EXECUTION COPY
EXCLUSIVE LICENSE AGREEMENT
THIS LICENSE AGREEMENT (the "Agreement") is made and is effective as of
this 10th day of December, 1996, by and between both RUTGERS, THE STATE
UNIVERSITY OF NEW JERSEY, having its statewide Office of Corporate Liaison and
Technology Transfer at X.X. Xxx 0000, ASB Xxxxx XX, Xxxxxx Xxxx, Xxxxxxxxxx, Xxx
Xxxxxx 00000-0000 and the University of Medicine and Dentistry, having its
office of Patents and Licensing at 00 Xxxxxxxxxxxxx Xxxx, X.X. Xxx 0000,
Xxxxxxxxxx, Xxx Xxxxxx 00000-0000 (hereinafter collectively referred to as
"Rutgers/UMDNJ"), and AVAX Technologies, Inc., a corporation having a principal
place of business at 0000 Xxxxxx Xxxxx, Xxxxxx Xxxx, Xxxxxxxx 00000 (hereinafter
referred to as "Licensee"). The terms "Licensee" and "Rutgers/UMDNJ" include
their respective Affiliates (as hereafter defined) unless otherwise specified in
the Agreement.
RECITALS
WHEREAS, Certain inventions disclosed under Rutgers' Docket # 00-0000-0
entitled "Noncharged Bisbenzimidazoles and Trisbenzimidazoles as Mammalian
Topoisomerase I Poisons"; Rutgers' Docket # 00-0000-0 entitled "Substituted
Benzimidazoles as Mammalian Topoisomerase I Poisons", Rutgers' Docket #
00-0000-0 entitled "Protoberberines and Related Compounds as Potent Inhibitors
of Mammalian Topoisomerase I", Rutgers' Docket # 00-0000-0 entitled "Substituted
Benzimidazo[2,1-a]-isoquinolines,5,6-Dihydro-benimidazo [2,1-a]-isoquinolines,
and Benzimidazole as Mammalian Topoisomerase I Poisons" and Rutgers' Docket #
00-0000-0, entitled "Substituted Benz[a]acridine Derivatives as Novel
Topoisomerase I Poisons" (hereinafter collectively referred to as the
"Invention") were made in the course of research at Rutgers/UMDNJ by Xx. Xxxxxx
XxXxxx and Xx. Xxxxx Xxx (hereinafter, "Inventors");
WHEREAS, Rutgers has been designated by UMDNJ to handle the licensing
of the Invention to Licensee;
WHEREAS, Licensee entered into two Confidentiality Agreements with
Rutgers/UMDNJ one effective February 23, 1995 and the other October 29, 1996
both terminating five (5) years from those respective dates for the purpose of
evaluating the Invention;
WHEREAS, Rutgers/UMDNJ and Licensee will be parties to a research
agreement of even date herewith under which Licensee will fund research by Drs.
XxXxxx and Liu related to the Invention, which funding shall be in the amount of
one hundred thousand dollars ($100,000) per year for the next three years from
the effective date of such research agreement;
WHEREAS, Licensee does not now make or sell any products that embody
the invention, but desires to do so;
WHEREAS, Licensee desires to receive from Rutgers/UMDNJ licenses to
develop, commercially manufacture, and sell products embodying the Invention and
Rutgers/UMDNJ is willing to grant Licensee such licenses;
WHEREAS, Licensee has reviewed certain of the Rutgers/UMDNJ Technology
prior to the date of this Agreement, subject to the confidentiality agreements,
and wishes to obtain a license to the Rutgers/UMDNJ Patent Rights (as
hereinafter defined) and the Rutgers/UMDNJ Technology (as hereinafter defined)
as consideration for Licensee's continuing royalty obligation hereunder; and
WHEREAS, Both parties recognize and agree that royalties due hereunder
will be paid on both pending patent applications and issued patents, as well as
on Rutgers/UMDNJ Technology, all on the terms set forth herein;
NOW THEREFORE, in consideration of the mutual promises and the
covenants herein contained and intending to be bound thereby, the parties hereto
agree as follows:
1. DEFINITIONS
1.01 The "Act" means 35 U.S.C. Section 200 et seq. and the regulations
promulgated thereunder, as in effect from time to time.
1.02 "Affiliate" means, with respect to any Entity (defined in
paragraph 1.04 below), any Entity that directly or indirectly controls, is
controlled by, or is under common control with such Entity. "Control" shall
mean, for this purpose, direct or indirect control of more than 50% of the
voting securities of an Entity or, if such Entity does not have outstanding
voting securities, more than 50% of the directorships or similar positions with
respect to such Entity.
1.03 "Bankruptcy Event" means, with respect to any Entity, a voluntary
or involuntary proceeding by or against such Entity that is instituted in
bankruptcy or under any insolvency law, or that a receiver or custodian is
appointed for such Entity, or that proceedings are instituted by or against such
Entity for corporate reorganization or the dissolution of such Entity, which
proceedings or appointment, if involuntary, shall not have been dismissed within
ninety (90) days after the date of filing or appointment, or that such Entity
makes an assignment for the benefit of creditors, or that substantially all of
the assets of such Entity are seized or attached and not released within ninety
(90) days thereafter.
1.04 "Entity" means a corporation, an association, a joint venture, a
partnership, a trust, a university, a business, an individual, a government or
political subdivision thereof, including an agency, or any other organization
that can exercise independent legal standing.
1.05 "Federal Government Interest" means the interest retained by the
federal government in the Invention pursuant to the Act.
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1.06 "Improvements" means any inventions (whether patentable or not),
information and data, in the Licensed Field (defined in paragraph 1.7 below)
that are:
(a) developed by Rutgers/UMDNJ during the term of this Agreement, the
manufacture use or sale of which would infringe an issued or pending
claim within the Rutgers/UMDNJ Patent Rights; or
(b) developed by Rutgers/UMDNJ during the term of the Research
Agreement and in the course of performing the research covered by the
Research Agreement.
1.07 "Licensed Field" means the use of Inventions for all human and
animal uses.
1.08 "Licensed Method" means any process, method, or use that is
covered by Rutgers/UMDNJ Patent Rights or Rutgers/UMDNJ Technology or whose use
or practice would constitute, but for the license granted to Licensee pursuant
to this Agreement, an infringement of any issued or pending claim within
Rutgers/UMDNJ Patent Rights.
1.09 "Licensed Improvements" means those Improvements which are made:
(a) to the Invention, the manufacture, use or sale of which would
infringe an issued or pending claim within the Rutgers/UMDNJ Patent
Rights; and
(b) in the course of performing the research covered by the Research
Agreement.
1.10 "Licensed Product" means any material, substance, composition,
service or kit, that is either:
(a) covered by an issued or pending claim of Rutgers/UMDNJ Patent
Rights or the manufacture, use or sale of which would constitute, but
for the license granted to Licensee pursuant to this Agreement, an
infringement of any such claim; or
(b) developed, made, sold, used, or registered using Rutgers/UMDNJ
Technology, Licensed Method or Licensed Improvements in whole or in
part.
1.11 "Major Market Countries" shall mean each of France, Germany,
Italy, the United Kingdom, the United States of America and Japan.
1.12 "Net Sales" means the total of the gross consideration received
for Licensed Products sold or transferred by Licensee less the sum of the
following (to the extent actually paid or allowed, and net of rebates or
allowances of such deductions):
(a) cash discounts in customary amounts;
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(b) trade or quantity discounts or allowances (including refunds,
rebates, charge backs, and retroactive price adjustments);
(c) sales, use, tariff, or excise taxes imposed upon particular sales;
(d) import/export duties; transportation charges and insurance.
Sales among Licensee and its Affiliates for ultimate third party use shall be
disregarded for purposes of computing Net Sales. At the request of either party,
but in no event more than once per year, royalties shall be valued by an
independent accountant, investment banker or financial consultant selected by
Licensee and reasonably acceptable to Rutgers/UMDNJ to ensure that such
royalties are fairly based on an arms length transaction.
1.13 "Payment Obligations" means the payment obligations of Licensee
pursuant to paragraphs 4.4 and 5.1.
1.14 "First Commercial Sale" means the initial transfer by or on behalf
of Licensee, its Affiliate or its sublicensees of Licensed Products or the
initial practice of a Licensed Method by or on behalf of Licensee, its Affiliate
or its sublicensees in exchange for cash or some equivalent to which value can
be assigned for the purpose of determining Net Sales.
1.15 "Research Agreement" means the research agreement between Licensee
and Rutgers/UMDNJ, substantially in the form of Exhibit A to be attached hereto,
which funds further research in the field of Rutgers/UMDNJ Patent Rights and is
to be executed at the same time as this License Agreement.
1.16 "Rutgers/UMDNJ Patent Rights" means the following:
(a) U.S. Patent Applications Numbers 08/442,857, 08/618,988 and
[60]/011,452, any other patent application owned by Rutgers/UMDNJ that
discloses or claims subject matter contained in Rutgers Files Docket
Number 00-0000-0, 00-0000-0, 00-0000-0, 00-0000-0 or 00-0000-0 and
counterpart foreign patents and patent applications owned by
Rutgers/UMDNJ (which counterparts, including PCT filings, are listed in
Exhibit B), including any reissues, extensions, substitutions,
continuations, continuations-in-part, and divisions thereof; and
(b) all U.S. and foreign patents and patent applications with respect
to Licensed Improvements.
1.17 "Rutgers/UMDNJ Technology" means all tangible information,
Licensed Improvements (other than those contained in the Rutgers/UMDNJ Patent
Rights) and physical objects related to the Invention or to Licensed Product, in
the Licensed Field (other than
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Rutgers/UMDNJ Patent Rights), including but not limited to formulations,
materials, data, drawings and sketches, designs, testing and test results,
regulatory information of a like nature, whether patentable or not, owned by
Rutgers/UMDNJ, which Rutgers/UMDNJ has the right to disclose and license to
Licensee, and which arose in the Inventors' laboratories under the direction of
one or more of the Inventors prior to the effective date of this Agreement or in
the performance of the Research Agreement.
1.18 "Rutgers/UMDNJ Proprietary Technology" means Rutgers/UMDNJ
Technology that is not:
(a) received by Licensee from a third party lawfully in possession of
same and having the right to disclose same; or
(b) now or hereafter in the public domain through no fault of Licensee;
or
(c) independently developed by Licensee as demonstrated by written
evidence without reference to information disclosed to Licensee by
Rutgers/UMDNJ; or
(d) disclosed without confidentiality restrictions by Licensee pursuant
to the prior specific written approval of Rutgers/UMDNJ's Technology
Transfer Department.
1.19 "Warrants" means warrants to be issued by Licensee to
Rutgers/UMDNJ to purchase 250,000 shares of common stock of Licensee at a price
of $4.12 per share. The first 150,000 warrants, as set forth in sub-paragraphs
(a) through (d), shall have an expiration date ten (10) years from the effective
date of this Agreement. The final 100,000 warrants, as set forth in
sub-paragraph (e), shall have an expiration date fifteen (15) years from the
effective date of this Agreement. Such warrants shall vest and shall be issued
to Rutgers/UMDNJ, so long as this Agreement is still in effect, in accordance
with the following schedule:
(a) 15,000 warrants shall vest within forty-five (45) days of the
execution of this Agreement.
(b) 35,000 warrants shall vest upon the earlier of June 30, 1998, or the
first filing of an Investigative New Drug Application (IND) with the United
States Food and Drug Administration (FDA) or its equivalent in another
Major Market Country.
(c) 50,000 warrants shall vest upon the completion of the Phase I trials
in the United States or another Major Market.
(c) 50,000 warrants shall vest upon the earlier of October 31, 2001, or
the date of initiation of Phase II trials (including any trials designated
PhaseI/II) in the United States or another Major Market Country.
(d) 100,000 warrants shall vest upon the earlier of October 31, 2011, or
the first filing a New Drug Application (NDA) with the United States FDA or
its equivalent in another Major Market Country.
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Such warrants shall provide for cashless exercise, piggyback registration rights
in any registration subsequent to the first underwritten public offering by
Licensee (subject to pro tanto cutbacks in favor of Licensee and any holder of
demand registration rights, pro rata cutbacks with other holders of piggyback
registration rights, underwriting lockups and other customary terms),
antidilution protection relating to share splits, share recombinations and share
dividends and other provisions protecting the owners of warrants which are
customary and reasonably acceptable to the parties.
2. GRANT
2.1 Subject to the terms and conditions in this Agreement,
Rutgers/UMDNJ hereby grants to Licensee, subject to the Act, the exclusive
worldwide right and license in the Licensed Field under Rutgers/UMDNJ Patent
Rights, Rutgers/UMDNJ Technology and Licensed Improvements to make, have made,
use, offer for sale, import and sell Licensed Products and to use or practice
any Licensed Method with respect to Licensed Products during the term of this
Agreement.
2.2 Subject to paragraph 13.3, Rutgers/UMDNJ expressly reserves the
right to use the Invention, Rutgers/UMDNJ Patent Rights, Rutgers/UMDNJ
Technology, Licensed Products, Licensed Methods and Licensed Improvements solely
for educational and research purposes and to publish the results thereof but
shall have no right to offer for sale, sell or commercialize any Licensed
Product which right will have been exclusively licensed to Licensee hereunder.
2.3 Rutgers/UMDNJ, principally through the Inventors, has disclosed
certain Rutgers/UMDNJ Technology to Licensee subject to the terms of the
Confidentiality Agreements entered into prior to the execution of this
Agreement, some of which Rutgers/UMDNJ Technology was made available to the
public without restriction. Accordingly, Rutgers/UMDNJ principally through the
Inventors shall provide to Licensee the following information:
(a) Within thirty (30) days of the execution of this Agreement, a list
of all prior written publications, oral presentations and any other
public disclosure of the Invention and/or Rutgers/UMDNJ Technology; and
(b) Within four (4) months from the date of execution of this Agreement
and from time to time thereafter, a list of all then existing
Rutgers/UMDNJ Technology, Rutgers/UMDNJ Proprietary Technology and
Improvements disclosed to the Rutgers/UMDNJ Office of Corporate Liaison
and Technology Transfer, or in the case of the Inventors, known to
them.
2.4 Subject to the rights of third parties, Rutgers/UMDNJ hereby agrees
that Licensee shall have a reasonable opportunity (for a period not to exceed
three (3) months from disclosure pursuant to paragraph 2.3) to negotiate a
royalty bearing license to any Improvements in the Licensed
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Field (specifically excluding Licensed Improvements which shall be subject to
this License pursuant to paragraph 2.1).
3. SUBLICENSES
3.1 Rutgers/UMDNJ grants to Licensee the right to grant sublicenses to
third parties under the licenses granted in Article 2, provided that Licensee
has current exclusive rights thereto under this Agreement. To the extent
feasible, sublicenses shall contain all of the obligations of the Licensee to
Rutgers/UMDNJ and to the United States government and be consistent with the
nonmonetary terms of this Agreement.
3.2 Within thirty (30) days after execution or receipt thereof, as
applicable, Licensee shall provide Rutgers/UMDNJ with a copy of each sublicense
issued hereunder and shall deliver copies of all royalty reports received by
Licensee from such sublicensees.
3.3 Upon termination of this Agreement other than by expiration
pursuant to Article 9, any and all sublicenses shall survive such termination.
4. PRECLINICAL DEVELOPMENT FEE, LICENSE MAINTENANCE FEES, EQUITY AND
MILESTONE PAYMENTS
4.1 Licensee agrees to pay to Rutgers/UMDNJ a [***] days of the
execution of this Agreement.
4.2 Licensee agrees to pay to Rutgers/UMDNJ a License Maintenance Fee
of [***] per year at Rutgers/UMDNJ or if such date follows the First Commercial
Sale of Licensed Product by Licensee or its sublicensees. The License
Maintenance Fee is non-refundable and is not an advance against royalties.
4.3 Licensee shall issue the Warrants to Rutgers/UMDNJ in accordance
with the vesting schedule contained in the definition thereof.
4.4 Licensee will pay to Rutgers/UMDNJ semi-annually, concurrently with
its payment of royalties as provided in paragraph 5.1, [***] of all non-royalty
consideration received by Licensee during the two most recently concluded fiscal
quarters from sublicensing or transferring (other than to Affiliates of
Licensee) the rights licensed to Licensee hereunder except for the following:
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[***]
Subject to Article 17 of this Agreement, amounts due under this Article 4.4
alone shall not be reduced in the aggregate by more than [***] in any year.
4.5 Licensee shall pay to Rutgers/UMDNJ Milestone Payment Fees, so long
as this Agreement remains in effect, in accordance with the following schedule:
Event Amount
(a) Payment on the earlier of October 31, $ 15,000
1999, or the date of the first filing of an application
for an Investigational New Drug (IND) with the United
States Food and Drug Administration (FDA) or its
equivalent in another Major Market Country
(b) By the earlier of October 31, 2001, $ 25,000
or the date of initiation of Phase II trials (including any
trial designated Phase I/II) in the United States or another
Major Market Country
(c) Payment by the earlier of October 31, $ 45,000
2005 or the date of first filing a New
Drug Application (NDA) with the United States
FDA or its equivalent in another Major
Market Country
(d) Payment by the earlier of October 31, $150,000
2008 or the date of first final approval of
an NDA by the United States FDA or its equivalent in
another Major Market Country
These Milestone Payment Fees shall be paid to Rutgers/UMDNJ within thirty (30)
days after the occurrence of the events set forth on the schedule above and
shall not be refundable or creditable against royalties. In no event shall any
milestone payment be payable with respect to more than one Licensed Product.
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5. ROYALTIES
5.1 Except as otherwise required by law, Licensee shall pay to
Rutgers/UMDNJ:
(a) a semi-annual royalty based on Net Sales during the two most
recently concluded fiscal quarters calculated as follows:
(i) to the extent a Rutgers/UMDNJ Patent Right underlying a
Licensed Product is unexpired in a country, a royalty of [***]
of such Licensed Product in such country during such period
shall be payable by Licensee, and
(ii) to the extent no Rutgers/UMDNJ Patent Right underlying a
Licensed Product is unexpired in a country, but such Licensed
Product uses or embodies Rutgers/UMDNJ Proprietary Technology,
a royalty of [***] of such Licensed Product in such country
during such period shall be payable be Licensee so long as
such sales occur no later than [***].
(b) [***], concurrently with its payment of royalties as provided in
paragraph 5.1(a), [***] of all royalty consideration received by
Licensee from its sublicensees (other than to Affiliates of Licensee)
during its two most recently concluded fiscal quarters on sales by such
sublicensee of Licensed Products.
Subject to Article 17 this Agreement, amounts due under this Article 5.2 alone
shall not be reduced [***]
5.2 No Payment Obligations shall be due with respect to any sale or
sublicense covering any Licensed Product in a country if:
(a) there are no issued Rutgers/UMDNJ Patent Rights underlying such
Licensed Product in such country; and
(b) to the extent that a patent application is pending, there is no
claim within such patent application on which a royalty herein can
reasonably be based which has been pending for less than seven (7)
years since the initial filing date; and
(c) no Rutgers/UMDNJ Proprietary Technology is used with respect to, or
embodied in such Licensed Product.
5.3 Royalties payable to Rutgers/UMDNJ shall be paid semi-annually on
or before June 30 and December 31 of each calendar year. Each such payment will
be for unpaid royalties that accrued within or prior to Licensee's two most
recently completed calendar quarters.
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5.4 Licensee shall pay to Rutgers/UMDNJ a minimum annual payment equal
to the amount set forth on the following schedule:
[***]
for the term of this Agreement beginning with the year of First Commercial Sale
of any Licensed Product in a Major Market Country. This minimum annual payment
shall be paid to Rutgers/UMDNJ by December 31 of each year and shall be credited
against the Payment Obligations due and owing for the calendar year in which the
minimum annual payment is supposed to be made. The first year's minimum annual
payment shall be prorated by the fractional number of full months remaining in
that calendar.
5.5 Licensee shall be entitled to credit against the royalty revenue
payable pursuant to paragraph 5.1(a) and (b) in the amount of [***] provided
that in no event shall such credit:
(a) reduce by more than [***] with respect to any calendar year; or
(b) excuse Licensee from making any minimum royalty payment pursuant to
paragraph 5.4, provided further that any unused credit remaining as a
result of such limitation shall be carried forward to subsequent years.
Within (3) years after receipt of each installment of such credit, Licensee
shall invest one-half of such installment in research or clinical trials at
Rutgers and UMDNJ (to be shared between the parties as they deem appropriate) to
be negotiated in good faith between the parties at that time.
5.6 All amounts due Rutgers/UMDNJ shall be payable in United States
Dollars in New Brunswick, New Jersey. When Licensed Products are sold for monies
other than United States Dollars, the earned royalties will first be determined
in the foreign currency of the country in which such Licensed Products were sold
and then converted into equivalent United States Dollars. The exchange rate will
be the United States Dollar buying rate quoted in the Wall Street Journal on the
last day of the reporting period.
5.7 Royalties earned with respect to sales occurring in any country
outside the United States shall be reduced by any taxes, fees or other charges
imposed by the government of such country on the remittance of income. The
parties shall reasonably cooperate with each other in execution of documents
which will avoid or reduce such taxes, fees and charges. Licensee shall be
responsible for all bank transfer charges.
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5.8 If at any time legal restrictions prevent the acquisition or prompt
remittance of United States Dollars by Licensee with respect to any country
where a Licensed Product is sold, Licensee shall pay royalties due to
Rutgers/UMDNJ from Licensee's other sources of United States Dollars.
5.9 In the event that any patent or any claim thereof included within
the Rutgers/UMDNJ Patent Rights shall be held invalid in a final decision by a
court of competent jurisdiction and last resort and from which no appeal has or
can be taken, all obligation to pay royalties based on such patent or claim or
any claim patentably indistinct therefrom shall cease as of the date of such
final decision. Licensee shall not, however, be relieved from paying any
royalties that accrued before such decision or that are based on another patent
or claim not involved in such decision, or that are based on Rutgers/UMDNJ
Technology.
5.10 To the extent Licensee or any Affiliate of Licensee is required,
by order or judgement of any court to obtain in any jurisdiction any license
from a third party in order to practice the rights purported to be granted to
Licensee by Rutgers/UMDNJ hereunder under issued patents in such jurisdiction,
then up to [***] of the royalties payable under such license in such
jurisdiction may be deducted from royalties otherwise payable to Rutgers/UMDNJ
hereunder, provided that in no event shall the aggregate royalties payable to
Rutgers/UMDNJ in any [***] in such jurisdiction be reduced [***] as a result of
any such deduction, provided further that any excess deduction remaining as a
result of such limitation may be carried forward to subsequent periods.
6. DILIGENCE
6.1 Licensee, upon execution of this Agreement, shall use all
reasonable efforts to develop, test, obtain regulatory approval, and manufacture
Licensed Products in all Major Market Countries, and any other countries in
which it is deemed reasonable and prudent to do so, in which Rutgers/UMDNJ
Patent Rights exist within a reasonable time after execution of this Agreement
and shall, within a reasonable time after obtaining requisite regulatory
approvals, earnestly and diligently endeavor to market and sell the same in
quantities sufficient to meet the market demands therefor.
6.2 Licensee shall be entitled to exercise prudent and reasonable
business judgment in meeting its diligence obligations hereunder.
6.3 If Licensee or its sublicensees fail to perform any of the
following:
(a) commence commercial marketing of Licensed Products in each Major
Market Country within six (6) months of receiving approval of such
Licensed Product in such country unless there is a significant, prudent
and reasonable business reason not to do so;
(b) reasonably fill the market demand for Licensed Products in each
Major Market Country following commencement of marketing in such
country at all times during the exclusive period of this Agreement; or
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(c) until the Minimum Payment Obligation's of paragraph 5.4 are
triggered, spend an aggregate of not less than:
(i) $200,000 in Year One;
(ii) $300,000 in Year Two; and
(iii) $500,000 in Year Three, and each year of this Agreement
thereafter
for the development, research, manufacture, regulatory approval,
marketing and selling of Licensed Products (including without
limitation, allocated overhead expenses and Sponsored Research
expenses);
(d) execute the Sponsored Research Agreement within forty-five (45)
days of the execution of this Agreement, or, where good faith
negotiations are continuing, for such longer period of time as agreed
to by and between the parties, providing for the funding of research in
the amount of at least $100,000 for the first three years;
then Rutgers/UMDNJ shall have the right and option upon sixty (60) days written
notice, either to terminate this Agreement in the countries where Licensee has
failed to perform or to reduce Licensee's exclusive license to a nonexclusive
license in the countries where Licensee has failed to perform, provided that any
such notice must be given within four (4) months after the occurrence or from
the time at which Rutgers/UMDNJ Office of Technology Transfer has or should have
knowledge of the occurrence of the alleged violation complained of in such
notice and Licensee does not cure the matter specified in such notice within
said sixty (60) day period. Should the Licensee fail to cure the matters
specified in such notice within said sixty (60) day period, the termination
shall be effective at the end of said period. This right, if exercised by
Rutgers/UMDNJ, supersedes the rights granted in Article 2 (GRANT).
7. PROGRESS AND ROYALTY REPORTS
7.1 Beginning December 31, 1997, and annually thereafter, Licensee
shall submit to Rutgers/UMDNJ a progress report covering Licensee's activities
related to the development and testing of all Licensed Products and the
obtaining of the governmental approvals necessary for marketing. These progress
reports shall be made for each Licensed Product in each Major Market Country and
for other countries upon request by Rutgers/UMDNJ.
7.2 Subject to applicable law, the progress reports submitted under
paragraph 7.1 shall include sufficient information to enable Rutgers/UMDNJ to
determine Licensee's progress in fulfilling its obligations under Article 6 and
shall contain information with respect to the following topics:
- summary of work completed
- key scientific discoveries
- summary of work in progress, including product development and
testing and
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progress in obtaining government approvals
- market plans for introduction of Licensed Products in
countries in which Licensed Product has not been introduced
- aggregate dollar value spent in the reporting period for
research, development, and marketing of Licensed Products
- activities in obtaining sublicensees and activities of
sublicensees
- financial statements as of the end of the previous calendar
quarter
- activities under the Research Agreement
7.3 Licensee shall have a continuing responsibility to keep
Rutgers/UMDNJ informed of its large/small Entity status (as defined by the
United States Patent and Trademark Office).
7.4 Subject to applicable law, Licensee shall report to Rutgers/UMDNJ
in its immediately subsequent progress or royalty report the date of First
Commercial Sale of each Licensed Product in each country.
7.5 After the First Commercial Sale of a Licensed Product anywhere in
the world by Licensee or its sublicensees, Licensee will make semi-annual
royalty reports to Rutgers/UMDNJ on or before each June 30 and December 31 of
each year. Each such royalty report will cover Licensee's two most recently
completed calendar quarters and will show the following:
(a) the gross sales and Net Sales of each type of Licensed Product and
a clear indication of how Net Sales and other consideration due to
Rutgers/UMDNJ hereunder were calculated;
(b) the royalties and other consideration, in U.S. dollars, payable
hereunder;
(c) the exchange rate used, if any; and
(d) any other information reasonably requested by Rutgers/UMDNJ in
support or explanation thereof.
7.6 If no sales of Licensed Products have been made during any
reporting period, a statement to this effect shall be made by Licensee.
8. BOOKS AND RECORDS
8.1 Licensee shall keep, cause its Affiliates to keep and use its best
efforts to cause its sublicensees to keep complete and accurate books and
records in accordance with generally accepted accounting principles accurately
showing all transactions and information relating to this Agreement. Such books
and records shall be preserved for at least five (5) years from the date of the
entry to which they pertain and shall be open to inspection by representatives
or agents of Rutgers/UMDNJ reasonably acceptable to Licensee at reasonable times
upon reasonable notice and may be exercised
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no more than two times per calendar year.
8.2 The fees and expenses of Rutgers/UMDNJ representatives performing
such an examination shall be borne by Rutgers/UMDNJ. However, if an error in
royalties in an amount equal to the greater of five percent (5%) of the total
royalties due for any year or fifty thousand dollars ($50,000) is discovered,
then the fees and expenses of these representatives shall be borne by Licensee.
9. TERM OF THE AGREEMENT
9.1 Unless otherwise terminated by operation of law or by acts of the
parties in accordance with the provisions of this Agreement, this Agreement
shall be in force from the effective date recited on page one and shall remain
in effect with respect to each Licensed Product in each country of the world
until the longer of:
(a) expiration of the last-to-expire Rutgers/UMDNJ Patent Right
licensed under this Agreement in such country; or
(b) ten years from the date of First Commercial Sale of a Licensed
Product in such country.
9.2 Any expiration or termination of this Agreement shall not affect
the rights and obligations set forth in the following Articles:
Article 8 Books and Records
Article 12 Disposition of Licensed Products on Hand Upon
Termination
Article 13 Use of Names, Trademarks and Confidential Data
Article 14 Representations and Warranties
Article 18 Indemnification
Article 23 Failure to Perform
Article 28 Confidentiality
10. TERMINATION BY RUTGERS/UMDNJ
10.1 If Licensee should materially breach or fail to perform in any
material respect any material provision of this Agreement then Rutgers/UMDNJ may
give written notice of such default to Licensee. If Licensee should fail to cure
such default within sixty (60) days after the effective date of such notice,
Rutgers/UMDNJ shall have the right to terminate this Agreement and the licenses
herein by a second written notice to Licensee. If a notice of termination is
sent to Licensee, this Agreement shall automatically terminate on the effective
date of such notice. Termination shall not relieve Licensee of its obligation to
pay all amounts due to Rutgers/UMDNJ as of the effective date
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of termination and shall not impair any accrued right of Rutgers/UMDNJ.
10.2 Rutgers/UMDNJ may terminate this Agreement immediately on written
notice to Licensee upon the occurrence of a Bankruptcy Event with respect to
Licensee.
11. TERMINATION BY LICENSEE
11.1 Licensee shall have the right at any time to terminate this
Agreement in whole or as to any portion of Rutgers/UMDNJ Patent Rights by giving
ninety (90) days notice thereof in writing to Rutgers/UMDNJ. If such termination
in whole is within the first year of this Agreement, other than in the first
three (3) months, Licensee shall pay Rutgers/UMDNJ a relicensing fee of Ten
Thousand Dollars ($10,000).
11.2 Any termination pursuant to the above paragraph shall not relieve
Licensee of any obligation or liability accrued hereunder prior to such
termination or rescind anything done by Licensee or any payments made to
Rutgers/UMDNJ hereunder prior to the time such termination becomes effective,
and such termination shall not affect in any manner any rights of Rutgers/UMDNJ
arising under this Agreement prior to such termination.
12. DISPOSITION OF LICENSED PRODUCTS AND INFORMATION
ON HAND UPON TERMINATION
12.1 Upon termination of this Agreement by either party:
(a) Licensee may sell all previously made or partially made Licensed
Products, but no more (and may complete Licensed Products for which
materials have been ordered or manufactured) within a period of one
hundred and twenty (120) days after the effective date of termination,
provided, however, that the disposition of such Licensed Products shall
be subject to the terms of this Agreement including, but not limited
to, the payment of royalties at the rate and at the time provided
herein and the rendering of reports thereon; and
(b) Licensee shall promptly return, and shall use all reasonable
efforts to cause its sublicensees to return, to Rutgers/UMDNJ all
Rutgers/UMDNJ Technology, and other property belonging to
Rutgers/UMDNJ, if any, that has been provided to Licensee or
sublicensees hereunder, and all copies and facsimiles thereof and
derivatives therefrom (except that Licensee may retain one copy of
written material for record purposes only, provided such material is
not used by Licensee for any other purpose and is not disclosed to
others).
15
13. USE OF NAMES, TRADEMARKS, AND CONFIDENTIAL INFORMATION
13.1 Nothing contained in this Agreement shall be construed as granting
any right to Licensee or its Affiliates to use in advertising, publicity, or
other promotional activities any name, trade name, trademark, or other
designation of Rutgers/UMDNJ or any of its units (including contraction,
abbreviation or simulation of any of the foregoing) without the prior, written
consent of Rutgers/UMDNJ; provided, however, that Rutgers/UMDNJ acknowledges and
agrees that Licensee may use Rutgers/UMDNJ's name and the names of Drs. XxXxxx
and Xxx in various documents used by Licensee for capital raising and financing
without such prior written consent where the use of such names may be required
by law. Rutgers/UMDNJ acknowledges that Drs. XxXxxx and Liu may act as
consultants and scientific advisors to Licensee with respect to the licenses
granted to Licensee hereunder, subject to Rutgers/UMDNJ policies.
13.2 Nothing herein shall be deemed to establish a relationship of
principal and agent between Rutgers/UMDNJ and Licensee, nor any of their agents
or employees for any purpose whatsoever. This Agreement shall not be construed
as constituting Rutgers/UMDNJ and Licensee as partners, or as creating any other
form of legal association or arrangement which would impose liability upon one
party for the act or failure to act of the other party.
13.3 In the event that Rutgers/UMDNJ desires to publish or disclose, by
written, oral or other presentation, Licensed Improvements, Rutgers/UMDNJ Patent
Rights, Rutgers/UMDNJ Proprietary Technology or any material information related
thereto which the Inventors reasonably believe jeopardize the aforementioned
rights the Inventors shall notify Licensee and Rutgers/UMDNJ in writing by
facsimile where confirmed by the receiving party, and/or by certified or
registered mail (return receipt requested) of their intention at least fifteen
(15) days prior to any speech, lecture or other oral presentation and at least
60 days before any written or other publication or disclosure. The Inventors
shall include with such notice a description of any proposed oral presentation
or, in any proposed written or other disclosure, a current draft of such
proposed disclosure or abstract. Licensee may request that the Inventors and
Rutgers/UMDNJ, no later than 30 days following the receipt of such notice, delay
such publication or disclosure in order to enable Licensee to request that
Rutgers/UMDNJ file, or have filed on its behalf, a patent application, copyright
or other appropriate form of intellectual property protection related to the
information to be disclosed. Upon receipt of such request, Rutgers/UMDNJ and the
Inventors shall arrange for a delay in publication or disclosure until such time
as Rutgers/UMDNJ has filed, or had filed on its behalf, such patent application,
copyright or other appropriate form of intellectual property protection in form
and in substance reasonably satisfactory to Licensee and Rutgers/UMDNJ. If
neither the Inventors nor Rutgers/UMDNJ receive any such request from Licensee
to delay publication or disclosure, Rutgers/UMDNJ or the Inventors may submit
such material for publication or presentation or make such other publication or
disclosure. If Rutgers/UMDNJ has not filed, or had filed on its behalf, such
patent application, copyright or other appropriate intellectual property
protection within thirty (30) days of a request by Licensee to Rutgers/UMDNJ to
do so, Licensee shall have the right but not the obligation to file on behalf of
Rutgers/UMDNJ any appropriate intellectual property protection upon notice to
Rutgers/UMDNJ within fifteen (15) days of the expiration of said thirty (30) day
period. Upon receipt of such notice, Rutgers/UMDNJ shall arrange
16
for a delay in publication or disclosure until such time as Licensee has filed
such patent application, copyright or other appropriate form of intellectual
property protection which Licensee agrees to file as soon as is reasonably
practicable provided, however that said deferral shall not exceed ninety (90)
days from the receipt of such notice.
14. LIMITED WARRANTY
14.1 As of the effective date of this Agreement Rutgers/UMDNJ
represents the following:
(a) Rutgers/UMDNJ has the right to grant the license granted in this
agreement, subject to the Federal Government Interest;
(b) Rutgers/UMDNJ has made an effective election under the Act to
retain title to the Rutgers/UMDNJ Patent Rights;
(c) attached as Exhibit C are copies of all United States Government
funding agreements underlying the Invention and all related progress
reports;
(d) the Rutgers Office of Corporate Liaison and Technology Transfer,
after inquiry of its counterpart at UMDNJ, the Inventors, and the
Office of the General Counsel has no notice of:
(i) any infringement or misappropriation by any third party of
any of the Rutgers/UMDNJ Patent Rights or Rutgers/UMDNJ
Technology;
(ii) any claim by a third party contesting the validity of any
Rutgers/UMDNJ Patent Rights or Rutgers/UMDNJ Technology; or
(iii) any pending or threatened litigation, or contested
administrative proceedings, with respect to the Invention, the
Rutgers/UMDNJ Patent Rights or the Rutgers/UMDNJ Technology;
and
(e) all topoisomerase inhibitors developed or under development by Xx.
XxXxxx or Xx. Xxx which have been disclosed to Rutgers/UMDNJ Office of
Corporate Liaison and Technology Transfer have been disclosed to
Licensee. Additionally, Rutgers/UMDNJ Office of Corporate Liaison and
Technology Transfer has no knowledge of any other topoisomerase
inhibitors under development by Drs. XxXxxx and Liu.
14.2 The Inventors represent the following:
(a) they have no knowledge of any infringement, misappropriation,
claim, litigation or contested administrative proceeding with respect
to the Invention, the Rutgers/UMDNJ Patent Rights or the Rutgers/UMDNJ
Technology;
17
(b) any pending or threatened litigation, or contested administrative
proceedings, with respect to the Invention, the Rutgers/UMDNJ Patent
Rights or the Rutgers/UMDNJ Technology;
(c) any claim by a third party contesting the validity of any
Rutgers/UMDNJ Patent rights or Rutgers/UMDNJ Technology; or
(d) all topoisomerase inhibitors developed or under development by the
Inventors have been disclosed to Licensee.
14.3 This license and the associated Invention are provided WITHOUT
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER
WARRANTY, EXPRESS OR IMPLIED. RUTGERS/UMDNJ MAKES NO REPRESENTATION OR WARRANTY
THAT THE LICENSED PRODUCTS OR LICENSED METHODS WILL NOT INFRINGE ANY PATENT OR
OTHER PROPRIETARY RIGHT.
14.4 IN NO EVENT WILL RUTGERS/UMDNJ BE LIABLE FOR ANY INCIDENTAL,
SPECIAL OR CONSEQUENTIAL DAMAGES RESULTING FROM EXERCISE OF THIS LICENSE OR
MANUFACTURE, SALE, OR USE OF THE INVENTION OR LICENSED PRODUCTS OR LICENSED
METHODS OR RUTGERS/UMDNJ TECHNOLOGY.
14.5 Subject to the provisions of paragraph 14.1, nothing in this
Agreement shall be construed as:
(a) a warranty by Rutgers/UMDNJ as to the validity or scope of any
Rutgers/UMDNJ Patent Rights or Rutgers/UMDNJ Technology;
(b) a warranty that anything made, used, sold or otherwise disposed of
under any license granted in this Agreement is or will be free from
infringement of patents or other intellectual property of third
parties;
(c) an obligation to bring or prosecute actions or suits against third
parties except as provided in Article 17;
(d) conferring by implication, estoppel or otherwise any license or
rights under any patents or other intellectual property of
Rutgers/UMDNJ, other than Rutgers/UMDNJ Patent Rights and Rutgers/UMDNJ
Technology as defined herein, regardless of whether such patents are
dominant or subordinate to Rutgers/UMDNJ Patent Rights; or
(e) an obligation to furnish any know-how not provided in Rutgers/UMDNJ
Patent Rights and Rutgers/UMDNJ Technology.
18
15. PATENT PROSECUTION
AND MAINTENANCE
15.1 Rutgers/UMDNJ, in cooperation with Licensee shall diligently
prosecute and maintain the United States patents comprising Rutgers/UMDNJ Patent
Rights through counsel mutually agreeable to Licensee and Rutgers/UMDNJ. Counsel
shall take instructions from Rutgers/UMDNJ. Additionally, Rutgers/UMDNJ or
patent counsel shall provide a copy of any and all correspondence or other
relevant documentation between Rutgers/UMDNJ and/or patent counsel and the
United States Patent and Trademark Office, any governmental agency or other
party (excluding internally distributed correspondence) where such documentation
pertains to the prosecution and maintenance of the aforementioned United States
patents which documentation shall include but not be limited to all bar dates,
filing dates, notification dates and other relevant dates. Licensee agrees to
keep confidential all documentation relating to the prosecution and maintenance
of Rutgers/UMDNJ Patent Rights so long as it is Rutgers/UMDNJ Confidential
Material.
15.2 Rutgers/UMDNJ shall give due consideration to amending any patent
application to include claims reasonably requested by Licensee to protect the
Licensed Products contemplated to be sold under this Agreement.
15.3 Rutgers/UMDNJ shall cooperate with Licensee in applying for an
extension of the term of any patent included within Rutgers/UMDNJ Patent Rights
if appropriate under any applicable statute. Licensee shall prepare all such
documents, and Rutgers/UMDNJ agrees to execute such documents and to take such
additional action as Licensee may reasonably request in connection therewith.
15.4 All future costs of preparing, filing, prosecuting, defending and
maintaining all United States patent applications and/or patents, including
interferences and oppositions, and, subject to paragraphs 15.5 and 15.6, all
corresponding foreign patent applications and patents covered by Rutgers/UMDNJ
Patent Rights shall be paid by Licensee. In addition, upon presentation of
appropriate evidence of such expense, Licensee shall pay all past patent
prosecution costs for the Rutgers/UMDNJ Patent Rights incurred by Rutgers/UMDNJ
prior to the execution of this Agreement which Rutgers/UMDNJ estimates to be
approximately $23,561.52 based on information currently available to
Rutgers/UMDNJ, which amount shall be due within sixty (60) days of the execution
of this Agreement. Current and future costs shall be payable by Licensee within
sixty (60) days of the billing date. If bills in excess of $10,000 remain
outstanding for more than such 60-day period after notice to Licensee then
Rutgers/UMDNJ may send a notice of termination to Licensee referencing such
bills and enclosing copies of invoices against which the same are payable, and
unless Licensee pays such bills within ninety (90) days after the effective date
of giving the termination notice in accordance with Article 19 or is contesting
such bills in good faith, Rutgers/UMDNJ may terminate this Agreement at the end
of such 90-day period.
15.5 Rutgers/UMDNJ shall, at the request of Licensee, file, prosecute,
and maintain patent applications and patents covered by Rutgers/UMDNJ Patent
Rights in foreign countries if available. Licensee consents to the filing of all
PCT and foreign patent applications that have already been filed
19
as of the effective date of this Agreement. Licensee shall notify Rutgers/UMDNJ
within six (6) months of the filing of the corresponding United States
application (or, with respect to United States applications pending as of the
date of execution of this Agreement, within three (3) months of the execution of
this Agreement) of the foreign jurisdictions in which it wishes to seek
corresponding patent protection. This notice shall be in writing. The absence of
such a notice from Licensee shall be considered by Rutgers/UMDNJ to be an
election not to request foreign rights.
15.6 Licensee's obligation to underwrite and to pay patent prosecution
costs shall continue for so long as this Agreement remains in effect, provided,
however, that:
(a) Licensee shall have no such obligation with respect to patent
prosecutions in foreign jurisdictions other than those in process as of
the date of this Agreement or which are designated in a notice to
Rutgers/UMDNJ pursuant to paragraph 15.5; and
(b) Licensee may terminate its obligations with respect to any given
patent application or patent upon three (3) months' written notice to
Rutgers/UMDNJ. Rutgers/UMDNJ shall use reasonable efforts to curtail
patent costs when such a notice is received from Licensee. Licensee
shall promptly pay patent costs incurred prior to the expiration of
such three-month period which cannot be so curtailed. Commencing at the
expiration of such three-month period, Rutgers/UMDNJ may continue
prosecution and/or maintenance of such application(s) or patent(s) at
its sole discretion and expense, and Licensee shall have no further
right or licenses thereunder or related to Rutgers/UMDNJ Technology in
the relevant jurisdiction.
15.7 Rutgers/UMDNJ shall have the right to file patent applications at
its own expense in any country or countries in which Licensee has not elected to
secure patent rights or in which Licensee's patent rights hereunder have
terminated, and such applications and resultant patents shall not be subject to
this Agreement and may be freely licensed by Rutgers/UMDNJ to others together
with Rutgers/UMDNJ Technology in the relevant jurisdiction.
15.8 Rutgers/UMDNJ shall not abandon any patent applications or issued
patent comprising Rutgers/UMDNJ Patent Rights or otherwise fail to prosecute
diligently or maintain any Rutgers/UMDNJ Patent Rights except following at least
forty-five (45) days written notice to Licensee, following which Licensee shall
have the right, but not the obligation, to commence or continue such prosecution
and to maintain any such Rutgers/UMDNJ Patent Rights under its own control and
expense.
16. PATENT MARKING
16.1 Licensee shall xxxx all Licensed Products made, used, or sold
under the terms of this Agreement, or their containers, in accordance with the
applicable patent marking laws.
20
17. PATENT INFRINGEMENT
17.1 In the event that Licensee shall learn of the infringement of any
patent or right licensed under this Agreement, Licensee shall call
Rutgers/UMDNJ's attention thereto in writing. Both parties to this Agreement
agree that during the period and in a jurisdiction where Licensee has exclusive
rights under this Agreement, neither will notify a third party of the
infringement of any of Rutgers/UMDNJ Patent Rights or such other intellectual
property rights without first obtaining consent of the other party, which
consent shall not be unreasonably withheld. Both parties shall use their best
efforts in cooperation with each other to terminate such infringement without
litigation. Rutgers/UMDNJ shall have the first option to undertake the
enforcement of the Rutgers/UMDNJ Patent Rights, provided, however, that Licensee
may join with Rutgers/UMDNJ and its counsel in prosecuting such legal action,
provided, however, that if the use of counsel chosen by Rutgers/UMDNJ would
present such counsel with a conflict of interest then Licensee may obtain
counsel of its choice at its sole expense.
17.2 Licensee may request that Rutgers/UMDNJ take legal action against
the infringement of Rutgers/UMDNJ Patent Rights licensed under this Agreement.
Such request shall be made in writing and shall include reasonable evidence of
such infringement and damages to Licensee. If Rutgers/UMDNJ does not commence a
diligent legal challenge within sixty (60) business days after such request (or
immediately in the event Licensee requests that Rutgers/UMDNJ seek provisional
relief and reasonably demonstrates that such relief is required), and the
infringing activity has not been abated within such time, or if at any time
thereafter Rutgers/UMDNJ does not persist in such diligent legal challenge until
the infringement has been abated, Licensee may, if the infringement occurred in
a jurisdiction where Licensee had exclusive rights under this Agreement, have
control over the prosecution of legal actions relating thereto. However, in the
event Licensee elects to bring suit in accordance with this paragraph 17.2,
Rutgers/UMDNJ may thereafter join with Licensee and its counsel in prosecuting
such legal action, provided, however, that if the use of counsel chosen by
Rutgers/UMDNJ would present such counsel with a conflict of interest then
Rutgers/UMDNJ may obtain counsel of its choice at its sole expense.
17.3 Recoveries or reimbursements from any such litigation or
settlement within the scope of paragraph 17.2 in a jurisdiction in which
Licensee had exclusive rights under this Agreement at the time of the
infringement shall be first applied to reimburse Licensee and/or Rutgers/UMDNJ
for out-of-pocket litigation costs (with respect to Licensee, to the extent not
theretofore credited against royalties in accordance with paragraph 17.5) and
then to Rutgers/UMDNJ for any royalties past due or withheld pursuant to
paragraph 17.5. Any remaining recoveries or reimbursements shall be divided
between Licensee and Rutgers/UMDNJ at a rate of 15% to Rutgers/UMDNJ and 85% to
Licensee.
17.4 In the event that a claim or suit is asserted or brought against
Licensee alleging that the manufacture or sale of any Licensed Product by
Licensee or its sublicensees, or the use of such Licensed Product by any
customer of any of the foregoing, infringes proprietary rights of a third party,
Licensee shall give written notice thereof to Rutgers/UMDNJ. Licensee may, in
its sole
21
discretion, modify such Licensed Product to avoid such infringement and/or may
settle on terms that it deems advisable in its sole discretion, subject to
paragraph 17.6. Otherwise, Licensee shall have the right, but not the
obligation, to defend any such claim or suit. In the event Licensee elects not
to defend such suit, Rutgers/UMDNJ shall have the right, but not the obligation
to do so at its sole expense.
17.5 Licensee may credit up to [***] of any litigation costs incurred
by Licensee in any country pursuant to paragraphs 17.3 or 17.4 and up to [***]
of all amounts paid in judgement or settlement of litigation within the scope of
paragraph 17.4 against royalties thereafter payable to Rutgers/UMDNJ hereunder
for such country and apply the same toward one-half of its actual, reasonable
out-of-pocket litigation costs. If one half of such litigation costs in such
country exceed [***] payable to Rutgers/UMDNJ in any year in which
such costs are incurred than the amount of such costs, expenses and amounts paid
in judgement or settlement, in excess of such [***] payable shall
be carried over and credited against royalty payments in future years for such
country.
17.6 Licensee shall not settle or compromise any suit in a manner that
imposes any obligations or restrictions on Rutgers/UMDNJ or grants any rights to
the Rutgers/UMDNJ Patent Rights without Rutgers' written permission, which
permission shall not be unreasonably withheld. Rutgers/UMDNJ shall not settle or
compromise any such suit in a manner that imposes any obligations or
restrictions on Licensee without Licensee's written permission, which permission
shall not be unreasonably withheld.
17.7 In any action to enforce any of the Rutgers/UMDNJ Patent Rights,
either party, at the request and expense of the other party, shall cooperate to
the fullest extent reasonably possible. This provision shall not be construed to
require either party to undertake any activities, including legal discovery, at
the request of any third party except as may be required by lawful process of a
court of competent jurisdiction.
17.8 Notwithstanding the foregoing, with respect to any country in
which a third-party commences a legal action in any country in which Licensee
has exclusive rights under this Agreement alleging that the practice of
Rutgers/UMDNJ Patent Rights infringes the third-party's patent rights, Licensee
shall withhold, pending final resolution of the litigation, [***] payable
to Rutgers/UMDNJ from sales made in that country. In the event that Licensee
recovers damages from any such litigation, it shall pay to Rutgers/UMDNJ the
[***] pursuant to paragraph 21.1. The credit relating to paragraph 17.4 shall
only apply to the extent that litigation costs are incurred in defense or
settlement of a claim that the practice of the Rutgers/UMDNJ patent rights
involved in the manufacture, use or sale of Licensed Products infringes the
proprietary rights of a third party.
18. INDEMNIFICATION AND INSURANCE
18.1 Licensee shall indemnify, hold harmless and defend Rutgers/UMDNJ,
its governors, trustees, officers, employees, students, agents and the Inventors
against any and all claims, suits, losses, liabilities, damages, costs, fees and
expenses (including reasonable attorneys' fees) resulting from or arising out of
the exercise of this license or any sublicense. This indemnification shall
include, but is not limited to, any and all claims alleging products liability.
Notwithstanding the foregoing, Licensee shall not have responsibility to assume
the defense of any claim prosecuted against both Licensee and Rutgers/UMDNJ to
the extent there is an actual or potential conflict of interest requiring
separate representations (it being understood that Licensee shall nevertheless
remain responsible for indemnifying Rutgers/UMDNJ for defense costs to the
extent provided
22
herein). In the absence of such a conflict, any separate representation of
Rutgers/UMDNJ with respect to a claim asserted against both Licensee and
Rutgers/UMDNJ shall, if at Rutgers/UMDNJ's request, be at Rutgers/UMDNJ's
expense.
18.2 Licensee shall, from the commencement of Company sponsored human
clinical trials, at its sole cost and expense, insure its activities in
connection with this Agreement and will maintain and keep in force, with
insurers acceptable to Rutgers/UMDNJ, or an equivalent program of self insurance
acceptable to Rutgers/UMDNJ the following types of insurance:
(a) Comprehensive or Commercial General Liability which shall include,
products liability with minimum limits as follows:
(i) $2,000,000 combined single limit as respects liability arising
out of products. This coverage may be maintained on either an
occurrence or claims made form. If products coverage is on a
claims made form, Licensee must maintain such coverage for six
years after termination or expiration of this license.
(ii) $5,000,000 General Aggregate.
(b) It is expressly understood and agreed, however, that the insurance
coverage and limits stated in (a) above shall not in any way limit the
liability of Licensee and that the required insurance shall be primary
coverage. Any insurance Rutgers/UMDNJ may purchase will be excess and
noncontributory. Licensee's liability insurance will be endorsed to
specifically name Rutgers/UMDNJ as an additional insured and provide as
primary coverage.
(c) Licensee shall furnish Rutgers/UMDNJ with a Certificate of
Insurance evidencing the coverage and limits required pursuant to (a)
above. The Certificate of Insurance shall:
(i) Provide for thirty (30) day advance written notice to
Rutgers/UMDNJ of cancellation or alteration of policy limits;
(ii) Indicate that Rutgers/UMDNJ has been endorsed as an
additional insured under the coverages referred to above;
(iii) Include a provision that the insurance will be primary
and any valid and collectible insurance or program of
self-insurance carried or maintained by Rutgers/UMDNJ shall be
excess and noncontributory.
18.3 Rutgers/UMDNJ shall promptly notify Licensee in writing of any
claim or suit brought against Rutgers/UMDNJ in respect of which Rutgers/UMDNJ
intends to invoke the provisions of paragraph 18.1. Licensee shall keep
Rutgers/UMDNJ informed on a current basis of its defense of any claims pursuant
to paragraph 18.1. Rutgers/UMDNJ shall provide full cooperation to Licensee in
such defense and make available to Licensee all documentary and other evidence
in its possession with respect thereto. Licensee shall not settle any claim or
suit on terms that impose any obligations or restrictions on Rutgers/UMDNJ
without Rutgers/UMDNJ written permission, which permission shall not be
unreasonably withheld.
18.4 Notwithstanding the foregoing, if the requirements of this Article
18 are not consistent with general industry norms or good business practices at
the time, Rutgers/UMDNJ agrees to negotiate in good faith to modify this Article
18; provided, however, that if the Licensee
23
using good faith reasonable efforts can not obtain the insurance required by
this Article 18 at rates which are prudent given the Licensee's financial
position as determined by the Board of Directors of Licensee at the time such
insurance is required then Rutgers/UMDNJ may modify or waive the requirements of
this Article 18 until the earlier of:
(a) a determination by the Board of Directors of the Licensee that
Licensee's financial position permits it to obtain the insurance
required by this Article 18; and
(b) the First Commercial Sale of any of Licensed Product by Licensee or
its sublicensees.
19. NOTICES
19.1 Any notice or payment required to be given to either party shall
be deemed to have been properly given and to be effective on the date of
delivery if delivered in person, by facsimile where confirmed by the receiving
party or if mailed by registered or certified mail (return receipt requested) to
the respective addresses given below, or to such other address as it shall
designate by written notice given to the other party.
In the case of Rutgers/UMDNJ:
Rutgers, The State University of New Jersey
Office of Corporate Liaison and Technology Transfer
P. O. Box 1179
ASB Annex II, Xxxxxx Road, Xxxxx Campus
Piscataway, NJ 08855-1179
Attention: Director
Fax: (000) 000-0000
In the case of Licensee:
President and CEO
AVAX Technologies, Inc.
0000 Xxxxxx Xxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Dr. Xxxx Xxxxx
Fax: (000) 000-0000
24
With a copy to:
AVAX Technologies, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Secretary
Fax (000) 000-0000
20. ASSIGNABILITY
20.1 This Agreement is binding upon and shall inure to the benefit of
Rutgers/UMDNJ, its successors and assigns, but shall be personal to Licensee and
assignable by Licensee only with the written consent of Rutgers/UMDNJ, which
consent shall not be unreasonably withheld. Notwithstanding the foregoing,
Licensee may, without such consent, assign this Agreement in whole or in part
to:
(a) a purchaser, merging or consolidating corporation, or acquiror of
substantially all of Licensee's assets or business and/or pursuant to
any reorganization of Licensee qualifying under section 368 of the
Internal Revenue Code of 1986 as amended, as may be in effect at such
time; or
(b) any Affiliate of Licensee so long as Licensee remains responsible
as guarantor for the performance of this Agreement.
21. LATE PAYMENTS
21.1 In the event any amounts due Rutgers/UMDNJ hereunder, including
but not limited to royalty payments, fees and patent cost reimbursements, are
not received when due, Licensee shall pay to Rutgers/UMDNJ interest charges at a
rate of four percent (4%) over the prime lending rate most recently announced by
Citibank, N.A. Such interest shall be calculated from the date payment was due
until actually received by Rutgers/UMDNJ.
22. WAIVER
22.1 It is agreed that no waiver by either party hereto of any breach
or default of any of the covenants or agreements herein set forth shall be
deemed a waiver as to any subsequent and/or similar breach or default.
25
23. FAILURE TO PERFORM
23.1 In the event of a failure of performance due under the terms of
this Agreement and if it becomes necessary for either party to undertake legal
action against the other on account thereof, then the prevailing party shall be
entitled to reasonable attorney's fees in addition to costs and necessary
disbursements.
24. GOVERNING LAWS
24.1 THIS AGREEMENT SHALL BE INTERPRETED AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW JERSEY, but the scope and validity of any
patent or patent application shall be governed by the applicable laws of the
country of such patent or patent application.
25. FOREIGN GOVERNMENT APPROVAL
OR REGISTRATION
25.1 If this Agreement or any associated transaction is required by the
law of any nation to be either approved or registered with any governmental
agency, Licensee shall assume all legal obligations to do so and the costs in
connection therewith.
26. EXPORT CONTROL LAWS
26.1 Licensee shall observe all applicable United States and foreign
laws with respect to the transfer of Licensed Products and related technical
data to foreign countries, including, without limitation, the International
Traffic in Arms Regulations (ITAR) and the Export Administration Regulations.
27. CONFIDENTIALITY
27.1 Any proprietary or confidential information relating to the
Invention (including but not limited to Rutgers/UMDNJ Technology and patent
prosecution documents relating to Rutgers/UMDNJ Patent Rights) collectively
constitute "Rutgers/UMDNJ Confidential Information." Licensee agrees that it
will not use Rutgers/UMDNJ Confidential Information for any purpose unrelated to
this Agreement or the Research Agreement, and will hold it in confidence during
the term of this Agreement and for a period of five years after the termination
or expiration date of this Agreement. Licensee shall exercise with respect to
such Rutgers/UMDNJ Confidential Information the same degree of care as Licensee
exercises with respect to its own confidential or proprietary information of a
similar nature, and shall not disclose it or permit its disclosure to any third
party (except to those of its employees, consultants, or agents who are bound by
the same obligation of
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confidentiality as Licensee is bound by pursuant to this Agreement). However,
such undertaking of confidentiality by Licensee shall not apply to any
information or data which:
(a) Licensee receives at any time from a third party lawfully in
possession of same and having the right to disclose same;
(b) is, as of the date of this Agreement, in the public domain, or
subsequently enters the public domain through no fault of Licensee;
(c) is independently developed by Licensee as demonstrated by written
evidence without reference to information disclosed to Licensee by
Rutgers/UMDNJ;
(d) is disclosed pursuant to the prior written approval of
Rutgers/UMDNJ; or
(e) is required to be disclosed pursuant to law or legal process
(including, without limitation, to a governmental authority) provided,
in the case of disclosure pursuant to legal process, reasonable notice
of the impending disclosure is provided to Rutgers/UMDNJ and
Rutgers/UMDNJ has agreed to such disclosure in writing or has exhausted
its right to contest such disclosure.
27.2 Any proprietary or confidential information or data acquired (from
a source other than Rutgers/UMDNJ) or developed by Licensee and disclosed to
Rutgers/UMDNJ under this Agreement constitute collectively "Licensee's
Confidential Information". Rutgers/UMDNJ agrees that it will not use Licensee's
Confidential Information for any purpose unrelated to this Agreement or the
Research Agreement and that it will hold Licensee's Confidential Information in
confidence during the term of this Agreement and for a period of five years
after the termination or expiration date of this Agreement. Rutgers/UMDNJ shall
exercise with respect to such Licensee Confidential Information the same degree
of care as Rutgers/UMDNJ exercises with respect to its own confidential or
proprietary information of a similar nature, and shall not disclose it or permit
the disclosure of Licensee's Confidential Information to any third party (except
to those of its employees, consultants, or agents who are bound by the same
obligation of confidentiality as Rutgers/UMDNJ is bound by pursuant to this
Agreement). However, such undertaking of confidentiality shall not apply to any
information or data which:
(a) Rutgers/UMDNJ receives at any time from a third party lawfully in
possession of same and having the right disclose same;
(b) is, as of the date of this Agreement, in the public domain, or
subsequently enters the public domain through no fault of
Rutgers/UMDNJ;
(c) is independently developed by Rutgers/UMDNJ as demonstrated by
written evidence without reference to information disclosed to
Rutgers/UMDNJ by Licensee;
(d) is disclosed pursuant to the prior written approval of Licensee; or
27
(e) is required to be disclosed pursuant to law or legal process
(including, without limitation, to a governmental authority) provided,
in the case of disclosure pursuant to legal process, reasonable notice
of the impending disclosure is provided to Licensee and Licensee has
agreed to such disclosure in writing or has exhausted its right to
contest such disclosure.
28. INFRINGEMENT UNDER DRUG PRICE COMPETITION ACT
28.1 In the event either party receives notice pertaining to any patent
included within Rutgers/UMDNJ Patent Rights pursuant to the Drug Price
Competition and Patent Term Restoration Act of 1984 (Public Law 98-417,
hereinafter, "the Act"), including but not necessarily limited to notices
pursuant to Sections 101 and 103 of the Act from persons who have filed an
Abbreviated New Drug Application ("ANDA") or a "paper" New Drug Application
("paper NDA"), or in the case of an infringement of Rutgers/UMDNJ Patent Rights
as defined in Section 271(e) of Title 35 of the United States Code, such party
shall notify the other party promptly but in no event later than ten (10) days
after receipt of such notice.
28.2 If Licensee wishes action to be taken against such infringement,
as provided in the Act, Licensee shall request such action by written notice to
Rutgers/UMDNJ. Within [thirty (30)] days of receiving said request,
Rutgers/UMDNJ will give written notice to Licensee of its election to:
(a) commence suit on its own account; or
(b) refuse to participate in such suit.
If Rutgers/UMDNJ elects not to bring such suit and the infringement occurred
during a period that Licensee had exclusive rights under this license, then
Licensee may thereafter bring suit for patent infringement as provided by the
Act. However, in the event Licensee elects to bring suit in accordance with this
paragraph, Rutgers/UMDNJ may thereafter join such suit at its own expense.
28.3 The provisions of paragraphs 17.3 through 17.6 shall likewise
apply to any legal action brought under this Article 28.
28.4 Rutgers/UMDNJ hereby authorizes Licensee to include in any NDA for
a Licensed Product a list of patents included within Rutgers/UMDNJ Patent Rights
identifying Rutgers/UMDNJ as patent owner.
29. ARBITRATION
Except with respect to disputes relating to product liability and other
third party claims, any dispute arising from or relating to this Agreement shall
be determined before a tribunal of three arbitrators in New York, New York in
accordance with the rules of the American Arbitration
28
Association. One arbitrator shall be selected by Rutgers/UMDNJ, one arbitrator
shall be selected by Licensee and the third arbitrator shall be selected by
mutual agreement of the first two arbitrators. The costs of such arbitration
shall be borne by the nonprevailing party. Judgment on the arbitration award may
be entered by any court of competent jurisdiction.
30. MISCELLANEOUS
30.1 The headings of the several articles are inserted for convenience
of reference only and are not intended to be a part of or to affect the meaning
or interpretation of this Agreement.
30.2 This Agreement will not be binding upon the parties until it has
been signed below on behalf of each party, in which event, it shall be effective
as of the date recited on page one.
30.3 No amendment or modification hereof shall be valid or binding upon
the parties unless made in writing and signed on behalf of each party.
30.4 This Agreement embodies the entire understanding of the parties
and shall supersede all previous communications, representations or
understandings, either oral or written, between the parties relating to the
subject matter hereof..
30.5 In case any of the provisions contained in this Agreement shall be
held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions hereof, but
this Agreement shall be construed as if such invalid or illegal or unenforceable
provisions had never been contained herein.
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IN WITNESS WHEREOF, both Rutgers/UMDNJ and Licensee have executed this
Agreement, in duplicate originals, by their duly authorized representatives on
the day and year hereinafter written.
AVAX Technologies, Inc. Rutgers, The State
University of New Jersey
By:__________________________ By:___________________________
(Signature) (Signature)
Name: Xxxxxxx Xxxxx Name: Xxxxxxx X. Xxxxx
Title: President and CEO AVAX Title: Director, Office of Corporate Liaison and
Technologies, Inc. Technology Transfer
Date:________________________ Date:_________________________
University of Medicine and Dentistry of
New Jersey
By:___________________________
(Signature)
Name: Xx. Xxxxxxxxx Xxxxxxx
Title: Senior Vice President for
Administration and Finance
Date:_______________________
AGREED AND ACCEPTED AS TO
PARAGRAPHS 2.3, 13.3 AND 14.2
By:___________________________ By:___________________________
(Signature) (Signature)
Name: Xx. Xxxxxx XxXxxx Name: Xx. Xxxxx Xxx
Date:_______________________ Date:_________________________
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