Exhibit 10.22
LICENSE AGREEMENT
BETWEEN
EMORY UNIVERSITY
AND
TRIANGLE PHARMACEUTICALS, INC.
* Certain confidential portions of this Exhibit were omitted by means of
marking such portions with an asterick (the "Xxxx"). This Exhibit has been
filed separately with the Secretary of the Commission without the Xxxx
pursuant to the Company's Application Requesting Confidential Treatment under
Rule 406 under the Securities Act.
TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS.................................................... 2
ARTICLE 2. GRANT OF LICENSE............................................... 11
ARTICLE 3. ROYALTIES AND OTHER PAYMENTS................................... 15
ARTICLE 4. REPORTS AND ACCOUNTING......................................... 30
ARTICLE 5. PAYMENTS....................................................... 33
ARTICLE 6. DEVELOPMENT AND MARKETING PROGRAM.............................. 34
ARTICLE 7. PATENT PROSECUTION............................................. 38
ARTICLE 8. INFRINGEMENT................................................... 41
ARTICLE 9. WARRANTIES; EXCLUSION OF WARRANTIES;
AND INDEMNIFICATION........................... 43
ARTICLE 10. CONFIDENTIALITY............................................... 47
ARTICLE 11. TERM AND TERMINATION.......................................... 50
ARTICLE 12. ASSIGNMENT.................................................... 54
ARTICLE 13. TRANSFER OF LICENSED TECHNOLOGY............................... 55
ARTICLE 14. REGISTRATION OF LICENSE....................................... 55
ARTICLE 15. NOTIFICATION AND AUTHORIZATION UNDER DRUG PRICE
COMPETITION AND PATENT TERM RESTORATION ACT................ 55
ARTICLE 16. MISCELLANEOUS................................................. 57
ARTICLE 17. NOTICES....................................................... 61
THIS LICENSE AGREEMENT is made and entered into as of this 17th day of
April 1996, by and between EMORY UNIVERSITY, a Georgia nonprofit corporation
with offices at 0000 Xxxxx Xxxxxx Xxxx, X.X., Xxxxxxx, Xxxxxxx 00000,
(hereinafter referred to as "EMORY"), and TRIANGLE PHARMACEUTICALS, INC., a for
profit Delaware corporation with principal offices located at 0 Xxxxxxxxxx
Xxxxx, 0000 Xxxxxxxxxx Xxxxx, Xxxxxx, XX 00000 (hereinafter referred to as
"COMPANY").
WITNESSETH
WHEREAS, EMORY is the assignee of all right, title, and interest in
certain inventions developed by employees of EMORY and is responsible for the
protection and commercial development of such inventions; and
WHEREAS, Xxx-Xxxx Xxxx, Xxxxxx X. Xxxxxx and Xxxxxxx Xxxxxxxx, each a
current or former employee of EMORY, are named as inventors in the patents and
patent applications identified in APPENDIX "A" to this Agreement and are
hereafter referred to as the "Inventors"; and
WHEREAS, COMPANY represents that it has the necessary expertise and will,
as appropriate, acquire the resources reasonably necessary to fully develop,
obtain approval for, and market therapeutic products based upon the inventions
claimed in the above referenced patents and applications; and
WHEREAS, LICENSOR wants to have such inventions developed, commercialized,
and made available for use by the public;
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NOW, THEREFORE, for and in consideration of the mutual covenants and the
premises herein contained, the parties, intending to be legally bound, hereby
agree as follows.
ARTICLE 1. DEFINITIONS
The following terms as used herein shall have the following meaning:
1.1 "Affiliate" shall mean any corporation or non-corporate business
entity which controls, is controlled by, or is under common control with a
party to this Agreement. A corporation or non-corporate business entity
shall be regarded as in control of another corporation if it owns, or
directly or indirectly controls, at least [ * ] of the voting stock of the
other corporation, or (a) in the absence of the ownership of at least [ * ] of
the voting stock of a corporation or (b) in the case of a non-corporate
business entity, or non-profit corporation, if it possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of such corporation or non-corporate business entity, as applicable.
1.2 "Agreement" or "License Agreement" shall mean this Agreement,
including all EXHIBITS and APPENDICES attached to this Agreement.
1.3 "BioChem" shall mean BioChem Pharma, Inc., located in Xxxxx, Xxxxxx,
Xxxxxx and its Affiliates.
1.4 "Dollars" shall mean United States dollars.
1.5 "FDA" shall mean the United States Food and Drug Administration or
successor entity.
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1.6 "Field of Use" shall mean the prevention and treatment of human
immunodeficiency virus (HIV) and hepatitis B virus (HBV).
1.7 "GW shall mean GlaxoWellcome plc and its Affiliates including, but
not limited to, all corporate entities acquired, directly or indirectly, by
GlaxoWellcome plc and its Affiliates as a result of the acquisition of Wellcome
plc and its Affiliates.
1.8 "GW Know How" shall mean all data, information and know-how, whether
patented or not, relating to the development and testing (including clinical
studies designed to support promotional efforts) of FTC and the therapeutic use
(including both the HIV and HBV indications) of FTC, developed, owned or
acquired by GW prior to and during the term of an Agreement between GW and
LICENSOR, dated as of February 1, 1992. This includes the data obtained from
any and all research and development activities required to evaluate and develop
FTC for human use and to prepare all data and documents for Registration of FTC
in each country of the Licensed Territory and the right, in countries where
applicable, to cross-reference all regulatory filings made by GW to enable
clinical testing and to obtain Registration of FTC.
1.9 "GW Patents" shall mean all patents and patent applications
necessary or useful for the manufacture, use, sale, offer for sale or
importation of FTC or compounds used in the production thereof, and the
therapeutic applications of FTC owned or controlled by GW or under which GW is,
or shall become, empowered to grant licenses (which shall include any such
patents and patent applications licensed by GW from BioChem), including any and
all substitutions, extensions, divisionals, continuations,
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continuations-in-part, renewals, supplementary protection certificates or
foreign counterparts of such patent applications and patents which issue
thereon, including reexamined and reissued patents.
1.10 "IND" shall mean an Investigational New Drug application or its
domestic or foreign equivalent.
1.11 "Indemnitees" shall mean (a) in the case of the indemnity set forth
in Subsection 9.5(a), the Inventors, LICENSOR, and their trustees, directors,
employees and students, and all of their heirs, executors, administrators,
successors and legal representatives; (b) in the case of the indemnity set forth
in Subsection 9.5(b), COMPANY, its affiliates, sublicensees, their directors,
officers, employees and their heirs, successors, executors, administrators and
legal representatives; and (c) in the case of the Indemnitees referenced in
Subsection 9.7(b), the parties identified in Subsections 1.7(a) and 1.7(b)
above.
1.12 "Licensed Compound" or "FTC" shall mean: (a) the (-) enantiomer
with the chemical name (2R-cis)-4-amino-5-fluoro-1-[2-(hydroxymethyl)-1,3-
oxathiolan-5-yl]-2(1H)-pyrimidinone; (b) any mixture of the (-) enantiomer
described in Subsection 1.12(a) and the (+) enantiomer with the chemical name
(2S-cis)-4-amino-5-fluoro-1-[2-(hydroxymethyl)-1,3-oxathiolan-5-yl]
-2(1H)-pyrimidinone, [ * ] or (c) any salts, esters and N alkylated derivatives
of any of the foregoing. "Licensed Compounds" shall mean all of the foregoing.
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1.13 "Licensed Patents" shall mean (a) the patents and patent
applications identified in APPENDIX "A," together with any and all
substitutions, extensions, divisionals, continuations, continuations-in-part,
renewals, supplementary protection certificates or foreign counterparts of such
patent applications and patents which issue thereon, anywhere in the world,
including reexamined and reissued patents and (b) all other patents and patent
applications in which or to which LICENSOR acquires rights during the term
hereof which contain claims covering the manufacture, use or sale of any
Licensed Product to the extent that LICENSOR possesses the right to license such
patents and patent applications to COMPANY for commercial purposes without
incurring financial or other non-contingent, material obligations to any third
parties.
1.14 "Licensed Product(s)" shall mean any Licensed Compound or any
pharmaceutical product containing one or more Licensed Compounds as active
ingredients, alone or in combination with other active ingredients, the
manufacture, use, importation, offer for sale or sale of which is covered by any
Valid Claim or which is made using Licensed Technology.
1.15 "Licensed Technology" shall mean all technical information and data,
whether or not patented, known or learned, invented, or developed by the
Inventors or any employees of LICENSOR working under the Inventors' direct or
indirect supervision, prior to or during the term hereof and while they are
under a duty to assign intellectual property rights to the LICENSOR, to the
extent that (a) such technical information and data are useful for the
manufacture, use, importation, offer for sale or
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sale of any Licensed Product; and (b) LICENSOR possess the right to license the
use of such information to COMPANY for commercial purposes without incurring
financial or other non-contingent, material obligations to any third parties and
without breaching any obligations of confidentiality with such parties.
1.16 "Licensed Territory" shall mean the world.
1.17 "LICENSOR" shall mean Emory University.
1.18 "Major Market Country" shall mean Japan, Germany, France, the United
Kingdom or the United States of America.
1.19 "NDA" shall mean a New Drug Application or its domestic or foreign
equivalent.
1.20 "Net Selling Price" of Licensed Products which contain as their
active ingredients only Licensed Compounds shall mean the gross selling price
paid by a purchaser of such Licensed Product to COMPANY, an Affiliate or
sublicensee of COMPANY, or any other party authorized by COMPANY to sell
Licensed Products plus, if applicable, the value of all properties and services
received in consideration of a Sale of a Licensed Product, less only (a)
discounts, rebates, sales, use, or other similar taxes, transportation and
handling charges and allowances; and (b) returns which are accepted by COMPANY
from independent customers in accordance with COMPANY's normal practice and for
which COMPANY gives credit to such purchasers or retroactive price reductions in
lieu of returns, whether during the specific royalty period or not. Where a
sale is deemed consummated by a gift, use, or other disposition of Licensed
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Products, for other than a selling price stated in cash, the term "Net Selling
Price" shall mean the average gross selling price billed by COMPANY in
consideration of the cash Sales of comparable Licensed Products during the then
current royalty period, less only reductions permitted in subsections (a) and
(b) above and such other reductions, if any, as LICENSOR agrees are appropriate,
which agreement will not be unreasonably withheld or delayed.
1.21 "Net Selling Price" of Licensed Products which contain as their
active ingredients both Licensed Compounds and compounds other than Licensed
Compounds (a "Combination Product") shall be negotiated in good faith by the
parties with the intention of agreeing upon a fair and equitable formula;
provided, however, that if the parties are unable to agree upon such formula
within a reasonable period of time, the Net Selling Price with respect to such
Combination Product shall mean the gross sales price of such Combination Product
billed to independent customers, less all the allowances, adjustments,
reductions, discounts, taxes, duties, rebates or other charges referred to in
Section 1.20 multiplied by a fraction, the numerator of which shall be the
average invoice price per gram of Licensed Compound contained in the most
comparable stock keeping unit of any product having the Licensed Compound as the
sole active ingredient during the applicable royalty period in the applicable
country of the Licensed Territory, when such comparable product is sold for the
same indication as such Combination Product and the denominator of which shall
be the average invoice price per gram of the Licensed Compound sold alone as
described immediately above
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plus the average invoice price(s) per gram of the other active ingredient(s)
contained in such Combination Product in such country during the applicable
royalty period when such active ingredients are sold alone for the same
indication as such Combination Product. If there is no average invoice price
per gram in a given country for one or more of the active ingredients comprising
a Combination Product, the Net Selling Price with respect to such Combination
Product shall be deemed to be the gross sales of such Combination Product billed
to independent customers, less all the allowances, adjustments, reductions,
discounts, taxes, duties, rebates or other charges referred to in Section 1.20,
times a fraction, the numerator of which is the number of Licensed Compounds in
such Combination Product and the denominator of which is the number of all
active ingredients in such Combination Product.
1.22 "Phase II Commencement Date" shall mean the date of commencement of
the initial well-controlled clinical trial of a Licensed Product for HIV or HBV,
as applicable, sponsored by COMPANY, the primary objective of which (as
reasonably determined by COMPANY) is to ascertain additional data regarding the
safety and tolerance of such Licensed Product and preliminary data regarding
such Licensed Product's antiviral effects for the applicable indication, is
commenced. For purposes of the preceding sentence, such clinical trial shall be
deemed to have commenced when such Licensed Product is first administered to any
patient enrolled in such clinical trial. For purposes of this definition, the
term "COMPANY" shall include Triangle Pharmaceuticals, Inc., its Affiliates and
sublicensees or any party in a co-promotion or
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co-marketing relationship with Triangle Pharmaceuticals, Inc pertaining to such
Licensed Product.
1.23 "Phase II Completion Date" in respect of HIV shall mean the
earlier of (a)[ * ] after completion of the statistical analyses of those
Phase II clinical studies which COMPANY considers reasonably necessary for
purposes of inclusion in an NDA for the applicable indication; or (b) [ * ]
after the last administration of a Licensed Product to all patients enrolled
in the last to be completed Phase II clinical study pursuant to the
applicable clinical study protocol; or (c) [ * ] days after the first
public disclosure of the final results of all Phase II clinical studies
intended to be included by COMPANY in the first NDA for the applicable
indication intended to be filed by COMPANY in any Major Market Country.
"Phase II Completion Date" in respect of HBV means the first to occur of the
periods specified in clauses (a) or (c) above. Notwithstanding the
foregoing, the filing by COMPANY of an NDA in a Major Market Country for a
given indication shall be deemed to constitute the Phase II Completion Date
for such indication. For purposes of this definition, the term "COMPANY"
shall include Triangle Pharmaceuticals, Inc., its Affiliates and sublicensees
or any party in a co-promotion or co-marketing relationship with Triangle
Pharmaceuticals, Inc. pertaining to any Licensed Product.
1.24 "Registration" shall mean, in relation to any Licensed Product, such
approvals by the regulatory authorities in a given country (including pricing
approvals) as
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may be legally required before such Licensed Product may be commercialized or
Sold in such country.
1.25 "Sale" or "Sold" shall mean the sale, transfer, exchange, or other
disposition of Licensed Products whether by gift or otherwise, subsequent to
Registration in a given country (if such Registration is required) by COMPANY,
its Affiliates, sublicensees or any third party authorized by COMPANY to make
such sale, transfer, exchange or disposition. Sales of Licensed Products shall
be deemed consummated upon the first to occur of: (a) receipt of payment from
the purchaser; (b) delivery of Licensed Products to the purchaser or a common
carrier; (c) release of Licensed Products from consignment; or (d) if otherwise
transferred, exchanged, or disposed of, whether by gift or otherwise, when such
transfer, exchange, gift, or other disposition occurs. Notwithstanding the
foregoing definition of Sale, to the extent COMPANY distributes any Licensed
Product under a Treatment IND or other expanded access program at a sales price
which exceeds its fully absorbed cost therefor, such excess shall be deemed to
be a Sale for which royalties are payable in accordance with the other terms
hereof; provided, however, that such distribution shall not be deemed to be
Registration of such Licensed Product.
1.26 "U.S. Government Licenses" shall mean the non-exclusive licenses
to the U.S. Government or agencies thereof pursuant to [ * ], copies of
which licenses are attached hereto as APPENDIX "B."
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1.27 "Valid Claim" shall mean (a) an issued claim of any unexpired patent
included among the Licensed Patents, or (b) a pending claim of any pending
patent application included among the Licensed Patents, which has not been held
unenforceable, unpatentable or invalid by a decision of a court or governmental
body of competent jurisdiction, unappealable or unappealed within the time
allowed for appeal, which has not been rendered unenforceable through disclaimer
or otherwise or which has not been lost through an interference proceeding.
1.28 "Yale Agreement" shall mean the License Agreement between LICENSOR
and Yale University, dated as of May 26, 1993, a true and correct copy of which
has been provided by LICENSOR to COMPANY.
ARTICLE 2. GRANT OF LICENSE
2.1 LICENSE. LICENSOR hereby grants COMPANY and its Affiliates the
exclusive right and license to practice the Licensed Patents and the Licensed
Technology to make, have made, use, import, offer for sale and sell Licensed
Products within the Field of Use in the Licensed Territory during the term of
this Agreement.
2.2 GOVERNMENT RIGHTS. The license granted in Section 2.1 above is
conditional upon and subject to the U.S. Government Licenses and other rights
retained by the United States in, and obligations imposed by applicable law
with respect to, inventions developed by nonprofit institutions with the
support of federal funds. These rights and obligations are set forth in 35
USCA Sections 201 et seq. and 37 CFR 401 et seq., which may be amended from
time to time by the Congress of the United States or
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through administrative procedures. All provisions required to be made a part
hereof by such statutes and regulations are hereby incorporated herein by
reference, to the extent, and only to the extent required by the foregoing,
Company agrees that Licensed Products leased or sold in the United States shall
be manufactured substantially in the United States.
2.3 RETAINED LICENSE. The license granted in Section 2.1 above is
further conditional upon and subject to a right and license retained by LICENSOR
on its behalf and LICENSOR's academic research collaborators to make and use
Licensed Products and practice Licensed Technology for research and educational
purposes only. LICENSOR shall promptly verify the names of any research
collaborators practicing the license retained in this Section 2.3 upon COMPANY's
written request.
2.4 SUBLICENSES. COMPANY may grant sublicenses upon LICENSOR's
written approval (which approval shall not be unreasonably withheld or
delayed). In the event LICENSOR does not respond to a request for approval
to sublicense within fifteen (15) days from receiving a copy of the proposed
sublicense agreement from COMPANY, such request shall be deemed to be
approved. COMPANY shall provide LICENSOR with complete copies of all
sublicense agreements within thirty (30) days of their execution. COMPANY
shall remain responsible to LICENSOR for the payment of all fees and
royalties due under this Agreement, whether or not such payments are made to
COMPANY by its sublicensees. COMPANY shall include in any sublicense granted
pursuant to this Agreement a provision requiring the sublicensee to indemnify
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LICENSOR and maintain liability insurance coverage to the same extent that
COMPANY is so required pursuant to Article 9 of this Agreement.
2.5 NO IMPLIED LICENSE. The license and rights granted in this
Agreement shall not be construed to confer any rights upon COMPANY by
implication, estoppel, or otherwise as to any technology not specifically
identified in this Agreement, except as otherwise implied by law to the extent
necessary to practice the Licensed Patents or Licensed Technology.
2.6 THIRD PARTY LICENSES. In the event LICENSOR acquires (a) a
license from a third party relating to intellectual property which would be
deemed to be Licensed Patents or Licensed Technology but for the inability to
sublicense such intellectual property to COMPANY without incurring financial
or other non-contingent, material obligations or (b) a license from GW for
either the GW Patents or GW Know How, LICENSOR shall give prompt notice and a
copy thereof to COMPANY. Such notice shall be accompanied by such data and
information in LICENSOR's possession, which LICENSOR is authorized to
transfer to COMPANY, or which can be obtained from such third party or GW, as
applicable, in order to assist COMPANY in determining whether to sublicense
such third party or GW license. COMPANY shall have [ * ] to elect whether to
obtain a sublicense under such third party or GW license pursuant to the
terms thereof within the Field of Use, but with no additional obligations of
any type other than as prescribed therein or, in the case of a GW license, as
prescribed in Section 3.3 hereof. If COMPANY fails to notify LICENSOR of its
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decision regarding the acquisition of such sublicense within such [ * ]
period, this Section 2.6 shall no longer apply to such third party or GW
license, as applicable.
2.7 RIGHT OF FIRST REFUSAL TO [ * ]
(a) As used in this Section 2.7, [ * ]shall mean [ * ]
(b) Except as otherwise set forth in Subsection 2.7(c), prior
to entering into any license or assignment agreement with a third party
relating to any of LICENSOR's rights in respect of the [ * ], LICENSOR shall
notify COMPANY of the terms of such proposed agreement. Such notice shall
include a copy of such proposed agreement, together with all data and
information in LICENSOR's possession relating to the [ * ] and its use as a
therapeutic agent. Such notice shall be deemed an offer to COMPANY to enter
into such proposed agreement. Thereafter, COMPANY shall have [ * ] to accept
such offer. Upon acceptance of such offer by COMPANY, such proposed
agreement shall be binding between COMPANY and LICENSOR. If COMPANY does not
accept such offer within such [ * ], LICENSOR shall be entitled, for a
period
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of [ * ] after expiration of such [ * ] period, to enter into such proposed
agreement on the terms offered to COMPANY. If LICENSOR does not enter into
such proposed agreement with such third party on the terms presented to
COMPANY within such [ * ], then LICENSOR must again comply with this
Subsection 2.7(b) before entering into such agreement. COMPANY agrees to
maintain the confidentiality of the terms of such offer in accordance with
the provisions of Article 10 hereof.
(c) LICENSOR may license or assign its rights in respect of
[ * ] to any of the Inventors or any corporate entity formed by or on behalf
of the Inventors (the foregoing being referred to as "Permitted Transferees")
for purposes of clinically developing [ * ]; provided, however, that, as a
condition precedent to any such license or assignment, the Permitted
Transferees agree to be bound by all the terms of Subsection 2.7(b) to the
same extent as LICENSOR pursuant to a written document. Such document shall
be delivered to COMPANY on or before such license or assignment to the
Permitted Transferees. Any purported license or assignment to such Permitted
Transferees without the execution and delivery of such written document, as
aforesaid, shall be void. Not more than one license or assignment permitted
by this Subsection 2.7(c) may be in effect at any time.
(d) LICENSOR represents that it has not licensed, assigned or
otherwise transferred any of its rights in and to [ * ] on or
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before the date hereof, except for a certain License Agreement between LICENSOR
and GW, dated February 1, 1992, which has been terminated.
(e) In the event COMPANY obtains a license from GW to any
intellectual property relating to [ * ], COMPANY shall grant LICENSOR or any
Permitted Transferee, as applicable, a sublicense thereunder with the right
to sublicense, to the extent sublicensing is permissible and subject to the
terms of such GW license. Such sublicense shall apply only to [ * ] and shall
terminate in the event COMPANY exercises the right of first refusal set forth
in Subsection 2.7(b).
ARTICLE 3. ROYALTIES AND OTHER PAYMENTS
3.1 LICENSE FEES. As partial consideration for entering into this
Agreement, COMPANY agrees to pay, or issue to, LICENSOR the following, unless
COMPANY has given LICENSOR notice of termination of this Agreement prior to an
applicable due date:
(a) [ * ], payable within [ * ] days after the date
hereof;
(b) [ * ], payable in [ * ] monthly installments on
the first day of each calendar month, commencing on the first day of the
[ * ] next succeeding the date hereof;
(c) [ * ], payable on the earlier of (i) [ * ]
after consummation by COMPANY of either the round of private equity financing
next succeeding the date hereof or its initial public offering, as applicable,
or (ii) [ * ] after the date hereof;
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(d) [ * ], payable on the earlier of (i) [ * ] after
consummation by COMPANY of either the round of private equity financing next
succeeding the round of private equity financing referred to in Subsection
3.1(c) above or its initial public offering, as applicable, or (ii) [ * ]
[ * ] after the date hereof; and
(e) 500,000 shares of COMPANY common stock upon execution of this
Agreement. Such shares shall be issued directly to LICENSOR or to certain
Inventors as directed by LICENSOR. Each recipient of any shares shall sign the
Restricted Stock Purchase Agreement and an Amended and Restated Investors'
Rights Agreement, each dated as of even date herewith.
3.2 MILESTONE PAYMENTS.
(a) COMPANY shall pay LICENSOR a milestone payment ("Milestone
Payments") in the amount specified below no later than [ * ] after
the occurrence of the corresponding event designated below (except as specified
in Subsection 3.2(b)) unless COMPANY has given LICENSOR notice of termination
prior to such due date:
EVENT MILESTONE PAYMENT
----- -----------------
[ * ] [ * ]
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(vi) [ * ] [ * ]
TOTAL MILESTONE PAYMENTS
(b) Except as otherwise provided in this Subsection 3.2(b),
only [ * ] of each Milestone Payment described in clauses (ii), (iii), (v)
and (vi) of Subsection 3.2(a) shall be payable on the applicable due date as
specified therein. The remaining [ * ] of the Milestone Payments set forth
in such clauses for a given indication shall be payable upon the earlier of
(i) [ * ] after commercial introduction by COMPANY of the first Licensed
Product in [ * ]. (if such indication is [ * ]or in any [ * ] (if such
indication is [ * ]) (ii) upon LICENSOR's grant of a sublicense to COMPANY in
respect of the GW Patents pursuant to Section 2.6 hereof or (iii) upon GW's
grant of a license to COMPANY in respect of the GW Patent Rights. In the
event the sublicense referred to in clause (ii) or the license referred to in
clause (iii) of this Subsection 3.2(b) above is granted prior to the
achievement of a milestone to which this Subsection 3.2(b) applies, [ * ] of
the applicable Milestone Payment shall be payable in accordance with
Subsection 3.2(a). Notwithstanding the foregoing, at such time as COMPANY
(x) obtains [ * ] for a Licensed Product for [ * ][ * ] (the "First
Indication"), (y) files an NDA for Registration in [ * ] of a [ * ] (the
"Second Indication") and (z) publishes Phase II/III results of clinical
studies for the Second Indication in a recognized scientific
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journal, [ * ] of the Milestone Payment payable upon NDA Filing for a
Licensed Product for the Second Indication, as set forth in Subsection
3.2(a), shall be payable in accordance with the provisions thereof.
3.3 ADDITIONAL MILESTONES. In the event LICENSOR and COMPANY execute
a sublicense agreement in respect of either [ * ]pursuant to Section 2.6,
COMPANY shall pay LICENSOR the applicable Milestone Payment set forth below,
unless COMPANY has given LICENSOR notice of termination prior to the
applicable due date specified below:
(a) [ * ], payable within [ * ] after the grant of a sublicense
by LICENSOR to COMPANY in respect of the [ * ]; and
(b) [ * ], payable within [ * ] after the grant of a sublicense
by LICENSOR to COMPANY in respect of the [ * ].
3.4 RUNNING ROYALTIES. COMPANY shall pay LICENSOR a royalty equal to
the following percentages of the Net Selling Price of Licensed Products Sold
in the Licensed Territory by COMPANY and its Affiliates and sublicensees for
[ * ]:
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(a) PERCENTAGE OF NET SELLING PRICE ANNUAL NET SELLING PRICE OF LICENSED
PRODUCTS FOR [ * ]
[ * ] [ * ]
(b) PERCENTAGE OF NET SELLING PRICE ANNUAL NET SELLING PRICE OF LICENSED
PRODUCTS FOR [ * ]
[ * ] [ * ]
By way of example only, if during a given calendar year, the Net Selling
Price of all Licensed Products for [ * ] were [ * ], the royalties payable by
COMPANY pursuant to Subsection 3.4(a) would be equal to [ * ] or [ * ]
(c) DURATION; REDUCTION. Royalties (at the rates set forth in Subsections
3.4(a) and (b), subject to reduction or modification only as prescribed
herein) shall be paid in respect of a given Licensed Product for a period of
[ * ] after commercial introduction of such Licensed Product in a given
country. Thereafter, royalties shall be paid only so long as the manufacture,
use, offer for sale, sale or importation of such Licensed Product in such
country would, in the absence of a license, infringe a Valid Claim of an
issued and unexpired patent within the Licensed Patents. If, during such
[ * ] period, a third party or third parties commence selling a therapeutic
product in a country in which there are no Valid Claims or are Valid Claims
only of the type
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described in Section 1.27(b) and (i) such product contains any Licensed
Compound ("unlicensed unit sales") and (ii) such unlicensed unit sales for
any royalty period amount to [ * ] or more of the COMPANY's unit sales of
such Licensed Product in such country in such royalty period, determined in
accordance with Subsection 3.4(d) below, then COMPANY's royalty obligation in
such country with respect to such Licensed Product shall be suspended
commencing with the royalty period next succeeding the royalty period in
which such [ * ] threshold was initially exceeded and shall resume with the
royalty period next succeeding the first royalty period in which such [ * ]
threshold is no longer exceeded. COMPANY's royalty obligations with respect
to such Licensed Product shall resume in such country if and when such Valid
Claim per Subsection 1.27(b) becomes a Valid Claim per Subsection 1.27(a).
(d) UNIT SALES. For purposes of this Section 3.4, (i) "unlicensed unit
sales" and "COMPANY unit sales" shall be deemed to mean the grams of Licensed
Compound in third party product (irrespective of dosage form) or the Licensed
Product (irrespective of dosage form), respectively, as reflected on the
label of each such unit; and (ii) unlicensed unit sales shall be determined
by the sales reports of IMS America Ltd. of Plymouth Meeting, Pennsylvania
("IMS") or any successor to IMS or any other independent marketing auditing
firm selected by COMPANY or its sublicensees and reasonably acceptable to
LICENSOR. If COMPANY is entitled to a royalty suspension based on unlicensed
unit sales pursuant to Subsection 3.4(c) for any royalty period, it or its
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sublicensees shall submit the sales report of IMS or such other independent
firm, as applicable, for the relevant royalty period to LICENSOR, together
with COMPANY's or its sublicensees' sales report for the relevant royalty
period. Such sales reports for each royalty period in which COMPANY is
entitled to such royalty suspension shall be submitted with the royalty
report for such royalty period submitted pursuant to Section 4.1.
3.5 ANNUAL MINIMUM ROYALTIES.
(a) Subject to Subsection 3.5 (c), in the event that COMPANY's
total annual royalty payment to LICENSOR pursuant to Subsection 3.4(a) above
during the [ * ] calendar year following the year during which the first FDA
Registration is granted for a Licensed Product covered by Subsection 3.4(a)
above and each calendar year thereafter for so long as there exist Valid
Claims in the U.S. is less than the annual minimum royalty set forth opposite
such year below (the "Annual Minimum"), COMPANY shall make a payment to
LICENSOR together with the report for the fourth quarter of such year
required in Section 4.1 of this Agreement equal to the difference between
such Annual Minimum and the total royalties paid to LICENSOR for the
preceding year pursuant to Subsection 3.4(a) above:
CALENDAR YEAR ANNUAL MINIMUM
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[ * ] [ * ]
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[ * ] [ * ]
(b) Subject to Subsection 3.5 (c), in the event that COMPANY's
total annual royalty payment to LICENSOR pursuant to Subsection 3.4(b) above
during the [ * ] calendar year following the year during which the first
Registration in a Major Market Country is granted for a Licensed Product
covered by Subsection 3.4(b) above and each calendar year thereafter for so
long as there exist Valid Claims in the U.S. is less than the annual minimum
royalty set forth opposite such year below (the "Annual Minimum"), COMPANY
shall make a payment to LICENSOR together with the report for the fourth
quarter of such year required in Section 4.1 of this Agreement equal to the
difference between such Annual Minimum and the total royalties paid to
LICENSOR for the preceding year pursuant to Subsection 3.4(b) above:
CALENDAR YEAR ANNUAL MINIMUM
------------- --------------
[ * ] [ * ]
(c) If during a given year, the sum of royalty payments paid
hereunder for all Licensed Products described in Subsections 3.4(a) and
3.4(b) of this Agreement exceeds the sum of the applicable Annual Minimums
which are required to be paid for
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such year pursuant to Subsections 3.5(a) and 3.5(b), COMPANY shall be deemed
to have satisfied the requirements of each of Subsections 3.5(a) and 3.5(b)
for such year. For any year in which no Valid Claims exist in the United
States for the entire year or this Agreement is not in effect for the entire
year, the Annual Minimum shall be prorated accordingly.
(d) Commencing upon FDA Registration for a Licensed Product and
ending upon expiration of the [ * ] calendar year following the year in which
such FDA Registration is granted, COMPANY may credit solely against running
royalties (paid pursuant to Section 3.4), all reasonable costs incurred by
COMPANY after the date hereof (including any reimbursements to LICENSOR
pursuant to Section 7.1 for INTER PARTES Patent Prosecution Activities, as
defined therein) in connection with any litigation, interference, opposition
or other action pertaining to the validity, enforceability, allowability or
subsistence of the Licensed Patents or whether COMPANY's practice of the
Licensed Patents infringes a third party patent. Until the end of such [ * ]
calendar year, the amount of such credits shall not exceed in any year [ * ]
of the royalty payments due hereunder in such year. Commencing upon the [ * ]
calendar year following the year in which such FDA Registration is granted,
such credits shall not exceed in any year [ * ] of the Annual Minimum
payments due in such year. Such costs shall not be credited against any
other payments due to LICENSOR under this Agreement.
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3.6 REIMBURSEMENTS. COMPANY shall reimburse LICENSOR, within [ * ]
after submission to COMPANY of invoices and reasonable substantiation
thereof, for expenses incurred by LICENSOR in preparing and reviewing this
Agreement, not to exceed [ * ].
3.7 ADDITIONAL PAYMENTS IN RESPECT OF SUBLICENSE AND OTHER
AGREEMENTS. In the event COMPANY grants sublicenses, sales or other rights
with respect to the Licensed Products pursuant to which COMPANY receives
remuneration other than royalties, then COMPANY shall pay to LICENSOR a
percentage (the "Applicable Percentage") as set forth below of all payments
that COMPANY receives from such sublicensees or other parties, including,
without limitation, (a) [ * ]; (b) [ * ]; (c) [ * ]; (d) [ * ]; and (e) [ * ]
. As used in this Section 3.7, the term "[ * ]" means [ * ] and all other
[ * ] to COMPANY in connection with a [ * ]; "[ * ]" means payments to
COMPANY equal to [ * ], where "A" is the [ * ] of COMPANY [ * ] purchased by
the [ * ], "B" is the [ * ] by the [ * ], and "C" is the [ * ] of the equity
which, for purposes hereof, shall be equal to [ * ] of the per share price
obtained by the COMPANY in its most recent round of preferred equity
financing, unless COMPANY's Board of Directors has established a new per
share price in good faith, in which case,
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such Board determined price shall apply; provided, however, that in the event
such shares or other units of equity are publicly traded on a recognized
securities market, the publicly traded price shall apply; "[ * ]" means [ * ]
to COMPANY upon the fulfillment by COMPANY or the [ * ] of [ * ] or [ * ] in
excess of those set forth in Section 3.2; "[ * ]" means [ * ] (such as [ * ])
made by [ * ] to COMPANY to preserve, or to avoid a forfeiture of rights under,
the [ * ] in excess of those set forth in Section 3.5; and "[ * ]" means the
amount by which actual payments made by a [ * ] to COMPANY for Licensed
Products or components of Licensed Products exceeds COMPANY's standard costs
for manufacture and shipment of such products plus [ * ] of such costs,
"standard costs" being determined in accordance with Generally Accepted
Accounting Principles. LICENSOR acknowledges that it shall not be entitled to
share in any payment made by a [ * ] regardless of how such payment is
denominated, that represents reimbursement or advance payment of costs
incurred by COMPANY for research, development or other purposes (as agreed by
LICENSOR and COMPANY) in COMPANY's pursuit of regulatory or marketing
approval for any Licensed Product. With respect to a [ * ] or [ * ]
concluded prior to Registration in [ * ] of the first Licensed Product, the
Applicable Percentage shall be [ * ]. With respect to a sublicense or other
contractual arrangement concluded after Registration in [ * ] of
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the first Licensed Product, the Applicable Percentage shall be [ * ]. With
respect to any sublicensing or other transaction to which this Section 3.7
applies but which relates to products or compounds in addition to Licensed
Products and for which an allocation would be necessary, the parties shall
meet and attempt to agree on which portion of the total payments received by
COMPANY pursuant to such transaction should be subject to this Section 3.7.
In the event the parties cannot agree upon such allocation within a
reasonable period of time, COMPANY shall select an independent certified
public accountant, to which LICENSOR have no reasonable objection, to
determine such allocation. Such allocation shall be determined in accordance
with generally accepted accounting principles in the United States.
3.8 ACCRUAL OF ROYALTIES. No royalty shall be payable on a Licensed
Product made, sold, or used for tests or development purposes or distributed
as samples. No royalties shall be payable on sales among COMPANY, its
Affiliates and sublicensees, but royalties shall be payable on subsequent
sales by COMPANY, its Affiliates or sublicensees to a third party. No
multiple royalty shall be payable because the manufacture, use or sale of a
Licensed Product is covered by more than one Valid Claim or at least one
Valid Claim and the Licensed Technology.
3.9 THIRD PARTY ROYALTIES.
(a) If COMPANY, its Affiliates or sublicensees determine after
consultation with LICENSOR, but at COMPANY's discretion, that it or they are
required to pay royalties or other fees to any third party (including under
any third party
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or GW license to which Section 2.6 applies) because the manufacture, use,
offer for sale, importation, or sale of a Licensed Product infringes any
patent or other intellectual property rights of such third party in a given
country ("Third Party Royalties"), COMPANY, its Affiliates or sublicensees
may deduct from running royalties thereafter due to LICENSOR (per Section 3.4
of this Agreement) with respect to the Net Selling Price of such Licensed
Product in such country up to [ * ] of the Third Party Royalties. In no
event shall the royalties due on such Sales of such Licensed Product in such
country on account of any reduction pursuant to this Subsection 3.9(a) be
thereby reduced to less than [ * ] on such Sales of such Licensed Product in
such country.
(b) If the sum of the royalties paid hereunder and Third Party
Royalties for a given Licensed Product in a given country exceeds, at any
time, [ * ] of the Net Selling Price for such Licensed Product, upon
COMPANY's request, LICENSOR and COMPANY agree to negotiate in good faith in
an effort to agree on a reduction in the royalties payable hereunder to
LICENSOR for such Licensed Product in such country. In the event the parties
are unable to agree to such reduction after a reasonable period of time, not
to exceed [ * ], either party may request that the issue be arbitrated in
accordance with Section 16.1 of this Agreement.
3.10 COMPULSORY LICENSES. Should a compulsory license be granted to
any third party in any country of the Licensed Territory to make, have made,
use, import, offer for sale or sell Licensed Products, the royalty rate
payable thereunder for sales of the
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Licensed Products by COMPANY in such country shall be adjusted to match any
lower royalty rate granted to the third party for such country. COMPANY
shall provide LICENSOR with prompt written notice of any governmental or
judicial procedures initiated in any country to impose a compulsory license.
COMPANY shall take all reasonable and legal steps as COMPANY deems
appropriate which are available to oppose such compulsory license and shall,
at LICENSOR's request, cooperate reasonably with LICENSOR in any legal action
which LICENSOR may wish to take to oppose such compulsory license, which
action shall be at LICENSOR's sole expense and may not be taken by LICENSOR
if such action would materially jeopardize the validity of any Licensed
Patents in such country.
3.11 REDUCTION IN ROYALTY DUE TO INVALID CLAIMS. In the event that
all applicable claims of all patents or patent applications included within
the Licensed Patents under which COMPANY is selling or actively developing a
Licensed Product shall be held invalid or not infringed by the Licensed
Products COMPANY is selling or actively developing by a court of competent
jurisdiction in a given country of the Licensed Territory, whether or not
there is a conflicting decision by another court of competent jurisdiction in
such country, COMPANY may cease all royalty payments on its, its Affiliates'
or its sublicensees' sales of such Licensed Product covered by such claims
and, if it does so, shall deposit such royalty payments in an
interest-bearing escrow account until such judgment is finally reversed by an
unappealed or unappealable decree of a court of competent jurisdiction of
higher dignity in such country or is otherwise
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unappealable or is unappealed within the time allowed therefor; provided,
however, that if such judgment is finally reversed by an unappealed or
unappealable decree of a court of competent jurisdiction of higher dignity in
such country, the former royalty payments shall be resumed and the royalty
payments not theretofore made and interest earned thereon shall become due
and payable to LICENSOR.
3.12 MOST FAVORED LICENSEE. Should COMPANY's exclusive license
hereunder become nonexclusive in any country of the Licensed Territory due to
LICENSOR's exercise of their conversion remedy and should LICENSOR thereafter
grant to a third party a license for any Licensed Product in such country
containing more favorable terms than those granted to COMPANY, then in such
an event, LICENSOR promptly shall notify COMPANY and or its Affiliates or
sublicensees, as applicable, and COMPANY and such Affiliates or sublicensees
shall have the benefit of such more favorable terms provided they accept any
less favorable terms contained in such license.
3.13 YALE AGREEMENT.
(a) LICENSOR covenants that, during the term of this Agreement, it
will:
(i) fulfill all of its obligations under the Yale Agreement,
including, but not limited to, any royalty obligations set forth therein;
(ii) take no action or omit to take any action which would
cause it to be in breach of any provision of the Yale Agreement; and
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(iii) immediately notify COMPANY in the event LICENSOR
receives notice from Yale University that LICENSOR is in default under the Yale
Agreement or that Yale University has terminated or intends to terminate the
Yale Agreement.
In the event of any default of the type described in clause (iii) above,
LICENSOR agrees that if it fails or does not intend to cure such default,
COMPANY may, at COMPANY's option, do so and may offset any reasonable expenses
COMPANY incurs in curing such default.
(b) Notwithstanding the provisions of Section 3.9, COMPANY, its
affiliates and sublicensees may fully credit any royalties which it or they pay
to Yale University against royalties payable hereunder.
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ARTICLE 4. REPORTS AND ACCOUNTING
4.1 ROYALTY REPORTS AND RECORDS. During the term of this Agreement,
COMPANY shall furnish, or cause to be furnished to LICENSOR, written reports
governing each of COMPANY's, COMPANY's Affiliates' and COMPANY's sublicensees'
fiscal quarters showing:
(a) the gross selling price of all Licensed Products Sold by
COMPANY, its Affiliates and sublicensees, in each country of the Licensed
Territory during the reporting period, together with the calculations of Net
Selling Price in accordance with Sections 1.15 and 1.16; and
(b) the royalties payable in Dollars, which shall have accrued
hereunder in respect to such Sales; and
(c) the exchange rates used, if any, in determining the amount of
Dollars; and
(d) a summary of all reports provided to COMPANY by COMPANY's
sublicensees; and
(e) the amount of any consideration received by COMPANY from
sublicensees, an explanation of the contractual obligation satisfied by such
consideration and calculation of any payments due LICENSOR pursuant to
Section 3.7 of this Agreement;
(f) the occurrence of any event triggering a Milestone Payment
obligation in accordance with Section 3.2; and
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(g) the basis for any credits taken against Annual Minimum
payments in accordance with Subsection 3.5 (d), including documentation of costs
incurred by COMPANY in any litigation, infringement, interference, or other
action pertaining to the Licensed Patents, and any deductions from running
royalty payments taken pursuant to Section 3.9, including documentation of any
royalties or other fees paid to third parties.
Reports shall be made semi-annually until the first Sale of a Licensed
Product and quarterly thereafter. Semi-annual reports shall be due within
Minimum payments due in such thirty (30) days of the close of every second and
Quarterly reports shall be due within sixty (60) days of the close of every
COMPANY fiscal quarter. COMPANY shall keep accurate records in sufficient
detail to enable royalties and other payments payable hereunder to be
determined. COMPANY shall be responsible for all royalties and late payments
that are due to LICENSOR that have not been paid by COMPANY's Affiliates and
sublicensees. COMPANY's sublicensees shall have, and shall be notified by
COMPANY that they have, the option of making any royalty payment directly to
LICENSOR.
4.2 RIGHT TO AUDIT. LICENSOR shall have the right, upon prior notice
to COMPANY, not more than once in each COMPANY fiscal year nor more than once in
respect of any fiscal year, through an independent certified public accountant
selected by LICENSOR and acceptable to COMPANY, which acceptance shall not be
unreasonably refused, to have access during normal business hours to those
records of COMPANY as may be reasonably necessary to verify the accuracy of the
royalty reports required to be
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furnished by COMPANY pursuant to Section 4.1 of the Agreement. COMPANY shall
include in any sublicenses granted pursuant to this Agreement a provision
requiring the sublicensee to keep and maintain records of Sales made pursuant to
such sublicense and to grant access to such records by LICENSOR's independent
certified public accountant. If such independent certified public accountant's
report shows any underpayment of royalties by COMPANY its Affiliates or
sublicensees, within thirty (30) days after COMPANY's receipt of such report,
COMPANY shall remit or shall cause its sublicensees to remit to LICENSOR:
(a) the amount of such underpayment; and
(b) if such underpayment exceeds [ * ] of the total royalties
owed for the fiscal year then being reviewed, the reasonably necessary fees
and expenses of such independent certified public accountant performing the
audit. Otherwise, LICENSOR's accountant's fees and expenses shall be borne
by LICENSOR. Any overpayment of royalties shall be fully creditable against
future royalties payable in any subsequent royalty periods. Upon the
expiration of [ * ] months following the end of any fiscal year, the
calculation of royalties payable with respect to such fiscal year shall be
binding and conclusive on LICENSOR and COMPANY, unless an audit is initiated
before expiration of [ * ].
4.3 CONFIDENTIALITY OF RECORDS. All information subject to review
under this Article 4 shall be confidential. Except where provided by law,
LICENSOR and its accountant shall retain all such information in confidence.
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ARTICLE 5. PAYMENTS
5.1 PAYMENTS AND DUE DATES. Except as otherwise provided herein,
royalties and sublicense and other fees payable to LICENSOR as a result of
activities occurring during the period covered by each royalty report
provided for under Article 4 of this Agreement shall be due and payable on
the date such royalty report is due. Payments of royalties in whole or in
part may be made in advance of such due date. Any payment in excess of [ * ]
shall be made by wire transfer to an account of LICENSOR designated by
LICENSOR from time to time; provided, however, that in the event that
LICENSOR fails to designate such account, COMPANY or its Affiliates and
sublicensees may remit payment to LICENSOR to the address applicable for the
receipt of notices hereunder; providing, further, that any notice by LICENSOR
of such account or change in such account, shall not be effective until
fifteen (15) days after receipt thereof by COMPANY.
5.2 CURRENCY RESTRICTIONS. Except as hereinafter provided in this
Section 5.2, all royalties shall be paid in Dollars. If, at any time, legal
restrictions prevent the prompt remittance of part of or all royalties with
respect to any country in the Licensed Territory where Licensed Products are
Sold, COMPANY or its sublicensee shall have the right and option to make such
payments by depositing the amount thereof in local currency to LICENSOR's
accounts in a bank or depository in such country.
5.3 INTEREST. Royalties and other payments required to be paid by
COMPANY pursuant to this Agreement shall, if overdue, bear interest at the
lesser of [ * ]
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[ * ] or a per annum rate of [ * ] until paid. The payment of such interest
shall not foreclose LICENSOR from exercising any other rights it may have
because any payment is overdue.
ARTICLE 6. DEVELOPMENT AND MARKETING PROGRAM
6.1 DUE DILIGENCE OBLIGATIONS. COMPANY shall directly, or through or
in collaboration with Affiliates and sublicensees, use its best efforts:
(a) to conduct a research and development program relating to the
use of Licensed Products in the Field of Use; and
(b) to diligently pursue Registration of the Licensed Products;
and
(c) to effectively market the Licensed Products.
6.2 FULFILLMENT; CONVERSION.
(a) For purposes of this Agreement, "best efforts" shall mean
that COMPANY shall use reasonable efforts including, to the extent
appropriate, pursuing sublicenses and corporate alliances consistent with
those used by comparable pharmaceutical companies in the United States in
research and development projects for therapeutic methods or compositions
deemed to have commercial value comparable to the Licensed Products.
COMPANY's best efforts obligations set forth in this Article 6 and implied by
law shall be deemed to have been fulfilled if COMPANY: (i) causes an IND to
be filed in a Major Market Country with respect to a Licensed Product for
[ * ] (each referred to as a [ * ]) by the end of
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the [ * ] after the date of this Agreement; and (ii) causes the Phase II
Commencement Date with respect to a first Licensed Product for each [ * ]
[ * ] to occur by the end of the [ * ] after the date of this
Agreement; and (iii) files an NDA for a Licensed Product for [ * ] in a Major
Market Country by the end of the [ * ] [ * ] after the date of this
Agreement; and (iv) diligently pursues such Registrations for [ * ]; and (v)
commences marketing at least one Licensed Product within [ * ] following such
Registration. COMPANY shall be entitled to obtain a maximum of three
consecutive extensions of time for meeting each of its obligations to
commence Phase II clinical studies or file an NDA for [ * ] by paying to
LICENSOR [ * ] for a first extension of [ * ] duration, [ * ] for a second
extension of [ * ] days' duration, and [ * ] for a third extension of [ * ]
duration. Payment for any such extension must be received by LICENSOR within
[ * ] business days following the expiration of the period during which any
diligence obligation was required to be met. COMPANY shall provide reports to
LICENSOR every [ * ] days following its NDA filing(s) concerning the status of
such filing(s) until final approval thereof. Each such report shall describe
the status of the COMPANY's NDA and disclose any request for additional
information or data received by COMPANY from the FDA during the reporting period
and COMPANY's plans for complying with such
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request. COMPANY shall immediately notify LICENSOR if COMPANY determines that
it is unwilling to comply with any FDA requirement the failure with which to
comply would result in the given Licensed Product being unapprovable by the FDA
(which notice is hereinafter referred to as a "Failure of Diligence Notice").
Upon receipt of such a Failure of Diligence Notice, COMPANY shall be deemed to
have failed to meet its diligence obligations, and LICENSOR may thereafter
invoke any remedy provided for in this Article without any further notice to
COMPANY.
(b) In the event COMPANY fails to meet any diligence requirement
set forth herein in respect of a Licensed Product for a given [ * ],
LICENSOR shall have the option in its sole discretion to (i) terminate the
Agreement within the entire Licensed Territory or any portion of the Licensed
Territory for such [ * ], (ii) convert the license granted in this
Agreement into a non-exclusive license within the entire Licensed Territory or
any portion of the Licensed Territory for such Major Indication, or (iii)
terminate the Agreement within a portion of the Licensed Territory and convert
the license granted in this Agreement into a non-exclusive license within a
portion of the Licensed Territory for such [ * ].
(c) Upon exercise by LICENSOR of any portion of its rights under
the preceding Subsection with respect to a given [ * ], COMPANY shall
deliver to LICENSOR all data, and shall grant to LICENSOR and its sublicensees a
non-exclusive, royalty free license under all intellectual property rights in
COMPANY's or COMPANY's sublicensees' control and required for regulatory or
commercial
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reasons in order to market any Licensed Product in the country or countries in
which termination has occurred for such [ * ]. COMPANY shall further
provide LICENSOR, promptly upon request, copies of any IND, NDA or other
documents required for regulatory approvals for Sale in the United States and
any foreign countries for such [ * ] and any other data and
information otherwise necessary or useful in connection with the development
thereof provided that such termination has occurred with respect to such
countries. COMPANY shall, further permit LICENSOR and any licensee of LICENSOR
to cross-reference such filings for such [ * ] and shall sell LICENSOR or
LICENSOR's licensees any Licensed Compounds or intermediates used in the
synthesis of such Licensed Compounds (and not being used by COMPANY for the
synthesis of other compounds) at COMPANY's cost.
(d) Prior to exercising any rights under this Section, LICENSOR
shall give COMPANY [ * ] notice and shall meet with COMPANY, at COMPANY's
request and expense, during such [ * ] period, to discuss any disagreements
about whether COMPANY has complied with the requirements of this Section.
Upon expiration of such [ * ] period, LICENSOR shall have the right in its
sole discretion to proceed with the exercise of all rights and remedies
provided for herein unless the applicable diligence obligation is met during
such [ * ] period.
6.3 PROGRESS REPORTS. COMPANY shall, no less frequently than once
every [ * ] until a Licensed Product has been Registered, provide LICENSOR
with a written report detailing all activities of COMPANY, its Affiliates and
sublicensees
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related to developing Licensed Products, except to the extent required to do so
more frequently pursuant to Section 6.2.
6.4 DEVELOPMENT OUTSIDE UNITED STATES. No later than COMPANY's filing
of an NDA for a Licensed Product in the United States, COMPANY shall directly,
or through or in collaboration with Affiliates and sublicensees, commence its
best efforts:
(a) to obtain Registration for a Licensed Product in such other
countries of the Licensed Territory as COMPANY or COMPANY's Affiliates and
sublicensees deem appropriate; and
(b) upon Registration of a Licensed Product in a particular
country proceed with due diligence to market such Licensed Product in such
country.
ARTICLE 7. PATENT PROSECUTION
7.1 LICENSED PATENTS ASSIGNED TO LICENSOR.
(a) LICENSOR shall be primarily responsible for all patent
prosecution activities pertaining to Licensed Patents assigned solely to
LICENSOR. LICENSOR shall select patent counsel, acceptable to COMPANY, to
prosecute, acquire from the relevant patent offices, defend and maintain and
handle any litigation, interference, opposition or other action pertaining to
the validity, enforceability, allowability or subsistence (all of the foregoing
activities being referred to as "Patent Prosecution Activities") of all such
Licensed Patents and shall provide COMPANY with copies of all filings and
correspondence pertaining to such Patent Prosecution Activities (pre and post
the date hereof), in a timely manner, so as to give COMPANY an opportunity to
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comment thereon. To the extent reasonably possible, LICENSOR shall pursue
Patent Prosecution Activities in respect of such Licensed Patents in at least
the following countries: [ * ] and [ * ]. LICENSOR shall, upon COMPANY's
request, pursue Patent Prosecution Activities of such Licensed Patents in
additional countries. If LICENSOR decides to abandon or allow to lapse any
patent application or patent within the Licensed Patents or discontinue any
other Patent Prosecution Activities in respect thereof in any country of the
Licensed Territory, LICENSOR shall inform COMPANY and COMPANY shall be given
the opportunity to assume Patent Prosecution Activities in respect thereof.
(b) COMPANY shall reimburse LICENSOR, not later than thirty (30)
days after receiving an invoice from LICENSOR (and reasonable substantiation
thereof if requested by COMPANY), for all reasonable out-of-pocket expenses
incurred by LICENSOR in respect of such Patent Prosecution Activities on or
after the eight (8) month anniversary of the date of this Agreement. LICENSOR
shall be responsible for all expenses incurred by it in respect of such Patent
Prosecution Activities prior to such eight (8) month anniversary date. Invoices
shall be submitted once in respect of each calendar quarter as promptly as
practicable after the end of such quarter. If COMPANY fails to promptly
reimburse LICENSOR for any undisputed expenses for Patent Prosecution Activities
respecting any patent application or issued patent assigned solely to LICENSOR
within the time allowed therefor, upon at least thirty (30) days' prior notice
to COMPANY, such patent application or issued patent shall not be considered a
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Licensed Patent and LICENSOR shall be free, at its election, to abandon or
maintain the prosecution of such patent application or issued patent or grant
rights to such patent application or issued patent to third parties.
(c) COMPANY reserves the right to terminate its obligations
pursuant to Section 7.1 with respect to any patent application or patent
included in the Licensed Patents in any country or countries upon at least
thirty (30) days' prior written notice to LICENSOR. After the date specified in
such notice on which COMPANY's obligation to pay further expenses for Patent
Prosecution Activities terminates, such patent application or patent, as the
case may be, shall no longer be included in the Licensed Patents in those
countries in which COMPANY has exercised its rights to terminate such
obligations.
7.2 LICENSED PATENTS JOINTLY ASSIGNED TO COMPANY AND LICENSOR. Any
invention relating to a Licensed Compound, the invention of which under
applicable patent law is attributed jointly to at least one employee of LICENSOR
and at least one employee of COMPANY, shall be assigned by such employees to
such LICENSOR and COMPANY. Any such jointly assigned patent, or patent
application which includes claims to any Licensed Products shall be considered
a Licensed Patent and subject to the terms of this Agreement. COMPANY shall be
primarily responsible for all Patent Prosecution Activities pertaining to
Licensed Patents jointly assigned to LICENSOR and COMPANY. COMPANY shall select
patent counsel, acceptable to LICENSOR, to pursue Patent Prosecution Activities
in respect of all such Licensed Patents and shall
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provide LICENSOR with copies of all filings and correspondence pertaining to
such Patent Prosecution Activities, in a timely manner, so as to give LICENSOR
an opportunity to comment thereon. COMPANY shall advise such patent counsel in
writing that for purposes of such Patent Prosecution Activities, such counsel
represents both COMPANY and LICENSOR. COMPANY shall further inform LICENSOR of
any decision by COMPANY to discontinue any Patent Prosecution Activities in
respect of any pending patent application or issued patent promptly upon
reaching such decision and in any case, no less than thirty (30) days before the
discontinuance thereof. COMPANY shall be solely responsible for all expenses
incurred by COMPANY in prosecuting and maintaining such patents. COMPANY shall
pursue Patent Prosecution Activities of such Licensed Products in those
countries it deems reasonably appropriate after consultation with LICENSOR. If
COMPANY fails to timely pursue Patent Prosecution Activities in respect of any
patent application or issued patent jointly assigned to COMPANY and LICENSOR in
any country in which LICENSOR wishes to pursue such Patent Prosecution
Activities, LICENSOR shall be free at its sole expense, to continue or
discontinue any or all of the Patent Prosecution Activities in respect of such
patent application or issued patent in such country or grant their rights to
such patent application or issued patent to third parties. Thereafter,
LICENSOR's rights to such patent application and issued patent shall no longer
be included in the license granted pursuant to Section 2.1 and COMPANY shall
further, upon LICENSOR's
44
request, license COMPANY's rights under such jointly assigned patents to
LICENSOR or any licensees of LICENSOR, non-exclusively on a royalty free basis.
ARTICLE 8. INFRINGEMENT
8.1 THIRD PARTY INFRINGEMENT. If COMPANY or LICENSOR becomes aware
of any activity that it believes infringes a Valid Claim, the party obtaining
such knowledge shall promptly advise the other of all relevant facts and
circumstances pertaining to the potential infringement. COMPANY shall have
the right to enforce any rights within the Licensed Patents or the Licensed
Technology against such infringement, at its own expense. LICENSOR shall
cooperate with COMPANY in such effort, at COMPANY's expense, including being
joined as a party to such action if necessary. COMPANY may deposit up to
[ * ] of any running royalties and Milestone Payments which are otherwise
payable to LICENSOR during the pendency of any such infringement action in an
interest-bearing escrow account (bearing interest at rates comparable to
other COMPANY deposits of immediately available funds). COMPANY shall, upon
the final resolution or settlement of such infringement action, provide
LICENSOR with an accounting of the total royalty payments and Milestone
Payments escrowed (and interest thereon) and COMPANY's expenses incurred in
such infringement action. COMPANY shall be entitled to offset any expenses
which COMPANY fails to recoup from any damage award or settlement payments
arising from such infringement action against such escrowed royalties. Any
escrowed payments (and interest thereon) in excess of COMPANY's unrecouped
expenses shall be immediately
* Confidential Treatment Requested
45
paid to LICENSOR. Any damage award or settlement payments made to COMPANY in
excess of COMPANY's expenses shall be treated as royalty bearing Sales of
Licensed Products and COMPANY shall make royalty payments on such revenues in
accordance with Article 3 of this Agreement.
8.2 LICENSOR'S RIGHT TO PURSUE THIRD PARTY INFRINGERS. If COMPANY
shall fail, within one hundred twenty (120) days after receiving notice from
LICENSOR of a potential infringement, or providing LICENSOR with notice of such
infringement, to either (a) terminate such infringement or (b) institute an
action to prevent continuation thereof and, thereafter, to prosecute such action
diligently, or if COMPANY notifies LICENSOR that it does not plan to terminate
the infringement or institute such action, then LICENSOR shall have the right to
do so at its own expense. COMPANY shall cooperate with LICENSOR in such effort,
including being joined as a party to such action if necessary. LICENSOR shall
be entitled to retain all damages or costs awarded to LICENSOR in such action.
ARTICLE 9. WARRANTIES; EXCLUSION OF WARRANTIES;
AND INDEMNIFICATION
9.1 WARRANTIES OF LICENSOR.
(a) LICENSOR represents and warrants that, to the best of its
knowledge:
46
(i) LICENSOR has disclosed to COMPANY all potential patent rights
in the control of third parties known to LICENSOR which may be needed to
commercialize any Licensed Products ; and
(ii)APPENDIX "A" is a complete list of all patents and patent
applications included in the Licensed Patents as of the date hereof. LICENSOR
will, from time to time during the term of this Agreement, promptly provide
COMPANY, upon request, with an updated version of APPENDIX "A".
(b) LICENSOR further represents and warrants that (i) it is the
exclusive owner or, in the case of the patents and patent applications licensed
pursuant to the Yale Agreement, the exclusive licensee, of all right, title and
interest in the patents and patent applications identified in APPENDIX "A" as of
the date hereof, subject to the rights of the U.S. Government as described in
the U.S. Government Licenses; and (ii) all patents and patent applications
licensed by it pursuant to the Yale Agreement are identified on APPENDIX "A".
For purposes of the representation and warranty set forth in clause (i) of
Subsection 9.1(a), "LICENSOR" shall mean the Inventor and any employees of EMORY
who work in the technology transfer area. COMPANY acknowledges that LICENSOR
has not undertaken any investigation with respect to the potential patent rights
of any third party.
9.2 WARRANTIES OF EACH PARTY. Each party hereto represents to the
others that it is free to enter into this Agreement and to carry out all of the
provisions hereof, including, in the case of LICENSOR, its grant to COMPANY of
the license described in Section 2. 1.
47
9.3 MERCHANTABILITY AND EXCLUSION OF WARRANTIES. COMPANY possesses
the necessary expertise and skill in the technical areas pertaining to the
Licensed Patents, Licensed Products and Licensed Technology to make, and has
made, its own evaluation of the capabilities, safety, utility and commercial
application of the Licensed Patents, Licensed Products and Licensed Technology.
ACCORDINGLY, EXCEPT AS SET FORTH IN SECTIONS 9.1 AND 9.2, LICENSOR DOES NOT MAKE
ANY REPRESENTATION OR WARRANTY OF ANY KIND WITH RESPECT TO THE VALIDITY OF
LICENSED PATENTS, LICENSED TECHNOLOGY OR LICENSED PRODUCTS AND EXPRESSLY
DISCLAIMS ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
AND ANY OTHER IMPLIED WARRANTIES WITH RESPECT TO THE CAPABILITIES, SAFETY,
UTILITY, OR COMMERCIAL APPLICATION OF THE LICENSED PATENTS, LICENSED TECHNOLOGY
OR LICENSED PRODUCTS.
9.4 NO LIABILITY FOR CONSEQUENTIAL DAMAGES AND LIMITATION OF
Liability. LICENSOR shall not be liable to COMPANY or COMPANY's Affiliates,
customers or sublicensees for compensatory, special, incidental, indirect,
consequential or exemplary damages resulting from the manufacture, testing,
design, labeling, use or sale of Licensed Products by or through COMPANY, its
Affiliates or sublicensees. This Section shall not affect COMPANY's rights
hereunder to any credit or royalty reduction explicitly permitted elsewhere
herein.
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9.5 INDEMNIFICATION. (a) COMPANY shall defend, indemnify, and hold
harmless the Indemnitees, from and against any and all claims, demands, loss,
liability, expense, or damage (including investigative costs, court costs and
reasonable attorneys' fees) Indemnitees may suffer, pay, or incur as a result of
claims, demands or actions against any of the Indemnitees arising or alleged to
arise by reason of, or in connection with, any and all personal injury
(including death) and property damage caused or contributed to, in whole or in
part, by manufacture, testing, design, use, Sale, or labeling of any Licensed
Products by COMPANY or COMPANY's Affiliates, contractors, agents or
sublicensees. COMPANY's obligations under this Article shall survive the
expiration or termination of this Agreement for any reason.
(b) LICENSOR shall indemnify and hold Indemnitees harmless from and
against any and all claims, demands, loss, liability, expense or damage
(including investigative costs, court costs and reasonable attorneys' fees)
Indemnitees may suffer, pay or incur as a result of claims, demands or actions
against any of the Indemnitees arising by reason of, or in connection with, the
breach by LICENSOR of any of their representations and warranties set forth in
this Agreement.
9.6 INSURANCE. Without limiting COMPANY's indemnity obligations under
the preceding Section, COMPANY shall, to the extent available at commercially
reasonable rates and prior to any clinical trial or Sale of any Licensed
Product, cause to be in force, an [ * ] insurance policy which:
* Confidential Treatment Requested
49
(a) insures LICENSOR and its Indemnitees for all claims, damages,
and actions mentioned in Section 9.5(a) of this Agreement; and
(b) requires the insurance carrier to provide LICENSOR with no
less than [ * ] written notice of any change in the terms or coverage of the
policy or its cancellation; and
(c) provides Indemnitees product liability coverage in an
amount no less than [ * ] per occurrence for bodily injury and [ * ] per
occurrence for property damage, subject to a reasonable aggregate amount, as
determined by COMPANY.
9.7 NOTICE OF CLAIMS; INDEMNIFICATION PROCEDURES.
(a) COMPANY shall promptly notify LICENSOR of all claims involving
the Indemnitees for which indemnification is or may be provided in Section
9.5(a) and shall advise LICENSOR of the policy amounts that might be needed to
defend and pay any such claims.
(b) An Indemnitee which intends to claim indemnification under
this Article shall promptly notify the other party (the "Indemnitor") in writing
of any matter in respect of which the Indemnitee or any of its employees or
agents intend to claim such indemnification. The Indemnitee shall permit, and
shall cause its employees and agents to permit, the Indemnitor, at its
discretion, to settle any such matter and agrees to the complete control of such
defense or settlement by the Indemnitor; provided, however, that such settlement
does not adversely affect the Indemnitee's rights
* Confidential Treatment Requested
50
hereunder or impose any obligations on the Indemnitee in addition to those set
forth herein in order for it to exercise such rights. No such matter shall be
settled without the prior written consent of the Indemnitor and the Indemnitor
shall not be responsible for any legal fees or other costs incurred other than
as provided herein. The Indemnitee, its employees and agents shall cooperate
fully with the Indemnitor and its legal representatives in the investigation and
defense of any matter covered by the applicable indemnification. The Indemnitee
shall have the right, but not the obligation, to be represented by counsel of
its own selection and expense.
ARTICLE 10. CONFIDENTIALITY
10.1 TREATMENT OF CONFIDENTIAL INFORMATION. Except as otherwise
provided hereunder, during the term of this Agreement and for a period of
[ * ] thereafter:
(a) COMPANY and its Affiliates and sublicensees shall retain in
confidence and use only for purposes of this Agreement, any written information
and data supplied by LICENSOR to COMPANY under this Agreement; and
(b) LICENSOR shall retain in confidence and use only for purposes
of this Agreement any written information and data supplied by COMPANY or on
behalf of COMPANY to LICENSOR under this Agreement.
For purposes of this Agreement, all such information and data which a
party is obligated to retain in confidence shall be called "Information."
* Confidential Treatment Requested
51
10.2 RIGHT TO DISCLOSE. To the extent that it is reasonably necessary
to fulfill its obligations or exercise its rights under this Agreement, or any
rights which survive termination or expiration hereof, each party may disclose
Information to its Affiliates, sublicensees, consultants, outside contractors,
actual or prospective investors, governmental regulatory authorities and
clinical investigators on condition that such entities or persons agree:
(a) to keep the Information confidential for a [ * ] time
period and to the same extent as each party is required to keep the
Information confidential; and
(b) to use the Information only for such purposes as such parties
are authorized to use the Information.
Each party or its Affiliates or sublicensees may disclose Information to
the government or other regulatory authorities to the extent that such
disclosure (i) is necessary for the prosecution and enforcement of patents, or
authorizations to conduct clinical trials or commercially market Licensed
Products, provided such party is then otherwise entitled to engage in such
activities during the term of this Agreement or thereafter in accordance with
the provisions of this Agreement, or (ii) is legally required.
10.3 RELEASE FROM RESTRICTIONS. The obligation not to disclose
Information shall not apply to any part of such Information that:
(a) is or becomes patented, published or otherwise part of the
public domain, other than by unauthorized acts of the party obligated not to
disclose such
* Confidential Treatment Requested
52
Information (for purposes of this Article 10 the "receiving party") or its
Affiliates or sublicensees in contravention of this Agreement; or
(b) is disclosed to the receiving party or its Affiliates or
sublicensees by a third party provided that such Information was not obtained by
such third party directly or indirectly from the other party to this Agreement;
or
(c) prior to disclosure under this Agreement, was already in the
possession of the receiving party, its Affiliates or sublicensees, provided that
such Information was not obtained directly or indirectly from the other party to
this Agreement; or
(d) results from research and development by the receiving party
or its Affiliates or sublicensees, independent of disclosures from the other
party of this Agreement, provided that the persons developing such information
have not had exposure to the information received from the other party to this
Agreement; or
(e) is required by law to be disclosed by the receiving party,
provided that the receiving party uses reasonable efforts to notify the other
party immediately upon learning of such requirement in order to give the other
party reasonable opportunity to oppose such requirement; or
(f) COMPANY and LICENSOR agree in writing may be disclosed.
53
ARTICLE 11. TERM AND TERMINATION
11.1 TERM. Unless sooner terminated as otherwise provided in this
Agreement, the term of this Agreement shall commence on the date of this
Agreement and shall continue in full force and effect until the expiration of
(a) the last to expire Valid Claim or (b) COMPANY's obligations to pay
royalties hereunder, whichever is last to occur.
11.2 TERMINATION. LICENSOR shall have the right to terminate this
Agreement upon the occurrence of any one or more of the following events,
provided that LICENSOR has given COMPANY the notice required in Section 11.3 and
COMPANY has failed to cure the breach described in such notice:
(a) failure of COMPANY to make any payment required pursuant to
this Agreement when due; or
(b) failure of COMPANY to timely issue COMPANY stock to LICENSOR
or certain Inventors as designated by LICENSOR in accordance with the certain
Restricted Stock Purchase Agreement between LICENSOR and COMPANY of even date
herewith; or
(c) failure of COMPANY to render reports to LICENSOR as required
by this Agreement; or
(d) the institution of any proceeding by COMPANY under any
bankruptcy, insolvency, or moratorium law; or
(e) any assignment by COMPANY of substantially all of its assets
for the benefit of creditors; or
54
(f) placement of COMPANY's assets in the hands of a trustee or a
receiver unless the receivership or trust is dissolved within thirty (30) days
thereafter and provided that in the case of in involuntary bankruptcy
proceeding, which is contested by COMPANY, such termination shall not become
effective until the bankruptcy court of jurisdiction has entered an order
upholding the petition; or
(g) a decision by COMPANY or COMPANY's permitted assignee of
rights under this Agreement to quit the business of developing or selling
Licensed Products; or
(h) the breach by COMPANY of any other material term of this
Agreement.
11.3 EXERCISE. LICENSOR may exercise its right of termination by
giving COMPANY, its trustees, receivers or assigns, thirty (30) days' prior
written notice of LICENSOR's election to terminate. Such notice shall include
the basis for such termination. Upon the expiration of such period, this
Agreement shall automatically terminate unless COMPANY has cured the breach.
Such notice and termination shall not prejudice LICENSOR's right to receive
royalties or other sums due hereunder and shall not prejudice any cause of
action or claim of LICENSOR.
11.4 FAILURE TO ENFORCE. The failure of LICENSOR, at any time, or for
any period of time, to enforce any of the provisions of this Agreement, shall
not be construed as a waiver of such provisions or as a waiver of the right of
LICENSOR thereafter to enforce each and every such provision of this Agreement.
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11.5 TERMINATION BY COMPANY. COMPANY shall have the right to terminate
this Agreement upon the occurrence of either of the following events:
(a) the breach of a material term of this Agreement by LICENSOR;
or
(b) upon COMPANY's convenience and written notice of such
termination given to LICENSOR at least ninety (90) days prior to the date of
such termination. The termination right set forth in this Subsection 11.5(b)
may be exercised by COMPANY in respect of either or both Major Indications in
the entire Licensed Territory or one or more countries of the Licensed Territory
without affecting this Agreement in the remaining countries of the Licensed
Territory.
11.6 EXERCISE. COMPANY may exercise its right of termination pursuant
to Section 11.5(a) by giving LICENSOR thirty (30) days' prior written notice of
COMPANY's election to terminate. The notice shall include the basis for such
termination. Upon the expiration of such period, this Agreement shall
automatically terminate unless LICENSOR has cured the breach. Such notice of
termination shall not prejudice any cause of action or claim of COMPANY accrued
or to accrue on account of any breach or default by LICENSOR.
11.7 EFFECT. If this Agreement is terminated as a result of COMPANY's
breach pursuant to Section 11.2, or is terminated in whole or in part (but only
with respect to that part with respect to which termination occurs) in
accordance with Section 11.5(b): (a) COMPANY shall use its best efforts to
return, or at LICENSOR's direction, destroy, all data, writings and other
documents and tangible materials supplied to COMPANY by
56
LICENSOR if the Agreement is terminated in whole; and (b) COMPANY shall further,
upon LICENSOR's request and with no need for additional consideration, grant
LICENSOR a non-exclusive, royalty free license (with the right to sublicense) to
all of COMPANY's rights in any Licensed Patents and other patents owned by,
licensed to (to the extent sublicensing is permissible and subject to the terms
thereof, including any royalty obligations) or controlled by COMPANY which
include claims covering or potentially covering the manufacture, use or sale of
any Licensed Products, or derivatives or analogues thereof. COMPANY shall
further provide LICENSOR with full and complete copies of all toxicity,
efficacy, and other data generated by COMPANY or COMPANY's Affiliates,
sublicensees, contractors or agents in the course of COMPANY's efforts to
develop Licensed Products or obtain governmental approval for the Sale of
Licensed Products, including but not limited to any IND, NDA or other documents
filed with any government agency. LICENSOR and its licensees shall be
authorized to cross-reference any such IND, NDA or other filings made in the
United States or foreign countries where permitted by law. LICENSOR shall be
authorized to provide data pertaining to the Licensed Patents and Licensed
Technology to any third party with a bona fide interest in licensing such
technology. Such data shall be provided on a confidential basis; provided,
however, that if such third party concludes a license with LICENSOR, such third
party shall be free to use such data for all purposes, including to obtain
government approvals to sell any product containing any Licensed Compound.
COMPANY shall cooperate reasonably (at no unreimbursed expense to
57
COMPANY) with any third party licensee of LICENSOR in pursuing governmental
approval to sell any product containing any Licensed Compound, including but not
limited to, permitting such third parties to cross-reference any NDA filed with
the FDA or Registration obtained from the FDA or analogous documents filed or
obtained in any foreign countries.
ARTICLE 12. ASSIGNMENT
COMPANY shall not assign this Agreement or any part thereof without the
prior written consent of LICENSOR, which consent shall not be unreasonably
withheld or delayed. COMPANY may, however, without consent, assign or sell
its rights under this Agreement (a) in connection with the transfer or sale
of substantially its entire business to which this Agreement pertains, (b) in
the event of its merger or consolidation with another company, or (c) to an
Affiliate. Any permitted assignee shall assume all obligations of its
assignor under this Agreement. No assignment shall relieve any party of
responsibility for the performance of any accrued obligation which such party
has under this Agreement. Any assignee of this Agreement shall assume all
accrued and prospective obligations including but not limited to those set
forth in Articles 6 and 7. Any such assignee shall further, within sixty
(60) days of becoming the assignee of rights hereunder, meet with LICENSOR's
representatives , to discuss such assignee's plans for the future development
of the Licensed Products. If such assignee determines that it does not wish
to continue the development or marketing obligations required under this
Agreement or otherwise attempt to sublicense its rights, then such assignee
shall
58
immediately terminate this Agreement; provided, however, that any sublicense
must be consummated no later than one hundred and eighty (180) days from the
effective date of the assignment to such assignee. Any such termination shall
be treated as a termination under Subsection 11.5(b).
ARTICLE 13. TRANSFER OF LICENSED TECHNOLOGY
Within sixty (60) days following the date hereof and as far as it has not
previously done so, LICENSOR shall supply COMPANY with all available Licensed
Technology. With respect to any Licensed Technology which becomes known to
LICENSOR during the term of this Agreement, such disclosure will be made at
least semi-annually or sooner, if practicable.
ARTICLE 14, REGISTRATION OF LISCENSE
COMPANY, at its expense, may register the license granted under this
Agreement in any country of the Licensed Territory where the use, sale or
manufacture of a Licensed Product in such country would be covered by a Valid
Claim. Upon request by COMPANY, LICENSOR agrees promptly to execute any "short
form" licenses submitted to it by COMPANY in order to effect the foregoing
registration in such country.
ARTICLE 15. NOTIFICATION AND AUTHORIZATION UNDER DRUG PRICE
COMPETITION AND PATENT TERM RESTORATION ACT
15.1 NOTICES RELATING TO THE ACT. LICENSOR shall use its best efforts
to notify COMPANY of (a) the issuance of each U.S. patent included among the
Licensed Patents, giving the date of issue and patent number for each such
patent; and (b) each
59
notice pertaining to any patent included among the Licensed Patents which
LICENSOR receives as patent owner pursuant to the Drug Price Competition and
Patent Term Restoration Act of 1984 (hereinafter the "Act"), including but
not necessarily limited to notices pursuant to Sections 101 and 103 of th ACT
From persons who have filed an abbreviated NDA ("ANDA") of a "paper" NDA.
Such notices shall be given promptly, but in any event within ten (10) days
of LICENSOR's notice of each such patent's date of issue or receipt of each
such notice pursuant to the Act, whichever is applicable.
15.2 AUTHORIZATION RELATING TO PATENT TERM EXTENSION. LICENSOR hereby
authorizes COMPANY (a) to include in any NDA for a Licensed Product, as COMPANY
may deem appropriate under the Act, a list of patents included among the
Licensed Patents that relate to such Licensed Product and such other information
as COMPANY in its reasonable discretion believes is appropriate to be filed
pursuant to the Act; (b) to commence suit for any infringement of the Licensed
pursuant to Sections 101 and 103 of the Act from persons Patents under Section
the submission by a third party of an IND or a paper NDA for a Licensed Product
271(e) (2) of Title 35 of the United States Code occasioned by pursuant to
(which consent will not be unreasonably withheld or delayed), to exercise any
rights that may be exercisable by LICENSOR as patent owner under the Act to
apply for an extension of the term of any patent included among the Licensed
Patents. In the event that applicable law in any other country of the Licensed
Territory hereafter provides for the extension of the term of any patent
included among the Licensed Patents in such country, upon request by COMPANY,
60
LICENSOR shall use its best efforts to obtain such extension or, in lieu
thereof, shall authorize COMPANY or, if requested by COMPANY or its sublicensees
to apply for such extension, in consultation with LICENSOR. LICENSOR agrees to
cooperate with COMPANY or its sublicensees, as applicable, in the exercise of
the authorization granted herein or which may be granted pursuant to this
Section 15.2 and will execute such documents and take such additional action as
COMPANY may reasonably request in connection therewith, including, if necessary,
permitting itself to be joined as a proper party in any suit for infringement
brought by COMPANY under subsection (b) above. The provisions of Article 8
shall apply to any suit for infringement brought by COMPANY under subsection (b)
above. In the event COMPANY decides not to commence suit for infringement under
subsection (b) above, COMPANY will notify LICENSOR of its decision within thirty
(30) days so that LICENSOR may institute such litigation itself, if it wishes,
at its own cost and expense.
ARTICLE 16. MISCELLANEOUS
16.1 ARBITRATION. Any controversy, claim or dispute regarding (a)
COMPANY's failure to meet its diligence obligations in accordance with Article 6
of this Agreement, including, without limitation, any dispute concerning the
scope of this arbitration clause or (b) the size of any royalty reduction
pursuant to Subsection 3.9(b), shall be resolved through arbitration conducted
under the auspices of the American Arbitration Association pursuant to that
organization's rules for commercial arbitration. Any
61
hearings requested by COMPANY shall be held in Atlanta, Georgia. Any hearings
requested by LICENSOR shall be held in Durham, North Carolina.
16.2 EXPORT CONTROLS. COMPANY acknowledges that LICENSOR is subject to
United States laws and regulations controlling the export of technical data,
biological materials, chemical compositions and other commodities and that
LICENSOR's obligations under this Agreement are contingent upon compliance with
applicable United States export laws and regulations. The transfer of technical
data, biological materials, chemical compositions and commodities may require a
license from the cognizant agency of the United States government or written
assurances by COMPANY that COMPANY shall not export data or commodities to
certain foreign countries without the prior approval of certain United States
agencies, or as otherwise prescribed by applicable law or regulation. LICENSOR
neither represents that an export license shall not be required nor that, if
required, such export license shall issue.
16.3 LEGAL COMPLIANCE. COMPANY shall comply with all laws and
regulations relating to its manufacture, use, sale, labeling or distribution of
Licensed Products and shall not take any action which would cause LICENSOR or
COMPANY to violate any laws or regulations.
16.4 INDEPENDENT CONTRACTOR. COMPANY's relationship to LICENSOR shall
be that of a licensee only. COMPANY shall not be the agent of LICENSOR and
shall have no authority to act for, or on behalf of, LICENSOR in any matter.
Persons
62
retained by COMPANY as employees or agents shall not, by reason thereof, be
deemed to be employees or agents of LICENSOR.
16.5 PATENT MARKING. COMPANY shall xxxx Licensed Products Sold in the
United States with United States patent numbers. Licensed Products manufactured
or Sold in other countries shall be marked in compliance with the intellectual
property laws in force in such countries. The foregoing obligations shall be
subject to size and space limitations.
16.6 USE OF NAMES. COMPANY shall obtain the prior written approval of
LICENSOR prior to making use for any commercial purpose of the name of any of
the Inventors, any employee of the LICENSOR, except that COMPANY may identify
LICENSOR to prospective investors and in public announcements relating to
consummation of this Agreement.
16.7 EFFECT. This Agreement shall not become effective or binding upon
the parties until signed by LICENSOR's Executive Vice President and the
President or any other authorized officer of COMPANY.
16.8 GOVERNING LAW. This Agreement and all amendments, modifications,
alterations, or supplements hereto, and the rights of the parties hereunder,
shall be construed under and governed by the laws of the State of Georgia and
the United States of America.
16.9 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between LICENSOR and COMPANY with respect to the subject matter hereof and
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shall not be modified, amended or terminated, except as herein provided or
except by another agreement in writing executed by the parties hereto.
16.10 SURVIVAL. Articles 9 and 10 shall survive termination of this
Agreement for any reason. Section 11.7 shall survive termination pursuant to
Section 11.2 or 11.5(b). Upon expiration of this Agreement, COMPANY shall have
a fully paid up license to use the Licensed Technology.
16.11 SEVERABILITY. All rights and restrictions contained herein may be
exercised and shall be applicable and binding only to the extent that they do
not violate any applicable laws and are intended to be limited to the extent
necessary so that they will not render this Agreement illegal, invalid or
unenforceable. If any provision or portion of any provision of this Agreement,
not essential to the commercial purpose of this Agreement, shall be held to be
illegal, invalid or unenforceable by a court of competent jurisdiction, it is
the intention of the parties that the remaining provisions or portions thereof
shall constitute their agreement with respect to the subject matter hereof, and
all such remaining provisions, or portions thereof, shall remain in full force
and effect. To the extent legally permissible, any illegal, invalid or
unenforceable provision of this Agreement shall be replaced by a valid provision
which shall implement the commercial purpose of the illegal, invalid, or
unenforceable provision. In the event that any provision essential to the
commercial purpose of this Agreement is held to be illegal, invalid or
unenforceable and cannot be replaced by a valid provision which will
64
implement the commercial purpose of this Agreement, this Agreement and the
rights granted herein shall terminate.
16.12 FORCE MAJEURE. Any delays in, or failure of performance of any
party to this Agreement, shall not constitute a default hereunder, or give rise
to any claim for damages, if and to the extent caused by occurrences beyond the
control of the party affected, including, but not limited to, acts of God,
strikes or other concerted acts of workmen, civil disturbances, fires, floods,
explosions, riots, war, rebellion, sabotage, acts of governmental authority or
failure of governmental authority to issue licenses or approvals which may be
required.
16.13 ATTORNEYS' FEES. If any action at law, in equity or under
Section 16.1 of this Agreement is necessary to enforce or interpret the terms
of this Agreement, the prevailing party shall be entitled to reasonable
attorneys' fees, costs and necessary disbursements, in addition to any other
relief to which the party may be entitled.
16.14 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
ARTICLE 17. NOTICES
17.1 NOTICES. All notices, statements, and reports required to be
given under this Agreement shall be in writing and shall be deemed to have been
given upon delivery in person or, when deposited (a) in the mail in the country
of residence of the party
65
giving the notice, registered or certified postage prepaid or (b) with a
professional courier service (e.g. FedEx or UPS), and addressed as follows:
To LICENSOR: Emory University
Director of Licensing and Patent Counsel
0000 Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx Xx Xxxxx
With an Informational
Copy to: Emory University
Office of the Vice President and
General Counsel
000 Xxxxxxxxxxxxxx Xxxxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxxx, Esq.
To COMPANY: Triangle Pharmaceuticals Inc.
0 Xxxxxxxxxx Xxxxx
0000 Xxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Company Secretary
Any party hereto may change the address to which notices to such party are to be
sent by giving notice to the other party at the address and in the manner
provided above. Any notice may be given, in addition to the manner set forth
above, by telex, facsimile or cable, provided that the party giving such notice
obtains acknowledgment by telex, facsimile or cable that such notice has been
received by the party to be notified. Notice made in this manner shall be
deemed to have been given when such acknowledgment has been transmitted.
66
17.2 ADDITIONAL PROVISIONS. Each party shall use reasonable efforts to
give any material notice hereunder by use of a professional courier service,
provided, that failure to do so shall have no effect if such notice is given in
any other manner prescribed by Subsection 17.1. COMPANY shall use reasonable
efforts to provide an informational copy of any notice to LICENSOR's Office of
the Vice President and General Counsel as set forth in Subsection 17.1,
provided, that failure to do so shall have no effect if such notice is given to
LICENSOR as otherwise prescribed in Subsection 17.1.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK].
67
IN WITNESS WHEREOF, LICENSOR and COMPANY have caused this Agreement to be
signed by their duly authorized representatives, under seal, as of the day and
year indicated below.
LICENSOR:
EMORY UNIVERSITY
By: /s/ Xxxx Xxxxxx
------------------------------------
Xxxx Xxxxxx
Executive Vice President
COMPANY:
TRIANGLE PHARMACEUTICALS, INC.
By: /s/ Xxxxx Xxxxx
---------------------------------------
Name:
Title:
[SIGNATURE PAGE FOR FTC LICENSE AGREEMENT]
S-1
page 1 of 3
APPENDIX "A"
FTC APPLICATIONS AND PATENTS
----------------------------
Docket No. Country Serial No. Filed Patent No. Grant Date
---------- ------- ---------- ----- ---------- ----------
EMU104 U.S. 07/473,318 02/01/90 5,204,466 04/20/93
[ * ] [ * ] [ * ] [ * ]
EMU105CIP U.S. 07/659,760 02/22/91 5,210,085 05/11/93
[ * ] [ * ] [ * ] [ * ]
[ * ] [ * ] [ * ] [ * ]
[ * ] [ * ] [ * ] [ * ]
[ * ] [ * ] [ * ] [ * ]
[ * ] [ * ] [ * ] [ * ]
[ * ] [ * ] [ * ] [ * ]
[ * ] [ * ] [ * ] [ * ]
[ * ] [ * ] [ * ] [ * ]
[ * ] [ * ] [ * ] [ * ]
[ * ] [ * ] [ * ] [ * ]
[ * ] [ * ] [ * ] [ * ]
[ * ] [ * ] [ * ] [ * ]
[ * ] [ * ] [ * ] [ * ]
* Confidential Treatment Requested
APPENDIX "A"
page 2 of 3
FTC APPLICATIONS AND PATENTS
----------------------------
FOREIGN
-------
Docket No. Country Serial No. Filing Date Patent No. Issue Date
---------- ------- ---------- ----------- ---------- ----------
XXX000 XXX XXX/XX00/00000 07/31/91 Publ. No. Publ. Date
WO 91/11186 08/08/91
Australia 73004/91 07/31/91 658136
Barbados 81/219 07/31/91 00/000
Xxxxxxxx 00000 07/31/91
Canada 2,075,189 07/31/91
Europe 91904454.5 07/31/91
provisional protection under Article 67(3) in Germany, Belgium,
Austria, France, Luxembourg, Spain, Greece, Sweden, Denmark,
Switzerland, Italy and the Netherlands
Finland 923446 07/31/91
Hungary P9202496 07/31/91
Hungary P/P 00581 211.300
Japan 3-504897 07/31/91
Korea 92-701845 07/31/91
Malawi 49/92 MW 49/92 12/12/94
Monaco PV PCT/US91 07/31/91 93 2233 02/23/93
/006
Norway P923014
Romania 1256/310792 108564
Russia 92016627.04 07/31/91
Xxx Xxxxx 00000 01/29/93
XXX000 XXX XXX/XX00/00000 2/20/92 WO92/14743 9/3/92
Australia 15617/92 2/20/92 000000
Xxxxxxxxx 37943/95 11/20/95
Brazil 9205661 2/20/92
Bulgaria 980621 2/20/92
Canada 2,104,399 2/20/92
China 92101981.5 2/20/92
China 95109814.4 2/22/92
Czechoslovakia PV-0497-92 2/20/92
Europe 92908027.3 2/20/92
Finland 933684 2/20/92
Hungary P-93 02377 2/20/92
Hungary P/P00510 6/30/95 211.344
Indonesia P-002339 2/22/92
Ireland 920545 7/21/92
APPENDIX "A"
page 3 of 3
Docket No. Country Serial No. Filing Date Patent No. Issue Date
---------- ------- ---------- ----------- ---------- ----------
EMU108 Israel 100965 2/17/92
Japan 4-507549 2/20/92
Xxxxxxxx XX 0000000 2/21/92
Mexico 92200747 2/21/92
New Zealand 241625 2/17/92
New Zealand 250842 2/17/92
Nigeria RP 48/92 2/21/92
Norway P932980 2/20/92
Pakistan 79/92 2/25/92 79/92 3/28/94
Philippines 43955 2/20/92
Poland P300471 2/20/92
Poland 310211 8/1/95
Portugal 100151 2/21/92
Republic of
Korea 93-702516 2/20/92
Romania 93-01137 2/20/92
Russia 93058540.04 2/20/92
South Africa 92/1251 7/20/92 92/1251 10/27/93
Taiwan 81101183 2/18/92
Thailand 015518 2/18/92
APPENDIX "B" page 1 of 6
LICENSE TO THE UNITED STATES GOVERNMENT
---------------------------------------
This instrument confers to the United States Government, as represented by
the Department of Health and Human Services, a nonexclusive, nontransferable,
irrevocable, paid-up license to practice or have practiced on its behalf
throughout the world the following subject invention. This license will
extend to all divisionals or continuations of the patent application and all
patents or reissues which may be granted thereon:
Invention Title: Method and Compositions for [ * ]
Inventors: Xx. Xxxxxx Xxxxxx
Xx. Xxx Xxxx Xxxx
Patent Application
Serial No.: [ * ]
Filing Date: [ * ]
Country, if other
than the United States: [ * ]
This subject invention was conceived or first actually reduced to practice in
performance of a government-funded project, National Institutes of Health
Grant/Contract [ * ]. Principal rights to this subject invention have
been left with the Licensor, Emory University, subject to the provisions of 37
CFR 401 and 45 CFR 8.
Signed: /s/ Xxx X. Xxxxxxx Date: 6/4/93
--------------------------------------- ---------------
Typed Name: Xxx X. Xxxxxxx, Ph.D.
Title: Associate Vice President for Research
Accepted on behalf of Government:
Date:
--------------------------------------------- ---------------
* Confidential Treatment Requested
APPENDIX "B"
page 2 of 6
LICENSE TO THE UNITED STATES GOVERNMENT
---------------------------------------
This instrument confers to the United States Government, as represented by
the Department of Health and Human Services, a nonexclusive, nontransferable,
irrevocable, paid-up license to practice or have practiced on its behalf
throughout the world the following subject invention. This license will
extend to all divisionals or continuations of the patent application and all
patents or reissues which may be granted thereon:
Invention Title: Method of [ * ] and [ * ] of [ * ]
Inventors: Xx. Xxxxxx Xxxxxx
Xx. Xxxxxxx Xxxxxxxx
Xx. Xxx Xxxx Xxxx
Patent Application
Serial No.: [ * ]
Filing Date: [ * ]
Country, if other
than the United States:
This subject invention was conceived or first actually reduced to practice in
performance of a government-funded project, National Institutes of Health
Grant/Contract [ * ]. Principal rights to this subject invention have been
left with the Licensor, Emory University, subject to the provisions of 37 CFR
401 and 45 CFR 8.
Signed: /s/ Xxx X. Xxxxxxx Date: 6/4/93
--------------------------------------- ---------------
Typed Name: Xxx X. Xxxxxxx, Ph.D.
Title: Associate Vice President for Research
Accepted on behalf of Government:
Date:
--------------------------------------- ---------------
* Confidential Treatment Requested
APPENDIX "B"
page 3 of 6
LICENSE TO THE UNITED STATES GOVERNMENT
---------------------------------------
This instrument confers to the United States Government, as represented by
the Department of Health and Human Services, a nonexclusive, nontransferable,
irrevocable, paid-up license to practice or have practiced on its behalf
throughout the world the following subject invention. This license will
extend to all divisionals or continuations of the patent application and all
patents or reissues which may be granted thereon:
Invention Title: Method for [ * ] and [ * ]
Inventors: Xx. Xxxxxx Xxxxxx
Xx. Xxxxxxx Xxxxxxxx
Xx. Xxx Xxxx Xxxx
Patent Application
Serial No.: [ * ]
Filing Date: [ * ]
Patent No.: [ * ]
Issue Date: May 11, 1993
Country, if other
than the United States: [ * ]
This subject invention was conceived or first actually reduced to practice in
performance of a government-funded project, National Institutes of Health
Grant/Contract [ * ]. Principal rights to this subject invention have been
left with the Licensor, Emory University, subject to the provisions of 37 CFR
401 and 45 CFR 8.
Signed: /s/ Xxx X. Xxxxxxx Date: 6/4/93
--------------------------------------- ---------------
Typed Name: Xxx X. Xxxxxxx, Ph.D.
Title: Associate Vice President for Research
Accepted on behalf of Government:
Date:
--------------------------------------- ---------------
[ * ]
* Confidential Treatment Requested
APPENDIX "B"
page 4 of 6
LICENSE TO THE UNITED STATES GOVERNMENT
---------------------------------------
This instrument confers to the United States Government, as represented by
the Department of Health and Human Services, a nonexclusive, nontransferable,
irrevocable, paid-up license to practice or have practiced on its behalf
throughout the world the following subject invention. This license will
extend to all divisionals or continuations of the patent application and all
patents or reissues which may be granted thereon:
Invention Title: Method of [ * ] and [ * ]
Inventors: Xx. Xxxxxx Xxxxxx
Xx. Xxxxxxx Xxxxxxxx
Xx. Xxx Xxxx Xxxx
Patent Application
Serial No.: [ * ]
Filing Date: [ * ]
Country, if other
than the United States:
This subject invention was conceived or first actually reduced to practice in
performance of a government-funded project, National Institutes of Health
Grant/Contract [ * ]. Principal rights to this subject invention have been
left with the Licensor, Emory University, subject to the provisions of 37 CFR
401 and 45 CFR 8.
Signed: /s/ Xxxxxxx Xx Xxxxx Date: 12/27/95
--------------------------------------- ---------------
Typed Name: Xxxxxxx Xx Xxxxx
Title: Director of Licensing and Patent Counsel
Accepted on behalf of Government:
Date:
--------------------------------------- ---------------
* Confidential Treatment Requested
APPENDIX "B"
page 5 of 6
LICENSE TO THE UNITED STATES GOVERNMENT
---------------------------------------
This instrument confers to the United States Government, as represented by
the Department of Health and Human Services, a nonexclusive, nontransferable,
irrevocable, paid-up license to practice or have practiced on its behalf
throughout the world the following subject invention. This license will
extend to all divisionals or continuations of the patent application and all
patents or reissues which may be granted thereon:
Invention Title: Method of [ * ] and [ * ]
Inventors: Xx. Xxxxxx Xxxxxx
Xx. Xxxxxxx Xxxxxxxx
Xx. Xxx Xxxx Xxxx
Patent Application
Serial No.: [ * ]
Filing Date: [ * ]
Country, if other
than the United States:
This subject invention was conceived or first actually reduced to practice in
performance of a government-funded project, National Institutes of Health
Grant/Contract [ * ]. Principal rights to this subject invention have been
left with the Licensor, Emory University, subject to the provisions of 37 CFR
401 and 45 CFR 8.
Signed: /s/ Xxxxxxx Xx Xxxxx Date: 12/27/95
--------------------------------------- ---------------
Typed Name: Xxxxxxx Xx Xxxxx
Title: Director of Licensing and Patent Counsel
Accepted on behalf of Government:
Date:
--------------------------------------- ---------------
* Confidential Treatment Requested
APPENDIX "B"
page 6 of 6
LICENSE TO THE UNITED STATES GOVERNMENT
---------------------------------------
This instrument confers to the United States Government, as represented by
the Department of Health and Human Services, a nonexclusive, nontransferable,
irrevocable, paid-up license to practice or have practiced on its behalf
throughout the world the following subject invention. This license will
extend to all divisionals or continuations of the patent application and all
patents or reissues which may be granted thereon:
Invention Title: [ * ] and [ * ] of [ * ]
Inventors: Xx. Xxxxxx Xxxxxx
Xx. Xxxxxxx Xxxxxxxx
Xx. Xxx Xxxx Xxxx
Patent Application
Serial No.: [ * ]
Filing Date: [ * ]
Country, if other
than the United States:
This subject invention was conceived or first actually reduced to practice in
performance of a government-funded project, National Institutes of Health
Grant/Contract [ * ]. Principal rights to this subject invention have been
left with the Licensor, Emory University, subject to the provisions of 37 CFR
401 and 45 CFR 8.
Signed: /s/ Xxxxxxx Xx Xxxxx Date: 4/11/96
--------------------------------------- ---------------
Typed Name: Xxxxxxx Xx Xxxxx
Title: Director of Licensing and Patent Counsel
Accepted on behalf of Government:
Date:
--------------------------------------- ---------------
* Confidential Treatment Requested
