Exhibit 10.25
License Agreement
By and between
EntreMed, Inc.
and
Celgene Corporation.
[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
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This Agreement effective as of the 23rd day of March, 2005, by and betweenEntreMed, Inc., a Delaware corporation having a place of business at 9640 Medical Center Drive, Rockville, MD 20850 (hereinafter “EntreMed”), andCelgene Corporation, a Delaware corporation having a place of business at 86 Morris Avenue, Summit NJ 07901 (together with itsAffiliates, hereinafter “Celgene”).
WITNESSETH
WHEREAS,EntreMed is engaged in the business of discovering and developing chemical and biological substances for therapeutic uses;
WHEREAS,Celgene is a company that develops, manufactures, markets and sells pharmaceutical products for healthcare;
WHEREAS,Celgene owns orControls certainPatent Rights andKnow-How related toTubulin Binding Agentslisted in Appendix B, and it has the right to grant certain rights and licenses thereunder as set forth herein; and
WHEREAS,EntreMed desires to obtain a worldwide exclusive license fromCelgene under thePatent Rights and KNOW-HOW to develop, make, manufacture, market, distribute, promote and sell and have sold theLicensed Product embodying theTubulin Binding Agents in theField in theTerritory, andCelgene desires to grant such a license toEntreMed, on the terms and conditions contained in thisAgreement.
NOW, THEREFORE, in consideration of the premises and the mutual promises herein contained,Celgene andEntreMed have agreed as follows:
ARTICLE 1 - DEFINITIONS
As used in thisAgreement, the following terms shall have the following meanings:
| 1.1 | “Affiliate” as applied to either party shall mean any company or other legal entity other than the party in question in whatever country organized, controlled by or under common control with that party. The term “control or controlled” with respect to anAffiliate means ownership or control, directly or indirectly, of at least fifty percent (50%) of the outstanding stock or voting rights entitled to elect directors. |
| 1.2 | “Agreement” shall mean thisAgreement including the Appendices attached hereto, each of which constitutes an integral part of the understandings andAgreements set forth herein. |
| 1.3 | “Commercially Reasonable Efforts” shall mean the reasonable efforts and resources thatan experienced pharmaceutical or biotechnology company would use to reasonably diligently develop and commercialize a compound owned by it or to |
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| | which it has rights and which is of similar market potential at a similar stage in development as theLicensed Product. |
| 1.4 | “Confidential Information” shall mean (i) the terms of thisAgreement including all Appendices and (ii) with respect to any Party (“Disclosing Party”), any information relating to the Disclosing Party, the products or the Disclosing Party’s business (including but not limited toKnow-How, technical information, research, personnel, marketing, strategic or other information) that is disclosed in writing, visually, orally or in electronic medium to the other Party (“Receiving Party”), whether prior to or after theEffective Date, in the course of the Parties’ evaluation, negotiation of or performance under thisAgreement which in written or other tangible form shall be clearly marked as being confidential and if not in written or tangible form when disclosed, will be indicated upon disclosure as being confidential and then summarized electronically or in writing and marked as being confidential within thirty (30) days after disclosure, but shall not include information that: |
| | 1.4.1 | the Receiving Party or anAffiliate owned or controlled prior to receipt from the Disclosing Party, or |
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| | 1.4.2 | is or becomes public through no fault of the Receiving Party or anyAffiliate thereof, or |
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| | 1.4.3 | is hereafter developed by the Receiving Party or anAffiliate independent of any disclosure from the Disclosing Party as evidenced by competent written evidence, or |
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| | 1.4.4 | the Receiving Party or anAffiliate obtains from aThird Party lawfully and not under a confidentiality obligation to the Disclosing Party, or |
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| | 1.4.5 | is required to be disclosed by law or regulation, provided that Receiving Party shall notify providing party forthwith of any such required disclosure. |
| 1.5 | “Control” shall mean, with respect to any Patent RightorKnow-How that the Party controlling such right owns a transferable interest or has a license to practice suchPatent Right orKnow-How and has the ability to grant the other Party access, a license or a sublicense (as applicable) to practice suchPatent Right orKnow-How. |
| 1.6 | “Effective Date” shall mean the date first written above. |
| 1.7 | “Field” shall mean all oncology indications in humans or animals. |
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| 1.8 | “First Commercial Sale” shall mean the first sale ofLicensed PRODUCT in any country byEntreMed or any of itsSublicensee orAffiliateS to anyThird Party for consideration. |
| 1.9 | “Know-How” shall mean the information listed in Appendix B and any and all unpatented proprietary information and know how, processes, techniques, designs, data and results in whatsoever form including, without limitation, all biological, toxicological, chemical information, biochemical information, metabolic, non-clinical, pre-clinical, clinical, pharmacological, pharmacokinetic data, assay, formulation, quality control, synthetic process, manufacturing methods, data and specifications, all of which specifically relate to the development, synthesis, manufacture, use or sale ofLicensed Products embodying theTubulin Binding Agents which is under theControl ofCelgene and/or any of itsAffiliates as of theEffective Date of thisAgreement. |
| 1.10 | “Licensed Product” shall mean any pharmaceutical product that is comprised of, or derived at least in part from, theTubulin Binding Agents. |
| 1.11 | “License Year” shall mean the period beginning on theEffective Date and ending on December 31 of that year and each subsequent calendar year during the term of theAgreement thereafter. |
| 1.12 | “Marketing Authorization” shall mean any and all marketing authorizations, regulatory approvals or registrations, including amendments and supplements thereto, granted by aRegulatory Authority, which are required for marketing, promotion, pricing, reimbursement and selling ofLicensed Products. |
| 1.13 | “NDA” shall mean any new drug application filed with anyRegulatory Authority, which is necessary for approval to use, market, sell and offer for sale of aLicensed Product. |
| 1.14 | “Net Sales” means the gross amount received byEntreMed or itsAffiliates orSublicensee for sale ofLicensed Product toThird Parties, less: |
| | 1.14.1 | sales taxes, value added taxes, excise taxes, and customs duties; |
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| | 1.14.2 | cost of export licenses and any taxes, fees or other charges associated with the exportation or importation ofLicensed Products; |
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| | 1.14.3 | rebates accrued, incurred or paid to Federal Medicaid and State Medicare and any other price reductions required by a governmental agency; |
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| | 1.14.4 | rejected shipments, returns, and retroactive deductions; |
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| | 1.14.5 | the amount received for sales which become the subject of a subsequent temporary or partial recall by a regulatory agency for safety or efficacy reasons outside the control ofEntreMed; and |
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| | 1.14.6 | customary cash, quantity, and trade discounts; provided, however, that a sale or transfer toAffiliates orSublicensees for re-sale by suchAffiliates orSublicensees shall not be considered a sale for the purpose of this provision but the resale by suchAffiliates orSublicensees shall be a sale for such purposes. |
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| | | A “sale” shall also include a transfer or other disposition for consideration, but not such transfers or dispositions, without consideration, for pre-clinical, clinical, regulatory or governmental purposes prior to receiving marketing approval for the specific indication for which such transfer is made. In the event that consideration in addition to or in lieu of money is received forLicensedProduct, such consideration shall be added to theNet Sales as valued on the day of receipt thereof byEntreMed. To the extent that aLicensed Product is sold in other than an arms length transaction,Net Sales shall be the fair market value of suchLicensed Product if sold in an arms length transaction, less the costs identified in this Article 1.14,Licensed Product shall be considered “sold” at the earlier of (a) the transfer of title in suchLicensed Product to a person other than anAffiliate orSublicensee ofEntreMed or (b) the shipment of suchLicensed Product from the manufacturing or warehouse facilities ofEntreMed or itsAffiliates orSublicensees to aThird Party. |
| 1.15 | “Patent Right(s)” shall mean theTubulin Binding Agents that are described in the following: |
| | 1.15.1 | the United States patent applications and patents listed in Appendix A; |
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| | 1.15.2 | the United States and foreign patents issued from applications listed in Appendix A and from divisionals and continuations of such applications; |
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| | 1.15.3 | claims of United States continuation-in-part applications and of equivalent foreign applications, and of the resulting patent(s), that are directed to subject matter specifically described in and claim the benefit of the priority of the aforementioned United States and foreign applications listed in Appendix A; |
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| | 1.15.4 | claims of all later-filed foreign patent applications, and of the resulting patents, that are directed to subject matter described in the United States patents and/or patent applications described in the foregoing subsections of this Article 1.15; and |
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| | 1.15.5 | any reissues, re-examinations or extension of United States patents described in the foregoing subsections of this Article 1.15. |
| 1.16 | “Payment Period” shall have the meaning as set forth in Article 5.3.1. |
| 1.17 | “Agents” shall mean anyThird Party engaged byEntreMed and/or itsAffiliates in the normal course of their business to market and/or distribute their product range in finished form underEntreMed’s trademarks in a particular country. |
| 1.18 | “Regulatory Authority” shall mean any regulatory agency, ministry, department or other governmental body having authority in any country tocontrol the development, manufacture, marketing and sale of products. |
| 1.19 | “Sublicensee” shall mean with respect to a Party any person, company, corporation or other business entity, other than a Party’sAffiliates, that is granted a sublicense byEntreMed to develop, make, have made, use, offer for sale and sellLicensed Product. |
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| 1.20 | “Territory” shall mean each and every country throughout the world. |
| 1.21 | “Third Party” shall mean any person, entity or corporation other than the Parties and theirAffiliates. |
| 1.22 | “Valid Claim” shall mean with respect to any country of theTerritory a claim of an issued and unexpired patent or a supplementary protection certificate included within the Patent Rights in such country which (i) has not been held unenforceable, unpatentable or invalid by a decision of a court or other governmental agency of competent jurisdiction, unappealable or unappealed within the time allowed for appeal, (ii) has not been admitted to be invalid or unenforceable through reissue or disclaimer or otherwise and (iii) absent a license, would be infringed by the use, making or selling of theLicensed Product. |
| 1.23 | “Tubulin Binding Agents” shall mean any compound described in thePatent Rights. |
ARTICLE 2 – GRANT OF RIGHTS
| | Celgene hereby grants toEntreMed an exclusive license, with the full right to grant sublicenses, under the Patent Rights and theKnow-How, to make, have made, manufacture, have manufactured, use, develop, clinically test, import and sellLicensed Productin theField in theTerritory. In addition of any rights reserved byCelgene under thisAgreement,Celgene shall retain a non- |
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| | exclusive license under thePatent Rights to continue its internal research studies and non-commercial outside research studies with respect to theTubulin Binding Agents. |
| 2.2. | Sublicenses and other Co-operations |
Any sublicense granted byEntreMed shall be subject to the terms and conditions of thisAgreement.
| | 2.2.1 | EntreMed may use and grant respective sublicenses to contractors in the drug development, non-clinical and clinical testing, clinical diagnostic formulation manufacture and registration ofLicensed Product. In the event thatEntreMed intends to grant a sublicense for the distribution, sale and/or marketing rights ofLicensed Product to anyThird Partyin theTerritory, entremedagrees thatCelgene shall have a first right to negotiate an exclusive or non-exclusive license to the rights offered under the proposed transaction (“Right of First Discussion”).Celgene shall have a sixty (60) day period following the date ofEntreMed’s written disclosure of the proposed transaction to exercise itsRight of First Discussion by providing written notice toEntreMed of its desire to negotiate a license agreement. In the event a license agreement is not executed within ninety (90) days following the date thatCelgene exercises itsRight of First Discussion,EntreMed shall be free to sublicense such rights to anyThird Party, provided, however, thatEntreMed may only offer such sublicense on terms and conditions that are not more favourable than the last offer made byCelgene toEntreMed. |
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| | 2.2.2 | EntreMedshall not grant any rights which are inconsistent with the rights granted to and obligations imposed onEntreMed hereunder. Each sublicense granted byEntreMed shall include an audit right byCelgene of the same scope as provided in Article 5.7. |
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| | 2.2.3 | Any sublicense granted byEntreMed shall provide for the sublicense termination upon the termination of thisAgreement. |
ARTICLE 3 – TRADEMARKS
| | 3.1 | EntreMed shall be free to select and to register trademarks at its sole discretion for sale ofLicensed Products in theTerritory. Such trademarks shall be prepared and owned byEntreMed atEntreMed’s expense. |
ARTICLE 4 – DEVELOPMENT
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| 4.1 | Disclosure ofKnow-How |
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| | Celgene undertakes to disclose within sixty (60) days following theEffective Date of thisAgreement allKnow-HowControlled by or in the possession ofCelgene or itsAffiliates existing as of theEffective Date of thisAgreement toEntreMed. |
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| 4.2 | Commercially Reasonable Efforts |
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| | EntreMed shall useCommercially Reasonable Efforts to develop and commercializeLicensed Products on a schedule that is consistent with sound and reasonable business practices and judgment. |
| 4.3 | Diligence |
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| | EntreMed shall useCommercially Reasonable Efforts to bring one or moreLicensed Products to market through a diligent program for exploitation of the Tubulin Binding Agents, Patent RightsandKnow How.Celgeneagrees thatEntreMed shall have complete control of all regulatory submissions ofLicensed Products to the appropriate regulatory agencies worldwide. Only one payment will be made for each of the milestones recited under 4.3.1, 4.3.2, 4.3.3 and 4.3.4. Diligence shall be demonstrated by attaining the following milestones: |
| | 4.3.1 within * years of theEffective Date, the * byEntreMed; |
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| | 4.3.2 within * years of theEffective Date, the * aLicensed Product; |
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| | 4.3.3 within * years of theEffective Date, the * aLicensed Product; and |
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| | 4.3.4 within * years of theEffective Date, the * or * to * aLicensed Product. |
| 4.4 | Failure to Achieve Milestones. |
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| | IfEntreMed is unable to meet any of the milestone events set forth in Article 4.3EntreMed,EntreMed shall be entitled to a*extension of the required milestone event. If after the extension,EntreMed fails to achieve the milestone,Celgene shall have the option, in its sole discretion, to modify the milestone event or to terminate thisAgreement. |
| 4.5 | Development Costs |
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| | For the time of thisAgreement,EntreMed bears all costs incurred by it in all future non-clinical and clinical development activities necessary for the development ofLicensed Products. |
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| 4.6 | Exchange of Information and Supply of Compounds |
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| | The parties, from time to time, but no more that twice a year, may meet to exchange information on the compounds that are being developed. In addition, to the extent that Celgene has any of the Tubulin Binding Agents in its possession, Celgene shall make these Tubulin Binding Agents available to EntreMed for testing, but it shall not be obligated to synthesize any new Tubulin Binding Agents for EntreMed. Neither party shall be obligated to engage in collaborative research or development activities regarding the Tubulin Binding Agents, but may do so to the extent that the parties agree in a separate written arrangement. |
ARTICLE 5 – FINANCIAL CONSIDERATION
| 5.1. | Upfront Fee |
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| | In consideration of the rights granted byCelgene toEntreMed hereunder,EntreMed will payCelgene the non-refundable, non-creditable sum of one million US Dollars ($1,000,000.00) to an account designated byCelgene to be paid within ten (10) business days following theEffective Date of thisAgreement. |
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| 5.2. | Milestone Payments |
| | 5.2.1. | In further consideration of the rights granted byCelgene toEntreMed hereunder, in particular the licenses set forth in Article 2 above,EntreMed will payCelgene milestone payments as follows: |
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| | | | | Event | | | Milestone Payment | |
| | (i) | | | * | | | | | $ | * | | |
| | (ii) | | | * | | | | | $ | * | | |
| | (iii) | | | * | | | | | $ | * | | |
| | (iv) | | | * | | | | | $ | * | | |
| | (v) | | | * | | | | | $ | * | | |
| | (vi) | | | * | | | | | $ | * | | |
| | (vii) | | | * | | | | | $ | * | | |
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| | 5.2.2. | EntreMed shall payCelgene the milestone payments set forth in Article 5.2.1 within thirty (30) days of the occurrence of the respective milestone event. For the avoidance of doubt, such milestone payments shall not be due more than once. The milestone payments are non-refundable, non-cancellable and not creditable against earned royalties to be paid on the sale ofLicensed Products under thisAgreement. The upfront-fee pursuant to Article 5.1. and all milestone payments shall be paid in US Dollars. As used in Articles 4 and 5, initiation of a clinical trial means the enrollment of the first patient in such a trial. |
5.3.Royalty Payments
| | 5.3.1. | In further consideration of the rights granted byCelgene toEntreMed hereunder, in particular the licenses set forth in Article 2 above,EntreMed will, within sixty (60) days after the first day of January, April, July and October of eachLicense Year, commencing upon theFirst Commercial Sale, payCelgene a royalty onNet Sales ofLicensed Products generated in the preceding calendar quarter (“Payment Period”) as a percentage as set forth below. |
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| | 5.3.2. | In countries whereLicensed Products are covered by aValid Claimunder an unexpiredPatent Right, the royalty rate shall be * percent (*%) ofNet Sales ofLicensedProducts up to * dollars ($*) calculated on an annual basis for the European countries, Japan and the United States combined. For all sales over $* in the respective territories the royalty rate shall be * percent (*%) ofNet Sales ofLicensed Products on an annual basis for the European countries, Japan and the United States combined. In those countries where there is no patent coverage, the royalty rate shall be * percent (*%) ofNet Sales ofLicensedProducts for the * (*) year period following theFirst Commercial Sale of suchLicensedProducts in such country. |
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| | 5.3.3. | The above royalty rates shall be payable on a country-by-country basis on theNet Sales of eachLicensed Product from itsFirst Commercial Sale until the expiration of the royalty term as provided in Articles 5.3.2 and 5.3.6. |
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| | 5.3.4 | In the event thatEntreMed, itsAffiliates,Sublicensees or Agents, in order to exploit the licenses granted to it byCelgene hereunder in any country, are required to make royalty payments to one or moreThird Parties to obtain a license under their patent rights in the absence of which theLicensed Product could not legally be developed, manufactured, clinically tested, registered, marketed or sold in such country, thenEntreMed may deduct * percent (*%) of the royalties paid to suchThird Parties from the royalties due toCelgene with regard to |
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| | | the respective countries up to a total of * percent (*%) reduction in the royalty rate dueCelgene. |
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| | 5.3.5. | No multiple royalties shall be payable because theLicensed Product, their development, manufacture, use or sale is or shall be covered by more than oneValid Claimof a patent included in thePatent Rights or more than one patent under thePatent Rights. |
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| | 5.3.6. | With regard to countries whereLicensed Products are covered by aValid Claimunder aPatent Right,EntreMed shall pay royalties on a country-by-country basis until the expiration of the last to expire of thePatent Rights. |
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| | 5.3.7 | IfEntreMed grants a sublicense of its rights under thisAgreement pursuant to Article 2.2 of thisAgreement in any of the countries in theTerritory,EntreMed shall pay toCelgene a portion of the upfront payments, milestone payments and other sublicensing fees received from the sublicense * |
EntreMed shall pay toCelgene its portion of any sublicensing fee within thirty (30) days ofEntreMed’sreceipt of any sublicensing fee. Sublicensing payments toCelgene are non-refundable, non-cancellable and not creditable against earned royalties to be paid on the sale ofLicensed Products under thisAgreement.
| | 5.3.8 | In establishing a lower royalty payment in those countries in which there is no patent coverage, as described in Article 5.3.2, the parties recognize, andEntreMed acknowledges, the substantial value of the technology being provided toEntreMed under thisAgreement, in addition to the grant ofPatent Rights andTubulin Binding Agents,Celgene has agreed to transfer toEntreMed theKnow-How. |
| 5.4. | Royalty Payment and Progress Reports |
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| | Each royalty payment shall be accompanied by a written report describing theNet Sales of theLicensed Product sold by or on behalf ofEntreMed, itsAffiliates andSublicensees during aPayment Period in each country in theTerritory in which suchNet Sales ofLicensed Product occurred during thePayment Period, specifying: the gross sales (if available) andNet Sales in each country’s currency; the applicable royalty rate under thisAgreement; the royalties payable in each country’s currency, including an accounting of deductions taken in the calculation ofNet Sales; the applicable exchange rate to convert from each country’s currency to US Dollars, under this Article 5.4.; the royalties payable in US Dollars and the minimum royalties pursuant to Article 5.3.4.EntreMedshall provide toCelgeneno less than semi-annually, on July 1 |
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| | and January 1 of each year, written progress reports regarding the status of the development and commercialization of thePatent Rights,Tubulin Binding Agentsand Know-How. Such report shall include progress on research and development, regulatory approvals, manufacturing, sublicensing, marketing and sales during the preceding six (6) months. |
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| 5.5. | Method and Manner of Royalty Payment |
| | 5.5.1. | EntreMed shall deliver toCelgene within sixty (60) days following the end of eachPayment Period a royalty report as set forth in Article 5.4. along withEntreMed‘s payment toCelgene of any royalty due and payable toCelgene for suchPayment Period. |
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| | 5.5.2. | All royalty payments shall be computed and paid in US Dollars at exchange rates as published by the Wall Street Journal on the last day of thePayment Period. |
| 5.6. | Withholding Tax |
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| | If laws or regulations require withholding byEntreMed of any taxes imposed uponCelgene on account of any royalties and advance payments, paid under thisAgreement, such taxes shall be deducted byEntreMed as required by law from such remittable royalty and advance payment and shall be paid byEntreMed to the proper tax authorities. Official receipts of payment of any withholding tax shall be secured and sent toCelgene as evidence of such payment. The Parties shall exercise their best efforts to ensure that any withholding taxes imposed are reduced as far as possible under the provisions of any relevant tax treaty. |
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| 5.7. | Records |
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| | EntreMed,itsAffiliates andSublicensee, shall keep and maintain records of sales ofLicensed Productso that the royalties payable and the royalty statements may be verified. Such records shall be open to inspection no more than twice in any one calendar year during normal business hours for a five (5) year period after the royalty period to which such records relate, by a nationallyindependent certified public accountant selected byCelgene to whomEntreMed has no reasonable objections and retained atCelgene’s expense. Said accountant shall sign a confidentiality agreement prepared byEntreMed and reasonably acceptable toCelgene and shall then have the right to examine the records kept pursuant to thisAgreement and report toCelgene the findings (but not the underlying data) of said examination of records as are necessary to evidence that the records were or were not maintained and used in accordance with thisAgreement. A copy of any report provided toCelgene by the accountant shall be given concurrently toEntreMed. If said examination of records reveals any underpayment(s) of the royalty payable, thenEntreMed shall promptly pay the balance due toCelgene, and if the underpayment(s) is/are more than five percent |
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(5%), thenEntreMed shall also bear the expenses of said accountant. If said examination of records reveals any overpayment(s) of royalty payable, thenCelgene shall credit the amount overpaid againstEntreMed’s future royalty payment(s).
| 5.8. | Overdue Payments |
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| | Payments not paid within the time period set forth in this Articles 5 shall bear interest at a rate of *% above the London Interbank Offered Rate (LIBOR) compounded on a quarterly basis from the due date until paid in full. |
ARTICLE 6 – CONFIDENTIALITY AND PUBLICATION
| 6.1 | Confidentiality |
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| | Subject to Article 6.2. below, neither Party shall use or disclose anyConfidential Information received by it pursuant to thisAgreement without the prior written consent of the other. |
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| 6.2 | Permitted Disclosure |
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| | Nothing contained in this Article shall be construed to restrict the Parties from disclosingConfidential Information as required: (i) for legal, regulatory, tax, or customs reasons, (ii) for audit purposes, (iii) by court or other government order, or, (iv) from using suchConfidential Information as is reasonably necessary to perform acts permitted by, or to exploit rights granted under thisAgreement, provided that the disclosing Party shall, in the event of disclosure under Articles (i), (ii) or (iii) above, provide the other Party copies of any suchConfidential Information at least five (5) business days prior to such disclosure so that the other Party may make any objections and/or secure any protective provisions it deems reasonably necessary. |
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| 6.3 | Publication |
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| | If either Party wishes to publish any information, data or results regarding theLicensed Product in written, oral, slide show or other form, a manuscript or copy of the proposed publication shall first be sent to the other Party at least sixty (60) days in advance of such publication for review. Unless the reviewing Party informs the other in writing during this sixty (60) day period that the proposed publication must be delayed in order to protect a patentable invention or prevented to avoid disclosure ofConfidential Information, the other Party shall be free to publish such results without restriction. In the event that a delay of the proposed publication is required, the other Party shall withhold such submission for publication for an additional period, up to ninety (90) days, or such other period as |
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| | the Parties may mutually agree. In the event that the proposed publication containsConfidential Information, Articles 6.1 and 6.2 shall apply. |
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| | In any event, any reference to either Party in any proposed publication shall only be allowed upon prior written approval of that Party. |
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| 6.4 | Press Release |
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| | Any publication or press release regarding the co-operation between the Parties under thisAgreement requires both Parties’ prior consent with such consent not to be unreasonably withheld or delayed. |
ARTICLE 7 – WARRANTIES AND LIMITATION OF LIABILITIES
| 7.1 | By Both Parties |
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| | Each party hereby represents and warrants that each has the full right and authority to enter into thisAgreement and that the entry into thisAgreement does not require the consent of aThird Party whose consent has not been obtained. |
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| 7.2 | ByCelgene |
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| | Celgene represents and warrants as follows: |
| | 7.2.1 | thatCelgene has not received any notice of infringement ofThird Party patents or notice of interfering subject matter; that, without having made any special investigation,Celgene is not aware of anyThird Party patents or patent applications that contain any interfering subject matter, or any issuedThird Party patents that would be infringed by the making, using, selling, offering for sale, or importing byEntreMed ofTubulin Binding Agents covered by thePatent Rights in any country in theterritory. |
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| | 7.2.2 | that thePatent Rights and theKnow-How transferred toEntreMed under thisAgreement, constitute the entirety ofPatent Rights andKnow-How embodying theTubulin Binding Agents; |
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| | 7.2.3 | that, with regard to theTubulin Binding Agents,Celgene has no applications filed or pending with the FDA as of theEffective Date, including without limitation any Investigational New Drug or Orphan Drug Status applications. |
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| 7.3 | Warranty Disclaimer |
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| | EXCEPT AS OTHERWISE EXPRESSLY SET FORTH HEREIN,Celgene MAKES NO REPRESENTATIONS OR EXTENDS ANY WARRANTIES OF ANY KIND EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OR VALIDITY OF ANYCelgene PATENT, KNOW HOW,Tubulin Binding Agents OR OTHER INTELLECTUAL PROPERTY RIGHTS. |
ARTICLE 8 – INDEMNIFICATION
| 8.1 | ByEntremed |
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| | EntreMed will defend, indemnify and hold harmlessCelgene, its successors,Affiliates and licensors and their employees, agents, officers, trustees, shareholders and directors and each of them (the “Celgene Indemnified Parties”) from and against any and allThird Party claims, causes of action and costs (including reasonable attorney’s fees) of any nature made or lawsuits or other proceedings filed or otherwise instituted against theCelgene Indemnified Parties in connection with any claims, suits or judgments arising out of any theory of product liability concerning the development, testing, manufacture, sale or use of anyLicensed Product byEntreMed, itsAffiliates or itsSublicensees. |
| | 8.1.1 | EntreMed’s indemnification under this Article 8.1 shall not apply to any liability, damage, loss or expense to the extent that it is directly attributable to the gross negligence, reckless misconduct or intentional misconduct ofCelgene. |
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| | 8.1.2 | Commencing not later than the date of first use of aLicensed Productin a clinical trial,EntreMed shall obtain and carry in full force and effect product liability insurance against any claims, judgments, liabilities and expenses for which it is obligated to indemnifyCelgene and others under Article 8.1 of thisAgreement, in such amounts and with such deductibles as are customary at the time for companies engaged in a similar business, and shall provideCelgene with written evidence of such insurance within thirty (30) days of the first use of aLicensed Product in a clinical trial. The insurance policy relating to such coverage shall nameCelgeneas an additional insured. |
| 8.2 | ByCelgene |
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| | Celgene will defend, indemnify and hold harmlessEntreMed, its successors,Affiliates and licensors and their employees, agents, officers, trustees, shareholders and directors and each of them (the “EntreMed Indemnified Parties”) |
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| | from and against any and allThird Party claims, causes of action and costs (including reasonable attorney’s fees) of any nature made or lawsuits or other proceedings filed or otherwise instituted against theEntreMed Indemnified Parties in connection with any claims, suits or judgments arising out of any theory of product liability concerning the development, testing, manufacture or use of anyCelgene TUBULIN BINDING AGENT byCelgene, itsAffiliates or itsSublicensees prior to theEffective Date. |
| | 8.2.1 | Celgene’s indemnification under this Article 9.2 shall not apply to any liability, damage, loss or expense to the extent that it is directly attributable to the gross negligence, reckless misconduct or intentional misconduct ofEntreMed. |
| 8.3 | Conditions to Indemnification. A person or entity that intends to claim indemnification under this Article 8 (the “Indemnitee”) shall promptly notify the party from whom indemnification is sought (the “Indemnitor”), of any loss, claim, damage, liability or action in respect of which the Indemnitee intends to claim such indemnification, and the Indemnitor shall assume the defense thereof with counsel mutually satisfactory to the Indemnitee whether or not such claim is rightfully brought; provided, however, that an Indemnitee shall have the right to retain its own counsel, with the fees and expenses to be paid by the Indemnitor if Indemnitor does not assume the defense, or if representation of such Indemnitee by the counsel retained by the Indemnitor would be inappropriate due to actual or potential differing interests between such Indemnitee and any other person represented by such counsel in such proceedings. The failure to deliver notice to the Indemnitor within a reasonable time after the commencement of any such action, only if prejudicial to its ability to defend such action, shall relieve such Indemnitor of any liability to the Indemnitee under this Article 8, but the omission so to deliver notice to the Indemnitor will not relieve it of any liability that it may have to any Indemnitee otherwise than under this Article 8. The Indemnitor may not settle or otherwise consent to an adverse judgement in any such loss, claim, damage or other proceeding, that diminshes the rights or interests of the Indemnitee without the prior express written consent of the Indemnitee, its consent not to be unreasonably witheld or delayed. The Indemnitee under this Article 8, its employees and agents, shall cooperate fully with the Indemnitor and its legal representatives in the investigations of any action, claim or liability covered by this indemnification. |
ARTICLE 9 – PATENT PROSECUTION, INFRINGEMENT AND MARKING
| | 9.1.1 | Celgene shall use reasonable efforts to prepare, file, prosecute andmaintain patent applications and patents directed tolicensed Products covered by thePatent Rights through patent counsel selected byCelgene andreasonably acceptable toEntreMed, who shall consult with and keep EntreMed advised with respect thereto in a timely manner. |
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| | 9.1.2 | EntreMedshall reimburseCelgene for * percent (*%) of reasonable patent expenses in theTerritory for the filing, prosecution and maintenance of thePatent Rights.EntreMed shall reimburseCelgene, within sixty (60) days afterEntreMed receives an itemized invoice for all patent expenses that are incurred and paid byCelgene after theEffective Date. |
| 9.2 | Cooperation In Prosecution |
| | 9.2.1 | With respect to any Patent Right, each patent application, office action, response to office action, request for terminal disclaimer, petition, and request for reissue or reexamination of any patent issuing from such application shall be provided toEntreMed sufficently prior to the filing of such application response, petition, or request to allow for review and comment byEntreMed.Celgene shall have the right to take any action that, in its judgement, is necessary to preserve such Patent Right. EntreMedshall have the right to comment on substantive official actions and shall have the right to suggest reasonable changes to prosecution strategy as it relates toEntreMed’s compound development. |
| 9.5 | Infringement and Declaratory Judgment Actions |
| | 9.5.1 | Notification. In the event that either party learns of the infringement ofany Patent Right, or the filing of a Declaratory Judgment actionalleging the invalidity, unenforceability, or noninfringement of any Patent Right (“DJ Action”), that party must promptly notify theother party of the infringement orDJ Action, as the case may be, inwriting, and must provide reasonable evidence of the infringement.Neither party will notify aThird Party of the infringement of any Patent Right or of the filing of aDJ Action directed to any Patent Right without first obtaining consent of the other party, whichconsent shall not be unreasonably withheld. |
| |
| | 9.5.2 | Entremed’s Right To File Infringement Actions. To the extent Celgene has the right to bring a suit or action to compel thetermination of infringement of thePatent Right,Celgenehereby grantsEntreMed the right and option, but not the obligation, tobring an action for infringement or to defend against a DJ action, at itssole expense, in the name ofEntreMed. IfEntreMed fails to take a suit or action to compel the termination of infringement within one hundred and eighty (180) days of learning of such infringement,Celgene shall have the sole right, but not the obligation, to bring a suit or action against the infringing entity. Nosettlement, consent judgment or other voluntary final disposition of a suitthat adversely affects Patent Right may be entered into without theconsent ofCelgene, which consent shall not be unreasonably withheld. |
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| | 9.5.3 | EntreMed’s Right To Defend Declaratory Judgement (DJ) Actions. In the event that aDJ Action is brought namingEntreMed as a defendant,EntreMed shallhave the right to proceed with the litigation or settle such action provided,however, that no settlement, consent judgment or other voluntary finaldisposition of a suit that adversely affects Patent Right may beentered into without the consent ofCelgene. |
| |
| | 9.5.4 | Celgene’s Recovery. In the event thatCelgene shall undertake theenforcement and/or defense of the Patent Right by litigation, anyrecovery of damages byCelgene for any such litigation shall be appliedfirst in satisfaction of any unreimbursed expenses and legal fees of Celgene relating to the suit. The balance remaining from any suchrecovery shall be used to compensateEntreMed for its lost sales,on the same basis as if they wereNet Sales and the relvant royalty payments toCelgene under thisAgreement shall be made. Any remaining damages shall belong toCelgene. |
| |
| | 9.5.5 | EntreMed’s Right To Litigate. In the event thatCelgene elects notto pursue an action for infringement or to defend against a DJaction, asthe case may be,Celgene shall notifyEntreMed in writing of suchelection andEntreMed shall have the right and option, but not theobligation, at its cost and expense, to initiate infringement litigation.Anyrecovery of damages byEntreMed for any such litigation shall be appliedfirst in satisfaction of any unreimbursed expenses and legal fees of EntreMed relating to the suit. The balance remaining from any suchrecovery shall be used to compensateEntreMed for its lost sales,on the same basis as if they wereNet Sales and the relevant royalty payments toCelgene under thisAgreement shall be made. Any remaining damages shall belong toEntreMed. |
| |
| | 9.5.6 | Cooperation. In any infringement suit either party may institute to enforceor defend the Patent Right pursuant to thisAgreement, the otherparty hereto shall, at the request of the party initiating such suit, cooperatein all respects and, to the extent possible, have its employees testify whenrequested and make available relevant records, papers, information, samples, specimens, and the like. All reasonable out-of-pocket costs incurred in connection with rendering cooperation requested hereunder shall be paid by the party requesting cooperation. |
| |
| | 9.5.7 | Third Party Royalty Reduction. In the event that an infringementaction is brought by aThird Party againstEntreMed alleging that EntreMed’s making, using, offering to sell, selling, or importing ofLicensed Products under the Patent Right infringes aThird Partypatent, and results in a judgment or settlement requiring royalties to bepaid byEntreMed to suchThird Party, the royalties owed by EntreMed toCelgene under Article 5 of thisAgreement shall bereduced by an amount equal to * percent ( * %) of the royaltiesowed to suchThird Party, provided |
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| | | that the royalties owed to Celgene shall not be reduced by an amount greater than * percent ( * %) ofNet Sales. |
| |
| | 9.6 | Patent Marking.EntreMed shall mark allLicensed Products or their containers that are made, used, or sold under the terms of thisAgreement, in accordance with applicable patent marking laws. |
ARTICLE 10 – TERM AND TERMINATION
| 10.1 | ThisAgreement shall become effective on theEffective Date. Unless sooner terminated by any other provision of thisAgreement, the term of theAgreement shall expire with respect to eachLicensed Product on a country-by-country basis upon date of expiration of all royalty obligations in the countries in theTerritory pursuant to Article 5.3.2 and 5.3.7 herein. |
| |
| 10.2 | Notwithstanding the stipulation in Article 10.1. hereof, either Party shall be entitled at any time, by giving written notice to the other Party, to terminate thisAgreement with immediate effect in the following itemized events: |
| | 10.2.1 | Except as otherwise provided in Article 10.2.2 below, if either Party notifies the other Party of the fact of major default or material breach of any provision in thisAgreement by the notified Party, and the notified Party fails to take corrective measures to mitigate or cure such default or breach within ninety (90) days from the date of notification, provided that notice of termination is given within six (6) months of the default or breach and prior to correction of the default or breach; |
| |
| | 10.2.2 | IfEntreMedat any time defaults in the payment of any sum when due and fails to make such payment within sixty (60) days after receipt of a written notice byCelgene; or |
| |
| | 10.2.3. | The other Party files in any court or agency pursuant to any statute or regulation pertaining to bankruptcy, solvency, or payment of debts, of any state or country, a petition in bankruptcy or insolvency or for reorganization or for an arrangement or for the appointment of a receiver or trustee of the Party or of its assets, or if the other Party proposes a writtenAgreement of composition or extension of its debts, or if the other Party shall be served with an involuntary petition against it, filed in any insolvency proceeding, and such petition shall not be dismissed within sixty (60) days after the filing thereof, or if the other Party shall propose or be a Party to any dissolution or liquidation, or if the other Party shall make an assignment for the benefit of creditors. |
| 10.3 | EntreMed may, at its discretion, terminate thisAgreement at any time for any reason, upon six (6) months prior written notice toCelgene. |
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ARTICLE 11 – EFFECTS OF TERMINATION
| 11.1 | In the event of a termination of thisAgreement pursuant to Articles 10.2 or 10.3, the following shall apply: |
| | 11.1.1. | EntreMed shall cease use of thePatent Right, Tubulin Binding Agents and theKnow-How. In addition,EntreMed shall return atCelgene’s reasonably incurred expense toCelgene any and allKnow-How andTubulin Binding Agents without delay, including copies and excerpts as disclosed byCelgene under thisAgreement. |
| |
| | 11.1.2. | EntreMed shall notifyCelgene of the amount ofLicensed ProductEntreMed and itsAffiliates andSublicensees then have on hand, the sale of which would, with regard toLicensed Product, but for the termination, be subject to royalty, and, if they so wish,EntreMed and itsAffiliate and itsSublicensees and Agents shall thereupon be permitted to sell that amount ofLicensed Product, provided thatEntreMed shall pay the royalty due thereon toCelgene. |
| 11.2 | In the event of the termination of thisAgreement under Articles 10.2 or 10.3,EntreMed shall transfer toCelgene all ofEntreMed’S regulatory filings forLicensed Products and grantCelgene an exclusive, royalty free license to use any ofEntreMed’s patents, know how, trademarks, data andMarket Authorization forCelgene to make, have made, manufacture, have manufactured, use, develop, clinically test, import and sell theLicensed Product in theTerritory. |
| |
| 11.3 | Expiration or termination of thisAgreement for any reason shall be without prejudice to the survival of the following provisions: |
| | 11.3.1. | the obligation of confidentiality provided for in Article 6 hereof; |
| |
| | 11.3.2. | Celgene’s right to receive milestone payments due and accrued up to the moment of expiration or termination pursuant to Article 5.2; |
| |
| | 11.3.3. | Celgene’s right to receive all payments of the royalties accrued under Article 5.3. hereof; |
| |
| | 11.3.4. | the rights and ownership in any intellectual property right the respective Party has obtained prior to expiration or termination; |
| |
| | 11.3.5. | any other rights or remedies which either Party may then or thereafter have hereunder or at law or in equity or otherwise; |
| |
| | 11.3.6 | the obligation of record keeping provided for in Article 5.7; and |
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| | 11.3.7 | Articles 1, 8, 10, 11, 12 and 13. |
ARTICLE 12 – GOVERNING LAW
| 12.1 | ThisAgreement shall be governed by and interpreted in accordance with the laws of Delaware, without giving effect to any choice of law rules. |
ARTICLE 13 – MISCELLANEOUS
| 13.1 | Celgene shall be entitled to assign or otherwise transfer its rights and obligations under thisAgreement in whole or in part to anyThird Party.EntreMed shall not be entitled to assign or otherwise transfer its rights and obligations under thisAgreement in whole or in part to anyThird Party without the prior written consent ofCelgenewhich consent shall not be unreasonably withheld except thatEntreMed may, without the consent ofCelgene, assign this Agreement to a legal successor of all or substantially all of its business or assets. |
| |
| 13.2 | Any and all rights acquired byEntreMed under thisAgreement shall extend to itsAffiliates. |
| |
| 13.3 | ThisAgreement sets forth the entireAgreement between the Parties and supersedes all previousAgreements, written or oral regarding the subject matter hereof. ThisAgreement may be amended only by an instrument in writing duly executed on behalf of the Parties. |
| |
| 13.4 | Neither Party shall be liable for delay or failure to perform hereunder due to any contingency beyond its control, including, but not limited to acts of God, fires, floods, wars, civil wars, sabotage, strikes, governmental laws, ordinances, rules or regulations, provided, such Party promptly gives to the other Party hereto written notice claiming force Majeure and uses its best efforts to eliminate the effect of such force Majeure, insofar as is possible and with all reasonable dispatch. |
| |
| 13.5 | Any waiver shall be made in writing for it to be effective and unless expressly stated shall not be a continuing waiver nor shall it prevent the waiving Party from acting upon that or any subsequent breach or from enforcing any term or condition of thisAgreement. |
| |
| 13.6 | The invalidity of any provision of thisAgreement or any loophole in thisAgreement shall not affect the validity of any other provision hereof. The Parties undertake to replace the invalid provision or close the loophole in theAgreement with another provision which reflects legally the originally intended commercial objectives of the Parties as closely as possible. |
| |
| 13.7 | In the performance of thisAgreement each Party shall be an independent contractor, and therefore, no Party shall be entitled to any benefits applicable to any employee of the other Party. No Party is authorized to act as an agent for the other |
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| | Party for any purpose, and no Party shall enter into any contract, warranty or representation as to any matter on behalf of the other Party. |
| |
| 13.8 | Any notice or other communication required or permitted to be given by either Party under thisAgreement shall be in writing and shall be effective when delivered, if delivered by hand or by electronic facsimile or five days after mailing if mailed by registered or certified mail, postage prepaid and return receipt requested, and shall be addressed to each Party at the following addresses or such other address as may be designated by notice pursuant to this Article: |
| | | | | |
| | If toCelgene | | If toEntreMed |
| | Celgene Corporation | | EntreMed, Inc. |
| | 86 Morris Avenue | | 9640 Medical Center Drive |
| | Summit, New Jersey 07901 | | Rockville, MD 20870 |
| | Attn: President and Chief Operating | | Attn: CEO |
| | Officer | | |
ARTICLE 14 – LIST OF APPENDICES
| 14.1 | The following Appendices are incorporated into and made part of thisAgreement: |
Appendix A:Patent Rights
Appendix B: KNOW-HOW
IN WITNESS WHEREOF, the Parties hereto have caused thisAgreement to be executed in duplicate by their duly authorized representatives.
| | | | | | | |
| Celgene Corporation | | EntreMed, Inc. |
| | | | | | | |
| By: | | | | By: | | |
| | | | | | |
| | Sol J. Barer | | | | James S. Burns |
| | | | | | | |
| Title: President & COO | | Title: President & CEO |
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Appendix A: Patent Rights(as ofEffective Date)
| | | | | | | | | | | | | | | | | | |
| |
| | Type | | | Application No. | | | Filing Date | | | Title | | | Status | | | Patent No. | |
| | * | | | * | | | * | | | * | | | * | | | * | |
| |
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Appendix B: KNOW-HOW
| | | |
| Title: | | Celgene’s Tubulin Binding Agents |
| Dated: | | November 8, 2004 |
| From: | | Celgene Drug Discovery |
| Comment: | | As previously provided toEntreMed byCelgene. |
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