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CONFIDENTIAL TREATMENT EXHIBIT 10.3
LICENSE AGREEMENT
Effective as of January 2, 1995 ("Effective Date"), THE BOARD OF TRUSTEES OF THE
XXXXXX XXXXXXXX JUNIOR UNIVERSITY, a body having corporate powers under the laws
of the State of California ("STANFORD"), and LeukoSite, Inc., a Delaware
corporation, having a principal place of business at 000 Xxxxx Xxxxxx,
Xxxxxxxxx, XX 00000 ("LICENSEE"), agree as follows:
1. BACKGROUND
1.1 STANFORD has certain rights to biological material known as Antibodies
to Human B7 integrin ("Biological Material[s]") developed in the
laboratory of Xxxxxx Xxxxxxx and described in Stanford Docket
S93-116.
1.2 STANFORD desires to have products of the Biological Material(s) marketed
at the earliest possible time in order that such products may be available
for public use and benefit.
1.3 LICENSEE wishes to acquire a license to said Biological Material(s) to
make, use, and sell Licensed Product(s) in the Licensed Field of Use.
1.4 Biological Material(s) was developed in the course of research supported
by the National Institutes of Health.
2. DEFINITIONS
2.1 "Biological Material(s)" means those materials included in Exhibit A. This
Exhibit may be amended from time to time by mutual consent of LICENSEE and
STANFORD.
2.2 "Licensed Field of Use" means all human therapeutic, prophylactic or
diagnostic uses.
2.3 "Licensed Territory" means worldwide.
2.4 "Licensed Product(s)" means any product in the Licensed Field of Use
containing, derived from, or made using Biological Material(s).
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2.5 "Exclusive" means that STANFORD will not grant other licenses to
Biological Material(s) described in Exhibit A.
2.6 "Non-exclusive" means that after a period of fifteen (15) years STANFORD
may grant other licenses to Biological Material(s) described in Exhibit A
according to paragraph 3.1.
2.7 "Net Sales" means the gross revenue derived by LICENSEE from Licensed
Product(s), less the following items but only insofar as they actually
pertain to the disposition of such Licensed Product(s) by LICENSEE, are
included in such gross revenue, and are separately billed:
(a) Import, export, excise and sales taxes, and custom duties, and
(b) Costs of transportation, insurance and packing;
(c) Credit for returns, rebates, allowances, or trade or customary
quantity or cash discounts;
(d) Disallowed reimbursements.
It is recognized that Licensed Products may be sold in combination 'with
other Therapeutically Active Substances (hereinafter referred to as
"Combination Products"). "Therapeutically Active" shall mean biologically
active in achieving a clinical therapeutic objective in concert with, or
supplementary to, a Licensed Product. In determining the Net Sales of
Combination Products, Net Sales shall first be calculated in accordance
with the definition of Net Sales in this Paragraph 2.7 and then multiplied
by the percentage value of the Licensed Product contained in the
Combination Product, such percentage value being the quotient obtained by
dividing (a) the current market value of the Licensed Product by (b) the
sum of the separate current market values of the Licensed Product and the
other components which are contained in the Combination Product. The
current market value of each Therapeutically Active substance and of the
Licensed Product shall be for a quantity comparable to that contained in
the Combination Product and of the same class, purity and potency. When no
current market value is available for a component other than the Licensed
Product of a Combination Product, LICENSEE shall calculate a hypothetical
market value for such component, allocating the same proportions of costs,
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overhead and profit as are then allocated to similar components make by
LICENSEE and having a ascertainable market value. If, however, the parties
determine that the above formula does not adequately and fairly reflect
the contribution of each component in a particular combination Product,
then the parties shall negotiate in good faith a modification of the
formula for the determination of Net Sales of that Combination Product.
In the event that a Licensed Product is incorporated into a service for
treating or diagnosing a patient, Net Sales for the Licensed Product for
the purpose of determining royalties under this Agreement shall be based
only on the Monetary Value of the Licensed Product used as part of such
service
For purposes of this Section, Monetary Value shall be the price of the
Licensed Product as sold by LICENSEE in arm's length transactions with
third parties, apart from any services for treating or diagnosing a
patient; regardless of whether such Licensed product was produced form
materials which were originally supplied by such third party. If no such
sales have taken place, Monetary Value of Licensed Product shall be the
price at which such Licensed Product would have been sold to a third
party, as agreed to by LICENSEE and STANFORD. If after sixty (60) days the
parties do not agree to such price the parties will submit such to binding
arbitration as set forth in Article 13 of this Agreement.
2.8 "Sub licensee" means any non-Affiliate third parry licensed by LICENSEE to
make, have made, use or sell any Licensed Product(s).
2.9 "Prior License Agreement" means License Agreement between STANFORD and
LICENSEE, effective date December 9, 1993.
2.10 "Exclusive Period" means the period beginning on the Effective Date and
ending fifteen (15) years thereafter.
3. GRANT
3.1 STANFORD hereby grants, and LICENSEE accepts, a license in the Licensed
Field of Use and Licensed Territory to make, have made and use Biological
Materials, and to make, have made, use, and sell Licensed Product(s). Said
license shall be an Exclusive license during the Exclusive Period and
includes the right "to grant sub license(s) during the Exclusive Period.
Thereafter, said license shall be fully-paid and Non-exclusive, unless
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sooner terminated according to Article 11 hereunder.
3.2 STANFORD reserves the right to supply any or all of Biological Material(s)
to academic research scientists, subject to limitation of use by such
scientists for research purposes and restriction from further
distribution.
4. GOVERNMENT RIGHTS
This Agreement is subject to all of the terms and conditions of Xxxxx 00
Xxxxxx Xxxxxx Code Sections 200 through 204, including an obligation that
Licensed Product(s) sold or produced in the United States be "manufactured
substantially in the United States," and LICENSEE agrees to take all
reasonable action necessary on its part as licensee to enable STANFORD to
satisfy its obligation thereunder, relating to Biological Material(s).
5. ROYALTIES
5.1 LICENSEE agrees to pay to STANFORD a non creditable, non refundable
license issue royalty of *. Upon receipt of payment, STANFORD shall send
Biological Material(s) to LICENSEE. Except for a Sub licensee, LICENSEE
shall not transfer Biological Material(s) to any third party without prior
written consent from STANFORD, which consent shall not be unreasonably
withheld or delayed.
5.2 LICENSEE shall pay license maintenance royalties of * on January 2, 1996,
and * on every January 2 thereafter through January 2, 2010. Said payments
are non refundable except that they are fully creditable against earned
royalties.
5.3 All payments to STANFORD shall be in U.S. Dollars, net of any non-U.S.
taxes.
5.4 In addition, during the Exclusive Period LICENSEE shall pay STANFORD an
earned royalty of * on Net Sales of Licensed Product(s) sold by LICENSEE
if the Licensed Product(s) are for therapeutic use, and * on Net Sales of
Licensed Product(s) sold by LICENSEE if the Licensed Product(s) are for
diagnostic use. Earned royalty payments shall be
*Confidential treatment requested: material has been omitted and filed
separately with the Commission.
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made as follows:
(a) Annually, for the preceding year ending on December 31 until annual
volume of Net Sales reaches *; and
(b) Quarterly thereafter.
5.5 If with respect to any Licensed Product(s) a royalty would be due under
Paragraph 5.4 of this Agreement and also under the Prior License
Agreement, only one royalty payment shall be due. Said royalty shall be
paid as follows: * on Net Sales of Licensed Product(s) if the Licensed
Product(s) are for therapeutic use, and * on Net Sales of Licensed
Product(s) if the Licensed Product(s) are for diagnostic use.
5.6 In the event that royalties are to be paid by LICENSEE to a third party
for Licensed Product(s) for which royalties are also due to STANFORD
pursuant to Paragraphs 5.4 or 5.5 (hereinafter referred to as "Other
Royalties"), then the royalties to be paid to STANFORD by LICENSEE
pursuant to Paragraph 5.4 or 5.5 shall be reduced by the amount of such
Other Royalties, but in no event shall the royalties under Paragraphs 5.4
or 5.5 be reduced by more than *.
6. SUBLICENSE(S)
6.1 LICENSEE may grant sub license(s) during the Exclusive Period, which sub
license(s) may extend beyond the Exclusive Period.
6.2 Any sublicense(s) granted by LICENSEE under this Agreement shall be
subject and subordinate to terms and conditions of this Agreement, except:
(a) Sub license terms and conditions shall reflect that any
sublicensee(s) shall not further sub license; and
(b) The earned royalty rate specified in the sublicense(s) may be at
higher rates than the rates in this Agreement.
Any such sub license(s) also shall expressly include the provisions of
Articles
*Confidential treatment requested: material has been omitted and filed
separately with the Commission.
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7, 8 and 9 for the benefit of STANFORD and provide for the transfer of all
obligations, including the payment of royalties specified in such
sublicense(s), to STANFORD or its designee, in the event that this
Agreement is terminated. At LICENSEE's request, Stanford agrees to
negotiate in good faith modification of royalties due from sublicensing if
such modification is deemed necessary to further the development of
Licensed Product(s).
6.3 LICENSEE agrees to provide STANFORD a copy of any sub license(s) granted
pursuant to this Article 6.
6.4 Product sales by sub licensees shall be considered to be sales by LICENSEE
under this agreement and LICENSEE shall pay earned royalties as specified
in Paragraph 5.4.
7. ROYALTY REPORTS, PAYMENTS, AND ACCOUNTING
7.1 Earned Royalty Payment and Report - Beginning with the first sale of a
Licensed Product, LICENSEE shall make written reports (even if there are
no sales) and earned royalty payments to STANFORD within sixty (60) days
of the reporting period of Paragraph 5.4 herein. This report shall state
the number, description, and aggregate Net Sales of Licensed Product(s)
during such completed period, and resulting calculation pursuant to
Paragraph 5.4 or 5.5 of earned royalty payment due STANFORD. Concurrent
with the making of each such report, LICENSEE shall include payment due
STANFORD of royalties for the period covered by such report.
7.2 Accounting - LICENSEE agrees to keep and maintain records for a period of
three (3) years showing the manufacture, sale, use, and other disposition
of products sold or otherwise disposed of under the license herein
granted. Such records will include general ledger records showing cash
receipts and expenses, and records which include production records,
customers, serial numbers and related information in sufficient detail to
enable the royalties payable hereunder by LICENSEE to be determined.
LICENSEE further agrees to permit its books and records to be examined by
STANFORD through an independent certified accountant from time to time,
upon reasonable notice during normal business hours and no more than once
each calendar year, to the extent necessary to verify reports provided for
in Paragraph 7.1. Such examination is to be made by STANFORD or its
designee, at the expense of STANFORD, except in the event that the results
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of the audit reveal" an underreporting of royalties due STANFORD of five
percent (5%) or more, in any calendar year, then the audit costs shall be
paid by LICENSEE.
8. NEGATION OF WARRANTIES
8.1 STANFORD represents that it owns the Biological Materials and has the
right to grant the licenses of this Agreement; it has not entered into any
agreement which is inconsistent with the rights and licenses granted to
LICENSEE under this Agreement.
8.2 Nothing in this Agreement shall be construed as:
(a) A warranty or representation that anything made, used, sold, or
otherwise disposed of under any license granted in this Agreement is
or will be free from infringement of patents, copyrights, and
trademarks of third parties;
(b) Conferring rights to use in advertising, publicity, or otherwise
any trademark or the name of "STANFORD"; or
(c) Granting by implication, estoppel, or otherwise any licenses or
rights under patents of STANFORD.
8.3 Except as expressly set forth in this Agreement, STANFORD MAKES NO
REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR
IMPLIED. THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE, OR THAT THE USE OF THE LICENSED
PRODUCT(S) WILL NOT INFRINGE ANY PATENT, COPYRIGHT, OR TRADEMARK, OR OTHER
RIGHTS OR ANY OTHER EXPRESS OR IMPLIED WARRANTIES.
8.4 LICENSEE agrees that nothing in this Agreement grants LICENSEE any express
or implied license or right under or to:
(a) U.S. Patent No. 4,237,224, "Process for Producing Biologically
Functional Molecular Chimeras"; U.S. Patent No. 4,468,464 and
U.S. Patent No. 4,740,470, both entitled, "Biologically
Functional Molecular
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Chimeras," (collectively known as the Xxxxx/Xxxxx patents) or
reissues thereof; or
(b) U.S. Patent 4,656,134, "Amplification of Eucaryotic Genes," or
any patent application corresponding thereto.
9. INDEMNITY
9.1 LICENSEE agrees to indemnify, hold harmless, and defend STANFORD and
Stanford Health Services and their respective trustees, officers,
employees, students, and agents against any and all claims for death,
illness, personal injury, property damage, and improper business practices
arising out of the manufacture, use, sale, or other disposition of
Biological Material or Licensed Product(s) by LICENSEE or Sublicensee(s),
or their customers.
9.2 STANFORD will not be liable for any indirect, special, consequential, or
other damages whatsoever, whether grounded in tort (including negligence),
strict liability, contract or otherwise. STANFORD will not have any
responsibilities or liabilities whatsoever with respect to Licensed
Products(s).
9.3 LICENSEE will at all times comply, through insurance or self-insurance,
with all statutory workers' compensation and employers' liability
requirements covering any and all employees with respect to activities
performed under this Agreement.
9.4 In addition to the foregoing, LICENSEE will maintain for itself or for
STANFORD, during the term of this Agreement and starting as of the time
and as set forth below with respect to Licensed Product(s) or Licensed
Process(es), Comprehensive General Liability Insurance, including Products
Liability Insurance, with reputable and financially secure insurance
carrier(s) to cover the activities of LICENSEE and its sublicensee(s)
under this Agreement. Such insurance will be written to cover claims
incurred, discovered, manifested, or made during or after the expiration
of this Agreement. At STANFORD's request, LICENSEE will furnish a
Certificate of Insurance evidencing primary coverage and requiring thirty
(30) days prior written notice of cancellation or material change to
STANFORD. All such insurance of LICENSEE shall be primary coverage;
insurance of STANFORD "4 or Stanford Health Services shall be excess and
noncontributory. At the time that Licensed Product(s) or Licensed
Process(es) is to be used in humans
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LICENSEE shall obtain and maintain insurance having a liability limit in
an amount agreed to by STANFORD and LICENSEE not to exceed Five Million
Dollars ($5,000,000) and will include STANFORD, Stanford Health Services,
their trustees, directors, officers, employees, students, and agents as
additional insureds. The Indemnification by LICENSEE shall not be limited
to their insurance coverage. Additionally, STANFORD agrees to negotiate in
good faith the reduction or elimination of such insurance coverage as of
the time that LICENSEE has a Net Worth which would be reasonably
acceptable for satisfying LICENSEE's indemnification obligations under
this Agreement. At the time of such negotiations and annually thereafter
after entering into such an agreement LICENSEE shall provide to STANFORD
audited financial statements. As claims or incidents occur, LICENSEE
agrees to maintain or restore the liability limit to the agreed amount.
10. STANFORD NAMES AND MARKS
LICENSEE agrees not to identify STANFORD in any promotional advertising or
other promotional materials to be disseminated to the public or any
portion thereof or to use the name of any STANFORD faculty member,
employee, or student or any trademark, service xxxx, trade name, or symbol
of STANFORD or the Stanford Health Services, or that is associated with
either of them, without STANFORD's prior written consent. Nothing in this
Article 10 shall prevent LICENSEE from identifying STANFORD in connection
with any financing, filing with a government agency, or where such
identification is required by law, rule or regulation.
11. TERMINATION
11.1 LICENSEE may terminate this Agreement by giving STANFORD notice in writing
at least ninety (90) days in advance of the Effective Date of termination
provided that LICENSEE shall thereupon cease use and sale of Biological
Material(s) and any Licensed Product(s).
11.2 STANFORD may terminate this Agreement if LICENSEE is in breach of any.
provision hereof; and LICENSEE fails to remedy any such breach within
sixty (60) days after written notice thereof by STANFORD.
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11.3 Surviving any termination are:
(a) Any cause of action or claim of LICENSEE or STANFORD, accrued or
to accrue, because of any breach by the other party;
(b) Payment of accrued royalties; and
(c) The provisions of Articles 7, 8 and 9.
11.4 Concurrent with notice of termination by either LICENSEE or STANFORD,
LICENSEE shall destroy all Biological Material(s) and Licensed Product(s)
in its possession, and shall provide written evidence of said destruction.
11.5 Upon termination of this Agreement LICENSEE, at its option, shall be
entitled to sell any completed inventory of a Licensed Product(s) as if
licensed by this Agreement which remains on hand as of the date of the
termination, so long as LICENSEE pays to STANFORD the royalties applicable
to said subsequent sales in accordance with the same terms and conditions
as set forth in this Agreement.
11.6 In the event that this Agreement and/or the rights and licenses granted
under this Agreement to LICENSEE is terminated, any sub license granted
under this Agreement shall remain in full force and effect as a direct
license between STANFORD and the Sub licensee under the terms and
conditions of the sub license agreement, subject to the Sub licensee
agreeing to be bound to STANFORD under such terms and conditions within
thirty (30) days after STANFORD provides written notice to the Sub
licensee of the termination of LICENSEE's rights and licenses under this
Agreement.
12 ASSIGNMENT
12.1 This Agreement shall not be assignable by either of the parties without
prior written consent of the other party except that LICENSEE, without the
consent of STANFORD, may assign this Agreement to an Affiliate or to a
transferee or a successor in interest of all or substantially all of the
portion of the business to which}Y this Agreement relates.
12.2 Subject to the limitations on assignment herein, this Agreement shall be
binding upon and inure to the benefit of said successors in interest and
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assigns of LICENSEE and STANFORD. Any such successor or assignee of a
party's interest shall expressly assume in writing the performance of all
the terms and conditions of this Agreement to be performed by said party-
13. MISCELLANEOUS
13.1 Arbitration - Any controversy arising under or related to this Agreement,
and any disputed claim by either party against the other under this
Agreement shall be settled by arbitration in accordance with the Licensing
Agreement Arbitration Rules of the American Arbitration
Association.
13.2 Termination Report - LICENSEE also agrees to make a written report to
STANFORD within ninety (90) days after the date of termination of this
Agreement, stating in such report the number, description, and Net Sales
of all products made, sold, or otherwise disposed of and upon which
royalties are payable hereunder but which were not previously reported to
STANFORD.
13.3 Notices - All notices under this Agreement shall be deemed to have been
fully given when done in writing and deposited in the United States mail,
registered or certified, and addressed as follows:
To STANFORD: Office of Technology Licensing
Stanford University
000 Xxxxx Xxxx, Xxxxx 000
Xxxx Xxxx, XX 00000-0000
Attention: Director
To LICENSEE: LeukoSite, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: President
Either party may change its address upon written notice to the other
party.
13.4 None of the terms of this Agreement can be waived except by the written
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consent of the party waiving compliance.
13.5 This Agreement shall be governed by the laws of the State of California
applicable to agreements negotiated, executed, and performed wholly within
California.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in duplicate
originals by their duly authorized officers or representatives.
THE BOARD OF TRUSTEES OF THE XXXXXX
XXXXXXXX JUNIOR UNIVERSITY
Signature /s/ Xxxxxxxxx Xx
Name: Xxxxxxxxx Xx
Title: Director, Technology Licensing
Date: January 12, 1995
LEUKOSITE, INC.
Signature /s/ Xxxxx Xxxxxxxxx
Name: X.X. Xxxxxxxxx
Title: CEO and Chairman
Date: January 20, 1995
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