LICENSE AGREEMENT
THIS LICENSE AGREEMENT (the "Agreement") made and effective as of this
30th day of June, 1996, by and between the UNIVERSITY OF PITTSBURGH - OF THE
COMMONWEALTH SYSTEM OF HIGHER EDUCATION, a non-profit education corporation
organized under the laws of the Commonwealth of Pennsylvania, located at 000
Xxxxxxx Xxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000 ("Pitt"), and GENVEC, INC., a
for-profit corporation organized under the laws of the State of Delaware, having
its principal place of business located at 00000 Xxxxxxxx Xxxxx, Xxxxxxxxx,
Xxxxxxxx 00000 ("GenVec").
W I T N E S S E T H
WHEREAS, GenVec is a biotechnology company involved in the field gene
therapy and has committed to acquire and maintain the research and technical
capabilities to develop, manufacture and market health care products; and
WHEREAS, Pitt is the assignee and owner of certain Patent Rights (as
defined below) related to inducible nitric oxide synthase ("iNOS") gene and GTP
hydroxylase ("GTPH") gene; and
WHEREAS, of even date herewith GenVec and Pitt have entered into a
Research Agreement relating to the conduct by Pitt of sponsored research
relating to iNOS for use in gene therapy; and
WHEREAS, of even date herewith GenVec and Pitt have entered into a
Stock Warrant Agreement pursuant to which GenVec has granted Pitt warrants to
purchase GenVec common stock; and
WHEREAS, Pitt wishes to grant to GenVec an exclusive worldwide license
to the Patent Rights and GenVec wishes to obtain such a license, all on the
terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and
obligations herein set forth, the parties hereto agree as follows:
SECTION 1
DEFINITIONS
The following terms shall have the following meanings as used in this
Agreement:
1.1 "AFFILIATE" shall mean any corporation or other business
entity which during the term of this Agreement controls, is controlled by, or
is under common control with GenVec, but only for so long as such entity
controls, is controlled by, or is under common control with GenVec. For this
purpose, control means the possession of the power to direct or cause the
direction of the
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management and the policies of an entity whether through ownership directly or
indirectly of over fifty percent (50%) of the stock entitled to vote, and for
non-stock organizations, the right to receive over fifty percent (50%) of the
profits by contract or otherwise, or in countries where control of over fifty
percent (50%) of such rights is not permitted in the country where such entity
exists, the maximum permitted in such country.
1.2 "CLINICAL AFFILIATE" shall mean any clinical or research
entity operated or managed as a facility under the University of Pittsburgh
Medical Center, whether or not owned by Pitt.
1.3 "CONFIDENTIAL INFORMATION" shall mean (i) any proprietary
or confidential information or material in tangible form disclosed hereunder
that is marked as "confidential" at the time it is delivered to the receiving
party, or (ii) proprietary or confidential information disclosed orally
hereunder which is identified as confidential or proprietary when disclosed
and the confidentiality of such disclosure is confirmed in writing within
thirty (30) days by the disclosing party.
1.4 "CORPORATE PARTNERSHIP" shall mean a written agreement
entered into by GenVec with a corporate entity pursuant to which GenVec
grants to such third party (a) a sublicense under the Patent Rights, which
agreement provides that GenVec shall receive in excess of * in cash or cash
equivalents in initial license fees and milestone payments, exclusive of
royalties, from such entity in exchange for such rights, or (b) an option to
acquire a sublicense under the Patent Rights or conduct a feasibility study
with respect thereto pursuant to which GenVec is contractually guaranteed to
receive a payment in cash or cash equivalents of * or more. It is understood
and agreed that any amounts received by GenVec from a third party for the
purchase of equity in GenVec, research and development, the license of
intellectual property other than the Patent Rights, or reimbursement for
patent or other expenses shall not be considered in determining whether the
monetary threshold in (a) or (b) above has been satisfied.
1.5 "DERIVED" shall mean a DNA sequence based on either the
human iNOS or the human GTPH gene which is a fragment isolated from such
gene, which fragment encodes a peptide with biological activity substantially
functionally equivalent to the native iNOS or GTPH protein, as the case may
be.
1.6 "EFFECTIVE DATE" shall mean the date first written above.
1.7 "FIELD" shall mean gene therapy using a DNA sequence
encoding all or part of the iNOS gene, and/or the GTPH gene, and/or a
sequence Derived from either or both such genes.
1.8 "LICENSED PRODUCT" shall mean a gene therapy product
containing an iNOS gene and/or a GTPH gene and/or a sequence Derived
therefrom, which product is:
(i) covered by one or more Valid Claims of the Patent Rights
in the country of manufacture or sale;
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(ii) produced, processed or otherwise manufactured by a
process or method covered by one or more Valid Claims of the Patent Rights in
the country of such manufacture; or
(iii) used in a process and/or method covered by one or more
Valid Claims of the Patent Rights in the country where such product is made or
sold.
1.9 "MANUFACTURING COSTS" shall mean (i) all direct and
indirect costs related to the manufacture of a Licensed Product, including
without limitation, costs for personnel, materials, quality control,
regulatory compliance, administrative expenses, subcontractors, fixed and
variable manufacturing overhead costs and business unit or division costs
reasonably allocable to the manufacture, packaging and labeling of such
Licensed Product, and the like, as determined and allocated by GenVec in
accordance with generally accepted accounting principles (GAAP), consistently
applied, or (ii) with respect to a Licensed Product purchased from a third
party vendor, reasonable amounts actually paid to the vendor for such
Licensed Product.
1.10 "NET PROFIT" shall mean the Net Revenues received by GenVec
with respect to Licensed Products, less:
(a) with respect to Net Revenues subject to Section 1.11
(c), (d) and (e), where GenVec or a third party which is not a sublicensee of
GenVec manufactures a Licensed Product for sale by GenVec, an amount for such
manufacturing equal to the greater of (i) * of Net Sales with respect to such
Licensed Product, or (ii) * of the Manufacturing Costs related to such
Licensed Product; and
(b) with respect to Net Revenues subject to Section 1.11 (d),
any expenses incurred or accrued in connection with the unit packaging,
labeling, marketing, distribution, sale or other disposition of the Licensed
Product by GenVec, and general and administrative expenses relating to the
preceding, as determined and allocated by GenVec in accordance with GAAP,
consistently applied.
1.11 "NET REVENUES" shall mean the gross revenues received by
GenVec for:
*
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For the avoidance of doubt, it is understood and agreed that Net Revenues shall
not include any amount received by GenVec from a third party for (i) the
purchase of equity in GenVec, (ii) research or development, or (iii)
reimbursement for patent expenses or other reimbursements. It is further
understood and agreed that where GenVec has entered into a co-promotion
agreement with a third party with respect to Licensed Products pursuant to which
both parties have the right to commercialize such Licensed Products, Net
Revenues shall only include those revenues received by GenVec with respect to
such Licensed Products which GenVec has the contractual right to retain. It is
further understood and agreed that Net Revenues shall not include Withholding
Taxes (as defined in Section 4.11 below) paid with respect to sales of Licensed
Products to governmental entities pursuant to applicable law.
1.12 "NET SALES" shall mean the amounts received by GenVec and
its sublicensees with respect to sales of Licensed Products to independent
third parties, less (i) rebates, credits and cash, trade and quantity
discounts, actually taken, (ii) excise taxes, sales, use, value added, and
other consumption taxes and other compulsory payments to governmental
authorities, actually paid, (iii) the cost of any shipping packages and
packing, if billed separately, (iv) insurance costs and outbound
transportation charges prepaid or allowed, (v) import and/or export duties
and tariffs actually paid, (vi) amounts allowed or credited due to returns or
uncollectible amounts, and (vii) amounts paid to independent third parties
for intellectual property rights to manufacture, use, import or sell Licensed
Products.
1.13 "PATENT RIGHTS" shall mean (i) the patent applications and
patents listed on Exhibit A hereto, and (ii) all patent applications and
patents relating to a nucleic acid sequence encoding all or part of a gene
for iNOS or GTPH or a sequence Derived therefrom, or methods of use thereof,
or methods of making or use of a gene for iNOS or GTPH or, a sequence Derived
therefrom, in each case, which is owned, in whole or part, or otherwise
controlled by Pitt during the term of this Agreement, (iii) all divisions,
continuations, continuations-in-part, and substitutions of any of the
preceding, (iv) all foreign patent applications corresponding to any of the
preceding applications or patents, and (v) all U.S. and foreign patents
issuing on any of the preceding applications, including extensions, reissues,
and re-examinations.
1.14 "PIVOTAL TRIAL" shall mean a Phase III clinical trial (as
prescribed by applicable FDA regulations) or a comparable trial designed to
provide statistically significant evidence of the safety and efficacy of a
Licensed Product in humans sufficient to obtain regulatory approval for the
sale of such Licensed Product.
1.15 "PLA" shall mean a Product License Application, as defined
in the U.S. Food, Drug and Cosmetic Act, as amended, and the regulations
promulgated thereunder, or any corresponding foreign application,
registration or certification.
1.16 "RESEARCH AGREEMENT" shall mean that certain Research
Agreement entered into by Pitt and GenVec on an even date herewith, a copy of
which is attached hereto as Exhibit B.
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1.17 "TRANSFER SALES" shall mean the amounts received by GenVec
with respect to sales of Licensed Products to its sublicensees, less: (i)
rebates, credits and cash, trade and quantity discounts, actually taken, (ii)
excise taxes, sales, use, value added, and other consumption taxes and other
compulsory payments to governmental authorities, actually paid, (iii) the
cost of any shipping packages and packing, if billed separately, (iv)
insurance costs and outbound transportation charges prepaid or allowed, (v)
import and/or export duties and tariffs actually paid, (vi) amounts allowed
or credited due to returns or uncollectible amounts, and (vii) amounts paid
to independent third parties for intellectual property rights to manufacture,
use, import or sell Licensed Products.
1.18 "VALID CLAIM" shall mean a claim of an issued and unexpired
patent included within the Patent Rights which has not been held
unenforceable or invalid by a court or other governmental agency of competent
jurisdiction, and which has not been admitted to be invalid or unenforceable
through reissue, disclaimer or otherwise.
SECTION 2
PATENTS
2.1 ASSIGNMENT. With respect to the Patent Rights, Pitt
warrants to GenVec that Pitt has obtained from each person who is an inventor
on the Patent Rights, or any part thereof, a valid and enforceable assignment
of any and all rights thereto or thereof to Pitt.
2.2 PATENT PROSECUTION. Pitt shall be responsible, using patent
counsel acceptable to GenVec, for the filing, registration, prosecution and
maintenance of all patent applications and patents within the Patent Rights
in the United States and in those countries listed on Exhibit C attached
hereto. GenVec shall be responsible, but shall have no obligation, as to such
activities in all other countries. GenVec shall pay all reasonable costs and
expenses actually incurred by Pitt with respect to such activities incurred
during the term of this Agreement, subject to receipt by GenVec of an
accounting of such expenses in a form acceptable to GenVec. GenVec shall have
reasonable opportunities to advise Pitt concerning, and Pitt shall cooperate
with GenVec with respect to, filing, registration, prosecution and
maintenance of all patent applications and patents within the Patent Rights.
For purposes of this Agreement, "reasonable opportunities" shall mean that
GenVec shall receive from Pitt or its patent counsel copies of all documents
and materials relating to filing, registration, prosecution and maintenance
of patent applications and patents within the Patent Rights as soon as is
reasonably practical after Pitt has received such documents and materials and
at least forty-five (45) days before any date imposed upon Pitt for action or
response with respect to such patent applications or patents. Pitt agrees to
consider GenVec's comments concerning such documents and materials, and shall
use its best efforts to incorporate into the final version of such documents
and materials any change(s) and/or claim(s) requested by GenVec thereof
submission prior to the applicable government agencies or other parties.
2.3 COPIES. Pitt shall provide GenVec true copies of all
amendments, replies, official actions and other documents relating to the
filing, registration, prosecution and maintenance by Pitt
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of patents and patent applications included within the Patent Rights,
promptly as such become available.
SECTION 3
GRANT OF LICENSE
3.1 LICENSE GRANT. Subject to the rights of the United States
government, if any, as set forth in 35 U.S.C. Section 200 ET SEQ., Pitt
hereby grants to GenVec an exclusive, worldwide license and right, including
the right to grant and authorize sublicenses, in and to all Patent Rights to
make, have made, use, import, offer for sale, sell and otherwise exploit
Licensed Products in the Field. Notwithstanding the above, Pitt reserves a
royalty-free, nontransferable, nonexclusive right to practice under the
Patent Rights, and/or otherwise utilize the Patent Rights for its own
noncommercial educational and research purposes.
3.2 SUBLICENSES
3.2.1 BY GENVEC. GenVec may sublicense its rights
hereunder on notice to Pitt. In any sublicense GenVec shall require:
(i) any and all sublicensees to be subordinate
to and consistent with the terms and conditions of this Agreement; and
(ii) the sublicensees to maintain, for no less
than three (3) years following each sale of Licensed Products, records adequate
to permit determination of royalties to be paid by GenVec pursuant to this
Agreement.
3.2.2 *
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3.2.3 SURVIVAL. In the event of any termination of this
Agreement, any such sublicense shall remain in full force and effect and
shall be assigned by GenVec to Pitt; provided, however, that the financial
obligations of each sublicense to Pitt shall be limited to the amounts that
GenVec would have been obligated to pay to Pitt for the activities of such
sublicensee pursuant to this Agreement.
SECTION 4
CONSIDERATION
4.1 WARRANTS. In partial consideration of the license granted
herein, of even date herewith GenVec has granted Pitt a warrant to purchase
shares of GenVec stock pursuant to the terms of the Stock Warrant Agreement.
4.2 PAST PATENT COSTS. Within thirty (30) days following the
Effective Date and receipt by GenVec of supporting documentation from Pitt,
GenVec shall reimburse Pitt for Pitt's reasonable out-of pocket expenses to
date in the filing and prosecution of the Patent Rights.
4.3 MILESTONES. In addition to the foregoing, GenVec shall pay to
Pitt the following amounts at the times indicated:
(i) within thirty (30) days of the Effective Date, * ;
provided, however, that any amounts paid to Pitt by GenVec pursuant to this
Section 4.3 shall be fully creditable against the amount due Pitt pursuant to
Section 4.2;
(ii) within thirty (30) days following the initiation of
human clinical trials of the first Licensed Product, * ;
(iii) within thirty (30) days following the initiation of a
Pivotal Trial with respect to the first Licensed Product, * ;
(iv) within thirty (30) days following filing of a PLA to
market the first Licensed Product, * ; and
(v) within thirty (30) days following the receipt of
final regulatory approval to market a Licensed Product in the United States,
* .
The foregoing payments shall be fully creditable against any amounts due Pitt
pursuant to Section 4.4 or 4.5 below.
4.4 PROFIT SHARING. Subject to Section 4.6 below, in partial
consideration of the license granted herein, GenVec shall pay to Pitt * of
the Net Profits.
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4.5 MINIMUM ROYALTY. Notwithstanding Section 4.4 above, with
respect to sales of Licensed Products (including sales of Licensed Products
in connection with a co-promotion relationship) made in countries where there
is a Valid Claim covering such Licensed Products, subject to Section 4.6,
GenVec shall pay to Pitt no less than * of Net Sales of
Licensed Products. All payments made under this Section 4.5 and Section 4.6
below shall be fully creditable against any amounts due Pitt under Section
4.4.
4.6 COMBINATION PRODUCTS. In the event that a Licensed Product
is sold in combination with one or more other product(s) (excluding any
products which have no therapeutic utility) or active therapeutic agent(s)
which are not Licensed Products, Net Revenues from such sales for purposes of
calculating the amounts due under Sections 4.4 and 4.5 above shall be
calculated by multiplying the Net Revenues of that combination by the
fraction A/(A + B), where A is the gross selling price of the Licensed
Product sold separately and B is the gross selling price of the other product
or active therapeutic agent(s) sold separately. In the event that no such
separate sales are made by GenVec, Net Sales Receipts for royalty
determination shall be as reasonably allocated by GenVec between such
Licensed Product and such other product, based upon their relative importance
and proprietary protection. In the event that Pitt believes such allocation
is inequitable and the parties are unable to resolve such dispute, the matter
may be submitted to arbitration pursuant to Section 14.11 below.
4.7 OTHER TECHNOLOGY AND PRODUCTS. It is understood and agreed
that in the event GenVec enters into an agreement with a third party which
provides such third party rights to the Patent Rights and/or Licensed
Products and intellectual property other than the Patent Rights and/or
products other than Licensed Products, pursuant to which it receives license
fees and/or milestone payments with respect to (i) intellectual property
other than the Patent Rights for use in the development or commercialization
of products other than Licensed Products, or (ii) products other than
Licensed Products, the portion of such amounts which constitute Net Profits
shall be as reasonably determined by GenVec based on an allocation between
the amounts attributable to the Patent Rights or Licensed Product and such
other intellectual property or product, based upon their relative importance
and proprietary protection, and GenVec shall only pay to Pitt that portion of
such amounts reasonably attributable to the Patent Rights or Licensed
Product, as the case may be. In the event that Pitt believes such allocation
is inequitable and the parties are unable to resolve such dispute, the matter
may be submitted to arbitration pursuant to Section 14.11 below.
4.8 PAYMENTS. GenVec shall pay amounts due Pitt pursuant to
this Section 4 within sixty (60) days after the last day of the calendar
quarter in which they are received. All payments due hereunder shall be made
in U.S. dollars, and shall be made by bank wire transfer in immediately
available funds to an account designated by Pitt.
4.9 PAYMENT TERM. Payments due under this Section 4 shall be
payable on a country-by-country and Licensed Product-by-Licensed Product
basis and shall be payable until the later of expiration of the
last-to-expire issued Valid Claim covering a Licensed Product in such country.
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4.10 WITHHOLDING TAXES. All amounts required to be paid to Pitt
pursuant to this Agreement may be paid with deduction for withholding for or
on account of any taxes (other than taxes imposed on or measured by net
income) or similar governmental charge imposed by a jurisdiction other than
the United States ("Withholding Taxes"). Upon Pitt's request, GenVec shall
provide to Pitt a certificate evidencing GenVec's payment of any Withholding
Taxes hereunder.
4.11 OTHER FACTORS AFFECTING PAYMENT. As to countries covered by
this Agreement which require governmental approval for remitting payments out
of the country or which limit the amount of payments payable within the
country, if the payments made hereunder by GenVec to Pitt in respect of Net
Revenues from sales of Licensed Products exceed the rate approved or
permitted by such country, then the rate of payment payable by GenVec in
respect of sales of Licensed Products sold in such country shall be the
maximum rate approved or permitted by that country.
4.12 LOCAL PAYMENT. If any portion of the payments due Pitt
hereunder cannot be remitted from a country because of government control,
and it is legally permissible to remit such payments within the country, then
GenVec shall have the obligation and the right to deposit in a bank of Pitt's
election in such country and in trust for Pitt that portion of payments that
could not be remitted from the country.
SECTION 5
CLINICAL TRIALS
5.1 CLINICAL TRIAL SITES. GenVec shall use reasonable efforts,
subject to prudent business and scientific judgment, to select Pitt and its
Clinical Affiliates as a principal clinical trial site in the United States
for conducting, at GenVec's sole discretion, at least one Phase I, Phase
I/II, Phase II, Phase II/III, or Phase III clinical trial of Licensed
Products, unless GenVec, in its reasonable business or scientific judgment,
determines that the conduct of a clinical trial at Pitt or its Clinical
Affiliates is impracticable for any reason, including, without limitation,
unavailability of adequate facilities to conduct such trial or of facilities
comparable to those available at other prospective clinical trial sites,
inadequate access to a patient population suitable for the proposed clinical
trial, and clinical requirements specified by Pitt, its Clinical Affiliates,
or any government regulatory agency having jurisdiction over such clinical
trial. In the event that Xx. Xxxxxxx X. Xxxxxxx, a member of the faculty of
Pitt, ceases to be employed by Pitt before or after initiation of any such
clinical trial, or otherwise becomes unavailable for any reason to supervise
the conduct of any such clinical trial, or in the event GenVec grants a
sublicense in respect of commercialization of Licensed Products, the
foregoing clinical trial obligations shall no longer apply; provided,
however, that GenVec shall use reasonable efforts to encourage any such
sublicensee to consider conducting a clinical trial in respect of a Licensed
Product at Pitt or its Clinical Affiliates. Pitt agrees to respond to all
proposals regarding any clinical trials in a timely fashion and to diligently
pursue any such trials as shall be undertaken at Pitt or at any Clinical
Affiliate, on mutually agreed terms at least as favorable to GenVec as those
charged by Pitt or by such Clinical Affiliate to a third party for
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comparable clinical trials. Both parties hereby agree that no obligation to
conduct such clinical trials is created hereunder.
5.2 MATERIAL TRANSFER. Any reagents or other materials prepared
in laboratories at Pitt disclosed in the Patent Rights, or otherwise relating
to materials and/or methods covered by the Patent Rights, shall be the
property of Pitt, subject to the license granted GenVec herein. Pitt agrees,
upon GenVec's request and without additional consideration, to provide
reasonable quantities of such reagents and materials to enable GenVec to
exploit the rights and license granted to GenVec by Pitt under this Agreement.
SECTION 6
SUPPLY OF LICENSED PRODUCTS TO PITT
6.1 PITT ACCESS. During the term of this Agreement, GenVec
shall, consistent with applicable law, its prudent business and scientific
judgment and its ability to supply Licensed Products, sell Licensed Products
to Pitt and its Clinical Affiliates for end use by such entities, at such
times and in such quantities as are mutually agreed.
6.2 TERMS. GenVec will sell each Licensed Product to Pitt *
SECTION 7
INFRINGEMENT
7.1 EXTINGUISHMENT OF INFRINGEMENT.
7.1.1 BY GENVEC. If, in GenVec's opinion, any patent
contained within the Patent Rights has been infringed, GenVec shall bring
such alleged infringement to the attention of Pitt, and GenVec may, at its
election and expense, after giving written notice to Pitt, take such steps as
it may consider necessary to prosecute such infringement at its own expense
in Pitt's name, subject to GenVec's maintaining ongoing consultations with
Pitt with respect to such infringement and absent Pitt's reasonable objection
to enforcing such Patent Rights. GenVec shall also have the right to defend
and control any declaratory judgment action, opposition or interference
relating to any of the patent applications or patents within the Patent
Rights. Pitt shall have the right, at its own expense, to be represented by
counsel in any such proceeding.
7.1.2 BY PITT. If GenVec, within * after notifying
Pitt, has failed to bring suit or to take and maintain other appropriate
corrective action, Pitt shall then have the right to bring such suit or take
such action at its own expense. In any litigation brought by Pitt, GenVec
shall have the right, at its own expense, to be represented by counsel. If
Pitt elects to
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bring suit or take and maintain such other corrective action, it will provide
GenVec with written notice of that decision. If Pitt fails to bring suit or
maintain such other action within * after notifying GenVec, GenVec shall
again have the right to do so. If Pitt brings a suit or takes other
corrective action and prevails against the infringer, as evidenced by a final
judgment or decree to such effect in favor of Pitt, it shall notify GenVec.
Notwithstanding the foregoing, neither party shall have the right to settle
any suit brought pursuant to this Section 7.1 without the prior written
consent of the other party, which consent shall not be unreasonably withheld.
7.2 AMOUNTS RECOVERED. In any litigation brought solely by Pitt,
any amounts recovered from any unauthorized user will be paid to Pitt. In any
litigation brought by GenVec, any amounts recovered from any unauthorized
user shall be paid to GenVec. The amount of any such damages recovered by
GenVec shall, after first deducting GenVec's out-of-pocket expenses
(including attorneys and expert fees) in bringing and prosecuting the action
which resulted in such damages, be added into Net Sales Receipts for the
fiscal quarter in which such damages were received by GenVec. If GenVec,
while successful in enforcing the Patent Rights, recovers less than its
out-of-pocket expenses incurred as a result of such litigation, GenVec shall
be entitled to deduct from payments otherwise due to Pitt hereunder * of the
difference between any amount received and those amounts expended by GenVec
in the conduct of such litigation.
7.3 INDEMNITY. In any litigation brought by GenVec, GenVec shall
indemnify, defend and hold harmless Pitt with respect to any counterclaim
brought against Pitt; provided, however, that in the event of a counterclaim
based on the negligence or willful misconduct of Pitt, GenVec shall not be
responsible for costs of any settlement, award or any defense or other
associated costs after judgment to the extent (on a pro rated basis) such
award is based on Pitt's negligence or willful misconduct.
7.4 CLAIMS OF INFRINGEMENT If the practice by GenVec of the
license granted herein results in any claim of infringement of an intellectual
property right of third party against GenVec, GenVec shall have the exclusive
right to defend any such claim, suit or proceeding, at its own expense, by
counsel of its own choice and shall have the sole right and authority to
settle any such suit; provided, however, Pitt shall cooperate with GenVec, at
GenVec's reasonable request, in connection with the defense of such claim.
GenVec shall be entitled to offset any costs and expenses (including attorneys
and professional fees) incurred in connection with any such proceeding against
any amounts it would otherwise owe Pitt under Article 4, up to a maximum of
* of such amounts.
SECTION 8
PUBLICATION
It is Pitt's policy that Pitt or any of its employees shall be free
to disclose any scientific work done by it or its employees in the form of
presentations at scientific meetings and publications in scientific journals.
However, Pitt shall give GenVec not less than forty-five (45) days prior
notice of
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presentations and meetings and will delay publications for no more than sixty
(60) days to allow for review by GenVec of the material to be published to
determine if it should be the subject of patent applications and for patent
applications to be prepared and filed where it is found to be appropriate.
GenVec shall have the right to extend the foregoing periods by an additional
sixty (60) days with the prior consent of Pitt, which consent shall not be
unreasonably withheld.
SECTION 9
DUE DILIGENCE
9.1 REASONABLE EFFORTS. GenVec agrees to use reasonable efforts
to diligently develop and commercialize at least one Licensed Product and
obtain such approvals as may be necessary for the sale of such Licensed
Product in the United States and such other worldwide markets as GenVec elects
to commercialize the Licensed Product. GenVec's efforts shall be comparable to
those efforts GenVec makes with respect to its other products of comparable
value, stage of development and patent protection. The selection of Licensed
Products for development and commercialization shall be in the sole discretion
of GenVec, and GenVec may satisfy its obligations under this Section 9 itself
or through a sublicensee. GenVec shall notify Pitt within thirty (30) days
after the first commercial sale of each Licensed Product.
9.2 MILESTONE. Without limiting the foregoing Section 9.1,
GenVec shall have the specific obligation to use its reasonable efforts
consistent with its prudent business and scientific judgment to commence
human clinical trials of at least one (1) Licensed Product within * following
the Effective Date. If GenVec fails to meet the foregoing milestone within
the time specified, the parties shall in good faith review whether GenVec has
materially satisfied its obligations. If Pitt, in good faith, concludes that
GenVec has failed in this respect, it shall notify GenVec in writing and
GenVec shall have * in which to cure such failure, provided that such failure
can be cured within * . If such failure can be cured within * and if GenVec
has not cured such failure within such time, Pitt shall have the right to
convert the exclusive license granted herein to a non-exclusive license on
written notice to GenVec, provided that such conversion is consistent with a
determination of the arbitrators pursuant to Section 14.11 hereof that GenVec
has failed to exercise due diligence in the development of Licensed Products
pursuant to its obligations under this Section 9. In such event, Pitt shall
not enter into any other agreement with a third party on more favorable terms
than those contained herein without providing GenVec an opportunity to obtain
the benefit of such more favorable terms.
9.3 COOPERATION. It is understood and agreed that the parties
intend to reasonably confer and cooperate with each other, without charge, in
the research and development of Licensed Products and shall establish a
committee of four (4) members with the representatives from each of Pitt and
GenVec to participate in such activities. Such committee shall meet not less
than approximately twice a year, at sites agreed by the committee. GenVec
shall provide to Pitt annual reports regarding its plans for developing and
commercializing the Licensed Products and provide Pitt an opportunity to
comment thereon. Prior to entering into any Corporate Partnership, GenVec
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shall disclose to Pitt the identity of the potential partner and the nature
and scope of the agreement under discussion.
SECTION 10
CONFIDENTIALITY
10.1 CONFIDENTIALITY. The parties acknowledge that during the term
of this Agreement each may have access to confidential, proprietary or trade
secret information of the other party. Except as expressly provided herein,
during the term of this Agreement and for five (5) years thereafter each party
shall maintain such information received from the other party as confidential,
not disclose it to others, limit access to it to those employees with a need
to know and take such action as shall be reasonably necessary to ensure that
its employees will not disclose it to others. Confidential, proprietary or
trade secret information must be designated as such by disclosing party in
writing at or before the disclosure if such disclosure is made in writing, or
if the disclosure is not made in writing within thirty (30) days of the
disclosure.
10.2 PERMITTED DISCLOSURES. Notwithstanding the foregoing,
confidential, proprietary and trade secret information shall not include any
of the following:
10.2.1 information which is or becomes publicly available
without fault by the receiving party;
10.2.2 information which, as shown by written records, was
known by the receiving party as of the Effective Date;
10.2.3 information which, as shown by written records, is
obtained by the receiving party from a third party with no obligation of
confidentiality; or
10.2.4 information which, as shown by written records, was
independently developed by the receiving party by employees having no access
to information under this Agreement.
In addition, each party may disclose otherwise confidential, proprietary or
trade secret information to the extent that such disclosure is reasonably
necessary in practicing the license granted herein, in filing, registering,
prosecuting, protecting, maintaining or otherwise defending patents and patent
applications, prosecuting or defending litigation, complying with applicable
governmental law or regulations, and conducting clinical trials. GenVec may,
further, disclose confidential information to a potential sublicensee or as
reasonably required in the course of a contemplated public offering or private
financing. All reports provided to Pitt by GenVec and its sublicensees
pursuant to this Agreement shall be treated as Confidential Information of
GenVec.
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SECTION 11
PUBLICITY
Nothing contained in this Agreement shall be construed as conferring any right
of one party to use in advertising, publicity or other promotional activities
any name, indicia, trade name, trademark or other designation (including any
contraction, abbreviation or simulation of any of the foregoing) of the other
party hereto without such party's prior written consent. Except as required by
law or regulation, each party hereto further agrees not to use, refer or
disclose the terms of this Agreement in any public announcement or in any
private communication to a third party or to use the name of the other party
in promotional activity without the express written approval of the other
party; provided, once a disclosure has been approved a party may make
disclosures which do not materially differ therefrom without obtaining further
approvals from the other party. GenVec agrees that it will not use the indicia
or names of Pitt or any of its personnel, agents or trustees in the
advertising, promotion or labeling of any Licensed Products or in the
promotion, advertising or public description of GenVec, its Affiliates,
sublicensees or employees without the prior written approval of Pitt;
provided, once a disclosure has been approved GenVec may make disclosures
which do not materially differ therefrom without obtaining further approvals
from Pitt.
SECTION 12
WARRANTIES AND INDEMNIFICATION
12.1 PITT. Pitt represents and warrants that: (i) the execution,
delivery, and performance of this Agreement have been duly authorized by all
necessary action on the part of Pitt; (ii) it is the sole and exclusive owner
of all right, title and interest in the Patent Rights; (iii) it has informed
GenVec that it has previously exclusively licensed certain of the Patent
Rights to a third party and that such third party has provided Pitt notice of
its termination of such license effective as of September 3, 1996, but
otherwise the Patent Rights are free and clear of any lien, encumbrance,
security interest and restriction on license; (iv) it has informed GenVec that
it has previously exclusively licensed certain of the Patent Rights to a third
party and that such third party has provided Pitt notice of its termination of
such license effective as of September 3, 1996, but otherwise Pitt has not
previously granted, and will not grant during the term of this Agreement, any
right, license or interest in and to the Patent Rights, or any portion
thereof, inconsistent with the license granted to GenVec herein; and (v) there
are no actions, suits, investigations, claims or proceedings pending or
threatened in any way relating to the Patent Rights.
12.2 GENVEC. GenVec represents and warrants that: (i) it is a
corporation duly organized validly existing and in good standing under the
laws of the State of Delaware; and (ii) the execution, delivery and
performance of this Agreement have been duly authorized by all necessary
corporate action on the part of GenVec.
12.3 DISCLAIMER OF WARRANTIES. Pitt makes no representations or
warranties that any of the Patent Rights are valid or that the manufacture,
use or sale of Licensed Products will not infringe
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upon any patent or other rights owned by third parties. PITT MAKES NO
WARRANTIES WHATSOEVER, EITHER EXPRESS OR IMPLIED, AS TO THE MERCHANTABILITY OR
FITNESS OF ANY LICENSED PRODUCT, INVENTION OR MATERIALS FOR A PARTICULAR
PURPOSE, AND GENVEC AND ITS SUBLICENSEES AND DISTRIBUTORS SHALL MAKE NO
STATEMENTS, REPRESENTATIONS OR WARRANTIES WHATSOEVER TO ANY THIRD PARTIES
WHICH IMPLY THAT PITT HAS MADE ANY SUCH WARRANTY.
12.4 INDEMNITY. GenVec will defend, indemnify and hold harmless
Pitt, its directors, officers, medical and professional staff, employees and
agents and their successors (the "Indemnitees") from and against any and all
obligations, claims, demands, damages, judgments, causes of action, losses,
costs and expenses of any kind and nature including, without limitation, court
costs, expenses and attorneys' fees incurred by or imposed upon the
Indemnitees or any of them in connection with a claim by a third party based
on the death, personal injury, illness, property damage or product liability
arising out of any use, sale or other disposition of any Licensed Product by
GenVec or its sublicensees, distributors or other transferee. GenVec's
obligation to protect, defend, indemnify and hold harmless hereunder shall
survive the termination and term of this Agreement, but shall exclude awards
and defense and other costs to the extent (on a pro rated basis) they result
or are alleged to have resulted from the negligence or willful misconduct of
Pitt.
12.5 INSURANCE. Before the start of clinical trials of any
Licensed Product, GenVec at its sole cost and expense shall procure and
maintain comprehensive general liability insurance policies for no less than
* combined single limit. In addition, GenVec shall carry product liability
insurance, or, in its reasonable business judgment, self-insure for, the
greater of the usual limits carried by GenVec for other products it is then
selling or a single limit of no less than * aggregate. These minimum limits
and coverages are to be noted on certificates of insurance naming Pitt as
additional insured and delivered to Pitt, together with copies of any and all
such insurance policies prior to the clinical testing, if any, or the sale of
any Licensed Product. The insurer will give Pitt thirty (30) days prior
written notice of cancellation or non-renewal of such insurance. GenVec shall
maintain such insurance for a reasonable period beyond the expiration or
termination of this Agreement during the period that any Licensed Product is
being distributed or sold by GenVec.
SECTION 13
TERM AND TERMINATION
13.1 TERM. Unless sooner terminated in a manner provided herein,
this Agreement shall continue in force on a country-by-country and Licensed
Product-by-Licensed Product basis until the expiration of the last-to-expire
of all Valid Claims in such country included in the Patent Rights. Following
such an expiration, GenVec shall have a non-exclusive, royalty-free,
irrevocable license in such country, with respect to all non-patented
intellectual property subject to this Agreement.
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13.2 TERMINATION FOR CAUSE. This Agreement may be terminated by
either party as follows:
13.2.1 INSOLVENCY. If the other party is adjudicated
insolvent, or files a petition for bankruptcy or liquidation or is
unsuccessful in effecting a dismissal within * of any involuntary petition
filed against it for bankruptcy or liquidation, or makes an assignment for
the benefit of creditors or admits in writing its inability to pay its debts
as they become due; or
13.2.2 UNCURED MATERIAL BREACH. Except as otherwise provided
herein, upon material breach of any of the terms or conditions of this
Agreement by the other party, if such breach has not been cured within * of
the non-breaching party giving written notice thereof to the breaching party.
Any such termination shall become effective upon the end of such period
unless the breaching party (or any other party on its behalf) has cured such
breach or default prior to the end of the * period; provided, however, if
either party receives notification from the other party of a material breach
and the party alleged to be in breach notifies the other party that it
disputes such alleged breach, then the matter shall be submitted to
arbitration pursuant to Section 14.11 below. In such event, no termination
shall become effective unless the arbitrators have determined that a material
breach has occurred and the breaching party fails to cure such breach within
the period for such cure specified by the arbitrators.
13.3 PERMISSIVE TERMINATION. Until November 30, 1996, GenVec may
terminate this Agreement with respect to all or part of the Patent Rights
and/or any country with thirty (30) days notice to Pitt. After November 30,
1996, GenVec may, consistent with its prudent business and scientific
judgment, terminate this Agreement with respect to all or part of the Patent
Rights and/or any country with * notice to Pitt.
13.4 EFFECT OF TERMINATION.
13.4.1 ACCRUED OBLIGATIONS. Termination of this Agreement
for any reason shall not release any party hereto from any liability which, at
the time of such termination, has already accrued to the other party or which
is attributable to such termination, nor shall it preclude either party from
pursuing all rights and remedies it may have hereunder or at law or in equity
with respect to any breach of this Agreement.
13.4.2 RETURN OF CONFIDENTIAL INFORMATION. Upon any
termination of this Agreement each party shall return to the other party all
Confidential Information received from the other party (except one copy of
which may be retained for archival purposes), and neither party shall use any
such Confidential Information of the other party for any purpose.
13.4.3 STOCK ON HAND. In the event this Agreement is
terminated for any reason, GenVec, its Affiliates and its sublicensees shall
have the right to sell or otherwise dispose of the stock of any Licensed
Product subject to this Agreement then on hand, subject to the right of Pitt
to receive payment thereon as provided in Section 4.
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13.5 SURVIVAL. Sections 7.3, 10.1, 10.2, 12.1 through 12.5, 13.4,
13.5, and 14.1 through 14.5 and Paragraph 3.2.3 shall survive expiration or
termination of this Agreement for any reason.
SECTION 14
MISCELLANEOUS
14.1 ENTIRE UNDERSTANDING. This Agreement constitutes the entire
understanding between the parties with respect to the subject matter hereof,
and supersedes and replaces all prior agreements, understanding, writings and
discussions between the parties as to the subject matter hereof.
14.2 AMENDMENTS; WAIVERS. This Agreement may be amended and any of
its terms or conditions may be waived only by a written instrument executed by
the parties or, in the case of a waiver, by the party waiving compliance. The
failure of either party at any time or times to require performance of any
provision hereof shall in no manner affect its rights at a later time to
enforce the same. No waiver by either party of any condition or term in any
one or more instances shall be construed as a further or continuing waiver of
such conditions or term or of any other condition or term.
14.3 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the parties hereto and their
respective successors and permitted assigns.
14.4 FORCE MAJEURE. Any delays in or failures of performance by
either party under this Agreement shall not be considered a breach of this
Agreement if and to the extent caused by occurrences beyond the reasonable
control of the party affected, including but not limited to: acts of God;
acts, regulations or laws of any government; strikes or other concerted acts
of workers; fires; earthquakes; floods; explosions; riots; wars; rebellion;
and sabotage. Any time for performance imposed hereunder shall be extended by
the actual time of delay caused by any such occurrence.
14.5 GOVERNING LAW. This Agreement shall be governed by and
construed and interpreted in accordance with the laws of the Commonwealth of
Pennsylvania.
14.6 ASSIGNMENT. This Agreement shall not be assignable by Pitt
without GenVec's prior written consent, not to be unreasonably withheld by
GenVec, except that Pitt shall not require GenVec's consent to assign its
right to receive royalties payable herein. This Agreement shall not be
assignable by GenVec without Pitt's prior written consent, not to be
unreasonably withheld by Pitt, except that GenVec shall not require Pitt's
consent to assign this Agreement to any Affiliate of GenVec, or to any entity
acquiring GenVec or substantially all of the assets of GenVec as to which this
agreement relates whether by sale, operation of law or otherwise, or to any
successor entity of GenVec as the result of a merger or consolidation. GenVec
shall, however, give Pitt at least sixty
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(60) days prior written notice of any such assignment. In the event of any
such assignment, the assignee shall assume and be bound by all of the terms
and conditions of this Agreement.
14.7 NOTICES. Any payment, notice or other communication required
or permitted to be given to either party hereto shall be deemed to have been
properly given and to be effective on the date of delivery if delivered in
person or telecopied (with confirmed answerback) to the number provided by the
other party, or five (5) days after mailing in the United States by certified
first-class United States mail, postage paid, return receipt requested, to the
other party's address as set forth hereinabove or to such other address as a
party shall designate by written notice to the other party.
14.8 HEADINGS. The headings of the several sections are inserted
for convenience of reference only and are not intended to be a part of or to
affect the meaning or interpretation of this Agreement.
14.9 EFFECTIVE DATE. This Agreement will not be binding upon the
parties until it has been signed below by or on behalf of both parties hereto,
in which event it shall be effective as of the date first above written.
14.10 SEVERABILITY. If any provisions of this Agreement are or
become invalid, are ruled illegal by any court of competent jurisdiction or
are deemed unenforceable under then current applicable law from time to time
in effect during the term hereof, it is the intention of the parties that the
remainder of this Agreement shall not be affected thereby. It is further the
intention of the parties that in lieu of each such provision which is invalid,
illegal, or unenforceable, there be substituted or added as part of this
Agreement a provision which shall be as similar as possible, but which shall
be valid, legal and enforceable.
14.11 ARBITRATION. Any controversy or claim arising out of or
relating to this Agreement, or the breach thereof, shall be settled by
arbitration in the Commonwealth of Pennsylvania in accordance with the
then-current Licensing Rules of the American Arbitration Association. No
arbitrator shall have any power to ignore or modify any of the provisions of
this Agreement, and their jurisdiction shall be limited accordingly. However,
the decision of the arbitrators shall be conclusive, binding and
non-appealable and judgment upon the award rendered by the arbitrators may be
entered in any court having jurisdiction thereof. The expenses of any
arbitration shall be shared equally by the parties. The board of arbitrators
shall be composed of three panelists of sufficient education and experience to
address competently the matter submitted to the panel for resolution. The
board shall be composed of one member selected by Pitt, one selected by
GenVec, and one selected jointly by GenVec and Pitt.
14.12 INDEPENDENT CONTRACTORS. The relationship of Pitt and GenVec
established by this Agreement is that of independent contractors. Nothing in
this Agreement shall be construed to create any other relationship between
GenVec and Pitt. Neither party shall have any right, power or authority to
assume, create or incur any expense, liability or obligation, express or
implied, on behalf of the other.
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14.13 FURTHER ASSURANCES. At any time or from time to time on and
after the date of this Agreement, either party shall at the request of the
other party (i) deliver to the other party such records, data or other
documents consistent with the provisions of this Agreement, (ii) execute, and
deliver or cause to be delivered, all such consents, documents or further
instruments of transfer or license, and (iii) take or cause to be taken all
such actions, as the other party may reasonably deem necessary or desirable in
order for the other party to obtain the full benefits of this Agreement and
the transactions contemplated hereby.
14.14 LIMITATION OF LIABILITY. NEITHER PARTY SHALL BE LIABLE TO THE
OTHER FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL OR INDIRECT DAMAGES ARISING
OUT OF THIS AGREEMENT, HOWEVER CAUSED, UNDER ANY THEORY OF LIABILITY.
14.15 RIGHT TO DEVELOP INDEPENDENTLY. Nothing in this Agreement
will impair GenVec=s right to independently acquire, license, develop for
itself, or have others develop for it, similar technology performing similar
functions as the Licensed Technology or to market and distribute products
based on such other technology.
IN WITNESS WHEREOF, both Pitt and GenVec have executed this
Agreement, in duplicate original, by their respective officers hereunto duly
authorized, as of the day and year first written above.
GENVEC, INC.
By:
----------------------------
Title:
----------------------------
Date:
----------------------------
UNIVERSITY OF PITTSBURGH - OF
THE COMMONWEALTH SYSTEM OF
HIGHER EDUCATION
By:
----------------------------
Title:
----------------------------
Date:
----------------------------
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EXHIBIT A
U.S. PATENTS AND PATENT APPLICATIONS WITHIN
THE PATENT RIGHTS AS OF THE EFFECTIVE DATE
*
EXHIBIT B
RESEARCH AGREEMENT
GENVEC - RESEARCH AGREEMENT
This Research Agreement ("Agreement") is entered into this 30th day
of June, 1996 (the "Effective Date"), by and between GenVec, Inc., a
corporation organized under the laws of the State of Delaware and having an
office at 00000 Xxxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000, hereinafter
referred to as SPONSOR;
and
University of Pittsburgh of the Commonwealth System of Higher
Education, a nonprofit Pennsylvania corporation having an office at Office of
Research, 000 Xxxxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000, hereinafter
referred to as UNIVERSITY.
WITNESSETH
WHEREAS, SPONSOR desires the research services of UNIVERSITY and
UNIVERSITY desires and agrees to provide such services to SPONSOR;
NOW, THEREFORE, inconsideration of the mutual promises and
undertakings set forth herein, the parties agree as follows:
1. SCOPE OF WORK
1.1 UNIVERSITY agrees to use its best efforts to perform
services for SPONSOR according to the Statement of Work which shall be agreed
by the parties and attached hereto as Appendix A. Such services shall be
hereinafter referred to as the PROJECT and shall be under the direction of Xx.
Xxxxxxx X. Xxxxxxx ("Xx. Xxxxxxx") as PRINCIPAL INVESTIGATOR. The research
activities described in Appendix A (Statement of Work and Budget) concern
further research relating to certain technology in the area of gene therapy
and inducible nitric oxide synthase ("iNOS") gene.
1.2 UNIVERSITY hereby represents and warrants that
pursuant to uniformly applied UNIVERSITY policies all inventions or other
intellectual property conceived, reduced to practice or otherwise developed by
any participant in the PROJECT is required to be assigned to the UNIVERSITY.
2. TERM
2.1 The term of this Agreement shall commence on the
effective date of this Agreement as set forth above and continue for a period
of two (2) years. In the event that results and data obtained in such period
indicate, in SPONSOR's opinion, that continued work is justified, the term of
this Agreement shall be extended for a third year.
2.2 Except as provided in Section 2.1, any extension of
this Agreement must be in writing upon terms mutually agreeable to the parties
hereto.
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3. PAYMENT
3.1 During the term of this Agreement, SPONSOR agrees to
pay to UNIVERSITY initial funding at an annualized rate of One Hundred
Thousand Dollars ($100,000) (the "Initial Funding Rate") for services to be
provided under this Agreement in accordance with the following annual payment
schedule:
(a) In the first year of the term of this Agreement,
Twenty-Five Thousand Dollars ($25,000) on
execution of this Agreement, and for each year
thereafter during the term hereof, Twenty-Five
Thousand Dollars ($25,000) on the anniversary of
the Effective Date;
(b) Twenty-Five Thousand Dollars ($25,000) on the
later of either (i) three (3) months after the
Effective Date or its anniversary, or (ii) three
(3) months after the date work on the PROJECT
began, or the anniversary of such date; and
(c) Twenty-Five Thousand Dollars ($25,000) on (i) the
three (3) month anniversary of the date of
payment by SPONSOR under (b), and (ii) on each
subsequent three (3) month anniversary of the
date of payment by SPONSOR under (b), until the
sum of all payments made by SPONSOR pursuant to
this Section 3.1 in a given year equals One
Hundred Thousand Dollars ($100,000).
SPONSOR shall continue to pay UNIVERSITY in accordance
with the Initial Funding Rate until the earlier to occur of (i) SPONSOR
achieving a cash balance position in excess of Twenty Million Dollars
($20,000,000), or (ii) entering into a Corporate Partnership (as defined in
the License Agreement entered by the parties of even date herewith) for the
development and commercialization of gene therapy products incorporating a
human iNOS gene, such product(s) being within the scope of a valid, issued
claim of a United States Patent owned solely by UNIVERSITY. Upon the
occurrence of either such event, SPONSOR shall provide UNIVERSITY notice
thereof, and thereafter SPONSOR shall pay to UNIVERSITY funding at an
annualized rate of Two Hundred Thousand Dollars ($200,000) (the "Target
Funding Rate") for the remainder of the term of this Agreement. SPONSOR shall
implement the Target Funding Rate by doubling to Fifty Thousand Dollars
($50,000) each of the remaining payments specified in parts (a), (b), and (c)
above.
3.2 UNIVERSITY costs shall follow the proposed budget as
contained in Appendix A. UNIVERSITY shall keep accurate books and records with
respect to all amounts expended on the PROJECT and SPONSOR shall have the
right once per year to audit such books and records.
3.3 UNIVERSITY shall not spend any amounts on the conduct
of the PROJECT except amounts provided by SPONSOR hereunder; provided,
UNIVERSITY may expend grant funds provided by U.S. Government on the PROJECT.
UNIVERSITY shall not expend any
-2-
amount on capital equipment in excess of Ten Thousand Dollars ($10,000)
without the prior written consent of SPONSOR.
3.4 The amounts set forth in Section 3.1 shall be SPONSOR's full
support of the research and shall cover all direct and indirect costs
(including without limitation, overhead) of conducting such research.
4. REPORTS
4.1 Every ninety (90) days following the beginning date of the
PROJECT, UNIVERSITY shall provide SPONSOR with an interim written report
describing activities, progress and results to date of the PROJECT. Within
ninety (90) days after completion of the PROJECT by UNIVERSITY or termination
of this Agreement under Section 10.0, UNIVERSITY shall provide a final
written report to SPONSOR describing the services performed and such other
information or data as may be specified in Appendix A. UNIVERSITY shall also,
at SPONSOR's option, meet with SPONSOR to discuss the PROJECT and the interim
and final reports.
4.2 SPONSOR shall have the right to use such reports and data for
any purpose, subject to Sections 6.2 and 9.4 and agrees to make no statement to
actual or potential investors in SPONSOR inconsistent with Section 7.1 below.
5. INSURANCE
5.1 UNIVERSITY shall provide the necessary Workers' Compensation
and Employers' Liability insurance to meet statutory liability limits of the
Commonwealth of Pennsylvania for the employees of UNIVERSITY involved in the
PROJECT.
6. LIABILITY
6.1 UNIVERSITY shall not be responsible or liable for any injuries
or losses which may result from the implementation or use by SPONSOR or
others of the results from the PROJECT or research data generated by
UNIVERSITY.
6.2 SPONSOR agrees to indemnify, defend and hold harmless
UNIVERSITY, its trustees, officers, agents and employees (the "University
Indemnitees") with respect to any expense, claim, liability, loss, damage, or
costs (including reasonable attorneys' fees) in connection with or in any way
arising out of the use by SPONSOR of the data or results from the PROJECT;
provided, however, that SPONSOR shall have no such obligation to the extent
that any such claim, liability, loss, damage or costs results from the
negligence or willful misconduct of a University Indemnitee.
6.3 UNIVERSITY agrees to indemnify, defend and hold harmless
SPONSOR, its trustees, officers, agents and employees (the "Sponsor
Indemnitees") with respect to any expense, claim, liability, loss, damage, or
costs (including reasonable attorneys' fees) in connection with or in any way
arising out of the conduct of the PROJECT at the UNIVERSITY; provided,
however, that UNIVERSITY shall have no such obligation to the extent that any
such claim, liability, loss, damage or costs results from the negligence or
willful misconduct of a Sponsor Indemnitee.
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7. DISCLAIMER OR WARRANTY
7.1 Any information and materials furnished by UNIVERSITY pursuant
to this Agreement are on an "as is" basis. UNIVERSITY disclaims any guarantee
that the PROJECT will be successful, in whole or part. UNIVERSITY MAKES NO
WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, AS TO SUCH INFORMATION AND
MATERIALS, INCLUDING WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE,
MERCHANTABILITY, PATENTABILITY, OR THAT USE BY SPONSOR OF THE RESULTS
OBTAINED WILL BE FREE FROM INFRINGEMENT OF PATENTS, COPYRIGHTS, TRADEMARKS OR
OTHER RIGHTS OF THIRD PARTIES. In no event shall UNIVERSITY be liable to
SPONSOR for indirect, special, or consequential damages, such as loss or
profits or inability to use the results obtained or any applications and
derivations thereof.
8. INTELLECTUAL PROPERTY RIGHTS
8.1 For purposes of this Agreement, "Inventions" shall mean
inventions, discoveries and other intellectual property made or developed by
UNIVERSITY employees or agents, whether or not patentable, during the term of
this Agreement as it may be extended, relating to the PROJECT. Rights held by
UNIVERSITY in any Inventions, including, without limitation, rights in and to
patent applications and patents which may be obtained thereon, shall be
deemed to be within the term "Patent Rights" as used in that certain License
Agreement entered by and between UNIVERSITY and SPONSOR effective of even
date herewith (the "License Agreement"), and shall be subject to the license
granted Sponsor therein.
8.2 Rights to Inventions, whether patentable or copyrightable or
not, conceived, reduced to practice or otherwise made or developed solely by
employees or agents of UNIVERSITY during the term of this Agreement, as it
may be extended, relating to the PROJECT, shall belong to UNIVERSITY, and
shall be subject to the License Agreement. Rights to Inventions, whether
patentable or copyrightable or not, relating to the PROJECT made solely by
employees or agents of SPONSOR shall belong to SPONSOR. Rights to Inventions,
whether patentable or copyrightable or not, relating to the PROJECT made
jointly by employees or agents of UNIVERSITY and employees or agents of
SPONSOR, shall be jointly owned by UNIVERSITY and SPONSOR, and, with respect
to UNIVERSITY's interest in any such jointly owned Invention, shall be
subject to the license Agreement. It is recognized and understood that Xx.
Xxxxxxx is conducting the research activity hereunder solely in his role as a
faculty member of UNIVERSITY and not as an employee or agent of SPONSOR.
9. PUBLICATIONS
9.1 SPONSOR recognizes that under UNIVERSITY policy, the results of
UNIVERSITY Project must be publishable. UNIVERSITY agrees to submit to
SPONSOR any proposed publication or presentation for prior review. SPONSOR
shall, within sixty (60) days after receipt, advise in writing if there is
any proprietary or patentable information which should not be disclosed at
the present time.
-4-
9.2 Should SPONSOR desire to have information withheld
from any proposed publication or presentation in order to seek protection of
intellectual property rights, UNIVERSITY agrees not to publicly disclose such
information for a period not to exceed six (6) months from the date of
UNIVERSITY's submission to SPONSOR of any proposed publication or presentation.
9.3 UNIVERSITY acknowledges that it may be necessary for
SPONSOR to disclose to UNIVERSITY information which SPONSOR considers
proprietary or confidential in order to perform the Project. If SPONSOR
considers any such information confidential, it shall be clearly marked
"CONFIDENTIAL INFORMATION" and sent by SPONSOR in writing to the PRINCIPAL
INVESTIGATOR, or orally disclosed to the PRINCIPAL INVESTIGATOR and reduced to
writing by SPONSOR, clearly marked "CONFIDENTIAL INFORMATION" and delivered to
the PRINCIPAL INVESTIGATOR within thirty (30) days of disclosure. Except as
expressly necessary for the performance of the PROJECT, UNIVERSITY shall
maintain such information as confidential, not disclose it to others, limit
access to it to those employees with a need to know and take such action as
shall be reasonably necessary to ensure that its employees will not disclose
it to others.
9.4 Notwithstanding the foregoing, confidential,
proprietary and trade secret information shall not include any of the
following:
(a) information which is or becomes publicly
available without fault by the receiving party;
(b) information which, as shown by written records,
was known by the receiving party as of the
Effective Date;
(c) information which, as shown by written records,
is obtained by the receiving party from a third
party with no obligation of confidentiality; or
(d) information which, as shown by written records,
was independently developed by the receiving
party by employees having no access to
information under this Agreement.
10. TERMINATION
10.1 Either party may terminate this Agreement upon the
material breach of the other, left uncured for more than sixty (60) days
following written notice of such breach by the party not in breach. SPONSOR
shall have the right to terminate this Agreement on notice to UNIVERSITY in
the event of the death or other unavailability of PRINCIPAL INVESTIGATOR and
the inability of the parties to agree to a substitute within thirty (30) days
following such unavailability.
10.2 SPONSOR may terminate this Agreement with ninety (90)
days notice to UNIVERSITY. Upon such an early termination of this Agreement,
SPONSOR shall pay all costs for
-5-
non-cancelable obligations accrued by UNIVERSITY as of the date of notice of
such termination is given.
11. PUBLICITY
11.1 SPONSOR shall not use the name or trademarks of
UNIVERSITY or the name of any UNIVERSITY personnel, in any publicity,
advertising, or news release without the prior written approval of UNIVERSITY.
12. GOVERNING LAW
12.1 This Agreement shall be deemed to be a contract
under, and shall be governed by and construed and enforced in accordance with
the laws of the Commonwealth of Pennsylvania.
13. MISCELLANEOUS
13.1 Nothing contained in this Agreement is to be construed
to constitute UNIVERSITY and SPONSOR as partners or joint ventures of each
other, or to constitute the employees, agents or representatives or either
party as the employees, agents or representatives of the other party, it being
intended that the relationship between UNIVERSITY and SPONSOR shall at all
times be that of independent contractors. Neither party hereto shall have any
express or implied right or authority to assume or create any obligation on
behalf of, or in the name of, the other party; or to bind the other party to
any contract, agreement or undertaking with any third party, SPONSOR agrees,
warrants, and represents to UNIVERSITY, with the intention that UNIVERSITY
may rely thereon, that SPONSOR does not now exercise, and will not during the
term of this Agreement exercise any significant degree of control over
UNIVERSITY's method of operation.
13.2 UNIVERSITY agrees that it is responsible for
withholding and paying of appropriate taxing bodies, all statutory payroll
taxes that are applicable to UNIVERSITY personnel to be supported under the
Project.
13.3 Failure to either party hereto enforce any of the
provision of this Agreement, or of any right with respect thereto, or failure
to exercise any election provided for herein, shall in no way be considered a
waiver of such provisions, rights or elections, or in any affect the validity of
this Agreement. The failure by any party hereto to enforce any of such
provisions, right or elections shall not prejudice such party from later
enforcing or exercising the same or any other provisions, rights or elections
which may have under this Agreement.
13.4 Should a court of competent jurisdiction later consider
any provision of this Agreement to be invalid, illegal or unenforceable, it
shall be considered severed from the Agreement. All other provisions, rights
and obligations shall continue without regard to the severed provisions,
provided that the remaining provisions of the Agreement are in accordance with
the intention of the parties. It is the further intention of the parties that
in lieu of any provision which is invalid, illegal or unenforceable, there must
be substituted or adds as part of this Agreement a provision which shall be as
similar as possible in economic and business objectives as intended by the
parties to this Agreement.
-6-
13.5 This Agreement may not be and shall not be construed to have
been modified, amended, rescinded, canceled or waived, in whole or in part,
except in writing signed by the parties hereto and making specific reference
to this Agreement.
13.6 The headings used herein are included solely for the purpose
of convenience, and shall not be used in any way to construe, modify,
explain, enlarge, or restrict any of the provisions hereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective duly authorized representatives.
UNIVERSITY OF PITTSBURGH
OF THE COMMONWEALTH SYSTEM
OF HIGHER EDUCATION
WITNESS:
------------------------- By:
-----------------------------------
Typed Name: Xxxxxxx Xxxxxx
Title: Director, Office of Research
Date: ______________, 1996
(SPONSOR) GENVEC, INC.
WITNESS:
------------------------- By:
-----------------------------------
Typed Name:
---------------------------
Title:
--------------------------------
Date: ______________, 1996
EXHIBIT C
TO LICENSE AGREEMENT
THE UNIVERSITY OF PITTSBURGH AND GENVEC, INC.
FOREIGN FILING COUNTRIES
*
EXHIBIT D
WARRANT AGREEMENT
This WARRANT AGREEMENT is entered into as of this 3Oth day of June,
1996, by and between GENVEC, INC., a Delaware corporation with its principal
place of business at 00000 Xxxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000 (the
"Company") and the UNIVERSITY OF PITTSBURGH - OF THE COMMONWEALTH SYSTEM OF
HIGHER EDUCATION, a Pennsylvania non-profit education corporation with its
principal place of business at 000 Xxxxxxx Xxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx
00000 (the "Holder").
WHEREAS, the Company and the Holder have entered into (i} a License
Agreement, dated as of the date hereof (the "License Agreement"}, pursuant to
which the Holder has granted to the Company an exclusive world-wide license for
the Licensed Technology (as defined in the License Agreement), and (ii} a
Sponsored Research Agreement, dated as of the date hereof (the "Research
Agreement"), pursuant to which the Company will pay the Holder to perform
certain research at the University of Pittsburgh; and
WHEREAS, the Company agrees to grant to the Holder the rights set forth
in this Warrant Agreement as part of the consideration for the Holder entering
into the License Agreement and the Research Agreement;
NOW, THEREFORE, in consideration of the mutual agreements, undertakings
and covenants set forth in this Warrant Agreement, and for other good and
valuable consideration, the receipt, sufficiency and adequacy of which are
hereby acknowledged, the parties, intending to be legally bound, agree as
follows:
1. THE WARRANT. The Company hereby agrees to issue and sell to the
Holder six hundred thousand (600,000) shares (the "Warrant Shares"), of the
Company's common stock, par value $.01 per share ("Common Stock"), at an
exercise price of two and a half U.S. dollars ($2.50) per share (the "Exercise
Price"), subject to the vesting schedule described in Section 2 and the other
provisions of this Warrant Agreement and upon the terms and conditions herein
set forth. The Exercise Price and the number of Warrant Shares purchasable upon
exercise of this Warrant Agreement are subject to adjustment from time to time
as provided in Section 8 of this Warrant Agreement.
2. VESTINQ SCHEDULE. The Holder's right to exercise this Warrant
Agreement will vest in the following increments (the "Increments") upon the
occurrence of the following events (the "Events"), each with respect to the
Licensed Product (as defined in the License Agreement), or dates: (a) one sixth
(1/6) of the Warrant Shares upon October 31, 1996; (b) one sixth (1/6) of the
Warrant Shares upon the earlier of demonstration of efficacy in a pre-clinical
large animal model of restenosis or January 31, 1998; (c) one sixth (1/6) of the
Warrant Shares upon the earlier of initiation of a Phase I or a Phase I/II
clinical trial or January 31, 1999; (d) one sixth (1/6) of the Warrant Shares
upon the earlier of completion of the clinical trial in Subsection 2(c) of this
Warrant Agreement or January 31, 2000; and (e) one third (1/3) of the Warrant
Shares upon the Company entering into, by written agreement, a Major Corporate
Partnership (as defined in the License Agreement) with Xxxxx XX, a German
corporation, or the
-1-
Affiliates (as defined in the License Agreement) of Xxxxx XX within twelve(12)
months of the Effective Date (as defined in the License Agreement); PROVIDED,
HOWEVER, that, notwithstanding any provision of this Warrant Agreement, the
Company will not be obligated to enter into a Major Corporate Partnership with
Xxxxx XX, the Affiliates of Xxxxx XX or any other person or entity as a result
of this Warrant Agreement. If, prior to the vesting in full of this Warrant
Agreement pursuant to this Section, (i) either the Company or the Holder
provides notice that it intends to terminate the License Agreement(and does not
voluntarily revoke that notice of termination, in recognition of a cured breach
pursuant to Section 13.2.2 of the License Agreement or otherwise, by written
notice to the other party), pursuant to Section 13.2 of the License Agreement
("Terminates the License Agreement"), (ii) the License Agreement terminates,
following notice by the Company that it intends to terminate the License
Agreement, pursuant to Section 13.3 of the License Agreement, or (iii) the
License Agreement otherwise terminates, the then unvested Increments will not
vest and, as of the date of such termination notice pursuant to Section 13.2 of
the License Agreement or termination pursuant to Section 13.3 of the License
Agreement or otherwise, this Warrant Agreement will be null and void with
respect to such unvested Increments (notwithstanding any notice period or period
staying termination of the License Agreement under Section 13.2 of the License
Agreement or any period staying termination of the License Agreement beyond the
thirty (30) days or six (6) months notice period under Section 13.3 of the
License Agreement; PROVIDED, HOWEVER, that if the License Agreement is
reinstated voluntarily by both parties or through arbitration pursuant to
Section 13.2 of the License Agreement, this Warrant Agreement will similarly be
reinstated, except that the Increments that were unvested as of the date of the
termination notice or termination will vest upon the earlier of the respective
Events or such respective dates as are reasonably agreed to by the parties or
determined as a part of the arbitration). If, after any Increment vests, the
Company Terminates the License Agreement or the License Agreement terminates
pursuant to Section 13.3 of the License Agreement or otherwise, this Warrant
Agreement will continue to be exercisable, to the extent of any then unexercised
portion of the vested Increments, until the Expiration Date (as defined in
Section 3 of this Warrant Agreement).
3. EXPIRATION DATE. This Warrant Agreement, and the Holder's right to
purchase any of the Warrant Shares, will expire and cease to be of force and
effect at 5:00 p.m. Eastern Standard Time on the fifth (5th) anniversary of the
date of this Warrant Agreement (the "Expiration Date"); PROVIDED, HOWEVER, that
if the Company has not completed an initial public offering of shares of Common
Stock (the "IPO") within two (2) years from the date of this Warrant Agreement,
the "Expiration Date" will be the third (3rd) anniversary of the effective date
of the IPO; PROVIDED FURTHER, that, notwithstanding any other provision of this
Section or this Warrant Agreement, the "Expiration Date" will not be any later
than the tenth (lOth) anniversary of the date of this Warrant Agreement.
4. EXERCISE OF THIS WARRANT AGREEMENT. The Holder may exercise this
Warrant Agreement, to the extent of any then unexercised portion of the vested
Increments, at any time prior to the Expiration Date, in whole or in part, for
amounts not less than one hundred thousand
-2-
(100,000) Warrant Shares subject to this Warrant Agreement, as adjusted from
time to time as provided in Section 8 of this Warrant Agreement, by: (a) the
surrender of this Warrant Agreement, with the Exercise Form attached hereto as
Annex A properly completed and executed, at the principal office of the Company
at 00000 Xxxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000 or at such other office of
the Company as the Company may designate by notice in writing to the holder of
this Warrant Agreement, and (b) the delivery of a certified check, bank draft or
wire transfer of immediately available funds, payable to the order of GenVec,
Inc., in an amount equal to the then aggregate purchase price for the Warrant
Shares being purchased upon such exercise. Upon receipt, by the Company on a
business day, of this Warrant Agreement, the completed and executed Exercise
Form and the then aggregate purchase price as provided in Subsections 4(a) and
(b) above, the Holder will be deemed to be the holder of record of the Warrant
Shares issuable upon such exercise as of the close of business on the date of
such receipt by the Company, and the Company will promptly execute or cause to
be executed and delivered to the Holder, a certificate or certificates
representing the aggregate number of Warrant Shares specified in the Exercise
Form. If this Warrant Agreement is exercised only in part and has not expired,
the Company will, at the time of delivery of said stock certificate or
certificates, deliver to the Holder a new Warrant Agreement of like tenor
evidencing the right of the Holder to purchase the remaining Warrant Shares then
covered by this Warrant Agreement. The Company will pay all expenses, taxes
(excluding any income taxes incurred by the Holder) and other charges payable in
connection with the preparation, execution and delivery of stock certificates
pursuant to this Section.
5. REPRESENTATIONS OF THE COMPANY. The Company hereby represents and
warrants to the Holder as follows:
(a) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware.
(b) This Warrant Agreement has been duly authorized by all necessary
corporate action on the part of the Company, has been duly executed by a duly
authorized officer of the Company, and constitutes a valid and binding
obligation of the Company.
(c) Neither the execution and delivery of this Warrant Agreement nor
the consummation of the transactions contemplated hereby will violate or result
in any violation of or be in conflict with or constitute a default under any
term of the charter or bylaws of the Company or of any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable to
the Company.
(d) Upon exercise of this Warrant Agreement and payment of the then
aggregate purchase price by the Holder, the Warrant Shares deliverable hereunder
will be duly issued, fully paid and nonassessable shares and free from all
taxes, liens and charges with respect to the issuance thereof.
6. REPRESENTATIONS OF THE HOLDER. The Holder hereby represents and
warrants to the Company as follows:
-3-
(a) The Holder is a non-profit education corporation duly organized,
validly existing and in good standing under the laws of the Commonwealth of
Pennsylvania.
(b) The Holder is acquiring this Warrant Agreement, and will acquire
the Warrant Shares issuable upon exercise of this Warrant Agreement, for
investment for its own account and not with a view to, or for resale in
connection with, any distribution of this Warrant Agreement or the Warrant
Shares issuable upon exercise of this Warrant Agreement. The Holder understands
that neither this Warrant Agreement nor the Warrant Shares issuable upon
exercise of this Warrant Agreement have been registered under the Securities Act
of 1933, as amended (the "Securities Act"), or under any state securities laws,
and, as a result thereof, are subject to substantial restrictions on transfer.
The Holder acknowledges that this Warrant Agreement and the shares issuable upon
exercise of this Warrant Agreement must be held indefinitely, unless
subsequently registered under the Securities Act and any applicable state
securities laws or unless exemptions from registration under the Securities Act
and such laws are available.
(c) The Holder is an "accredited investor," as that term is defined in
Rule 5Ol under the Securities Act.
(d) The Holder is either (i) not an "Investment Company," as that term
is defined in the Investment Company Act of 1940, or (ii) excluded from the
definition of an Investment Company under Section 3(c)(1) of the Investment
Company Act of 1940.
(e) The Holder is a college, university or other public or private
institution which has received exempt status under section 501(c)(3) of the
Internal Revenue Code of 1986 (26 U.S.C.A. Section 501(c)(3)) and which has a
total endowment of $30 million or more according to its most recent audited
financial statements.
7. SURVIVAL OF REPRESENTATIONS. The representations and warranties made
in Sections 5 and 6 of this Warrant Agreement will survive the date of this
Warrant Agreement and will expire upon the earliest of (a) the Expiration Date,
(b) if, before any Increment vests, the Company or the Holder Terminates the
License Agreement or the License Agreement terminates pursuant to Section 13.3
of the License Agreement or otherwise, the date of the termination of the
License Agreement, (c) if, after any Increment vests, the Company or the Holder
Terminates the License Agreement or the License Agreement terminates pursuant to
Section 13.3 of the License Agreement or otherwise, the exercise of the entire
unexercised portion of the vested Increments, or (d) the exercise of this
Warrant Agreement for all of the remaining Warrant Shares purchasable upon
exercise of this Warrant Agreement.
8. CERTAIN ADIUSTMENTS. The Exercise Price at which Warrant Shares may
be purchased and the number of Warrant Shares to be purchased upon exercise of
this Warrant Agreement are subject to change or adjustment as follows:
(a) STOCK DIVIDENDS, DISTRIBUTIONS, SUBDIVISIONS, COMBINATIONS OR
RECLASSIFICATIONS. In case the Company (i) pays a dividend in shares of
-4-
Common Stock or makes a distribution in shares of Common Stock, (ii) subdivides
its outstanding shares of Common Stock, (iii) combines its outstanding shares of
Common Stock into a smaller number of shares of Common Stock or (iv) issues, by
reclassification of its shares of Common Stock, other securities of the Company
(including any such reclassification in connection with a consolidation or
merger in which the Company is the surviving corporation), the number of Warrant
Shares purchasable upon exercise of this Warrant Agreement will be adjusted so
that the Holder will be entitled to receive the kind and number of Warrant
Shares or other securities of the Company which it would have owned or have been
entitled to receive after the happening of any of the events described above, if
this Warrant Agreement had been exercised immediately prior to the happening of
such event or any record date with respect thereto. Whenever the number of
Warrant Shares purchasable upon the exercise of this Warrant Agreement is
adjusted, as herein provided, the Exercise Price payable upon the exercise of
this Warrant Agreement will be adjusted by multiplying such Exercise Price
immediately prior to such adjustment by a fraction, of which the numerator will
be the number of Warrant Shares purchasable upon the exercise of this Warrant
Agreement immediately prior to such adjustment, and of which the denominator
will be the number of Warrant Shares purchasable immediately thereafter. An
adjustment made pursuant to this Subsection 8(a) will become effective
immediately after the effective date of such event retroactive to the record
date, if any, for such event. No adjustment in the number of Warrant Shares
purchasable hereunder will be required unless such adjustment would require an
increase or decrease of at least one percent (1%) in the number of Warrant
Shares purchasable upon the exercise of this Warrant Agreement; PROVIDED,
HOWEVER, that any adjustments which by reason of this restriction are not
required to be made will be carried forward and taken into account in any
subsequent adjustment. All calculations will be made to the nearest
one-thousandth of a share.
(b) PRESERVATION OF PURCHASE RIGHTS UPON MERQER, CONSOLIDATION, ETC. In
case of any consolidation of the Company with or merger of the Company into
another corporation or other entity or in case of any sale, transfer or lease to
another corporation or other entity of all or substantially all the property of
the Company, the Company or such successor or purchasing corporation or other
entity, as the case may be, will, at its option, (i) if any Increment has
vested, pay the Holder an amount in cash equal to the number of Warrant Shares
then exercisable pursuant to this Warrant Agreement multiplied by the difference
between (A) the then current market value of a Warrant Share (determined in such
reasonable manner as may be prescribed by the Board of Directors of the Company
or such successor or purchasing corporation or other entity, as the case may be,
in its discretion) and(B) the then current Exercise Price, (ii) execute with the
Holder an agreement that the Holder will have the right thereafter, upon vesting
of any Increment and payment of the Exercise Price in effect immediately prior
to such action, to purchase upon exercise of this Warrant Agreement the kind and
amount of shares and other securities and property which the Holder would have
owned or have been entitled to receive after the happening of such
consolidation, merger, sale, transfer or lease had this Warrant Agreement been
exercised immediately prior to such action,
-5-
or (iii) combine its options under (i) and (ii) of this Subsection 8(b);
PROVIDED, HOWEVER, that no adjustment in respect of cash dividends, interest or
other income on or from such shares or other securities and property will be
made during the term of this Warrant Agreement or upon the exercise of this
Warrant Agreement. Any agreement executed under Subsection 8(b) (ii) or (iii)
will provide for adjustments, which will be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 8. The provisions of
this Subsection 8(b) will similarly apply to successive consolidations, mergers,
sales, transfers or leases.
(c) NO ADIUSTMENT FOR CASH DIVIDENDS. No adjustment in respect of any
cash dividends will be made during the term of this Warrant Agreement or upon
the exercise of this Warrant Agreement.
9. FRACTIONAL SHARES. Fractional shares will not be issued upon the
exercise of this Warrant Agreement, but in any case where the Holder would,
except for the provisions of this Section, be entitled under the terms of this
Warrant Agreement to receive a fractional share upon the exercise of this
Warrant Agreement, the Company will, upon the exercise of this Warrant Agreement
for the largest number of whole shares then called for, pay a sum in cash equal
to the fraction ("F") represented by the fractional share multiplied by the
difference of the then current market value ("MV") of a Warrant Share
(determined in such reasonable manner as may be prescribed by the Board of
Directors of the Company in its discretion) less the then current Exercise Price
("EP"):
Sum in cash = (MV -EP) * F
10. TAXES. The Company covenants and agrees that it will pay when due
and payable any federal taxes and any taxes imposed by the State of Delaware,
other than income taxes incurred by the Holder, in respect of the issue of this
Warrant Agreement, or any Warrant Shares or certificates therefor upon the
exercise of this Warrant Agreement pursuant to the provisions of this Warrant
Agreement.
11. NOTICE OF CERTAIN EVENTS. In case at any time the Company:
(a) Terminates the License Agreement prior to the vesting in full of
this Warrant Agreement;
(b) proposes, by resolution of its Board of Directors, a stock
dividend, distribution, subdivision, combination or reclassification of the
shares of capital stock of the Company for which this Warrant Agreement is
exercisable; or
(c) proposes, by resolution of its Board of Directors, any capital
reorganization or any reclassification or change of capital stock that affects
the Warrant Shares of the Company or any consolidation, merger or sale of
properties and assets of the type described in Section 8 of this Warrant
Agreement; then, and in each of said cases, the Company will cause notice
thereof to be delivered promptly to the Holder; PROVIDED, HOWEVER, that the
Company need not deliver any separate notice pursuant to Subsection 11(a) if
such notice is provided in accordance with the License Agreement and need not
deliver any notice pursuant to Subsections 11(b)
-6-
and 11(c) until after any Increment has vested and unless there exists a then
unexercised portion of the vested Increments.
12. RESERVATION OF SHARES. The Company will at all times reserve and
keep available out of its authorized but unissued stock, for the purpose of
effecting the exercise of this Warrant Agreement, such number of its duly
authorized shares of capital stock for which this Warrant Agreement is
exercisable, and the appropriate number of shares of any stock into which such
stock is convertible, as will from time to time be sufficient to effect the
exercise of this Warrant Agreement.
13. NO RIQHTS AS SHAREHOLDER; LIMITATION OF LIABILITY. This Warrant
Agreement, as distinct from the shares for which this Warrant Agreement is
exercisable, will not entitle the Holder to any of the rights of a shareholder
of the Company. No provision of this Warrant Agreement, in the absence of
affirmative action by the Holder to purchase the Warrant Shares, and no mere
enumeration herein of the rights or privileges of the Holder, will give rise to
any liability of the Holder for the purchase price or as a shareholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.
14. TRANSFER RESTRICTIONS.
(a) SECURITIES LAWS. NEITHER THIS WARRANT AGREEMENT NOR THE SECURITIES
ISSUABLE UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. NEITHER THIS WARRANT
AGREEMENT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF NOR ANY INTEREST OR
PARTICIPATION, HEREIN OR THEREIN MAY BE SOLD, ASSIGNED, PLEDGED, HYPOTHECATED,
ENCUMBERED OR IN ANY OTHER MANNER TRANSFERRED OR DISPOSED OF EXCEPT IN
COMPLIANCE WITH THE SECURITIES ACT OF 1933, AS AMENDED, THE SECURITIES LAWS OF
EACH RELEVANT STATE, AND THE TERMS AND CONDITIONS HEREOF. EACH OF THE HOLDER OF
THIS WARRANT AGREEMENT AND THE HOLDER OF THE SECURITIES ISSUABLE UPON EXERCISE
HEREOF IS SUBJECT TO THE RESTRICTIONS HEREIN SET FORTH.
(b) STOCK CERTIFICATE LEGEND. Each certificate for shares issued upon
exercise of this Warrant Agreement will bear the following legend:
"The shares represented by this certificate have been acquired for
investment and have not been registered under the Securities Act of
1933, as amended, or the securities laws of any State. Neither the
shares nor any interest or participation in the shares may be sold,
assigned, pledged, hypothecated, encumbered or in any other manner
transferred or disposed of in the absence of such registration or
exemption therefrom under such Act or such laws and an opinion {which
will be in form and substance satisfactory to the Company) of counsel
satisfactory to the Company that such registration is not required."
{c) GENERAL RESTRICTIONS. The Holder may not transfer or assign this
Warrant Agreement unless it is transferred or assigned to the purchaser of all
of the outstanding capital stock or all or substantially all of the assets,
including every right and interest the Holder may have in the Licensed
Technology, of the Holder. The Company may deem and treat the person in whose
name this Warrant Agreement is
-7-
registered as the holder and owner hereof (notwithstanding any notations of
ownership or writing hereon made by anyone other than the Company) for all
purposes and will not be affected by any notice to the contrary, until
presentation of this Warrant Agreement to the Company for registration of
transfer consistent with this Section. The holder of this Warrant Agreement
further agrees that prior to any transfer of this Warrant Agreement, consistent
with this Section, or any transfer of the shares issued upon exercise hereof,
such holder will give written notice to the Company, together with a copy of the
opinion of such holder's counsel as to the availability of exemption from
registration under all applicable securities laws in connection with any such
transfer (which opinion will be reasonably satisfactory to counsel for the
Company).
15. LOCK-UP. In connection with any public offering of shares of Common
Stock, the Holder agrees to enter into a written agreement with the managing
underwriters, if the managing underwriters demand or request such an agreement,
in such form and containing such provisions as are required by the managing
underwriters (except that such provisions will not be less favorable to the
Holder than the provisions of agreements, if any, entered into by the managing
underwriters with other holders of Common Stock or securities of the Company
convertible into Common Stock) to preclude the Holder from directly or
indirectly offering to sell, contracting to sell or otherwise disposing of any
shares of Common Stock, any options or warrants to purchase shares of Common
Stock, or any securities convertible into or exchangeable for shares of Common
Stock.
16. MISCELLANEOUS.
(a) AMENDMENTS AND WAIVERS. This Warrant Agreement and any provision
hereof may be changed, waived, discharged or terminated only by an instrument in
writing signed by the party (or any predecessor in interest thereof) against
which enforcement of the same is sought.
(b) SUCCESSORS AND ASSIQNS. This Warrant Agreement will be binding upon
and inure to the benefit of the successors and assigns of the Company and the
heirs and permitted registered assigns and transferees of the Holder.
(c) LOSS, THEFT, DESTRUCTION OR MUTILATION. Upon receipt by the Company
of evidence reasonably satisfactory to it that this Warrant Agreement has been
lost, stolen, destroyed or mutilated, and in the case of any lost, stolen or
destroyed Warrant Agreement, a bond of indemnity reasonably satisfactory to the
Company, or in the case of a mutilated Warrant Agreement, upon surrender and
cancellation hereof, the Company will execute and deliver in the name of the
registered holder of this Warrant Agreement, in exchange and substitution for
the Warrant Agreement so lost, stolen, destroyed or mutilated, a new Warrant
Agreement of like tenor with appropriate insertions and variations.
(d) LAW GOVERNING. This Warrant Agreement will be governed by, and
construed in accordance with, the internal laws of the State of Delaware.
-8-
(e) ENTIRE AQREEMENT. This Warrant Agreement and the attached Annex A
constitute the full and entire understanding and agreement among the parties
with regard to the subject of this Warrant Agreement and the attached Annex A,
and supersede all prior agreements, understandings, inducements or conditions,
express or implied, oral or written, with respect to the subject of this Warrant
Agreement and the attached Annex A.
(f) NOTICES. Unless otherwise provided, all notices, requests, demands
and other communications required or permitted under this Warrant Agreement will
be in writing and will be deemed to have been duly made and received: (i) upon
personal delivery or confirmed facsimile to the party to be notified; (ii) three
(3) business days after deposit with the United States Post Office, by
registered or certified mail or by first class mail, postage prepaid, addressed
as set forth below; or (iii) one (1) business day after deposit with Federal
Express or another reputable overnight courier (for next business day delivery),
shipping prepaid, addressed as set forth below:
(i) If to the Company, then to:
GenVec, Inc.
00000 Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
ATTN: Chief Financial Officer
with a copy to
ATTN: Vice President -- Business Development
(ii) If to the Holder, then to:
University of Pittsburgh
000 Xxxxxxx Xxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attn: [Name]
[Title]
Either party may change the address to which communications are to be sent by
giving five (5) business days' advance notice of such change of address to the
other party in conformity with the provisions of this Section.
(g) HEADINGS. The headings in this Warrant Agreement are for purposes
of reference only and will not affect the meaning or construction or any of the
provisions hereof.
(h) EXECUTION; COUNTERPARTS. This Warrant Agreement may be executed in
any number of counterparts, each of which will be deemed to be an original as
against any party whose signature appears on such counterpart, and all of which
will together constitute one and the same instrument. This Warrant Agreement
will become binding when one or more counterparts of this Warrant Agreement,
individually or taken together,
-9-
bear the signatures of all of the parties to this Warrant Agreement and the seal
of the Company.
IN WITNESS WHEREOF, the parties have caused this Warrant Agreement to
be duly executed and delivered as of the day and year first written above.
UNIVERSITY OF PITTSBURGH
By: /s/ Xxxxxx Xxxxxxx
-------------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Interim Vice Chancellor for Business
GENVEC, INC.
By: /s/ Xxxxxx X. X'Xxxxxx
-------------------------------------------
Xxxxxx X. X'Xxxxxx
President
Attest:
/s/ Xxxxxxx X. Xxxxxxxx III
----------------------------------
Xxxxxxx X. Xxxxxxxx III
Secretary
[Corporate Seal]
-10-
ANNEX A
EXERCISE FORM
TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THE ATTACHED
WARRANT AGREEMENT OF
GENVEC, INC.
The undersigned, the record holder of the attached original, executed
Warrant Agreement (the "Warrant Agreement"), pursuant to the provisions of the
Warrant Agreement, hereby irrevocably elects to exercise the right, represented
by the Warrant Agreement, to purchase ________________ Warrant Shares (as
defined in the Warrant Agreement) covered by the Warrant Agreement, and herewith
tenders payment in full therefor at the price per share provided by the Warrant
Agreement.
-----------------------------------
By:
--------------------------------
Name:
Title:
Address:
---------------------------
Dated: ,
------------------------ ------------
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