NOTE: Information in this document marked with an "[*]" has been omitted and
filed separately with the Commission. Confidential treatment has been requested
with respect to the omitted portions.
COLLABORATION AND LICENSE AGREEMENT
This Collaboration and License Agreement ("AGREEMENT") is made as of
March 7, 2002 (the "EFFECTIVE DATE") by and between the VirRx, Inc., a Delaware
corporation, having a place of business at 0000 Xxxxxx Xxxxx Xxxxx, Xx. Xxxxx,
Xxxxxxxx 00000 ("VIRRX") and Introgen Therapeutics, Inc., a Delaware corporation
having a place of business at 000 Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx
00000 ("INTROGEN"). Each of VirRx and Introgen are referred to in this Agreement
as a "PARTY" and collectively as "PARTIES."
RECITALS:
A. VirRx owns or controls certain technology related to [*] Vectors (as
defined below), and desires to conduct further research relating to
such [*] Vectors and other matters;
B. Introgen is willing, for the purposes of enabling such research, to
make an equity investment in VirRx under the terms of the Stock
Purchase Agreement between the Parties dated as of the Effective Date
(the "STOCK PURCHASE AGREEMENT"); and
C. As a benefit of Introgen's funding of VirRx's research, Introgen
desires to obtain an exclusive license from VirRx to the Licensed
Subject Matter (as defined below), all on the terms and conditions set
forth below.
NOW, THEREFORE, in consideration of the mutual covenants and promises herein
contained, the Parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the meanings
indicated:
1.1 "[*] Vector" means any composition comprising both: (i) [*].
1.2 "Affiliate" means any entity that controls, is controlled by or is
under common control with Introgen. An entity shall be regarded as in control of
another entity for purposes of this definition if it owns or controls more than
fifty percent (50%) of the shares of the subject entity entitled to vote in the
election of directors (or, in the case of an entity that is not a corporation,
for the election of the corresponding managing authority).
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1.3 "BLA Approval" means approval from the United States Food and Drug
Administration (or its equivalent in a Major Market Country outside the United
States) of a BLA filed by or on behalf of Introgen, to market a Licensed
Product. For such purposes a "BLA" means a Biological License Application, as
defined in the United States Food, Drug and Cosmetic Act and the regulations
promulgated thereunder, or an equivalent foreign application for marketing
approval in Major Market Country outside the United States.
1.4 "Collaboration Technologies" means any data, invention, material or
other subject matter conceived or first reduced to practice by VirRx personnel
(including persons or entities working on VirRx's behalf) arising out of or in
connection with the Research Program during the Research Term or the one-year
period immediately thereafter, or derived by VirRx personnel (including persons
or entities working on VirRx's behalf) from Introgen Confidential Information.
1.5 "Contract Year" means a year of 365 days (or 366 days in a leap
year) beginning on the Effective Date and ending one (1) year thereafter and so
on year-by-year.
1.6 "Control" means, with respect to particular subject matter, a
Party's possession of the ability to grant a license or sublicense in such
subject matter under this Agreement without violating the terms of any agreement
or other arrangement, if any, under which the Party first acquired rights in
such subject matter from a third party.
1.7 "Distinct [*] Vectors" means [*] Vectors differing in one or more
distinct substantive functions that result in materially different therapeutic
effects as to safety and/or efficacy and/or to materially different types of
cancer that can be treated.
1.8 "Existing Third-Party Agreements" means that certain License and
Exclusive License Option Agreement between VirRx and [*] University
dated March 1, 2002, and that Materials Transfer Agreement between VirRx and
[*] University dated January 17, 2002.
1.9 "Funded Expenses" means, with respect to the Research Program or
Other Funded Research, respectively: (i) direct salary expense for VirRx
employees conducting such Research Program or Other Funded Research, plus direct
employee benefit costs of such personnel (not including any amount associated
with equity incentive plans), on a percentage-of-time basis, (ii) amounts paid
to third parties for their performance of the Research Program or Other Funded
Activities, (iii) administrative expenses, and (iv) other direct costs incurred
by VirRx in performing the Research Program or Other Funded Research. For
purposes of clause (iii), "administrative expenses" shall mean the reasonable
and customary costs of supporting and maintaining the Research Program and the
Other Funded Research, respectively (e.g. legal, payroll and accounting
expenses), and for purposes of clause (iv), "other direct costs" shall mean the
costs of facilities, equipment and materials used by VirRx directly in the
Research Program or Other Funded Activities, respectively, provided that: (x)
such administrative expenses and other direct costs are allocated to the
Research Program and Other Funded Research on a reasonable basis, in the same
manner and on a consistent basis for all such activities and other activities of
VirRx outside the Research Program and the Other Funded Research, and (y) in no
event shall the sum of such administrative expenses and such other direct costs
for the Research Program or the Other Funded Research, respectively, exceed
[*] of the respective costs described in (i) for the
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Research Program or such Other Funded Research. In addition, in no event shall
such administrative expenses and other direct costs include costs of capital, or
the costs of capacity not required or not utilized for the conduct of the
Research Program.
1.10 "IND" means an Investigational New Drug Application for a product,
as defined in the U.S. Food, Drug and Cosmetic Act and the regulations
promulgated at 21 C.F.R. Section 312 et seq., and any other regulatory filing in
any country other than the United States made for the purpose of proceeding with
clinical testing.
1.11 "JRC" has the meaning set forth in Section 2.2.
1.12 "Licensed Product" means (i) a product, composition or material
the manufacture, sale or use of which would, but for the license granted herein,
directly infringe a Valid Claim in the country for which such product,
composition or material is sold, or (ii) solely for the purposes of Introgen's
royalty obligations under Section 5.4, a commercial product within the Licensed
Subject Matter comprising an [*] Vector, as provided by VirRx to Introgen under
this Agreement.
1.13 "Licensed Subject Matter" means the Collaboration Technologies,
the Patent Rights, and, to the extent owned or Controlled by VirRx, any
inventions, discoveries and other subject matter covered by or relating to the
Patent Rights including, without limitation, the Related Materials.
1.14 "Major Market Country" means any one of the United States, United
Kingdom, France, Germany, Italy, Spain or Japan.
1.15 "Net Sales" means sales to third parties of Licensed Products by
Introgen, its Affiliates, or Sublicensees, for which royalties are due under
ARTICLE V below. Net Sales shall be equal to net sales as determined in
accordance with generally accepted accounting principles minus, to the extent
not already considered in determining net sales in accordance with generally
accepted accounting principles: (i) trade, cash and quantity credits, discounts,
refunds or government rebates; (ii) amounts for claims, allowances or credits
for returns, retroactive price reductions, or chargebacks; (iii) shipping costs,
including packaging, handling fees and freight; (iv) sales taxes, value-added
taxes, duties and other governmental charges; and (v) provisions for
uncollectible accounts. For the removal of doubt, Net Sales shall not include
sales among Introgen, its Affiliates or Sublicensees, provided that if Introgen
sells a Licensed Product to an Affiliate for resale, Net Sales shall include net
sales by such Affiliate to third parties on the resale of such Licensed Product,
with such net sales determined in the same manner as set forth above for
determining Net Sales by Introgen. In the event that Introgen grants a
sublicense hereunder, and receives payments based upon the Sublicensee's sales
of Licensed Products, Introgen may upon notice to and approval of VirRx, such
approval not to be unreasonably withheld, modify this definition of "Net Sales"
for purposes of calculating royalties payable to VirRx on such Sublicensee's
sales to be the same as the definition of sales on which the Sublicensee's
royalty to Introgen is based.
1.16 "Other Funded Research" means any activities for which Periodic
Introgen Funding is used, in accordance with Section 5.2.3(b) below.
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1.17 "Patent Rights" means any and all rights in and to:
(a) the patent applications listed in Exhibit 1.17 hereto, any
patents issuing on such patent applications, any foreign counterparts of such
patent applications and patents, and any patent or application anywhere in the
world that claims or otherwise covers subject matter claimed or disclosed in any
of the patent applications in Exhibit 1.17 or the foreign counterparts thereof
(collectively, "Existing Patents");
(b) any patent or patent application that claims or otherwise
covers an invention relating to any Collaboration Technology or any invention
owned or Controlled by VirRx relating to any [*] Vector, or the manufacture or
use thereof; and
(c) all divisions, continuations, continuations-in-part,
patents of addition, substitutions, registrations, reissues, reexaminations or
extensions of any kind with respect to a patent or patent application described
in Paragraph (a) or (b) above.
1.18 "Periodic Introgen Funding" means any funds paid to VirRx under
Sections 1.2(a) and (b) of the Stock Purchase Agreement (and as described in
Section 5.1.1 below).
1.19 "Related Material" means any information, biological materials and
other items that relate to or are useful in connection with subject matter
covered by or within the Patent Rights or the Collaboration Technologies owned
or Controlled by VirRx.
1.20 "Research Plan and Budget" means the written workplan and budget
for the Research Program to be conducted under this Agreement, as established in
accordance with Section 2.3 hereof.
1.21 "Research Program" means the research, discovery,
characterization, optimization and pre-clinical development of [*] Vectors,
and/or such other matters as the JRC may approve, conducted by VirRx during the
Research Term.
1.22 "Research Term" means the period commencing on the Effective Date
and ending on the first to occur of (i) termination of this Agreement or the
Research Program in accordance with ARTICLE XII below; or (ii) four (4) years
after the Effective Date, or if it is extended under Section 2.1(b) below, the
end of such extended period.
1.23 "Sublicensee" means any non-Affiliate third Party to whom Introgen
has granted the right to manufacture and sell Licensed Products, with respect to
Licensed Products manufactured by such third Party.
1.24 "Valid Claim" means a claim of an issued and unexpired patent or a
claim of a pending patent application within the Patent Rights which has not
been held unpatentable, invalid or unenforceable by a court or other government
agency of competent jurisdiction and has not been admitted to be invalid or
unenforceable through reissue, re-examination, disclaimer or otherwise;
provided, however, that if the holding of such court or agency is later reversed
by a court or agency with overriding authority, the claim shall be reinstated as
a Valid Claim with respect to Net Sales made after the date of such reversal.
Notwithstanding the foregoing provisions of this Section, if a
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claim of a pending patent application within the Patent Rights has not issued as
a claim of an issued patent within the Patent Rights, within five (5) years
after the filing date from which such claim takes priority, such pending claim
shall not be a Valid Claim for purposes of this Agreement, unless and until a
patent (otherwise meeting the definition of Valid Claim) issues on such
application; from and after such issuance such claim shall be deemed a Valid
Claim with respect to Net Sales made after such issuance.
ARTICLE II
RESEARCH PROGRAM
2.1 Generally.
(a) VirRx shall use its reasonable best efforts to conduct,
and shall furnish the facilities and personnel necessary to carry out, the
Research Program in accordance in all respects with the Research Plan and
Budget.
(b) The Research Program shall be performed during the
Research Term, which may be extended by written agreement between Introgen and
VirRx. Unless so extended by a written agreement signed by VirRx and Introgen,
the Research Program shall end at the end of the Research Term.
2.2 The JRC. Promptly after the Effective Date, the Parties shall
establish a Joint Research Committee ("JRC"). The JRC shall have responsibility
to (i) oversee, review and coordinate the Research Program, (ii) expedite the
progress of work being done under the Research Plan and Budget, and (iii) make
such other decisions as are expressly allocated to the JRC under this Agreement.
(a) Membership. The JRC shall be comprised of an equal number
of representatives from each of Introgen and VirRx. The exact number of such
representatives shall be two (2) for each of Introgen and VirRx, or such other
number as the Parties may agree. Either Party may replace its respective JRC
representatives at any time, with prior written notice to the other Party.
(b) Meetings. The JRC shall meet monthly, or as more or less
often as otherwise agreed by the Parties, at such locations as the Parties
agree. It is understood that such meetings shall be held at least quarterly in
person, otherwise by telephone.
(c) Decision Making. Decisions of the JRC shall be made by
majority vote of all JRC members present in person or by other means (e.g.,
teleconference) at any meeting; provided that, if there is not an equal number
of representatives of each Party present at such meeting, then only an equal
number of representatives of each Party shall be entitled to vote at such
meeting. In the event that the votes required to approve a decision cannot be
reached, then either Party may, by written notice to the other, have such issue
referred to the President of Introgen and the President VirRx, for attempted
resolution by good-faith negotiations within thirty (30) days after such notice
is
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received. Minutes of the JRC meetings shall be taken, and shall, at a minimum,
record all decisions made. Such minutes shall be subject to approval in writing
by both Parties.
(d) Coordination. The Parties acknowledge that Introgen may
also conduct activities complementary or related to the research to be performed
by VirRx under the Research Program. To ensure that such activities remain
coordinated, VirRx and the JRC shall meet or consult periodically to establish
and revise priorities for work to be performed under the Research Program,
including the research experiments and other steps to be taken by VirRx in
pursuit of those priorities, all under the provisions of Section 2.1 above.
2.3 Research Plan and Budget.
(a) Priorities. The Research Plan and Budget shall be based on
priorities established by the JRC, taking into account VirRx's and Introgen's
views as to the feasibility of the scope and timing of such research activities
and objectives.
(b) Establishment of Research Plan and Budget. The general
plan for the Research Plan and Budget is attached hereto as Exhibit 2.3. As soon
as practicable after the Effective Date, the JRC shall establish and approve a
detailed Research Plan and Budget for the initial Contract Year. By [*] of each
year during the Research Term, the JRC shall establish and approve the detailed
Research Plan and Budget for the next succeeding Contract Year, including a
general plan and budget for the remaining period of the Research Term. The JRC
shall review the Research Plan and Budget on an ongoing basis and may make
changes thereto as the JRC approves in writing.
2.4 Records. VirRx shall keep accurate financial and scientific records
of its activities under the Research Program and Other Funded Research and will
make such records available to Introgen or Introgen's authorized representative,
during normal business hours, and upon reasonable notice. It is understood that
such records shall include detailed records, including witnessed laboratory
notebooks, sufficient to document inventions made and all Funded Expenses. Upon
request by Introgen and at Introgen's expense, VirRx shall promptly provide
copies of such materials to Introgen, and Introgen hereby acknowledges that such
copies shall be considered Confidential Information (to the extent provided in
Section 9.1 hereof).
2.5 Information and Reports. VirRx shall disclose to Introgen all
Licensed Subject Matter promptly after the Effective Date. Thereafter, VirRx
shall promptly disclose to Introgen any additional Licensed Subject Matter
developed or acquired after the Effective Date, with significant discoveries or
advances being communicated immediately after such Licensed Subject Matter is
obtained or its significance is appreciated, including in each case biological
or other tangible materials within the Licensed Subject Matter. During the
Research Term, VirRx will provide to Introgen, at least once per quarter, a
written summary of its activities under the Research Program, and the results of
those activities.
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2.6 Publication and Academic Rights.
(a) Publication. Subject to the rights granted to Introgen
pursuant to this Agreement, and the restriction of Paragraph (b) below, VirRx
may publish or otherwise disclose significant scientific results established by
VirRx during the course of the Research Program.
(b) Review. VirRx shall submit to the JRC, at least [*] prior
to submission for publication or other disclosure, materials relating to the
Licensed Subject Matter. The JRC shall promptly review the proposed publication
or disclosure and discuss any concerns regarding dissemination of significant
proprietary information. In any case, the proposed publication or disclosure
shall be withheld until the same has been approved by the JRC.
ARTICLE III
PATENT RIGHTS AND TECHNOLOGY RIGHTS
3.1 Ownership.
(a) Subject to Sections 3.1(b) and (c), VirRx shall own all
right, title and interest in and to any inventions conceived or reduced to
practice: (i) solely by employees or consultants of VirRx in which said
employees and consultants are not affiliated with or employed by [*] University
with an obligation to assign such rights to [*] University, or (ii) by employees
or consultants of VirRx who do not utilize any [*] University owned and operated
laboratory facilities or receive any research funding which is administered
through [*] University except for research funding provided by VirRx, or (iii)
by third parties retained by VirRx but not [*] University, or, by such employees
and consultants working together, during the term of this Agreement. Subject to
Sections 3.1(b) and (c), inventions within the scope of the Licensed Subject
Matter that are conceived or reduced to practice (x) solely by employees or
consultants of VirRx in which said employees and consultants are affiliated with
or employed by [*] University with an obligation to assign such rights to [*]
University, or (y) by employees or consultants of VirRx who utilize any [*]
University owned and operated laboratory facilities or result from research
funding which is administered through [*] University for research funding
provided to VirRx, or (z) by third parties retained by [*] University, shall be
owned exclusively by [*] University; provided, however, such inventions shall in
each case be Controlled by VirRx pursuant to Existing Third Party Agreements,
included within the Licensed Subject Matter under this Agreement, and licensed
or sublicensed to Introgen under this Agreement without violating the terms of
any Existing Third Party Agreement or any other agreement or arrangement with a
third party.
(b) Introgen shall own all right, title and interest in and to
any inventions made by Introgen during the term of this Agreement, to the extent
that Introgen's personnel (including third parties working on behalf of
Introgen) would be an inventor thereof under U.S. patent law.
(c) Patent rights to inventions that are made jointly by
employees of VirRx and Introgen shall be owned [*]. For purposes of this Section
3.1, whether an invention is made
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"jointly" shall be determined under principles of inventorship in accordance
with U.S. patent law, [*].
3.2 Patents. The filing for, prosecution of applications and
maintenance of patents on inventions covered by or within such Collaboration
Technologies shall be handled in accordance with ARTICLE VIII of this Agreement.
3.3 Assignments. VirRx shall obtain written agreements from all
employees involved in the Research Program who are working for, or at the
request, of VirRx which require that all Collaboration Technologies conceived or
reduced to practice by such VirRx personnel as a result of or in connection with
the Research Program shall be promptly reported and assigned to VirRx. Provided,
however, such requirement to assign shall not apply to Collaboration
Technologies made by employees and consultants that (i) are affiliated with or
employed by [*] University with an obligation to assign such rights to [*]
University, (ii) utilize any [*] University owned and operated laboratory
facilities or result from research funding which is administered through [*]
University except for research funding provided by VirRx.
ARTICLE IV
LICENSES
4.1 Licensed Subject Matter. VirRx hereby grants to Introgen a
worldwide, exclusive license to make, use, sell, offer to sell, import, export
and otherwise exploit the Licensed Subject Matter; it being understood that:
(a) Introgen may have any of the license rights performed on
its behalf by a third Party;
(b) Such Licensed Subject matter does not include "Other
Technology" (as defined below); and
(c) Introgen may grant and authorize sublicenses within the
scope of the foregoing license, provided that:
(i) if this Agreement is terminated for any reason,
any such sublicense shall survive, provided that upon request by VirRx, the
third-party sublicensee promptly agrees in writing to be bound by the applicable
terms of this Agreement; and
(ii) Introgen shall provide a copy to VirRx of any
sublicense granted pursuant to this Section 4.1 within five (5) business days of
execution thereof; provided that the terms of an Existing Third-Party Agreement
require VirRx's further disclosure of such sublicense to
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[*] University or [*] University. VirRx shall maintain any such sublicense as
Confidential Information pursuant to ARTICLE IX.
4.2 Warranties.
(a) Licensed Subject Matter. VirRx represents and warrants to
Introgen that: (i) with respect to Licensed Subject Matter existing as of the
Effective Date, VirRx is and shall continue to be during the Term of this
Agreement, the exclusive owner of the entire right, title, and interest in and
to all such Licensed Subject Matter, except as set forth in Sections 4.3 and
13.3; (ii) upon the invention of all other Licensed Subject Matter not described
in clause (i) (or upon VirRx's first acquiring rights in such Licensed Subject
Matter, if such Licensed Subject Matter is not invented by VirRx, its employees,
or others working on VirRx's behalf), VirRx shall be, and shall continue to be
throughout the term of this Agreement, the exclusive owner of the entire right,
title and interest in all such Licensed Subject Matter, except as set forth in
Sections 4.3, 13.3 and/or the written agreement, if any, under which VirRx first
acquires rights in such Licensed Subject Matter from a third party; (iii) VirRx
has the full right to enter into this Agreement and perform its obligations
hereunder; (iv) VirRx has not previously granted and will not grant any rights
in the Licensed Subject Matter that are inconsistent with the rights and
licenses granted to Introgen herein; (v) to VirRx's knowledge, there are no
claims of any third parties that would call into question the rights of VirRx to
grant to Introgen the rights and licenses contemplated hereunder; and (vi)
except for the Patent Rights, and the Related Materials, as of the Effective
Date, VirRx does not own or Control rights to any patent, patent application,
invention or other subject matter pertaining to [*] Vectors or claims of which
would dominate any practice of the Licensed Subject Matter; (vii) VirRx is not
aware of any prior art that is not cited in the Patent Rights existing as of the
Effective Date that could render unpatentable any invention within a pending
patent application, or render invalid or unenforceable any issued patent, within
such Patent Rights, and (viii) VirRx has disclosed to Introgen all information
of which VirRx is aware relating to VirRx or the Licensed Subject Matter that,
in the reasonable opinion of VirRx as of the Effective Date, would materially
impact Introgen's decision to enter into this Agreement and the transactions
contemplated hereby.
4.3 Third-Party Rights. The Parties understand and acknowledge that
with respect to particular [*] Vectors, VirRx's rights in and to all or part of
the Licensed Subject Matter may derive from the Existing Third-Party Agreement
(the "In-Licensed Rights"). VirRx represents and warrants to Introgen that (a)
VirRx has the right, under the Existing Third-Party Agreement, to fully include
the In-Licensed Rights within the Licensed Subject Matter under this Agreement,
and to grant to Introgen under this Agreement the same rights with respect to
the In-Licensed Rights as are granted to Introgen with respect to Licensed
Subject Matter owned by VirRx, including the right for Introgen to grant and
authorize sublicenses; and (b) to the extent it obtains or has obtained such
rights under the Existing Third-Party Agreement, such Existing Third-Party
Agreement shall not terminate, expire, or in any way be limited at any time in
any manner that would affect Introgen's rights under this Agreement as a direct
result of any act or failure to act by VirRx, or as a direct result of the
breach of any covenant, representation or warranty made by VirRx under the
Existing Third Party Agreement. If, despite the representations and warranties
set forth in this Section 4.3, an Existing Third-Party Agreement terminates,
expires or is otherwise limited in a manner that affects Introgen's rights under
this Agreement, Introgen may at its option and without limiting any other rights
and remedies available to it, become a direct licensee under the Existing
Third-Party
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Agreement with respect to the rights VirRx obtained under that Agreement;
provided that (i) Introgen is in full compliance with the terms hereof, (ii) all
payments owed under such Existing Third-Party Agreement resulting from the
activity hereunder are paid in full; and (iii) Introgen agrees to assume all
duties of VirRx under such Existing Third-Party Agreement. In addition, except
as set forth in the preceding sentence, it is understood that VirRx is solely
responsible for payments that are or may become due under the Existing
Third-Party Agreement.
4.4 Disclaimer. EXCEPT AS PROVIDED IN THIS ARTICLE IV, NEITHER PARTY
MAKES ANY WARRANTIES OR CONDITIONS (EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE)
WITH RESPECT TO THE SUBJECT MATTER HEREOF, AND VIRRX SPECIFICALLY DISCLAIMS ANY
AND ALL IMPLIED WARRANTIES OR CONDITIONS OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE (WHETHER OR NOT VIRRX KNOWS, HAS REASON TO KNOW, HAS BEEN
ADVISED, OR IS OTHERWISE IN FACT AWARE OF ANY SUCH PURPOSE) AND ALL WARRANTIES
AND CONDITIONS OF THE VALIDITY OF THE PATENT RIGHTS OR NONINFRINGEMENT OF THIRD
PARTY INTELLECTUAL PROPERTY RIGHTS.
ARTICLE V
PAYMENTS AND REPORTS
5.1 Equity Investment. In consideration for VirRx's performance of its
obligations under this Agreement, Introgen and VirRx shall enter into the Stock
Purchase Agreement under which Introgen will purchase up to [*] of VirRx
Preferred Stock, as described below (but in all cases, subject to the terms and
conditions of the Stock Purchase Agreement).
5.1.1 Periodic Funding. Under Sections 1.2(a) and (b) of the
Stock Purchase Agreement, Introgen will make periodic investments in VirRx of up
to an aggregate of Two Million Four Hundred and Seventy Five Thousand Dollars
(US $2,475,000) during the Research Term.
5.1.2 Milestone-Based Funding. In addition, under Sections
1.2(c), (d) and (e) of the Stock Purchase Agreement, Introgen will make the
following investments in VirRx upon achievement of the corresponding milestones:
(i) Two Hundred Thousand Dollars (US $200,000) upon
[*] upon completion of the first Phase I clinical study of the [*], it being
understood that the foregoing investment shall be made only [*] and that the
total investment under this clause (i) shall not exceed $200,000;
(ii) Four Hundred Thousand Dollars (US $400,000) upon
[*] upon completion of the first Phase II clinical study for [*] it being
understood that: (1) the foregoing investments described in this clause (ii)
shall be made only [*]
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with respect to each such Distinct [*] Vector); (2) the total investment under
this clause (ii) shall not exceed $1,200,000; (3) Introgen shall receive a
credit equal to fifty percent (50%) of the investment made under this clause
(ii) in the form of immediately available funds toward the amount, if any, that
may thereafter be due and payable under Section 5.3 below; and (4) Introgen
shall have [*] with respect to any Distinct [*] Vector if Introgen previously
made an investment [*] (for purposes of this clause (ii) [*], and
(iii) One Million Dollars (US $1,000,000) upon [*]
upon completion of the first Phase III clinical study of [*] it being understood
that: (1) the foregoing investments described in this clause (iii) shall be made
only [*] with respect to each such Distinct [*] Vector); (2) the total
investment under this clause (iii) shall not exceed $3,000,000; (3) Introgen
shall receive a credit equal to twenty- five percent (25%) of the amounts
invested under this clause (iii) in the form of immediately available funds
toward the amount, if any, that may thereafter be due and payable under Section
5.3 below; and (4) Introgen shall have [*] with respect to any Distinct [*]
Vector if Introgen previously made an investment [*] (for purposes of this
clause (iii), [*].
5.1.3 Stock Purchase Agreement Controls. Notwithstanding
Sections 5.1.1 and 5.1.2, it is understood that Introgen's obligations to make
any investment in VirRx shall be solely in accordance with the terms and
conditions of the Stock Purchase Agreement. In the event of any conflict or
inconsistency between the Stock Purchase Agreement and Section 5.1.1 or 5.1.2
above, the terms and conditions of the Stock Purchase Agreement shall control.
5.2 Use of Proceeds for Research Program. VirRx shall use the Periodic
Introgen Funding solely for the In-License Expenses and the Funded Expenses that
VirRx incurs in performing the Research Program and/or Other Funded Research, as
further described in Sections 5.2.1, 5.2.2 and 5.2.3 below.
5.2.1 In-License Expenses. VirRx may use up to [*] of the
Periodic Introgen Funding to pay In-License Expenses for any Contract Year
during the Research Term. As used in this Agreement, "In-License Expenses" means
license fees payable by VirRx to [*] University and [*] University under the
terms of an Existing Third-Party Agreement in consideration of all or a portion
of the In-Licensed Rights.
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5.2.2 Research Program. After the payment of the In-License
Expenses authorized under Section 5.2.1, at least [*] of the
Periodic Introgen Funding (on a rolling, six-month basis) shall be used solely
for Funded Expenses that VirRx incurs in performing the Research Program in
accordance with the Research Plan and Budget approved by the JRC.
5.2.3 Other Funded Research. After the payment of the
In-License Expenses authorized under Section 5.2.1, VirRx may use up to [*] of
the Periodic Introgen Funding to pay up to an additional [*] in In-License
Expenses (beyond that authorized under Section 5.2.1) and for Funded Expenses of
Other Funded Research in accordance with this Section 5.2.3.
(a) From time to time, VirRx may propose to the JRC a
plan for research activities to be supported with Periodic Introgen Funding
outside the Research Program, together with information to enable the JRC to
understand the background, rationale and prospects for such activities. Promptly
following receipt of such a proposal, the JRC will discuss whether the proposed
activities should be included under the Research Program. To the extent that
VirRx and Introgen mutually agree to do so, the Research Plan and Budget may be
modified to include such activities within the Research Program (i.e. in
addition to or in lieu of other activities, then within the Research Program).
(b) In the event VirRx and Introgen do not agree to
include the proposed activities within the Research Program in accordance with
paragraph (a) above, then subject to paragraph (c) below, VirRx shall have the
right to pursue such activities outside the Research Program ("Other Funded
Research") and to utilize a portion of the Periodic Introgen Funding for such
Other Funded Research. VirRx agrees that the only costs outside the Research
Plan and Budget that can be funded with Periodic Introgen Funding are the Funded
Expenses of Other Funded Research described in this Section 5.2.3(b). VirRx also
agrees that the Other Funded Research will only include bona fide scientific
research initiatives directed toward the discovery or development of
pharmaceutical products or technologies useful for pharmaceutical research.
(c) In consideration for its support of Other Funded
Research, VirRx agrees to provide Introgen a right of first offer with respect
to the grant of any rights by VirRx or its Affiliates with respect to any
product or technology arising out of such Other Funded Research ("OTHER
TECHNOLOGY"). VirRx shall notify Introgen in writing of any such proposed grant
of rights to Other Technology, and upon request by Introgen (the "NEGOTIATION
REQUEST") within thirty (30) days after Introgen's receipt of such notice from
VirRx, the parties shall negotiate toward the grant to Introgen of rights to
such Other Technology on reasonable terms and conditions. Such negotiations
shall continue for a period of [*] after the Negotiation Request (such period
being referred to as the "NEGOTIATION PERIOD"). If the Parties do not agree on
the terms of such a grant to Introgen by the end of the Negotiation Period, such
rights may be granted to a third party. It is understood that if Introgen does
not provide a Negotiation Request within the above-described 30-day period,
VirRx will be free to grant to a third party rights to that Other Technology on
such terms as VirRx considers appropriate.
5.3 Milestone Payment. In further consideration of the rights and
licenses granted by VirRx to Introgen under this Agreement, and in addition to
the amounts described in Section 5.1
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above, Introgen shall pay to VirRx an amount equal to Five Million Dollars
($5,000,000) within thirty (30) days following the first achievement by
Introgen, its Affiliates or Sublicensees, as the case may be, of the first BLA
Approval of the first Licensed Product. It is understood that such payment shall
be made only one time, in no event shall more than one payment be due under this
Section 5.3, and that Introgen shall receive credit toward the payment of such
amount as provided in Section 5.1.2 above.
5.4 Royalties.
(a) Base Royalty. In consideration of the rights and licenses
granted by VirRx to Introgen under this Agreement, subject to the terms and
conditions of this Section 5.4, Introgen agrees to pay to VirRx the following
royalties based on Net Sales by Introgen, its Affiliates or Sublicensees of
Licensed Products:
(i) [*] of such Net Sales with respect to Licensed
Products that consist of an [*] Vector developed by VirRx that are not
materially modified by Introgen (or by a third party under the authority of
Introgen); or
(ii) [*] of such Net Sales with respect to Licensed
Products other than those described in (i) above. It is understood that Licensed
Products for which the royalty will be as set forth in this Section 5.4(a)(ii)
will include those comprising an [*] Vector materially modified by Introgen (or
by a third Party under authority of Introgen), which modifications may include,
but shall not be limited to, bona fide modification of the coding region or
delivery of the [*] Vector, or incorporation into the [*] Vector of other
subject matter. It is understood that a modification to an [*] Vector made
solely for the purpose of reducing the royalties payable to VirRx shall not be
deemed a "material modification" for the purposes of this Section 5.4(a)(ii).
The base royalties calculated under this Section 5.4(a) shall be reduced by [*]
with respect to Net Sales of Licensed Products if the sale or use of such
Licensed Products would not, but for the license granted herein, directly
infringe a Valid Claim in the country for which such Licensed Products are sold.
(b) Royalty Term. The obligation of Introgen to pay royalties
under this Section 5.4 shall continue for each Licensed Product on a
country-by-country basis, until such time as neither the manufacture, sale nor
use of such Licensed Product would infringe a Valid Claim in such country.
(c) Multiple Royalties. If Introgen, its Affiliate or
Sublicensee is required to pay to non-Affiliate third parties amounts with
respect to a Licensed Product under agreements for patent rights or other
technologies that Introgen, its Affiliate or Sublicensee in-licenses or acquires
with respect to such Licensed Product, Introgen may deduct [*] of the amount
owing such non-Affiliate third parties (prior to any reductions) from the
royalty owing to VirRx for the sale of such Licensed Product pursuant to Section
5.4(a) above. Notwithstanding the foregoing provisions of this Section 5.4(c),
(i) Introgen may deduct [*] of amounts owing to third parties with respect to a
patent or patent application if Introgen concludes that the manufacture, sale,
offer
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for sale, use, import, export or other exploitation of the Licensed Product
could infringe such patent or patent application in any country, but (ii) in no
event shall the royalties due to VirRx pursuant to Section 5.4(a) above be
reduced under this Section 5.4(c) to less than [*] of the amount that would
otherwise be due to VirRx hereunder.
(d) Credit for Milestone Payment. If Introgen is required to
make a milestone payment to VirRx under Section 5.3 of this Agreement, Introgen
may deduct [*] of the amount of that payment from any royalties then owing, or
that may later become owing, to VirRx pursuant to Section 5.4(a) above for sales
of Licensed Product; provided that such credit shall not reduce by more than [*]
the amount of any such royalty payment. To the extent any milestone payment
under Section 5.3 of this Agreement is paid to VirRx in Introgen common stock,
for the purpose of calculating the credit amount available to Introgen under
this Section 5.4(d), the amount of such milestone payment paid in Introgen
common stock shall be determined by multiplying the number of shares of Introgen
common stock transferred to VirRx by the lesser of (i) the price per share at
the time of the milestone payment or (ii) the then current price per share at
the time the credit is taken; provided that if VirRx previously sold (or
otherwise transferred) all or a portion of such Introgen common stock shares,
the amount of the milestone payment attributable to those shares shall in no
event be less than the amount determined by multiplying the number of the shares
by the per-share price at which VirRx sold them.
(e) Credit for Distinct [*] Vectors Dropped from the Program. If
Introgen ceases at any time diligent research, development or marketing of any
Distinct [*] Vectors for which Introgen has made a milestone-based investment in
VirRx as described in Section 5.1(iii), then, with respect to each such Distinct
[*] Vectors, Introgen may deduct [*] of the amount of that milestone-based
investment from any royalties then owing, or that may later become owing, to
VirRx pursuant to Section 5.4(a) above for sales of Licensed Product; provided
that such credit shall not reduce by more than [*] the amount of any such
royalty payment. To the extent any milestone payment under Section 5.1(iii) of
this Agreement is paid to VirRx in Introgen common stock, for the purpose of
calculating the credit amount available to Introgen under this Section 5.4(e),
the amount of such milestone payment paid in Introgen common stock shall be
determined by multiplying the number of shares of Introgen common stock
transferred to VirRx by the lesser of (i) the price per share at the time of the
milestone payment or (ii) the then current price per share at the time the
credit is taken; provided that if VirRx previously sold (or otherwise
transferred) all or a portion of such Introgen common stock shares, the amount
of the milestone payment attributable to those shares shall in no event be less
than the amount determined by multiplying the number of the shares by the
per-share price at which VirRx sold them.
(f) Single Royalty; Non-Royalty Sales. In the event that more
than one Valid Claim within the Patent Rights is applicable to any Licensed
Product subject to royalties under this Section 5.4, then only one royalty shall
be paid to VirRx with respect to such Licensed Product. It is understood that
royalties shall only be payable under this Section 5.4 with respect to Licensed
Products whose manufacture, sale or use would infringe a Valid Claim in the
country for which such Licensed Product is sold. In no event shall more than one
royalty be due hereunder with respect to any Licensed Product unit; nor shall a
royalty be payable under Section 5.4(a) with respect to sales of Licensed
Products for use in research and/or development, in clinical trials or as
samples. Notwithstanding Section 5.4(a) above, no royalty shall be due hereunder
with respect to transfers of
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Licensed Products for use in clinical trials, development or other transactions
that are not a full commercial sale.
(g) Combination Products. In the event that a Licensed Product
is sold in combination for a single price with another product, component or
service, or if a Licensed Product incorporates an active ingredient, for which
no royalty would be due hereunder if sold separately, Net Sales from such
combination sales for purposes of calculating the amounts due under this Section
5.4 shall be as reasonably allocated by Introgen between such Licensed Product
and such other product, component and/or service.
(h) Competition. If, despite the exclusive license granted to
Introgen under the Patent Rights hereunder, there is substantial competition
from sales of competing products in a particular country during a calendar
quarter, the royalties otherwise payable under this Section 5.4 with respect to
sales of Licensed Products in such quarter in such country shall be reduced by
[*]. For such purposes, "substantial competition" means that sales by dollars or
units of a competing product by a third party that is not an Affiliate exceed
[*] of the corresponding sales of Licensed Products; and "competing product"
means a product or service that comprises an [*] Vector and is directed against
the same indications as a Licensed Product.
(i) Royalty Reports and Payments. After the first commercial
sale by Introgen, its Affiliates or Sublicensees of a Licensed Product for which
royalties are payable under this Section 5.4, Introgen shall make quarterly
written reports to VirRx within forty-five (45) days after the end of each
calendar quarter, stating in each such report the number, description, and
aggregate Net Sales of such Licensed Product sold during the calendar quarter.
Simultaneously with the delivery of each such report, Introgen shall pay to
VirRx the total royalties, if any, due to VirRx for the period of such report.
If no royalties are due, Introgen shall so report. VirRx shall not provide to
third parties any information contained in reports provided to VirRx pursuant to
this Section 5.4(i), except as required by any VirRx licensor or as otherwise
permitted hereunder. For the purposes of this Section 5.4(i), commercial sales
by Introgen's Affiliates and Sublicensees shall be considered made during the
calendar quarter in which the Affiliate or Sublicensee reports the sale to
Introgen.
(j) Currency Conversion. If any currency conversion shall be
required in connection with the calculation of royalties under this Section 5.4,
such conversion shall be made using the selling exchange rate for conversion of
the foreign currency into U.S. Dollars, quoted for current transactions reported
in The Wall Street Journal for the last business day of the calendar quarter to
which such payment pertains.
(k) Records; Inspection. Introgen shall keep complete, true
and accurate books of account and records for the purpose of determining the
royalty amounts payable under this Section 5.4. Such books and records shall be
kept reasonably accessible for at least [*] following the end of the calendar
quarter to which they pertain. Such records will be open for inspection during
such [*] period by a representative or agent of VirRx for the purpose of
verifying the royalty statements. Such inspections may be made no more than once
each calendar year, at reasonable times mutually agreed by Introgen and VirRx.
The VirRx's representative or agent will be obliged to execute a reasonable
confidentiality agreement prior to commencing any such
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inspection. VirRx shall bear the costs and expenses of inspections conducted
under this Section 5.4(k), unless a variation or error producing an underpayment
in royalties payable exceeding [*] of the amount paid for the period covered by
the inspection is established in the course of any such inspection, whereupon
all costs relating to the inspection and any unpaid amounts that are discovered
will be paid by Introgen, together with interest on such unpaid amounts at the
rate specified in Section 5.7 below.
(l) Conversion. Effective upon written notice to VirRx,
Introgen may convert the license granted to Introgen under Section 4.1 to be
non-exclusive. In such event, or in the event such license becomes non-exclusive
under ARTICLE VI below, the royalties payable to VirRx under this Section 5.4
following such notice after any adjustment shall be [*].
5.5 License Fee. In further consideration of the rights and licenses
granted by VirRx to Introgen under this Agreement, Introgen agrees to pay to
VirRx an annual license maintenance fee equal in amount to [*] plus any annual
license fees due and payable by VirRx to [*] University, which shall be due and
payable within thirty (30) days after each yearly anniversary following the end
of the Research Term (i.e., so that the first such payment shall be due thirty
(30) days after the first anniversary of the end of the Research Term);
provided, however, that:
(a) If Introgen converts the license granted to it under
Section 4.1 to a non-exclusive license, or such license otherwise becomes
non-exclusive under ARTICLE VI below, the license maintenance fee payable to
VirRx under this Section 5.5 following such notice and after any adjustment
under Section 5.5(b), shall be reduced by [*]; and
(b) If, in any year after the end of the Research Term,
Introgen is required to pay royalties to VirRx in an amount greater than [*]
under Section 5.4 above for Net Sales of Licensed Products made during such
year, by Introgen, its Affiliates or Sublicensees, Introgen may deduct the
amount by which those royalty payments exceed [*] from the license maintenance
fee payable by Introgen to VirRx under this Section 5.5 for such year.
5.6 Patent Expenses. Introgen shall reimburse VirRx for reasonable
documented out-of-pocket expenses of filing, prosecuting and maintaining the
patents and patent applications within the Patent Rights prior to the Effective
Date, up to a maximum of [*]. Such amount shall be reimbursed within thirty (30)
days after the Effective Date. Expenses for prosecution of the Patent Rights
after the Effective Date are covered by ARTICLE VIII below.
5.7 Payment Method. Except to the extent the milestone-based
investments contemplated by Section 5.1.2 of this Agreement may be made (under
the terms of the Stock Purchase Agreement) in Introgen common stock, all amounts
payable under this Agreement shall be made by bank wire transfer in immediately
available funds to an account designated by VirRx. All payments hereunder shall
be made in U.S. dollars. Any payments or portions thereof due under this ARTICLE
V which are not paid on the date such payments are due under this Agreement
shall bear interest equal to the prime rate as reported by Citibank, New York,
New York, plus two percent (2%), on the date such payment is due, calculated on
the number of days such payment is delinquent.
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ARTICLE VI
DUE DILIGENCE
6.1 Introgen agrees to use its commercially reasonable efforts to
develop one or more Licensed Product(s) in the United States as soon as
practical, consistent with Introgen's normal business practices and judgments.
In any event, however, Introgen shall be deemed to have satisfied its
obligations under this Section 6.1 if Introgen has an ongoing research and/or
development program with respect to such Licensed Products involving
expenditures of at least [*] per year. Any efforts of Introgen's sublicensees
shall be considered efforts of Introgen for the purpose of determining
Introgen's compliance with its obligation under this Section 6.1.
6.2 After the first year from the Effective Date, VirRx shall have the
right, no more often than once per year upon sixty (60) days written notice to
Introgen, to require Introgen to report to VirRx in writing on its efforts in
complying with Section 6.1 above.
6.3 If Introgen fails to fulfill its obligations under Section 6.1 and
VirRx so notifies Introgen in writing, Introgen shall have [*] from the date of
VirRx's notice to undertake the required efforts. If after the [*] period,
Introgen is continuing not to make the required efforts, Introgen shall not be
deemed to be in breach of this Agreement, but the exclusive license granted by
VirRx to Introgen under Section 4.1 shall become non-exclusive and the license
maintenance fee payable by Introgen shall increase to an amount equal to [*].
ARTICLE VII
INFRINGEMENT BY THIRD PARTY
7.1 Enforcement.
(a) By Introgen. As between the Parties to this Agreement,
Introgen (itself or through others) shall have the initial right to control the
enforcement of the Licensed Subject Matter or defend any declaratory judgment
action with respect thereto (each for the purposes of this ARTICLE VII, an
"ENFORCEMENT ACTION").
(b) By VirRx. In the event that Introgen does not initiate an
Enforcement Action to enforce the Licensed Subject Matter against infringement
or misappropriation by a third party in a country, within [*] days of a request
by VirRx to initiate such Enforcement Action, VirRx may initiate an Enforcement
Action against such infringement or misappropriation at its own expense.
Notwithstanding the foregoing, Introgen shall have the exclusive right to
sublicense any alleged infringer consistent with the requirements of Section 4.1
above and subject to the notice and approval obligations under the Existing
Third-Party Agreement. In the event VirRx initiates an Enforcement Action
against infringement or misappropriation by a third party and
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Introgen or an Affiliate enters into a sublicense or settlement agreement with
such third party, any license fees, settlements, royalties and other payments to
Introgen by such third party shall first go to VirRx to the extent VirRx has
incurred any out of pocket costs and expenses related to such Enforcement
Action.
7.2 Cooperation. The non-controlling Party shall, at the controlling
Party's reasonable request, fully cooperate with the Party controlling any
Enforcement Action, including but not limited to, joining as a Party-plaintiff,
using best efforts to cause its employees to testify at such an action and to
make available relevant records, papers, information, samples, specimens and the
like. The Party controlling the Enforcement Action shall keep the
non-controlling Party reasonably informed of the progress of such action, and
the non-controlling Party shall have the right to participate in such
Enforcement Action with counsel of its own choice at its own expense.
7.3 Division of Recoveries. All court-awarded judgments recovered in an
Enforcement Action shall be first applied to reimburse the controlling Party and
then the non-controlling Party's unreimbursed expenses, including without
limitation, reasonable attorneys' fees and court costs. Any remainder shall be
divided with [*] of the remainder being paid to the controlling Party, and [*]
of the remainder being paid to the non-controlling Party.
7.4 Defense. Introgen may notify VirRx if Introgen obtains knowledge,
or reasonably believes, that Introgen, its Affiliate or Sublicensee, distributor
or other customer has or may be sued by a third Party charging infringement of
patent rights that dominate a claim of patents within the Patent Rights, or
cover the development, manufacture, importation, use, distribution or sale of a
Licensed Product. In such case, as between Introgen and VirRx, Introgen shall be
entitled to control the defense in any such action(s), and Introgen may, in
addition to its rights under Section 5.4(c), [*] of the amounts otherwise
payable by Introgen to VirRx under Section 5.3 or 5.4 above, as a reserve to [*]
of the legal defense costs, attorneys' fees and liability incurred in
preparation, defense and/or settlement of such a claim pending the final
resolution such a claim or action. Notwithstanding, Introgen shall withhold only
that portion of such amounts as may reasonably be necessary to reimburse amounts
in accordance with this Section 7.4. In addition, if Introgen is required to pay
a royalty or other amount to a third Party to develop, make, import, use
distribute or sell a Licensed Product as a result of a final judgment or
settlement, Introgen may, consistent with Section 5.4(c), deduct [*] of such
amounts from the royalties otherwise payable to VirRx under this Agreement;
provided that such royalties shall not be reduced by more than [*].
ARTICLE VIII
INVENTIONS/ PATENT PROSECUTION
8.1 Prosecution by VirRx. Subject to Section 8.2 below, VirRx shall
have the right, at its option, to control the filing for, prosecution and
maintenance of the patents within the Patent Rights; provided however that VirRx
shall first consult with Introgen as to the filing, prosecution and maintenance
of such patents and patent applications, shall keep Introgen fully informed in
relation
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thereto, and shall furnish to Introgen copies of documents relevant to any such
filing, prosecution and maintenance. For purposes of this ARTICLE VIII,
"prosecution and maintenance" of patents and patent applications shall be deemed
to include, without limitation, the conduct of interferences or oppositions,
and/or requests for re-examinations, reissues or extensions of patent terms;
provided, however, that VirRx shall initiate an interference, opposition,
re-examination, reissue or other similar procedure only as mutually agreed by
VirRx and Introgen. Introgen shall reimburse VirRx for all reasonable
out-of-pocket expenses incurred by VirRx after the Effective Date for the filing
for, prosecution and maintenance of patents within the Patent Rights. Such
payments shall be due thirty (30) days following receipt of invoice by Introgen
for such expenses. If Introgen elects to no longer pay the expenses of a patent
or patent application within the Patent Rights in any country (an "Excluded
Country"), Introgen shall notify VirRx not less than thirty (30) days prior to
such action; in such event Introgen shall no longer be obligated to reimburse
such expenses incurred after the date of Introgen's notice, provided that the
license granted to Introgen hereunder with respect to such patent or patent
application shall terminate (with respect to Excluded Countries that are Major
Market Countries) or become non-exclusive (with respect to Excluded Countries
that are not Major Market Countries).
8.2 Prosecution by Introgen. If VirRx elects not to file, prosecute or
maintain any patent application or patent within the Patent Rights, or pay any
fee related thereto, in any country other than an Excluded Country, VirRx shall
promptly notify Introgen of such election, but in no case later than sixty (60)
days prior to any required action relating to the filing, prosecution or
maintenance of such patent application or patent. In such event, or if Introgen
elects to take over the filing, prosecution and/or maintenance of one or more
patents or applications within the Patent Rights, then in any such case upon
notice to VirRx Introgen shall have the right, at its option, to control the
filing, prosecution and/or maintenance of any such patent applications or
patents within the Patent Rights at its own expense. In the event that Introgen
takes over the filing, prosecution and/or maintenance of a patent or application
within the Patent Rights, Introgen shall keep VirRx reasonably informed on
matters regarding such filing, prosecution and maintenance.
ARTICLE IX
CONFIDENTIALITY
9.1 Confidential Information. The Parties may, from time to time, in
connection with this Agreement, disclose to each other Confidential Information.
"Confidential Information" shall mean any information disclosed in writing by
Introgen or VirRx to the other, and marked by the disclosing Party with the
legend "CONFIDENTIAL" or other similar legend sufficient to identify such
information as confidential proprietary information of the disclosing Party.
Neither Party shall use Confidential Information of the other Party except as
expressly authorized in this Agreement, and each Party will use diligent efforts
to prevent the disclosure of the other Party's Confidential Information to third
parties. Notwithstanding the foregoing, the recipient Party's obligations under
this ARTICLE IX shall not apply to Confidential Information that:
(a) is disclosed orally; provided, however, that the recipient
Party's obligations under this ARTICLE IX shall apply to information disclosed
orally if such information is reduced to
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writing and marked with the legend "CONFIDENTIAL" by the disclosing Party within
thirty (30) days after disclosure thereof or if such information is disclosed
orally during any meeting of the JRC or board of directors of VirRx;
(b) is in the recipient Party's possession at the time of
disclosure thereof as demonstrated by documentary evidence;
(c) is or later becomes part of the public domain through no
fault of the recipient Party;
(d) is received from a third Party having no obligations of
confidentiality to the disclosing Party; or
(e) is developed independently by the recipient Party without
access to the disclosing Party's Confidential Information;
9.2 Compelled Disclosures. Notwithstanding the provisions of Section
9.1:
(a) The recipient Party may disclose the other Party's
Confidential Information to the extent the recipient party is required to do so
by law or regulation; provided, however, that the recipient Party: (i) asserts
the confidential nature of the Confidential Information to the court or agency;
(ii) provides prompt written notice to the other Party to enable such other
Party to seek a protective order or otherwise prevent disclosure of such
Confidential Information; and (iii) reasonably cooperates with the other Party
(at the other Party's expense) in protecting against the disclosure or in
obtaining a protective order narrowing the scope of the compelled disclosure;
and
(b) VirRx may disclose to [*] University or [*] University (as
applicable) the terms of any sublicense provided to it by Introgen pursuant to
Section 4.1; provided, however, that: (i) such disclosure is limited to that
which is required by the terms of an Existing Third-Party Agreement then in
effect; and (ii) before the disclosure, [*] University or [*] University (as
applicable) enters into a confidentiality agreement with Introgen that is at
least as protective of Introgen's Confidential Information as the terms of this
Agreement are.
9.3 Licensed Subject Matter.
(a) Notwithstanding the provisions of Section 9.1, Introgen
may use and disclose Confidential Information comprising the Licensed Subject
Matter: (a) to the extent necessary or useful in connection with the exercise of
Introgen's rights (including commercialization and/or sublicensing of Licensed
Subject Matter), or performance of Introgen's obligations or duties under this
Agreement, or to investors, advisors and others on a need-to-know basis under
reasonable conditions of confidentiality; and (b) as required by law.
(b) VirRx shall not disclose or provide the information
comprising the Licensed Subject Matter to any third party except: (a) as
required to file for, prosecute and maintain patents within the Licensed Subject
Matter under Section 8.1; (b) as required by an Existing Third-Party Agreement;
(c) as required by the patent disclosure policy of [*] University; or (d) as
required by law.
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9.4 Survival. The obligations of the Parties pursuant to this ARTICLE
IX with respect to Confidential Information of the other Party shall continue in
full force and effect for a period of five (5) years after expiration or
termination of this Agreement.
ARTICLE X
INDEMNIFICATION
10.1 Indemnification of VirRx. Introgen shall hold VirRx, its
successors and assigns, the directors, officers, consultants and employees of
any of the foregoing, and [*] University and its [*] (collectively, the "VIRRX
INDEMNITEES") harmless against any loss, cost, liability and expense (including
settlement costs, court costs, and the reasonable fees of attorneys and other
professionals) arising out of or resulting from, any and all claims brought by
third parties alleging personal injury or property damage in conjunction with,
or arising out of the design, manufacture, distribution or use of Licensed
Products and other products embodying the Licensed Subject Matter by Introgen,
its Affiliates or Sublicensees.
10.2 Indemnification of Introgen. VirRx shall hold Introgen, its
Affiliates and Sublicensees, the successors and assigns of each, and the
directors, officers and employees of any of the foregoing (collectively, the
"INTROGEN INDEMNITEES") harmless against any loss, cost, liability and expense
(including settlement costs, court costs, and the reasonable fees of attorneys
and other professionals) arising out of or resulting from, any claimed breach of
the representations and warranties made by VirRx under this Agreement.
10.3 Procedure. Notwithstanding the foregoing, a party under this
Agreement ("INDEMNIFYING PARTY") shall have no obligation to hold an Indemnitee
of the other party harmless under this ARTICLE X unless the Indemnitee seeking
indemnification hereunder (i) promptly notifies the Indemnifying Party of such
claim (ii) gives the Indemnifying Party sole control of the defense or
settlement of such claim, and (iii) provides the Indemnifying Party, at the
Indemnifying Party's expense, with reasonable assistance and full information
with respect to such claim. Notwithstanding the foregoing, the Indemnifying
Party shall have no obligations for any claim if the Indemnitee seeking
indemnification makes any admission, settlement or other communication regarding
such claim without the prior written consent of the Indemnifying Party, which
consent shall not be unreasonably withheld.
ARTICLE XI
USE OF NAMES
11.1 Party Names. Except as required by law, neither Introgen nor VirRx
shall issue any press release or other public statements in connection with this
Agreement intended for use in the public media in a manner suggesting any
endorsement by the other of Introgen or VirRx, respectively, without the
approval of such other Party, which approval shall not be unreasonably withheld.
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ARTICLE XII
TERM AND TERMINATION
12.1 Term. Unless terminated earlier pursuant to this ARTICLE XII, the
term of this Agreement shall commence on the Effective Date and continue in full
force and effect until the later of: (a) the expiration, revocation or
invalidation of the last patent within the Patent Rights; or (b) the abandonment
of the last patent application within the Patent Rights. Introgen's license
under Section 4.1 shall survive the expiration, (but not an earlier termination,
except as provided in Section 12.4 below) of this Agreement.
12.2 Termination for Breach. In the event of a material breach of this
Agreement, the nonbreaching Party shall be entitled to terminate this Agreement
by written notice to the breaching Party, if such breach is not cured within
sixty (60) days after written notice is given by the nonbreaching Party to the
breaching Party specifying the breach. However, if the Party alleged to be in
breach of this Agreement disputes such breach within such sixty (60) day period,
the nonbreaching Party shall not have the right to terminate this Agreement
unless it has been determined by a mutually agreed process of binding
arbitration that this Agreement was materially breached, and the breaching Party
fails to comply with its obligations hereunder within thirty (30) days after
such determination.
12.3 Certain Terminations Upon Notice.
(a) Any provision herein notwithstanding, Introgen may
terminate this Agreement in its entirety, at any time
by giving VirRx written notice. Upon termination of
this Agreement in its entirety under this Section
12.3(a), all rights and obligations of the Parties
shall terminate, except as provided in Section 12.4
below.
(b) Any provision herein notwithstanding, Introgen may
terminate its rights and obligations as to any
particular patent or patent application within the
Patent Rights, or as to any particular Licensed
Product, at any time by giving VirRx at least thirty
(30) days prior written notice. From and after the
effective date of such termination under this Section
12.3(b) with respect to a particular patent or patent
application, such patent(s) and application(s) in the
particular country shall cease to be within the
Patent Rights for all purposes of this Agreement, and
all rights and obligations of Introgen with respect
to such patent(s) and patent application(s) shall
terminate. From and after the effective date of a
termination under this Section 12.3(b) with respect
to particular Licensed Product, the license granted
to Introgen under Section 4.1 shall terminate with
respect to such Licensed Product.
(c) Any provision herein notwithstanding, Introgen may
terminate the Research Program, effective any time
after the one-year anniversary of the Effective Date
by giving VirRx at least ninety (90) days prior
written notice. Upon
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termination of the Research Program under this
Section 12.3(c): (i) all rights and obligations of
the Parties under Sections 2.1, 2.2 and 2.3 shall
terminate, except those rights and obligations
accrued prior to termination; and (ii) the exclusive
license granted by VirRx to Introgen under Section
4.1 shall become non-exclusive, except that the
license shall remain exclusive with respect to any
Licensed Subject Matter that relates to any Distinct
[*] Vectors (and the manufacture and use thereof) for
which, at the time of the Research Program's
termination, an IND has been filed.
12.4 Survival.
(a) Termination of this Agreement for any reason shall not
release either Party hereto from any liability which at the time of such
termination has already accrued to the other Party.
(b) In the event this Agreement is terminated for any reason,
Introgen and its Affiliates shall have the right to sell or otherwise dispose of
the stock of any Licensed Products then on hand, all subject to the payment to
VirRx of fees and royalties pursuant to ARTICLE V hereof. Upon termination of
this Agreement for any reason, any sublicense to a third Party granted by
Introgen hereunder shall survive, provided that upon request by VirRx, such
third Party promptly agrees in writing to be bound by the applicable terms of
this Agreement.
(c) Articles 3, 4, 7, 8, 9, 10, 11 and 13, and Section 5.2,
shall survive the expiration and any termination of this Agreement; provided
that upon a termination by Introgen under Section 12.3(a) above, or under
Section 12.2 by reason of a breach by Introgen, the provisions of Articles 4, 7
and 8 shall terminate and not survive. Except as otherwise provided in this
Section 12.4, all rights and obligations of the Parties under this Agreement
shall terminate upon the expiration or termination of this Agreement.
ARTICLE XIII
GENERAL
13.1 Governing Law. This Agreement shall be governed by, and construed
and interpreted in accordance with, the laws of Texas, without regard to
conflicts-of-laws principles.
13.2 Independent Contractors. The relationship of Introgen and VirRx
established by this Agreement is that of independent contractors. Nothing in
this Agreement shall be construed to create any other relationship between
Introgen and VirRx. Neither Party shall have any right, power or authority to
assume, create or incur any expense, liability or obligation, express or
implied, on behalf of the other.
13.3 Assignment. This Agreement may not be assigned by either Party
without the prior written consent of the other, except that either Party may
assign its rights and obligations under this Agreement to a third Party that
succeeds to all or substantially all of the business or assets of the assigning
Party relating to this Agreement whether by sale, merger, operation of law or
otherwise;
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provided that such assignee or transferee agrees in writing to be bound by the
terms and conditions of this Agreement. In addition, Introgen may assign this
Agreement to an entity that is an Affiliate of Introgen at the time of the
assignment, provided, that VirRx consents to such assignment, such consent shall
not be unreasonably withheld.
13.4 Limitation of Liability. NEITHER PARTY SHALL BE LIABLE TO THE
OTHER PARTY OR ANY THIRD PARTY FOR ANY SPECIAL, CONSEQUENTIAL, EXEMPLARY OR
INCIDENTAL DAMAGES (INCLUDING LOST OR ANTICIPATED REVENUES OR PROFITS RELATING
TO THE SAME), ARISING FROM ANY CLAIM RELATING TO THIS AGREEMENT, WHETHER SUCH
CLAIM IS BASED ON CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, EVEN IF AN
AUTHORIZED REPRESENTATIVE OF SUCH PARTY IS ADVISED OF THE POSSIBILITY OR
LIKELIHOOD OF SAME.
13.5 No Implied Obligations. Introgen's sole obligation to exploit the
Licensed Subject Matter is as set forth in ARTICLE VI. Nothing in this Agreement
shall be deemed to require Introgen to otherwise exploit the Licensed Subject
Matter nor prevent Introgen from commercializing products similar to or
competitive with a Licensed Product.
13.6 Force Majeure. In the event either Party hereto is prevented from
or delayed in the performance of any of its obligations hereunder by reason of
acts of God, war, strikes, riots, storms, fires, or any other cause whatsoever
beyond the reasonable control of the Party, the Party so prevented or delayed
shall be excused from the performance of any such obligation to the extent and
during the period of such prevention or delay.
13.7 Notices. Any notice or other communication required by this
Agreement shall be made in writing and given by prepaid, first class, certified
mail, return receipt requested, and shall be deemed to have been served on the
date received by the addressee at the following address or such other address as
may from time to time be designated to the other Party in writing:
If to VirRx: VirRx, Inc.
0000 Xxxxxx Xxxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx Xxxx
With copy to: Xxxxxxxxx Xxxxxxxx, LLP
Xxx Xxxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xx. Xxxxx, Xxxxxxxx, 00000
Attn: Xxxxxx X. Xxxxx, Esq.
If to Introgen: Introgen Therapeutics, Inc.
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: President
With a copy to: Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxxxxx X. Xxxxx
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And with a copy of all financial reports to:
Introgen Therapeutics, Inc.
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Chief Financial Officer
13.8 Compliance with Law. Each of the Parties shall comply with all
applicable federal, state and local laws and regulations in connection with its
activities pursuant to this Agreement.
13.9 Modification; Waiver. This Agreement may not be altered, amended
or modified in any way except by a writing signed by both Parties. The failure
of a Party to enforce any provision of this Agreement shall not be construed to
be a waiver of the right of such Party to thereafter enforce that provision or
any other provision or right.
13.10 Headings. Headings included herein are for convenience only, do
not form a part of this Agreement and shall not be used in any way to construe
or interpret this Agreement.
13.11 Severability. If any provision of this Agreement shall be found
by a court to be void, invalid or unenforceable, the same shall be reformed to
comply with applicable law or stricken if not so conformable, so as not to
affect the validity or enforceability of the remainder of this Agreement.
13.12 Entire Agreement. The Parties hereto acknowledge that this
Agreement and its Exhibits set forth the entire agreement and understanding of
the Parties hereto as to the subject matter hereof, and supersedes all prior
discussions, agreements and writings in respect hereto.
13.13 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but both of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties hereto have caused their duly
authorized representatives to execute this Agreement.
VIRRX, INC. INTROGEN THERAPEUTICS, INC.
("VirRx") ("Introgen")
By: /s/ XXXXXXX XXXX By: /s/ XXXXX X. XXXXX
---------------------------- ----------------------------
Name: Xxxxxxx Xxxx Name: Xxxxx X. Xxxxx
-------------------------- --------------------------
Title: President Title: President & CEO
------------------------- -------------------------
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EXHIBIT 1.17
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EXISTING PATENTS
Tech. Disclosure #/ Appln Serial #/ Date Title
VirRx I.D. No. Issued Patent #
[*]
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EXHIBIT 2.3
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GENERAL PLANS FOR RESEARCH PLAN AND BUDGET
[*]
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