LICENSE AGREEMENT
This LICENSE AGREEMENT (the "Agreement") is made and entered into this
25th day of October, 2005 among Xxxx Xxxxxxxxxx, residing at 00 Xxxxxxxxxx Xxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000, ("Licensor") and DNAPRINT PHARMACEUTICALS, INC., a
corporation organized and existing under the laws of Florida and having an
address at 000 Xxxxxxxx Xxxxxx, Xxxxxxxx, XX 00000 ("Licensee").
WHEREAS, Licensor is an inventor and owner of the entire right, title and
interest in and to the compounds described in Exhibit A (the `Compounds") and
all Patent Rights with respect thereto;
WHEREAS, Licensor desires to grant an exclusive license to Licensee of all
Patent Rights and other intellectual property associated with the Compounds, and
Licensee desires to receive such a license;
NOW, THEREFORE, in consideration of the mutual undertakings and covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto agree as
follows:
1. Licensor Rights. Licensor represents and warrants that the Patent
Rights and other rights covered hereby are jointly owned by him and Xxxxxxx X.
Xxxxxx ("Xxxxxx") also an inventor, that Xxxxxx has granted Licensor the full
and unrestricted right to enter into this License Agreement and to grant the
licenses and rights provided for herein, which licenses and rights apply to the
entirety of the Patent Rights and other rights covered hereby, without regard to
any interest owned by Xxxxxx. Licensor hereby represents and warrants that
Xxxxxx has agreed to be bound by the terms of this License Agreement, including
the exclusive license granted hereby and that the term "Licensor" as used herein
shall include Xxxxxx.
2. Definitions. As used in this Agreement, the following terms, whether
used in the singular or plural, shall have the following meanings:
2.1 "Affiliate" means any corporation, company, partnership, joint
venture and/or firm which controls, is controlled by or is under common control
with Licensee. For purposes of this Section 2.1, "control" shall include, but
not be limited to, (a) in the case of corporate entities, direct or indirect
ownership of over fifty percent (50%) of the stock or shares entitled to vote
for the election of directors; and (b) in the case of noncorporate entities,
direct or indirect ownership of fifty percent (50%) or more of the equity
interest with the power to direct the management and policies of such
noncorporate entities. The term "Affiliate" shall also include any firm or
entity in which Licensee holds an equity interest of 25% or more.
2.2 "Improvements" means and shall include any inventions relating
to the Compounds in the Field owned or invented by Licensor which would infringe
one or more claims maintained in good faith in a United States patent
application or an unexpired or nonlapsed patent included in the Patent Rights.
2.3 "Field" means all uses or potential uses of the Compounds,
including all therapeutic, diagnostic, and prophylactic uses.
2.4 "Product Candidate" means each product candidate which is
covered by a Valid Claim included in the Patent Rights, and selected by Licensee
for use in clinical testing.
2.5 "Licensed Products" means any product or process the
manufacture, use or sale of which is covered by or subject to a Valid Claim of
any of the Patent Rights in the country where such product is sold or such
process is practiced.
2.6 "Net Sales" shall mean the gross amount actually received by
Licensee, its Affiliates, or sublicensees from sales by Licensee, its
Affiliates, or sublicensees of Licensed Products, less: (i) returns, credits or
allowances, if any, actually granted; (ii) discounts actually allowed; (iii)
retroactive price reductions; (iv) freight, postage, and insurance charges and
additional special packaging charges; (v) customs duties and (vi) excises, sales
taxes, duties or other taxes imposed upon and paid with respect to such sales
(excluding what is commonly known as income tax). Net Sales shall not include
any transfer between Licensee and its Affiliates for resale, but shall include
the resale by Licensee or an Affiliate.
2.7 "Party" means Licensor or Licensee; "Parties" means Licensor and
Licensee.
2.8 "Patent Rights" means all patents and patent applications (which
for all purposes of this Agreement shall be deemed to include certificates of
invention, applications for certificates of invention and utility models)
throughout the world, covering or relating to the Compounds, including any
substitutions, extensions or supplementary protection certificates of, reissues,
reexaminations, renewals, divisions, continuations or continuations-in-part,
which Licensor owns or controls, or under which Licensor has the right to grant
sublicenses to Licensee.
2.9 "Technology Rights" means all information owned or possessed by
Licensor, together with all improvements, discoveries, methods, processes or
developments, whether patentable or otherwise, relating to the Compounds, which
is necessary for Licensee to develop, manufacture, use and/or sell Licensed
Products hereunder.
2.10 "Valid Claim" means a claim of any unexpired United States or
foreign patent or any subsisting patent application which shall not have been
withdrawn, canceled or disclaimed, nor held invalid by a court of competent
jurisdiction in an unappealed or unappealable decision.
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3. License Grant
3.1 Representations. Licensor represents and warrants that he has
the right to enter into this License Agreement; and he has the full and
unrestricted right to grant the licenses and rights provided for herein.
3.2 License. Licensor hereby grants to Licensee the sole and
exclusive, worldwide license, including the right to sublicense others under the
Patent Rights and the Technology Rights in the Field, including without
limitation the right to make, have made, use, sell or otherwise dispose of
Licensed Products. Any and all Improvements conceived after the Effective Date
hereof shall be included in the Patent Rights and be subject to the payments
called for in Section 4, hereof.
3.3 Assistance. Licensor shall provide Licensee with all information
directly related to the Patent Rights and Technology Rights as may be known or
possessed by Licensor and as may be reasonably necessary for Licensee to exploit
the licenses granted in Section 3.2.
3.4 Limitation. The license rights granted hereunder shall terminate
in the event of a default by Licensee in its obligations to Licensor hereunder
which is not cured within 90 days after receipt by Licensee of detailed written
notice of such default.
3.5 Improvements. Licensor shall provide Licensee with written
notification of each Improvement and a description thereof sufficient for
Licensee to understand, evaluate, and consider such Improvement, and if
possible, sufficient to enable preparation of a patent application thereon. Such
notice from Licensor to Licensee shall be made promptly after Licensor or
persons acting on behalf of Licensor have reduced such Improvement to practice,
but in any event, shall be made at least thirty (30) days prior to any
publication of nonconfidential disclosure thereof.
4. License Fees and Royalties: Licensee shall make the following payments
to Licensor:
4.1 License Maintenance Fees. Upon execution of this Agreement,
Licensee shall pay $10,000 to patent counsel designated by Licensor. Thereafter,
Licensee shall pay Licensor $25,000 on the annual anniversary of execution of
this Agreement for each of 2006, 2007, 2008, and 2009. If at any time, the
United States Patent and Trademark Office or a court of competent jurisdiction
declares that the Patent Rights are invalid or unenforceable in any material
respect, Licensee, at its option, may terminate this Agreement and cease making
payments pursuant to this Section 4.1. Upon each of the fifth, tenth, and
fifteenth anniversaries of the execution of this Agreement, Licensee may, at its
option, either (i) terminate this Agreement upon written notice to Licensor, or
(ii) maintain this Agreement for an additional five year term. If Licensee
chooses to maintain this Agreement for an additional five year term, Licensee
shall continue to pay Licensor $25,000 annually on the anniversary of execution
of this Agreement. If royalties commence, the $25,000 will be deducted from the
royalties.
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4.2 Royalties.
(a) The Licensee shall pay to Licensor, during the applicable term
described in Section 4.2(b) below, earned royalties at the
rate of two percent (2%) on all Net Sales by Licensee, its
Affiliates, or sublicensees of Licensed Products covered by a
Valid Claim of the Patent Rights.
(b) The obligation of Licensee to pay royalties on sales of
Licensed Products covered by a Valid Claim of the Patent
Rights shall terminate on a country-by-country basis on the
expiration or termination of any applicable Valid Claim under
the Patent Rights in the country in which the product is
manufactured, used, or sold. This paragraph is not intended to
allow the transfer of Licensed Products between a country
subject to the foregoing termination and a country not subject
to the foregoing termination in derogation or circumvention of
Licensor's rights to such royalties.
4.3 Sublicenses. The Licensee may grant sublicenses hereunder to
persons, firms or corporations under such terms and conditions as it may
arrange; provided, however, that such sublicenses shall include all of the
rights of and obligations due to the Licensor that are contained in this
Agreement.
4.4 Reports and Payments. Licensee shall deliver to Licensor within
forty-five (45) days after the end of each calendar quarter a written report
showing its computation of royalties due under this Agreement for such calendar
quarter. Thirty (30) days after delivery of each such report, Licensee shall
tender payment of all amounts shown to be due thereon. The royalty payments due
on sales in currencies other than U.S. dollars shall be calculated using the
appropriate exchange rate for such currency quoted by the Bank of America
foreign exchange desk on the close of business on the business day immediately
preceding the date of such report. All amounts due under this Agreement shall be
paid to Licensor in United Slates dollars. During the term of this Agreement,
Licensor shall have the right from time to time (not to exceed once during each
calendar year) to inspect, or have an agent, accountant or other representative
inspect, during normal business hours, and upon reasonable advance notice (not
less than 72 hours), such books, records and other supporting data of Licensee
or its Affiliates as may be necessary to verify Licensee's computation of
royalties due under this Agreement. Licensor agrees to maintain the
confidentiality of any information acquired during such inspection or review. If
such review shows that the Licensor has failed to pay any royalties owed,
Licensee shall promptly remit such additional royalties to Licensor, together
with interest at a rate of 10% per annum calculated from the date any such
payment was due. If such review shows that Licensee has understated royalties
owed by 10% or more, Licensee shall reimburse Licensor for the cost of
conducting such review.
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4.5 Progress Payments. In addition to the foregoing, Licensee shall
make the following payments to Licensor:
(a) $50,000 upon a filing by or on behalf of Licensee of an
Investigational New Drug Application ("IND") with the U.S.
Food and Drug Administration (the "FDA") covering a phase I
clinical trial of each Product Candidate, and acceptance
thereof by the FDA;
(b) $50,000 upon completion of such phase I trial for each Product
Candidate;
(c) $75,000 upon completion of a phase II clinical trial of each
Product Candidate pursuit to an IND approved by the FDA; and
(d) $100,000 upon notice of approval by the FDA of a Licensed
Product for commercial sale.
5. Commercialization. Licensee or its assignee shall use commercially
reasonable efforts to develop and commercialize the Compounds in a manner
consistent with reasonable business judgment and product development practice in
the pharmaceutical industry including determining whether (i) it is commercially
feasible to develop a product using the Compounds and (ii) such development is
consistent with Licensee's business plans and objectives. If Licensee determines
either that it is not commercially feasible or that such development is not
consistent with its business plans and objectives, the licenses granted
hereunder shall terminate. Licensee, however, will still be liable for annual
license maintenance fees for the remaining years of a five year term as
specified in Section 4.1., except for termination as allowed by this Agreement.
6. Intellectual Property Rights.
6.1 Right of Licensee to Prosecute Applications. Licensor agrees
that Licensee shall have the exclusive right, at Licensee's expense but in the
name of Licensor to file, prosecute, maintain and enforce patent applications
and patents relating to the Compounds, provided that Licensee shall use
commercially reasonable efforts to implement the foregoing. Copies of all
substantive communications to and from patent offices regarding applications or
patents relating to the Compounds shall be provided to Licensor promptly after
the receipt thereof; copies of proposed substantive communications to such
patent offices shall be provided to Licensor in sufficient time before the due
date in order to enable Licensor an opportunity to comment on the content
thereof. Licensee will reasonably consider such comments but shall be under no
obligation to incorporate Licensor's comments into any substantive
communications. Licensee shall timely notify Licensor (but in no event less than
30 days prior to the expiration of any priority rights period) if it intends not
to seek patent protection on the Compounds in any country or territory, and
Licensor shall have the right to file, maintain and enforce in such country
patents relating to the Compounds, and such patents and patent applications
shall not be included within the terms of this Agreement.
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6.2 Assistance. Licensor shall provide to Licensee or its authorized
attorneys, agents or representatives reasonable assistance as necessary for
Licensee to exploit its right under Section 6.1 to file, prosecute, maintain and
enforce patent applications and patents. Licenser shall execute or use his best
efforts to have executed all legal documents necessary to file, prosecute,
maintain and enforce patent applications or patents at no charge to Licensee.
6.3 Third Party Infringement.
(a) Each Party shall promptly report in writing to each other
Party during the term of this Agreement any (i) known
infringement or suspected infringement of any of the Patent
Rights in the Field or (ii) unauthorized use or
misappropriation of the Technology Rights in the Field by a
third party of which it becomes aware, and shall provide each
other Party with all available evidence supporting said
infringement, suspected infringement or unauthorized use or
misappropriation. Within ninety (90) days after Licensee
becomes, or is made, aware of any of the foregoing, Licensee
shall decide whether or not to initiate an infringement or
other appropriate suit and Licensee shall advise the Licensor
of such decision in writing. The inability of Licensee to
decide on a course of action within such ninety (90) day
period shall for purposes of this Agreement be deemed a
decision not to initiate an infringement or other appropriate
suit.
(b) Except as provided in paragraph (d) below, Licensee shall have
the right to initiate an infringement or other appropriate
suit anywhere in the world against any third party who at any
time has infringed, or is suspected of infringing, any of the
Patent Rights or of using without proper authorization or
misappropriating all or any portion of the Technology Rights.
Licensee shall give the Licensor sufficient advance notice of
the intent to file said suit and the reasons therefor, and
shall provide Licensor with an opportunity to make suggestions
and comments regarding such suit. Licensee shall keep Licensor
promptly informed of, and shall from time to time consult with
Licensee regarding, the status of any such suit and shall
provide Licensor with copies of all documents filed in, and
all written communications relating to the suit.
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(c) Licensee shall select counsel for any suit referred to in
paragraph (b) and shall otherwise fully control such suit, its
conduct, compromise or settlement. Licensee shall, except as
provided below, pay all expenses of the suit, including,
without limitation, attorneys' fees and court costs. Any
damages, settlement fees or other consideration for past
infringement received as a result of such litigation shall be
paid first to Licensee, in reimbursement of all expenses
incurred by Licensee in connection with such suit; any amount
remaining shall be allocated 98% to Licensee and 2% to
Licensor. If necessary, Licensor shall join as a party to the
suit but shall be under no obligation to participate except to
the extent that such participation is required as the result
of being a named party to the suit. Licensor shall offer
reasonable assistance to Licensee in connection therewith at
no charge to Licensee except for reimbursement of reasonable
expenses, including out-of-pocket expenses and salaries of
Licensor personnel, incurred in rendering such assistance.
Licensor shall have the right to participate and be
represented in any such suit by its own counsel at its own
expense.
(d) Licensee shall promptly advise the Licensor of the intent of
Licensee not to initiate an infringement or other appropriate
suit pursuant to paragraph (b) above. In the event that
Licensee does not initiate an infringement or other
appropriate suit pursuant to paragraph (b) above within 90
days of becoming aware of any infringement or suspected
infringement of any of the Patent Rights or unauthorized use
or misappropriation of any of the Technology Rights by a third
party, or if Licensee shall have advised Licensor of the
intent not to initiate such suit, Licensor shall have the
right, at its expense, of initiating an infringement or other
appropriate suit. In exercising its rights pursuant to this
paragraph (d), Licensor shall have the sole and exclusive
right to select counsel and shall pay all expenses of the suit
including without limitation attorneys' fees and court costs.
If necessary, Licensee shall join as a party to the suit and
shall participate only to the extent that such participation
is required as a result of its being a named party to the suit
or being the holder of, or inventor under any patent at issue
or being the owner of any Technology Rights at issue. At
Licensor's request, Licensee shall offer reasonable assistance
to Licensor in connection therewith at no charge to Licensor
except for reimbursement of reasonable out-of-pocket expenses
incurred in rendering such assistance. Without-limiting the
generality of the preceding sentence, Licensee shall cooperate
fully in order to enable Licensor to have the right to be
represented in any such suit by its own counsel at its own
expense.
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6.4 Claimed Infringement.
(a) In the event that a third party at any time provides written
notice of a claim to, or brings an action, suit or proceeding
against, any Party or any of their respective affiliates or
sublicensees, claiming infringement of its patent rights or
copyrights or unauthorized use or misappropriation of its
technology, based upon an assertion or claim arising out of
the development, manufacture, use or sale of Licensed Products
(a "Claim"), such Party shall promptly notify the other Party
of the Claim or the commencement of such action, suit or
proceeding, enclosing a copy of the claim and/or all papers
served.
(b) Licensee shall have sole and exclusive responsibility for the
selection of counsel and control of any Claim, and shall keep
Licensor informed of the current status of the suit. Licensor
shall cooperate with Licensee and give all reasonable
assistance in connection with the conduct of such suit.
(c) In the event that the Claim (whether pursuant to a settlement
of the suit or a final judgment) results in an obligation to
pay the Third Party a royalty on future sales of the Licensed
Product, such royalties shall be paid by Licensee and for all
purposes of this Agreement, such royalties shall be deducted
in determining the amount of Net Sales hereunder.
7. Publication Review. In the case of any paper, technical report or
abstract, summary or synopsis thereof intended to be published or presented by
Licensor, ("paper"), Licensor shall provide Licensee with an advance copy. If a
patent application has already been filed with respect to all inventions
described therein, Licensor shall send Licensee a final form copy thereof at
least thirty (30) days prior to submission for publication nor any public
disclosure thereof ("disclosure"). In all other cases, Licensor shall, at least
forty five (45) days prior to disclosure, send Licensee a final form copy of
each paper. In such cases, Licensee may require Licensor to delay making such
proposed disclosure for a maximum of an additional forty five (45) days in order
to protect the potential patentability of any invention described therein. (In
the case of non-patentable, but confidential information contained in a paper,
the parties shall negotiate an acceptable version for publication within ninety
(90) days after notification). Licensor shall use his best efforts and cooperate
with Licensee insuring that any improvement or invention in the Field identified
by Licensee in such paper or report is filed by Licensor as a patent
application.
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8. Liability Insurance. No later than the first commercial sale of a
Licensed Product, Licensee shall carry a product liability insurance policy
protecting the Licensor with respect to such Licensed Product in an amount of
not less than five million dollars ($5,000,000) per occurrence with a minimum of
an aggregate of ten million dollars ($10,000,000) for personal injury or death.
Notwithstanding the foregoing, Licensee shall only be obligated to purchase such
insurance to the extent that it is available at commercially reasonable rates.
9. Warranty. Except as otherwise expressly set forth in this agreement,
Licensor makes no representations and extends no warranties of any kind, either
express or implied, including but not limited to warranties of merchant ability,
fitness for a particular purpose, and validity of patent rights claims, issued
or pending. Nothing in this agreement shall be construed as a representation
made or warranty given by Licensor that the practice by Licensee of the License
granted hereunder shall not infringe the patent rights of any third party.
10. Term and Termination. This Agreement shall terminate on the later of
(a) the twentieth (20th) anniversary hereof or (b) the date of the expiration of
the last to expire Valid Claim under the Patent Rights.
11. Assignment. Licensee may not assign its rights and obligations
hereunder without written consent of Licensor, which consent will not be
unreasonably withheld. Notwithstanding the foregoing, Licensee may assign
hereunder to persons, firms or corporations under such terms and conditions as
it may arrange; provided, however, that such assignment transfers all of the
rights of and obligations due to Licensor that are contained in this Agreement;
and further provided, however, that if Licensee receives any consideration for
such assignment, Licensor will receive the lesser of (a) $100,000, or (b)
one-half of such consideration if such consideration is valued at less than
$100,000.
12. Notice.
All notices and payments required or permitted to be given hereunder shall
be in writing and addressed to the respective parties as follows;
If to Licensor: Xxxx Xxxxxxxxxx. Ph.D
00 Xxxxxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
If to Licensee: DNAPrint Pharmaceuticals, Inc.
000 Xxxxxxxx Xxx.
Xxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx
With a copy to: Xxxxxx X. XxXxxxxx, Esq.
Xxxxxx X. XxXxxxxx, P.A.
0000 Xxx xx Xxx Xxxx., Xxx. 000
Xxxxx, XX 00000
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or such other addresses as may be designated by the respective parties in
writing. A notice shall be deemed given the earlier of the date when actually
received or five (5) days after deposit in the United Stares registered or
certified mail, postage prepaid, and properly addressed.
13. Section Headings. Section headings are for convenience only and shall
not be construed to limit or extend the meaning of any portion of this License
Agreement.
14. Law Governing and Construction. This License Agreement shall be
governed by and construed in accordance with the laws of the Commonwealth of
Massachusetts as if the Agreement had been delivered in Massachusetts and all
acts which are done or are required to be done hereunder were all performed
within the Commonwealth of Massachusetts. This License Agreement has been
drafted on the basis of mutual understanding and neither party shall be
prejudiced as being the drafter thereof.
15. Entire Agreement, Modification, Etc. This instrument contains the
entire and only agreement between the parties relative to the subject matter
hereof and supersedes all previous negotiations, representations, undertakings
and agreements both written and oral heretofore made between the parties as to
the subject matter. Any representation, promise or condition in connection
herewith not specifically incorporated herein shall not be binding upon either
party. The provisions of this agreement may not be explained, supplemented, or
qualified through evidence of custom, trade usage or prior course of dealings.
No modification, renewal, extension, waiver, cancellation or termination of this
Agreement or of any of the provisions herein contained shall be valid until and
unless made in writing and signed on behalf of the respective parties by duly
authorized officers thereof.
16. Severability. If any provisions of this License Agreement shall be
construed to be illegal or invalid, the legality or the validity of any other
provisions hereof shall not be affected thereby. Any illegal or invalid
provision of this License Agreement shall be severable, and all other provisions
shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have entered into this License Agreement
as of the date first above written.
DNAPrint Pharmaceuticals, Inc.
By:/s/ Xxxxxxx Xxxxxxx /s/ Xxxx Xxxxxxxxxx
---------------------------- ---------------------------
Xxxx Xxxxxxxxxx. Ph.D
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