT RIGHTS incurred by JHU subsequent to the EFFECTIVE DATE of this
Agreement.
3.7 Form of Payment. All payments under this Agreement snail be made in
U.S. Dollars the Company. Checks are to be made payable to "The Xxxxx Xxxxxxx
University". Wire transfers may be made through:
The Xxxxx Xxxxxxx University
All First Bank
00 X. Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Transit/Routing/ABA number. 000000000
Account Number: 00000000
Reference: JHU SOM Office of Technology Licensing
(JHU REF. DM -3326)
Attn: Xxxx Xxxxxxxx
Company shall be responsible for any and all costs associated with wire
transfers.
3.8 Late Payments. In the event that any payment due hereunder is not
made when due, the payment shall accrue interest beginning on the tenth day
following the due date thereof, calculated at the annual rate of the sum of (a)
two percent (2%) plus (b) the prime interest rate quoted by The Wall Street
Journal on the date said payment is due, the interest being compounded on the
last day of each calendar quarter, provided however, that in no event shall said
annual interest rate exceed the maximum legal interest rate for corporations.
Each such payment when made shall be accompanied by all interest so accrued.
Said interest and the payment and acceptance thereof shall not negate or waive
the right of JHU to seek any other remedy, legal or equitable, to which it may
be entitled because of the delinquency of any payment including, but not limited
to termination of this Agreement as set forth in Paragraph 9.2.
3.9 Third Party Patents. In the event that Company, acting in good
faith, must enter into licensing agreements with one or more third parties
holding patent rights which may be infringed by Company's practice of the PATENT
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RIGHTS set forth herein, then Company shall have the right to deduct the running
royalty rate demanded by the third party(ies) from JHU's running royalty rate
(#3 on Exhibit A) provided that in no event shall JHU's running royalty rate be
reduced by more than 50%, and subject to section 3.3 herein.
ARTICLE IV
PATENT PROSECUTION, MAINTENANCE, & INFRINGEMENT
4.1 Prosecution & Maintenance. (a) JHU, at Company's expense, shall
file, prosecute and maintain all patents and patent applications specified under
PATENT RIGHTS upon authorization of Company and Company shall be licensed
thereunder. Title to all such patents and patent applications shall reside in
JHU. JHU shall direct counsel to diligently prosecute and maintain the United
States patent applications and patents comprising PATENT RIGHTS, using counsel
of its choice. JI-11's counsel shall take instructions only from JHU, provided,
however, that JHU shall consult with Company as to all matters relating to the
PATENT RIGHTS. If a change in patent counsel is required as deemed by JHU and/
or Company, JHU shall consult with Company with respect to selection of new
patent counsel. Selection of new patent counsel shall be reasonably acceptable
to both parties. JHU shall provide Company with copies of all relevant
documentation in advance of filing so that Company may be informed and apprised
of the continuing prosecution and provide consultative comments and suggestions
to JHU. Company agrees to keep this documentation confidential.
(b) JHU shall give due consideration to amending any patent application
to include claims reasonably requested by Company to protect the LICENSED
PRODUCTS contemplated to be sold under this Agreement.
(c) JHU shall cooperate with Company in applying for an extension of the
term of any patent included within PATENT RIGHTS if appropriate under the Drug
Price Competition and Patent Term Restoration Act of 1984. Company shall prepare
all such documents, and JHU agrees to execute such documents and to take such
additional action as Company may reasonably request in connection therewith.
(d) JHU shall, at the request of Company, file, prosecute, and maintain
patent applications and patents covered by PATENT RIGHTS in foreign countries if
available, and provided that Company has provided JHU written notification of
its request at least sixty (60) days before such action is due. Failure to
provide such written notification can be considered by JHU as Company's decision
not to file. Company consents to the filing of all PCT and foreign patent
applications that have already been filed as of the Effective Date.
(e) Company's obligation to underwrite and to pay foreign patent
prosecution costs shall continue for so long as this Agreement remains in
effect, provided, however, that Company may terminate its obligations with
respect to any given patent application or patent upon three (3) months' prior
written notice to JHU. JHU shall use reasonable efforts to curtail future patent
costs when such a notice is received from Company. Company shall promptly pay
patent costs which cannot be so curtailed, and all patent related costs incurred
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and royalties due up to the date of Company's written notice. Commencing on the
effective date of such notice, JHU may continue prosecution and/or maintenance
of such application(s) or patent(s) at its sole discretion and expense, and
Company shall have no further right or licenses thereunder. JHU retains the
right to license such right and licenses to third parties.
(f) JHU shall not abandon any patent applications or issued patent
comprising a part of the PATENT RIGHTS or otherwise fail to prosecute diligently
or maintain any JHU PATENT RIGHTS except following at least forty-five (45) days
written notice to Company, following which, Company shall have the right, but
not the obligation, to commence or continue such prosecution and to maintain any
such PATENT RIGHTS under its own control and expense.
4.2 Notification. Each party will notify the other promptly in writing
when any infringement by another is uncovered or suspected.
4.3 Infringement. Company shall have the first right to enforce any patent
within PATENT RIGHTS against any infringement or alleged infringement thereof,
and shall at all times keep JHU informed as to the status thereof. Company may,
in its sole judgment and at its own expense, institute suit against any such
infringer or alleged infringer and control, settle, and defend such suit in a
manner consistent with the terms and provisions hereof and recover, for its
account, any damages, awards or settlements resulting therefrom, subject to
Paragraph 4.4. This right to xxx for infringement shall not be used in an
arbitrary or capricious manner. JHU shall reasonably cooperate in any such
litigation at Company's expense.
If Company elects not to enforce any patent within the PATENT RIGHTS, then it
shall so notify JHU in writing within ninety (90) days of receiving notice that
an infringement exists, and JHU may, in its sole judgment and at its own
expense, take steps to enforce any patent and control, settle, and defend such
suit in a manner consistent with the terms and provisions hereof, and recover,
for its own account, any damages, awards or settlements resulting therefrom.
4.4 Recovery. Any recovery by Company under Paragraph 4.3 shall be deemed
to reflect loss of commercial sales, and Company shall pay to JHU four percent
(4%) of the recovery net of all reasonable costs and expenses associated with
each suit or settlement. If the cost and expenses exceed the recovery, then one-
half (1/2) of the excess shall be credited against royalties payable by Company
to JHU hereunder in connection with sales in the country of such legal
proceedings, provided, however, that any such credit under this Paragraph shall
not exceed fifty percent (50%) of the royalties otherwise payable ta,JHU with
regard to sales in the country of such action in any one calendar year, with any
excess credit being carried forward to future calendar years.
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ARTICLE V
OBLIGATIONS OF THE PARTIES
5.1 Reports. Company shall provide to JHU within thirty (30) days of the
end of each March and December after the EFFECTIVE DATE of this Agreement, a
written report to JHU of the amount of LICENSED sold, the total NET SALES of
such LICENSED PRODUCT and the running royalties due to JHU as a result of NET
SALES by Company, AFFILIATED COMPANIES and SUBLICENSEE thereof. Payment of any
such royalties due shall accompany such report. The report of sales and
royalties due shall be substantially in the format of the sales and royalty
report form given in Exhibit B. Until Company, an AFFILIATED COMPANY or a
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SUBLICENSEE has achieved a first commercial sale of a LICENSED PRODUCT and
received FDA market approval, a report shall be submitted at the end of every
June and December after the EFFECTIVE DATE of this Agreement and will include a
full written report describing Company's, AFFILIATED COMPANIES or any
SUBLICENSEE's technical efforts towards meeting its obligations under the terms
of this Agreement.
5.2 Records. Company shall make and retain, for a period of three (3)
years following the period of each report required by Paragraph 5.1, true and
accurate records, files and books of account containing all the data reasonably
required for the full computation and verification of sales and other
information required in Paragraph 5.1. Such books and records shall be in
accordance with generally accepted accounting principles consistently applied.
Company shall permit the inspection and copying of such records, files and books
of account by JHU or its agents during regular business hours upon ten (10)
business days' written notice to Company. Such inspection shall not be made more
than once each calendar year. All costs of such inspection and copying shall be
paid by JHU, provided that if any such inspection shall reveal that an error has
been made in the amount equal to five percent (5%) or more of such payment, such
costs shall be borne by Company. Company shall include in any agreement with its
AFFILIATED COMPANIES or its SUBLICENSEE which permits such party to make, use or
sell the LICENSED PRODUCT, a provision requiring such party to retain records of
sales and provisions of LICENSED PRODUCT and other information as required in
Paragraph 5.1 and permit JHU to inspect such records as required by this
Paragraph.
5.3 Product Development Diligence. The Company shall exercise reasonable
efforts to develop and to introduce LICENSED PRODUCT into the commercial market
as soon as practicable, consistent with sound and reasonable business practice
and judgment. Thereafter, until the expiration of the Agreement, the Company
shall endeavor to keep such products reasonably available to the public. To this
end, the Company shall use its reasonable best efforts to meet the following
milestones for LICENSED PRODUCT on the following anniversaries of the EFFECTIVE
DATE:
Sixty (60) Days Submit a business plan to JHU
Three (3) Years Commence Phase Illl studies
Eight (8) Years File a New Drug Application (NDA) or its equivalent
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with the US FDA or a European Nation party to the
EMEA
5.4 Financial Diligence. The Company shall have obtained the following
financing by the following anniversaries of the EFFECTIVE DATE:
Six (6) Months $3,000,000
Eighteen (18) Months $5,000,000
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TOTAL $8,000,000
In the event that the Company has not obtained such funding on or before the
milestone dates, then JHU shall have the right, but not the obligation, to
terminate the license granted to the Company under this Agreement, subject to
the Company's right to cure such failure within 60 days from the date of such
milestone.
5.5 Patent Acknowledgement. Company agrees that all packaging containing
individual LICENSED PRODUCT sold by Company, AFFILIATED COMPANIES and
SUBLICENSEE of Company will be marked with the number of the applicable
patent(s) licensed hereunder in accordance with each country's patent laws.
ARTICLE VI
REPRESENTATIONS
6.1 Representations by JHU. (a) JHU warrants that it has good and
marketable title to its interest in the inventions claimed under PATENT RIGHTS
with the exception of certain retained rights of the United States government.
JHU does not warrant the validity of any patents or that practice under such
shall be free of infringement. EXCEPT AS EXPRESSLY SET FORTH IN THIS PARAGRAPH
6.1, COMPANY, AFFILIATED COMPANIES AND SUBLICENSEE AGREE THAT THE PATENT RIGHTS
ARE PROVIDED "AS IS", AND THAT JHU MAKES NO REPRESENTATION OR WARRANTY WITH
RESPECT TO THE PERFORMANCE OF LICENSED PRODUCT INCLUDING THEIR SAFETY,
EFFECTIVENESS, OR COMMERCIAL VIABILITY. JHU DISCLAIMS ALL WARRANTIES WITH REGARD
TO PRODUCT LICENSED UNDER THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO, ALL
WARRANTIES, EXPRESS OR IMPLIED, OF MERCHANTABILITY AND FITNESS FOR ANY
PARTICULAR PURPOSE. NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, JHU
ADDITIONALLY DISCLAIMS ALL OBLIGATIONS AND LIABILITIES ON THE PART OF JHU AND
INVENTOR, FOR DAMAGES, INCLUDING, BUT NOT LIMITED TO, DIRECT, INDIRECT, SPECIAL,
AND CONSEQUENTIAL DAMAGES, ATTORNEYS' AND EXPERTS' FEES, AND COURT COSTS (EVEN
IF JHU HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, FEES OR COSTS),
ARISING OUT OF OR IN CONNECTION WITH THE MANUFACTURE, USE, OR SALE OF THE
PRODUCT LICENSED UNDER THIS AGREEMENT COMPANY, AFFILIATED COMPANIES AND
SUBLICENSEE ASSUME ALL RESPONSIBILITY AND LIABILITY FOR LOSS OR DAMAGE CAUSED BY
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A PRODUCT MANUFACTURED, USED, OR SOLD BY COMPANY, ITS SUBLICENSEE AND AFFILIATED
COMPANIES WHICH IS A LICENSED PRODUCT AS DEFINED IN THIS AGREEMENT.
(b) To the best of JHU's knowledge and belief as of the EFFECTIVE DATE,
JHU has all right, title, and interest in and to its ownership interest in the
PATENT RIGHTS, with the exception of certain rights retained by the U.S.
government, and to the best of JHU's knowledge and belief, there are no
licenses, options, liens, or threatened legal disputes, proceedings or claims on
the EFFECTIVE DATE noticed to the Office of General Counsel of JHU or the JHU
School of Medicine Office of Technology Licensing relating to, or adversely
affecting, or limiting its rights or the rights of Company under this Agreement.
(c) To the best of JHU's knowledge and belief, as of the EFFECTIVE DATE,
there is no claim, pending or threatened, of which the Director or the Office of
General Counsel of JHU has notice, of infringement, interference, or invalidity
regarding any part or all of the PATENT RIGHTS and their use as contemplated in
the underlying patent applications as presently drafted.
ARTICLE VII
INDEMNIFICATION
7.1 Indemnification. JHU and the Inventor of LICENSED PRODUCT and will
not, under the provisions of this Agreement or otherwise, have control over the
manner in which Company or its AFFILIATED COMPANIES or its SUBLICENSEE or those
operating for its account or third parties who purchase LICENSED from any of the
foregoing entities, practice the inventions of LICENSED PRODUCT. Company shall
defend and hold JHU, The Xxxxx Xxxxxxx Health Systems, their present and former
trustees, officers, Inventor of PATENT RIGHTS, agents, faculty, employees and
students harmless as against any judgments, fees, expenses, or other costs
arising from or incidental to any product liability or other lawsuit, claim,
demand or other action brought as a consequence of the practice of said
inventions by any of the foregoing entities, whether or not JHU or said
Inventor, either jointly or severally, is named as a party defendant in any such
lawsuit. Practice of the inventions covered by LICENSED PRODUCT by an AFFILIATED
COMPANY or an agent or a SUBLICENSEE or a third party on behalf of or for the
account of Company or by a third party who purchases LICENSED PRODUCT, shall be
considered Company's practice of said inventions for purposes of this Paragraph.
The obligation of Company to defend and indemnify as set out in this Paragraph
shall survive the termination of this Agreement.
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ARTICLE VIII
CONFIDENTIALITY
8.1 Confidentiality. If necessary, the parties will exchange information,
which they consider to be confidential. The recipient of such information agrees
to accept the disclosure of said information which is marked as confidential at
the time it is sent to the recipient, and to employ all reasonable efforts to
maintain the information secret and confidential, such efforts to be no less
than the degree of care employed by the recipient to preserve and safeguard its
own confidential information. The information shall not be disclosed or revealed
to anyone except employees or agents of the recipient who have a need to know
the information and who have entered into a secrecy agreement with the recipient
under which such employees or agents are required to maintain confidential the
proprietary information of the recipient and such employees or agents shall be
advised by the recipient of the confidential nature of the information and that
the information shall be treated accordingly.
The obligations of this Paragraph shall also apply to AFFILIATED COMPANIES
and/or SUBLICENSEE provided such information by Company. JHU's, Company's,
AFFILIATED COMPANIES, and SUBLICENSEES' obligations under this Paragraph shall
extend until three (3) years after the termination of this Agreement.
8.2 Exceptions. The recipient's obligations under Paragraph 8.1 shall not
extend to any part of the information:
a. that can be demonstrated to have been in the public domain or
publicly known and readily available to the trade or the public
prior to the date of the disclosure; or
b. that can be demonstrated, from written records to have been in the
recipient's possession or readily available to the recipient from
another source not under obligation of secrecy to the disclosing
party prior to the disclosure; or
c. that becomes part of the public domain or publicly known by
publication or otherwise, not due to any unauthorized act by the
recipient; or
d. that is demonstrated from written records to have been developed
by or for the receiving party without reference to confidential
information disclosed by the disclosing party.
e. that is required to be disclosed by law, government regulation or
court order.
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8.3 Right to Publish. JHU may publish manuscripts, abstracts or the like
describing the PATENT RIGHTS, inventions contained therein provided confidential
information of Company as defined in Paragraph 8.1, is not included or without
first obtaining approval from Company to include such confidential information.
Otherwise, JHU and the Inventor shall be free to publish manuscripts and
abstracts or the like directed to the work done at JHU related to the licensed
technology without prior approval.
ARTICLE IX
TERM & TERMINATION
9.1 Term. The term of this Agreement shall commence on the EFFECTIVE
DATE and shall continue, in each country, until the date of expiration of the
last to expire patent included within PATENT RIGHTS in that country or if no
patents issue then for a term of twenty (20) years from the EFFECTIVE DATE of
this Agreement.
9.2 Termination By Either Party. This Agreement may be terminated by
either party, in the event that the other party (a) files or has filed against
it a petition under the Bankruptcy Act, makes an assignment for the benefit of
creditors, has a receiver appointed for it or a substantial part of its assets,
or otherwise takes advantage of any statute or law designed for relief of
debtors or (b) fails to perform or otherwise breaches any of its obligations
hereunder, if, following the giving of notice by the terminating party of its
intent to terminate and stating the grounds therefor, the party receiving such
notice shall not have cured the failure or breach within forty-five (45) days
for a financial breach (with the exception of Funding Diligence controlled by
Paragraph 5.4) or sixty (60) days for a non-financial breach. In no event,
however, shall such notice or intention to terminate be deemed to waive any
rights to damages or any other remedy which the party giving notice of breach
may have as a consequence of such failure or breach.
9.3 Termination by Company. Company may terminate this Agreement and the
license granted herein, for any reason, upon giving JHU sixty (60) days written
notice.
9.4 Obligations and Duties upon Termination. If this Agreement is
terminated, both parties shall be released from all obligations and duties
imposed or assumed hereunder to the extent so terminated, except as expressly
provided to the contrary in this Agreement. Upon termination, both parties shall
cease any further use of the confidential information disclosed to the receiving
party by the other party. Termination of this Agreement, for whatever reason,
shall not affect the obligation of either party to make any payments for which
it is liable prior to or upon such termination. Termination shall not affect
JHU's right to recover unpaid royalties or fees or reimbursement for patent
expenses incurred pursuant to Paragraph 4.1 and legal expenses pursuant to
Paragraph 3.5 prior to termination. Upon termination Company shall submit a
final royalty report to JHU and any royalty payments and unreimbursed patent
Page 15
expenses due JHU shall become immediately payable. Furthermore, upon termination
of this Agreement, all rights in and to the licensed technology including PATENT
RIGHTS shall revert immediately to JHU at no cost to JHU. Upon termination of
this Agreement, any SUBLICENSEE shall become a direct licensee of JHU. Company
shall provide written notice of such to each SUBLICENSEE with a copy of such
notice provided to JHU.
ARTICLE X
MISCELLANEOUS
10.1 Use of Name. Except as set forth below, neither party shall use the
name of the other without such party's prior written consent. Company shall not
use the name of The Xxxxx Xxxxxxx University or The Xxxxx Xxxxxxx Health System
or any of its constituent parts, such as the Xxxxx Xxxxxxx Hospital or any
contraction thereof or the name of Inventor of PATENT RIGHTS in any advertising,
promotional, sales literature or fundraising documents without prior written
consent from an officer of JHU, unless otherwise required by law. Company shall
allow at least seven (7) business days notice of any proposed public disclosure
for JHU's review and comment or to provide written consent.
10.2 No Partnership. Nothing in this Agreement shall be construed to create
any agency, employment, partnership, joint venture or similar relationship
between the parties other than that of a licensor/licensee. Neither party shall
have any right or authority whatsoever to incur any liability or obligation
(express or implied) or otherwise act in any manner in the name or on the behalf
of the other, or to make any promise, warranty or representation binding on the
other.
10.3 Notice of Claim. Each party shall give the other or its representative
immediately notice of any suit or action filed, or prompt notice of any claim
made, against them arising out of the performance of this Agreement.
10.4 Product Liability. Prior to initial human testing or first
commercial sale of any LICENSED PRODUCT in any particular country, Company shall
establish and maintain, in each country in which Company, an AFFILIATED COMPANY
or SUBLICENSEE shall test or sell LICENSED PRODUCT, product liability or other
appropriate insurance coverage appropriate to the risks involved in marketing
LICENSED PRODUCT and will annually present evidence to JHU that such coverage is
being maintained. Upon JHU's request, Company will furnish JHU with a
Certificate of Insurance of each product liability insurance policy obtained.
JHU shall be listed as an additional insured in Company's said insurance
policies. If such Product Liability insurance is underwritten on a 'claims made'
basis, Company agrees that any change in underwriters during the term of this
Agreement will require the purchase of 'prior acts' coverage to ensure that
coverage will be continuous throughout the term of this Agreement.
Page 16
10.5 Governing Law. This Agreement shall be construed, and legal relations
between the parties hereto shall be determined, in accordance with the laws of
the State of Maryland applicable to contracts solely executed and wholly to be
performed within the State of Maryland without giving effect to the principles
of conflicts of laws. Any disputes between the parties to the Agreement shall be
brought in the state or federal courts of Maryland.
10.6 Notice. All notices or communication required or permitted to be given
by either party hereunder shall be deemed sufficiently given if mailed by
registered mail or certified mail or sent by overnight courier, such as Federal
Express, to the other party at its respective address set forth below or to such
other address as one party shall give notice of to the other from time to time
hereunder. Mailed notices shall be deemed to be received on the third business
day following the date of mailing. Notices sent by overnight courier shall
be deemed received the following business day.
If to Company: Attn: Paralex, Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Attn: President
If to JHU: Office of Technology Licensing
The Xxxxx Xxxxxxx University
School of Medicine
000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: Director
10.7 Compliance with All Laws. In all activities undertaken pursuant to
this Agreement, both JHU and Company covenant and agree that each will in all
material respects comply with such Federal, state and local laws and statutes,
as may be in effect at the time of performance and all valid rules, regulations
and orders thereof regulating such activities.
10.8 Successors and Assigns. Neither this Agreement nor any of the rights
or obligations created herein, except for the right to receive any remuneration
hereunder, may be assigned by either party, in whole or in part, without the
prior written consent of the other party, except that either party shall be free
to assign this Agreement in connection with any sale of substantially all of its
assets without the consent of the other. Such assignment shall be subject to JHU
approval, which approval shall not be unreasonably withheld. This Agreement
shall bind and inure to the benefit of the successors and permitted assigns of
the parties hereto.
10.9 No Waivers; Severability. No waiver of any breach of this Agreement
shall constitute a waiver of any other breach of the same or other provision of
this Agreement, and no waiver shall be effective unless made in writing. Any
provision hereof prohibited by or unenforceable under any applicable law of any
Page 17
jurisdiction shall as to such jurisdiction be deemed ineffective and deleted
herefrom without affecting any other provision of this Agreement. It is the
desire of the parties hereto that this Agreement be enforced to the maximum
extent permitted by law, and should any provision contained herein be held by
any governmental agency or court of competent jurisdiction to be void, illegal
and unenforceable, the parties shall negotiate in good faith for a substitute
term or provision which carries out the original intent of the parties
10.10 Entire Agreement; Amendment. Company and JHU acknowledge that they
have read this entire Agreement and that this Agreement, including the attached
Exhibits constitutes the entire understanding and contract between the parties
hereto and supersedes any and all prior or contemporaneous oral or written
communications with respect to the subject matter hereof, all of which
communications are merged herein. It is expressly understood and agreed that (i)
there being no expectations to the contrary between the parties hereto, no usage
of trade, verbal agreement or another regular practice or method dealing within
any industry or between the parties hereto shall be used to modify, interpret,
supplement or alter in any manner the express terms of this Agreement; and (ii)
this Agreement shall not be modified, amended or in any way altered except by an
instrument in writing signed by both of the parties hereto.
10.11 Delays or Omissions. Except as expressly provided herein, no delay or
omission to exercise any right, power or remedy accruing to any party hereto,
shall impair any such right, power or remedy to such party nor shall it be
construed to be a waiver of any such breach or default, or an acquiescence
therein, or in any similar breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of any party of any
breach or default under this Agreement, or any waiver on the part of any party
of any provisions or conditions of this Agreement, must be in writing and shall
be effective only to the extent specifically set forth in such writing. All
remedies either under this Agreement or by law or otherwise afforded to any
party, shall be cumulative and not alternative.
10.12 Force Majeure. If either party fails to fulfill its obligations
hereunder (other than an obligation for the payment of money), when such failure
is due to an act of God, or other circumstances beyond its reasonable control,
including but not limited to fire, flood, civil commotion, riot, war (declared
and undeclared), revolution, or embargoes, then said failure shall be excused
for the duration of such event and for such a time thereafter as is reasonable
to enable the parties to resume performance under this Agreement.
10.13 Further Assurances. Each party shall, at any time, and from to
time, prior to or after the EFFECTIVE DATE of this Agreement, at reasonable
request of the other party, execute and deliver to the other such instruments
and documents and shall take such actions as may be required to more effectively
carry out the terms of this Agreement.
Page 18
10.14 Survival. All representations, warranties, covenants and agreements
made herein and which by their express terms or by implication are to be
performed after the execution and/or termination hereof, or are prospective in
nature, shall survive such execution and/or termination, as the case may be.
This shall include Articles VI, VII, VIII, IX, and X.
10.15 No Third Party Beneficiaries. Nothing in this Agreement shall be
construed as giving any person, firm, corporation or other entity, other than
the parties hereto and their successors and permitted assigns, any right, remedy
or claim under or in respect of this Agreement or any provision hereof.
10.16 Headings. Article headings are for convenient reference and not a
part of this Agreement. All Exhibits are incorporated herein by this reference.
10.17 Security. JHU will maintain first interest in its license to the
Company until the total licensing fee, past patent costs, legal costs of
Paragraph 3.5 and equity have been delivered to JHU.
10.18 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original and all of which when taken together shall be
deemed but one instrument.
IN WITNESS WHEREOF, this Agreement shall take effect as of the EFFECTIVE DATE
when it has been executed below by the duly authorized representatives of the
parties.
THE XXXXX XXXXXXX UNIVERSITY
By: /s/ Xxxxxxx X. Xxx April 18, 2001
----------------------------------------------- -----------------------
Title: Xxxxxxx X. Xxx, Ph.D., Executive Director (Date)
Licensing and Business Development
The Xxxxx Xxxxxxx School of Medicine
COMPANY
By: /s/ signature 11/16/00
----------------------------------------------- -----------------------
Title: Chairman & CEO (Date)
Page 19
EXHIBIT A
LICENSE FEE & ROYALTIES
1. License Fee: The license fee due under Paragraph 3.1 is fifty thousand
dollars ($50,000).
A $10,000 processing fee will be deducted by the Office of Technology Licensing
from any fees received from Company.
2. Minimum Annual Royalties: The minimum annual royalties pursuant to
Paragraph 3.2 are:
1st year five thousand dollars ($5,000).
2nd year ten thousand dollars ($10,000).
3rd year twenty thousand dollars ($20,000).
4th year forty thousand dollars ($40,000).
5th year sixty thousand dollars ($60,000).
6th year and beyond one hundred thousand dollars ($100,000).
A $5000 maintenance fee will be deducted annually from any royalties or other
fees received from Company.
3. Royalties: The running royalty rates payable under Paragraph 3.3 are-
Licensed Product four percent (4%)
Page 20
EXHIBIT B
QUARTERLY SALES & ROYALTY REPORT
FOR LICENSE AGREEMENT BETWEEN Company AND
THE XXXXX XXXXXXX UNIVERSITY DATED
[EFFECTIVE DATE OF AGREEMENT]
FOR PERIOD OF_____________________ TO ___________________
TOTAL ROYALTIES DUE FOR THIS PERIOD $______________________
--------------------------------------------------------------------------------
PRODUCT *JHU TOTAL NET ROYALTY AMOUNT
NAME REFERENCE SALES/SERVICES; RATE DUE
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
* Please provide the JHU Disclosure Number or Patent Reference
This report format is to be used to report quarterly royalty statements to
JHU. It should be placed on Company letterhead and accompany any royalty
payments due for the reporting period. This report shall be submitted even if no
sales are reported.
XXXXX XXXXXXX
U N I V E R S I T Y
School of Medicine
Office of Technology Licensing
000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx XX 00000
(000) 000-0000 /FAX (000) 000-0000
Internet: xxxxxxxxxxx@xxxx.xxx
xxx.xxx xxx.xxx/xxx
May 15, 2001
Dr. Xxxx Xxxxxx Paramount Capital
000 Xxxxxxx Xxxxxx, 00xx Xx.
Xxx Xxxx, XX 00000
Re: Exclusive License Agreement between Paralex, and The Xxxxx Xxxxxxx
University (JHU) Ref. DM-3326
Dear Xx. Xxxxxx:
Enclosed please find two original copies of the above-referenced agreement.
As discussed with Xx. Xxxxxxx Xxx, please initial the agreed-upon change to
paragraph 3.4 which provides 15% of Common Stock to JHU ("JHU stock"). Return
one original to my office at your earliest convenience.
As you may know, JHU distributes a portion of all revenue received from the
licensing of a JHU invention to the inventors. Therefore, please provide two
distinct stock certificates: one for 35% of JHU stock in the name of inventor
Xxxxxxx Xxxxxx, and the second for 65% of the JHU stock to JHU. Any rounding
necessary should benefit JHU's portion.
Please feel free to contact our office if you have any questions.
Sincerely,
/s/ Xxxxx Xxxxx
Xxxxx Xxxxx
Senior Technology Licensing Assistant
xxxxxx@xxxx.xxx
---------------
Enclosures
cc: Xxxxxxx X. Xxxxxxxx, Ph.D.
The Xxxxx Xxxxxxx University
School of Medicine
&
Amendment to Exclusive
License Agreement
November 30, 2001
Amendment to LICENSE AGREEMENT
This amendment is entered into by and between THE XXXXX XXXXXXX UNIVERSITY,
a Maryland corporation having an address at 000 Xxxxxx Xxxxx, Xxxxx 000,
Xxxxxxxxx, XX 00000 ("JHU") and PARALEX, INC., a Delaware corporation having an
address of 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000 (Company), with
respect to the following:
Whereas, JHU and Company are parties to a License Agreement dated April 18,
2001 ("the License") relating to a JHU invention entitled "Xanthine Oxidase
Inhibitors as Calcium-Sensitizing Therapeutic Agents for Heart Failure" (JHU
Ref. DM-3326) developed during the course of research conducted by JHU inventor
Dr, Xxxxxxx Xxxxxx; and
Whereas, the License requires Company to have obtained $3,000,000 in
financing by 10118101; and
Whereas, JHU and Company have agreed to amend the License so as Company will
have sufficient time to obtain the $3,000,000 by merger with a separate
corporate entity;
NOW THEREFORE, the parties hereby agree as follows:
* In Paragraph 5.4, delete "Six (6) Months" and replace with --Eleven
(11) Months--.
IN WITNESS WHEREOF, this Agreement shall take effect as of October 18, 2001
upon execution by the duly authorized representatives of the parties below.
THE XXXXX XXXXXXX UNIVERSITY
By: /s/ Xxxxxxx X. Xxx Nov. 30, 2001
----------------------------------------------- -----------------------
Title: Xxxxxxx X. Xxx, Ph.D., Executive Director (Date)
Licensing and Business Development
The Xxxxx Xxxxxxx School of Medicine
PARALEX, INC.
By: /s/ signature 11/28/01
----------------------------------------------- -----------------------
Title: (Date)
