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