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EXHIBIT 10.8
LICENSE AGREEMENT
This Agreement is made and entered into as of the 1st day of May,
1996, by and between the OKLAHOMA MEDICAL RESEARCH FOUNDATION, an Oklahoma
nonprofit corporation ("OMRF"), 000 X.X. 00xx Xxxxxx, Xxxxxxxx Xxxx, Xxxxxxxx
00000; and ZymeTx, Inc., a corporation duly incorporated under the laws of
Delaware ("Licensee"), and maintaining offices at 000, X.X. 00xx Xxxxxx,
Xxxxxxxx Xxxx, Xxxxxxxx 00000.
RECITALS
A. OMRF owns: (1) rights in and to technology relating to
enzyme specific substrate and inhibitor compounds developed by Symex, Dr. Liav,
Xx. Xxxxxxxxx and Xx. Xxxxxxxxxx, including the Licensed Technology further
described and defined below, and (2) the Licensed Marks, as also defined below.
B. Licensee desires to obtain the right to utilize Licensed
Technology in order to make, use and sell Licensed Products or Licensed
Services (as defined below) and the right to use the Licensed Marks to
advertise, market, lease and sell the Licensed Products and Licensed Services.
NOW, THEREFORE, for and in consideration of the foregoing and the
mutual covenants and agreements contained herein, the parties hereto agree as
follows:
1. DEFINITIONS
As used herein:
1.1 "Agreement" means this Agreement including all Exhibits
attached to this Agreement together with any written amendments of any of the
foregoing.
1.2 "Effective Date" shall be that date, on or before November 15,
1996, upon which Licensee consummates Qualified Financing.
1.3 "Licensed Marks" means the trademarks, service marks and
tradenames ViraSTAT(R) and ViraZyme(R) .
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1.4 "Licensed Patents" means the following United States Patent
and Patent Applications:
(a) Serial Number 07/458,805, filed 12/29/89, "Method for
diagnosing Human Influenza and 4-Position modified chromogenic N-
Acetylneuraminic Acid Substrates for use therein," Turner, Maher,
Xxxxxxxxxxx and Xxxxx inventors;
(b) Patent Number 5,252,458, issued 10/12/93, "Method for visually
detecting the presence of a virus in a clinical specimen," Liav,
Maher, Shimasaki, Xxxxxxxxxxx and Xxxxx inventors;
(c) Serial Number 08/286,573, filed 8/5/94, "Synthesis of 4-
Alkoxy-N-Acetylneuraminic Acid," Liav, Hardgrave, Xxxxxxxx and Xxxxxx
inventors; and
all divisionals, continuations, reissues, extensions and foreign counterparts
of the patent, these patent applications and all patents which issue thereon.
1.5 "Licensed Process" means any process which is covered in whole
or in part by an issued, unexpired claim or a pending claim contained in the
Licensed Patents in the country in which the process is practiced.
1.6 "Licensed Products" means any product or part of a product
which:
(a) is covered in whole or in part by an issued, unexpired claim
or a pending claim contained in the Licensed Patents in the country in
which the product or part of a product is made, used or sold; or
(b) is manufactured using a Licensed Process; or
(c) is used in a Licensed Process and has no substantial use
except in a Licensed Process; or
(d) utilizes in whole or in part Licensed Technology.
1.7 "Licensed Services" means services provided by utilizing a
Licensed Process.
1.8 "Licensed Technology" means the designs, technical
information, know-how, knowledge, data, discoveries, inventions,
specifications, test results and other information relating to the Symex
Technology or the Licensed Patents and known to, or discovered by, OMRF prior
to or during the License Term.
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1.9 "License Term" means the period of time commencing upon the
Effective Date and continuing until the Termination Date.
1.10 "Licensed Territory" means the world.
1.11 "Licensee's Auditors" means the independent certified or
chartered accountants regularly employed by Licensee to audit its accounts and
certify its financial statements.
1.12 "Net Sales" means for each applicable period, the gross amount
invoiced by Licensee or sublicensee (under subparagraph 2.3) to unrelated third
parties for sales of Licensed Products and Licensed Services, less:
(a) all trade, quantity, case and other discounts;
(b) all commissions, credits, product returns, refunds,
rebates, chargebacks, retroactive price adjustments and any
other reasonable allowances paid to unrelated third parties;
(c) all taxes imposed on the production, sale, delivery or
use of the Product or Licensed Services;
(d) that portion of the sales value which Licensee can show
is associated with delivery systems; and
(e) any other similar and customary deductions used to
determine net sales pursuant to generally accepted accounting
procedures ("GAAP").
1.13 "Proprietary Information" is defined in Paragraph 8.1 of this
Agreement.
1.14 "Qualified Financing" means the sale by Licensee of common
and/or preferred stock of Licensee and the receipt by Licensee of gross cash
proceeds in consideration thereof at least equal to Two Million Dollars
($2,000,000).
1.15 "Required Consents" is defined in Paragraph 13.3 of this
Agreement.
1.16 "Symex" means Symex Corp., a Delaware corporation.
1.17 "Symex Technology" means all intellectual property, designs,
technical information, know-how, knowledge, data, specifications, test results
and other information of Symex which was collateral under, and retained by OMRF
in full
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satisfaction of, the rights of OMRF under that certain Security Agreement and
Conditional Assignment dated February 13, 1993 by and between OMRF and Symex,
and that certain Security Agreement and Conditional Assignment dated March 18,
1993, by and between OMRF and Symex.
1.18 "Termination Date" means the date of termination under
Paragraph 10.2, 10.3 or 10.5.
1.19 "ZymeTx Common Stock" means the common stock, $0.001 par
value, of ZymeTx, Inc.
1.20 "ZymeTx Preferred Stock" means the redeemable convertible
preferred stock, $0.001 par value, of ZymeTx, Inc.
2. GRANT OF LICENSE
2.1 License. Subject to the license retained by OMRF in Paragraph
2.2 below and the other terms of this Agreement, OMRF hereby grants to Licensee
the exclusive, worldwide right and license:
(a) during the License Term to use the Licensed Technology to develop,
make, have made, use, lease, sell and otherwise commercially exploit
Licensed Products, to practice the Licensed Processes and to sell and
perform Licensed Services; and
(b) for ten (10) years from the Effective Date to use the Licensed
Marks to advertise, market, use, lease and sell the Licensed Products
and Licensed Services. Upon expiration of such ten (10) year period
during the License Term, and if, at such time, Licensee is not in
default hereunder, OMRF shall, upon the request of Licensee, assign to
Licensee all rights in the Licensed Marks together with the goodwill
associated therewith.
2.2 Retained License. OMRF retains on behalf of itself the
perpetual, royalty-free right and license to practice the Licensed Technology
for noncommercial research and educational purposes.
2.3 Sublicenses. Provided that written approval of OMRF (expressed
by its President) is obtained in advance, which approval shall not unreasonably
be withheld, Licensee shall have the right to grant sublicenses under this
Agreement.
2.4 Sublicensee Obligations. All sublicenses granted by Licensee
shall provide that the obligations to OMRF of Licensee under Sections 3, 5, 7,
8, 9, 10,
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11 and 12 of this Agreement shall be binding upon sublicensee as if it were a
party to this Agreement, and a copy of those sections of this Agreement shall
be attached to all sublicense agreements.
2.5 Sublicense Copies and Reports. Licensee shall provide to OMRF
(1) a copy of all sublicense agreements promptly after execution, and (2)
annually, together with the report required in Paragraph 6.1 of this Agreement,
copies of all reports received by Licensee from its sublicensees during the
preceding twelve (12) month period.
2.6 No Implied License. The license and right granted in this
Agreement shall not be construed to confer any rights upon Licensee by
implication, estoppel or otherwise as to any technology not specifically
identified in this Agreement as "Licensed Technology," nor shall it be
construed to confer any rights outside the Licensed Territory.
3. PAYMENTS AND OTHER CONSIDERATION
3.1 Amounts. As part of the consideration specified under this
Agreement to be given by Licensee for the right and license granted in this
Agreement, Licensee shall pay, deliver or procure delivery to OMRF:
(a) upon the closing of the Qualified Financing, the sum of Eight
Hundred and Twenty-Five Thousand Dollars ($825,000); plus
(b) upon execution of this Agreement, a Promissory Note in the
amount of Four Hundred and Twenty-Five Thousand Dollars ($425,000) in
the form set forth in Exhibit A to this Agreement which note will not
become effective or a debt obligation of Licensee to OMRF until the
Effective Date; plus
(c) upon execution of this Agreement, One Hundred and Fifty-Six
Thousand, Two Hundred and Fifty shares (156,250) of ZymeTx Preferred
Stock and warrants in the form attached hereto as Exhibit B; plus
(d) upon execution of this Agreement, Five Hundred and Four
Thousand, Two Hundred and Seventy-Two shares (504,272) of ZymeTx
Common Stock; plus
(e) a royalty equal to two percent (2%) of Net Sales of the
Licensed Products and Licensed Services Sold by or for the Licensee
and its sublicensees. Insofar as Licensee is required to pay
royalties to Biota Holdings, Ltd. ("Biota") under its assumption of
responsibilities under the
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Biota Agreement pursuant to Section 4, Licensee shall be entitled to
an offset, from the Royalties payable under this subparagraph, in an
amount equal to such payments to Biota.
3.2 Non-cumulative Royalties. Royalties shall be payable by
Licensee with respect to all of its or sublicensees' Sales except for resale of
such products purchased from Licensor. Royalties shall not become payable at
the time of sale, transfer or disposal among Licensee and its sublicensees, but
shall become payable only when Licensee or its sublicensees sell such products
to a third party, except where such sales to a third party are not
contemplated, in which event royalties shall be payable by Licensee when such
sale, transfer or disposal among Licensee and its sublicensees occurs.
3.3 No Multiple Royalties. No multiple royalties shall be payable
because any Licensed Product or Licensed Service is covered by more than one
patent within the Licensed Patents.
3.4 Deduction of Taxes. Any income or other tax which Licensee is
required to withhold and pay on behalf of OMRF with respect to the royalties
payable to OMRF under this Agreement shall be deducted from such royalties
prior to remittance to OMRF; provided however, that in regard to any tax so
deducted, Licensee shall give OMRF such assistance as may reasonably be
necessary to enable OMRF to claim exemption therefrom and to obtain for
Licensor the most favorable tax treatment legally possible. In each case
Licensee shall furnish OMRF with proper evidence of the taxes so paid on its
behalf.
3.5 Interest. Royalty and other payments required in this
Agreement shall, if overdue, bear interest until payment at a par annum rate
four percent (4%) above the prime rate in effect at the Chase Manhattan Bank,
N.A., New York, New York, U.S.A., on the due date. The payment of such interest
shall not foreclose OMRF from exercising any other rights it may have because
any payment is late.
3.6 Currency Conversion and Delivery. All payments required in
this Agreement shall be paid in United States dollars, delivered in accordance
with Paragraphs 6.2 and 13.1 of this Agreement or to such other place as OMRF
may reasonably designate consistent with the applicable laws and regulations in
any foreign country. If any currency conversion shall be required in connection
with the payment of royalties hereunder, such conversion shall be made at no
expense to OMRF at the exchange rate prevailing at the Chase Manhattan Bank,
N.A., New York, New York, U.S.A., on the last business day of the calendar
quarterly reporting period to which such payment(s) relate.
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3.7 Board of Directors. At all times during the period beginning
on the date of this Agreement and ending on the closing of Licensee's Initial
Public Offering pursuant to an effective registration statement filed under the
Securities Act of 1933, as amended, covering the offer and sale of Common
and/or Preferred Stock for the account of the Licensee, OMRF may designate one
(1) member of Licensee's Board of Directors.
4. ASSUMPTION OF OBLIGATION OF OMRF TO BIOTA HOLDINGS, LTD.
The licenses granted to Licensee under Section 2 of this Agreement are
subject to and subordinate to the rights of Biota Holdings, Ltd. ("Biota")
under that certain Termination Agreement dated February 16, 1993, by and
between Biota and Symex, that certain Royalty Agreement of the same date
between Biota and Symex and that certain Consent Agreement of the same date by
and among Biota, Symex and OMRF (collectively the "Biota Agreements").
Licensee hereby assumes the responsibilities and obligations of OMRF under the
Biota Agreements and agrees to indemnify and hold harmless OMRF for any
liabilities, damages, royalties, costs or expenses OMRF may incur as a
consequence of Licensee's failure to perform or honor the obligations of OMRF
under the Biota Agreements.
5. RECORDS
5.1 Records of Sales. Licensee shall at all times during the term
of this Agreement and for a period of five (5) years after termination of this
Agreement keep at its principal place of business true and accurate records of
all Sales subject to Section 3 of this Agreement in such form and manner that
all royalties owed hereunder to OMRF may be readily and accurately determined.
Such records shall include, but not by way of limitation, all information
necessary for Licensee's Auditors to prepare the reports required by Section 6
of this Agreement.
5.2 Inspection. OMRF shall have the right, from time to time, at
reasonable times during normal business hours, during the period of this
Agreement and for five years thereafter, to examine the records of Licensee for
the purpose of verifying the amounts owed to OMRF hereunder and the accuracy of
the reports furnished by Licensee and Licensee's Auditors under Section 6 of
this Agreement. OMRF shall maintain the confidentiality of all confidential
information obtained by it from examination of Licensee's records and shall use
such information only for the purposes of this Agreement.
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6. REPORTS
6.1 Licensee will provide OMRF with copies of all financial
reports presented to Licensee's Board of Directors and a copy of Licensee's
Auditors' annual audit report.
6.2 Licensee will provide OMRF semi-annual payment reports within
thirty (30) days of December 30 and June 30. Such reports shall include at
least the following:
(a) the total Net Sales of all Licensed Products and Licensed Services
Sold by Licensee and its sublicensees during the preceding six (6)
month period and for the calendar year to date;
(b) the royalties owed to OMRF pursuant to Paragraph 3.1(e) with
respect to the preceding six (6) month period and for the calendar
year to date;
(c) the names and address of all new sublicensees of Licensee since
the previous report.
6.3 Payments. With each such report delivered, Licensee shall pay
to OMRF all amounts due under this Agreement. If no payments are due, Licensee
shall so report.
7. PATENT PROSECUTION AND PATENT AND TRADEMARK INFRINGEMENT
7.1 Patent Prosecution. Licensee shall seek prompt issuance of,
and maintain during the License Term the patents and patent applications, as
the case may be, specifically identified by patent number or application serial
number in Paragraph 1.4 of this Agreement. The prosecution and maintenance of
all patent applications and patents within the Licensed Patents shall be the
primary responsibility of Licensee at Licensee's expense; provided, however,
that OMRF (or, at OMRF's option, its patent counsel ) shall be provided copies
of all correspondence between Licensee's patent counsel and the U. S. Patent
and Trademark Office and foreign associate counsel or other patent offices
relating to the Licensed Patents and shall be afforded reasonable opportunities
to advise Licensee, and OMRF shall cooperate with Licensee in such prosecution.
Licensee shall promptly advise OMRF of the grant, lapse, revocation, surrender,
of any threatened invalidation or of its intention to abandon any such patent
or application. Licensee shall reimburse OMRF for all out-of-pocket fees,
costs and expenses, if any, paid or incurred by OMRF in maintaining the
Licensed Patents during the License Term. Licensee shall deliver such
reimbursement to OMRF (or, if OMRF
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requests, directly to OMRF's patent counsel) within thirty (30) days after OMRF
notifies Licensee from time to time of the amount of such fees, costs and
expenses which have been paid or incurred by OMRF.
7.2 Notice of Infringement. Licensee shall promptly notify OMRF of
any alleged infringement of the Licensed Patents or Licensed Marks and of any
available evidence of such infringement.
7.3 Suit By Licensee. Licensee shall have the initial right, but
shall not be obligated, to commence suit for any infringement of the Licensed
Patents and/or Licensed Marks. The total cost of any such infringement action
commenced solely by Licensee shall be borne by Licensee, and Licensee shall
retain any recovery or damages awarded in such action.
7.4 Suit By OMRF. In the event that, after sixty (60) days from
notification by Licensee of infringement of the Licensed Patents and/or the
Licensed Marks, Licensee has not notified OMRF of its intention to commence an
action against the infringer of said Licensed Patents and/or Licensed Marks,
OMRF shall have the right to commence an action in its own name and OMRF shall
notify Licensee of such commencement. In the event OMRF commences an action
against the infringer of said Licensed Patents, Licensee shall have the right
to be joined as a party in said litigation and to be represented by counsel of
choice, provided that Licensee bear the fees of its counsel. In the event of
any recovery, through settlement or otherwise, each of the parties shall be
entitled to such portion of the proceeds realized therefrom in an amount equal
to the portion of the recovery that is commensurate with such party's
contribution to the costs of prosecuting said action (inclusive of such party's
attorney fees).
7.5 Defense. In the event that a declaratory judgment action
alleging invalidity, unenforceability or noninfringement of any of the Licensed
Patents or Licensed Marks shall be brought against OMRF, OMRF shall not have
any obligation to defend such action; provided, however, that if OMRF
determines at any time that it does not desire to defend such action, OMRF
shall promptly so advise Licensee, and Licensee shall then have the right to
defend such action on OMRF's behalf at Licensee's expense, in which event
Licensee shall indemnify OMRF against any order for costs or award of sanctions
that may be made or entered against OMRF in such proceedings. In the event that
a declaratory judgment action alleging invalidity, unenforceability or
noninfringement of any of the Licensed Patents shall be brought against
Licensee, OMRF, at its option, shall have the right, but shall not be
obligated, within ninety (90) days after commencement of such action, to be
joined as a defendant in such action at its own expense.
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7.6 Cooperation. In any suit either party may commence or defend
pursuant to its rights under this Agreement in order to enforce or defend the
validity or enforceability of the Licensed Patents or Licensed Marks, the other
party shall, at the request and expense of the party initiating or defending
such suit, cooperate in all respects and, to the extent possible, have its
employees testify when requested and make available relevant records, papers,
information, samples, specimens and the like.
8. LICENSED MARKS
8.1 Limitation. Except as provided in Paragraph 2.1(b), Licensee
shall not have or acquire any right, title or interest in the Licensed Marks,
or in any other trademark, service xxxx or tradename that is now owned or
hereafter acquired by OMRF and used either alone or in conjunction with other
words or names, or in the good will thereof, other than the limited license
expressly granted herein. If Licensee, in spite of this provision, acquires
any such right, title or interest by operation of law or otherwise prior to
exercise of Licensee right under Paragraph 2.1(b), Licensee shall upon request
by OMRF reconvey the same to OMRF. Except as provided in Paragraph 2.1(b),
Licensee will immediately discontinue use of the Licensed Marks and eliminate
the Licensed Marks from all property of Licensee immediately upon the
Termination Date; provided, however, that Licensee may promptly thereafter use
up any reasonable quantity of goods and packaging materials bearing the
Licensed Marks which Licensee may have on hand at the Termination Date.
8.2 Trademark Application Prosecution. Licensee shall apply for,
seek prompt issuance of, and maintain during the License Term the trademark
applications and registrations specifically identified by registration number
or application serial number on Exhibit A to this Agreement, at Licensee's
expense; provided, however, that OMRF (or, at OMRF's option, its intellectual
property counsel) shall be provided copies of all correspondence between
Licensee's trademark counsel and the U.S. Patent and Trademark Office and
foreign associate counsel or other trademark offices relating to the Licensed
Marks and shall be afforded reasonable opportunities to advise Licensee, and
OMRF shall cooperate with Licensee in such prosecution. Licensee shall
promptly advise OMRF of the grant, lapse, revocation, surrender, of any
threatened invalidation or of its intention to abandon any such registration or
application. Licensee shall reimburse OMRF for all out-of-pocket fees, costs
and expenses, if any, paid or incurred by OMRF in maintaining the Licensed
Marks during the License Term. Licensee shall deliver such reimbursement to
OMRF (or, if OMRF requests, directly to OMRF's intellectual property counsel)
within thirty (30) days after OMRF notifies Licensee from time to time of the
amount of such fees, costs and expenses which have been paid or incurred by
OMRF.
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8.3 Quality Standards. Licensee shall at all times maintain high
manufacturing quality standards for Licensed Products and similarly high
standards for the provision of Licensed Services. Licensee shall provide OMRF,
at Licensee's expense, samples of Licensed Products manufactured or sold by
Licensee, in such reasonable quantities and at such reasonably frequent
intervals as OMRF may prescribe from time to time, for the purpose of enabling
OMRF to ascertain whether Licensee is complying with the requirements of this
section. OMRF's authorized representative shall have the right from time to
time during reasonable business hours to enter the manufacturing and assembly
plant or plants of Licensee and to inspect the manufacturing and assembly
operations of Licensee with respect to the quality and performance of the
Licensed Products being produced. In the event OMRF determines that any
Licensed Product or Licensed Service manufactured, used, leased or sold by
Licensee does not comply with applicable regulatory requirements or the
standards set forth herein, OMRF shall have the right: (a) to require Licensee
to comply with such quality standards or, (b) at OMRF's option, to terminate
the right and license to use the Licensed Marks granted in this Agreement.
9. CONFIDENTIALITY
9.1 Maintenance of Confidentiality. Licensee will not, without the
express written consent of OMRF in advance, for any reason or at any time
either during or for a period of three years subsequent to the License Term
except as otherwise provided in this paragraph, use (except in the course of
practicing the licenses granted in this Agreement) or disclose (except as is
necessary in the course of marketing and selling Licensed Products or Licensed
Services, or obtaining governmental approval to do so, as contemplated in this
Agreement) to any person (including without limitation any director, officer or
employee of Licensee who is not under an obligation of confidentiality
substantially similar to the obligation contained herein) the Licensed
Technology or any other information relating to the Licensed Products or the
Licensed Services (hereinafter referred to as the "Proprietary Information").
This obligation of non-use and non-disclosure shall not extend to Proprietary
Information:
(a) which can be demonstrated by Licensee to have been within its
legitimate possession prior to the time of disclosure by OMRF;
(b) which was in the public domain prior to disclosure by OMRF, as
evidenced by documents which were generally published prior to such
disclosure;
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(c) which, after disclosure by OMRF, comes into the public domain
through no fault of Licensee;
(d) which is disclosed to Licensee by a third party having
legitimate possession thereof and the unrestricted right to make such
disclosure; or
(e) which is disclosed by Licensee to a third party in connection
with a valid business purpose and the third party executes a
Confidentiality Agreement with Licensee containing obligations of
confidentiality substantially similar to the obligation contained
herein, but prohibiting further disclosures.
9.2 Prior Agreements. The provisions of this Agreement supersede
and shall be substituted for any terms of any prior confidentiality agreement
between Licensee and OMRF which are not consistent with this Agreement.
10. TERM AND TERMINATION
10.1 Duration. This Agreement shall commence upon the date hereof
and shall continue until the Termination Date.
10.2 Termination. OMRF shall have the right to terminate this
Agreement on the occurrence of any one or more of the following events:
(a) default by Licensee on any payment required pursuant to the
Promissory Notes provided for in paragraph 3.1(b);
(b) default by Licensee on any payment required pursuant to
royalties on the sales of Licensed Products and Licensed Services
provided for in paragraph 3.1(e);
(c) failure of Licensee to render reports to OMRF as required by
this Agreement;
(d) any assignment by Licensee of substantially all of its assets
for the benefit of creditors;
(e) placement of Licensee's assets in the hands of a receiver
unless the receivership is dissolved within thirty (30) days
thereafter;
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(f) failure to consummate a Qualified Financing on or before
November 15, 1996; or
(g) the material breach by Licensee of any other term of this
Agreement.
10.3 Exercise. OMRF may exercise its right of termination by giving
Licensee, its trustees or receivers or assigns, five (5) days prior written
notice in the case of paragraph 10.2(a) or thirty (30) days prior written
notice in the cases of paragraphs 10.2(b) through 10.2(g) of OMRF's election to
terminate. Upon the expiration of such period, this Agreement shall
automatically terminate unless the other party has previously cured the breach
or condition permitting termination under the preceding paragraph, in which
case this Agreement shall not terminate. Such notice and termination shall not
prejudice OMRF's rights to any royalties and other sums due hereunder and shall
not prejudice any cause of action or claim of OMRF accrued or to accrue on
account of any breach or default by Licensee.
10.4 Failure to Enforce. The failure of OMRF at any time, or for
any period of time, to enforce any of the provisions of this Agreement shall
not be construed as a waiver of such provisions or the right of OMRF thereafter
to enforce each and every such provision.
10.5 Termination by Licensee. Licensee may terminate this Agreement
at any time by giving OMRF six months prior written notice of Licensee's
election to terminate.
10.6 Effect. In the event this Agreement is terminated for any
reason whatsoever, Licensee shall not have any right to return of any payments
of any kind theretofore made by it to OMRF pursuant to this Agreement, Licensee
shall return, or at OMRF's direction destroy, all plans, drawings, papers,
notes, writings and other documents, samples, organisms, biological materials
and models pertaining to the Licensed Technology, retaining no copies, and
Licensee shall refrain from using or publishing any portion of the Licensed
Technology as provided in Section 9 of this Agreement. Upon the Termination
Date, Licensee shall cease manufacturing, processing, producing, using, selling
or distributing Licensed Products and Licensed Services; provided, however,
that Licensee may continue to sell in the ordinary course of business for a
period of ninety (90) days reasonable quantities of Licensed Products which are
fully manufactured and in Licensee's normal inventory at the Termination Date
if:
(a) all monetary obligations of Licensee to OMRF have been
satisfied and
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(b) royalties on such sales are paid to OMRF in the amounts and in
the manner provided in this Agreement.
The provisions of Sections 9, 11 and 12 of this Agreement shall remain in full
force and effect notwithstanding any termination of this Agreement.
11. INDEMNIFICATION AND INSURANCE
11.1 Indemnification. Licensee shall defend, indemnify, and hold
harmless OMRF and its officers, directors, trustees and employees and all of
its heirs, executors, administrators and legal representatives ("Indemnitees")
from and against any and all claims, demands, loss, liability, expense or
damage (including investigative costs, court costs and attorneys' fees)
Indemnitees may suffer, pay or incur as a result of claims, demands or actions
against any of the Indemnitees arising or alleged to arise by reason of or in
connection with any and all personal injury, economic loss and property damage
caused or alleged to be caused or contributed to in whole or in part by the
manufacture, use, lease, sale or sublicense of Licensed Products or Licensed
Services by Licensee, whether asserted under a tort or contractual theory or
any other legal theory. Licensee's obligations under this paragraph shall
survive the Termination Date.
11.2 Insurance. Without limiting Licensee's indemnity obligations
under the preceding paragraph, Licensee represents that before any Licensed
Product or Licensed Service is Sold, there will be a liability insurance policy
in force and agrees that Licensee shall maintain throughout the License Term
and for at least ten (10) years after the Termination Date such policy which:
(a) Insures Indemnitees for all claims, demands and actions
mentioned in the preceding paragraph of this agreement;
(b) Includes a contractual endorsement providing coverage for all
liability which may be incurred by Indemnitees in connection with this
Agreement;
(c) Requires the insurance carrier to provide OMRF with no less
than thirty (30) days written notice of any change in the terms or
coverage of the policy or its cancellation; and
(d) Provides Indemnitees product liability coverage in an amount
not less than Ten Million Dollar ($10,000,000) combined single limit
for bodily injury and property damage liability, subject to a
deductible of not more than Ten Thousand Dollar ($10,000) per
occurrence.
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11.3 Notice of Claims. Licensee will promptly notify OMRF of all
claims involving Products and will advise OMRF of the policy amounts that might
be needed to defend and pay any such claims. In the event OMRF believes the sum
of such policy amounts may exceed Licensee's total insurance coverage, OMRF may
request and Licensee shall acquire additional coverage, not to exceed the
amounts set forth in the preceding subparagraph of this Agreement, in order
fully to protect OMRF as set forth above.
11.4 Insurance After Termination. Licensee hereafter shall, during
the License Term and for a period of ten (10) years after the Termination
Date, provide OMRF copies of liability policies which comply fully with this
agreement. If Licensee fails at any time to maintain insurance as required in
this Agreement, OMRF may (but shall be under no obligation to) purchase its own
policy providing all or any of the coverage and recover from Licensee the cost
thereof, which shall be payable on demand.
11.5 Compliance with Securities Laws. Licensee represents that any
sales of its securities that shall be affected subsequent to the date hereof
shall only be made, and that any activities to raise funds with which Licensee
will satisfy any of its obligations to OMRF hereunder will only be conducted,
in compliance with all applicable laws, including without limitation all
applicable federal, state or foreign securities laws. Through the closing of
the Qualified Financing, Licensee shall retain independent legal counsel to
advise Licensee with respect to the liabilities and obligations arising out of,
among other things, the raising of funds by Licensee to fund its payment
obligations to OMRF hereunder and the offers or sales of securities by
licensee. Such counsel shall be experienced and competent in corporate and
securities matters such as the foregoing and shall be reasonably acceptable to
OMRF. It is understood and agreed that current counsel to Licensee, Xxxxxxxx
XxXxxx XxXxxxxxx XxXxx & Xxxxxx, P.C., and Xxxxxxx X. Xxxxxx who is counsel to
said firm, is acceptable to OMRF.
11.6 Indemnification by Licensee. Licensee shall indemnify and
hold harmless Indemnitees against and with respect to all losses, damages,
claims, liabilities or expenses (including reasonable attorneys' fees and
expenses) incurred or sustained by any of them as a result of, or arising out
of, any violation, breach or nonfulfillment on the part of Licensee of any
representation, warranty, covenant or agreement made by Licensee pursuant to
this Agreement. OMRF or other indemnified party hereunder shall notify in
writing Licensee promptly after it or they acquire actual knowledge of any
action or claim against it or them hereunder which may give rise to liability
of Licensee pursuant to this paragraph. Licensee may, at its own expense,
through legal counsel approved by OMRF, defend or settle any such claim or
action, provided that Licensee posts security that is adequate in the
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reasonable discretion of OMRF to protect OMRF or the other indemnified party or
parties and provided OMRF is notified in writing of Licensee's intent to do so
defend within ten days after Licensee has been notified by OMRF or such other
indemnified party of such claim or action.
11.7 Contribution by Licensee. If the indemnification provided for
in the immediately preceding paragraph is unavailable or insufficient to hold
harmless an indemnified party in respect of any of the losses, claims, damages
or liabilities (or actions in respect thereof) referred to above, then
Licensee shall contribute to the amount paid or payable by each such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by Licensee on the one hand and OMRF and any
other indemnified parties on the other from the activities from which such
losses, claims, damages or liabilities arose, as well as the relative fault of
Licensee on the one hand and OMRF on the other in connection with the actions
or inactions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations.
12. MERCHANTABILITY, EXCLUSION OF WARRANTIES, LIMITATION OF LIABILITY AND
LICENSEE'S WARRANTIES
12.1 Warranty. Licensee possesses the expertise and skill in the
technical areas in which the Licensed Products and Licensed Processes are
involved necessary to make, and has made, its own evaluation of the
capabilities, safety, utility and commercial application of the Licensed
Technology, Licensed Products and Licensed Processes.
ACCORDINGLY, OMRF MAKES NO REPRESENTATION OR WARRANTY OF ANY KIND WITH
RESPECT TO THE LICENSED TECHNOLOGY, LICENSED PRODUCTS, LICENSED
PROCESSES OR LICENSED SERVICES AND EXPRESSLY DISCLAIMS ANY WARRANTIES
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND ANY OTHER
IMPLIED WARRANTIES WITH RESPECT TO THE CAPABILITIES, SAFETY, UTILITY
OR COMMERCIAL APPLICATION OF LICENSED TECHNOLOGY, LICENSED PRODUCTS,
LICENSED PROCESSES AND LICENSED SERVICES.
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12.2 Limitation of Liability.
OMRF SHALL NOT BE LIABLE FOR ANY DIRECT, CONSEQUENTIAL OR OTHER
DAMAGES SUFFERED BY LICENSEE OR ANY OTHERS RESULTING FROM THE USE OF
THE LICENSED TECHNOLOGY, LICENSED PRODUCTS, LICENSED PROCESSES OR
LICENSED SERVICES.
12.3 Representations and Warranties of Licensee. Licensee hereby
makes the following representations and warranties to OMRF, which
representations and warranties, together with all other representations and
warranties of Licensee in this Agreement, are true and correct on the date
hereof:
(a) Licensee is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and has all
requisite corporate power and authority to enter into this Agreement
and perform its obligations hereunder.
(b) Neither the execution or delivery of this Agreement, nor the
consummation of the transactions contemplated herein, will (a) violate
or conflict with any provision of the Certificate of Incorporation or
By-laws of Licensee, as each may have been amended, (b) with or
without the giving of notice or the lapse of time or both (i) result
in a breach of, or violate, or be in conflict with or constitute a
default under, or result in the termination or cancellation of, or
accelerate the performance required under, any security instrument,
mortgage, note, debenture, indenture, loan, lease, contract, agreement
or other instrument, to which Licensee is a party or by which it or
any of its properties or assets may be bound or affected, or (ii)
result in the loss or adverse modification of any lease, franchise,
license or other contractual right or other authorization granted to
or otherwise held by Licensee, (c) require the consent of any party to
any such agreement or commitment to which Licensee is a party or by
which any of its properties or assets are bound, (d) result in the
creation or imposition of any lien, claim or encumbrance upon any
property or assets of Licensee, (e) require any consent, approval,
authorization, order, filing, registration or qualification of or with
any court or governmental authority or arbitrator to which Licensee is
subject or by which any of its properties or assets may be bound or
affected.
(c) All action to authorize the execution and delivery of this
Agreement and the consummation of the transactions contemplated herein
have been duly taken, and this Agreement constitutes the valid and
binding obligation of Licensee enforceable in accordance with its
terms.
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(d) There are no claims (relating to patent infringement or any
other matters), actions, suits, proceedings, arbitrations or
investigations pending or, to the best of Licensee's knowledge,
threatened, against Licensee which if adversely determined would
adversely affect the Licensed Technology (or the patentability
thereof) or other technology practiced by Licensee, or Licensee's
ability to enter into or carry out this Agreement or use or license
Licensed Technology.
13. MISCELLANEOUS AND GENERAL
13.1 Export Controls. Licensee acknowledges that OMRF is subject to
United States laws and regulations controlling the export of technical data,
computer software, laboratory prototypes and other commodities and that its
obligations hereunder are contingent on compliance with all applicable United
States export and other laws and regulations. The transfer of certain technical
data and commodities may require a license from the cognizant agency of the
United States Government and/or written assurances by Licensee that Licensee
shall not export data or commodities to certain foreign countries without prior
approval of such agency. OMRF neither represents that a license shall not be
required nor that, if required, it shall be issued.
13.2 Legal Compliance. Licensee agrees that it will comply with all
applicable laws and regulations relating to its manufacture, processing,
production, use, advertisement, marketing, sale and distribution of Licensed
Products and Licensed Services and that it will not at any time take any action
which would cause OMRF or Licensee to be in violation of any of such applicable
laws and regulations.
13.3 Required Consents. Licensee shall obtain any and all licenses,
permits, approvals or authorizations ("Required Consents") required by any
governmental entity or agency having jurisdiction over the transactions
contemplated by this Agreement. OMRF shall cooperate with, and provide
reasonable assistance to, Licensee in obtaining the Required Consents;
provided, however, that Licensee shall reimburse OMRF for all of OMRF's
out-of-pocket expenses incurred in providing such assistance.
13.4 Independent Contractor. Licensee's relationship to OMRF
hereunder shall be that of a licensee only. Licensee shall not be the agent of
OMRF and shall have no authority to act for or on behalf of OMRF in any matter.
Persons retained by Licensee as employees or agents shall not by reason thereof
be deemed to be employees or agents of OMRF.
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13.5 Patent Marking. Licensee agrees to xxxx the Licensed Products
sold in the United States and, to the extent practical, identify all Licensed
Services with all applicable United States patent numbers. All Licensed
Products shipped to or sold in other countries shall be to the extent practical
marked in such a manner as to conform with the patent laws and practice of the
country of manufacture or sale.
13.6 Use of Names. None of the names of OMRF or any officers,
trustees, directors or employees of either may be used by Licensee in any
manner for announcing, advertising, promoting or marketing of Licensed
Products, Licensed Services, Licensed Processes or securities of Licensee
unless the written permission of OMRF, or the individual, as the case may be,
is obtained in advance.
13.7 Interpretation. The parties are equally responsible for the
preparation of this Agreement, and in any judicial proceeding the terms hereof
shall not be more strictly construed against one party than the other.
13.8 Place of Execution. This Agreement and any subsequent
modifications or amendments hereto shall be deemed to have bean executed in the
State of Oklahoma, U.S.A. This Agreement shall not become effective or binding
upon OMRF until signed on its behalf by its President.
13.9 Governing Law. This Agreement and all amendments,
modifications, alterations, or supplements hereto, and the rights of the
parties hereunder, shall be construed under and governed by the laws of the
State of Oklahoma and the United States of America.
13.10 Arbitration. Any controversy or claim arising out of or
relating to this Agreement of the breach thereof will be settled by arbitration
in Oklahoma City, Oklahoma, before and in accordance with the Commercial
Arbitration Rules of the American Arbitration Association. The award rendered
in that arbitration will be binding on the parties hereto, and judgement upon
the award can be entered by any court having jurisdiction thereof. Without
detracting from the generality of the foregoing, the following specific
provisions also will apply:
(a) The proceedings will be held by a panel of three arbitrators,
each party having the right to select one arbitrator, with the third
to be selected in accordance with the Rules of the American
Arbitration Association;
(b) The parties, by mutual agreement, can also provide that all or
part of the arbitration proceedings be held outside of Oklahoma City,
Oklahoma; in this event, the parties will equally bear any specific
expenses resulting from that decision;
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(c) Before rendering their final decisions, the arbitrators will
first act as friendly, disinterested parties for the purpose of
helping the parties reach compromise settlements on the points in
dispute; and
(d) The costs of the arbitration will be in the discretion of the
arbitrators, provided, however, that no party is obliged to pay more
than its own costs, the costs of the arbitrator it has nominated, and
the cost of the third arbitrator.
13.11 Notices. All notices, statements and reports required or
contemplated herein by one party to the other shall be in writing and shall be
deemed to have been given upon delivery in person or upon the expiration of
five (5) days after deposit in a lawful mail depository in the country of
residence of the party giving the notice, registered or certified airmail
postage prepaid, and addressed as follows:
If to OMRF: Attention: President
Oklahoma Medical Research Foundation
000 X. X. 00xx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
With a copy to: Xxxx X. Xxxxx, Esq.
Xxxxxxxxxx & Cody
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Facsimile: (000) 000-0000
If to Licensee: Attention: President
ZymeTx, Inc.
000 X.X. 00xx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
With a copy to: Xxxxxxx X. Xxxxxx, Esq.
Xxxxxxxx XxXxxx XxXxxxxxx XxXxx &
Xxxxxx, P.C.
Twelfth Floor
One Leadership Square
000 X. Xxxxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
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Either party hereto may change the address to which notices to such
party are to be sent by giving notice to the other party at the address and in
the manner provided above. Any notice herein required or permitted to be given
may be given, in addition to the manner set forth above, by telex, facsimile or
cable, provided that the party giving such notice obtains acknowledgement by
telex, facsimile or cable that such notice has been received by the party to be
notified. Notice made in this manner shall be deemed to have been given when
such acknowledgement has been transmitted.
13.12 Assignments and Inurement. Licensee shall not grant, transfer,
convey, sublicense or otherwise assign any of its rights or delegate any of its
obligations under this Agreement without the prior written consent of OMRF
except as explicitly permitted in this Agreement, and any attempt to do so
shall be of no effect; however, this Agreement shall be assignable by OMRF.
This Agreement shall be binding upon and inure to the benefit of the successors
and permitted assigns of the parties hereto.
13.13 Entire Agreement. This Agreement constitutes the entire
agreement between OMRF and Licensee with respect to the subject matter hereof
and shall not be modified, amended or terminated except as herein provided or
except by another agreement in writing executed by the parties hereto.
13.14 Headings. The section and paragraph headings are for
convenience only and are not a part of this Agreement.
13.15 Severability. All rights and restrictions contained herein may
be exercised and shall be applicable and binding only to the extent that they
do not violate any applicable laws and are intended to be limited to the extent
necessary so that they will not render this Agreement illegal, invalid or
unenforceable. If any provision or portion of any provision of this Agreement
not essential to the commercial purpose of this Agreement shall be held to be
illegal, invalid or unenforceable by a court of competent jurisdiction, it is
the intention of the parties that the remaining provisions or portions thereof
shall constitute their agreement with respect to the subject matter hereof, and
all such remaining provisions or portions thereof shall remain in full force
and effect. To the extent legally permissible, any illegal, invalid or
unenforceable provision of this Agreement shall be replaced by a valid
provision which will implement the commercial purpose of the illegal, invalid
or unenforceable provision. In the event that any provision essential to the
commercial purpose of this Agreement is held to be illegal, invalid or
unenforceable and cannot be replaced by a valid provision which will implement
the commercial purpose of this Agreement, this Agreement and the rights granted
herein shall terminate.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
OKLAHOMA MEDICAL RESEARCH FOUNDATION
By: /s/ XXXXXXX X. XXXXXXX
----------------------------------
Xxxxxxx X. Xxxxxxx, M.D.
President & Chief Scientific
Officer
Licensee:
ZymeTx, Inc
By: /s/ XXXXX X. XXXXXXXXXX
----------------------------------
Xxxxx X. Xxxxxxxxxx
President
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