Exhibit 10.4
Agreement No. 96-0155
STANDARD LICENSE AGREEMENT: XXXXXX TECHNOLOGY
This Agreement is made effective the 6th day of September, 1996, by and
between Wisconsin Alumni Research Foundation (hereinafter called "XXXX"), a
nonstock, nonprofit Wisconsin corporation, and Discovery Laboratories, Inc.
(hereinafter called "Discovery"), a corporation organized and existing under the
laws of Delaware;
WHEREAS, XXXX owns certain inventions relating to processes for
preparing Compounds and to certain intermediates in such processes, and XXXX is
willing to grant a license to Discovery with respect to Compounds under certain
patents claiming such inventions, and Discovery desires such a license under
such patents;
NOW THEREFORE, in consideration of the mutual covenants and agreements set
forth below, the parties covenant and agree as follows:
Section 1. Definitions.
For the purpose of this Agreement, the Appendix A definitions shall apply.
Section 2. Grant.
A. License.
(i) Patent Licenses
(1) Exclusive License - Compound.
XXXX hereby grants to Discovery an exclusive license under the Licensed
Patents to make and use Compounds for the preparation of Products and to make,
have made, use and sell Products in the Licensed Field and Licensed Territory.
(2) Exclusive License - Use.
XXXX hereby grants to Discovery an exclusive license under the Use Patents
to use the Compounds, to use and sell Products and practice the methods claimed
by the Use Patents in the Licensed Field and Licensed Territory.
(3) Nonexclusive License - Process.
XXXX hereby grants to Discovery a nonexclusive license to practice
Processes of Licensed Patents and Ancillary Patents and to make, have made and
use Ancillary Compounds, but only for the purpose of making Compounds and
Products in the Licensed Field and Licensed Territory.
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(ii) Product Information License
(1) Nonexclusive License - Information.
XXXX hereby grants to Discovery a nonexclusive license to use the Product
Information to make Products in the Licensed Field and Licensed Territory and to
obtain governmental approval of Products in the Licensed Field and Licensed
Territory.
(2) Confidentiality.
Discovery agrees to maintain the Product Information in confidence in
accordance with this Section 2A(ii)(2) both during and after the term of this
Agreement. Discovery may disclose the Product Information to any governmental
agency pursuant to an application for approval of a Product in the Licensed
Field and Licensed Territory if the confidentiality of such Product Information
is reasonably protected under the law or policy of such agency. The law and
policies imposed by the United States FDA shall be deemed acceptable for the
United States. Otherwise, only persons within Discovery's organization and
consultants of Discovery who execute written confidentiality agreements shall be
permitted access to the Product Information, and only on a need-to-know basis.
Discovery may make copies of the Product Information, but all such copies shall
be subject to the terms of this Agreement.
(3) Additional Product Information.
If Discovery requires any existing raw or other data that verifies or
supports any of the Product Information (including raw data contained in
laboratory notebooks and the like) with regard to any governmental approval
process or if required by any governmental approval agency, XXXX will use its
best efforts to obtain such raw data from Sumitomo and/or Taisho upon
Discovery's written request to XXXX. XXXX shall pay the actual cost of the
translation and verification of the translation of such data. Within thirty (30)
days after the receipt of a supported invoice regarding such payments, Discovery
will reimburse XXXX for all such payments, provided that the translation is
requested or approved by Discovery. All additional data provided to Discovery
under this Section 2A(ii)(3) shall be considered Product Information hereunder.
B. Sublicenses.
(i) Discovery may grant written, exclusive or nonexclusive
sublicenses to third parties; however, XXXX shall not have any direct
enforcement obligations to any such sublicensees under Section 9. Any
agreement granting a sublicense shall state that the sublicense is
subject to the termination of this Agreement. Discovery shall have the
same responsibility for the activities of any sublicensee as if the
activities were directly those of Discovery.
(ii) In respect to sublicenses granted by Discovery under this
Section 2B, Discovery shall pay to XXXX [***]. In addition if
Discovery receives any fees, minimum royalties or other payments in
consideration for any rights granted under a sublicense, and such
payments are not based directly upon the amount or value of products
sold by the sublicensee, (hereinafter defined as "Other Sublicensee
Income") then Discovery shall pay to XXXX [***] of such Other
Sublicensee Income in the manner specified in Section 3F; provided,
however, that other Sublicensee Income shall exclude the following,
in relation to which no payments shall be due to XXXX:
[***] Confidential treatment requested.
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(a) payments received by Discovery solely for performance of
research and development including, but not limited to, milestone
payments for achievement of objectives in research and
development, but only to the extent that such payments cover the
actual cost of the research and development work conducted by
Discovery or cover the license fees due on the completion of
certain development milestones by Discovery under Sections 3B and
3C hereof;
(b) Investments made by a sublicensee in either Discovery or
one of its affiliates to the extent that such investments are
made at current market value, including but not limited to, any
payments or other consideration representing the current market
value of shares in Discovery or any of its affiliates;
(c) Payments made to Discovery solely to the extent that
they cover the actual costs of conducting clinical testing and
other activities in connection with obtaining regulatory
approvals for Products; or
(d) Reimbursed expenses of Discovery.
For purposes of Subsection (b) above, the "current market value" of the
investment shall be determined as follows: (i) it shall be determined as at the
earlier of (a) the date when the investment is made or (b) the day prior to the
date when the investment is first publicly disclosed on the Dow Xxxxx News Wire
(the "Determination Date"); (ii) if there is no public market for Discovery's
securities that are being purchased by the sublicensee, then the current market
value shall be determined by Discovery's Board of Directors in good faith, and
if XXXX disputes such determination, the current market value shall be
determined by an independent investment banker whose fees shall be shared by
Discovery and XXXX; (iii) if there is a public market for Discovery's securities
that are being purchased by the sublicensee, then the current market value shall
be determined using the average of the closing bid and asked prices of the
securities in the Over-The-Counter Market Summary or the closing price quoted on
any exchange on which the securities are listed as published in The Wall Street
Journal for the ten (10) trading days prior to the Determination Date.
Notwithstanding the foregoing, in the event the sublicensee is purchasing
Discovery's securities in connection with Discovery's initial public offering of
such securities, the current market value shall be determined using the offering
price of such securities to the public in Discovery's initial public offering.
Discovery shall not receive from sublicensees anything of value in lieu of cash
payments in consideration for any sublicense under this Agreement without the
express prior written permission of XXXX.
C. Option.
XXXX hereby grants Discovery an option to expand the Licensed Territory to
include all countries of the world except Argentina, Spain, Portugal, Korea and
Japan by paying the appropriate option fees on the schedule set forth in Section
3C of this Agreement.
D. Standstill.
During the term of this Agreement, XXXX will not grant a license to any
third party to the Compound or the Product Information for any other indication
in the Licensed Territory, excepting XXXX'x existing license with Penederm
Incorporated.
[***] Confidential treatment requested.
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X. Xxxxx Forward.
(i) To the extent permitted by applicable law, XXXX hereby grants
Discovery a nonexclusive license to make the Compounds under the
claims of future patent applications, and patents which mature from
any such applications, which are owned by XXXX if the claimed
inventions are new and useful processes for making the Compounds or
Products. Discovery's rights under such inventions shall be limited to
the practice thereof within the Licensed Field and Licensed Territory
and shall be subject to the intervening rights of third parties that
have funded the research under which the inventions were first
conceived and/or made and to the rights of current licensees. XXXX
will promptly notify Discovery of any such invention by mailing a copy
of the U.S. patent application, without claims, directed to such
invention to:
Discovery Laboratories, Inc.
Attn: Xx. Xxxxx Xxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Such notification shall be given to Discovery promptly after XXXX has
filed the U.S. patent application.
(ii) Sixty (60) days after receipt by Discovery of such
notification, and unless Discovery informs XXXX in writing that it has
elected otherwise, such new and useful invention(s) shall become a
part of the Ancillary Patents hereunder. At any time more than two (2)
years after receipt by Discovery of such notification, XXXX may
inquire of Discovery as to whether Discovery is in fact then actually
using the added invention(s) to make Compounds. If Discovery is not
doing so, XXXX may, at its sole discretion, delete such invention(s)
from Ancillary Patents.
Section 3. Consideration.
A. Development.
Discovery agrees to and warrants that: it has, or will obtain, the
expertise necessary to independently evaluate the inventions of the Licensed
Patents; it will establish and actively and diligently pursue the development
plan (see Appendix H) to the end that the inventions of the Licensed Patents
will be utilized to provide Products for sale in the retail market; and within
one month following the end of each calendar quarter ending on March 31, June
30, September 30 and December 31 and until the date of first commercial sale of
Products, it will supply XXXX with a written Development Report. All development
activities and strategies and all aspects of Products design and decisions to
market and the like are entirely at the discretion of Discovery, and Discovery
shall rely entirely on its own expertise with respect thereto. XXXX'x review of
Discovery's development plan is solely to verify the existence of Discovery's
commitment to development activity and to assure compliance with Discovery's
obligations to utilize the inventions of the Licensed Patents for the
marketplace, as set forth above. The development plan set forth on Appendix H
represents the current plans for the development work to be carried out by
Discovery. The parties recognize and agree that it will be necessary from time
to time to revise the development plan to take account of changes in
circumstances relating to the development work, and that the parties shall work
together in good faith to determine mutually acceptable modifications to the
development plan; provided, however, that such modifications shall only become
effective once a written revised development plan is prepared and signed on
behalf of both parties
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B. License Fees.
Discovery agrees to pay to XXXX license fees for rights granted in the
Western Hemisphere in accordance with the following table:
Event License Fee
----- -----------
Execution of this Agreement (less $25,000 $ 225,000
credit; balance of $200,000 due on
execution)
Upon completion of Phase II studies in the $ 150,000
United States
Upon Date of NDA Submission in the U.S. $1,000,000
In accordance with the terms of the Option Agreement between the parties hereto
dated June 7, 1996, the $25,000 option fee paid under the terms of that
agreement shall be creditable against the fees due and payable by Discovery
under this Section 3B. All fees due under this Section 3B are payable only once,
regardless of the number of Products, clinical studies or NDA submissions made
by Discovery pursuant to this Agreement.
C. Option Fees.
(i) Discovery agrees to pay to XXXX option fees in accordance
with the following table to add Belgium, France, Germany, Italy, the
Netherlands, Switzerland and the United Kingdom to the Licensed
Territory:
Event License Fee
----- -----------
Execution of this Agreement $ 200,000
Upon exercise of the option in Europe but in $ 200,000
no event later than January 1, 2002
(Discovery must exercise option if any
development work is done in Europe)
Upon Date of NDA Submission with the first $1,000,000
European country's equivalent of the FDA
The above named countries shall be considered added to the license granted
hereunder by expansion of the Licensed Territory after payment of the $200,000
installment due upon exercise of the option to expand the Licensed Territory.
All fees due under this Section 3C are payable only once, regardless of the
number of Products, or submissions to the European equivalent of the FDA.
(ii) Discovery agrees to pay an option fee of $500,000 on or
before January 1, 2002 to add Australia, New Zealand, Ireland,
Finland, Denmark, Norway, Sweden, Greece and any and all remaining
countries of the world to the Licensed Territory except Argentina,
Spain, Portugal, Korea and Japan.
(iii) In Argentina, Spain, Portugal and Korea, Discovery shall
have the right to prior review and approval of any license agreement
to be entered into by XXXX under the Licensed Patents or the Use
Patents in the Licensed Field. Such approval shall not be unreasonably
withheld. Such
Page 5 of 26
license agreements shall provide that the licensees for any of the territories
of Argentina, Spain, Portugal and Korea are (i) prohibited from directly or
indirectly making any sales or marketing products containing the Compound
outside of such licensee's territory and (ii) required to xxxx products
containing the Compound as not for resale outside of such licensee's
territories. In the event that any of such licensees violates the foregoing
prohibition or obligation, XXXX shall enforce its contractual rights against
such licensee to the greatest extent permitted under applicable law.
Additionally, XXXX may only enter into a license with the following parties in
the following countries:
Argentina - Gador
Spain and Portugal - FAES
Korea - YuYu
If XXXX and the above named companies are unable to reach agreement on a license
then Discovery shall have the option to obtain a license under the Licensed
Patents and the Use Patents in the Licensed Field in Argentina, Spain, Portugal
and Korea under the terms of a separate agreement to be negotiated between the
parties. Such agreement shall incorporate the required fees set forth in the
agreement between XXXX and Sumitomo and Taisho, No. 93-0052, dated May 1, 1993.
D. Royalty.
In addition to the Section 3 license fee, Discovery or its sublicensee(s)
agree to pay XXXX as "earned royalties" a royalty equal to [***] of the
Net Selling Price of Products sold by Discovery in quarters where no Competive
Product is sold in a particular country and [***] of the Net Selling Price of
Products sold by Discovery in quarters when a Competing Product is sold
in a particular country during the period commencing on the date of first
commercial sale and ending on the Royalty Termination Date.
E. Minimum Royalty.
Discovery further agrees to pay to XXXX a minimum royalty of $100,000 per
calendar year or part thereof during which this Agreement is in effect starting
in calendar year 2002, against which any earned royalty paid for the same
calendar year will be credited. The minimum royalty for a given year shall be
due at the time payments are due for the calendar quarter ending on December 31.
It is understood that the minimum royalties will apply on a calendar year basis,
and that sales of Products requiring the payment of earned royalties made during
a prior or subsequent calendar year shall have no effect on the annual minimum
royalty due XXXX for any given calendar year.
F. Accounting; Payments.
(i) Amounts owing to XXXX under Sections 2B and 3D shall be paid
on a quarterly basis, with such amounts due and received by XXXX on or
before the thirtieth day following the end of the calendar quarter
ending on March 31, June 30, September 30 or December 31 in which such
amounts were earned. The balance of any amounts which remain unpaid
for more than thirty (30) days after they are due to XXXX shall accrue
interest until paid at the rate of the lesser of one percent (1%) per
month or the maximum amount allowed under applicable law. However, in
no event shall this interest provision be construed as a grant of
permission for any payment delays.
(ii) Except as otherwise directed, all amounts owing to XXXX
under this Agreement shall be paid in U.S. dollars to XXXX at the
address provided in Section 1 5(a). All royalties
[***] Confidential treatment requested.
Page 6 of 26
owing with respect to Selling Prices stated in currencies other than
U.S. dollars shall be converted at the rate shown in the Federal
Reserve Noon Valuation - Value of Foreign Currencies on the day
preceding the payment.
(iii) A full accounting showing how any amounts owing to XXXX
under Sections 2B and 3D have been calculated shall be submitted to
XXXX on the date of each such payment. Such accounting shall be on a
per-country and product line, model or tradename basis and shall be
summarized on the form shown in Appendix E of this Agreement. In the
event no payment is owed to XXXX, a statement setting forth that fact
shall be supplied to XXXX.
Section 4. Certain Warranties of XXXX.
X. XXXX warrants that except as otherwise provided under Section 13 of
this Agreement with respect to U.S. Government interests, it is the owner
of the Licensed Patents, Use Patents, and Ancillary Patents or otherwise
has the right to grant the licenses granted to Discovery in this Agreement.
However, nothing in this Agreement shall be construed as:
(i) a warranty or representation by XXXX as to the validity or
scope of any of Licensed Patents, Use Patents or Ancillary Patents;
(ii) a warranty or representation that anything made, used, sold
or otherwise disposed of under the license granted in this Agreement
will or will not infringe patents of third parties;
(iii) an obligation to bring or prosecute actions or suits
against third parties for infringement of Licensed Patents, Use
Patents or Ancillary Patents;
(iv) an obligation to furnish any know-how not provided in
Licensed Patents, Use Patents or Ancillary Patents or any services
other than those specified in this Agreement; or
(v) a warranty or representation by XXXX that it will not grant
licenses to others to make, use or sell products not-covered by the
claims of the Licensed Patents, Use Patents or Ancillary Patents which
may be similar and/or compete with Products made or sold by Discovery
or its sublicensee(s).
X. XXXX MAKES NO REPRESENTATIONS, EXTENDS NO WARRANTIES OF ANY KIND,
EITHER EXPRESS OR IMPLIED, AND ASSUMES NO RESPONSIBILITIES WHATSOEVER WITH
RESPECT TO USE, SALE, OR OTHER DISPOSITION BY DISCOVERY, ITS SUBLICENSEE(S)
OR THEIR VENDEES OR OTHER TRANSFEREES OF PRODUCTS INCORPORATING OR MADE BY
USE OF INVENTIONS LICENSED UNDER THIS AGREEMENT.
Section 5. Recordkeeping.
A. Discovery and its sublicensee(s) shall keep books and records
sufficient to verify the accuracy and completeness of Discovery's and its
sublicensee(s)'s accounting referred to above, including without limitation
inventory, purchase and invoice records relating to the Products or their
manufacture. Such books and records shall be preserved for a period not
less than six years after they are created during and after the term of
this Agreement.
Page 7 of 26
B. Discovery and its sublicensee(s) shall take all steps necessary so
that XXXX may within thirty days of its request review and copy all the
books and records at a single U.S. location to verify the accuracy of
Discovery's and its sublicensee(s)'s accounting. Such review may be
performed by any employee of XXXX as well as by any attorney or registered
CPA designated by XXXX, upon reasonable notice and during regular business
hours.
C. If a royalty payment deficiency is determined, Discovery and its
sublicensee(s) shall pay the royalty deficiency outstanding within thirty
(30) days of receiving written notice thereof, plus interest on outstanding
amounts as described in Section 3F(i).
D. If a royalty payment deficiency for a calendar year exceeds five
percent (5%) of the royalties paid for that year, then Discovery or its
sublicensee(s) shall be responsible for paying XXXX'x out-of-pocket
expenses incurred with respect to such review.
Section 6. Term; Termination.
A. The term of the license granted under this Agreement shall begin on
the execution date and shall end on the Royalty Termination Date at which
time Discovery shall have a paid-up license under this Agreement.
B. Discovery may terminate this Agreement at any time by giving at
least ninety days' written and unambiguous notice of such termination to
XXXX. Such a notice shall be accompanied by a statement of the reasons for
termination.
C. If Discovery at any time defaults in the timely payment of any
monies due to XXXX or the timely submission to XXXX of any Development
Report, fails to actively pursue the development plan, or commits any
material breach of any other material covenant herein contained, and
Discovery fails to remedy any such breach or default within ninety days
after written notice thereof by XXXX, XXXX may, at its option, terminate
this Agreement by giving notice of termination to Discovery.
D. Upon the termination of this Agreement, Discovery shall remain
obligated to provide an accounting for and to pay royalties earned up to
the date of the termination and any minimum royalties shall be prorated as
of the date of termination by the number of days elapsed in the applicable
calendar year.
Section 7. Assignability.
This Agreement may not be transferred or assigned by Discovery except with
the prior written consent of XXXX, which shall not be unreasonably withheld;
provided that Discovery may assign this Agreement (i) to the purchaser of
substantially all of Discovery's stock, assets or business pursuant to the
transaction transferring such assets, and (ii) to an affiliate of Discovery
(meaning any entity which controls, is controlled by or is under common control
with Discovery), provided in each case that the assignee first agrees to assume
all of Discovery's obligations and liabilities under this Agreement.
Section 8. Contest of Validity.
In the event Discovery contests the validity of any Licensed Patent or
Ancillary Patent, Discovery shall continue to pay royalties with respect to that
patent as if such contest were not underway until the patent is adjudicated
invalid or unenforceable by a court of last resort.
Page 8 of 26
Section 9. Enforcement.
A. Licensed Patents. XXXX intends to protect the Licensed Patents
against infringers or otherwise act to eliminate infringement, when, in
XXXX'x sole judgment, such action may be reasonably necessary, proper, and
justified. In the event that Discovery believes there is infringement of
any Licensed Patent under this Agreement which is to Discovery's
substantial detriment, Discovery shall provide XXXX with written notice
that such infringement is occurring including the following:
(i) reasonable evidence of the infringement, and (ii) [***]; except in
the event that the alleged infringer identified by Discovery's
infringement notice is either (a) any of the entities identified in
Section 3.C.(iii) hereof or (b) any other licensee of XXXX'x in relation
to the Licensed Patents and/or the Use Patents, [***]. In the event that
XXXX does take action to xxxxx the infringement, [***]. If XXXX does
not take action to xxxxx the infringement of the Licensed Patents within
[***], Discovery may either reduce the royalty owed on sales of Products
under Section 3D in the country where the infringement is occurring from
[***] to [***] until such infringement is abated or Discovery may, with
XXXX'x written consent, bring an action to enforce the Licensed Patents.
If Discovery chooses to bring an action against the infringer of the
Licensed Patents, [***].
B. Use Patents. XXXX intends to protect the Use Patents against
infringers or otherwise act to eliminate infringement, when, in XXXX'x sole
judgment, such action may be reasonably necessary, proper, and justified.
In the event that Discovery believes there is infringement of any Use
Patent under this Agreement which is to Discovery's substantial detriment,
Discovery shall provide XXXX with written notice that such infringement is
occurring including the following: (i) reasonable evidence of the
infringement, and (ii) [***]; except in the event that the alleged
infringer identified by Discovery's infringement notice is either (a)
any of the entities identified in Section 3.C.(iii) hereof or (b) any
other licensee of XXXX'x in relation to the Licensed Patents and/or the
Use Patents, [***]. In the event that XXXX does take action to xxxxx the
infringement, [***]. If XXXX does not take action to xxxxx the infringement
of the Licensed Patents within [***], Discovery may either reduce the
royalty owed on sales of Products under Section 3D in the country
where the infringement is occurring from [***] to [***] until such
infringement is abated or Discovery may bring an action to enforce the Use
Patents. If Discovery chooses to bring an action against the infringer
of the Use Patents, [***].
[***] Confidential treatment requested.
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[***]
Section 10. Patent Marking.
Discovery shall insure that it and its sublicensee(s) apply patent markings
that meet all requirements of U.S. law, 35 U.S.C. 287, with respect to all
Products subject to this Agreement.
Section 11. Product Liability; Conduct of Business.
A. Discovery shall, at all times during the term of this Agreement and
thereafter, indemnify, defend and hold XXXX, the inventors of the Licensed
Patents and Ancillary Patents harmless against all claims and expenses,
including legal expenses and reasonable attorneys fees, arising out of the
death of or injury to any person or persons or out of any damage to
property and against any other claim, proceeding, demand, expense and
liability of any kind whatsoever (other than patent infringement claims and
claims based on XXXX'x fraudulent conduct) resulting from the production,
manufacture, sale, use, lease, consumption or advertisement of Products,
the Compound, or Ancillary Compounds arising from any right or obligation
of Discovery or any sublicensee hereunder. Notwithstanding the above, XXXX
at all times reserves the right to retain counsel of its own to defend its
interests at its own expense.
B. Discovery shall, at all times during the term of this Agreement and
thereafter, indemnify, defend and hold Sumitomo and Taisho harmless against
all claims and expenses, including legal expenses and reasonable attorneys
fees, arising out of the death of or injury to any person or persons or out
of any damage to property and against any other claim, proceeding, demand,
expense and liability of any kind whatsoever (other than patent
infringement claims and claims based on Sumitomo or Taisho's fraudulent
conduct) resulting from the production, manufacture, sale, use, lease,
consumption or advertisement of Products, the Compound, or Ancillary
Compounds arising from any right or obligation of Discovery or any
sublicensee hereunder and relating to the Product Information.
Notwithstanding the above, Sumitomo and Taisho at all times shall have the
right to retain counsel of their own to defend their respective interests
at their own expense.
C. Discovery warrants that it now maintains and will continue to
maintain liability insurance coverage appropriate to the risk involved in
marketing the products subject to this Agreement and that such insurance
coverage lists XXXX and the inventors of the Licensed Patents and Ancillary
Patents as additional insureds. Within thirty (30) days after XXXX requests
such information (which it may request not more than once per year),
Discovery will present evidence to XXXX that the coverage is being
maintained with XXXX and its inventors listed as additional insureds.
D. Discovery warrants that it now maintains and will continue to
maintain liability insurance coverage appropriate to the risk of the
Product Information involved in marketing the products subject to this
Agreement and that such insurance coverage lists Sumitomo and Taisho as
additional insureds. Within thirty (30) days after XXXX requests such
information (which it may request not more than once per year), Discovery
will present evidence to XXXX that the coverage is being maintained with
Sumitomo and Taisho listed as additional insureds.
[***] Confidential treatment requested.
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Section 12. Use of Names.
Discovery and its sublicensee(s) shall not use XXXX'x name, the name of any
inventor of inventions governed by this Agreement, the name of the University of
Wisconsin, or the name of Sumitomo or Taisho in sales promotion, advertising, or
any other form of publicity without the prior written approval of the entity or
person whose name is being used, except for or in connection with disclosures or
usages required by law (e.g., as a part of or in connection with relevant patent
applications, filings to obtain governmental permits and approvals, disclosures
and filings required by stock exchange or securities laws, rules and
regulations).
Section 13. United States Government Interests.
It is understood that if the United States Government (through any of its
agencies or otherwise) has funded research, during the course of or under which
any of the inventions of the Licensed Patents or Ancillary Patents were
conceived or made, the United States Government is entitled, as a right, under
the provisions of 35 U.S.C. ss 200-212 and applicable regulations of Chapter 37
of the Code of Federal Regulations, to a nonexclusive, nontransferable,
irrevocable, paid-up license to practice or have practiced the invention of such
Licensed Patents or Ancillary Patents for governmental purposes. Any license
granted to Discovery in this Agreement shall be subject to such right.
Section 14. Miscellaneous.
This Agreement shall be construed in accordance with the internal laws of
the State of Wisconsin. If any provisions of this Agreement are or shall come
into conflict with the laws or regulations of any jurisdiction or any
governmental entity having jurisdiction over the parties or this Agreement,
those provisions shall be deemed automatically deleted, if such deletion is
allowed by relevant law, and the remaining terms and conditions of this
Agreement shall remain in full force and effect. If such a deletion is not so
allowed or if such a deletion leaves terms thereby made clearly illogical or
inappropriate in effect, the parties agree to substitute new terms as similar in
effect to the present terms of this Agreement as may be allowed under the
applicable laws and regulations. The parties hereto are independent contractors
and not joint venturers or partners.
Section 15. Notices.
Any notice required to be given pursuant to the provisions of this
Agreement shall be in writing and shall be deemed to have been given at the
earlier of the time when actually received as a consequence of any effective
method of delivery, including but not limited to hand delivery, transmission by
telecopier, or delivery by a professional courier service or the time when sent
by certified or registered mail addressed to the party for whom intended at the
address below or at such changed address as the party shall have specified by
written notice, provided that any notice of change of address shall be effective
only upon actual receipt.
(a) Wisconsin Alumni Research Foundation
Attn: Managing Director
000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
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(b) Discovery Laboratories, Inc.
Attn: Xx. Xxxxx Xxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Section 16. Integration.
This Agreement constitutes the full understanding between the parties with
reference to the subject matter hereof, and no statements or agreements by or
between the parties, whether orally or in writing, except as provided for
elsewhere in this Section 16, made prior to or at the signing hereof, shall vary
or modify the written terms of this Agreement. Neither party shall claim any
amendment, modification, or release from any provisions of this Agreement by
mutual agreement, acknowledgment, or otherwise, unless such mutual agreement is
in writing, signed by the other party, and specifically states that it is an
amendment to this Agreement.
Section 17. Contract Formation and Authority.
The persons signing on behalf of XXXX and Discovery hereby warrant and
represent that they have authority to execute this Agreement on behalf of the
party for whom they have signed.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on
the dates indicated below.
WISCONSIN ALUMNI RESEARCH FOUNDATION
By: /s/ Xxxxxxx X. Xxxxxx Date: Sept. 24, 1996
--------------------------------------- --------------
Xxxxxxx X. Xxxxxx, Managing Director
DISCOVERY LABORATORIES, INC.
By: /s/ Xxxxx X. Xxxxxx Date: Sept. 10, 1996
--------------------------------------- --------------
Xxxxx X. Xxxxxx, Chairman
Reviewed by XXXX'x Attorney:
/s/ Xxxxxxxxx X.X. Xxxxxx
---------------------------
Xxxxxxxxx X.X. Xxxxxx, Esq.
Sept. 5, 1996
-------------
(XXXX'x attorney shall not be deemed a signatory to this Agreement.)
Page 12 of 26
APPENDIX A
A. "Licensed Patents" shall refer to and mean those patents and patent
applications listed on Appendix B hereto and all continuations,
continuations-in-part, divisions, reissues, reexaminations, extensions or other
government actions which extend the subject matter of any such patents and
patent applications, and any corresponding foreign patent applications, and any
patents, patents of addition, or other equivalent foreign patent rights issuing,
granted or registered based on or resulting from any of the foregoing that are
in countries in the Licensed Territory.
B. "Use Patents" shall refer to and mean those patents and patent
applications listed on Appendix C hereto and all continuations,
continuations-in-part, divisions, reissues, reexaminations, extensions or other
government actions which extend the subject matter of any such patents and
patent applications, and any corresponding foreign patent applications, and any
patents, patents of addition, or other equivalent foreign patent rights issuing,
granted or registered based on or resulting from any of the foregoing.
C. "Ancillary Patents" shall refer to and mean those patents and patent
applications listed on Appendix D hereto and all continuations, divisions,
reissues, reexaminations, extensions or other government actions which extend
the subject matter of any such patents and patent applications, and any
corresponding foreign patent applications, and any patents, patents of addition,
or other equivalent foreign patent rights issuing, granted or registered based
on or resulting from any of the foregoing that are in countries in the Licensed
Territory.
D. "Product Information" shall mean the information referred to by XXXX
Ref. No. P96029US provided to Discovery by XXXX pursuant to a confidentiality
agreement to be signed by Discovery and XXXX, and all other data and other
information provided to Discovery by XXXX, Sumitomo or Taisho that relates to
the Compound, except that Product Information shall exclude any information or
data that becomes publicly known other than through disclosure by Discovery or
that is independently developed by Discovery.
E. "Sumitomo" shall mean Sumitomo Pharmaceuticals, Co. Ltd., a Japanese
Corporation.
F. "Taisho" shall mean Taisho Pharmaceuticals, Co. Ltd., a Japanese
Corporation.
G. "Compounds" shall mean: 26,26,26,27,27,27 -hexafluoro-1 alpha,25-
dihydroxycholecalciferol as further identified in Appendix F, which contains a
structural drawing of each Compound.
H. "Ancillary Compounds" shall mean those compounds described and claimed
in Licensed Patents and Ancillary Patents which are intermediates in Processes.
I. "Processes" shall mean the processes described and claimed in Licensed
Patents and Ancillary Patents.
J. "Products" shall mean and be limited to product(s) containing the
Compound in combination with any other material(s) in any formulation, a dosage
or form suitable for sale to the retail market place, which the parties agree
provides a reasonable and convenient measure of the rights granted to Discovery
under this Agreement.
Page 13 of 26
K. "Competing Products" shall mean those Products containing the Compound
for which another party has sought and obtained approval from the FDA (or its
foreign equivalent) for treatment of osteoporosis.
L. "Selling Price" shall mean, in the case of Products that are sold, the
invoice price to the retail customer of Products (regardless of uncollectible
accounts) less any shipping costs, allowances because of returned Products, or
sales taxes. The "Selling Price" for a Product that is transferred to a third
party for promotional purposes without charge or at a discount ( a "Free
Sample") shall be the average invoice price to the retail customer of that type
of Product during the applicable calendar quarter; provided, however, that there
shall be deemed to be no "Selling Price" and no royalties due for Free Samples
that represent 2% or less of gross sales during any quarterly period. For
purposes of this subsection, "retail customer" shall mean and be limited to
wholesalers, retailers, and managed care organizations (i.e., McKesson,
Whitmire, Kaiser, Wal-Mart, Walgreens and the like) to which pharmaceutical
products are customarily sold in the United States.
M. "Development Report" shall mean a written account of Discovery's
progress under the development plan having at least the information specified on
Appendix G to this Agreement, and shall be sent to the address specified on
Appendix G.
N. "Licensed Field" shall mean and be limited to the field of prevention,
treatment, amelioration or cure of metabolic bone disease.
O. "Licensed Territory" shall be limited to the Western Hemisphere (which
shall mean the half of the earth including North America, Latin America and
South America) but may be expanded to include all of the countries of the world
except Spain, Portugal, Korea and Japan pursuant to Section 3C of this
Agreement.
P. "Royalty Termination Date" shall refer to and mean fifteen years from
the date approval is received for sale of Products in the United States.
Q. "IND Approval" shall mean approval by the FDA of an Investigational New
Drug application which permits Discovery to conduct clinical studies of the new
drug in the United States.
R. "Date of NDA Submission" shall mean the date when Discovery first
submits an application for New Drug Approval of a Compound or Product to the
FDA.
S. "FDA" shall mean the U.S. Food and Drug Administration
Page 14 of 00
XXXXXXXX X
LICENSED PATENTS AND PATENT APPLICATIONS
APPLIC.
REFERENCE PATENT ISSUE SERIAL
NUMBER COUNTRY NUMBER DATE NUMBER
--------------------------------------------------------------------------------
26,26,26,27,27,27-hexafluoro-1 alpha,25-Dihydroxycholecalciferol and Process for
Preparing the- Same (DeLuca, Tanaka, Ikekawa & Kobayashi)
P81016US U.S. 4,358,406 11/09/82
Page 15 of 26
APPENDIX C
USE PATENTS AND PATENT APPLICATIONS
[***]
[***] Confidential treatment requested.
Page 16 of 26
APPENDIX D
ANCILLARY PATENTS AND PATENT APPLICATIONS
[***]
[***] Confidential treatment requested.
Page 17 of 26
[***]
[***] Confidential treatment requested.
Page 18 of 26
[***]
[***] Confidential treatment requested.
Page 19 of 26
[***]
[***] Confidential treatment requested.
Page 20 of 26
[***]
[***] Confidential treatment requested.
Page 21 of 26
[***]
[***] Confidential treatment requested.
Page 22 of 26
APPENDIX E
XXXX ROYALTY REPORT
Discovery: Agreement No.:
--------------------------- ------------------
Inventor: P#: P
--------------------------- ----------------------------
Period Covered: From: / /199 Through: / /199
------------------ -------------------------
Prepared By: Date:
--------------------------- ----------------------------
Approved By: Date:
--------------------------- ----------------------------
If license covers several major product lines, please prepare a separate report
for each line. Then combine all product lines into a summary report.
Report Type: [ ] Single Product Line Report: ___________________________________
[ ] Multiproduct Summary Report. Page 1 of _________ Pages
[ ] Product Line Detail. Line: ______ Tradename: ______ Page: __
Report
Currency: [ ] U.S. Dollars [ ] Other ___________________________________
--------------------------------------------------------------------------------
Gross *Less: Net Royalty Period Royalty Amount
----------------------
Country Sales Allowances Sales Rate: This Year Last Year
--------------------------------------------------------------------------------
U.S.A.
--------------------------------------------------------------------------------
Canada
--------------------------------------------------------------------------------
Europe
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Japan
--------------------------------------------------------------------------------
Other:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
================================================================================
TOTAL:
================================================================================
Total Royalty: _______ Conversion Rate: _______ Royalty in U.S. Dollars: $______
The following royalty forecast is non-binding and for XXXX'x internal planning
purposes only:
Royalty Forecast Under This Agreement:
Next Quarter: _____ Q2: _____ Q3: _____ Q4: _____
--------------------------------------------------------------------------------
* On a separate page, please indicate the reasons for returns or other
adjustments if significant.
Also note any unusual occurrences that affected royalty amounts during this
period.
To assist XXXX'x forecasting, please comment on any significant expected trends
in sales volume.
--------------------------------------------------------------------------------
Page 23 of 26
APPENDIX F
DIAGRAM
26,26,26,27,27,27-hexafluoro-1 alpha,25-dihydroxycholecalciferol
Page 24 of 26
APPENDIX G
DEVELOPMENT REPORT
A. Date development plan initiated and time period covered by this report.
B. Development Report (4-8 paragraphs).
1. Activities completed since last report including the object and
parameters of the development, when initiated, when completed and the
results.
2. Activities currently under investigation, i.e., ongoing activities
including object and parameters of such activities, when initiated,
and projected date of completion.
C. Future Development Activities (4-8 paragraphs).
1. Activities to be undertaken before next report including, but nor
limited to, the type and object of any studies conducted and their
projected starting and completion dates.
2. Estimated total development time remaining before a product will be
commercialized.
D. Changes to initial development plan (2-4 paragraphs).
1. Reasons for change.
2. Variables that may cause additional changes.
E. Items to be provided if applicable:
1. Information relating to Product that has become publicly available,
e.g., published articles, competing products, patents, etc.
2. Development work being performed by third parties other than Discovery
to include name of third party, reasons for use of third party,
planned future uses of third parties including reasons why and type of
work.
3. Update of competitive information trends in industry, government
compliance (if applicable) and market plan.
PLEASE SEND DEVELOPMENT REPORTS TO:
Wisconsin Alumni Research Foundation
Attn.: Contract Coordinator
000 Xxxxxx Xxxxxx
P.O. Box 7365
Madison, W1 53707-7365
Page 25 of 26
APPENDIX H
DEVELOPMENT PLAN
Estimated
Start Date Finish Date
---------- -----------
1. Development Program
A. Development Activities to be Undertaken
(Please break activities into subunits with the date of completion of
major milestones)
1.
2.
.
.
.
B. Estimated Total Development Time
II. Governmental Approval
A. Types of submissions required
B. Government agency e.g. FDA, EPA, etc.
III. Proposed Market Approach
IV. Competitive Information
A. Potential Competitors
B. Potential Competitive Devices/Compositions
C. Known Competitor's plans, developments, technical achievements
D. Anticipated Date of Product Launch
Total Length: approximately 2-3 pages
Page 26 of 26
