EXHIBIT 99.1
LICENSE AGREEMENT
* Represents language that is redacted and subject to confidential
treatment
This LICENSE AGREEMENT is made as of the 1st day of August, 1991 by and
between THE TRUSTEES OF THE UNIVERSITY OF PENNSYLVANIA, a nonprofit corporation
organized and existing under the laws of the Commonwealth of Pennsylvania (the
"University"), and GENTA INCORPORATED, a corporation organized and existing
under the laws of Delaware ("Licensee").
R E C I T A L S
A. The University is the owner of certain patent applications and other
technology relating to antisense oligonucleotides developed by Xx. Xxxx X. Xxxx,
a faculty member of the University; and
B. Licensee desires to acquire certain rights and licenses with respect
to the patent applications and technology relating to antisense oligonucleotides
developed by Xx. Xxxx, as more fully provided herein.
C. Licensee further desires to fund continued research by Xx. Xxxx
relating to antisense oligonucleotides and has entered into a Sponsored Research
Agreement with the University dated as of August 1, 1991 (the "Research
Agreement"); and
D. Licensee has received an option in the Research Agreement to acquire
certain rights and licenses with respect to technology developed during the term
of the Research Agreement, on terms substantially similar to those set forth
herein.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, and intending to be legally bound hereby, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
1.1 The following terms, as used herein, shall have the following
meanings:
"Affiliate" means, when used with reference to Licensee, any person
directly or indirectly controlling, controlled by or under common control with
Licensee. For purposes of this Agreement, "control" means the direct or indirect
ownership of over 50% of the outstanding voting securities of an entity, or the
right to receive over 50% of the profits or earnings of a person, or the right
to control the policy decisions of a person.
"Bankruptcy Event" means the person in question becomes insolvent, or
voluntary or involuntary proceedings by or against such person are instituted in
bankruptcy or under any insolvency law, or a receiver or custodian is appointed
for such person, or proceedings are instituted by or against such person for
corporate reorganization or the dissolution of such person, which proceedings,
if involuntary, shall not have been dismissed within ninety (90) days after the
date of filing, or such person makes an assignment for the benefit of creditors,
or substantially all of the assets of such person are seized or attached and not
released within ninety (90) days thereafter.
"Calendar Quarter" means each three-month period, or any portion
thereof, beginning on January 1, April 1, July 1 and October 1.
"Confidential Information" means (i) the Technical Information, (ii)
any other information or material in tangible form that is marked as
confidential or proprietary by the furnishing party at the time it is delivered
to the receiving party, (iii) information that is furnished orally if the
furnishing party identifies such information as confidential or proprietary when
it is disclosed and promptly confirms such designation in writing after such
disclosure, and (iv) in the event the Principal Investigator under the Research
Agreement signs Licensee's confidentiality agreement included as Attachment C to
the Research Agreement, the information designated as confidential information
pursuant to the terms and conditions stated therein.
"Effective Date" means the first date when the University and Licensee
have executed this Agreement and Licensee has paid the fee specified in Section
3.1 hereof.
"Federal Government Interest" means the rights of the United States
Government under Public Laws 96-517, 97-256 and 98-620, codified at 35 U.S.C.
xx.xx. 200-212, and any regulations issued thereunder, as such statute or
regulations may be amended from time to time hereafter.
"Field" means technology related to antisense oligonucleotides.
"Licensed Patents" means (i) United States Patent Application, Serial
No 288,692 , "Anti-Sense Oligonucleotides for Inhibiting the Growth of Lymphema
and Leukemia Cells"; (ii) all patent applications filed for University
Inventions or Joint Inventions (as defined in the Research Agreement) for which
Licensee has exercised its option to license and has licensed from the
University pursuant to Section 5.4 of the Research Agreement; (iii) all patents
issuing upon the foregoing applications in (i) and (ii); (iv) all continuations,
continuations-in-part, additions, divisions, renewals, extensions,
reexaminations and reissues of any of the foregoing in (i) and (ii) claiming
inventions in the Field; and (v) all United States and foreign counterparts of
any of the foregoing in (i) and (ii).
2
"Licensed Product(s)" means and includes all products the manufacture,
composition, use, sale or other disposition of which (i) is subject to a claim
of a Licensed Patent or (ii) uses or incorporates any of the Technical
Information.
"Licensed Technology" means the Licensed Patents and the Technical
Information.
"Net Sales Price" means the gross amount charged by Licensee for the
sale of a Licensed Product, net of returns and credits for rejected goods, and
after deducting (i) trade, quantity and cash discounts actually allowed, (ii)
sales, use or other similar taxes (including foreign government withholding),
the legal incidence of which is on Licensee, and (iii) freight allowances,
insurance and customs duties for the Licensed Product. If a Licensed Product is
sold for consideration other than solely cash, the fair market value of such
other consideration shall be included in the Net Sales Price.
"Person" or "person" means any corporation, partnership, joint venture
or natural person.
"Sale", "sale" or any variation thereof means the sale, assignment,
lease or other disposition of a Licensed Product by Licensee to a non-Affiliate.
A Licensed Product shall be deemed to have been sold for purposes of calculating
royalties under Article III hereof upon the first to occur of the following: (i)
the transfer of title in the Licensed Product from Licensee to a non-Affiliate;
or (ii) shipment of the Licensed Product from the manufacturing facilities of
Licensee to a non-Affiliate.
"Technical Information" means and includes all technical information,
trade secrets, developments, discoveries, know-how, methods, techniques,
formulae, processes and other information developed by Xx. Xxxx that the
University owns or possesses on the date hereof and that relates to the use of
antisense oligonucleotides in the Field, or which are developed under the
Research Agreement and are related to University Inventions or Joint Inventions,
including by way of illustration and not limitation, designs, data, drawings,
documents, models, and other similar information. "Technical Information" shall
exclude any of the foregoing that are included in a claim of the Licensed
Patents.
"Valid Claim" means a claim of an issued and unexpired patent included
within the Licensed Patents that has not been withdrawn, canceled or disclaimed
or held invalid or unenforceable by a court or governmental authority of
competent jurisdiction in an unappealed or unappealable decision, or a claim of
a pending patent application included within the Licensed Patents, which patent
application was filed in good faith and has not been abandoned or finally
disallowed.
3
ARTICLE II
GRANT OF LICENSE
2.1 Grant of License.
(a) Subject to the terms and conditions contained in this Agreement,
the University hereby grants to Licensee an exclusive, worldwide,
royalty-bearing right and license (including the right to sublicense) to make,
have made, use, and sell the Licensed Products in the Field and to practice
under the Licensed Patents and use the Technical Information in connection
therewith.
(b) The University reserves the right to practice the Licensed Patents
and to use the Technical Information for non-commercial research and educational
purposes.
2.2 Right to Sublicense. Licensee shall have the right to sublicense to
any third party the rights conferred upon Licensee under this Agreement, subject
to the following conditions:
(a) Licensee shall forward to the University, within thirty (30) days
after execution, a complete and accurate written copy of the relevant provisions
of each such sublicense granted hereunder;
(b) In each such sublicense, the sublicensee shall acknowledge that it
is subject to the terms and conditions of the license granted to Licensee under
this Agreement, and that any sub-sublicensee of a sublicensee similarly shall be
bound by this Agreement.
(c) Notwithstanding any such sublicense, Licensee shall remain
primarily liable to the University for all of Licensee's duties and obligations
contained in this Agreement, and any act or omission of a sublicensee which
would be a material breach of this Agreement if performed by Licensee shall be
deemed to be a breach by Licensee of this Agreement;
(d) If Licensee becomes subject to a Bankruptcy Event, all payments
then or thereafter due and owing to Licensee from its sublicensees shall, to the
extent allowable by applicable law and upon notice from the University to any
such sublicensee, become payable directly to the University for the account of
Licensee; provided, however, that the University shall remit to Licensee the
amount by which such payments exceed the amounts owed by Licensee to the
University.
2.3 No Rights by Implication. No rights or licenses with respect to the
Licensed Technology are granted or deemed granted hereunder or in connection
herewith, other than those rights or licenses expressly granted in this
Agreement.
4
2.4 Federal Government Interest. Licensee acknowledges that in
accordance with the Federal Government Interest, the United States Government
retains certain rights in inventions funded in whole or in part under any
contract, grant or similar agreement with a Federal agency. The license to the
Licensed Technology granted under this Article II is expressly subject to all of
such rights.
ARTICLE III
ROYALTIES
3.1 License Fee. In consideration of the license granted hereunder,
Licensee shall pay to the University upon execution of this Agreement, a
one-time nonrefundable license fee of $10,000. This license fee shall be in
addition to the royalties payable pursuant to this Agreement and shall not be
credited against or otherwise reduce future royalties.
3.2 Royalties. In further consideration of the rights and licenses
granted hereunder, Licensee shall pay to the University the following royalties:
(a) a royalty of * of the Net Sales Price of all Licensed Products sold
in a country in which the manufacture, use or sale of such Licensed Product is
subject to a Valid Claim of the Licensed Patents in such country; and
(b) a royalty of * of the Net Sales Price of all Licensed Products the
manufacture, use or sale of which uses or incorporates any Technical
Information.
Sales of any Licensed Product shall be subject to the highest royalty
applicable under this Section 3.2, but shall not be subject to more than one
royalty, regardless of the number of Licensed Patents or components of Technical
Information applicable to such Licensed Product.
3.3 Other Compensation. In addition to the royalties payable under
Section 3.2 hereof, Licensee shall pay to the University the following amounts:
(a) a royalty of * of all royalties, license fees, advances (other than
research funding) and other payments of compensation (however characterized)
received by Licensee solely and directly in consideration for the sublicense of
any of Licensee's rights granted hereunder. Each such payment by a sublicensee
to Licensee (including partial payments) shall be subject to royalty under this
Agreement. Any noncash consideration received by Licensee shall be valued at its
fair market value as of the date of receipt. Licensee shall not owe royalties to
the University on the amount of any sponsored research funding or milestone
payments resulting from the progress of research and development received from a
sublicensee.
(b) a diligence fee of (i) one hundred thousand dollars ($100,000),
payable annually on each of the first, second and third anniversaries of the
effective date of this Agreement, or (ii) three hundred fifty thousand dollars
5
($350,000), payable during the three-year period following the effective date of
the Agreement at such times as the parties may mutually agree (hereinafter
referred to collectively as the "Diligence Payments"). With the prior written
approval of the University, such payments may be made to the University either
in cash or in kind, or both. The value of any in kind payment shall be
determined by prior mutual agreement of the University and Licensee.
The Diligence Payments shall be used by the University solely to
support the further development of the Licensed Technology and any sums paid by
Licensee under the Research Agreement shall be fully creditable against the
Diligence Payments. In the event the Research Agreement is terminated pursuant
to its terms, then Licensee may elect to spend the Diligence Payments to fund
further development of the Licensed Technology by a third party which Licensee
reasonably determines is best able to develop the Licensed Technology.
3.4 Minimum Royalties. Licensee shall pay to the University as a
nonrefundable advance against royalties during the ensuing year, minimum annual
royalties on the following dates in the corresponding amounts (the "Minimum
Royalties"):
Minimum Royalty Year Beginning
--------------- --------------
$10,000 4th Anniversary of the Effective Date
$15,000 5th Anniversary of the Effective Date
$20,000 6th Anniversary of the Effective Date
$25,000 Each Anniversary of the Effective Date
thereafter
Minimum Royalties shall be available for credit against royalties only
during the year in which such Minimum Royalties are paid and shall not be
available for credit in any other year. Any payments made by Licensee to support
research in the Field by the University shall be fully credited against Minimum
Royalties due in the year such research payments are made.
3.5 Sales to Federal Government. To the extent required by the Federal
Government Interest, sales by Licensee to the United States Government shall not
be subject to royalty.
3.6 Payments. Royalties payable under Section 3.2 hereof shall be paid
within sixty (60) days following the last day of the Calendar Quarter in which
the royalties accrue, and royalties payable under Section 3.3(a) within ninety
(90) days following the last day of the Calendar Quarter in which the royalties
accrue. After termination of this Agreement, the final royalty payment shall be
made in accordance with the provisions of Section 9.4 hereof. Payments shall be
deemed paid as of the day on which they are received at the account designated
pursuant to Section 3.8.
6
3.7 Reports. Licensee shall deliver to the University within sixty (60)
days after the end of each Calendar Quarter a report, certified by the chief
financial officer of Licensee, setting forth in reasonable detail the
calculation of the royalties payable to the University for such Calendar
Quarter, including, without limitation, the Licensed Products sold by Licensee
and any sublicensee in each country during such Calendar Quarter, the Net Sales
Price thereof, all relevant compensation received from sublicensees, and the
amount of Minimum Royalties available for credit for the corresponding Calendar
Quarter.
3.8 Currency, Place of Payment, Interest.
(a) All dollar amounts referred to in this Agreement are expressed in
United States dollars. All payments to the University under this Agreement shall
be made in United States dollars (or other legal currency of the United States)
by check payable to "The Trustees of the University of Pennsylvania."
(b) If Licensee receives revenues from sales of Licensed Products in a
currency other than United States dollars, royalties shall be converted into
United States dollars at the conversion rate for the foreign currency as
published in the eastern edition of The Wall Street Journal as of the last date
of the Calendar Quarter. If at any time legal restrictions prevent the prompt
remittance of part or all royalties by Licensee or any sublicensee with respect
to any country where a Licensed Product is sold, Licensee or such sublicensee
shall have the right and option to make such payments by depositing the amount
thereof in local currency to the University's account in a bank or other
depository in such country; provided, however, that if such legal restrictions
are not removed within one (1) year after the date such account is established,
Licensee then shall remit promptly to the University an amount in United States
dollars equal to the deferred royalties held in such account. Upon receipt of
these deferred royalties by the University, Licensee shall be entitled to
transfer to its own account all corresponding amounts held on behalf of the
University in the local bank or depository.
(c) Amounts that are not paid when due shall accrue interest from the
due date until paid, at a rate equal to the lesser of the prime rate as
published in the eastern edition of The Wall Street Journal as of the last date
of the Calendar Quarter when such amounts become due, plus two percent (2%), or
the maximum interest rate allowed by applicable law. The University may treat
unpaid payments as a breach of this Agreement in accordance with Section
9.2(a)(i) hereof notwithstanding the payment of interest.
3.9 Records. Licensee will maintain, and will cause its sublicensees to
maintain, complete and accurate books and records which enable the royalties
payable hereunder to be verified. The records for each Calendar Quarter shall be
maintained for three years after the submission of each report under Section 3.7
hereof. Upon reasonable prior notice to Licensee, the University and its
accountants, which shall be reasonably acceptable to Licensee, shall have access
to the books and records of Licensee and its sublicensees to conduct a review or
7
audit thereof. Such access shall be available not more than once each calendar
year, during normal business hours, and for two years after the expiration or
termination of this Agreement. If the University determines that Licensee has
underpaid royalties by 10% or more, Licensee will pay the costs and expenses of
the University's accountant in connection with its review or audit.
3.10 Duration of Royalty Obligations. Licensee's royalty obligations
for a Licensed Product shall terminate on a country-by-country basis with the
expiration of the last to expire Licensed Patent utilized by or in a Licensed
Product in such country, or ten (10) years from the date of first commercial
sale of a Licensed Product in such country in the event only unpatented
Technical Information is utilized in or by such Licensed Product.
3.11 Mandatory Licensing. In the event that Licensee is required by
law, judgment or final order to acquire one or more royalty-bearing licenses
from a third party in order to fully exercise in a given country the rights
granted by the University hereunder, then Licensee shall be entitled to credit
an amount equal to fifty percent (50%) of the royalties actually paid to such
third party against royalties payable to the University under Section 3.2 hereof
for Licensed Products sold in that country, provided however that for any
calendar quarter such credits do not exceed fifty percent (50%) of the royalties
payable to the University in such calendar quarter.
3.12 Royalty Reduction. In the event Licensee must license rights from
any other party in order to exercise rights granted by the University herein,
then Licensee may credit against royalties due hereunder an amount equal to
forty percent (40%) of the royalties paid by Licensee to such other party. In no
event shall Licensee pay to the University in any calendar quarter less than
fifty percent (50%) of the royalties due under Section 3.2(a) and 3.2(b) hereof.
3.13 Cumulative Credits. Under no circumstances shall Licensee be
entitled to receive credits against royalties payable to the University under
Section 3.2 hereof that, for any calendar quarter, exceed in the aggregate fifty
percent (50%) of the royalties payable to the University under that section in
such calendar quarter. This provision applies to any credits that Licensee may
receive, without limitation, under Sections 3.4, 3.11, 3.12, 6.3 or 7.1(a)
hereof.
ARTICLE IV
CERTAIN OBLIGATIONS OF LICENSEE
4.1 Licensee Efforts; Reporting.
(a) Licensee shall use its good faith efforts to develop for commercial
use and to market Licensed Products as soon as practicable, consistent with
sound and reasonable business practices. In this connection, the parties
acknowledge that the Licensed Technology has only recently been invented and
that substantial additional effort, expense and time, as well as regulatory
approval, will be required before manufacture and sales of any Licensed Product
will be possible.
8
(b) Until the date of first commercial sale of Licensed Products,
Licensee shall provide the University on each June 1 and December 1 with written
reports, setting forth in such detail as the University may reasonably request,
the progress of the development, evaluation, testing and commercialization of
the Licensed Products. Licensee also shall notify the University within thirty
(30) days after the first commercial sale of a Licensed Product.
4.2 Compliance With Laws.
(a) Licensee shall comply with all applicable prevailing laws, rules
and regulations pertaining to the development, testing, manufacture, marketing
and import or export of the Licensed Products. Without limiting the foregoing,
Licensee acknowledges that the transfer of certain commodities and technical
data is subject to United States laws and regulations controlling the export of
such commodities and technical data, including all Export Administration
Regulations of the United States Department of Commerce. These laws and
regulations, among other things, prohibit or require a license for the export of
certain types of technical data to specified countries. Licensee will comply
with all applicable United States laws and regulations controlling the export of
commodities and technical data, and will be solely responsible for any violation
thereof by Licensee or its sublicensees.
(b) To the extent required by the Federal Government Interest, all
Licensed Products to be used or sold in the United States shall be manufactured
substantially in the United States, and Licensee shall take such actions as are
necessary to assure that it and its sublicensees comply with the obligations
imposed by this Section 4.2(b).
4.3 Government Approvals. Licensee will be responsible for obtaining,
at its cost and expense, all governmental approvals required to commercially
market the Licensed Products.
4.4 Patent Notices, etc. Licensee shall xxxx the Licensed Products sold
in the United States with all applicable patent numbers. All Licensed Products
shipped to and/or sold in other countries shall be marked and labeled in such a
manner as to conform with all applicable laws of the country where the Licensed
Products are sold.
4.5 Security Interest. Solely so that the University may enforce the
termination provisions set forth in Article IX hereof in the event of a
Bankruptcy Event, and to the extent allowed by applicable law and in
consideration of the license and other rights granted in this Agreement,
Licensee hereby grants to the University a security interest in the Licensed
Technology to secure performance of Licensee's obligations under this
Agreement. Upon default by Licensee or if Licensee becomes subject to a
Bankruptcy Event, the University shall have all the rights and remedies of a
secured party under the Uniform Commercial Code. Licensee shall execute any
such instruments or documents as shall be required to evidence and perfect such
security interest in any jurisdiction.
9
ARTICLE V
WARRANTIES AND REPRESENTATIONS
5.1 Representations and Warranties of the University. The University
represents and warrants to Licensee that: (a) this Agreement, when executed and
delivered by the University, will be the legal, valid and binding obligation of
the University, (b) the University has not granted rights in or to the Licensed
Technology to any person other than Licensee, except to the extent provided by
the Federal Government Interest; (c) the University has not received any written
notice that the Licensed Technology infringes the proprietary rights of any
third party; and (d) the University has received no written notice of any patent
or other proprietary technology of the University other than the Licensed
Patents and the Technical Information which would be required to make, have
made, use and sell the Licensed Products and to practice under the Licensed
Technology in connection therewith. However, the University gives no
representation or warranty that any patent within the Licensed Patents will be
granted or, if granted, that any such patent will be valid. The representations
and warranties in clauses (b), (c), and (d) hereof are to the knowledge of the
University, based upon conversations with certain officials of the University
and Xx. Xxxx. The University has made no independent investigation, examination
or review of the matters which are subject to the foregoing representations,
other than a review of relevant files maintained in the University's Office of
Corporate Programs & Technology.
5.2 Representations and Warranties of Licensee. Licensee represents and
warrants to the University as follows:
(a) Licensee is a corporation duly organized, validly existing and in
good standing under the laws of Delaware, and has all requisite corporate power
and authority to execute, deliver and perform this Agreement;
(b) this Agreement, when executed and delivered by Licensee, will be
the legal, valid and binding obligation of Licensee; and
(c) the execution, delivery and performance of this Agreement by
Licensee does not conflict with, or constitute a breach or default under, (i)
the charter documents of Licensee, (ii) any state or federal law, order,
judgment or governmental rule or regulation applicable to Licensee, or (iii)
any provision of any material agreement, contract, commitment or instrument to
which Licensee is a party; and the execution, delivery and performance of this
Agreement by Licensee does not require the consent, approval or authorization
of, or notice, declaration, filing or registration with, any governmental or
regulatory authority.
10
ARTICLE VI
LIMITATION ON LIABILITY AND INDEMNIFICATION
6.1 No Warranties; Limitation on Liability. EXCEPT AS EXPLICITLY SET
FORTH IN SECTION 5.1 HEREOF, THE LICENSED TECHNOLOGY IS PROVIDED ON AN "AS IS"
BASIS AND THE UNIVERSITY MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR
IMPLIED, WITH RESPECT TO THE LICENSED TECHNOLOGY OR THE LICENSED PRODUCTS. BY
WAY OF EXAMPLE BUT NOT OF LIMITATION, THE UNIVERSITY MAKES NO REPRESENTATIONS OR
WARRANTIES (i) OF COMMERCIAL UTILITY, (ii) OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, OR (iii) THAT THE USE OF THE LICENSED TECHNOLOGY WILL NOT
INFRINGE ANY PATENT, COPYRIGHT OR TRADEMARK OR OTHER PROPRIETARY OR PROPERTY
RIGHTS OF OTHERS. THE UNIVERSITY SHALL NOT BE LIABLE TO LICENSEE, LICENSEE'S
SUCCESSORS OR ASSIGNS OR ANY THIRD PARTY WITH RESPECT TO ANY CLAIM ON ACCOUNT
OF, OR ARISING FROM, THE USE OF INFORMATION IN CONNECTION WITH THE LICENSED
TECHNOLOGY SUPPLIED HEREUNDER OR THE MANUFACTURE, USE OR SALE OF LICENSED
PRODUCTS OR ANY OTHER MATERIAL OR ITEM DERIVED THEREFROM. THE UNIVERSITY SHALL
NOT BE LIABLE TO LICENSEE OR ANY OTHER PERSON FOR ANY LOSS OF PROFITS, LOSS OF
BUSINESS OR INTERRUPTION OF BUSINESS, OR FOR ANY INDIRECT, SPECIAL OR
CONSEQUENTIAL DAMAGES OF ANY KIND INCURRED BY LICENSEE OR ANY OTHER PERSON
WHETHER UNDER THIS AGREEMENT OR OTHERWISE, EVEN IF THE UNIVERSITY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH LOSS.
6.2 Licensee Indemnification. Licensee will indemnify and hold harmless
the University, its trustees, officers, agents and employees (collectively, the
"Indemnified Parties"), from and against any and all liability, loss, damage,
action, claim or expense suffered or incurred by the Indemnified Parties
(including reasonable attorney's fees) (individually, a "Liability" and
collectively, the "Liabilities") which results from or arises out of (a) the
development, use, manufacture, promotion, sale or other disposition of the
Licensed Technology and any Licensed Products by Licensee, its Affiliates,
assignees, sublicensees, vendors or other third parties; (b) breach by Licensee
of any covenant or agreement contained in this Agreement or the Research
Agreement; and (c) the successful enforcement by an Indemnified Party of its
rights under this Section 6.2. The indemnification obligation under clause (a)
shall apply regardless of any contributory negligence of the Indemnified Party.
Without limiting the foregoing, Licensee will indemnify and hold harmless the
Indemnified Parties from and against any Liabilities resulting from:
11
(i) any product liability or other claim of any kind related to the use
by a third party of a Licensed Product that was manufactured, sold or otherwise
disposed of by Licensee, its Affiliates, assignees, sublicensees, vendors or
other third parties;
(ii) a claim by a third party that the Licensed Technology or the
design, composition, manufacture, use, sale or other disposition of any Licensed
Product infringes or violates any patent, copyright, trademark or other
intellectual property rights of such third party; and
(iii) clinical trials or studies conducted by or on behalf of Licensee
relating to the Licensed Products, including, without limitation, any claim by
or on behalf of a human subject of any such clinical trial or study, any claim
arising from the procedures specified in any protocol used in any such clinical
trial or study, any claim of deviation, authorized or unauthorized, from the
protocols of any such clinical trial or study, and any claim resulting from or
arising out of the manufacture or quality control by a third party of any
substance administered in any clinical trial or study.
Notwithstanding anything in this Agreement or the Research Agreement to
the contrary, the University shall indemnify Licensee, Licensee's employees,
directors, officers, affiliates and agents for any claims for injuries to
persons or damages which occur on University premises or premises under the
exclusive control of the University during the conduct of research activities by
the University under the Research Agreement.
6.3 Procedures. The Indemnified Party shall promptly notify Licensee of
any claim or action giving rise to a Liability subject to the provisions of
Section 6.2. Licensee shall have the right to defend any such claim or action,
at its cost and expense. Licensee shall not settle or compromise any such claim
or action in a manner that imposes any restrictions or obligations on the
University or grants any rights to the Licensed Technology, without the
University's written consent which consent shall not be unreasonably withheld.
If Licensee fails or declines to assume the defense of any such claim or action
within thirty (30) days after notice thereof, the University may assume the
defense of such claim or action for the account and at the risk of Licensee,
provided that Licensee is consulted as to such defense and prior to any
settlement. Licensee shall pay promptly to the Indemnified Party any
Liabilities to which the foregoing indemnity relates, as incurred. The
indemnification rights of the University or other Indemnified Party contained
herein are in addition to all other rights which such Indemnified Party may
have at law or in equity or otherwise. Notwithstanding the foregoing, in the
event of settlement, judgment or other final resolution of a claim by a third
party under Section 6.2 (ii) hereof requiring Licensee to pay royalties to such
third party for Licensed Products sold in a given country, Licensee shall have
the right to credit such amounts against the royalties payable to the
University under Section 3.2 for sales of Licensed Products in such country,
provided however, that for any calendar quarter such credits do not exceed
fifty percent (50%) of the royalties payable to the University in such calendar
quarter.
12
6.4 Product Liability Insurance. Licensee shall purchase and maintain
in effect and shall require its sublicensees to purchase and maintain in effect
a policy of products liability insurance covering all claims with respect to
Licensed Products manufactured or sold within the terms of any license granted
hereunder, which policy shall: (i) be in such form and amount of coverage and
written by such company as the University shall approve, (ii) provide that such
policy is primary and not excess or contributory with regard to other insurance
the University may have, (iii) provide at least 30 days notice to the University
of cancellation, and (iv) include the University as an additional named insured.
Licensee shall furnish a certificate of such insurance to the University on or
before the date of first commercial sale of any Licensed Products. If Licensee
and its sublicensees are unable to obtain such insurance at commercially
reasonable rates, and Licensee establishes to the University's reasonable
satisfaction that the general practice among U.S. manufacturers and distributors
of biotechnology products at the time is not to carry product liability
insurance, the Licensee shall, at its sole expense, make alternative
arrangements, satisfactory to the University in the University's reasonable
discretion, to assure the University that Licensee's indemnity under Article VI
hereof will protect the University as fully as if Licensee had obtained the
required insurance. Such alternative arrangements may include, by way of
example, but not limitation, providing irrevocable letters of credit or similar
financial guarantees of Licensee's indemnity obligation.
ARTICLE VII
PATENTS AND INFRINGEMENT
7.1 Prosecution of Patents.
(a) The University shall be responsible for and shall control the
preparation, prosecution and maintenance of the Licensed Patents and any other
rights included in the Licensed Technology. Licensee shall reimburse the
University for all reasonable documented expenses (including legal fees, filing
and maintenance fees or other governmental charges) incurred subsequent to the
date of this Agreement in connection with the filing, prosecution and
maintenance of the Licensed Patents or other Licensed Technology. Licensee may
credit such expenses against its royalty payments to the University under
Section 3.2 hereof, provided however, that for any calendar quarter, Licensee
may not credit amounts in excess of fifty percent (50%) of the royalties payable
for the calendar quarter to the University.
(b) Licensee and the University shall mutually determine the countries
where the Licensed Patents will be prosecuted and maintained. If Licensee
declines to pay for patent prosecution and maintenance costs in any such
mutually determined jurisdiction, the University may do so at its cost and
expense but such patents shall be excluded from the definition of Licensed
Patents.
13
(c) If the University elects not to file, prosecute or maintain any
patent or patent application included in the Licensed Patents, it shall notify
Licensee at least sixty (60) days prior to taking, or not taking, any action
which would result in abandonment, withdrawal, or lapse of such patent or patent
application. Licensee shall then have the right to file, prosecute or maintain
the patent or patent application at its own expense and such costs may be
credited against royalties payable by Licensee under Section 3.2 hereof as
provided in subsection (a) hereof.
(d) Each party shall cooperate with the other party to execute all
lawful papers and instruments and to make all rightful oaths and declarations as
may be necessary in the preparation and prosecution of all such patents and
other applications and protections referred to in this Section 7.1.
7.2 Ownership. The University shall retain all right, title and
interest in and to the Licensed Patents and other Licensed Technology, and any
patents, copyrights and other protections related thereto, regardless of which
party prepares, prosecutes or maintains the patents, copyrights or other
protections related to the Licensed Technology, subject to the express license
granted to Licensee under Article II hereof.
7.3 Infringement by Third Party.
(a) Each party will promptly notify the other party in writing of any
infringement or possible infringement of any of the Licensed Patents or other
Licensed Technology. Licensee shall have the right, but not the obligation, to
prosecute such infringement at its own expense. In such event, the University
shall cooperate with Licensee, at Licensee's expense. Licensee shall not settle
or compromise any such suit in a manner that imposes any obligations or
restrictions on the University or grants any rights to the Licensed Technology,
without the University's written consent which consent shall not be unreasonably
withheld.
(b) If Licensee fails to prosecute such infringement within ninety (90)
days after receiving written notice thereof, the University shall have the
right, but not the obligation, to prosecute such infringement at its own
expense. In such event, Licensee shall cooperate with the University, at the
University's expense.
(c) Any recovery obtained by the prosecuting party as a result of such
proceeding, by settlement or otherwise, shall be applied first to the
prosecuting party, in an amount equal to two times its costs and expenses of the
litigation, with the remainder to be paid 50% to the University and 50% to the
Licensee.
7.4 Certain Notices. Licensee shall notify the University at least
sixty (60) days before the Licensee uses or exports the Licensed Technology or
any Licensed Product in or to any country outside of the United States, to allow
the University to make any patent filings or to take other actions necessary to
protect the Licensed Technology.
14
ARTICLE VIII
CONFIDENTIALITY
8.1 Confidentiality.
(a) For a five (5) year period from the effective date of this Agreement,
Licensee and its sublicensees shall maintain in confidence and shall not
disclose to any third party the Confidential Information received pursuant to
this Agreement, without the prior written consent of the University. The
foregoing obligation shall not apply to:
(i) information that is known to Licensee or independently developed
by Licensee prior to the time of disclosure, in each case, to the extent
evidenced by written records promptly disclosed to the University upon
receipt of the Confidential Information;
(ii) information disclosed to Licensee by a third party that has a
right to make such disclosure;
(iii) information that becomes patented, published or otherwise part
of the public domain as a result of acts by the University or a third
person obtaining such information as a matter of right; or
(iv) information that is required to be disclosed by order of the U.S.
Food and Drug Administration or similar authority or a court of competent
jurisdiction; provided that the parties shall use their best efforts to
obtain confidential treatment of such information by the agency or court.
(b) Licensee will take all reasonable steps to protect the Confidential
Information of the University with the same degree of care Licensee uses to
protect its own confidential or proprietary information. Without limiting the
foregoing, Licensee shall ensure that all of its employees having access to the
Confidential Information of the University are obligated to abide by Licensee's
obligations hereunder.
(c) The University shall not be obligated to accept any Confidential
Information of the Licensee. If Licensee desires to furnish any such
Confidential Information to any University personnel, Licensee may request such
individual to sign a confidentiality agreement with Licensee in the form of
Attachment C of the Research Agreement. The University bears no institutional
responsibility for maintaining the confidentiality of any Confidential
Information of Licensee.
8.2 Publication.
(a) Licensee acknowledges that the basic objective of research and
development activities of the University is the generation of new knowledge and
its expeditious dissemination. To further that objective, the University
retains the right, at its discretion, to demonstrate, publish or publicize a
description of the Licensed Technology and any results of research conducted by
the University with the Licensed Technology, subject to the provisions of
clauses (b) and (c) below.
15
(b) Should the University desire to disclose publicly, in writing or by
oral presentation, Confidential Information related to the Licensed Technology
for which a patent application has not been filed, the University shall notify
Licensee in writing of its intention at least forty-five (45) days before such
disclosure. The University shall include with such notice a description of the
oral presentation or, in the case of a manuscript or other proposed written
disclosure, a current draft of such written disclosure. Licensee may request the
University, no later than forty-five (45) days following the receipt of the
University's notice, to file a patent application, copyright or other filing
related to such Invention. All such filings shall be subject to the provisions
of Section 7.1 of this Agreement. Upon receipt of such request, the University
shall arrange for a short delay in publication, not to exceed sixty (60) days,
to permit filing of a patent or other application by the University, or if the
University declines to file such application, to permit Licensee to make such a
filing.
(c) If the University desires to demonstrate, publish or publicize
Confidential Information related to the Licensed Technology that is not
patentable in the United States, and Licensee objects to such proposed
disclosure within the time period specified in clause (b) above, the parties
will negotiate in good faith to determine whether the proposed disclosure can be
modified or withheld, consistent with the objectives of each party. In no event
shall the University be prohibited from proceeding with any such publication,
provided it has abided by the provisions of this Agreement regarding disclosure.
8.3 Use of Name. Nothing contained in this Agreement shall be construed
as conferring any right to use any name, trade name, trademark, or other
designation of either party hereto (including any contraction, abbreviation or
simulation of any of the foregoing), or the name of any trustee, director,
officer or employee thereof, without the express prior written approval of the
affected party, except where, upon advice of counsel, such use is required to
comply with any law or regulation of a governing body having jurisdiction over a
party or over the making, using or selling of a Licensed Product or practice of
the Licensed Method. Each party hereto further agrees not to use or refer to
this Agreement or any license granted hereunder in any promotional activity
associated with Licensed Products, without the express prior written approval of
the other party, provided however that Licensee shall be permitted to refer to
this Agreement and the license granted hereunder in discussions or negotiations
with other corporations or businesses (or persons representing such businesses)
with which it contemplates entering a business relationship.
8.4 Injunctive Relief. Because damages at law may be an inadequate
remedy for breach of any of the covenants, promises and agreements contained in
16
Section 8.1 hereof, the University shall be entitled to injunctive relief in any
state or federal court located within the Eastern District of Pennsylvania,
including specific performance or any order enjoining the breaching party from
any threatened or actual breach of such covenants, promises or agreements.
Licensee hereby waives any objection it may have to the personal jurisdiction or
venue of any such court with respect to any such action. The rights set forth in
this Section 8.4 shall be in addition to any other rights which the University
may have at law or in equity.
ARTICLE IX
TERM AND TERMINATION
9.1 Term. This Agreement and the license granted herein shall commence
on the Effective Date and shall continue, subject to earlier termination under
Sections 9.2 or 9.3 hereof, for the duration of Licensee's royalty obligations
to the University pursuant to Article III.
9.2 Termination by the University.
(a) Upon the occurrence of any of the events set forth below ("Events of
Default"), the University shall have the right to terminate this Agreement by
giving written notice of termination, such termination effective in accordance
with the terms of each subparagraph below:
(i) nonpayment of any amount payable to the University that is
continuing ninety (90) calendar days after the University gives Licensee
written notice of such nonpayment;
(ii) breach by Licensee of any covenant (other than a payment breach
referred to in clause (i) above) or any material representation or warranty
contained in this Agreement that is continuing forty-five (45) calendar
days after the University gives Licensee written notice of such breach;
(iii) Licensee fails to comply with the terms of the license granted
under Section 2.1 hereof and such noncompliance is continuing sixty (60)
calendar days after the University gives Licensee notice of such
noncompliance;
(iv) Licensee becomes subject to a Bankruptcy Event;
(v) the dissolution or cessation of operations by Licensee.
(b) No exercise by the University of any right of termination shall
constitute a waiver of any right of the University for recovery of any monies
then due to it hereunder or any other right or remedy the University may have at
law or under this Agreement.
17
9.3 Termination by Licensee. Licensee shall have the right to terminate
this Agreement, at any time and with or without cause, upon 180 days' written
notice to the University.
9.4 Rights and Duties Upon Termination. Within thirty (30) days after
termination of this Agreement, each party shall return to the other party any
Confidential Information of the other party. Licensee shall provide the
University with a written inventory of all Licensed Products in process of
manufacture or in stock, and Licensee (and its Affiliates and sublicensees)
shall have the privilege of disposing of such Licensed Products within a period
of one hundred eighty (180) days thereafter; provided, however, that Licensee
shall pay royalties on any Net Sales of such Licensed Products at the rate and
at the time herein provided and shall render reports thereon in the manner
herein provided.
9.5 Sublicenses. Any sublicenses granted by Licensee under Section 2.2
of this Agreement may survive termination in accordance with the terms of such
sublicense if so requested by the University and if the sublicensee agrees, in
which event the sublicense shall be assigned to the University.
9.6 Provisions Surviving Termination. Licensee's obligation to pay any
royalties accrued but unpaid prior to termination of this Agreement shall
survive such termination. In addition, Sections 2.3, 7.1, 8.1, 8.3, 9.4, 9.5,
9.6, 9.7, 10.1, 10.5 and Articles 5 and 6 and any other provisions required to
interpret the rights and obligations of the parties arising prior to the
termination date shall survive expiration or termination of this Agreement.
9.7 Notification and Authorization under Drug Price Competition and
Patent Term Restoration.
(a) The University shall notify Licensee of (i) the issuance of each
U.S. patent included within the Licensed Patents, giving the date of issue and
patent number for each such patent, and (ii) each notice pertaining to any
patent included within the Licensed Patents which it receives as patent owner
pursuant to the Drug Price Competition and Patent Term Restoration Act (the
"Act"), including but not limited to notices pursuant to section 101 and 103 of
the Act from persons who have filed an abbreviated NDA or a "paper" NDA. Such
notices shall be given promptly, but in any event within ten (10) days of each
such patent's date of issue or receipt of each such notice pursuant to the Act,
whichever is applicable.
(b) The University hereby authorizes Licensee to include in any NDA for
a Licensed Product, as Licensee may deem appropriate under the Act, a list of
patents included within the Licensed Patents identifying the University as
patent owner that relate to such Licensed Product and such other information as
is required to be filed pursuant to the Act. The University agrees as patent
owner under the Act to apply for an extension of the term of any patent included
within the Licensed Patents, as patent owner under the Act, upon request by and
at the
18
expense of Licensee. The University also agrees to execute such documents
and take such additional action as the U.S. Patent and Trademark Office or U.S.
Food and Drug Administration may require in connection therewith; provided
however, that the University's reasonable costs in connection with this Section
9.7 are reimbursed by Licensee.
ARTICLE X
ADDITIONAL PROVISIONS
10.1 Arbitration.
(a) All disputes arising between the University and Licensee under this
Agreement shall be settled by arbitration conducted in the English language in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association. The parties will cooperate with each other in causing the
arbitration to be held in as efficient and expeditious a manner as practicable.
Any arbitration proceeding instituted by either party under this Agreement shall
be brought in a neutral territory agreeable to both parties.
(b) Any award rendered by the arbitrators shall be final and binding
upon the parties hereto. Judgment upon the award may be entered in any court of
record of competent jurisdiction. Each party shall pay its own expenses of
arbitration and the expenses of the arbitrators shall be equally shared unless
the arbitrators assess as part of their award all or any part of the arbitration
expenses of one party (including reasonable attorneys' fees) against the other
party.
(c) Each party irrevocably and unconditionally consents to the
jurisdiction of any such proceeding and waives any objection that it may have to
personal jurisdiction or the laying of venue of any such proceeding.
10.2 Assignment. No rights hereunder may be assigned by either party,
directly or by merger or other operation of law, without the express written
consent of the other party; provided, however, that a merger, consolidation,
sale of assets or other transaction in which the control of Licensee [with
respect to the Licensed Technology is transferred] shall not be deemed an
assignment of this Agreement that requires University approval. Any prohibited
assignment of this Agreement or the rights hereunder shall be null and void. No
assignment by Licensee shall relieve Licensee of responsibility for the
performance of any accrued obligations which it has prior to such assignment.
This Agreement shall inure to the benefit of permitted assigns of the assigning
party.
10.3 No Waiver. A waiver by either party of a breach or violation of
any provision of this Agreement will not constitute or be construed as a waiver
of any subsequent breach or violation of that provision or as a waiver of any
breach or violation of any other provision of this Agreement.
19
10.4 Independent Contractor. Nothing herein shall be deemed to
establish a relationship of principal and agent between the University and
Licensee, nor any of their agents or employees for any purpose whatsoever. This
Agreement shall not be construed as constituting the University and Licensee as
partners, or as creating any other form of legal association or arrangement
which could impose liability upon one party for the act or failure to act of the
other party.
10.5 Notices. Any notice under this Agreement shall be sufficiently
given if sent in writing by prepaid, first class, certified or registered mail,
return receipt requested, addressed as follows:
if to the University, to:
Office of Corporate Programs & Technology
University of Pennsylvania
Suite 419, 000 Xxxxx 00xx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxx, Director
with copy to:
Office of the General Counsel
University of Pennsylvania
000 Xxxxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
Attn: General Counsel
if to Licensee, to:
Genta Incorporated
00000 Xxxx X. Xxxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxx
with copy to:
Xxxxxx X. Xxxxxx, Xx., Esq.
Pillsbury, Madison & Sutro
000 Xxxxxxxxxx Xxxxxx
X.X. Xxx 0000 Xxx Xxxxxxxxx, XX 00000
or to such other addresses as may be designated from time to time by notice
given in accordance with the terms of this Section.
10.6 Entire Agreement. This Agreement, the Research Agreement of even
date herewith, and the Attachments to each Agreement embody the entire
understanding between the parties relating to the subject matter hereof and
supersede all prior understandings and agreements, whether written or oral. In
the event of any inconsistency or conflict between specific provision(s) of this
20
Agreement and the Research Agreement, the relevant provision(s) of this
Agreement shall prevail. This Agreement may not be varied except by a written
document signed by duly authorized representatives of both parties.
10.7 Severability. Any of the provisions of this Agreement which are
determined to be invalid or unenforceable in any jurisdiction shall be
ineffective to the extent of such invalidity or unenforceability in such
jurisdiction, without rendering invalid or unenforceable the remaining
provisions hereof or affecting the validity or unenforceability of any of the
terms of this Agreement in any other jurisdiction.
10.8 Headings. Any headings and captions used in this Agreement are for
convenience of reference only and shall not affect its construction or
interpretation.
10.9 No Third Party Benefits. Nothing in this Agreement, express or
implied, is intended to confer on any person other than the parties hereto or
their permitted assigns, any benefits, rights or remedies.
10.10 Governing Law. This Agreement shall be construed, governed,
interpreted and applied in accordance with the laws of the State of Delaware,
without giving effect to conflict of law provisions.
10.11 Counterparts. This Agreement shall become binding when any one or
more counterparts hereof, individually or taken together, shall bear the
signatures of each of the parties hereto. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original as against the
party whose signature appears thereon, but all of which taken together shall
constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this License
Agreement as of the date first above written.
THE TRUSTEES OF THE UNIVERSITY OF PENNSYLVANIA
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Director, Center to Technology
Transfer
GENTA INCORPORATED
By: /s/ Xxxxxx X. Xxxxx
------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chief Executive Officer
21
