Exhibit 10.16
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
LICENSE AGREEMENT
BETWEEN
THERAPX L.L.C. AND XX. XXXXXXX XXXXXXXX
AND
NOVIRIO PHARMACEUTICALS, LTD.
LICENSE AGREEMENT
THIS LICENSE AGREEMENT is made by and between Novirio Pharmaceuticals Ltd., a
corporation organized under the laws of Cayman Islands ("Novirio"), TherapX
Pharmaceuticals, L.L.C. a limited liability company organized in the State of
Alabama ("TherapX"), and Xx. Xxxxxxx Xxxxxxxx, an individual residing in the
State of Georgia, U.S.A. ("Xx. Xxxxxxxx").
W I T N E S S E T H:
WHEREAS, TherapX is the exclusive licensee from UAB Research Foundation pursuant
to an option agreement dated January 3, 1995, and exercised on March 26, 1998,
("collectively Primary License") of certain intellectual property rights,
including pending U.S. patent application serial no. 08/521,474, (Sommadossi and
Schinazi) entitled, "Method to Improve the Biological and Antiviral Activity of
Protease Inhibitors," and has the right to grant sublicenses to this
intellectual property.
WHEREAS, Xx. Xxxxxxxx is the co-inventor and owner of certain intellectual
property rights, including pending U.S. patent application serial no.
08/521,474, (Sommadossi and Schinazi) entitled "Method to Improve the Biological
and Antiviral Activity of Protease Inhibitors," and has the right to grant
licenses to this intellectual property.
WHEREAS, Novirio is a company dedicated to the development and production of
anti-viral compounds and desires to obtain a license to the patent application
referenced above, and all U.S. and corresponding foreign patents issuing
therefrom.
NOW, THEREFORE, in consideration of the mutual covenants and promises contained
in this Agreement and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Novirio, TherapX, and Xx. Xxxxxxxx
agree as follows:
ARTICLE 1. DEFINITIONS
The following terms, whether used in the singular or plural, shall have the
following meanings:
1.1 "Affiliate" shall mean any corporation, partnership, or other
business entity which is directly or indirectly controlled by Novirio or any
entity which directly or indirectly controls
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Novirio. "Controls" as used herein means owns directly or indirectly at least
thirty percent (30%) of the outstanding voting securities.
1.2 "Agreement" or "License Agreement" shall mean this Agreement,
including all Exhibits attached to this Agreement.
1.3. "Effective Date" means the later of (i) the date on which Novirio
executes this Agreement, (ii) the date on which TherapX executes this Agreement,
or (iii) the date on which Xx. Xxxxxxxx executes this Agreement.
1.4. "Field of Use" shall mean all human antiviral (including HIV)
applications and uses.
1.5. "First Commercial Sale" means, with respect to each Licensed
Product, the first commercial sale by Novirio, its Affiliates, sublicensees
and/or distributors of such Licensed Product, other than for clinical trial
purposes or compassionate use.
1.6. "IND" means an Investigational New Drug Application filed with the
United States Food and Drug Administration ("FDA") in respect of the Licensed
Technology.
1.7. "Indemnitees" shall mean TherapX and TherapX's officers, directors
and employees, and Xx. Xxxxxxxx, and their heirs, executors, administrators,
legal representatives.
1.8. "Licensed Patents" means all patents and patent applications
listed in attached Exhibit A (which shall be updated as additional patents or
patent applications are added to this Agreement by mutual agreement of the
Parties) throughout the world, including any substitutions, extensions,
reissues, reexaminations, renewals, divisions, continuations or
continuations-in-part, which TherapX and Xx. Xxxxxxxx own, or otherwise has the
right to grant licenses under.
1.9. "Licensed Product" means a product which, or the manufacture, use
or sale of which is covered by a Valid Claim of any of the TherapX and Xx.
Xxxxxxxx Patent Rights in the country where the product is manufactured, used or
sold.
1.10. "Licensed Technology" shall mean all designs, technical
information, know-how, knowledge, data, specifications, test results and other
information, whether or not patented,
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which is known to TherapX and Xx. Xxxxxxxx on the date of this Agreement and is
useful for the manufacture, use or sale of any Licensed Product.
1.11. "NDA" means a New Drug Application filed with the FDA relating to
the Licensed Technology.
1.12. "Net Selling Price" of Licensed Products shall mean the gross
invoiced price paid to Novirio, its Affiliates, or sublicensees by a purchaser
of a Licensed Product less the following discounts: (a) [**] actually allowed
and taken; (b) [**] Licensed Products; (c) [**] costs, if separately itemized on
the invoice paid by the customer; and (d) [**] included in the invoiced amount,
and (e) to the extent separately stated on purchase orders, invoices or other
documents of Sale, [**]. Where a Sale is deemed consummated by a gift, use, or
other disposition of Licensed Products for other than a selling price stated in
cash, the term "Net Selling Price" shall mean the average gross selling price
paid to Novirio [**] of the [**] of Licensed Products [**] such Sale, [**]
(other than as provided for in (a) - (d) above). If no Sales of Licensed
Products have occurred [**], then sales [**] shall be used in such
determination.
"Net Selling Price" with respect to any Combination Product (a
Licensed Product incorporating additional active ingredients) shall be
negotiated in good faith by the parties with the intention of agreeing upon a
fair and equitable formula; provided, however, that if the parties are unable to
agree upon such definition within a reasonable period of time, Net Selling Price
with respect to such Combination Product shall mean the gross sales of such
Product paid by independent customers, [**] referred to in the above definition
of Net Selling Price [**] of which shall be the [**] in the most [**] Licensed
Product having the [**] during the applicable royalty period in a country of the
Licensed Territory, when such comparable Licensed Product is Sold [**] as such
Combination Product and [**] of which shall [**] of the [**] as described
immediately above [**] contained in such Combination Product in such country
during the applicable royalty period [**] as such Combination Product. If there
is [**] in a given country for [**] a Combination Product, Net Selling Price
with respect to such Combination Product shall be deemed to be [**]Percent
([**]%) of the gross Sales of such Combination Product paid [**] referred to in
the above definition of Net Selling Price.
1.13. "Party" means Novirio or TherapX or Xx. Xxxxxxxx; "Parties" means
Novirio and TherapX and Xx. Xxxxxxxx.
1.14. "Phase II" means the first controlled FDA approved first
controlled clinical trials conducted with a limited number of human patients and
are designed to measure the
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effectiveness of a new pharmaceutical product, that is, the effective dose and
regiment for further study in larger clinical trials. Completion of Phase II
represents a milestone to then begin the Phase III clinical trials that are
pivotal to product approval.
1.15. "Sale or Sold" shall mean the sale, transfer, exchange, or other
disposition of Licensed Products whether by gift or otherwise, including but not
limited to the use of Licensed Products by any person authorized by Novirio
other than Novirio. Neither (a) the provision of Licensed Products, prior to the
approval of Licensed Products in a country and pursuant to a requirement issued
by the appropriate governmental agency in that country, for consumption by or
administration to persons for humanitarian purposes or compassionate use, (b)
the provision of Licensed Products for use in clinical trials, nor (c) the
provision of samples in reasonable quantities without charge for promotional
purposes shall be deemed a Sale for the purposes of this Agreement. Sales of
Licensed Products shall be deemed consummated upon the first to occur of: (a)
receipt of payment from the purchaser; (b) delivery of Licensed Products to the
purchaser or a common carrier; (c) release of Licensed Products from
consignment; (d) if deemed Sold by use, when first put to such use; or (e) if
otherwise transferred, exchanged, or disposed of whether by gift or otherwise
when such transfer, exchange, gift, or other disposition occurs.
1.16. "Sublicensee" means any third party other than an Affiliate
granted the right, subject to the terms and conditions of Article 2, to make,
use and sell a Licensed Product, but not including a third party that is not
granted the right to make such Product but merely purchases such Product in
finished form for resale.
1.17. "Sublicense Payments" means sublicense fees, milestone payments
and other cash consideration (excluding royalties) received by Novirio from a
Sublicensee, provided that in no event shall Sublicense Payments include any
funds provided by a Sublicensee to fund research, development, and clinical
trials, to reimburse Novirio for research, development, and clinical trial
expenses or to purchase equity securities of Novirio.
1.18. "Sublicense Royalties" means royalties on sales of Licensed
Product received by Novirio from a Sublicensee.
1.19. "Valid Claim" means a claim which (i) in the case of any
unexpired United States or foreign patent, shall not have been donated to the
public, disclaimed, nor held invalid or unenforceable against the other Party by
a court of competent jurisdiction in an unappealed or
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unappealable decision, or (ii) in the case of any United States or foreign
patent application, shall not have been cancelled, withdrawn, abandoned nor been
pending for more than five (5) years.
ARTICLE 2. GRANT OF LICENSE
2.1. License Grant from TherapX. TherapX hereby grants to Novirio, and
Novirio hereby accepts, an exclusive sublicense, including the right to grant
further sublicenses pursuant to Section 2.4, under the Licensed Patents in
Exhibit A to make, have made, use, import, offer for sale, and sell Licensed
Products covered by such Licensed Patents only and to practice Licensed
Technology with respect to such Licensed Patents only for the Field of Use
during the term of the Agreement.
2.2. License Grant from Xx. Xxxxxxxx. Xx. Xxxxxxxx hereby grants to
Novirio, and Novirio hereby accepts, an exclusive license, including the right
to grant sublicenses pursuant to Section 2.4, under the Licensed Patents in
Exhibit A to make, have made, use, import, offer for sale, and sell Licensed
Products covered by such Licensed Patents only and to practice Licensed
Technology with respect to such Licensed Patents only for the Field of Use
during the term of the Agreement.
2.3. Retained License. The parties hereto acknowledge that pursuant to
the Primary License UAB Research Foundation has retained on behalf of itself and
any research collaborators, a royalty-free right and license to make and use
Licensed Products and to practice Licensed Technology for research and
educational purposes only.
2.4. Sublicense Rights. Novirio shall have the right to grant
sublicenses under the sublicense granted pursuant to Section 2.1 above and under
the license granted pursuant to Section 2.2 above to parties with whom Novirio
has agreed to jointly develop and/or commercialize Licensed Products; provided
that any sublicense granted by Novirio under this Agreement shall be subject and
subordinate to, and consistent with, the terms and conditions of this Agreement,
and shall provide that any such sublicensee shall not further sublicense except
on terms consistent with this Section 2.4. Novirio shall provide TherapX and Xx.
Xxxxxxxx with a copy of any sublicense granted pursuant to this Section 2.4
within one (1) month after the execution thereof. Such copy may be redacted to
exclude confidential scientific information and other information required by a
sublicensee to be kept confidential, provided that all relevant financial terms
and information shall be retained therein. In the event of a material default by
any sublicensee under a sublicense agreement, Novirio will inform TherapX and
Xx. Xxxxxxxx
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and take such action, after consultation with TherapX and Xx. Xxxxxxxx, which in
Novirio's reasonable business judgment will address such default.
2.5. Diligence and Commercialization. Novirio shall use its reasonable
best efforts, either directly or through Affiliates or sublicensees, throughout
the term of this Agreement to bring Licensed Products to market through a
thorough, vigorous, and diligent program for exploitation of the right and
license granted in this Agreement to Novirio and to create, supply, and service
as extensive a market as possible. In no instance shall Novirio's reasonable
best efforts be less than efforts customary in Novirio's industry.
2.6. Lack of Diligence. If TherapX and Xx. Xxxxxxxx conclude that
Novirio is not diligent in development or Sales of Licensed Products pursuant to
Article 2.5 for any reason other than (a) the withholding by a regulatory agency
or marketing approval despite Novirio's diligent effort to obtain such approval;
(b) unanticipated technical or scientific problems which have been promptly
reported to TherapX and Xx. Xxxxxxxx in writing; or (c) other causes beyond the
reasonable control of Novirio which have been promptly reported to TherapX and
Xx. Xxxxxxxx in writing; then TherapX and Xx. Xxxxxxxx may give notice to
Novirio stating the basis for its conclusion and, upon the request of TherapX
and Xx. Xxxxxxxx, Novirio shall show cause why the license granted hereunder
should not be terminated. If within ninety (90) days after Novirio's receipt of
said notice, the parties have not resolved the matter through good faith
negotiations in a mutually acceptable manner, the parties shall submit the
dispute to arbitration under the provisions of Article 13 of this Agreement.
ARTICLE 3. PAYMENT OBLIGATIONS
3.1. License Fee. In consideration of the rights granted to Novirio
under this Agreement, Novirio shall pay to TherapX and Xx. Xxxxxxxx the
following non-refundable, non-creditable license fee on the Effective Date:
(a) To TherapX: $50,000.00, and,
(b) To Xx. Xxxxxxxx: $50,000.00
3.2. Reimbursement of Patent Expenses. Within [**] days after the end
of each calendar quarter, TherapX shall provide Novirio with an invoiced
accounting of all patent related expenses incurred by TherapX, as described in
Section 4.1, below, during such calendar quarter.
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Novirio shall reimburse TherapX for all such invoiced patent related expenses
[**] after receipt of such accounting.
3.3. Milestone Payments. Within [**] days after the occurrence of the
milestones specified below, Novirio shall make the following non-refundable,
non-creditable payments to TherapX and Xx. Xxxxxxxx:
To TherapX: Milestone Payment
[**]
$[**]
[**] $[**]
To Xx. Xxxxxxxx: Milestone Payment
[**] $[**]
[**] $[**]
The milestone payments in this Section 3.3 shall be payable only once, for each
significant disease indication for which the milestones are applicable.
3.4. Royalties.
(a) Novirio shall pay to TherapX and Xx. Xxxxxxxx, according
to the payment schedule described in subsection (b), during the applicable term
described in subsection (c), earned royalties at the rate of (i) [**] percent
([**] %) of Net Sales of a Licensed Product covered by a Valid Claim in the
country of sale included in the Licensed Patents and (ii) [**] percent ([**] %)
of Net Sales of a Licensed Product not covered by such a Valid Claim in the
country of sale, provided that in no event shall more than one royalty be due
TherapX and Xx. Xxxxxxxx for the sale of any Licensed Product.
(b) The earned royalties described in subsection (a) above shall be
paid to TherapX and Xx. Xxxxxxxx according to the following schedule:
(i) To TherapX: [**] percent ([**]%) of the earned royalties, and,
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(ii) To Xx. Xxxxxxxx: [**] percent ([**]%) of the earned royalties.
(b) Novirio shall be obligated to pay royalties at the rate set forth
in subsection (a) (i), on a country by country basis, so long as there continues
to be a Valid Claim included in the Licensed Patents that cover the applicable
Licensed Product in such country. Novirio shall be obligated to pay royalties at
the rate set forth in subsection (a) (ii), on a country by country basis, on Net
Sales of a Licensed Product not covered by a Valid Claim (including a Licensed
Product which previously was covered by a Valid Claim) until the tenth
anniversary of the First Commercial Sale of such Licensed Product in such
country.
(c) Novirio shall pay to TherapX and Xx. Xxxxxxxx [**] percent ([**]%)
of Sublicense Payments.
(d) Novirio shall pay to TherapX and Xx. Xxxxxxxx [**] percent ([**]%)
of Sublicense Royalties.
(e) Notwithstanding the foregoing, Novirio may deduct from royalties
otherwise owed under subsections (a) and (d) [**] percent ([**]%) of any
royalties or other payments required to be paid for licenses under intellectual
property rights of third parties.
ARTICLE 4. REPORTS AND PAYMENTS
4.1. Payments. Unless otherwise specified, all payments required under
this Agreement shall be payable within [**] days of the due date for each
payment. All payments due under this Agreement shall be made either by wire
transfer or immediately available funds or in person or via the mail or private
courier to the following address:
TherapX
X.X. Xxx 000000
Xxxxxxxxxx, XX 00000
Xx. Xxxxxxx Xxxxxxxx
0000 Xxxxxxx Xxxx Xxxxx
Xxxxxxx, XX 00000
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4.2. Progress Reports. Novirio will provide TherapX and Xx. Xxxxxxxx
with semi-annual progress reports detailing the activities of Novirio relevant
to Novirio's Development Plan.
4.3. Royalty Reports. Once royalties are due, within [**] days of
September 30, December 31, March 31 and June 30 of each year and of the year
following the termination or expiration of this Agreement, Novirio shall render
a written report setting forth for the preceding calendar quarter, the following
as may be applicable:
(a) all Sales (including Net Selling Price of each
product sold) of Licensed Products by Novirio, its
sublicensees, and its Affiliates on a
country-by-country basis throughout the Licensed
Territory;
(b) the amount of royalty payable hereunder;
(c) any other information reasonably necessary to show
the basis on which such royalty has been computed;
(d) any payments due TherapX and Xx. Xxxxxxxx pursuant to
Section 3.4(c) and 3.4(d);
(e) other income received by Novirio from sublicensees
and the amount thereof due to TherapX and Xx.
Xxxxxxxx accompanied by an explanation of the basis
of said income and the amount of such income due
TherapX and Xx. Xxxxxxxx; and
(f) in case no payment is due, Novirio shall so report.
Each royalty report shall be accompanied by the payment of all royalties due for
the quarter calendar year in question.
4.4. Currency Conversion. If any Licensed Products are Sold for monies
other than United States dollars, the Net Selling Price of such Licensed
Products shall first be determined in the foreign currency of the country in
which such Licensed Products are Sold and then converted to United States
dollars at the spot rate published by The Wall Street Journal (U.S. edition) for
conversion of that foreign currency into United States dollars on the last day
of the quarter for which such payment is due.
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4.5. Interest. Payments required under this Agreement shall, if
overdue, bear interest until payment at a per annum rate three percent (3%)
above the prime rate in effect as published in The Wall Street Journal on the
due date. The payment of such interest shall not foreclose TherapX or Xx.
Xxxxxxxx from exercising any other rights they may have because any payment is
late.
ARTICLE 5. RECORDS
5.1. Records of Sales. During the term of this Agreement and for a
period of three (3) years thereafter, Novirio shall keep at its principal place
of business true and accurate records of all Sales in accordance with generally
accepted accounting principles in the respective country where such Sales occur
and in such form and manner so that all royalties owed to TherapX and Xx.
Xxxxxxxx may be readily and accurately determined. Novirio shall furnish TherapX
and Xx. Xxxxxxxx copies of such records upon TherapX and Xx. Xxxxxxxx'x request,
which shall not be made more often than once per License Agreement Year.
5.2. Audit of Records. TherapX and Xx. Xxxxxxxx shall have the right,
from time to time at reasonable times during normal business hours through an
independent certified public accountant, to examine the records of Novirio in
order to verify the calculation of any royalties payable under this Agreement.
Such examination and verification shall not occur more than once each License
Agreement Year and the calendar year immediately following termination of this
Agreement. Unless otherwise agreed in writing by Novirio, the fees and expenses
of performing such examination and verification shall be borne by TherapX and
Xx. Xxxxxxxx. If such examination reveals an underpayment by Novirio of more
than five percent (5%) for any quarter examined, Novirio shall pay TherapX and
Xx. Xxxxxxxx the amount of such underpayment plus interest and shall reimburse
TherapX and Xx. Xxxxxxxx for all expenses of the accountant reasonably incurred
in performing the examination.
ARTICLE 6. PATENT PROSECUTION
6.1. Prosecution and Maintenance of Licensed Patents. The prosecution
and maintenance of the Licensed Patents shall be the primary responsibility of
UAB, as provided in the Primary License. TherapX shall keep Novirio informed as
to all developments with respect to Licensed Patents to the extent that TherapX
is so informed by the Primary Licensors. Novirio shall be afforded reasonable
opportunities to advise TherapX and cooperate with TherapX and Xx. Xxxxxxxx in
such prosecution and maintenance.
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Novirio, upon [**] days advance written notice to TherapX and Xx. Xxxxxxxx and
the Primary Licensors, may advise TherapX and Xx. Xxxxxxxx that it no longer
wishes to pay expenses for filing, prosecuting or maintaining one or more
Licensed Patents. TherapX and Xx. Xxxxxxxx may, at its option, elect to pay such
expenses or permit such Licensed Patents to become abandoned or lapsed in the
event that the Primary Licensors elect not to pay such expenses. If TherapX and
Xx. Xxxxxxxx elects to pay such expenses, such patents shall not be subject to
any license granted to Novirio hereunder.
6.2. Extension of Licensed Patents. Novirio may request that TherapX
and Xx. Xxxxxxxx make a request, in accordance with the Primary License, of
Primary Licensors that the Primary Licensors have the normal term of any
Licensed Patent extended or restored under a country's procedure of extending
life for time lost in governmental regulatory approval processes, and the
expense of same shall be borne in accordance with the terms of Section 3.2.
Novirio shall assist the Primary Licensors and TherapX and Xx. Xxxxxxxx to take
whatever action is necessary to obtain such extension. In the case of such
extension, royalties pursuant to Article 3 hereof shall be payable until the end
of the extended life of the patent. In the event that Novirio does not elect to
extend Licensed Patent(s), TherapX and Xx. Xxxxxxxx may, at its own expense,
effect the extension of such Licensed Patent(s) as provided in the Primary
License. If TherapX and Xx. Xxxxxxxx or the Primary Licensors elect to pay such
expenses, such extended Licensed Patents shall not be subject to any license
granted to Novirio hereunder.
6.3. Further Obligations.
(a) Except as otherwise provided in Article 7, each party's
responsibilities for patent prosecution activities pursuant to this Article 6
shall also include ex parte and inter partes activities relating to the relevant
patent applications and patents, including all interference, opposition and
observation proceedings before any patent offices and litigation to determine
the validity, enforceability, allowability or subsistence of such patent
applications and patents. Each party agrees to give due consideration to the
other party's or its sublicensee's position with respect to any such patent
prosecution activities, (which term as used herein, shall include without
limitation, any inter partes activities of the type described in the first
sentence of this subparagraph (a)). In the event a party fails to initiate or
pursue any patent prosecution activities for which it is responsible, or having
commenced such patent prosecution activities, declines to pursue such patent
prosecution activities, it shall give notice to the other party pursuant to the
applicable provisions of subparagraph (b) below and the other party or its
sublicensees, as applicable, may initiate, pursue or assume such patent
prosecution activities, at its sole expense.
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(b) In conducting its patent prosecution activities under this
License Agreement in compliance with the provisions of the Primary License, each
party hereto shall use the patent attorneys selected by UAB. In addition to the
other obligations set forth in this Article 6, each party undertakes to keep the
other party and, if applicable such other party's sublicensee throughout the
term of this License Agreement regularly informed of the status and progress of
the patent prosecution activities it undertakes under this, License Agreement
including, but not limited to, supplying the other party or its sublicensee, as
applicable, upon reasonable request and at reasonable intervals, with the
correspondents with the United States, Japan and European patent office
counterparts with respect to the United States, Japan and European patents and
patent applications. To the extent that a party has not previously done so, or
promptly upon request by the other party or its sublicensee, in order to assist
such other party or its sublicensees in connection with any of its activities or
the exercise of any of its rights pursuant to Article 6, such party shall
provide the other party or its sublicensee with such additional relevant
documentation which such other party or its sublicensee may reasonably request
relating to such patent applications and patents in the Licensed Patents,
including but not limited to, copies thereof and access to laboratory notebooks,
other supporting data and relevant employees. If a party decides to abandon or
allow to lapse any patent application or patent or not to initiate or any other
patent prosecution activity for which it has patent prosecution responsibility
pursuant to this Article 6, it shall give the other party or its sublicense
notice thereof in a sufficiently timely manner so as to enable such other party
or its sublicensee to determine whether to assume patent prosecution activity in
connection therewith. Each party shall use its best efforts to give such notice
at least [**] days before any abandonment, lapse or any other relevant deadline.
(c) Novirio and TherapX and Xx. Xxxxxxxx agree that, during
the term of any sublicensee agreement, the rights of Novirio under this Article
6 shall be exercised, if at all, by its sublicense with respect to all patent
prosecution activities in any portion of the Licensed Territory in which a
sublicense agreement is then in effect. With respect to such patent prosecution
activities, TherapX and Xx. Xxxxxxxx shall communicate with such sublicensee
directly.
ARTICLE 7. ABATEMENT OF INFRINGEMENT
7.1. Infringement. Novirio shall promptly inform TherapX and Xx.
Xxxxxxxx and TherapX and Xx. Xxxxxxxx will promptly notify Novirio of any
suspected infringement of any Licensed Patents. During the term of this
Agreement, TherapX and Xx. Xxxxxxxx and Novirio
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shall have the right to institute an action for infringement of the Licensed
Patents against such third party in accordance with the following:
(a) If UAB, TherapX and Xx. Xxxxxxxx and Novirio, agree to
institute suit jointly, the suit shall be brought in all their names and the
out-of-pocket costs thereof shall be borne equally. Any recovery or settlement
received by TherapX and Xx. Xxxxxxxx and/or Novirio for punitive or exemplary
damages shall be shared equally, and any other recovery or settlement received,
including compensatory damages or damages based on a loss of revenues, shall be
paid to Novirio, and Novirio shall pay to TherapX and Xx. Xxxxxxxx an amount
representing the royalty which would have been paid by Novirio on such amount in
accordance with the provisions of Article 3 had such amount been accrued by
Novirio as Sales. The parties shall agree upon the manner in which they shall
exercise control over such action and may, if they so desire, also be
represented by separate counsel of their own such action and may, if they so
desire, also be represented by separate counsel of their own selection. The fees
of which counsel shall be paid by the respective parties so represented;
(b) In the absence of agreement to institute a suit jointly,
UAB may, as provided in the Primary License, institute suit, and, at its option,
name TherapX and Xx. Xxxxxxxx as plaintiffs. UAB shall bear the entire cost of
such litigation and shall be entitled to retain the entire amount of any
recovery or settlement; and
(c) In the absence of agreement to institute a suit jointly
and if UAB notify TherapX and Xx. Xxxxxxxx that it has decided not to join in or
institute a suit, as provided in (a) or (b) above, TherapX and Xx. Xxxxxxxx may
institute suit and, at its option, name the Primary Licensor and/or Novirio as
plaintiff. TherapX and Xx. Xxxxxxxx shall bear the entire cost of such
litigation, including defending any counterclaims brought against UAB or Novirio
and paying any judgments rendered against UAB or Novirio, and TherapX and Xx.
Xxxxxxxx shall be entitled to retain the entire amount of any recovery or
settlement.
(d) In the absence of agreement to institute suit jointly and
if UAB and TherapX and Xx. Xxxxxxxx have decided not to join in or institute a
suit, as provided in (a) - (c) above, Novirio may institute suit and at its
option name UAB and/or TherapX and Xx. Xxxxxxxx as plaintiffs. Novirio shall
bear the enter cost of such litigation, including defending any considerations
brought against UAB or TherapX and Xx. Xxxxxxxx and paying any judgments
rendered against UAB or TherapX and Xx. Xxxxxxxx, and Novirio shall be entitled
to retain the entire amount of any recovery or settlement.
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7.2. Abandonment of Infringement. Should either TherapX and Xx.
Xxxxxxxx or Novirio commence a suit under the provisions of this Article and
thereafter elect to abandon such suit, the abandoning party shall give timely
notice to the other parties who may, if so desired, continue prosecution of such
suit, provided that the sharing of expenses and any recovery in such suit shall
be as agreed upon between TherapX and Xx. Xxxxxxxx and Novirio.
ARTICLE 8. CONFIDENTIALITY
8.1. Confidential Information. Novirio shall not, without the express
written consent of TherapX and Xx. Xxxxxxxx, for any reason or at any time for a
period of five (5) years from the Effective Date of this Agreement, disclose to
third parties any information disclosed in the Licensed Patents or Licensed
Technology or any other information pertaining to the Licensed Patents and
Licensed Technology disclosed to Novirio by TherapX and Xx. Xxxxxxxx, (such
information shall be collectively referred to as "Proprietary Information").
This obligation of nondisclosure shall not extend to information:
(a) which Novirio can demonstrate through documentation
to have been within Novirio's legitimate possession prior to the time of
disclosure of such information to Novirio by TherapX and Xx. Xxxxxxxx;
(b) which was in the public domain prior to disclosure by
TherapX and Xx. Xxxxxxxx, as evidenced by documents published prior to such
disclosure;
(c) which, after disclosure by TherapX and Xx. Xxxxxxxx,
comes into the public domain through no fault of Novirio;
(d) which is disclosed to Novirio by a third party having
legitimate possession of the information and the unrestricted right to make such
disclosure.
(e) which is disclosed in the issued Licensed Patents.
8.2. Disclosure of Confidential Information. Notwithstanding the
provisions of Section 8.1 above, and to the extent necessary:
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(a) a party may disclose and use the other party's
information for purposes of securing the registration of, and of governmental
approval to market, pursuant to this Agreement, any Licensed Products;
(b) a party may disclose and use the other party's
information where the disclosure and use of such will be necessary to the
procurement of patent protection, pursuant to this Agreement, for a Licensed
Product;
(c) a party may disclose and use the other party's information
to the extent that it is necessary to aid in the development and
commercialization, pursuant to this Agreement, of any Licensed Product provided
that any such disclosure of the disclosing party's information shall be in
confidence and subject to provisions the same, or substantially the same, as
those in Section 8.1 hereof.
8.3. Prior Agreements. The provisions of this Agreement supersede and
shall be substituted for any terms of any prior confidentiality agreement
between Novirio and TherapX and Xx. Xxxxxxxx which are not consistent with this
Agreement.
ARTICLE 9. LIMITED WARRANTY, MERCHANTABILITY AND
EXCLUSION OF WARRANTIES
9.1. Limited Warranty. TherapX and Xx. Xxxxxxxx represent and warrant
that they have the right and authority to enter into this Agreement and that
neither the execution of this Agreement nor the performance of its obligations
hereunder will constitute a breach of the terms and provisions of any other
agreement to which TherapX and Xx. Xxxxxxxx are parties. TherapX and Xx.
Xxxxxxxx do not warrant the validity of the Licensed Patents licensed hereunder
and make no representation whatsoever with regard to the scope of the Licensed
Patents or that such Licensed Patents may be exploited by Novirio or its
Affiliates without infringing other patents.
Novirio possesses the necessary expertise and skill in the technical areas in
which the Licensed Products and Licensed Technology are involved to make, and
has made, its own evaluation of the capabilities, safety, utility, and
commercial application of the Licensed Patents and Licensed Technology.
ACCORDINGLY, THERAPX AND XX. XXXXXXXX MAKES NO REPRESENTATION OR WARRANTY OF ANY
KIND WITH RESPECT TO THE LICENSED PATENTS OR LICENSED TECHNOLOGY AND EXPRESSLY
DISCLAIMS ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
AND ANY OTHER IMPLIED WARRANTIES WITH RESPECT TO THE
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CAPABILITIES, SAFETY, UTILITY, OR COMMERCIAL APPLICATION OF LICENSED PATENTS OR
LICENSED TECHNOLOGY.
ARTICLE 10. DAMAGES, INDEMNIFICATION, AND INSURANCE
10.1. No Liability. TherapX and Xx. Xxxxxxxx shall not be liable to
Novirio and Novirio's customers, sublicensees or Affiliates for special,
incidental, indirect, or consequential damages resulting from defects in the
design, testing, labeling, manufacture, or other application of Licensed
Products manufactured, tested, designed, sublicensed, or Sold pursuant to this
Agreement.
10.2. Indemnification. Novirio shall defend, indemnify, and hold
harmless the Indemnitees from and against any and all claims, demands, loss,
liability, expense, or damage (including investigative costs, court costs and
attorneys' fees) Indemnitees may suffer, pay, or incur as a result of claims,
demands or actions against any of the Indemnitees arising or alleged to arise by
reason of or in connection with any and all personal injury and property damage
caused or contributed to in whole or in part by Novirio's manufacture, testing,
design, use, sale, or labeling of any Licensed Products, or the practice of any
Licensed Patents. Novirio's obligations under this Article shall survive the
expiration or termination of this Agreement for any reason.
10.3. No Patent Infringement Suit. To the extent that the rights have
not already been licensed exclusively to another party, TherapX and Xx. Xxxxxxxx
agree not to xxx Novirio or its Affiliates or sublicensees for patent
infringement for practicing a claim of a patent assigned or licensed to TherapX
and Xx. Xxxxxxxx if practicing said claim is required to make, have made, use,
import, offer for Sale, Sell or have Sold Licensed Products.
10.4. Insurance. Without limiting Novirio's indemnity obligations under
the preceding paragraph, Novirio, its Affiliates, and sublicensees shall
maintain throughout the term of this Agreement and for ten (10) years thereafter
a liability insurance policy which:
(a) insures Indemnitees for all claims, damages, and actions
mentioned in Article 11.1 of this Agreement;
(b) includes a contractual endorsement providing coverage for all
liability which may be incurred by Indemnitees in connection with this
Agreement;
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(c) requires the insurance carrier to provide TherapX and Xx.
Xxxxxxxx with no less than thirty (30) days written notice of any change in the
terms or coverage of the policy or its cancellation; and
(d) provides Indemnitees product liability coverage in an amount
no less than One Million Dollars ($1,000,000) per occurrence for bodily injury
and One Million Dollars ($1,000,000) per occurrence for property damage, subject
to a reasonable aggregate amount.
10.5. Notice of Claims. Novirio shall promptly notify TherapX and Xx.
Xxxxxxxx of all claims involving the Indemnitees and will advise TherapX and Xx.
Xxxxxxxx of the policy amounts that might be needed to defend and pay any such
claims.
ARTICLE 11. TERM AND TERMINATION
11.1. Term. Unless sooner terminated as otherwise provided in this
Agreement, the term of this Agreement shall commence on the date hereof and
shall continue until the date of expiration of the last to expire of the
Licensed Patents, including any renewals or extensions thereof.
11.2. Termination by TherapX and Xx. Xxxxxxxx. TherapX and Xx. Xxxxxxxx
shall have the right to terminate this Agreement upon the occurrence of any one
or more of the following events:
(a) failure of Novirio to make any payment required pursuant to
this Agreement when due; or
(b) failure of Novirio to render reports to TherapX and Xx.
Xxxxxxxx as required by this Agreement; or
(c) the insolvency of Novirio; or
(d) the institution of any proceeding by Novirio under any
bankruptcy, insolvency, or moratorium law; or
(e) any assignment by Novirio of substantially all of its assets
for the benefit of creditors; or
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(f) placement of Novirio's assets in the hands of a trustee or
receiver unless the receivership or trust is dissolved within thirty (30) days
thereafter; or
(g) the breach of any other material term of this Agreement.
11.3. Notice of Bankruptcy. Each party hereto shall inform the other
party hereto of its intention to file a voluntary petition in bankruptcy or its
learning of another's intention to file an involuntary petition in bankruptcy in
respect of such party to be receive at least thirty (30) days prior to filing
(or learning of) such a petition or intention. A party's filing without
conforming to this requirement shall be deemed a material, pre-petition
incurable breach.
11.4. Exercise. TherapX and Xx. Xxxxxxxx may exercise its right of
termination by giving Novirio, its trustees or receivers or assigns, sixty (60)
days prior written notice of TherapX and Xx. Xxxxxxxx'x election to terminate.
Upon the expiration of such period this Agreement shall automatically terminate
unless the Novirio has cured the breach. Such notice and termination shall not
prejudice TherapX and Xx. Xxxxxxxx'x right to receive royalties or other sums
due hereunder and shall not prejudice any cause of action or claim of TherapX
and Xx. Xxxxxxxx'x accrued or to accrue on account of any breach or default by
Novirio.
11.5 Failure to Enforce. The failure of TherapX and Xx. Xxxxxxxx at any
time, or for any period of time, to enforce any of the provisions of this
Agreement shall not be construed as a waiver of such provisions or as a waiver
of the right of TherapX and Xx. Xxxxxxxx thereafter to enforce each and every
such provision.
11.6 Termination by Novirio. Novirio may terminate this Agreement at
its sole discretion upon four (4) months' written notice to TherapX and Xx.
Xxxxxxxx. In the event of such termination, Novirio agrees, upon the request of
TherapX and Xx. Xxxxxxxx, to provide TherapX and Xx. Xxxxxxxx with all existing
data in Novirio's possession or control in support of registration of Licensed
Products for the Field of Use with the relevant federal agencies. TherapX and
Xx. Xxxxxxxx shall have the unrestricted right to provide such data to third
parties.
11.7 Effect. In the event this Agreement is terminated for any reason
whatsoever, Novirio shall return, or at TherapX and Xx. Xxxxxxxx'x direction
destroy, all plans, drawings, papers, notes, writings and other documents, and
models pertaining to the Licensed Patents or Technology, retaining only one copy
in its corporate counsel's office for the sole purpose of compliance with
surviving terms of this Agreement or defense against any legal actions related
to this Agreement, shall refrain from using or publishing any portion of the
Licensed Technology
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as provided in Article 8 of this Agreement and shall sell to TherapX and Xx.
Xxxxxxxx at cost all organisms and other biological and chemical materials. Upon
termination of this Agreement, Novirio shall cease manufacturing, processing,
producing, using, or Selling Licensed Products; provided, however, that Novirio
may continue to Sell in the ordinary course of business for a period of [**]
months reasonable quantities of Licensed Products which are fully manufactured
and in Novirio's normal inventory at the date of termination if (a) all monetary
obligations of Novirio to TherapX and Xx. Xxxxxxxx have been satisfied and (b)
royalties on such sales are paid to TherapX and Xx. Xxxxxxxx in the amounts and
in the manner provided in this Agreement. However, nothing herein shall be
construed to release either party of any obligation which matured prior to the
effective date of such termination.
11.8 Survival. The provisions of Articles 8, 9, and 10 of this
Agreement shall remain in full force and effect notwithstanding the termination
of this Agreement.
ARTICLE 12. ASSIGNMENT
Novirio may not assign this Agreement or any of the rights or obligations
hereunder without the prior written consent of TherapX and Xx. Xxxxxxxx, except
to an Affiliate of Novirio or to any other party who acquires all or
substantially all of the business of Novirio, or all of the business relating to
the Licensed Product by merger, sale of assets or otherwise, so long as such
Affiliate or other party agrees in writing to be bound by the terms of this
Agreement.
ARTICLE 13. ARBITRATION
Any dispute related to this Agreement shall be settled by arbitration.
Arbitration shall be conducted under the Commercial Arbitration Rules of the
American Arbitration Association by three arbitrators, one to be appointed by
TherapX and Xx. Xxxxxxxx, one to be appointed by Novirio, and one to be
appointed by the two arbitrators appointed by TherapX and Xx. Xxxxxxxx and
Novirio. Arbitration shall take place in Boston, Massachusetts, and the decision
of the arbitrators shall be enforceable, but not appealable, in any court of
competent jurisdiction. The fees and expenses incurred in connection with such
arbitration shall be borne by the party initiating the arbitration proceeding
(or equally by both parties if both parties jointly initiate such proceeding)
subject to reimbursement by the party which does not prevail in such proceeding
promptly upon the termination thereof in the event that the party initiating
such proceeding is the prevailing party.
ARTICLE 14. MISCELLANEOUS
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14.1 Export Controls. Novirio acknowledges that TherapX and Xx.
Xxxxxxxx is subject to United States laws and regulations controlling the export
of technical data, computer software, laboratory prototypes, and other
commodities and that TherapX and Xx. Xxxxxxxx'x obligations under this Agreement
are contingent upon compliance with applicable United States export laws and
regulations. The transfer of technical data and commodities may require a
license from the cognizant agency of the United States government or written
assurances by Novirio that Novirio shall not export data or commodities to
certain foreign countries without the prior approval of certain United States
agencies. TherapX and Xx. Xxxxxxxx neither represents that an export license
shall not be required nor that, if required, such export license shall issue.
14.2 Legal Compliance. Novirio shall comply with all laws and
regulations relating to its manufacture, processing, producing, use, Selling, or
distributing of Licensed Products. Novirio shall not take any action which would
cause TherapX and Xx. Xxxxxxxx or Novirio to violate any laws and regulations.
14.3 Independent Contractor. Novirio's relationship to TherapX and Xx.
Xxxxxxxx shall be that of a licensee only. Novirio shall not be the agent of
TherapX and Xx. Xxxxxxxx and shall have no authority to act for or on behalf of
TherapX and Xx. Xxxxxxxx in any matter. Persons retained by Novirio as employees
or agents shall not by reason thereof be deemed to be employees or agents of
TherapX and Xx. Xxxxxxxx.
14.4 Patent Marking. Novirio shall xxxx Licensed Products Sold in the
United States with United States patent numbers. Licensed Products manufactured
or sold in other countries shall be marked in compliance with the intellectual
property laws in force in such foreign countries.
14.5 Use of Names. Novirio shall obtain the prior written approval of
TherapX and Xx. Xxxxxxxx prior to making use of its name for any commercial
purpose, except as required by sublicensees and by law. As an exception to the
foregoing, both Novirio and TherapX and Xx. Xxxxxxxx shall have the right to
publicize the existence of this Agreement; however, neither Novirio nor TherapX
and Xx. Xxxxxxxx shall disclose the terms and conditions of this Agreement
without the other party's consent, except as required by law.
14.6 Place of Execution. This Agreement and any subsequent
modifications or amendments hereto shall be deemed to have been executed in
________________.
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14.7 Governing Law. This Agreement and all amendments, modifications,
alterations, or supplements hereto, and the rights of the parties hereunder,
shall be construed under and governed by the laws of the State of Massachusetts
and the United States of America.
14.8 Entire Agreement. This Agreement constitutes the entire agreement
between TherapX and Xx. Xxxxxxxx and Novirio with respect to the subject matter
hereof and shall not be modified, amended or terminated except as herein
provided or except by another agreement in writing executed by the parties
hereto. In the event of any conflict between the terms hereof and the terms of
the Primary License, the terms of the Primary License shall control.
14.9 Severability. All rights and restrictions contained herein may be
exercised and shall be applicable and binding only to the extent that they do
not violate any applicable laws and are intended to be limited to the extent
that they do not violate any applicable laws and are intended to be limited to
the extent necessary so that they will not render this Agreement illegal,
invalid or unenforceable. If any provision or portion of any provision of this
Agreement not essential to the commercial purpose of this Agreement shall be
held to be illegal, invalid or unenforceable by a court of competent
jurisdiction, it is the intention of the parties that the remaining provisions
or portions thereof shall constitute their agreement with respect to the subject
matter hereof, and all such remaining provisions or portions thereof shall
remain in full force and effect. To the extent legally permissible, any illegal,
invalid or unenforceable provision of this Agreement shall be replaced by a
valid provision which will implement the commercial purpose of the illegal,
invalid or unenforceable provision. In the event that any provision essential to
the commercial purpose of this Agreement is held to be illegal, invalid or
unenforceable and cannot be replaced by a valid provision which will implement
the commercial purpose of this Agreement, this Agreement and the rights granted
herein shall terminate.
14.10 Force Majeure. Any delays in, or failure of, performance of any
party to this Agreement shall not constitute default hereunder, or give rise to
any claim for damages, if and to the extent caused by occurrences beyond the
control of the party affected, including, but not limited to, acts of God,
strikes or other work stoppages; civil disturbances, fires, floods, explosions,
riots, war, rebellion, sabotage, acts of governmental authority or failure of
governmental authority to issue licenses or approvals which may be required.
ARTICLE 15. NOTICES
All notices and other communications shall be hand delivered, sent by private
overnight mail service, or sent by registered or certified mail, postage
prepaid, return receipt requested, and
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addressed to the party to receive such notice or other communication at the
address given below, or such other address as may hereafter be designated by
notice in writing:
If to TherapX: TherapX L.L.C.
X.X. Xxx 000000
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
With a copy to: Xx. Xxxx-Xxxxxx Xxxxxxxxxx
0000 Xxxxxxxxx Xxx
Xxxxxxxxxx, XX 00000
If to Xx. Xxxxxxxx: Xx. Xxxxxxx Xxxxxxxx
0000 Xxxxxxx Xxxx Xxxxx
Xxxxxxx, XX 00000
If to Novirio: Novirio Pharmaceuticals, Ltd.
c/o MPM Asset Management LLC
Xxx Xxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Facsimile: (000) 000-0000
With copies to: Xxxxxx X. Xxxxxx, Esq.
Xxxx & Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile: (000) 000-0000
Any such notice, instruction or communication shall be deemed to have been
delivered upon receipt if delivered by hand, three business days after it is
sent by registered or certified mail, return receipt requested, postage prepaid,
one business day after it is sent via a reputable nationwide overnight courier
service, or when transmitted with electronic confirmation of receipt, if
transmitted by facsimile (if such transmission is on a business day; otherwise,
on the next business day following such transmission).
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
in their names by their properly and duly authorized officers or representatives
as of the date first above written.
Novirio Pharmaceuticals Ltd. TherapX Pharmaceuticals L.L.C. Xx. Xxxxxxx Xxxxxxxx
By:/s/Xxxxx Xxxxxx By: illegible /s/ Xxxxxxx Xxxxxxxx
---------------------- ---------------------- ----------------------
Xx. Xxxxxxx Xxxxxxxx
Title: President CEO Title: Member
---------------------- ----------------------
Date: June 20, 1998 Date: June 20, 1998 June 20, 1998
---------------------- ---------------------- ----------------------
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EXHIBIT A
LICENSED PATENT RIGHTS
U.S. Serial No. 08/521,474
"Method to Improve the Biological
and Antiviral Activity of Protease Inhibitors"
