Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
EXHIBIT 10.24
LICENSE AGREEMENT
(Antibody Diagnostic Field)
THIS LICENSE AGREEMENT (this "Agreement"), effective as of _________ __, 2000
(the "Effective Date"), is between DYAX CORP., having a principal place of
business at Xxx Xxxxxxx Xxxxxx, Xxxx. 000, Xxxxx 000, Xxxxxxxxx,
Xxxxxxxxxxxxx 00000 XXX (collectively referred to herein as "Licensor"); and
_________________________("Licensee"), a __________________ corporation
having its principal place of business at
_______________________________________________________________________.
R E C I T A L S
A. Licensor has the right to grant licenses to and under certain
technology described and claimed in U.S. Patent No. 5,223,409 entitled "Directed
Evolution of Novel Binding Proteins", U.S. Patent No. 5,403,484 entitled
"Viruses Expressing Chimeric Binding Proteins", and U.S. Patent No. 5,571,698
entitled "Directed Evolution of Novel Binding Proteins", U.S. Patent No.
5,837,500 entitled "Directed Evolution of Novel Binding Proteins", and
associated patent rights.
B. Licensee desires to obtain a license from Licensor to practice the
inventions described in the patents referenced above and Licensor is willing to
grant such a license on the terms and subject to the conditions provided herein.
NOW, THEREFORE, in consideration of the mutual covenants set forth in
this Agreement, the parties hereby agree as follows:
ARTICLE 1. DEFINITIONS
For purposes of this Agreement, the terms defined in this Article shall have the
meanings specified below:
1.1 "AFFILIATE" shall mean a corporation or other legal entity that
controls, is controlled by, or is under common control with such party. For
purposes of this definition, "control" means the ownership, directly or
indirectly, of more than fifty percent (50%) of the outstanding equity
securities of a corporation which are entitled to vote in the election of
directors or a more than fifty percent (50%) interest in the net assets or
profits of an entity which is not a corporation.
1.2."END USER" shall mean a person or entity whose use of a product
results in its destruction, loss of activity, and/or loss of value.
1.3."FIELD OF USE" shall mean human IN VITRO diagnostic or research
reagent uses, and not for any therapeutic, IN VIVO diagnostic, purification or
separations, agricultural, industrial enzymes or other purposes.
1
1.4."FIRST COMMERCIAL SALE" shall mean the initial transfer by Licensee
or its Affiliate (or a Third Party Transferee of any of the foregoing) of a
Licensed Product for value and not for demonstration, testing or promotional
purposes.
1.5."LICENSED INTERMEDIATE" shall mean any fusion protein (including
without limitation any chimeric binding protein), genetic package (including
without limitation any virus, spore or cell) or other intermediate compound, or
any compound derived from any of the foregoing, that is (i) discovered, made or
developed by Licensee using a method covered by Patent Rights or (ii) is
otherwise covered by Patent Rights.
1.6. "LICENSED PRODUCT" shall mean any product intended for sale to an
End User as an IN VITRO diagnostic or research reagent, and sold in the form of
an immunoassay kit or vial containing one or more antibodies as a binding moiety
that is discovered, made or developed, whether by Licensee, its Affiliates or
any Third Party Transferee, using a Licensed Intermediate or a method covered by
Patent Rights.
1.7."NET SALES" shall mean the amounts received on sales of Licensed
Products in the Field of Use by Licensee, its Affiliates and any Third Party
Transferee, less five percent (5%) for normal and customary deductions, such as
trade discounts, rebates, or commissions actually allowed and taken, credits for
rejections or returns, taxes levied, and shipping costs, without any further
reductions. In any transfers of Licensed Products between Licensee and one of
its Affiliates or between any of the foregoing and a Third Party Transferee and
its Affiliates, the Net Sales Price shall be calculated based on the final sale
of the Licensed Product to parties which are not Affiliates of Licensee or of
such Third Party Transferee. In the event that non-monetary consideration is
received for any Licensed Products, Net Sales with respect to such Licensed
Products shall be calculated based on the fair market value of such
consideration.
1.8."PATENT RIGHTS" shall mean any and all Valid Claims (defined below)
of United States Patent Nos. 5,223,409, 5,403,484, 5,571,698 and 5,837,500
(collectively, the "U.S. Patents"), reissues, reexaminations, renewals and
extensions thereof, and all continuations, continuations-in-part and divisionals
of the applications for such U.S. patents and all counterparts thereto in
countries outside the United States, all of which patents and patent
applications as of the Effective Date are listed in ATTACHMENT B. Patent Rights
shall exclude (i) Claim 66 in U.S. Patent No. 5,223,409 to the extent that it
covers single chain antibodies, or (ii) any claim to specific protein or peptide
sequences, or nucleic acids thereof, that bind to a specific biological or
molecular target.
1.9."ROYALTY PERIOD" shall mean the calendar quarter, or partial
calendar quarter, commencing with the First Commercial Sale of any Licensed
Product in each country, and each calendar quarter thereafter.
1.10."THIRD PARTY TRANSFEREE" shall mean any party, other than an
Affiliate of Licensee, which is undertaking to make, have made, use, sell or
have sold Licensed Products and (i) to which Licensee (or any of its
Affiliates), sells, transfers, or otherwise makes available any Licensed
Intermediate or (ii) for which Licensee (or any of its Affiliates) performs
services or provides proprietary information, with respect to any Licensed
Intermediate.
2
1.11."VALID CLAIM" shall mean either (a) a claim of an issued patent
that has not been held unenforceable or invalid by an agency or a court of
competent jurisdiction in any unappealable or unappealed decision or (b) a claim
of a pending patent application that has not been abandoned or finally rejected
without the possibility of appeal or refiling.
The above definitions are intended to encompass the defined terms in both the
singular and plural forms.
ARTICLE 2. GRANT OF RIGHTS
2.1. LICENSE GRANT. Subject to the terms and conditions set forth
herein, Licensor hereby grants Licensee and its Affiliates a world-wide,
nonexclusive, royalty-bearing license (without the right to grant
sublicenses) under Patent Rights (i) to research and develop, make, have
made, use, sell and have sold Licensed Products in the Field of Use and (ii)
to research and develop, make and use Licensed Intermediates in the Field of
Use for sale or transfer to any Third Party Transferee.
2.2. LIMITATION OF RIGHTS. Licensee acknowledges that its rights
under Patent Rights are limited to those expressly granted herein and that
Licensee is expressly prohibited from selling, transferring or otherwise
making available to third parties Licensed Products or Licensed Intermediates
for use outside the Field of Use.
2.3. COVENANT NOT TO XXX. In partial consideration for the grant of
rights hereunder, Licensee agrees not to enforce against Licensor or its
Affiliates any patent right owned or controlled by Licensee or its Affiliates
during the term of this Agreement that Licensor or its Affiliates may
infringe in practicing the inventions claimed in Patent Rights. Nothing in
this Section 2.3 is intended to grant Licensor or its Affiliates any
proprietary rights or rights to nonsuit with respect to specific peptides or
proteins or analogs thereof. The parties agrees that the covenant not to xxx
in this Section 2.3 is a right that transfers with any sale or disposition by
Licensee or its Affiliates of the applicable patent right.
ARTICLE 3. THIRD PARTY AGREEMENTS
3.1. REQUIRED AGREEMENT. Licensee acknowledges that the value of
Patent Rights is measured in part by the value of products resulting from any
Licensed Intermediate. Licensee agrees, therefore, that it will not sell,
transfer, or otherwise make available a Licensed Intermediate to any Third
Party Transferee and will not provide services or proprietary information
with respect to any Licensed Intermediate to any Third Party Transferee,
unless such Third Party Transferee agrees to the provisions substantially as
set forth attached in ATTACHMENT C ("Third Party Agreement").
ARTICLE 4. PAYMENTS, RECORDS AND REPORTS
4.1. PAYMENTS. Licensee shall make the payments in the Payment
Schedule as set forth in ATTACHMENT A.
3
4.1.1. SIGNING FEE. Licensee agrees to pay Licensor, within
ten (10) days of the Effective Date, a nonrefundable signing fee in the amount
specified in the Payment Schedule.
4.1.2. MAINTENANCE FEE. Licensee agrees to pay Licensor, on
every anniversary of the Effective Date, an annual maintenance fee for the
license granted under this Agreement in the amount specified in the Payment
Schedule.
4.1.3. TRANSFER FEE. Licensee agrees to pay Licensor the
amount specified in the Payment Schedule within thirty (30) days of the transfer
of a Licensed Intermediate or provision of services therefor to a Third Party
Transferee for each specific biological or molecular target.
4.1.4.5 10(K) OR PMA MILESTONE. Licensee agrees to pay
Licensor the amount specified in the Payment Schedule within thirty (30) days of
the first 510(k) application or Pre-Market Approval application in the United
States or foreign equivalent thereof for each indication for a Licensed Product.
4.1.5. ROYALTIES. Licensee agrees to pay Licensor,
concurrently with delivery of the quarterly report set forth in Section 4.2,
royalties on aggregate Net Sales of Licensed Products during the prior Royalty
Period; provided, however that in the event Licensed Products contain one or
more active components which are not covered by the Patent Rights, the royalty
due on such Net Sales shall be calculated by dividing the Net Sales of the
combination product by the number of active components not covered by the Patent
Rights, but in no event shall the amount due Licensor be reduced by more than
75%.
4.2. REPORTS AND PAYMENTS.
4.2.1. THIRD PARTY TRANSFEREE TRANSFERS AND REPORTS. On each
anniversary of the Effective Date, and within thirty (30) days after a transfer
described in Section 4.1.3, Licensee shall deliver to Licensor a report
containing the following information with respect to each Third Party Transferee
to whom Licensee has transferred Licensed Intermediates during the period since
the last such report or, in the case of the first such period, since the
Effective Date:
a. a copy of the Third Party Agreement with such Third Party
Transferee; and
b. to the extent publicly available or not subject to
confidentiality obligations, identification of the specific biological or
molecular target to which such Licensed Intermediates are to be directed.
4.2.2. ROYALTY PAYMENTS AND REPORTS. Commencing with the First
Commercial Sale of a Licensed Product in any country, within thirty (30) days
after the conclusion of each Royalty Period, Licensee shall deliver to Licensor
a report containing the following information:
x.xxxxx sales of Licensed Products, in each country of sale,
made by or on behalf of Licensee and its Affiliates during the applicable
Royalty Period;
b.calculation of Net Sales for the applicable Royalty Period
in each country of sale, together with the exchange rates used for conversion;
and
c.calculation of the amount payable to Licensor for the
applicable Royalty Period.
4
All such reports shall be maintained in confidence by Licensor. If no royalties
or other payments are due to Licensor for any reporting period, the report shall
so state. Concurrent with these reports, Licensee shall remit to Licensor any
payment due for the applicable Royalty Period. The method of payment shall be by
check or wire transfer as directed from time to time by Licensor. All amounts
payable to Licensor under this Section will first be calculated in the currency
of sale and then converted into U.S. dollars in accordance with Section 4.3, and
such amounts shall be paid without deduction of any withholding taxes,
value-added taxes, or other charges applicable to such payments.
4.3. PAYMENTS IN U.S. DOLLARS. All payments due under this Agreement
shall be payable in United States dollars. Conversion of foreign currency to
U.S. dollars shall be made at the conversion rate existing in the United States
(as reported in the WALL STREET JOURNAL) on the last working day of the calendar
quarter preceding the applicable calendar quarter. Such payments shall be
without deduction of exchange, collection, or other charges.
4.4. RECORDS. Licensee and its Affiliates shall maintain, and shall
ensure that any Third Party Transferee shall maintain, complete and accurate
records of Licensed Products made, used, or sold under this Agreement and any
amounts payable to Licensor in relation to such Licensed Products, which records
shall contain sufficient information to permit Licensor to confirm the accuracy
of any reports delivered to Licensor in accordance with Section 4.2. Licensee
and its Affiliates shall retain such records relating to a given Royalty Period
for at least three (3) years after the conclusion of that Royalty Period, during
which time Licensor shall have the right, at its expense, to cause an
independent certified public accountant to inspect such records during normal
business hours for the sole purpose of verifying any reports and payments
delivered under this Agreement. Such accountant shall not disclose to Licensor
any information other than information relating to accuracy of reports and
payments delivered under this Agreement and shall provide Licensee with a copy
of any report given to Licensor. The parties shall reconcile any underpayment or
overpayment within thirty (30) days after the accountant delivers the results of
the audit. In the event that any audit performed under this Section reveals an
underpayment in excess of five percent (5%) in any Royalty Period, Licensee
shall bear the full cost of such audit.
4.5. LATE PAYMENTS. Any payments by Licensee that are not paid on or
before the date such payments are due under this Agreement shall bear interest,
to the extent permitted by law, at two percentage points above the base prime
rate of interest most recently reported in THE WALL STREET JOURNAL, calculated
based on the number of days that payment is delinquent.
4.6. OTHER LICENSES. In the event that Licensor enters into an
agreement with a third party (other than a not-for-profit institution) in which
Licensor grants a license solely under the Patent Rights for Licensed Products
in the Field of Use only and the amounts to be paid to Licensor are more
favorable to such third party than the amounts to be paid by Licensee under this
Agreement, then Licensor shall notify Licensee and Licensee shall have the right
to substitute such payment amounts for the payments due in this Agreement.
5
ARTICLE 5. REPRESENTATIONS AND WARRANTIES
5.1. AUTHORIZATION. Each party represents and warrants to the other
that it has the legal right and power to enter into this Agreement, to extend
the rights and licenses granted to the other in this Agreement, and to fully
perform its obligations hereunder, and that the performance of such obligations
will not conflict with its charter documents or any agreements, contracts, or
other arrangements to which it is a party.
5.2. OWNERSHIP OF PATENT RIGHTS. Licensor represents and warrants that,
as of the Effective Date, it possesses the exclusive right, title, and interest
in and to the Patent Rights and that it has the full legal right and power to
enter into the obligations and grant the rights and licenses set forth in this
Agreement.
5.3. DISCLAIMER OF WARRANTIES. Nothing in this Agreement shall be
construed as:
a.a warranty or representation by Licensor as to the validity
or scope of any patent included within the Patent Rights;
b.a warranty or representation that the exploitation of the
Patent Rights or the manufacture, use or sale of a Licensed Intermediate or a
Licensed Products is or will be free from infringement of patents of third
parties;
c.an obligation of either party to bring or prosecute actions
or suits against third parties for infringement;
d.an obligation of Licensor to maintain any patent or to
continue to prosecute any patent application included within the Patent Rights
in any country;
e.an obligation of either party to furnish any confidential
information or know-how;
f.creating any agency, partnership, joint venture or similar
relationship between Licensor and Licensee; or
g.conferring by implication, estoppel or otherwise any
license, immunity or right under any patent of Licensor other than those
specified in Patent Rights.
ARTICLE 6. INDEMNIFICATION
6.1. INDEMNIFICATION. Licensee shall indemnify, defend, and hold
harmless Licensor and its Affiliates and their directors, officers, employees,
and agents and their respective successors, heirs and assigns (the
"Indemnities") against any liability, damage, loss, or expense (including
reasonable attorneys fees and expenses of litigation) incurred by or imposed
upon the Indemnitees or any one of them in connection with any claims, suits,
actions, demands, or judgments concerning any product, process or service that
is made, used, sold or provided pursuant to any right or license granted under
this Agreement.
6
ARTICLE 7. TERM AND TERMINATION
7.1.TERM. Unless sooner terminated as provided herein, this Agreement
shall commence on the Effective Date and shall remain in effect until the
expiration of the last to expire of the applicable Patent Right, unless earlier
terminated as provided in this Article.
7.2. TERMINATION BY LICENSEE. Licensee may terminate this agreement for
any reason upon six (6) months notice to Licensor.
7.3. TERMINATION BY LICENSOR. In the event that Licensee fails to make
timely payment of any amounts due to Licensor under this Agreement, including
amounts due under Article 4 hereof, Licensor may terminate this Agreement upon
thirty (30) days written notice to Licensee, unless Licensee pays all past-due
amounts prior to the expiration of such thirty (30)-day notice period.
7.4. OTHER MATERIAL BREACH. In the event that either party commits a
material breach of any of its obligations under this Agreement, other than that
stated in Section 7.3, and such party fails to remedy that breach within ninety
(90) days after receiving written notice thereof from the other party, that
other party may immediately terminate this Agreement upon written notice to the
breaching party.
7.5. EFFECT OF TERMINATION. Upon the expiration or termination of this
Agreement, Licensee's rights under the Patent Rights shall terminate
immediately. Such expiration or termination shall not affect the rights of any
Third Party Transferee if any such Third Party Transferee performs its
obligations under the Third Party Agreement. The following provisions shall
survive the expiration or termination of this Agreement: Articles 1, 3, 6 and 8
and Section 2.3; as well as Licensee's obligations to make payments and reports
pursuant to Article 4 with respect to Licensed Products developed using the
Patent Rights, or developed as a result of Licensed Intermediates, during the
term of this Agreement.
7.6. NOTICE OF TERMINATION. Licensee agrees that, in the event that
this Agreement is terminated pursuant to the terms hereof, Licensee shall so
notify each Third Party Transferee within twenty (20) days of such termination.
ARTICLE 8. MISCELLANEOUS
8.1. NOTICES. All notices, requests, demands and other communications
required or permitted to be given pursuant to this Agreement shall be in writing
and shall be deemed to have been duly given upon the date of receipt if
delivered by hand, recognized international overnight courier, confirmed
facsimile transmission, or registered or certified mail, return receipt
requested, postage prepaid to the following addresses or facsimile numbers:
If to Licensor: If to Licensee:
Dyax Corp. To the address or facsimile
One Xxxxxxx Square, Xxxx. 000, Xxxxx 000 number set forth below Licensee's signature
Xxxxxxxxx, XX 00000 to this Agreement
Attention: Chief Executive Officer
Facsimile: (000) 000-0000
7
8.2. GOVERNING LAW & JURISDICTION. This Agreement shall be governed by
and construed in accordance with the laws of the Commonwealth of Massachusetts.
The parties hereby irrevocably consent and submit to the exclusive jurisdiction
of any Commonwealth of Massachusetts or Federal court sitting in Boston in any
action or proceeding of any type whatsoever arising out of or relating to this
Agreement.
8.3. SPECIFIC PERFORMANCE. The parties agree that irreparable damage
will occur in the event that the provisions of Article 3 are not specifically
enforced. In the event of a breach or threatened breach of any such provisions,
Licensee agrees that Licensor shall, in addition to all other remedies, be
entitled to temporary or permanent injunction, without showing any actual damage
or that monetary damages would not provide an adequate remedy and without the
necessity of posting any bond, and/or a decree for specific performance, in
accordance with the provisions hereof.
8.4. ASSIGNMENT. This Agreement may not be assigned by either party
without the prior written consent of the other party, except that either party
may assign this Agreement to any of its Affiliates or to a successor in
connection with the merger, consolidation, or sale of all or substantially all
of its assets or that portion of its business pertaining to the subject matter
of this Agreement, with prompt written notice to the other party of any such
assignment. This Agreement shall inure to the benefit of and be binding upon the
parties and their respective lawful successors and assigns.
8.5. COMPLIANCE WITH LAW. Nothing in this Agreement shall be construed
so as to require the commission of any act contrary to law, and wherever there
is any conflict between any provision of this Agreement and any statute, law,
ordinance or treaty, the latter shall prevail, but in such event the affected
provisions of the Agreement shall be conformed and limited only to the extent
necessary to bring it within the applicable legal requirements.
8.6. AMENDMENT AND WAIVER. This Agreement may be amended, supplemented,
or otherwise modified only by means of a written instrument signed by both
parties. Any waiver of any rights or failure to act in a specific instance shall
relate only to such instance and shall not be construed as an agreement to waive
any rights or fail to act in any other instance, whether or not similar.
8.7. SEVERABILITY. In the event that any provision of this Agreement
shall, for any reason, be held to be invalid or unenforceable in any respect,
such invalidity or unenforceability shall not affect any other provision hereof,
and the parties shall negotiate in good faith to modify the Agreement to
preserve (to the extent possible) their original intent.
8.8. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior agreements or understandings between the parties relating to the subject
matter hereof.
8
IN WITNESS WHEREOF, the undersigned have duly executed and delivered this
Agreement as a sealed instrument effective as of the date first above written.
LICENSOR: LICENSEE:
DYAX CORP.
--------------------- ---------------------
By: By:
Name: Name:
Title: Title:
Address:
Facsimile:
9
ATTACHMENT A
PAYMENT SCHEDULE
-----------------------------------------------------------------
PAYMENTS
-----------------------------------------------------------------
Signing Fee $ 52,500
-----------------------------------------------------------------
Annual Maintenance Fee $ 27,500
-----------------------------------------------------------------
Each transfer of one or more Licensed $ 27,500
Intermediates or provision of services
therefor for a specific target
-----------------------------------------------------------------
First application for a 510(k), PMA or $ 102,500
equivalent for each indication
-----------------------------------------------------------------
Royalty rate on Net Sales 2.2%
-----------------------------------------------------------------
Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.
ATTACHMENT B
PATENT RIGHTS
=========================================================================================================
APPLICATION/
COUNTRY PATENT NO. FILING DATE PATENT NO. ISSUE DATE
---------------------------------------------------------------------------------------------------------
US 07/664,989* 3/1/91 5,223,409 6/29/93
---------------------------------------------------------------------------------------------------------
US 9,319 1/26/93 5,403,484 4/4/95
---------------------------------------------------------------------------------------------------------
US 08/057,667 6/18/93 5,571,698 11/5/96
---------------------------------------------------------------------------------------------------------
US div 08/415,922 4/3/95 5,837,500 11/17/98
---------------------------------------------------------------------------------------------------------
US div 08/993,776 12/18/97
---------------------------------------------------------------------------------------------------------
US div ************* 11/16/98
---------------------------------------------------------------------------------------------------------
US div ************* 11/16/98
---------------------------------------------------------------------------------------------------------
PCT US89/03731 9/1/89
W09002809 pub 3/22/90
---------------------------------------------------------------------------------------------------------
EPO 89/910702.3 9/1/89 436,597 4/2/97
EP436597 pub 7/17/91
---------------------------------------------------------------------------------------------------------
EPO div 96/112867.5 8/9/96 Allowed
768377 pub 4/16/97 pub
---------------------------------------------------------------------------------------------------------
Japan 89510087 9/1/89
JP4502700 (pub) 5/21/92
---------------------------------------------------------------------------------------------------------
Canada 610,176 9/1/89 1,340,288 12/29/98
---------------------------------------------------------------------------------------------------------
Ireland IR89/2834 9/4/89
---------------------------------------------------------------------------------------------------------
Xxxxxx 00000 9/1/89 91501 6/11/98
---------------------------------------------------------------------------------------------------------
Israel 3 divs 5/29/97
---------------------------------------------------------------------------------------------------------
PCT US92/01456 2/27/92
W09215677 (pub) 9/17/92
---------------------------------------------------------------------------------------------------------
EPO 92/908057.0 2/27/92
---------------------------------------------------------------------------------------------------------
Canada 2105300 2/27/92
---------------------------------------------------------------------------------------------------------
Japan 92507558 2/27/92
---------------------------------------------------------------------------------------------------------
PCT US92/01539 2/28/92
X00000000 (pub) 9/17/92
---------------------------------------------------------------------------------------------------------
EPO 92/908799.7 2/28/92
---------------------------------------------------------------------------------------------------------
Canada 2105303 2/28/92
---------------------------------------------------------------------------------------------------------
Japan 92508216 2/28/92
=========================================================================================================
* CIP of US SN487,063 filed 3/2/90 which is a CIP of US SN240,160 filed 9/2/88
All Protein Engineering Corporation patent rights have been assigned to Dyax
Corp.
ATTACHMENT C
THIRD PARTY AGREEMENT
1. The [Third Party Transferee] hereby acknowledges that Dyax Corp.
("Licensor"), having a principal place of business at Xxx Xxxxxxx Xxxxxx, Xxxx.
000, Xxxxx 000, Xxxxxxxxx, Xxxxxxxxxxxxx 00000, has licensed certain patent
rights to and under U.S. Patent Nos. 5,223,409; 5,403,484; 5,571,698; 5,571,698;
5,837,500; and associated patent rights, to ______________ ("Licensee") under a
License Agreement (the "License") effective as of _______, and that it expects
to receive from Licensee or its Affiliates one or more Licensed Intermediates or
services or proprietary information with respect to one or more Licensed
Intermediates (collectively, the "Transferred Technology"). All terms not
otherwise defined herein shall have the same meanings set forth in the License.
2. In consideration of the value of the patent rights referenced above in
developing the Transferred Technology, the [Third Party Transferee] agrees (a)
to use the Transferred Technology solely within the Field of Use to research and
develop, make, have made, use, sell and have sold Licensed Products
(collectively, "Covered Products"); and (b) to maintain and retain complete and
accurate records of sales of Covered Products and any amounts paid or payable to
Licensee in relation to such Covered Products, all in accordance with Article 4
of the License.
3. If the [Third Part Transferee] is notified, by Licensor or Licensee or
otherwise, that the License has been terminated in accordance with its terms,
such termination shall not affect the rights of the undersigned to research and
develop, make, use and sell Covered Products; provided, however, that the [Third
Party Transferee] hereby agrees that from and after the date of such termination
the undersigned shall have the obligation (a) to pay directly to Licensor all
amounts due pursuant to the Payment Schedule elected by Licensee under Section
4.1 of the License, including royalties on Net Sales, with respect to all
Covered Products (which shall be deemed for purposes of this paragraph to be
"Licensed Products" as defined in the License), and (b) deliver directly to
Licensor all reports otherwise due to Licensee pursuant to paragraph 1 above.
All such payments and reports shall be subject to the terms and conditions
therefor set forth in the License. To the extent that the foregoing constitutes
a grant of rights under Patent Rights with respect to the Transferred
Technology, such rights shall be contingent and, in the event of a failure to
make any such payments or any other material breach by the undersigned,
terminate upon thirty (30) days notice unless the breach is cured prior to
expiration of such period.
