EXHIBIT 10.5
LICENSE AGREEMENT
THIS LICENSE AGREEMENT (the "Agreement") effective as of April 4, 1996
(the "Effective Date"), is entered by and between CIBA-GEIGY Limited, a Swiss
corporation, with principal offices at Klybeckstrasse 141, Basel, Switzerland
("Ciba"), and TherAtid, Incorporated, a California corporation, having a
principal place of business at 828 Eastbrook Court, Danville, California
94506-1206 ("TherAtid"). All references to TherAtid shall include its
Affiliates.
RECITALS
A. Ciba is the sole and exclusive owner of certain Patent Fights and
Know-How (as such terms are defined below) relating to [*] and analogs of such
compounds, and the use thereof, and related subject matter; and
B. TherAtid desires to obtain an exclusive license to the Patent Rights
and Know-How and Ciba is willing to grant such a license to TherAtid, on the
terms and conditions herein.
NOW, THEREFORE, Ciba and TherAtid agree as follows:
1. Definitions.
1.1 "Affiliate" means, with respect to each party, any legal
entity that directly or indirectly controls, is controlled by, or is under
common control with, such party, but only for so long as such control shall
continue. One entity shall be deemed to control another entity if such entity
has the power to direct or cause the direction of the management or policies of
the other entity.
1.2 "Confidential Information" shall mean (i) any proprietary
or confidential information or material in tangible form disclosed hereunder
that is marked as "confidential" at the time it is delivered to the receiving
party, or (ii) proprietary or confidential information disclosed orally
hereunder which is identified as confidential or proprietary when disclosed and
such disclosure of confidential information is confirmed in writing within
thirty (30) days by the disclosing party.
1.3 "Dominating Patent" shall mean an unexpired patent owned
or controlled by a third party that has not been invalidated in a final
unappealed or unappealable judgment by a court or competent jurisdiction, which
patent covers the manufacture, use or sale of Licensed Products under
circumstances such that TherAtid or its sublicensees have no commercially
reasonable alternative to obtaining a royalty-bearing license under such patent
in order to commercialize Licensed Products under this Agreement.
1.4 "Field" shall mean all human and veterinary therapeutic
and prophylactic uses, excluding use as a vaccine adjuvant and, with respect to
[*], excluding use for the treatment of asthma and other allergic diseases which
materially affect lung function. As used herein, "vaccine
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adjuvant" shall mean a substance administered with an antigen to enhance the
immune response to that antigen.
1.5 "Gross Profit" shall mean Net Sales amounts received by
TherAtid for the commercial sale of Licensed Products, less (i) any taxes or
other government levies due with regard to such amounts, (ii) any expenses
incurred or accrued in connection with the manufacture, use, marketing, sale or
other disposition of the Licensed Products, and (iii) general and administrative
expenses, reasonably allocated according to GAAP.
1.6 "Know-How" shall mean all ideas, inventions, data, trade
secrets, instructions, processes, formulas, chemical, pharmacological,
toxicological, pharmaceutical, physical and analytical, manufacturing (including
but not limited to processes, yields, reagents and conditions relating to
compound manufacture) data and information, owned or controlled by Ciba existing
as of the Effective Date, which are not generally known during the term of this
Agreement, and which are sufficient to allow a chemist skilled in the art to
synthesize and manufacture Licensed Products, in liposome form or otherwise.
1.7 "Licensed Product" will mean any product which (i) but for
the license granted herein would infringe a Valid Claim in the country such
product is made or sold, or (ii) incorporates in material part or is made using
Know How.
1.8 "Net Sales" means the gross revenues actually received
from sales of Licensed Products by TherAtid and its sublicensees, less (i)
normal and customary rebates, and cash and trade discounts, actually taken, (ii)
sales, use and/or other excise taxes or duties actually paid, (iii) the cost of
any packages and packing, if billed separately, (iv) insurance costs and
outbound transportation charges prepaid or allowed, (v) import and/or export
duties actually paid, and (vi) amounts allowed or credited due to returns.
1.9 "Patent Rights" means the patents listed on Exhibit A
hereto, and all divisions, continuations, continuations-in-part, and
substitutions thereof. Patent Rights shall also include any U.S. and foreign
patent applications or patents owned by or licensed to Ciba which claim
inventions relating to the patent rights listed on Exhibit A, conceived or
reduced to practice in connection with research sponsored by Ciba including,
without limitation, in the laboratory of Dr. Isaiah J. Fidler at the M.D.
Anderson Cancer Center at the University of Texas.
1.10 "Territory" means all countries of the world.
1.11 "Valid Claim" means (i) a claim of an issued and
unexpired patent included within the Patent Rights which has not been held
unenforceable or invalid by a court or other governmental agency of competent
jurisdiction, and which has not been disclaimed or admitted to be invalid or
unenforceable through reissue or otherwise, or (ii) a claim of a pending
application within the Patent Rights.
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2. Grant.
Ciba hereby grants to TherAtid an exclusive, worldwide,
royalty bearing license under the Patent Rights, with the fight to grant and
authorize sub-licenses, to make, have made, import, have imported, use, sell,
offer for sale and otherwise exploit the Licensed Products in the Field in the
Territory.
3. Technical Assistance.
3.1 Delivery of Know-How. Within ninety (90) days after the
Effective Date, Ciba shall deliver to TherAtid the Know-How in electronic or
hard copy formats.
3.2 Technical Assistance. Until six (6) months following
delivery of the Know- How pursuant to Section 3.1, at TherAtid's request, Ciba
shall promptly provide TherAtid or its designee, instruction, advice and
assistance regarding the practice of the Patent Rights and use of the KnowHow,
including without limitation, relating to the manufacture of compounds within
the scope of the Patent Rights. Such assistance shall be provided at a site
agreed by the parties, at agreed times.
[*]
3.3 Regulatory Data and Filings. On the Effective Date,
without additional cost, Ciba shall promptly provide TherAtid with access to and
the fight to use all regulatory filings made by Ciba or its Affiliates with
respect to compounds within the scope of the Patent Rights, together with the
underlying pre-clinical and clinical data. TherAtid and its sublicensees may use
and incorporate such filings and data in support of efforts to obtain regulatory
approval of Licensed Products worldwide.
3.4 Clinical Trial Data. So far as it has the right to do so,
Ciba shall provide TherAtid with all data from any clinical trials performed by
Ciba or its Affiliates with respect to any compound within the scope of the
Patent Rights including but not limited to copies of any clinical trial
agreement(s), protocols, case report forms and supporting documentation relating
to Phase II trials of such compounds. For those data yet to become available
from the ongoing Phase III clinical trial with respect to the evaluation of [*]
for the treatment of osteogenic sarcoma in progress at the National Cancer
Institute of the U.S. National Institutes of Health ("NCI") on the Effective
Date, Ciba will use all reasonable endeavors to help TherAtid obtain access to
such data directly from the NCI, including making a written request to the NCI
to give TherAtid access to the data.
TherAtid and its sublicensees may use and incorporate such
data in support of filings for regulatory approval of Licensed Products
worldwide.
3.5 Other Intellectual Property. In the event that Ciba has
any option or other rights with respect to intellectual property relating to the
Field developed in connection with research sponsored by Ciba including, without
limitation, in the laboratory of Dr. Isaiah J. Fidler at the M.D. Anderson
Cancer Center at the University of Texas, and the owner of such intellectual
property
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refuses to acknowledge or contests such rights, Ciba shall use reasonable
endeavors to perfect and enforce its interest in such intellectual property.
4. Consideration.
4.1 License Fee. Within thirty (30) days of the Effective
Date, TherAtid shall pay to Ciba a license fee of [*].
4.2 Annual Maintenance Fee. TherAtid shall pay to Ciba an
annual maintenance fee of [*] during the period commencing on the first
anniversary of the Effective Date and continuing until the initiation of any
Phase III clinical trial sponsored by TherAtid or a TherAtid sublicensee for any
Licensed Product; provided, however, that in the event that any additional
patients are added to the Phase III clinical trial of [*] in progress on the
Effective Date at the National Cancer Institute of the U.S. National Institutes
of Health, TherAtid's obligations to pay the annual maintenance fee shall
terminate on the date that the first such patient is enrolled in such clinical
trial.
4.3 Milestone Payments. Unless the Agreement is terminated
earlier, following the first achievement by TherAtid of the following milestones
with respect to such first Licensed Product for humans incorporating [*], and
the first Licensed Product for humans incorporating [*], TherAtid shall pay Ciba
one-time milestone payments, as follows:
Event Payment
----- -------
[*]
The payments set forth above shall be made with respect to each of [*],
provided, however, if TherAtid ceases all development of [*] after having made
payments with respect to the applicable compound under this Section 4.3
following the accomplishment of any milestone specified herein, there shall be
no payment due upon the accomplishment of that same milestone with respect to
any subsequent back-up compound after the first backup compound pursued by
TherAtid. When milestones are achieved with respect to such first back-up
compound which were not previously paid with respect to an earlier compound,
such milestone payments shall be paid pursuant to this Section 4.3.
4.4 Royalties. In consideration of the license granted herein,
TherAtid shall pay to Ciba royalties on Net Sales of Licensed Products sold by
TherAtid on a Licensed Product-by- Licensed Product basis as set forth below:
4.4.1 Licensed Products Sold by TherAtid. TherAtid shall
pay to Ciba the following royalties with respect to Net Sales of Licensed
Products sold by TherAtid, as follows:
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(a) [*]
(b) [*]
4.4.2 Licensed Products Sold by Sublicensees. TherAtid
shall pay to Ciba the following royalties with respect to Net Sales of Licensed
Products sold by sublicensees of TherAtid, as follows:
(a) [*]
(b) [*]
Notwithstanding the above, in the event that TherAtid has an
ownership interest, direct or indirect, [*] in any sublicensee, royalties shall
be due with respect to sales of Licensed Products at the rates set forth in
Section 4.2.1, rather than the rates set forth in this Section 4.2.2.
4.4.3 Royalty Reduction. The royalty rates set forth in
Sections 4.4.1 and 4.4.2 above shall be reduced by [*] if the applicable
Licensed Products are not within the scope of an issued Valid Claim within the
Patent Rights in the country such Licensed Products are either made or sold.
4.5 Commercial Impracticability. Notwithstanding the above, in
the event that TherAtid believes that the foregoing royalty rates would make the
sale of Licensed Products commercially impracticable it may notify Ciba, and in
such event the parties shall negotiate in good faith a reduction in such
royalties; provided, the foregoing terms shall remain in effect until such other
terms are agreed in writing.
4.6 One Royalty. No more than one royalty payment shall be due
with respect to a sale of a particular Licensed Product. No multiple royalties
shall be payable because any Licensed Product, or its manufacture, sale or use
is covered by more than one Valid Claim. No royalty shall be payable under
Section 4.4 above with respect to sales of Licensed Products among TherAtid and
its sublicensees, but shall be payable on sales of Licensed Products by TherAtid
or its sublicensees to third parties, nor shall a royalty be payable under this
Article 4 with respect to Licensed Products distributed for use in research
and/or development, in clinical trials or as promotional samples if such
promotional samples are provided without charge.
5. Payments.
5.1 Payment Method. All payments due hereunder shall be made
in U.S. dollars, and shall be made by bank wire transfer in immediately
available funds to an account designated by Ciba. Any payments that are not paid
on the date such payments are due under this Agreement shall bear interest to
the extent permitted by applicable law at the prime rate as reported by the
Chase Manhattan Bank, New York, New York, on the date such payment is due
calculated on the number
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of days such payment is delinquent. This Section 5.1 shall in no way limit any
other remedies available to Ciba.
5.2 Currency Conversion. If any currency conversion shall be
required in connection with the calculation of royalties hereunder, such
conversion shall be made using the selling exchange rate for conversion of the
foreign currency into U.S. dollars, quoted for current "sell" transactions
reported in The Wall Street Journal for the last business day of the calendar
quarter to which such payment pertains.
5.3 Restrictions on Payment. To the extent and as long as the
laws and/or regulations in force in any country prohibit the payment, conversion
or remittance of the royalties as hereby contemplated, TherAtid's obligations
under Article 5 may be discharged by the deposit thereof to the account of
TherAtid, or its designee, in any commercial bank or trust company selected by
Ciba located in such country; provided, that no infraction of law or regulation
occurs in making such deposit. If due to restrictions or prohibitions imposed by
national or international authority, payments cannot be made as aforesaid, the
parties shall consult with a view to finding a prompt and acceptable solution,
and TherAtid will, from time to time, deposit such monies as Ciba may lawfully
direct, at no additional out-of-pocket expense to TherAtid.
5.4 Withholding Taxes. All royalty amounts required to be paid
to Ciba pursuant to this Agreement may be paid with deduction for withholding
for or on account of any taxes (other than taxes imposed on or measured by net
income) or similar governmental charge imposed by a juris diction other than the
United States ("Withholding Taxes") to the extent Ciba or its successor has the
lawful right to utilize the Withholding Taxes paid by TherAtid as a credit
against Ciba's regular tax liability. TherAtid shall provide Ciba a certificate
evidencing payment of any Withholding Taxes hereunder.
6. Reports and Records.
6.1 Royalty Reports. TherAtid shall deliver to Ciba [*] in
which Licensed Products are sold a written report setting forth in reasonable
detail, on a country-by-country and Licensed Product-by-Licensed Product basis,
the calculation of the royalties payable to Ciba for such [*], including the
Licensed Products sold in each country, the Net Sales thereof, and all amounts
received from sublicensees for sales of Licensed Products. Such reports shall be
Confidential Information of TherAtid subject to Article 8 herein.
6.2 Inspection of Books and Records. TherAtid and its
sublicensees shall maintain accurate books and records which enable the
calculation of royalties payable hereunder to be verified. TherAtid shall retain
the books and records for each [*] period for three (3) years after the
submission of the corresponding report under Section 6.1 hereof. Upon thirty
(30) days prior notice to TherAtid and the pertinent sublicensee, independent
accountants selected by Ciba, reasonably acceptable to TherAtid, after entering
into a confidentiality agreement with TherAtid, may have access to the books and
records of TherAtid and its sublicensees to conduct a review or audit once per
calendar year, for the sole purpose of verifying the accuracy of TherAtid's
payments and
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compliance with this Agreement. The accounting firm shall report to Ciba only
whether there has been a royalty underpayment and, if so, the amount thereof.
Such access shall be permitted during TherAtid's normal business hours during
the term of this Agreement and for two (2) years after the expiration or
termination of this Agreement. Any such inspection or audit shall be at Ciba's
expense, however, in the event an inspection reveals underpayment of [*] in any
audit period, TherAtid shall pay the costs of the inspection and promptly pay to
Ciba any underpayment with interest from the date such amount(s) were due, at
the prime rate reported by the Chase Manhattan Bank, New York, New York.
7. Diligence.
7.1 Reasonable Efforts. TherAtid agrees to use reasonable
efforts consistent with its prudent business judgment to diligently develop and
commercialize the Patent Rights and obtain such approvals as may be necessary
for the sale of the Licensed Products in the United States and such other
worldwide markets as TherAtid elects to commercialize the Licensed Products.
TherAtid shall notify Ciba within thirty (30) days after the first commercial
sale of each Licensed Product.
7.2 Sublicense to Ciba. In the event that TherAtid elects not
to commercialize Licensed Products in a particular country itself or through a
sublicensee or a distributor, it shall notify Ciba. In such event, TherAtid
shall negotiate a sublicense with Ciba under the Patent Rights and KnowHow in
such country on reasonable terms customary in the industry to be negotiated in
good faith by the parties.
8. Confidentiality; Publications.
8.1 Confidential Information. Unless otherwise expressly
provided for in this Agreement, both parties shall treat as confidential any
Know-How and any and all other information and data received or derived under
this Agreement from the other party and designated as proprietary or
confidential at the time of disclosure ("Confidential Information"), and shall
not disclose any Confidential Information received from the other party to any
third party during the Agreement Period and for five (5) years thereafter,
except for information which:
(a) was known to the receiving party prior to the
disclosure by the other party as evidenced by written record or other proof;
(b) has become public knowledge through no fault of
the receiving party;
(c) has been received from a third party who did not
acquire it directly or indirectly from the disclosing party;
(d) was independently developed by the receiving
party prior to receipt from the disclosing party, as shown by contemporaneous
written documentation;
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(e) needs to be disclosed to government officials for
purposes of obtaining registration of the Products; or
(f) is compelled to be disclosed in the course of
litigation by a third party, provided that the party compelled to make such
disclosure provides the other party to this Agreement with notice of such
compulsion sufficiently in advance of disclosure so as to provide such other
party a reasonable time period to seek a protective order.
8.2 Use and Disclosures. Notwithstanding the above, TherAtid
may disclose Confidential Information of the other (i) to their legal
representatives and employees, to Affiliates, to legal representatives and
employees of Affiliates, and to consultants, to the extent such disclosure is
reasonably necessary to achieve the purposes of this Agreement, and provided
such representatives, employees and consultants are covered by obligations of
confidentiality with respect to such information no less stringent than those
set forth herein; (ii) in connection with the filing and support of patent
applications; (iii) as required by law or to comply with applicable governmental
regulations or court order or otherwise submit information to tax or other
governmental authorities, including the FDA and its foreign counterparts, or
(iv) to a sublicensee, in confidence, in connection with a sublicense permitted
under this Agreement; provided that if a party is required to make any such
disclosure of another party's Confidential Information, other than pursuant to a
confidentiality agreement, it will give reasonable advance notice to the other
party of such disclosure and, save to the extent inappropriate in the case of
patent applications, will use its reasonable best efforts to secure confidential
treatment of such information in consultation with the other party prior to its
disclosure (whether through protective orders or otherwise) and disclose only
the minimum necessary to comply with such requirements.
8.3 Non-Disclosure. The existence and the terms of this
Agreement shall not be disclosed by TherAtid or Ciba to any third party or be
published unless both parties expressly agree otherwise in writing. The text of
any press release to be issued by TherAtid and/or Ciba concerning this Agreement
as well as the precise date and timing of the press release shall be agreed
between the Parties in writing in advance, such agreement not to be unreasonably
withheld or delayed. However, this restriction shall not apply to disclosure of
information set forth in the form of an agreed press release, which will be
prepared in mutually agreeable format and substance following the closing of
this Agreement, and to announcements required by law or regulation except that
in such event the parties shall coordinate to the extent possible with respect
to the working of any such announcement. This restriction shall not apply to
disclosure of this Agreement to certain private third parties such as the
shareholders of TherAtid, investment bankers, attorneys and other professional
consultants, and prospective investors in TherAtid.
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9. [*]
In the event [*] elects to [*] any Licensed Product [*] shall
notify [*] and [*] shall [*] such Licensed Product [*] on agreed terms
reasonable and customary in the industry. In such case, [*] shall have [*] from
the date it receives such written notice from [*] in which to notify [*] whether
[*] wishes [*]. After the expiration of such [*] period, or any mutually agreed
upon extension thereof, if, [*], the parties have [*] with respect to [*] shall
[*] with regard to such Licensed Product [*].
10. [*]
10.1 [*]. Within [*] from the Effective Date, [*] agrees to
deliver to [*] at no additional cost, [*] of such [*].
10.2 [*]. In the event that [*] wishes to develop or
commercialize a Licensed Product [*] and is unable [*] on commercially
reasonable terms [*] request, [*] agrees during the term of this Agreement at
its discretion either (i) subject to Section [*] all Know-How necessary [*]; or
(ii) to provide [*] with their requirements of [*] at a transfer price equal to
[*] as determined in accordance with GAAP plus a reasonable profit margin
customary in the trade. In the event [*] pursuant to option (ii) hereof, the
parties shall promptly enter into a [*] consistent with the preceding terms.
10.3 [*]. In the event that [*] wishes to develop or
commercialize a Licensed Product [*] and is unable [*] on commercially
reasonable terms [*] request, [*] agrees during the term of this Agreement at
its discretion either (i) subject to Section [*] all Know-How necessary [*]; or
(ii) to provide [*] with their requirements of [*] at a transfer price equal to
[*], as determined in accordance with GAAP plus a reasonable profit margin
customary in the trade. In the event [*] pursuant to option (ii) hereof, the
parties shall promptly enter into a [*] consistent with the preceding terms.
10.4 [*]. In the event that [*] elects to [*] pursuant to
either Section [*] shall provide [*] with at least [*], and shall deliver to [*]
all Know-How relating to the [*] at least [*] prior to the date that [*] shall
cease to provide the applicable [*]. In such event, the parties shall assist and
cooperate with each other in order that [*] may initiate [*] as soon as
practicable, and shall take such actions as are appropriate to achieve such
goal.
11. Representations and Warranties.
11.1 Ciba represents and warrants that: (i) it is a
corporation duly organized validly existing and in good standing under the laws
of Switzerland; (ii) the execution, delivery and performance of this Agreement
have been duly authorized by all necessary corporate action on the part of Ciba;
(iii) Ciba and Ciba-Geigy Corporation are the sole and exclusive owners of all
right, title and interest in the Patent Rights and the Know-How; (iv) Ciba has
the fight to grant the rights and licenses granted herein; (v) the Patent Rights
and Know-How are free and clear of any lien,
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encumbrance, security interest or restriction on license; (vi) it has not
previously granted, and will not grant during the term of this Agreement, any
right, license or interest in or to the Patent Rights or Know-How, or any
portion thereof, inconsistent with the license granted to TherAtid herein; (vii)
there are no threatened or pending actions, suits, investigations, claims or
proceedings in any way relating to the Patent Rights or Know-How; and (viii) the
practice by TherAtid or its sublicensees of the Patent Rights or Know-How
licensed herein does not and shall not require a license, additional to the
license hereby granted, under any other intellectual property owned or
controlled by Ciba or its Affiliates.
11.2 TherAtid. TherAtid represents and warrants that: (i) it
is a corporation duly organized validly existing and in good standing under the
laws of the State of California; and (ii) the execution, delivery and
performance of this Agreement have been duly authorized by all necessary
corporate action on the part of TherAtid.
12. Patent Prosecution and Enforcement.
12.1 Ciba's Responsibilities. Ciba shall, at its sole expense,
have the initial right and obligation to control the preparation, filing,
prosecution and maintenance of the Patent Rights, and any interferences,
re-examinations, reissues and oppositions proceeding relating thereto, using
patent counsel of its choice. Ciba shall consult with TherAtid regarding the
conduct of all such activities, by providing TherAtid a reasonable opportunity
to review and comment on all proposed submissions to any patent office before
submittal, and provided further that Ciba shall keep TherAtid reasonably
informed as to the status of such patent applications by promptly providing
TherAtid copies of all communications relating to such patent applications that
are received from any patent office.
12.2 Ciba Failure to Prosecute. Ciba may elect on ninety (90)
days prior notice to TherAtid to discontinue prosecution of any patent
applications within the Patent Rights or the conduct of any activities with
respect to the patent applications or patents subject to Section 12. 1. In the
event Ciba declines to file or having filed fails to further prosecute or
maintain any patent applications or patents, or conduct any interferences,
re-examinations, reissues or oppositions, then TherAtid shall have the right to
prepare, file, prosecute and maintain such patent applications and patents in
such countries worldwide it deems appropriate, and conduct any interferences, re
examinations, reissues or oppositions, at its sole expense using patent counsel
of its choice. TherAtid may credit any expenses incurred in connection with such
activities set forth in this Section 12.2 against any royalties due Ciba
pursuant to Article 4.
12.3 Copies. Upon request by TherAtid, Ciba shall promptly
provide to TherAtid a copy of any patent applications within the Patent Rights
filed by Ciba or its Affiliates during the term of this Agreement and all
material documents received from or sent to any patent office relating thereto
which relate to the scope, term, maintenance, validity or enforceability of any
of the Patent Rights, or any challenge to or change to any of the preceding.
12.4 Enforcement. If either party becomes aware that any
Patent Rights are being or have been infringed by any third party, such party
shall promptly notify the other party hereto in
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writing describing the facts relating thereto in reasonable detail. Ciba shall
have the initial right, but not the obligation, to institute, prosecute and
control any action, suit or proceeding (an "Action") with respect to such
infringement, including any declaratory judgment action, at its expense, using
counsel of its choice. In the event Ciba fails to initiate or defend any Action
involving the Patent Rights within one hundred eighty (180) days of receiving
notice of any alleged infringement, TherAtid shall have the fight, but not the
obligation, to initiate and control such an Action, and Ciba shall cooperate
with TherAtid in connection with any such Action. Any amounts recovered in such
Action shall be used first to reimburse TherAtid and Ciba for any costs and
expenses incurred in connection with such Action (including attorneys' and
experts' reasonable fees), and any remainder shall be divided between the
parties with Ciba receiving [*] and TherAtid [*].
12.5 Third Party Royalty Offset. In the event that TherAtid
enters into a license agreement with any third party with respect to a
Dominating Patent or to avoid or settle a claim of infringement or
misappropriation of any intellectual property fight made by such third party due
to TherAtid's practice of the Patent Rights, TherAtid may offset any payments
made in accordance with such license agreements against any amounts owed Ciba
pursuant to Article 4 hereof, up to a [*] of the amounts due thereunder.
12.6 Patent Term Extensions. With respect to any patent within
the Patent Rights, Ciba will designate TherAtid or its designee as its agent for
obtaining an extension of such patent or governmental equivalent which extends
the exclusivity of any of the patent subject matter where available in any
country in the world or if not feasible, at TherAtid's option, permit TherAtid
to file in Ciba's name or diligently obtain such extension for TherAtid or its
sublicensee(s), at TherAtid's expense. Furthermore, Ciba and its Affiliates
agree to provide reasonable assistance to facilitate TherAtid's or its
sublicensees' efforts to obtain any extension.
13. Arbitration.
Ciba and TherAtid agree that any dispute or controversy
arising out of, in relation to, or in connection with this Agreement, or the
validity, enforceability, construction, performance or breach thereof, shall be
settled by binding arbitration in New York, New York, United States of America,
under the then-current Licensing Agreement Rules of the American Arbitration
Association by one (1) arbitrator appointed in accordance with such Rules. The
arbitrators shall determine what discovery will be permitted, based on the
principle of limiting the cost and time which the parties must expend on
discovery; provided, the arbitrators shall permit such discovery as they deem
necessary to achieve an equitable resolution of the dispute. Such proceedings
shall be conducted in English, and any written evidence originally in a language
other than English shall be submitted in an English translation accompanied by
the original or a true copy thereof. The decision and/or award rendered by the
arbitrator shall be written, final and non-appealable and may be entered in any
court of competent jurisdiction. In the event that in any arbitration instituted
pursuant to Section 15.2, the arbitrator determines that there has been a
material breach of the Agreement, at the option of the non breaching party, the
arbitrator shall direct that the Agreement be terminated effective immediately.
The parties agree that, any provision of applicable law notwithstanding, they
will not request, and the arbitrator shall have no authority to award, punitive
or exemplary damages against any party. The
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costs of any arbitration, including administrative fees and fees of the
arbitrator, shall be shared equally by the parties. Each party shall bear the
cost of its own attorneys' fees and expert fees.
14. Indemnification.
14.1 TherAtid. TherAtid shall indemnify, defend and hold
harmless Ciba and its directors, officers, employees and agents (each a "Ciba
Indemnitee") from and against any and all liabilities, damages, losses, costs or
expenses (including reasonable attorneys and professional fees and other
expenses of litigation and/or arbitration) (a "Liability") resulting from any
claim, suit or proceeding brought by a third party against a Ciba Indemnitee,
arising out of or in connection with (i) any misrepresentation with regard to,
or breach of any of the representations and warranties of TherAtid set forth in
Section 11.2, or (ii) the development, manufacture, use, sale or consumption of
any Licensed Product by TherAtid or its sublicensees, except to the extent
caused by the negligence or willful misconduct of Ciba.
14.2 Ciba. Ciba shall indemnify, defend and hold harmless
TherAtid and its directors, officers, employees and agents (each a "TherAtid
Indemnitee") from and against any and all liabilities, damages, losses, costs or
expenses (including reasonable attorneys' and professional fees and other
expenses of litigation and/or arbitration) (a "Liability") resulting from any
claim, suit or proceeding brought by a third party against a TherAtid
Indemnitee, arising out of or in connection with any misrepresentation with
regard to, or breach of any of, the representations and warranties of Ciba set
forth in Section 1.1.
14.3 Procedure. In the event that any Indemnitee intends to
claim indemnification under this Article 14 it shall promptly notify the other
party in writing of such alleged Liability. The indemnifying party shall have
the right to control the defense thereof. The affected Indemnitees shall
cooperate fully with the indemnifying party and its legal representatives in the
investigation and conduct of any Liability covered by this Article 14. The
Indemnitee shall not, except at its own cost, voluntarily make any payment or
incur any expense with respect to any claim, suit or Liability, or make any
admission of liability or attempt to settle any claim without the prior written
consent of the indemnifying party, which such party shall not be required to
give.
15. Term and Termination.
15.1 The term of this Agreement shall commence on the
Effective Date, and unless earlier terminated as provided in Article 15, shall
continue in full force and effect on a country-by- country and Licensed
Product-by-Licensed Product basis until there are no remaining royalty payment
obligations in a country, at which time the Agreement shall expire in its
entirety in such country. Notwithstanding the above, upon the expiration of this
Agreement in any country, TherAtid shall have a non-exclusive, irrevocable,
fully paid-up right and license to use and exploit the Know-How.
15.2 If either party materially breaches this Agreement, the
other party may elect to give the breaching party written notice describing the
alleged breach. If the breaching party has not cured such breach within sixty
(60) days after receipt of such notice, the notifying party will be
-12-
entitled, in addition to any other rights it may have under this Agreement, to
terminate this Agreement effective immediately; provided, however, if either
party receives notification from the other of a material breach and if the party
alleged to be in default notifies the other party in writing within thirty (30)
days of receipt of such default notice that it disputes the asserted default,
the matter will be submitted to non-binding mediation and no termination shall
become effective prior to the completion of such mediation.
15.3 Termination for Insolvency. Either party may terminate
this Agreement if the other becomes the subject of a voluntary or involuntary
petition in bankruptcy or any proceeding relating to insolvency, receivership,
liquidation, or composition or the benefit of creditors, if that petition or
proceeding is not dismissed with prejudice within sixty (60) days after filing.
15.4 Permissive Termination. TherAtid may terminate this
Agreement with respect to any country or any patent application or patent within
the Patent rights with sixty (60) days written notice to Ciba.
15.5 Effect of Termination.
(a) Accrued Rights and Obligations. Termination of
this Agreement for any reason shall not release any party hereto from any
liability which, at the time of such termination, has already accrued to the
other party or which is attributable to a period prior to such termination, nor
preclude either party from pursuing any rights and remedies it may have
hereunder or at law or in equity which accrued or are based upon any event
occurring prior to such termination.
(b) Return of Materials. Upon any termination of this
Agreement, each party shall promptly return to the other party all Confidential
Information received from the other party (except one copy of which may be
retained for archival purposes).
(c) Stock on Hand. In the event this Agreement is
terminated for any reason, TherAtid and its Affiliates and sublicensees shall
have the right to sell or otherwise dispose of the stock of any Licensed Product
subject to this Agreement then on hand, subject to Articles 4 and 5.
(d) Sublicensees. In the event of any termination of
this Agreement any sublicensees granted by TherAtid shall remain in force and
effect and shall be assigned by TherAtid to Ciba, provided, however, that the
financial terms of such sublicenses shall be no less favorable to Ciba than the
terms of this Agreement.
15.6 Survival. Sections 15.5 and 15.6, and Articles 5, 6, 8,
9, 11, 13, 14 and 16 of this Agreement shall survive termination of this
Agreement for any reason.
-13-
16. Miscellaneous.
16.1 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without
reference to principles of conflicts of laws.
16.2 Independent Contractors. The relationship of the parties
hereto is that of independent contractors. The parties hereto are not deemed to
be agents, partners or joint venturers of the others for any purpose as a result
of this Agreement or the transactions contemplated thereby.
16.3 Assignment. Neither party may assign this Agreement or
the supply agreement without the prior written consent of the other, which
consent shall not be unreasonably withheld; provided, however, TherAtid may
assign this Agreement in connection with a transfer of all or substantially all
of its assets relating to the agreements, whether by sale, merger, operation of
law or otherwise. This Agreement shall be binding upon and inure to the benefit
of the parties and their successors and assigns.
16.4 Right to Develop Independently. Nothing in this Agreement
will impair TherAtid's right to independently acquire, license, develop for
itself, or have others develop for it, intellectual property and technology
performing similar functions as the Patent Rights and Know- How or to market and
distribute Licensed Products based on such other intellectual property and
technology.
16.5 Notices. Any required notices hereunder shall be given in
writing by certified mail or overnight express delivery service at the address
of each party below, or to such other address as either party may indicate on
its behalf by written notice. Notice shall be deemed served when delivered or,
if delivery is not accomplished by reason or some fault of the addressee, when
tendered.
If to Ciba: Ciba-Geigy Limited
Pharma Licensing
Klybeckstrasse 141
4002 Basel
Switzerland
Attention:
If to TherAtid: TherAtid, Incorporated
828 Eastbrook Court
Danville, California 94506-1206
Attention: Chief Executive Officer
16.6 Force Majeure. Neither party shall lose any rights
hereunder or be liable to the other party for damages or losses (except for
payment obligations) on account of failure of performance by the defaulting
party if the failure is occasioned by war, strike, fire, Act of God, earthquake,
flood, lockout, embargo, governmental acts or orders or restrictions, failure of
suppliers,
-14-
or any other reason where failure to perform is beyond the reasonable control
and not caused by the negligence, intentional conduct or misconduct of the
nonperforming party and the nonperforming party has exerted all reasonable
efforts to avoid or remedy such force majeure; provided, however, that in no
event shall a party be required to settle any labor dispute or disturbance.
16.7 Compliance with Laws. Each party shall furnish to the
other party any information related to the subject matter of this Agreement
requested or required by that party during the term of this Agreement or any
extensions hereof to enable that party to comply with the requirements of any
U.S. or foreign federal state and/or government agency.
16.8 LIMITATION OF LIABILITY. NEITHER PARTY SHALL BE LIABLE TO
THE OTHER FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL OR INDIRECT DAMAGES ARISING
OUT OF THE PERFORMANCE OF THIS AGREEMENT, HOWEVER CAUSED, UNDER ANY THEORY OF
LIABILITY.
16.9 Further Assurances. At any time or from time to time on
and after the date of this Agreement, Ciba shall at the request of TherAtid (i)
deliver to TherAtid such records, data or other documents consistent with the
provisions of this Agreement, (ii) execute, and deliver or cause to be
delivered, all such consents, documents or further instruments of transfer or
license, and (iii) take or cause to be taken all such actions, as TherAtid may
reasonably deem necessary or desirable in order for TherAtid to obtain the full
benefits of this Agreement and the transactions contemplated hereby.
16.10 Severability. In the event that any provisions of this
Agreement are determined to be invalid or unenforceable by a court of competent
jurisdiction, the remainder of the Agreement shall remain in full force and
effect without said provision. The parties shall in good faith negotiate a
substitute clause for any provision declared invalid or unenforceable, which
shall most nearly approximate the intent of the parties in entering this
Agreement; provided, if the parties are unable to agree on such a substitute
clause and the deletion of the provision held invalid or unenforceable would
produce material adverse financial consequences for one party, such party shall
have the fight to terminate the Agreement with one hundred eighty (180) days
notice.
16.11 Waiver. The failure of a party to enforce any provision
of the Agreement shall not be construed to be a waiver of the right of such
party to thereafter enforce that provision or any other provision or right.
16.12 Entire Agreement; Amendment. This Agreement including,
its Exhibits, sets forth the entire agreement and understanding of the parties
with respect to the subject matter hereof, and supersedes all prior discussions,
agreements and writings in relating thereto. This Agreement may not be altered,
amended or modified in any way except by a writing signed by both parties.
16.13 Counterparts. This Agreement may be executed in two
counterparts, each of which shall be deemed an original and which together shall
constitute one instrument.
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IN WITNESS WHEREOF, Ciba and TherAtid have executed this Agreement by
their respective duty authorized representatives.
CIBA-GEIGY LIMITED THERATID, INCORPORATED
By: /s/ DR. E. SCHWEIZER By: /s/ ANTHONY E. MAIDA III
----------------------------------- ------------------------------
Print Name: Dr. E. Schweizer Print Name: Anthony E. Maida III
--------------------------- ----------------------
Title: Chief Scientific and Technical Title: Chief Executive Officer
-------------------------------- ---------------------------
Adviser
By: /s/ R.E. WALKER
-------------------------
Print Name: R.E. Walker
-----------------
Title: Division Counsel
----------------------
EXHIBIT A: PATENT RIGHTS
-16-
EXHIBIT A
Part I
Patents relating to [*]
Appendix A: Patent rights by Case 4-12450
-----------------------------------------
Country Patent No. Patent Expiry
- ------- ---------- -------------
[*] [*] [*]
Austria 25495 July 25, 2000
Australia 541147 July 25, 2000
Belgium 25495 July 25, 2000
Bermuda 28 July 25, 2000
Canada 1183129 Feb. 26, 2002
Cyprus 1381 July 25, 2000
Czech Republic 276965 July 25, 2000
Denmark 161025 July 25, 2000
Germany 25495 July 25, 2000
Finland 75578 July 21, 2000
France 25495 July 25, 2000
Great Britain 25495 July 25, 2000
Hong Kong 857/87 July 25, 2000
Hungary 188861 July 24, 2000
Ireland 50145 July 24, 2000
Israel 60676 July 24, 2000
Italy 25495 July 25, 2000
Japan 1507734 July 25, 2000
Kenya P3723 July 25, 2000
Luxembourg 25495 July 25, 2000
Malaya 554/87 July 25, 2000
[*] [*] [*]
Netherlands 25495 July 25, 2000
New Zealand 194432 July 24, 2000
Norway 157177 July 22, 2000
Portugal 71607 June 4, 1996
Russia 1277905 July 24, 2000
Russia 1277906 July 24, 2000
Sabah 405/87 July 25, 2000
Sarawak 3237 July 25, 2000
Singapore 381/87 July 25, 2000
South Africa 4487/80 July 24, 2000
Spain 493633 Oct. 27, 2000
Sweden 25495 July 25, 2000
Switzerland 25495 July 25, 2000
USA 4406890 Sept. 27, 2000
Venezuela 49953 April 29, 2002
Appendix B: Patent rights by Case 4-14026
-----------------------------------------
Country Patent No. Patent Expiry
- ------- ---------- -------------
Australia 566879 July 22, 2003
Belgium 897359 July 25, 2003
France 102319 July 18, 2003
Great Britain 102319 July 18, 2003
Hong Kong 798/90 July 18, 2003
Ireland 55793 July 22, 2003
Israel 69294 July 21, 2003
Italy 1168778 July 22, 2003
Luxembourg 102319 July 18, 2003
Netherlands 102319 July 18, 2003
New Zealand 205000 July 22, 2003
[*] [*] [*]
Singapore 779/89 July 18, 2003
South Africa 5360/83 July 22, 2003
Sweden 102319 July 18, 2003
Switzerland 102319 July 18, 2003
USA 5189017 Feb. 23, 2010
USA 5334583 Feb. 23, 2010
Appendix C: Patent rights by Case 4-15115
-----------------------------------------
Country Patent No. Patent Expiry
- ------- ---------- -------------
Austria 178624 Oct. 14, 2005
Australia 590221 Oct. 15, 2005
Belgium 178624 Oct. 14, 2005
[*] [*] [*]
Canada 1260393 Sept. 26, 2006
Denmark 165220 Oct. 15, 2005
Germany 178624 Oct. 14, 2005
Finland 86371 Oct. 14, 2005
France 178624 Oct. 14, 2005
Gibraltar 389 Oct. 14, 2005
Great Britain 178624 Oct. 14, 2005
Greece 852492 Oct. 15, 2000
Hong Kong 1357/94 Oct. 14, 2005
Hungary 198128 Oct. 15, 2005
Ireland 58143 Oct. 14, 2005
Israel 76700 Oct. 14, 2005
Italy 178624 Oct. 14, 2005
[*] [*] [*]
Japan 1897352 Oct. 16, 2005
[*] [*] [*]
Korea (South) 28375 Oct. 16, 2000
Luxembourg 178624 Oct. 14, 2005
Netherlands 178624 Oct. 14, 2005
New Zealand 213828 Oct. 15, 2005
Norway 171443 Oct. 15, 2005
Pakistan 129986 Oct. 10, 2001
Philippines 22978 Feb. 24, 2006
Portugal 81298 Aug. 31, 2002
Singapore 898/93 Oct. 14, 2005
South Africa 7888/85 Oct. 15, 2005
Spain 547889 Aug. 26, 2006
Sweden 178624 Oct. 14, 2005
Switzerland 178624 Oct. 14, 2005
Taiwan 25805 Oct. 15, 2001
USA 4971802 Nov. 20, 2007
Appendix D: Patent rights by Case 4-16897
-----------------------------------------
Country Patent No. Patent Expiry
- ------- ---------- -------------
Australia 623876 Jan. 31, 2009
Austria 329609 Feb. 6, 2009
Belgium 329609 Feb. 6, 2009
Canada 1336578 Aug. 8, 2012
[*] [*] [*]
France 329609 Feb. 6, 2009
Germany 329609 Feb. 6, 2009
Great Britain 329609 Feb. 10, 2009
Ireland 63493 Feb. 10, 2009
Israel 89248 Feb. 10, 2009
Italy 329609 Feb. 6, 2009
[*] [*] [*]
[*] [*] [*]
Luxembourg 329609 Feb. 6, 2009
Netherlands 329609 Feb. 6, 2009
New Zealand 227944 Feb. 10, 2009
Philippines 26919 Dec. 3, 2009
South Africa 1053/89 Feb. 10, 2009
Sweden 329609 Feb. 6, 2009
Switzerland 329609 Feb. 6, 2009
USA 5137720 Aug. 11, 2009
Appendix E: Patent Rights by Case 4-17454
-----------------------------------------
Country Patent No. Patent Expiry
USA 4,994,440 Feb. 13, 2009
Note: Ciba-Geigy Corporation had a Research Collaboration Agreement with the
Roswell Park Memorial Institute which it has not been possible to track down,
and consequently although the above-mentioned patent is in the name of Ciba, it
may be that, in line with other Agreements between Ciba, the Roswell Park
Memorial Institute and Health Research, Inc. concluded at about the same time,
some royalty payment of the order of 1% to 5% (taking into account either
party's contribution to the development) would have to be made to Roswell Park
for exploitation of this patent for the indication of renal cell carcinoma, the
precise amount to be negotiated prior to commercialization.
EXHIBIT A
Part II
Patents relating to [*]
Appendix A: Patent rights by Case 4-18903
(based on Swiss priority patent application no. 3776/91-2, filed Dec. 19, 1991)
Country Patent No. Patent Expiry
- ------- ---------- -------------
[*] [*] [*]
New Zealand 245507 Dec. 17, 2012
Portugal 548024 Dec. 11, 2012
[*] [*] [*]
South Africa 9831/92 Dec. 18, 2012
[*] [*] [*]
USA 5342977 Dec. 17, 2012