1
EXHIBIT 10.22
LICENSE AGREEMENT
THIS LICENSE AGREEMENT (together with the attached Exhibits, the ("Agreement")
is made as of July 8 (the "Effective Date") by and between Genetics Institute,
Inc., a Delaware corporation with a business address at 00 Xxxxxxxxx Xxxx Xxxxx,
Xxxxxxxxx, Xxxxxxxxxxxxx 00000 ("GI") and Xcyte Therapies, Inc., a Delaware
corporation with a business address at 0000 Xxxxxxx Xxx Xxxxx, Xxxxx 000,
Xxxxxxx, Xxxxxxxxxx 00000 ("Xcyte").
1. BACKGROUND.
1.1 GI. GI has acquired and/or licensed the rights to certain
patents, as set forth in Exhibit D to this Agreement (the
"Patents"), pursuant to agreements between GI and third parties
(defined below as the "Licensors").
1.2 XCYTE. Xcyte desires to license and/or sublicense the Patents
from GI, to make, use and sell Products (defined below) in the
Field (defined below). GI is Willing, for the consideration and
on the terms set forth herein, to license and/or sublicense the
Patents to Xcyte for such purposes.
1.3 AGREEMENT. In consideration of the mutual covenants and promises
contained in this Agreement and other good and valuable
consideration, the Parties agree as follows:
2. DEFINITIONS. As used in this Agreement, the following terms shall have
the meanings set forth below.
2.1 "AFFILIATE" means any corporation, company, partnership, joint
venture and/or firm which controls, is controlled by or is under
common control with a Party. For purposes of this Section 2.1,
"control" means (a) in the case of corporate entities, direct or
indirect ownership of at least fifty percent (50%) of the stock
or shares entitled to vote for the election of directors; and
(b) in the case of non-corporate entities, direct or indirect
ownership of at least fifty percent (50%) of the equity interest
with the power to direct the management and policies of such
noncorporate entities.
2.2 "COMBINATION PRODUCT" means any Product sold in combination with
one or more other products which are not Products.
2.3 "CONFIDENTIAL INFORMATION" shall mean(i) any proprietary or
confidential information or material in tangible form disclosed
hereunder that is marked as "Confidential" at the time it is
delivered to the receiving party, or (ii) proprietary or
confidential information disclosed orally hereunder which is
identified as confidential or proprietary when disclosed and
such disclosure of confidential information is confirmed in
writing within thirty (30) days by the disclosing party.
*Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
2
"Confidential Information" does not include information which
(a) was known to the receiving Party at the time it was
disclosed, other than by previous disclosure by the disclosing
Party, as evidenced by written records at the time of
disclosure; (b) is at the time of disclosure or later becomes
publicly known under circumstances involving no breach of this
Agreement; (c) is lawfully and in good faith made available to
the receiving Party by a third party who did not derive it from
the disclosing Party and who imposes no obligation of confidence
on the receiving Party; or (d) is developed by the receiving
Party independent of any disclosure by the disclosing Party.
2.4 "DISTRIBUTOR" means a third party which is not a Xcyte Affiliate
or Sublicensee and which is a distributor, wholesaler or other
entity purchasing Products from Xcyte or its Affiliate or
Sublicensee for resale.
2.5 "FIELD" means ex vivo activation or expansion of human T-cells
(including T-cells modified through gene transfer (except as
indicated below) or otherwise) for treatment and/or prevention
of infectious diseases (including, without limitation, AIDS),
cancer and immunodeficiency states. [*]
2.6 "IMPROVEMENTS" means any invention or discovery whether or not
patentable which is used commercially by Xcyte during the term
of this Agreement and which directly relates to the methods of
preparing T-cells claimed in the Patents, and is within the
scope thereof. It is understood and agreed that any ligand
(including, without limitation, any antibody or antibody
derivative) identified or used by Xcyte or its designees for the
practice of the methods claimed in the Patents shall not be an
Improvement.
2.7 "LICENSE AGREEMENTS" means the 1995 Acquisition Agreement
between GI and Repligen Corporation, together with the following
agreements, pursuant to which GI licensed the Patents which are
sublicensed to Xcyte under this Agreement:
(a) "NAVY AGREEMENT" means the December 10, 1996 License
Agreement between GI and the Navy, a copy of which is
attached as EXHIBIT A to this Agreement.
(b) "MICHIGAN AGREEMENT" means the May 28, 1992 License
Agreement between GI and Michigan, a copy of which is
attached as EXHIBIT B to this Agreement
(c) "DFCI AGREEMENT" means the July 20, 1993 License
Agreement between DFCI and Repligen, a copy of which is
attached as EXHIBIT C to this Agreement.
2.8 "LICENSORS" means the United States of America, represented by
the Secretary of the Navy (the "Navy"), the University of
Michigan ("Michigan") and the Xxxx Xxxxxx Cancer Institute
("DFCI").
*Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
-2-
3
2.9 "NET SALES" means the aggregate United States dollar equivalent
of gross revenues derived by or payable to Xcyte, its Affiliates
and Sublicensees from or on account of the sale or distribution
of Products (including Combination Products) and Services to
third parties, less (a) reasonable credits or allowances, if
any, actually granted on account of price adjustments, rebates,
discounts, recalls, rejection or return of items previously
sold, (b) excises, sales taxes, value added taxes, consumption
taxes, duties or other taxes imposed upon and paid with respect
to such sales or Services (excluding income or franchise taxes
of any kind) and (c) separately itemized insurance, packaging
and transportation costs incurred in shipping Products
(including Combination Products) to such third parties. No
deduction shall be made for any item of cost incurred by Xcyte,
its Affiliates or Sublicensees in preparing, manufacturing,
shipping or selling Products (including Combination Products)
except as permitted pursuant to clauses (a), (b) and (c) of the
foregoing sentence. Net Sales shall not include any transfer
between Xcyte and any of its Affiliates or Sublicensees for
resale.
If Xcyte or an Affiliate or Sublicensee sells Products
(including Combination Products) to a Distributor, Net Sales
shall be calculated from the gross revenues received by Xcyte
and/or its Affiliate or Sublicensee from the sale of Products to
the Distributor.
In the event that Xcyte or any of its Affiliates or Sublicensees
shall make any transfer of Products (including Combination
Products) to third parties for other than monetary value, such
transfer shall be considered a sale hereunder for accounting and
royalty purposes. Net Sales for any such transfers shall be
determined on a country-by-country basis and shall be the
average price of "arms length" sales by Xcyte, its Affiliates or
Sublicensees in such country during the royalty reporting period
in which such transfer occurs or, if no such "arms length" sales
occurred in such country during such period, during the last
period in which such "arms length" sales occurred. If no "arms
length" sales have occurred in a particular country, Net Sales
for any such transfer in such country shall be the average price
of arms length" sales in all countries in the Territory.
Notwithstanding the foregoing, no transfer of Products
(including Combination Products) for testing, pre-clinical,
clinical or developmental purposes or as samples shall be
considered a sale hereunder.
In the event a Product or Combination Product is sold to
end-users together with a Service, in calculating Net Sales the
payment received by Xcyte for such Service component shall be
included in Net Sales, subject to Section 5.2(b); provided, any
payment received by Xcyte for any service which is not a Service
shall not be included in Net Sales.
2.10 "PARTY" means GI or Xcyte; "Parties" means GI and Xcyte.
-3-
4
2.11 "PATENTS" means the patents and patent applications listed in
EXHIBIT D attached to this Agreement and shall include any
foreign counterparts of the patents and patent applications
listed in EXHIBIT D (which for all purposes of this Agreement
shall be deemed to include certificates of invention anti
applications for certificates of invention and priority rights),
together with any reissues extensions or other governmental acts
which effectively extend the period of exclusivity by the patent
holder, substitutions, confirmations, registrations,
revalidations, additions, continuations, continuations-in-pan,
or divisions of or to any of the foregoing, to the extent GI
owns or controls such rights, or has acquired or licensed such
rights under the License Agreements.
2.12 "PRODUCT" means any product developed by or on behalf of Xcyte,
the manufacture, use or sale of which is covered by a Valid
Claim of the Patents in the country of manufacture, use or sale.
2.13 "SERVICE" means any service provided by Xcyte in connection with
a Product in the Field. By way of illustration and without
limitation, services would include apheresis conducted in
connection with the use of a Product or services relating to
cell testing or cell characterization or quality assurance or
quality control of Products.
2.14 "SUBLICENSEE" means a third party, including any Xcyte
Affiliate, to which Xcyte has granted a further sublicense to
make, use, import, offer for sale and/or sell the Products.
2.15 "TECHNOLOGY" means the technology described in the Patents
related to the manufacture, use or sale of the Products in the
Field.
2.16 "TERRITORY" means, with respect to each Patent, the area of the
world in which GI has the rights to practice under such Patent,
as set forth in applicable License Agreement under which GI
obtained rights to such Patent.
2.17 "VALID CLAIM" means (a) a claim of an unexpired patent which
shall not have been withdrawn, canceled or disclaimed, nor held
invalid or unenforceable by a court of competent jurisdiction in
an. unappealed or unappealable decision or (b) a claim of a
patent application which is either: (i) the subject of a pending
patent interference proceeding or (ii) supported by the
disclosure of such application or any prior filed patent
application for a cumulative period not exceeding seven (7)
years from the earliest date of such supporting disclosure for
such claim in any such patent application.
3. LICENSE FROM GI TO XCYTE.
3.1 GRANT. Subject to the fulfillment of the terms and conditions of
this Agreement, including, without limitation, the conditions of
sublicense set forth in Section 3.4, below, GI grants to Xcyte
exclusive, royalty-bearing licenses and/or sublicenses
-4-
5
under the Patents, restricted to the Field, to make and have
made, to use, to offer for sale, to sell and have sold, to
import and have imported, and to export and have exported, the
Products in the Territory.
3.2 TERM. The licenses and/or sublicenses granted in Section 3.1,
above, shall run to the end of the enforceable term of the
Patents or License Agreements under which such license and/or
sublicense is granted.
3.3 FURTHER SUBLICENSES. Xcyte shall have the right to grant further
sublicenses under the foregoing license and/or sublicense,
provided the Sublicensees agree to comply with all terms and
conditions of this Agreement. Notwithstanding any such further
sublicenses, Xcyte shall remain primarily liable for all of such
Affiliates' and Sublicensees' duties and obligations contained
in this Agreement.
3.4 CONDITIONS OF SUBLICENSE. With respect to the applicable Patents
or the applicable claim or claims of such Patents, the
sublicenses granted to Xcyte under this Agreement are subject to
the following conditions imposed on GI, as licensee, and Xcyte,
as sublicensee, by the applicable Licensors:
(a) APPROVAL OF LICENSORS. Each such sublicense shall be
subject to the prior written approval of the applicable
Licensor to the extent required by the License
Agreements.
(b) LICENSORS' RETAINED RIGHTS. Each sublicense is subject
to any and all rights retained by the applicable
Licensor.
(c) CONSISTENT WITH TERMS OF LICENSE AGREEMENTS. Each
sublicense is granted pursuant to the terms of the
applicable License Agreement. No provision of this
Agreement shall be in derogation of or diminish any
rights of each Licensor in the applicable License
Agreement. Each sublicense under this Agreement may be
modified or terminated in whole or in part upon the
modification or termination in whole or in part of the
applicable License Agreement; provided, GI shall not
terminate or enter into any modification of any of the
License Agreements if such modification or termination
would affect the rights of Xcyte under this Agreement,
without the prior written consent of Xcyte, and shall
notify Xcyte within ten (10) business days if GI
receives any notice from any Licensor that (i) such
Licensor believes that GI is in default or breach of the
relevant License Agreement, or (ii) such Licensor
intends to terminate the relevant License Agreement, or
(iii) such Licensor intends to modify GI's rights under
the applicable License Agreement (e.g., by converting
GI's exclusive rights under such License Agreement to
non-exclusive rights). Should any sublicense granted by
Xcyte under this Agreement not comply with the
requirements of any License Agreement, such sublicense
of rights under this Agreement may be void. If either
Party becomes aware of any potential inconsistency of a
sublicense granted by Xcyte with this
-5-
6
Agreement, it shall promptly notify the other Party,
providing a detailed explanation of the potential
inconsistency.
(d) GI TO FURNISH COPY. Within thirty (30) days of the
Effective Date, and within thirty (30) days of any
modification of this Agreement, GI may be obligated to
furnish to each Licensor a true and complete copy of
this Agreement and any modification hereof.
4. PRODUCT DEVELOPMENT.
4.1 DILIGENCE OBLIGATIONS. Xcyte shall exercise commercially
reasonable and diligent efforts, in its scientific and business
judgement, to develop at least one Product itself or through
sublicensees. Each year during the term of the Agreement until
the first commercial sale of a Product, Xcyte, itself or through
a sublicensee, shall expend no less than five hundred thousand
dollars ($500,000) annually on research and development
activities directly relaxing to Product development. During the
term of this Agreement, within sixty (60) days of each
anniversary of the Effective Date, Xcyte shall issue to GI a
progress report detailing Xcyte's progress in developing
Products.
4.2 CONVERSION OF LICENSE AND/OR SUBLICENSE. In the event that Xcyte
fails to satisfy the requirements set forth in Section 4.1,
above, GI shall have the right, in its sole discretion, upon
written notice to Xcyte, to convert the licenses and/or
sublicenses granted to Xcyte under this Agreement from exclusive
to non-exclusive; provided Xcyte has not cured such failure
within sixty (60) days following written notice from GI of any
such failure. In the event that GI converts such licenses and/or
sublicense to non-exclusive, GI shall be entitled to grant
additional licenses and/or sublicenses under the Patents to not
more than two (2) unrelated third parties. If GI exercises its
conversion right under this Section 4.2, thereafter the royalty
obligation due to GI pursuant to Section 5.2 below shall be
reduced by [*] but in no event shall be less than [*] of Net
Sales of Product or Combination Product.
5. CONSIDERATION.
5.1 LICENSE FEE. In partial consideration for the license granted
herein, on the Effective Date Xcyte shall pay to GI a license
fee in the form of 145,875 shares of Xcyte preferred stock,
subject to the terms and conditions of the Stock Purchase
Agreement attached hereto as Exhibit E, and shall pay a total of
fifty three thousand four hundred eighty-seven U.S. dollars and
fifty cents ($53,487.50) to the Licensors as provided in the
Letter Agreement of even date herewith between GI, Xcyte and the
Licensors. In addition, upon the first to occur of(i) notice
from GI to Xcyte of the issuance of the first Valid Claim within
the Patents, (ii) the first grant of a sublicense by Xcyte to a
third party pursuant to Section 3.3, or (iii) the third
anniversary of the Effective Date, GI shall have the right to
purchase 194,500 additional shares of Xcyte stock, subject to
the terms and conditions of the Stock Warrant Agreement attached
hereto as Exhibit F.
5.2 ROYALTY PAYMENTS.
*Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
-6-
7
(a) With respect to the sales of each Product, Xcyte shall
pay GI a royalty of [*] of Net Sales of Products sold by
Xcyte, its Affiliates and Sublicensees without any
Services.
(b) With respect to the sales of each Product, Xcyte shall
pay GI a royalty of [*] of Net Sales of Products by
Xcyte, its Affiliates and Sublicensees sold together
with one or more Services.
(c) With respect to the sales of each Combination Product,
Xcyte shall pay GI a royalty of such Combination
Product, as follows:
(i) [*] of Net Sales of each Combination Product
sold by Xcyte, its Affiliates and Sublicensees,
if such Combination Product is sold without any
Services, and
(ii) [*] of Net Sales of each Combination Product
sold by Xcyte, its Affiliates and Sublicensees,
if such Combination Product is sold together
with one or more Services;
provided, in each case, in determining Net Sales of
Combination Products, Net Sales shall first be
calculated in accordance with the definition of Net
Sales and then multiplied by a fraction, the numerator
of which is the current Net Selling Price of Product and
the denominator of which is the current Net Selling
Price of the Combination Product. If there is no Net
Selling Price of Product, then the numerator shall be
the fair market value of the Product for the quantity
contained in the Combination Product and of the same
class, purity and potency, as negotiated in good faith
by the parties, or, failing such agreement, as is
determined by an appraisal to be conducted by an
independent third party mutually agreed to by Xcyte and
GI, which determination shall be binding. However, in no
event shall the royalty be less than [*] of Net Sales of
each Combination Product.
(d) In addition to the royalties payable under this Section
5.2, Xcyte shall pay to GI a portion of all
compensation, including license fees, advances and other
payments of compensation (however characterized), which
are owed to Xcyte pursuant to further sublicensing of
the rights granted to Xcyte hereunder, as follows:
Sublicense Date % of Compensation
--------------- -----------------
Within 24 months of Effective Date [*]
After 24 months after Effective Date [*]
*Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
-7-
8
Notwithstanding the above, it is understood and agreed
that Xcyte shall not be obligated to pay to GI any
portion of any amounts received from any Sublicensee as
payments for research and development activities to be
conducted by Xcyte on behalf of such Sublicensee, or
amounts received from a Sublicensee for equity, or the
license or sublicense of any intellectual property other
than the Patents, or products other than the Products,
or reimbursement for patent or other expenses.
(e) Xcyte and its Affiliates and Sublicensees shall be
responsible for any payments due to third parties under
licenses or similar agreements entered by Xcyte or its
Affiliates or Sublicensees necessary for the
manufacture, use or sale of Products. Xcyte may offset
one-half of any such payments made by Xcyte or its
Affiliates or Sublicensees to third parties against
royalties due GI pursuant to Section 5.2(a), (b) and (c)
above; provided, GI shall have the right to receive the
greater of (i) [*] the amounts due pursuant to Sections
5.2(a), (b) and (c) above, or (ii) [*] of Net Sales of
Product or Combination Product.
(f) Payments due under this Section 5.2 shall be payable on
a country-by-country and Product-by-Product basis and
shall be payable until (i) with respect to Patents owned
by GI, the expiration of the last-to-expire Valid Claim,
and (ii) with respect to Patents subject to the License
Agreements, the expiration of the applicable license
term, as set forth in Section 3.2.
(g) Regardless of any credits or offsets available to Xcyte
under Section 5.2(e) of this Agreement commencing on the
first anniversary of the Launch of the first Product in
any country, in no year shall Xcyte pay to GI less than
the greater of (i) [*] of the royalties due pursuant to
Sections 5.2(a), (b) or (c) in any year with regard to
any Product or (ii) [*] of Net Sales of Product or
Combination Product. Any credits or offsets not
creditable against royalties in the year such credit or
offset is earned may be carried forward until fully
applied.
5.3 REPORTS AND PAYMENT. Xcyte shall deliver to GI, within sixty
(60) days after the end of each calendar quarter, a written
report showing its computation of royalties due under this
Agreement upon Net Sales by Xcyte, its Affiliates and
Sublicensees during such calendar quarter. All Net Sales shall
be segmented in each such report according to sales by Xcyte,
each Affiliate and each Sublicensee, as well as on a
country-by-country basis, including the rates of exchange used
to convert such royalties to United States Dollars from the
currency in which such sales were made. Subject to the
provisions of Sections 5.4 and 5.5 of this Agreement,
simultaneously with the delivery of each such report, Xcyte
shall tender payment in United States Dollars of all royalties
shown to be due therein.
*Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
-8-
9
For purposes hereof, the rates of exchange to be used for
converting royalties hereunder to United States Dollars shall be
the closing price published for the purchase of United States
Dollars in the East Coast Edition of the Wall Street Journal for
the last business day of the calendar quarter for which payment
is due.
5.4 FOREIGN ROYALTIES. Where royalties are due hereunder for sales
of Products in a country where, by reason of currency
regulations or taxes of any kind, it is impossible or illegal
for Xcyte, any Affiliate or Sublicensee to transfer royalty
payments to GI for Net Sales in that country, such royalties
shall be deposited in whatever currency is allowable by the
person or entity not able to make the transfer for the benefit
or credit of GI in an accredited bank in that country that is
reasonably acceptable to GI.
5.5 TAXES. Any and all income or similar taxes imposed or levied on
account of the receipt of royalties payable under this Agreement
which are required to be withheld by Xcyte shall be paid by
Xcyte, its Affiliates or Sublicensees on behalf of GI and shall
be paid to the proper taxing authority. Proof of payment shall
be secured and sent to GI by Xcyte, its Affiliates or
Sublicensees as evidence of such payment in such form as
required by the tax authorities having jurisdiction over Xcyte,
its Affiliates or Sublicensees. Such taxes shall be deducted
from the royalty that would otherwise be remittable by Xcyte,
its Affiliates or Sublicensees.
5.6 RECORDS. Xcyte shall keep, and shall require all Affiliates and
Sublicensees to keep, for a period of at least two (2) years,
full, true and accurate books of accounts and other records
containing all information and data which may be necessary to
ascertain and verify the royalties payable hereunder. During the
term of this Agreement and for a period of two (2) years
following its termination, GI shall have the right from time to
time (not to exceed once during each calendar year) to inspect
in confidence, or have an agent, accountant or other
representative inspect in confidence, such books, records and
supporting data.
6. REPRESENTATION, WARRANTY AND INDEMNITY.
6.1 REPRESENTATION AND WARRANTY OF GI. GI represents and warrants to
Xcyte that, subject to the terms and conditions of this
Agreement and the License Agreements, (i) it has an interest
licensable or sublicensable to Xcyte in the Patents; (ii) it has
full right, power and authority to grant the licenses and /
sublicense granted by it under this Agreement; (iii) GI has not
previously granted, and will not grant during the term of this
Agreement, any right, license or interest in and to the Patents,
or any portion thereof, inconsistent with the license granted to
Xcyte herein; (iv) as of the Effective Date, there are no
actions, suits, investigations, claims or proceedings pending or
threatened in any way relating to the Patents except as set
forth on Schedule 6.1 to this Agreement; and (v) during
-9-
10
the term of this Agreement, GI shall use its reasonable efforts
not to breach any of the License Agreements.
6.2 REPRESENTATION AND WARRANTY OF XCYTE. Xcyte represents and
warrants to GI that, subject to the terms and conditions of this
Agreement and the License Agreements, during the term of this
Agreement, Xcyte shall use its reasonable efforts not to breach
any of the License Agreements.
6.3 INDEMNITY OF GI BY XCYTE. Xcyte shall defend, indemnify and hold
GI (and its agents, directors, officers and employees) harmless,
at Xcyte's cost and expense, from and against any and all
losses, costs, liabilities, damages, fees and expenses,
including reasonable attorneys' fees and expenses (collectively,
"Liabilities") arising out of or in connection with the
manufacture, promotion, sale or other disposition of the
Products by Xcyte, its Affiliates and Sublicensees, and any
actual or alleged injury, damage, death or other consequence
occurring to any third person as a result, directly or
indirectly, of the possession, consumption or use of the
Products sold by Xcyte or its Affiliates or Sublicensees,
regardless of the form in which any such claim is made.
6.4 EFFECT OF REPRESENTATIONS AND WARRANTIES. It is understood that
if the representations and warranties made by a party under this
Article 6 are not true and accurate, the party making such
representations and warranties shall indemnify and hold the
other party harmless from and against any Liabilities incurred
as a result.
6.5 EXCLUSION. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER
PARTY, OR ANY OF ITS OFFICERS, DIRECTORS, SHAREHOLDERS,
EMPLOYEES OR AGENTS, OR ANY OTHER PERSON OR ENTITY, FOR ANY
INCIDENTAL, CONSEQUENTIAL, OR OTHER SPECIAL DAMAGES, INCLUDING
WITHOUT LIMITATION, LOST PROFITS OR OPPORTUNITIES INCURRED BY
SUCH PARTY, OR ANY OTHER PERSON OR ENTITY, ARISING OUT OF OR
RELATING TO THIS AGREEMENT, THE LICENSES AND RIGHTS GRANTED
HEREIN, THE PRODUCT, PATENTS OR IMPROVEMENTS, OR ACTUAL OR
ALLEGED NEGLIGENCE, STRICT LIABILITY, BREACH OF REPRESENTATIONS
OR WARRANTIES, OR ANY OTHER CAUSE OF ACTION.
6.6 PROCEDURE. A party entitled to indemnification hereunder agrees
to give prompt written notice to the indemnifying party after
the receipt by such party of any written notice of the
commencement of any action, suit, proceeding or investigation or
threat thereof made in writing for which such party will claim
indemnification pursuant to this Agreement. Unless, in the
reasonable judgment of the indemnified party, a conflict of
interest may exist between the indemnified party and the
indemnifying party with respect to a claim, the indemnifying
party may assume the defense of such claim with counsel
reasonably satisfactory to the
-10-
11
indemnified party. if the indemnifying party is not entitled to,
or elects not to, assume the defense of a claim, it will not be
obligated to pay the fees and expenses of more than one counsel
with respect to such claim. The indemnifying party will not be
subject to any liability for any settlement made without its
consent, which consent shall not be unreasonably withheld or
delayed.
7. INTELLECTUAL PROPERTY.
7.1 IMPROVEMENTS. Xcyte shall own the entire right, title and
interest in and to all Improvements.
7.2 OPTION; RIGHT OF FIRST REFUSAL. Xcyte grants to GI an option to
execute an exclusive, worldwide, royalty-bearing
commercialization license, with the right to grant sublicenses,
to the Improvements, to commercialize products based on or
incorporating Improvements outside the Field, on terms to be
negotiated by the parties in good faith.
GI may exercise its option by written notice to Xcyte within
three (3) months of notice by Xcyte to GI of such Improvement
and receipt by GI of sufficient technical information to
evaluate such Improvement. If GI exercise its option, the
parties will negotiate in good faith to reach agreement on a
commercialization license for up to 120 days. If GI does not
exercise its option, or the parties do not reach agreement
within 120 days, Xcyte may commercialize such Improvement
outside the Field, itself or license such Improvement to a third
party, without obligation to GI. Before entering into any
transaction with a third party on terms which, taken as a whole,
are materially more favorable than those offered to GI in
writing to license such Improvement, Xcyte will inform GI and
shall allow GI sixty (60) days in which to elect whether to
license such Improvement under all the terms of the proposed
transaction with the third party. Nothing in this Section 7.2
shall imply the grant of any license under the Patents to Xcyte
outside the Field.
7.3 PATENT MAINTENANCE. GI shall have the right to seek or continue
to seek or maintain patent protection on the Patents in any
country. GI shall obtain the advice of Xcyte concerning the
countries in which to seek or maintain patent protection, and
the nature and text of such patents and prosecutions matters
related thereto prior to the filing thereof and provide Xcyte a
reasonable opportunity to review and comment on all proposed
submissions to any patent office before submittal, and provided
further that GI shall keep Xcyte reasonably informed as to the
status of such patent applications by promptly providing Xcyte
copies of all communications relating to such patent
applications that are received from any patent office. Xcyte
shall reimburse GI for any reasonable expenses incurred by GI
during the term of this Agreement in preparing, filing,
prosecuting and maintaining any Patents containing claims
relating to the Field. If GI elects not to seek or continue to
seek or maintain patent protection on any patent
-11-
12
application or patent within the Patents in any country, Xcyte
shall have the right, at its expense, to file, procure and
maintain in such countries such Patents. If Xcyte elects not to
continue to make payments to seek or continue to seek or
maintain patent protection on any patent application or patent
within the Patents in any country, it may notify GI, and its
obligation to make such payments shall cease and its license
with regard to such patent application or patent shall
terminate. Xcyte shall have the right, at Xcyte cost and
expense, to audit all expenses relating to the preparing,
filing, prosecuting and maintaining of the Patents.
7.4 PATENT INFRINGEMENT.
(a) Each Party shall promptly report in writing to the other
Party during the term of this Agreement any known
infringement or suspected infringement of any of the
Patents, and promptly shall provide the other Party with
all available evidence supporting said infringement,
suspected infringement, or unauthorized use or
misappropriation.
(b) Except as provided in Section 7.4(c) below, Xcyte shall
have the right to initiate an infringement or other
appropriate suit anywhere in the Territory against any
third party who at any time has infringed, or is
suspected of infringing, any of the Patents in the
Field. Xcyte shall give GI sufficient advance notice of
its intent to file said suit and the reasons therefor,
and shall provide GI with an opportunity to make
suggestions and comments regarding such suit. Xcyte
shall keep GI promptly informed, and shall from time to
time consult with GI regarding the status of any such
suit and shall provide GI with copies of all documents
filed in, and all written communications relating to,
such suit. Xcyte shall have the sole and exclusive right
to select counsel for any such suit and shall, except as
provided below, pay all expenses of the suit, including
without limitation attorneys' fees and court costs. GI,
in its sole discretion, may elect, within sixty (60)
days after the commencement of such litigation, to
contribute to the costs incurred by Xcyte in connection
with such litigation and, if it so elects, any damages,
royalties, settlement fees or other consideration
received by Xcyte or any of its Affiliates for
infringement as a result of such litigation shall be
shared by Xcyte and GI pro rata based on their
respective sharing of the costs of such litigation. In
the event that Gl elects not to contribute to the costs
of such litigation, Xcyte and/or its Sublicensees shall
be entitled to retain any damages, royalties, settlement
fees or other consideration for infringement resulting
therefrom. If necessary, GI shall join as a party to the
suit but shall be under no obligation to participate
except to the extent that such participation is required
as the result of being a named party to the suit. GI
shall offer reasonable assistance to Xcyte in connection
therewith at no charge to Xcyte except for reimbursement
of reasonable out-of-pocket expenses,
-12-
13
incurred in rendering such assistance. GI shall have the
right to participate and be represented in any such suit
by its own counsel at its own expense.
(c) In the event that Xcyte elects not to initiate an
infringement or other appropriate suit pursuant to
Section 7.4(b) above, Xcyte shall promptly advise GI of
its intent not to initiate such suit, and GI shall have
the right, at the expense of GI, of initiating an
infringement or other appropriate suit against any third
party who at any time has infringed, or is suspected of
infringing, any of the Patents in the Field. GI shall
have the sole and exclusive right to select counsel for
any such suit and shall, except as provided below, pay
all expenses of the suit including without limitation
attorneys' fees and court costs. Xcyte, in its sole
discretion, may elect, within sixty (60) days after the
commencement of such litigation, to contribute to the
costs incurred by GI in connection with such litigation
and, if it so elects, any damages, royalties, settlement
fee or other consideration received by GI or any of its
Affiliates for infringement as a result of such
litigation shall be shared by GI and Xcyte pro rata
based on their respective sharing of the costs of such
litigation. In the event that Xcyte elects not to
contribute to the costs of such litigation, GI and/or
its Affiliates shall be entitled to retain any damages,
royalties, settlement fees or other consideration for
infringement resulting therefrom. If necessary, Xcyte
shall join as a party to the suit but shall be under no
obligation to participate except to the extent that such
participation is required as a result of being a named
party to the suit. At GI's request, Xcyte shall offer
reasonable assistance to GI in connection therewith at
no charge to GI except for reimbursement of reasonable
out-of-pocket expenses incurred in rendering such
assistance. Xcyte shall have the right to participate
and be represented in any such suit by its own counsel
at its own expense.
7.5 CLAIMED INFRINGEMENT.
(a) In the event that a third party at any time provides
written notice of a claim to, or brings an action, suit,
or proceeding against, either Party or any of their
respective Affiliates or Sublicensees, claiming
infringement of its patent rights or unauthorized use or
misappropriation of its know-how, based upon an
assertion or claim arising out of the development, use,
manufacture, distribution, or sale of Products, such
Party shall promptly notify the other Party of the claim
or the commencement of such action, suit, or proceeding,
enclosing a copy of the claim and/or all papers served.
Each Party agrees to make available to the other Party
its advice and counsel regarding the technical merits of
any such claim at no cost to the other Party.
(b) THE FOREGOING STATES THE ENTIRE RESPONSIBILITY OF THE
PARTIES IN THE CASE OF ANY CLAIMED INFRINGEMENT OR
-13-
14
VIOLATION OF ANY THIRD PARTY'S RIGHTS OR UNAUTHORIZED
USE OR MISAPPROPRIATION OF ANY THIRD PARTY'S KNOW-HOW.
8. CONFIDENTIAL INFORMATION.
8.1 NONDISCLOSURE OF CONFIDENTIAL INFORMATION. Each Party shall not
directly or indirectly publish, disseminate or otherwise
disclose, deliver or make available to any person outside its
organization any of the other Party's Confidential information.
Each Party may disclose the other Party's Confidential
Information to persons within its organization and to its
Affiliates and Sublicensees who/which have a need to receive
such Confidential Information in order to further the purposes
of this Agreement and who/which are bound to protect the
confidentiality of such Confidential Information, as set forth
in Section 8.4 below. Each Party may disclose the other Party's
Confidential Information to a governmental authority or by order
of a court of competent jurisdiction, provided that such
disclosure is subject to all applicable governmental or judicial
protection available for like material and reasonable advance
notice is given to the other Party.
8.2 USE OF CONFIDENTIAL INFORMATION. Each Party shall use the other
Party's Confidential Information solely for the purposes
contemplated in this Agreement or for such other purposes as may
be agreed upon by the Parties in writing.
8.3 PHYSICAL PROTECTION OF CONFIDENTIAL INFORMATION. The Parties
shall exercise commercially reasonable precautions to physically
protect the integrity and confidentiality of the other Party's
Confidential Information.
8.4 AGREEMENTS WITH PERSONNEL AND THIRD PARTIES. The Parties have or
shall obtain agreements with all personnel and third parties who
will have access to the other Party's Confidential Information
which impose comparable confidentiality obligations as are set
forth in this Agreement on such personnel and third parties.
9. TERM AND TERMINATION.
9.1 TERM. Unless sooner terminated in accordance with the provisions
of this Section 9, this Agreement shall continue in force on a
country-by-country and Product-by-Product basis for the period
set forth in Section 3.2.
9.2 TERMINATION FOR BREACH. Each Party shall be entitled to
terminate this Agreement by written notice to the other party in
the event that the other party shall be in default of any of its
material obligations hereunder, and shall fail to remedy any
such default within sixty (60) days after notice thereof by the
non-breaching party. Any such notice shall specifically state
that the non-breaching party intends to terminate this Agreement
in the event that the breaching party shall fail to remedy the
default.
-14-
15
9.3 PERMISSIVE TERMINATION. Xcyte may terminate this Agreement with
thirty (30) days notice to GI.
9.4 EFFECT OF TERMINATION.
(a) ACCRUED OBLIGATIONS. Termination of this Agreement for
any reason shall not release any Party hereto from any
liability which, at the time of such termination, has
already accrued to the other Party or which is
attributable to such termination, nor shall it preclude
either Party from pursuing all rights and remedies it
may have hereunder or at law or in equity with respect
to any breach of this Agreement.
(b) RETURN OF CONFIDENTIAL INFORMATION. Subject to any
license granted pursuant to Section 7.2, upon any
termination of this Agreement each Party shall return to
the other Party all Confidential Information received
from the other Party (except one copy of which may be
retained for archival purposes), and neither Party shall
use any such Confidential Information of the other Party
for any purpose.
(c) STOCK ON HAND. In the event this Agreement is terminated
for any reason, Xcyte, its Affiliates and its
Sublicensees shall have the right for six (6) months
following the date of termination to sell or otherwise
dispose of the stock of any Licensed Product subject to
this Agreement then on hand, subject to the right of GI
to receive payment thereon as provided in Section 5.
9.5 SURVIVAL OF OBLIGATIONS. Notwithstanding any termination of this
Agreement, the obligations of the Parties under Sections 5.3,
5.6, 6,7.1, 8,9.4, 9.5 and 10 shall survive and continue to be
enforceable.
10. MISCELLANEOUS.
10.1 PUBLICITY. Neither Party shall originate any publicity, news
release or other public announcement, written or oral, relating
to this Agreement or the existence of an arrangement between the
Parties, without the prior written approval of the other Party,
which approval shall not be unreasonably withheld, except as
otherwise required by law. It is expressly understood that
nothing in this Section 10.1 shall prevent a Party from making a
disclosure in connection with any required filings with the
Securities and Exchange Commission or in connection with the
offering of securities or any financing.
10.2 EXPORT CONTROL. The Parties acknowledge that the export of
technical data, materials, or products is subject to the
exporting Party receiving the necessary export licenses and that
the Parties cannot be responsible for any delays attributable to
export controls which are beyond the reasonable control of
either Party. The Parties agree that regardless of any
disclosure made by the Party
-15-
16
receiving an export of an ultimate destination of any technical
data, materials, or products, the receiving Party will not
reexport either directly or indirectly, any technical data,
material, or products without first obtaining the applicable
validated or general license from the United States Department
of Commerce, United States Food and Drug Administration, and/or
any other agency or department of the United States Government,
as required. The receiving Party shall provide the exporting
Party with any information, materials, certifications, or other
documents which may be reasonably required in connection with
such exports under the Export Administration Act of 1979, as
amended, its rules and regulations, the Federal Food, Drug and
Cosmetic Act, and other applicable export laws.
10.3 NO IMPLIED LICENSES. Only the licenses granted pursuant to the
express terms of this Agreement shall be of any legal force and
effect. No license tights shall be created by implication or
estoppel.
10.4 NO AGENCY. Nothing herein shall be deemed to constitute either
Party as the agent or representative of the other Party, or both
Parties as joint venturers or partners for any purpose. Each
Party shall be an independent contractor, not an employee or
partner of the other Party, and the manner in which each Party
renders its services under this Agreement shall be within its
sole discretion. Neither Party shall be responsible for the acts
or omissions of the other Party, and neither Party will have
authority to speak for, represent or obligate the other Party in
any way without prior written authority from the other Party.
10.5 NOTICE. All notices required under this Agreement to be given by
one Party to the other shall be in writing and shall be given by
addressing the same to the other at the address or facsimile
number set forth below, or at such other address or facsimile
number as either may specify in writing to the other. All
notices shall become effective when deposited in the United
States Mail with proper postage for first class registered or
certified mail prepaid, return receipt requested, or when
delivered personally, or, if promptly confirmed by mail as
provided above, when dispatched by facsimile.
GI: Genetics Institute, Inc.
00 Xxxxxxxxx Xxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Telecopier (000) 000-0000
Attn: Legal Department
Xcyte: Xcyte Therapies, Inc.
0000 Xxxxxxx Xxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Telecopier (000) 000-0000
-16-
17
Attn: President and CEO
10.6 ASSIGNMENT. This Agreement, and the rights and obligations
hereunder, may not be assigned or transferred, in whole or in
part, by either Party without the prior written consent of the
other Party, except that neither Party shall require the other
Party's consent to assign this Agreement to any Affiliate, or to
any entity acquiring such Party or substantially all of the
assets of such Party as to which this Agreement relates whether
by sale, operation of law or otherwise, or to any successor
entity of such Party as the result of a merger or consolidation.
10.7 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement of the Parties with regard to its subject matter, and
supersedes all previous written or oral representations,
agreements and understandings between the Parties.
10.8 NO MODIFICATION. This Agreement may be changed only by a writing
signed by the Parties.
10.9 HEADINGS. The headings contained in this Agreement are for
convenience of reference only and shall not be considered in
construing this Agreement.
10.10 WAIVER. The waiver by either Party of a breach or a default of
any provision of this Agreement by the other Party shall not be
construed as a waiver of any succeeding breach of the same or
any other provision, nor shall any delay or omission on the part
of either Party to exercise or avail itself of any right, power
or privilege that it has or may have hereunder operate as a
waiver of any right, power, or privilege by such Party.
10.11 SEVERABILITY. In the event that any one or more of the
provisions contained in this Agreement shall, for any reason, be
held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect
any other provisions of this Agreement, and all other provisions
shall remain in full force and effect. If any of the provisions
of this Agreement is held to be excessively broad or invalid,
illegal or unenforceable in any jurisdiction, it shall be
reformed and construed by limiting and reducing it so as to be
enforceable to the maximum extent permitted by law in
conformance with its original intent. In the event that after
such reformation, a Party's rights or obligations are materially
changed, then such Party may terminate this Agreement.
10.12 FORCE MAJEURE. Any delays in or failures of performance by
either party under this Agreement shall not be considered a
breach of this Agreement if and to the extent caused by
occurrences beyond the reasonable control of the party affected,
including but not limited to: acts of God, acts, regulations or
laws of any government; strikes or other concerted acts of
workers; fires; earthquakes; floods; explosions; riots; wars;
rebellion; and sabotage. Any time for performance imposed
hereunder shall be extended by the actual time of delay caused
by any such occurrence.
-17-
18
10.13 LIMITATION OF LIABILITY. NEITHER. PARTY SHALL BE LIABLE TO THE
OTHER FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL OR INDIRECT
DAMAGES ARISING OUT OF THIS AGREEMENT, HOWEVER CAUSED, UNDER ANY
THEORY OF LIABILITY.
10.14 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the Parties hereto and their successors
and permitted assigns.
10.15 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all
of which together shall constitute one and the same instrument.
10.16 APPLICABLE LAW. This Agreement shall in all events and for all
purposes be governed by, and construed in accordance with, the
law of The Commonwealth of Massachusetts without regard to any
choice of law principle that would dictate the application of
the law of another jurisdiction.
10.17 HSR. Xcyte represents and warrants that neither Xcyte nor any
ultimate parent entity of Xcyte has $10 million in sales or
total assets and therefore does not meet the size of person test
under Title II of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976 and the regulations promulgated thereunder.
-18-
19
IN WITNESS WHEREOF, duly-authorized representatives of the Parties have
signed this Agreement as a document under seal as of the Effective Date.
GENETICS INSTITUTE, INC.
By /s/ Xxxx X. Xxxx
-------------------------------
Print Name
-----------------------
Title
----------------------------
XCYTE THERAPIES, INC.
By /s/ Xxxxxx Xxx Xxxxxxxx
-------------------------------
Print Name Xxxxxx Xxx Xxxxxxxx
-----------------------
Title President & CEO
----------------------------
-19-
