Exhibit 10.7
LICENSE AGREEMENT
This LICENSE AGREEMENT (the "Agreement") effective as of May 31, 1996 (the
"Effective Date"), is entered by and between Scios Inc., a Delaware corporation,
with principal offices at 0000 Xxxxxxxx Xxxxxxx, Xxxxxxxx Xxxx, Xxxxxxxxxx 00000
("Scios"), and GenVec, Inc., a Delaware corporation, having a principal place of
business at 00000 Xxxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000 ("GenVec").
RECITALS
A. Scios is the sole and exclusive owner of certain Patent Rights and
Know-How (as such terms are defined below) relating to vascular endothelial
growth factor (VEGF) 121 and nucleic acid sequences encoding VEGF 121, and the
use thereof, and related subject matter;
B. GenVec desires to obtain an exclusive license to the Patent Rights and
Know-How in the Field (as defined below) and Scios is willing to grant such a
license to GenVec, on the terms and conditions herein;
C. GenVec and Scios each wish to cooperate to facilitate the development
of proprietary VEGF products, as set forth herein;
D. Of even date herewith, Scios and GenVec have entered into a Stock
Warrant Agreement pursuant to which GenVec will grant to Scios a warrant to
purchase shares of GenVec common stock; and
E. Of even date herewith, Scios and GenVec have entered into a Stock
Purchase Agreement (attached hereto as Exhibit D) pursuant to which Scios will
purchase shares of GenVec Class D Convertible Preferred Stock.
NOW, THEREFORE, Scios and GenVec agree as follows:
1. DEFINITIONS
1.1 "Affiliate" means any corporation or other entity which is directly or
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indirectly controlling, controlled by or under the common control of a party
hereto. For the purpose of this Agreement, "control" shall mean the direct or
indirect ownership of at least fifty percent (50%) of the outstanding shares or
other voting rights of the subject entity to elect directors, or if not meeting
the preceding, any entity owned or controlled by or owning or controlling at the
maximum control or ownership right permitted in the country where such entity
exists.
1.2 "Competing Product" shall mean any product in the Field sold by a
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person other than (a) GenVec, (b) a GenVec sublicensee of the Licensed
Technology, (c) [*] or (d) a
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sublicensee of [*] patent rights with respect to [*], in each case,
which if sold by GenVec would be a Licensed Product.
1.3 "Confidential Information" shall mean (i) any proprietary or
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confidential information or material in tangible form disclosed hereunder that
is marked as "confidential" at the time it is delivered to the receiving party,
or (ii) proprietary or confidential information disclosed orally hereunder which
is identified as confidential or proprietary when disclosed and such disclosure
of confidential information is confirmed in writing within thirty (30) days by
the disclosing party.
1.4 "Core Countries" shall mean the [*]
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1.5 "Derived" shall mean a [*]
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1.6 "Equity Value" shall mean an amount for the purchase of shares of
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GenVec stock, which is equal to [*] of the fair market value of such stock, with
such fair market value determined based on the share price on the date of actual
purchase, unless GenVec enters into a written agreement to sell such equity to
the purchasing party in the future and the share price on the actual date of
purchase is lower than the share price at the date such agreement is executed,
in which event the fair market value of such equity for purposes of this Section
1.6 shall be based on the share price on the date such agreement is executed.
1.7 "Excess Equity Purchase Amount" shall mean any amount received by
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GenVec from a corporate partner in connection with an agreement for the
development or commercialization of a Licensed Product for the purchase of
shares of GenVec stock which is greater than the Equity Value of such stock.
1.8 "Field" shall mean [*]
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1.9 "Licensed Product" shall mean [*] or a product within the scope
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of a Valid Claim within the Patent Rights.
1.10 "Licensed Technology" means the Know-How and Patent Rights.
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1.10.1 "Know-How" shall mean any and all technical information,
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materials (including without limitation, biological materials), processes,
procedures, compositions, devices, methods, formulas, protocols, techniques,
designs, drawings, and other technical data which is
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RESPECT TO THE OMITTED PORTIONS.
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owned, in whole or part, or controlled by Scios or its Affiliates during the
term of this Agreement, which is necessary or useful for the development,
manufacture, use or sale of Licensed Products. Know-How shall not include any
inventions included in the Patent Rights, and shall not include any business
information, such as market research or business analysis.
1.10.2 "Patent Rights" means (i) the patent applications and patents
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listed on Exhibit A hereto, and (ii) [*] in each case, which is owned, in
whole or part, or controlled by Scios or its Affiliates during the term of this
Agreement including, without limitation, Scios' interest in any Joint
Inventions; and all divisions, continuations, continuations-in-part, and
substitutions of any of the preceding; all foreign patent applications
corresponding to any of the preceding applications or patents; and all U.S. and
foreign patents issuing on any of the preceding applications, including
extensions, reissues, and re-examinations.
[*]
1.13 "Net Revenues" means the gross revenues received by GenVec for:
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[*]
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RESPECT TO THE OMITTED PORTIONS.
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[*]
For the avoidance of doubt, it is understood and agreed that [*]
1.14 "Net Sales" means the amounts received by GenVec and its sublicensees
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with respect to sales of Licensed Products to independent third parties, [*]
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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1.16 "Transfer Sales" means the amounts received by GenVec with respect to
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sales of Licensed Products to its sublicensees, less: [*]
1.17 "Territory" means all countries of the world.
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1.18 "Valid Claim" means (i) a claim of an issued and unexpired patent
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claiming [*]
2. LICENSE
2.1 License Grant. Scios hereby grants to GenVec an exclusive, worldwide
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license under the Licensed Technology, with the right to grant and authorize
sublicenses, to make, have made, import, have imported, use, sell, offer for
sale and otherwise exploit Licensed Products in the Field in the Territory.
2.2 Delivery of Know-How. Within [*] after the Effective Date,
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Scios shall deliver to GenVec the biological materials listed on Exhibit B
hereto and the [*]. Within [*] after the Effective Date, knowledgeable
representatives of the parties shall meet to discuss the existing Know-How and
shall agree on which Know-How Scios shall deliver to GenVec, and the schedule of
delivery and form thereof. At least semi-annually during the term of the
Agreement, Scios shall provide to GenVec all Know-How developed or generated
during the preceding [*] period.
2.3 Cooperation. It is understood and agreed that the parties intend to
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confer and cooperate to aid each other, without charge, in the development and
commercialization of products within the Patent Rights. The parties shall
negotiate in good faith the scope and nature of such activities, but agree to do
at least the following:
2.3.1 Scios Activities. Scios shall: (i) provide GenVec with
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protocols for Scios' [*]
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[*] Such discussions will be participated in by Scios representatives with
appropriate expertise in the relevant topics. The discussions shall include
updates to GenVec as the understanding of these areas develops.
[*]
2.3.3 Level of Cooperation. Unless otherwise agreed, neither party
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shall have any obligation to provide services to the other pursuant to this
Section 2.3 or Section 3.10 in excess of an aggregate of [*] per calendar
quarter.
2.3.4 Termination. Except as expressly provided in this Section
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2.3.4, the foregoing cooperative activities (but not activities subject to
Section 3.10) shall terminate, at [*]
3. CONSIDERATION
3.1 Warrants. In partial consideration of the license granted herein, of
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even date herewith GenVec has granted Scios a warrant to purchase shares of
GenVec stock pursuant to the terms of the Stock Warrant Agreement attached
hereto as Exhibit C.
3.2 Profit Sharing. Subject to Section 3.4 below, in partial
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consideration of the license granted herein, [*]
3.3 Minimum Royalty. Notwithstanding Section 3.2 above, with respect to
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sales of Licensed Products (including sales of Licensed Products in connection
with a co-promotion relationship) made in countries where there is a Valid Claim
of an issued patent within the Patent Rights covering such Licensed Products,
subject to Section 3.4, GenVec shall pay to Scios no less [*]
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THE OMITTED PORTIONS.
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[*]
3.4 Payment Reductions. In the event that a Licensed Product is made,
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used or sold in a country where there is a competing product in the Field, the
amounts due Scios pursuant to Sections 3.2 and 3.3 shall be reduced as follows:
[*]
3.6 Other Technology and Products. It is understood and agreed that in
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the event GenVec enters into an agreement with a third party which provides such
third party rights to the Licensed Technology and/or Licensed Products and
intellectual property other than the Licensed Technology and/or products other
than Licensed Products, pursuant to which it receives license fees and/or
milestone payments with respect to (i) intellectual property other than the
Licensed Technology for use in the development or commercialization of products
other than Licensed Products, or (ii) products other than Licensed Products, the
portion of such amounts which constitute Net Profits shall be as reasonably
determined by the parties based on an allocation between the amounts
attributable to the Licensed Technology or Licensed Product and such other
intellectual property or
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product, based upon their relative importance and proprietary protection, and
GenVec shall only pay to Scios that portion of such amounts reasonably
attributable to the Licensed Technology or Licensed Product, as the case may be.
3.7 Commercial Impracticability. Notwithstanding the above, in the event
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that GenVec believes that the payments set forth in Sections 3.2 or 3.3 above
would make the sale of Licensed Products commercially impracticable it may
notify Scios, and in such event the parties shall negotiate in good faith a
reduction in such payments.
3.8 One Payment. No more than one payment shall be due with respect to a
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sale of a particular Licensed Product. No multiple payments shall be payable
because any Licensed Product, or its manufacture, sale or use is covered by more
than one Valid Claim. No amount shall be payable under Sections 3.2 or 3.3
above with respect to Licensed Products distributed for use in research and/or
development, in clinical trials, or as promotional samples where such samples
are provided at or below cost.
3.9 Payment Term. Payments due under this Article 3 shall be payable on a
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country-by-country and Licensed Product-by-Licensed Product basis. In countries
where there exists a Valid Claim of an issued patent within the Patent Rights
covering a particular Licensed Product, such payments shall be payable until the
expiration of the last-to-expire issued Valid Claim within the Patent Rights in
such country covering such Licensed Product. If no Valid Claim of an issued
patent within the Patent Rights covering a particular Licensed Product exists in
a country, payments shall be payable in such country until the earlier of (i)
[*] of the Effective Date, or (ii) [*] of the first commercial sale of a
Licensed Product in such country; provided, in the event that a patent within
the Patent Rights containing a Valid Claim issues in such country, then GenVec
shall make payments with respect to such Valid Claim for the period set forth in
the second sentence above.
3.10 Information regarding [*]. In partial consideration of the rights
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granted herein, GenVec shall provide to Scios during the term of this Agreement
general insights and information concerning the decision-making and development
processes utilized by GenVec in the development of [*]. Such discussions will be
participated in by GenVec representatives with appropriate expertise in the
relevant topics. The discussions shall include updates to Scios as the
understanding of these areas develops. During the interactions between Scios and
GenVec subject to this Section 3.10, GenVec need not disclose to Scios any
Confidential Information of GenVec except as it may pertain to a Licensed
Product, or any Confidential Information obtained from a third party. During the
period of cooperative activities subject to Section 2.3, GenVec may provide such
insights and information in the context of discussions regarding the development
of a Licensed Product. Thereafter, GenVec may provide such insight and
information to Scios in the context of another product or general education
regarding the gene therapy field. Following termination of the cooperative
activities subject to Section 2.3, GenVec shall not be required to meet with
Scios representatives more than twice per calendar year to provide information
under this Section, or participate in any such meetings more than five (5) years
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following the date of termination of the cooperative activities subject to
Section 2.3. Such meeting may be held in person or by telephone or video
conference.
4. PAYMENTS
4.1 Payments. GenVec shall pay amounts due Scios pursuant to Article 3
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within [*] after the last day of the calendar quarter in which they are
received; provided, any amounts due with respect to Net Revenues subject to
Section 1.13 (a) or (b) shall be paid to Scios within [*] after such amounts are
received by GenVec. All payments due hereunder shall be made in U.S. dollars,
and shall be made by bank wire transfer in immediately available funds to an
account designated by Scios.
4.2 Currency Conversion. If any currency conversion shall be required in
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connection with the calculation of payments hereunder, such conversion shall be
made using the selling exchange rate for conversion of the foreign currency into
U.S. dollars, quoted for current "buy" transactions for purchasing U.S. dollars
as reported in The Wall Street Journal for the last business day of the calendar
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quarter to which such payment pertains.
4.3 Restrictions on Payment. To the extent and as long as the laws and/or
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regulations in force in any country prohibit the payment, conversion or
remittance of any of the payments as hereby contemplated, GenVec's obligations
under Article 4 may be discharged by the deposit thereof to the account of
GenVec, or its designee, in any commercial bank or trust company selected by
Scios located in such country; provided, that no infraction of law or regulation
occurs in making such deposit. If due to restrictions or prohibitions imposed
by national or international authority, pay ments cannot be made as aforesaid,
the parties shall consult with a view to finding a prompt and acceptable
solution, and GenVec will, from time to time, deposit such monies as Scios may
lawfully direct, at no additional out-of-pocket expense to GenVec and with no
further obligation to Scios.
4.4 Withholding Taxes. All amounts required to be paid to Scios pursuant
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to this Agreement may be paid with deduction for withholding for or on account
of any taxes (other than taxes imposed or measured by net income) or similar
governmental charge imposed on such payment by a jurisdiction other than the
United States ("Withholding Taxes"). GenVec agrees to take reasonable efforts
to structure its business arrangements in order to minimize the Withholding
Taxes, but shall have no obligation to follow any course of action or enter into
any business relationship which would have an adverse impact on GenVec or its
Affiliates or sublicensees, as reasonably determined by GenVec. Upon Scios'
request, GenVec shall provide Scios a certificate evidencing payment of any
Withholding Taxes hereunder.
5. REPORTS AND RECORDS
5.1 Net Profit Reports. GenVec shall deliver to Scios within [*] after
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the end of each calendar quarter in which Licensed Products are sold a written
report setting forth in
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reasonable detail, on a Licensed Product-by-Licensed Product basis, the
calculation of the amounts payable to Scios for such calendar quarter, including
the quantities of Licensed Products sold and the Net Revenues and Net Profits
with respect thereto. Such reports shall be Confidential Information of GenVec
subject to Article 7 herein.
5.2 Inspection of Books and Records. GenVec shall maintain accurate books
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and records which enable the calculation of amounts payable hereunder to be
verified. GenVec shall retain the books and records for each quarterly period
for [*] after the submission of the corresponding report under Section 5.1
hereof. Upon [*] prior notice to GenVec, independent accountants selected by
Scios, reasonably acceptable to GenVec, after entering into a confidentiality
agreement with GenVec in a form reasonably acceptable to GenVec, may have access
to the books and records of GenVec to conduct a review or audit once per
calendar year, for the sole purpose of verifying the accuracy of GenVec's
payments and compliance with this Agreement. The accountants shall report to
Scios only whether there has been an underpayment and, if so, the amount
thereof. Such access shall be permitted during GenVec's normal business hours at
agreed times during the term of this Agreement and for [*] after the expiration
or termination of this Agreement. Any such inspection or audit shall be at
Scios' expense, however, in the event an inspection reveals underpayment of [*]
or more in any audit period, GenVec shall pay the costs of the inspection.
6. DILIGENCE
6.1 Reasonable Efforts. GenVec agrees to use reasonable efforts to
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diligently develop and commercialize at least one Licensed Product and obtain
such approvals as may be necessary for the sale of such Licensed Products in the
United States and such other worldwide markets as GenVec elects to commercialize
the Licensed Products. GenVec's efforts shall be comparable to those efforts
GenVec makes with respect to its other products of comparable value, stage of
development and patent protection. The selection of Licensed Products for
development and commercialization shall be in the sole discretion of GenVec, and
GenVec may satisfy its obligations under this Article 6 itself or through a
sublicensee. GenVec shall notify Scios within [*] after the first commercial
sale of each Licensed Product.
[*]
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7. CONFIDENTIALITY; PUBLICATIONS
7.1 Confidential Information. Except as expressly provided herein, the
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parties agree that, for the term of this Agreement and for [*] thereafter, the
receiving party shall keep completely confidential and shall not publish or
otherwise disclose and shall not use for any purpose except for the purposes
contemplated by this Agreement any Confidential Information furnished to it by
the disclosing party hereto pursuant to this Agreement, except that to the
extent that it can be established by the receiving party by competent proof that
such Confidential Information:
(i) was already known to the receiving party, other than under an
obligation of confidentiality, at the time of disclosure;
(ii) was generally available to the public or otherwise part of the
public domain at the time of its disclosure to the receiving party;
(iii) became generally available to the public or otherwise part of
the public domain after its disclosure and other than through any act or
omission of the receiving party in breach of this Agreement;
(iv) was independently developed by the receiving party; or
(v) was lawfully disclosed to the receiving party by a person other
than a party hereto.
7.2 Permitted Use and Disclosures. Each party hereto may use or disclose
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information disclosed to it by the other party to the extent such use or
disclosure is reasonably necessary in filing or prosecuting patent applications,
prosecuting or defending litigation, complying with laws, governmental
regulations or court orders submitting information to tax or other governmental
authorities, conducting pre-clinical research and development or clinical
trials, making a permitted sublicense or otherwise exercising its rights
hereunder, provided that if a party is required to make any such disclosure of
another party's confidential information, other than pursuant to a
confidentiality agreement, it will give reasonable advance notice to the latter
party of such disclosure and, save to the extent inappropriate in the case of
patent applications, will use reasonable efforts to secure confidential
treatment of such information prior to its disclosure (whether through
protective orders or otherwise).
7.3 Public Disclosures. Except as expressly provided in this Article 7,
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no disclosure or public announcement or other disclosure to third parties
concerning the existence of this Agreement shall be made, either directly or
indirectly, by any party to this Agreement, except as may be legally or
contractually required or as may be required for recording purposes, without
first obtaining the approval of the other party and agreement upon the nature
and text of such announcement of disclosure, which approval shall not be
unreasonably withheld. The party required to make any such public announcement
shall use its reasonable
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efforts to inform the other party of the proposed announcement in reasonably
sufficient time prior to public release, and shall use its reasonable efforts to
provide the other party with a written copy thereof, in order to allow such
other party to comment upon such announcement. Once a particular disclosure has
been approved, further disclosures which do not differ materially therefrom may
be made without obtaining any further consent of the other party.
7.4 Confidential Terms. Except as expressly provided herein, each party
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agrees not to disclose any terms of this Agreement to any third party without
the consent of the other party; provided, reasonable disclosures may be made as
required by securities or other applicable laws, or to actual or prospective
investors or corporate partners, or to a party's accountants, attorneys and
other professional advisors.
8. REPRESENTATIONS AND WARRANTIES
8.1 Scios. Scios represents and warrants that: (i) it is a corporation
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duly organized, validly existing and in good standing under the laws of
Delaware; (ii) when executed and delivered, this Agreement will become valid and
binding on Scios, and enforceable against Scios in accordance with its terms;
(iii) the execution, delivery and performance of this Agreement have been duly
authorized by all necessary corporate action on the part of Scios; (iv) it is
the sole and exclusive owners of all right, title and interest in the Patent
Rights and the Know-How; (v) it has the right to grant the rights and licenses
granted herein; (vi) the Patent Rights and Know-How are free and clear of any
lien, encumbrance, security interest or restriction on license; (vii) it has not
previously granted, and will not grant during the term of this Agreement, any
right, license or interest in or to the Patent Rights and Know-How, or any
portion thereof, inconsistent with the license granted to GenVec herein; and
(viii) there are no threatened or pending actions, suits, investigations, claims
or proceedings in any way relating to the Patent Rights or Know-How.
8.2 GenVec. GenVec represents and warrants that: (i) it is a corporation
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duly organized validly existing and in good standing under the laws of the State
of Delaware; (ii) when executed and delivered, this Agreement will become valid
and binding on GenVec, and enforceable against GenVec in accordance with its
terms; (iii) the execution, delivery and performance of this Agreement have been
duly authorized by all necessary corporate action on the part of GenVec, and
(iv) as of the Effective Date, without conducting any inquiry, GenVec is not
aware of threatened or pending actions, suits, investigations, claims or
proceedings in any way relating to issued patents which GenVec necessarily must
acquire license or other rights to in order to commercialize the Licensed
Technology.
9. INTELLECTUAL PROPERTY
9.1 Ownership. Title to all inventions and other intellectual property
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made solely by or on behalf of GenVec during the term of the Agreement shall be
owned by GenVec. Title to all inventions and other intellectual property made
solely by or on behalf of Scios during the term of the Agreement shall be owned
by Scios. Title to all inventions and other intellectual property made
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jointly by or on behalf of Scios and GenVec during the term of the Agreement
shall be jointly owned by GenVec and Scios (each a "Joint Invention").
Inventorship of inventions and other intellectual property rights conceived
and/or reduced to practice by the parties and ownership rights with respect
thereto, shall be determined in accordance with the patent laws of the United
States.
9.2 Patent Prosecution.
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[*]
9.2.3 Joint Inventions.
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[*]
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[*]
9.2.4 GenVec Responsibilities. GenVec shall, at its sole expense,
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have the right to control the preparation, filing, prosecution and maintenance
of any patent applications and patents solely owned by it, and any
interferences, re-examinations, reissues and oppositions relating thereto, using
patent counsel of its choice.
9.3 Copies. Upon request by GenVec, Scios shall provide to GenVec a copy
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of any patent applications within the Patent Rights filed by Scios or its
Affiliates during the term of this Agreement promptly after such application is
filed. GenVec shall treat such patent applications as Confidential Information
of Scios until such applications are published.
9.4 Enforcement. If either party hereto becomes aware that any Patent
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Rights (including, without limitation, patents claiming any Joint Invention) are
being or have been infringed by any third party or are subject to a declaratory
judgment action, or that any Know-How has been misappropriated by a third party,
such party shall promptly notify the other party hereto in writing describing
the facts relating thereto in reasonable detail.
[*]
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[*]
9.6 Patent Term Extensions. With respect to patents within the Patent
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Rights, if Scios has not itself earlier applied for a patent extension or other
governmental equivalent available under applicable law with respect to a
particular patent, at GenVec's request following approval of a Licensed Product,
Scios shall, unless Scios or another Scios licensee is developing a product
within the scope of such patent and such product has entered Phase II clinical
trials as of the date of
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GenVec's request and Scios notifies GenVec that it intends to file a request for
a patent extension or equivalent based on such other product, designate GenVec
(or its designee) as Scios' agent for obtaining an extension of such patent or
governmental equivalent which extends the exclusivity of any of the patent
subject matter where available in any country in the world, or if not feasible,
at GenVec's option, permit GenVec to file in Scios' name to obtain such
extension for GenVec or its sublicensee(s), at GenVec's expense. Furthermore,
Scios and its Affiliates agree to provide reasonable assistance to facilitate
GenVec's or its sublicensees' efforts to obtain any such extension. In the event
that GenVec elects not to seek such an extension or equivalent in any country it
shall notify Scios, and Scios shall have the right to seek such an extension or
equivalent in such country, at its expense.
9.7 [*]. As of the Effective Date, GenVec has disclosed to Scios certain
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publications relating to [*] which GenVec believes may be relevant to the
commercialization of the Licensed Technology.
10. DISPUTE RESOLUTION
10.1 Mediation. If a dispute arises out of or relates to this contract, or
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the breach thereof, and if said dispute cannot be settled through negotiation,
the parties agree first to try in good faith to settle the dispute by mediation
under the Commercial Mediation Rules of the American Arbitration Association
before resorting to arbitration, litigation, or some other dispute resolution
procedures.
10.2 Arbitration. Scios and GenVec agree that any dispute or controversy
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arising out of, in relation to, or in connection with this Agreement, or the
validity, enforceability, construction, performance or breach thereof, which is
not resolved by mediation shall be settled by binding arbitration in Rockville,
Maryland, under the then-current Commercial Arbitration Rules and Supplemental
Procedures for Large, Complex Disputes of the American Arbitration Association
by one (1) arbitrator appointed in accordance with such Rules. The arbitrators
shall determine what discovery will be permitted, based on the principle of
limiting the cost and time which the parties must expend on discovery; provided,
the arbitrators shall permit such discovery as they deem necessary to achieve an
equitable resolution of the dispute. The decision and/or award rendered by the
arbitrator shall be written, final and non-appealable and may be entered in any
court of competent jurisdiction. The parties agree that, any provision of
applicable law notwithstanding, they will not request, and the arbitrator shall
have no authority to award, punitive or exemplary damages against any party.
The costs of any arbitration, including administrative fees and fees of the
arbitrator, shall be shared equally by the parties. Each party shall bear the
cost of its own attorneys' fees and expert fees.
11. INDEMNIFICATION
11.1 GenVec. GenVec shall indemnify, defend and hold harmless Scios and
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its directors, officers, employees and agents (each a "Scios Indemnitee") from
and against any and all liabilities,
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damages, losses, costs or expenses (including reasonable attorneys' and
professional fees and other expenses of litigation and/or arbitration) (a
"Liability") resulting from any claim, suit or proceeding brought by a third
party against a Scios Indemnitee, arising out of or in connection with (i) any
misrepresentation with regard to, or breach of, any of the representations and
warranties of GenVec set forth in Section 8.2, or (ii) the use by GenVec or its
sublicensees of the biological materials provided by Scios to GenVec, or the
development, manufacture, use and sale of Licensed Products by GenVec or its
sublicensees, except, in each case, to the extent due to the negligence or
willful misconduct of Scios.
11.2 Scios. Scios shall indemnify, defend and hold harmless GenVec and its
-----
directors, officers, employees and agents (each a "GenVec Indemnitee") from and
against any and all liabilities, damages, losses, costs or expenses (including
reasonable attorneys' and professional fees and other expenses of litigation
and/or arbitration) (a "Liability") resulting from any claim, suit or proceeding
brought by a third party against a GenVec Indemnitee, arising out of or in
connection with any misrepresentation with regard to, or breach of, any of the
representations and warranties of Scios set forth in Section 8.1, except, to the
extent due to the negligence or wilful misconduct of GenVec.
11.3 Procedure. In the event that any Indemnitee intends to claim
---------
indemnification under this Article 11 it shall promptly notify the other party
in writing of such alleged Liability. The indemnifying party shall have the
right to control the defense thereof. The affected Indemnitees shall cooperate
fully with the indemnifying party and its legal representatives in the
investigation and conduct of any Liability covered by this Article 11. The
Indemnitee shall not, except at its own cost, voluntarily make any payment or
incur any expense with respect to any claim, suit or Liability, or make any
admission of liability or attempt to settle any claim without the prior written
consent of the indemnifying party, which such party shall not be required to
give.
12. TERM AND TERMINATION
12.1 Term. The term of this Agreement shall commence on the Effective
----
Date, and unless earlier terminated as provided in this Article 12, shall
continue in full force and effect on a country-by-country and Licensed Product-
by-Licensed Product basis until there are no remaining payment obligations in a
country, at which time the Agreement shall expire in its entirety in such
country. Notwithstanding the above, upon the expiration of this Agreement in
any country, GenVec shall have a non-exclusive, irrevocable, fully paid-up right
and license to use and exploit the Know-How for any purpose.
12.2 Termination for Cause. If either party materially breaches this
---------------------
Agreement, the other party may elect to give the breaching party written notice
describing the alleged breach. If the breaching party has not cured such breach
or is diligently seeking to cure such breach within [*] after receipt of such
notice, the notifying party will be entitled, in addition to any other rights it
may have under this Agreement, to terminate this Agreement effective
immediately; provided, however, if either party receives notification from the
other of a material breach and if the party alleged to be in default notifies
the other party in writing within [*] of receipt
[*] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
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of such default notice that it disputes the asserted default, the matter will be
submitted to dispute resolution as provided in Article 10 of this Agreement. In
such event, the nonbreaching party shall not have the right to terminate this
Agreement until it has been determined in an arbitration proceeding that the
other party materially breached this Agreement, and the breaching party fails to
cure such breach within [*] after the conclusion of such arbitration proceeding.
12.3 Termination for Insolvency. Either party may terminate this Agreement
--------------------------
if the other becomes the subject of a voluntary or involuntary petition in
bankruptcy or any proceeding relating to insolvency, receivership, liquidation,
or composition or the benefit of creditors, if that petition or proceeding is
not dismissed with prejudice within [*] after filing.
12.4 Termination for Impracticability. GenVec may terminate this Agreement
--------------------------------
with [*] written notice to Scios if GenVec or a GenVec sublicensee encounters
significant technical, safety or efficacy difficulties in the development,
manufacture or commercialization of a Licensed Product within the Patent Rights
which would make the commercialization of such a Licensed Product commercially
impracticable.
12.5 Effect of Termination.
---------------------
12.5.1 Accrued Rights and Obligations. Termination of this Agreement
------------------------------
for any reason shall not release any party hereto from any liability which, at
the time of such termination, has already accrued to the other party or which is
attributable to a period prior to such termination, nor preclude either party
from pursuing any rights and remedies it may have hereunder or at law or in
equity which accrued or are based upon any event occurring prior to such
termination.
12.5.2 Return of Confidential Information. Upon any termination of
----------------------------------
this Agreement, each party shall promptly return to the other party all
Confidential Information received from the other party (except one copy of which
may be retained for archival purposes).
12.5.3 Stock on Hand. In the event this Agreement is terminated
-------------
for any reason, until [*] after the effective date of such a termination GenVec
and its sublicensees shall have the right to sell or otherwise dispose of the
stock of any Licensed Product subject to this Agreement then on hand, subject to
Articles 4 and 5.
12.5.4 Sublicensees. In the event of any termination of this
------------
Agreement any sublicensees granted by GenVec shall remain in force and effect
and shall be assigned by GenVec to Scios, provided, however, that the financial
obligations of each sublicense to Scios shall be limited to the amounts GenVec
would have been obligated to pay to Scios for the activities of such sublicensee
pursuant to this Agreement
[*]
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12.6 Survival. Sections 9.1, 9.2.3, 9.2.4, 9.5, 12.5 and 12.6, and
--------
Articles 4 (with respect to Licensed Products sold prior to such termination or
pursuant to Section 12.5.3), 5, 7, 8, 10, 11 and 13 of this Agreement shall
survive termination of this Agreement for any reason.
13. MISCELLANEOUS
13.1 Governing Law. This Agreement and any dispute arising from the
-------------
performance or breach hereof shall be governed by and construed in accordance
with the laws of the State of Maryland, without reference to principles of
conflicts of laws.
13.2 Independent Contractors. The relationship of the parties hereto is
-----------------------
that of independent contractors. The parties hereto are not deemed to be
agents, partners or joint venturers of the others for any purpose as a result of
this Agreement or the transactions contemplated thereby.
13.3 Assignment. Neither party may assign this Agreement without the prior
----------
written consent of the other, which consent shall not be unreasonably withheld;
provided, however, either party may assign this Agreement in connection with a
transfer of all or substantially all of its assets relating to the agreements,
whether by sale, merger, operation of law or otherwise. This Agreement shall be
binding upon and inure to the benefit of the parties and their permitted
successors and assigns.
13.4 Notices. Any required notices hereunder shall be given in writing by
-------
certified mail or overnight express delivery service at the address of each
party below, or to such other address as either party may indicate on its behalf
by written notice. Notice shall be deemed served when delivered or, if delivery
is not accomplished by reason or some fault of the addressee, when tendered.
If to Scios: Scios Inc.
0000 Xxxxxxxx Xxxxxxx
Xxxxxxxx Xxxx, XX 00000
Attention: General Counsel
with a copy to: Vice President, Business Development
If to GenVec: GenVec, Inc.
00000 Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: President
with a copy to: Vice President, Corporate Development
13.5 Force Majeure. Neither party shall lose any rights hereunder or be
-------------
liable to the other party for damages or losses (except for payment obligations)
on account of failure of performance by the defaulting party if the failure is
occasioned by war, strike, fire, Act of God, earthquake, flood, lockout,
embargo, governmental acts or orders or restrictions, failure of suppliers, or
any other
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reason where failure to perform is beyond the reasonable control and not caused
by the negligence, intentional conduct or misconduct of the nonperforming party
and the nonperforming party has exerted all reasonable efforts to avoid or
remedy such force majeure; provided, however, that in no event shall a party be
required to settle any labor dispute or disturbance.
13.6 Compliance with Laws. Each party shall furnish to the other party any
--------------------
information related to the subject matter of this Agreement requested or
required by that party during the term of this Agreement or any extensions
hereof to enable that party to comply with the requirements of any U.S. or
foreign federal, state and/or government agency.
13.7 Covenant Not To Xxx. During the term of this Agreement, Scios agrees
-------------------
not to assert or enforce against GenVec or any GenVec sublicensee any
intellectual property right owned or controlled by Scios or its Affiliates which
GenVec or its sublicensees may infringe or practice in connection with the
development, manufacture, use, import, sale or other commercialization of any
Licensed Product.
13.8 LIMITATION OF LIABILITY. NEITHER PARTY SHALL BE LIABLE TO THE OTHER
-----------------------
FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL OR INDIRECT DAMAGES ARISING OUT OF
THE PERFORMANCE OF THIS AGREEMENT, HOWEVER CAUSED, UNDER ANY THEORY OF
LIABILITY.
13.9 Advice of Counsel. GenVec and Scios have each consulted counsel of
-----------------
their choice regarding this Agreement, and each acknowledges and agrees that
this Agreement shall not be deemed to have been drafted by one party or another
and will be construed accordingly.
13.10 Further Assurances. At any time or from time to time on and after
------------------
the date of this Agreement, either party shall at the request of the other party
(i) deliver to the requesting party such records, data or other documents
consistent with the provisions of this Agreement, (ii) execute, and deliver or
cause to be delivered, all such consents, documents or further instruments of
assignment, transfer or license, and (iii) take or cause to be taken all such
actions, as the requesting party may reasonably deem necessary or desirable in
order for the requesting party to obtain the full benefits of this Agreement and
the transactions contemplated hereby.
13.11 Severability. In the event that any provisions of this Agreement are
------------
determined to be invalid or unenforceable by a court of competent jurisdiction,
the remainder of the Agreement shall remain in full force and effect without
said provision. The parties shall in good faith negotiate a substitute clause
for any provision declared invalid or unenforceable, which shall most nearly
approximate the intent of the parties in entering this Agreement; provided, if
the parties are unable to agree on such a substitute clause and the deletion of
the provision held invalid or unenforceable would produce material adverse
financial consequences for one party, such party shall have the right to
terminate the Agreement with one hundred eighty (180) days notice.
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13.12 Waiver. The failure of a party to enforce any provision of the
------
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.
13.13 Entire Agreement; Amendment. This Agreement including, its Exhibits,
---------------------------
sets forth the entire agreement and understanding of the parties with respect to
the subject matter hereof, and supersedes all prior discussions, agreements and
writings in relating thereto including, without limitation, the Confidentiality
Agreement entered by the parties dated March 14, 1996. This Agreement may not be
altered, amended or modified in any way except by a writing signed by both
parties.
13.14 Counterparts. This Agreement may be executed in two counterparts,
------------
each of which shall be deemed an original and which together shall constitute
one instrument.
IN WITNESS WHEREOF, Scios and GenVec have executed this Agreement by their
respective duly authorized representatives.
SCIOS INC. GENVEC, INC.
By:___________________________ By:___________________________
Print Name:___________________ Print Name:___________________
Title:________________________ Title:________________________
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