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.
EXHIBIT 10.10
LICENSE AGREEMENT
BETWEEN
PRESIDENT AND FELLOWS OF HARVARD COLLEGE
AND
KOSAN BIOSCIENCES, INC.
Effective as of December, 1998
Re: Harvard Case No 1185-95
In consideration of the mutual promises and covenants set forth below, the
parties hereto agrees as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
1.1 AFFILIATE: any company, corporation, or business in which LICENSEE owns
or controls at least fifty percent (50%) of the voting stock or other
ownership. Unless otherwise specified, the term LICENSEE includes
AFFILIATES.
1.2 FIELD: polyketide production, drug discovery and screening of
polyketides and [**], manufacture of compounds
developed as a result of such activities, and commercialization of such
compounds for any and all purposes.
1.3 HARVARD: President and Fellows of Harvard College, a nonprofit
Massachusetts educational corporation having offices at the Office for
Technology and Trademark Licensing, 124 Mt. Auburn Street, Suite 410
South, Cambridge, Massachusetts 02138.
1.4 LICENSED PROCESSES: the processes covered by a VALID CLAIM in the
country where such process is used, or in the country where the
resulting product is manufactured or sold.
1.5 LICENSED PRODUCTS: products covered by a VALID CLAIM in the country of
manufacture, use or sale, or products made or services provided in
accordance with or by the practice of LICENSED PROCESSES.
1.6 LICENSEE: Kosan Biosciences, Inc. (Kosan) a corporation organized under
the laws of California having its principal offices at 1450 Rollins
Road, Burlingame, CA 94010.
1.7 NET SALES: the amount billed, invoiced, or received (whichever occurs
first) by LICENSEE or its sublicensees, for sales, leases, or other
transfers of LICENSED PRODUCTS, less:
(a) customary trade, quantity or cash discounts and non-affiliated
brokers' or agents' commissions actually allowed and taken;
(b) amounts repaid or credited by reason of rejection or return;
and
[**] 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.
(c) to the extent separately stated on purchase orders, invoices,
or other documents of sale, duties, taxes levied on and/or
other governmental charges made as to production, sale,
transportation, delivery or use and paid by or on behalf of
LICENSEE or sublicensees.
(d) reasonable charges for delivery or transportation provided by
third parties, if separately stated.
NET SALES also includes the fair market value of any non-cash
consideration received by LICENSEE or sublicensees for the sale, lease,
or transfer of LICENSED PRODUCTS. In the event LICENSEE negotiates in
good faith a sublicense with a definition of NET SALES which differs
from the above, and provided the negotiated definition does not cause
material changes in the royalties due HARVARD, such negotiated
definition shall control royalties due HARVARD hereunder for such
sublicense, provided that HARVARD shall have thirty (30) days to review
and approve the proposed negotiated definition, which approval shall
not be unreasonably withheld.
1.8 ACADEMIC RESEARCH PURPOSES: use of PATENT RIGHTS for academic research
or other not-for-profit scholarly purposes which are undertaken at a
non-profit or governmental institution, that does not use the PATENT
RIGHTS in the production or manufacture of products for sale or the
performance of services for a fee, or in the performance of research
sponsored by another for-profit entity. LICENSEE acknowledges that
HARVARD is currently receiving research support from a foundation
entity for cloning the biosynthetic genes for a particular natural
product and for the expression of genes once cloned to test for
activity, and such research shall be deemed to be for ACADEMIC RESEARCH
PURPOSES hereunder, and HARVARD represents that the foundation sponsor
has no right to manufacture or commercialize products under the PATENT
RIGHTS.
1.9 NON-ROYALTY SUBLICENSE INCOME: Sublicense issue fees, sublicense
maintenance fees, sublicense milestone payments, and similar
non-royalty payments made by sublicensees to LICENSEE on account of
sublicenses pursuant to this Agreement, including any initial option or
license fees for any sublicense which includes the PATENT RIGHTS, and
rights to the LICENSED PROCESSES or LICENSED PRODUCTS. Notwithstanding
the above, it is understood and agreed that NON-ROYALTY SUBLICENSEE
INCOME shall not include any amounts received by LICENSEE from
sublicensees for: the purchase of equity in LICENSEE, debt financing,
research and development, the license or sublicense of any intellectual
property other than the PATENT RIGHTS, products other than LICENSED
PRODUCTS, reimbursement for patent or other expenses, or sublicense
milestone payments and other payments for milestones achieved or other
events that did not result from the use of LICENSED PROCESSES or are
not for LICENSED PRODUCTS.
1.10 PATENT RIGHTS: United States patent application [**], the inventions
described and claimed therein, and any divisions, substitutions,
continuations thereof, and continuations-in-part thereof to the extent
the claims are directed to subject matter specifically described in
[**], patents issuing on any of the preceding, and reexaminations,
reissues and extensions thereof, and any and all foreign patent
applications and patents corresponding thereto, or corresponding to PCT
patent application No. US96/16202, all to the extent owned or
controlled by HARVARD.
1.11 TERRITORY: Worldwide.
[**] 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.
1.12 VALID CLAIM: means an issued claim of any unexpired patent or a claim
of any pending patent application within the PATENT RIGHTS which has
not been held unenforceable, unpatentable or invalid by a decision of a
court or governmental body of competent jurisdiction, in a ruling that
is unappealable or unappealed within the time allowed for appeal, which
has not been rendered unenforceable through disclaimer or otherwise,
and which has not been lost through an interference proceeding.
Notwithstanding the foregoing, a claim of a pending patent application
shall cease to be a VALID CLAIM if no patent has issued on such claim
on or prior to the seventh anniversary of the date of filing of the
corresponding parent patent application, provided that such claim shall
once again become a VALID CLAIM on the issue date of a patent that
subsequently issues and covers such claim.
1.13 The terms 'Public Law 96-517" and 'Public Law 98-620" include all
amendments to those statutes.
1.14 The terms 'sold' and 'sell' include, without limitation, leases and
other transfers and similar transactions.
ARTICLE II
REPRESENTATIONS
2.1 HARVARD and the Regents of the University of California ('The Regents')
are joint owners by assignment from Ralph H. Lambalot, Amy M. Gehring
and Christopher T. Walsh (to HARVARD) and Ralph Reid (to The Regents)of
certain rights, title and interest in United States Patent Application
[**] entitled 'Acyl Carrier Protein Synthases and Uses Thereof'
(H.U. Case $$1185-95), in the foreign patent applications corresponding
thereto, and in the inventions described and claimed therein.
The Regents have authorized HARVARD to act as their sole patent and
licensing agent for said patent applications under a letter of
Agreement dated April 10, 1997, a copy of which is included in Appendix
A.
2.2 HARVARD represents and warrants that: (i) the execution, delivery and
performance of this Agreement have been duly authorized by all
necessary institutional action on the part of HARVARD and The Regents;
(ii)the PATENT RIGHTS are free and clear of any lien, encumbrance,
security interest or restriction on license, other than those specified
in Article III of this Agreement; (iii) 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 any portion thereof,
inconsistent with the license granted to LICENSEE herein; and (iv)there
are no threatened or pending actions, suits, investigations, claims or
proceedings in any way relating to the PATENT RIGHTS.
2.3 HARVARD has the authority to issue licenses under PATENT RIGHTS with
respect to the entire interest of The Regents and HARVARD therein.
2.4 HARVARD is committed to the policy that ideas or creative works
produced at HARVARD should be used for the greatest possible public
benefit, and believes that every reasonable incentive should be
provided for the prompt introduction of such ideas into public use, all
in a manner consistent with the public interest.
[**] 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.
2.5 LICENSEE intends to diligently develop the invention and to bring
LICENSED PRODUCTS to market which are subject to this Agreement.
2.6 LICENSEE is desirous of obtaining an exclusive license in the TERRITORY
in order to practice the above-referenced invention covered by PATENT
RIGHTS in the United States and in certain foreign countries, and to
manufacture, use and sell in the commercial market the LICENSED
PRODUCTS made in accordance therewith, and HARVARD is desirous of
granting such a license to LICENSEE in accordance with the terms of
this Agreement.
ARTICLE III
GRANT OF RIGHTS
3.1 HARVARD hereby grants to LICENSEE and LICENSEE accepts, subject to the
terms and conditions hereof, in the TERRITORY and in the FIELD:
an exclusive commercial license under PATENT RIGHTS to make and have
made, to import, have imported, to use and have used, to offer for
sale, to sell and have sold the LICENSED PRODUCTS, and to practice the
LICENSED PROCESSES, for the life of the PATENT RIGHTS. Such licenses
shall include the right to grant sublicenses under the terms outlined
in this Agreement. In order to provide LICENSEE with commercial
exclusivity for so long as the license under PATENT RIGHTS remains
exclusive, HARVARD agrees that it will not grant licenses under PATENT
RIGHTS to others except as required by HARVARD's obligations in
paragraph 3.2(a) or as permitted in paragraph 3.2(b).
3.2 The granting and exercise of this license is subject to the
following conditions:
(a) HARVARD's "Statement of Policy in Regard to Inventions,
Patents and Copyrights," dated August 10, 1998, Public Law
96-517, Public Law 98-620, and HARVARD's obligations under
agreements with other non-profit sponsors of research. Any
right granted in this Agreement greater than that permitted
under Public Law 96-517, or Public Law 98-620, shall be
subject to modification as may be required to conform to the
provisions of those statutes.
(b) HARVARD reserves the right to make and use, and grant to
others researchers at non-profit or governmental institutions
non-exclusive licenses to make and use for ACADEMIC RESEARCH
PURPOSES only the subject matter described and claimed in
PATENT RIGHTS.
(c) LICENSEE shall use diligent efforts to effect introduction of
the LICENSED PRODUCTS into the commercial market as soon as
practicable, consistent with sound and reasonable business
practice and judgment; thereafter, until the expiration of
this Agreement, LICENSEE shall endeavor to keep LICENSED
PRODUCTS reasonably available to the public.
(d) At any time after three (3) years from the effective date of
this Agreement, HARVARD may terminate or render this license
non-exclusive if, in HARVARD's reasonable judgment, the
Progress Reports furnished by LICENSEE do not demonstrate that
LICENSEE:
(i) has put the PATENT RIGHTS into commercial use in the
country or countries hereby licensed, directly or
through a sublicense, and is keeping products
resulting from the use of the PATENT RIGHTS
reasonably available to the public, or
(ii) is engaged in research, development, manufacturing,
marketing or sublicensing activity reasonably
appropriate to achieving the objectives of 3.2(d)(i).
Such activity shall include, but not necessarily be
limited to, achievement of the following milestones
by LICENSEE:
(i) within twelve (12) months from the effective date
of this Agreement, initiate or sponsor experiments
designed to demonstrate heterologous expression of an
[**] polyketide, using a LICENSED PROCESS or
LICENSED PRODUCT;
(ii) within eighteen (18) months from the effective
date of this Agreement, initiate or sponsor
experiments designed to demonstrate heterologous
expression of a [**] polyketide, using a LICENSED
PROCESS or LICENSED PRODUCT;
(iii) within eight (8) years from the effective date
of this Agreement, file or have a sublicensee file an
IND or other regulatory permit for a LICENSED PROCESS
or LICENSED PRODUCT;
(e) In all sublicenses granted by LICENSEE hereunder, LICENSEE
shall include a requirement that the sublicensee use
reasonable efforts to bring the subject matter of the
sublicense into commercial use in a timely manner. LICENSEE
shall further provide in such sublicenses that such
sublicenses are subject and subordinate to the terms and
conditions of this Agreement, except (i): the sublicensee may
not further sublicense, except to its agents, AFFILIATES, and
distributors; and (ii) the rate of royalty on NET SALES paid
by the sublicensee to the LICENSEE. Copies of all sublicense
agreements shall be provided promptly to HARVARD; such copies
shall be treated as confidential consistent with the
provisions of Article 5.4(d).
(f) If LICENSEE is unable or unreasonably unwilling to grant
sublicenses, either as suggested by HARVARD or by a potential
sublicensee or otherwise, and LICENSEE has not previously
granted an exclusive license to a third party, then HARVARD
may directly license such potential sublicensee unless, in
HARVARD's reasonable judgment, such license would be contrary
to sound and reasonable business practice, and the granting of
such license would not materially increase the availability to
the public of LICENSED PRODUCTS. In making any such
determination, HARVARD agrees to take into serious
consideration LICENSEE's reasons for being unwilling to grant
the sublicense, including LICENSEE's belief that the
sublicense would have a material adverse impact on LICENSEE's
business. In any such event LICENSEE shall have the right of
last refusal, to be exercised within sixty (60) days after
notice in writing from Harvard, to sublicense such rights to
such sublicensee(s) on terms no less favorable to such
sublicensee(s) than those negotiated by Harvard.
(g) A license in any other territory or field of use in addition
to the TERRITORY and/or FIELD shall be the subject of a
separate agreement and shall require LICENSEE's submission of
evidence, satisfactory to HARVARD, demonstrating LICENSEE's
willingness and ability to develop and commercialize in such
other territory and/or field
[**] 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.
of use the kinds of products or processes likely to be
encompassed in such other territory and/or field.
(h) During the period of exclusivity of this license in the United
States, LICENSEE shall cause any LICENSED PRODUCT produced for
sale by LICENSEE in the United States to be manufactured
substantially in the United States. In the event that LICENSEE
cannot obtain this guarantee from a sublicensee, HARVARD
agrees to cooperate with LICENSEE in requesting the
appropriate exemption from the United States Government.
3.3 All rights reserved to the United States Government and others under
Public Law 96-517, and Public Law 98-620, shall remain and shall in no
way be affected by this Agreement.
ARTICLE IV
ROYALTIES
4.1 LICENSEE shall pay to HARVARD a non-refundable license issue fee of
[**] dollars ($[**]). [**] of this sum ($[**]) shall be payable upon
execution of this Agreement and the balance of the sum ($[**])
on the first anniversary of the date of execution.
4.2 (a) LICENSEE shall pay to HARVARD during the term of this
Agreement with respect to LICENSED PRODUCTS within the scope
of an issued VALID CLAIM in the country of manufacture, use or
sale, a royalty of [**] percent ([**]%) of NET SALES made
by LICENSEE. In the case of sublicenses, LICENSEE shall pay to
HARVARD a royalty of [**] percent ([**]%) of NET SALES
made by sublicensees with respect to LICENSED PRODUCTS within
the scope of an issued VALID CLAIM in the country of
manufacture use or sale. In the case of sublicenses, LICENSEE
shall also pay to HARVARD a royalty of [**] percent ([**]%)of
NON-ROYALTY SUBLICENSE INCOME, provided however, that this sum
shall not exceed [**] dollars ($[**]) for any given
sublicense.
(b) The royalty rates set forth in Paragraph 4.2(a) above shall be
reduced by [**] percent ([**]%) if the applicable LICENSED
PRODUCTS are not within the scope of an issued VALID CLAIM of
a patent within the PATENT RIGHTS in the country such LICENSED
PRODUCTS are manufactured, used or sold, but are within the
scope of a pending VALID CLAIM of a patent application within
the PATENT RIGHTS in the country such LICENSED PRODUCTS are
manufactured used or sold. However, this provision shall not
apply to NON-ROYALTY SUBLICENSE INCOME payable under Paragraph
4.2 (a) above.
(c) on sales between LICENSEE and its AFFILIATES or sublicensees
for resale, the royalty shall be paid on the NET SALES of the
AFFILIATE or sublicensee.
(d) In the event that a LICENSED PRODUCT is sold in combination as
a single product with another product, active component or
service whose sale and use are not covered by a VALID CLAIM of
the LICENSED PRODUCT in the country for which the combination
product is sold, NET SALES from such sales for purposes of
calculating the amounts due under Paragraph 4.2(a) and (b)
above shall be calculated by
[**] 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.
multiplying the NET SALES of that combination by the fraction
A/(A + B), where A is the gross selling price of the LICENSED
PRODUCT sold separately and B is the gross selling price of
the other product, active component or service sold
separately; provided that pursuant to this adjustment
provision the applicable percentage royalty (based on NET
SALES or NON-ROYALTY SUBLICENSE INCOME) shall not be reduced
to below [**] ([**]%) of the original rate specified.
In the event that no such separate sales are made by LICENSEE
or its sublicensee, NET SALES for royalty determination shall
be as reasonably allocated by agreement of HARVARD and
LICENSEE between such LICENSED PRODUCT and such other product,
active component or service, based upon their relative
importance and proprietary protection.
(e) 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 this Paragraph 4.2
with respect to LICENSED PRODUCTS distributed for use in
research and/or development, or in clinical trials.
(f) Royalties due under this Paragraph 4.2 shall be payable on a
country-by-country and LICENSED PRODUCT-by-LICENSED PRODUCT
basis until the expiration of the last-to-expire issued VALID
CLAIM covering such LICENSED PRODUCT in such country.
4.3 No later than January 1 of each calendar year after the first
commercial sale of a LICENSED PRODUCT, LICENSEE shall pay to HARVARD a
minimum annual royalty of [**] dollars ($[**]). This minimum royalty
payment shall be included in the Royalty Reports under Paragraph 5.4
and credited against earned royalties for that calendar year only.
4.4 No later than January 1 of each calendar year after the effective date
of this Agreement, and until the first commercial sale of a LICENSED
PRODUCT, LICENSEE shall pay to HARVARD the following non-refundable
license maintenance royalty and/or advance on royalties. [**]
percent ([**]%) Of such payments may be credited against royalties on
sales due for that calendar year or any subsequent calendar year and
Royalty Reports shall reflect such a credit. However, such credits
shall not reduce the amount of minimum royalties, royalties on sales or
other payments due in any calendar year by more than [**] percent
([**]%) in any one year.
[**] [**] dollars ($[**])
[**] [**] dollars ($[**])
[**] [**] dollars ($[**])
[**] [**] dollars ($[**])
4.5 No later than January 1 of the calendar year following achievement of
the following milestones LICENSEE shall pay to HARVARD the following
non-refundable milestone payments:
[**] $[**]
No second milestone payment for an IND filing shall be made if the
LICENSED PRODUCT for which the second IND filing is made contains an
active ingredient that was a component of
[**] 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.
another LICENSED PRODUCT for which a previous IND filing was made and
the milestone payment therefor paid.
[**] $[**]
Such payments shall be fully credited against royalties on sales due
for any subsequent calendar year or running royalties due for that
calendar year and Royalty Reports shall reflect such a credit. However,
such credits shall not reduce the amount of minimum royalties,
royalties on sales or other payments due in any calendar year by more
than [**] percent ([**]%) in any one year.
4.6 LICENSEE shall be responsible for the payment of any amounts due to
third parties to obtain and practice any rights necessary to exploit
the PATENT RIGHTS. Up to [**] percent ([**]%) of any such payments by
LICENSEE may be credited against any amounts due to HARVARD, except
that such credits shall not reduce the amount of minimum royalties,
royalties on sales or other payments due in any calendar year by more
than [**] percent ([**]%) in any one year.
4.7 The total of all credits against minimum royalties, royalties on sales
or other payments under Article IV shall not reduce the total amount of
minimum royalties, royalties on sales or other payments due to HARVARD
in any calendar year by more than [**] percent ([**]%) in any one year.
Any credit which is unexpended may be carried forward until applied.
ARTICLE V
REPORTING
5.1 Prior to signing this Agreement, LICENSEE has provided to HARVARD a
written research and development plan under which LICENSEE intends to
bring the subject matter of the licenses granted hereunder into
commercial use upon execution of this Agreement. Such plan includes
projections of sales and proposed marketing efforts.
5.2 No later than [**] after June 30 of each calendar year, LICENSEE shall
provide to HARVARD a written annual Progress Report describing progress
on research and development, regulatory approvals, manufacturing,
sublicensing, marketing and sales during the most recent twelve (12)
month period ending June 30 and plans for the forthcoming year. This
Progress Report may be combined with the Royalty Report due under
Paragraph 5.4 (a). If progress differs from that anticipated in the
plan required under Paragraph 5.1, LICENSEE shall explain the reasons
for the difference and propose a modified research and development plan
for HARVARD's review. LICENSEE shall also provide any reasonable
additional data HARVARD requires to evaluate LICENSEE's performance.
5.3 LICENSEE shall report to HARVARD the date of first sale of LICENSED
PRODUCTS (or results of LICENSED PROCESSES) in each country within [**]
of occurrence.
5.4 (a) LICENSEE shall submit to HARVARD within [**] after each [**], a
Royalty Report setting forth for such [**] at least the
following information:
[**] 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.
(i) the number of LICENSED PRODUCTS sold by LICENSEE, its
AFFILIATES and sublicensees in each country, as
reported to LICENSEE, and any subsequent corrections
to the initial report to LICENSEE;
(ii) total billings for such LICENSED PRODUCTS;
(iii) an accounting for all LICENSED PROCESSES used or
sold;
(iv) deductions applicable to determine the NET SALES
thereof;
(v) the amount of NON-ROYALTY SUBLICENSE INCOME received
by LICENSEE, until the amount due under Paragraph 4.2
(a) has been paid; and
(vi) the amount of royalty due thereon, or the amount of
license maintenance or milestone payments due. If no
royalties or other payments are due to HARVARD for
any reporting period, the Royalty Report shall
include the statement that no royalties are due.
Such report shall be certified as correct by an officer of
LICENSEE and shall include a detailed listing of all
deductions from royalties.
(b) LICENSEE shall pay to HARVARD with each such Royalty Report
the amount of royalty due with respect to such half year. If
multiple technologies are covered by the license granted
hereunder, LICENSEE shall specify which PATENT RIGHTS are
utilized for each LICENSED PRODUCT and LICENSED PROCESS
included in the Royalty Report.
(c) All payments due hereunder shall be deemed received when funds
are credited to HARVARD's bank account and shall be payable by
check or wire transfer in United States dollars. Conversion of
foreign currency to U.S. dollars shall be made at the
conversion rate existing in the United States (as reported in
the New York Times or the Wall Street Journal) on the last
working day of each royalty period. No transfer, exchange,
collection or other charges shall be deducted from such
payments.
(d) All such royalty reports and other reports containing
LICENSEE'S business terms and information shall be maintained
in confidence by HARVARD except as required by law, or by
specific reporting requirements to the Federal Government;
however, HARVARD may include in its usual reports annual
amounts of royalties paid.
(e) Late payments shall be subject to a charge of [**] percent
([**]) per month, or [**] dollars ($[**]), whichever is
greater.
ARTICLE VI
RECORD KEEPING
6.1 LICENSEE shall keep, and shall require its AFFILIATES and sublicensees
to keep, accurate records (together with supporting documentation) of
LICENSED PRODUCTS made, used or sold under this Agreement, appropriate
to determine the amount of royalties due to HARVARD
[**] 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.
hereunder. Such records shall be retained for at least [**]
following the end of the reporting period to which they relate. They
shall be available during normal business hours for examination by an
accountant selected by HARVARD, reasonably acceptable to LICENSEE for
the sole purpose of verifying reports and payments hereunder. In
conducting examinations pursuant to this paragraph, HARVARD's
accountant shall have access to all records which HARVARD reasonably
believes to be relevant to the calculation of royalties under Article
IV.
6.2 HARVARD's accountant shall not disclose to HARVARD any information
other than information relating to the accuracy of reports and payments
made hereunder.
6.3 Such examination by HARVARD's accountant shall be at HARVARD's expense,
except that if such examination shows an underreporting or underpayment
in excess of [**] percent ([**]%) for any [**] period, then
LICENSEE shall pay the cost of such examination as well as any
additional sum that would have been payable to HARVARD had the LICENSEE
reported correctly, plus interest on said sum at the rate of
[**] percent ([**] %) per month.
ARTICLE VII
DOMESTIC AND FOREIGN PATENT FILING AND MAINTENANCE
7.1 Upon execution of this Agreement, LICENSEE shall reimburse HARVARD for
all reasonable expenses HARVARD has incurred for the preparation,
filing, prosecution and maintenance of PATENT RIGHTS. Thereafter,
subject to Paragraph 7.4, LICENSEE shall reimburse HARVARD, within
forty five (45) days from receipt of an invoice, for all reasonable
amounts for such future expenses agreed upon by the parties under this
Article VII, which invoice shall not precede the accrual of such future
expenses by more than sixty (60) days. Late payment of these invoices
shall be subject to interest charges of [**] percent ([**]%) per
month. HARVARD shall, in its sole discretion, using patent counsel
reasonably acceptable to LICENSEE, be responsible for the preparation,
filing, prosecution and maintenance of any and all patent applications
and patents included in PATENT RIGHTS. HARVARD shall consult with
LICENSEE as to the preparation, filing, prosecution and maintenance
of such patent applications and patents and any interference or
opposition relating thereto and shall furnish to LICENSEE copies of
documents relevant to any such preparation, filing, prosecution or
maintenance.
7.2 HARVARD shall promptly provide to LICENSEE copies of any and all patent
applications within the PATENT RIGHTS filed by HARVARD 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.
7.3 HARVARD and LICENSEE shall cooperate fully in the preparation, filing,
prosecution and maintenance of PATENT RIGHTS and of all patents and
patent applications licensed to LICENSEE hereunder, executing all
papers and instruments or requiring members of HARVARD to execute such
papers and instruments so as to enable HARVARD to apply for, to
prosecute and to maintain patent applications and patents in HARVARD's
name in any country. Each party shall provide to the other prompt
notice as to all matters which come to its attention and which may
affect the preparation, filing, prosecution or maintenance of any such
patent applications or patents.
[**] 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.
7.4 LICENSEE may elect to surrender its PATENT RIGHTS in any country
upon sixty (60) days' written notice to HARVARD. Such notice shall
not relieve LICENSEE from responsibility to reimburse HARVARD for
patent-related expenses incurred prior to the expiration of the
sixty (60)-day notice. However, LICENSEE shall not have
responsibility to reimburse HARVARD for patent-related expenses
incurred subsequent to expiration of the notice, and HARVARD shall
make an effort to minimize patent-related expenses during the sixty
(60)-day notice period.
ARTICLE VIII
INFRINGEMENT
8.1 With respect to any PATENT RIGHTS that are exclusively licensed to
LICENSEE pursuant to this Agreement, LICENSEE shall have the right but
not the obligation to prosecute in its own name and at its own expense
any suit relating to the infringement of such patent, so long as such
license is exclusive at the time of the commencement of such action.
LICENSEE shall have the right to authorize sublicensees to conduct such
actions. HARVARD agrees to notify LICENSEE promptly of each
infringement of such patents of which HARVARD is or becomes aware,
providing all available details relating thereto. Before LICENSEE
commences an action with respect to any infringement of such patents,
LICENSEE shall give careful consideration to the views of HARVARD and
to potential effects on the public interest in making its decision
whether or not to sue.
8.2 (a) If LICENSEE elects to commence an action as described
above, HARVARD may, to the extent permitted by law, elect to
join as a party in that action. Regardless of whether HARVARD
elects to join as a party, HARVARD shall cooperate fully with
LICENSEE in connection with any such action.
(b) If HARVARD elects to join as a party pursuant to subparagraph
(a), HARVARD shall jointly control the action with LICENSEE.
(c) If HARVARD is required to join LICENSEE as a party pursuant to
subparagraph (a) for LICENSEE to maintain such activity,
HARVARD shall join and LICENSEE shall reimburse HARVARD for
any costs HARVARD incurs, including reasonable attorneys'
fees, as part of an action brought by LICENSEE, irrespective
of whether HARVARD becomes a co-plaintiff.
8.3 No settlement, consent judgment or other voluntary final disposition of
the suit which imposes any obligations or costs on HARVARD may be
entered into without the prior written consent of HARVARD, which
consent shall not be unreasonably withheld.
8.4 Recoveries or reimbursements from actions commenced pursuant to this
Article shall first be applied to reimburse LICENSEE and HARVARD for
any costs of the action not previously reimbursed under Paragraph
8.2(c) above. Any remaining recoveries or reimbursements which are paid
in replacement of lost or forfeited sales by LICENSEE or a sublicensee
shall be retained by LICENSEE and treated as NET SALES of LICENSED
PRODUCTS, subject to the royalty obligations to HARVARD outlined in
Paragraph 4.2 above. Any additional recoveries or reimbursements which
are payments for wilful infringement or punitive damages shall be
shared by LICENSEE and HARVARD in proportion to the expenses each,
without reimbursement from the other, incurred in conducting the suit.
8.5 If LICENSEE elects not to exercise its right to prosecute an
infringement of the PATENT RIGHTS pursuant to this Article, HARVARD
may do so at its own expense, controlling such action and retaining all
recoveries therefrom. LICENSEE shall cooperate fully with HARVARD in
connection with any such action, and subsequent to determination of
recoveries or reimbursements, costs incurred by LICENSEE shall be
reimbursed by HARVARD.
8.6 In the event the recoveries or reimbursements are not sufficient to
cover the parties' costs, reimbursements shall be allocated in
proportion to the expenses LICENSEE and HARVARD incurred in conducting
the suit.
8.7 Without limiting the generality of Paragraph 8.5, HARVARD may, at its
election and by notice to LICENSEE, establish a time limit of one
hundred and twenty (120) days for LICENSEE to decide whether to
prosecute any infringement of which HARVARD is or becomes aware. If, by
the end of such period, LICENSEE has not commenced such an action,
HARVARD may prosecute such an infringement at its own expense,
controlling such action and retaining all recoveries therefrom. With
respect to any such infringement action prosecuted by HARVARD in good
faith, LICENSEE shall pay over to HARVARD any payments (whether or not
designated as 'royalties') made by the alleged infringer to LICENSEE
under any existing sublicense, where sublicensee has been notified that
they are in default under the terms of the sublicense, or future
sublicense entered into as a result of such infringement action
authorizing LICENSED PRODUCTS, up to the amount of HARVARD's
unreimbursed litigation expenses (including, but not limited to,
reasonable attorneys' fees).
8.8 If a declaratory judgment action is brought naming LICENSEE as a
defendant and alleging invalidity of any of the PATENT RIGHTS, and
requiring LICENSEE to respond within twenty (20) days, HARVARD may,
with notice to LICENSEE within ten (10) days of the commencement
of such an action, elect to take over the sole defense of the action
at its own expense. LICENSEE shall cooperate fully with HARVARD in
connection with any such action. Otherwise, LICENSEE shall have the
right to conduct such action, subject to Paragraph 8.1 above.
ARTICLE IX
TERMINATION OF AGREEMENT
9.1 This Agreement, unless terminated as provided herein, shall remain in
effect until the last patent or patent application in PATENT RIGHTS has
expired or been abandoned.
9.2 HARVARD may terminate this Agreement with thirty (30) days notice
and without cure by LICENSEE or within such other period expressly
provided in this Paragraph 9.2, as follows:
(a) If LICENSEE does not make a payment due hereunder and fails to
cure such non-payment (including the payment of interest in
accordance with Paragraph 5.4(e)) within forty-five (45) days
after the date of notice in writing of such non-payment by
HARVARD.
(b) If LICENSEE defaults in its obligations under Paragraph
10.4(c) and (d) to procure and maintain insurance.
(c) If, at any time after three (3) years from the date of this
Agreement, HARVARD determines that the Agreement should be
terminated pursuant to Paragraph 3.2(d).
(d) If LICENSEE shall become insolvent, shall make an assignment
for the benefit of creditors, or shall have a petition in
bankruptcy filed for or against it. Such termination shall be
effective immediately upon HARVARD giving written notice to
LICENSEE.
(e) If an examination by HARVARD's accountant pursuant to
Article VI shows an underreporting or underpayment by
LICENSEE in excess of twenty percent (20%) for any twelve
(12) month period, and LICENSEE fails to cure such
non-payment within forty-five (45) days after the date of
notice in writing of such non-payment by HARVARD.
(f) If LICENSEE is convicted of a felony relating to the
manufacture, use, or sale of LICENSED PRODUCTS.
(g) Except as provided in subparagraphs (a), (b), (c), (d), (e)
and (f) above, if LICENSEE defaults in the performance of any
obligations under this Agreement and the default has not been
remedied within ninety (90) days after the date of notice
in writing of such default by HARVARD.
9.3 Notwithstanding Paragraph 9.2 above, 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 after receipt of such
notice within the applicable period specific above, the notifying
party will be 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 binding
arbitration as provided in Paragraph 11.15 of this Agreement. In
such event, the nonbreaching party shall not have the right to
terminate this Agreement until it has been determined in such
arbitration proceeding that the other party materially breached this
Agreement, and the breaching party fails to cure such breach within
ninety (90) days after the conclusion of such arbitration proceeding.
9.4 (a) 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) In the event this Agreement is terminated for any reason,
LICENSEE and sublicensees, shall for a period not to exceed
six (6) months or one hundred and eighty (180), have the
right to sell or otherwise dispose of the stock of any
LICENSED PRODUCTS then on hand, subject to Article III.
(c) LICENSEE may terminate this Agreement by giving ninety (90)
days' advance written notice of termination to HARVARD, and
paying a termination fee of five thousand dollars ($5,000).
Upon termination, LICENSEE shall submit a final Royalty
Report to
HARVARD and any royalty payments and unreimbursed patent
expenses invoiced by HARVARD shall become immediately payable.
(d) In the event of any termination of this Agreement any
sublicenses granted by LICENSEE shall remain in force and
effect and shall be assigned by LICENSEE to HARVARD, provided,
that such sublicensee is currently in good standing with
regard to its obligations under the sublicense or has cured
any default or breach within the period provided in such
sublicense, and further provided, that the financial
obligations of each such sublicensee shall be limited to those
due HARVARD hereunder for the practice of such a sublicense,
and further provided that no added obligations are imposed on
HARVARD as a result of this assignment.
9.5 Article X and Paragraphs 6.1, 6.2, 6.3, 8.4, 8.5, 9.4 and 9.5
of this Agreement shall survive termination.
ARTICLE X
GENERAL
10.1 HARVARD does not warrant the validity of the PATENT RIGHTS licensed
hereunder and makes no representations whatsoever with regard to the
scope of the licensed PATENT RIGHTS or that such PATENT RIGHTS may be
exploited by LICENSEE, an AFFILIATE, or sublicensee without infringing
other patents.
10.2 HARVARD EXPRESSLY DISCLAIMS ANY AND ALL IMPLIED OR EXPRESS WARRANTIES
AND MAKES NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR ANY PARTICULAR PURPOSE OF THE PATENT RIGHTS OR INFORMATION
SUPPLIED BY HARVARD, LICENSED PROCESSES OR LICENSED PRODUCTS
CONTEMPLATED BY THIS AGREEMENT.
10.3 (a) LICENSEE shall indemnify, defend and hold harmless HARVARD and
The Regents and their current or former directors, governing
board members, trustees, officers, faculty, medical and
professional staff, employees, students, and agents and their
respective successors, heirs and assigns (collectively, the
'Indemnitees'), against any liability, damage, loss or
expenses (including reasonable attorneys' fees and expenses of
litigation) incurred by or imposed upon the Indemnitees or any
of them in connection with any claims, suits, actions, demands
or judgments arising out of any theory of product liability
(including, but not limited to, actions in the form of tort,
warranty, or strict liability) concerning any product, process
or service made, used or sold pursuant to any right or license
granted under this Agreement.
(b) LICENSEE shall, at its own expense, provide attorneys
reasonably acceptable to HARVARD to defend against any actions
brought or filed against any Indemnitee hereunder with respect
to the subject of indemnity contained herein, whether or not
such actions are rightfully brought.
(c) Beginning at the time any such product, process or service is
being commercially distributed or sold (other than for the
purpose of obtaining regulatory approvals) by LICENSEE or by a
sublicensee, AFFILIATE or agent of LICENSEE, LICENSEE shall,
at its sole cost and expense, procure and maintain commercial
general liability
insurance in amounts not less than two million dollars
($2,000,000) per incident and two million dollars
($2,000,000) annual aggregate and naming the Indemnitees as
additional insureds. During clinical trials of any such
product, process or service, LICENSEE shall, at its sole
cost and expense, procure and maintain commercial general
liability insurance in such equal or lesser amount as
HARVARD shall reasonably require, naming the Indemnitees as
additional insureds. Such commercial general liability
insurance shall provide (i) product liability coverage and
(ii) broad form contractual liability coverage for
LICENSEE's indemnification under this Agreement. If
LICENSEE elects to self-insure all or part of the limits
described above (including deductibles or retentions which
are in excess of two hundred and fifty thousand dollars
($250,000) annual aggregate) such self-insurance program
must be acceptable to HARVARD and the Risk Management
Foundation of the Harvard Medical Institutions, Inc. in
their sole discretion. The minimum amounts of insurance
coverage required shall not be construed to create a limit
of LICENSEE's liability with respect to its indemnification
under this Agreement.
(d) LICENSEE shall provide HARVARD with written evidence of such
insurance upon request of HARVARD. LICENSEE shall provide
HARVARD with written notice at least [**] prior to the
cancellation, non-renewal or material change in such
insurance; if LICENSEE does not obtain replacement insurance
providing comparable coverage within such [**] period,
HARVARD shall have the right to terminate this Agreement
effective at the end of [**] period without notice or any
additional waiting periods.
(e) LICENSEE shall maintain such commercial general liability
insurance beyond the expiration or termination of this
Agreement during (i) the period that any product, process, or
service, relating to, or developed pursuant to, this Agreement
is being commercially distributed or sold by LICENSEE or by a
sublicensee, AFFILIATE or agent of LICENSEE and (ii) a
reasonable period after the period referred to in (e)(i) above
which in no event shall be less than fifteen (15) years.
10.4 LICENSEE shall not use HARVARD's or The Regents' name or insignia, or
any adaptation of them, or the name of any of HARVARD's or The Regents'
inventors in any advertising, promotional or sales literature without
the prior written approval of HARVARD.
10.5 Without the prior written approval of HARVARD in each instance, which
approval shall not be unreasonably withheld, neither this Agreement nor
the rights granted hereunder shall be assigned in whole or in part by
LICENSEE to any person whether voluntarily or involuntarily, by
operation of law or otherwise, except that LICENSEE may assign this
Agreement and the rights granted hereunder, in whole or in part,
without such consent, to a successor to substantially all of the
business or assets relating to the LICENSED PRODUCTS, and such
succession may include but not be limited to one by acquisition,
merger, change of corporate name or change in make-up, organization,
state of incorporation, or identity. Any such assignment shall occur
without any further consideration to HARVARD. This Agreement shall be
binding upon the respective successors, legal representatives and
assignees of HARVARD and LICENSEE.
10.6 The interpretation and application of the provisions of this Agreement
shall be governed by the laws of the Commonwealth of Massachusetts.
10.7 LICENSEE shall comply with all applicable laws and regulations. In
particular, it is understood and acknowledged that the transfer of
certain commodities and technical data is
[**] 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.
subject to United States laws and regulations controlling the export of
such commodities and technical data, including all Export
Administration Regulations of the United States Department of Commerce.
These laws and regulations among other things, prohibit or require a
license for the export of certain types of technical data to certain
specified countries. LICENSEE hereby agrees and gives written assurance
that it will comply with all United States laws and regulations
controlling the export of commodities and technical data, that it will
be solely responsible for any violation of such by LICENSEE or its
AFFILIATES or sublicensees, and that it will defend and hold HARVARD
and The Regents harmless in the event of any legal action of any nature
occasioned by such violation.
10.8 LICENSEE agrees (i) to use reasonable efforts to obtain all regulatory
approvals required for the manufacture and sale of LICENSED PRODUCTS
and LICENSED PROCESSES and (ii) to utilize appropriate patent marking
on such LICENSED PRODUCTS, as required by applicable law. LICENSEE also
agrees to register or record this Agreement as is required by law or
regulation in any country where the license is in effect.
10.9 Any notices to be given hereunder shall be sufficient if signed by the
party (or party's attorney) giving same and either (a) delivered in
person, or (b) mailed certified mail return receipt requested, or (c)
faxed to the other party if the sender has evidence of successful
transmission and if the sender promptly sends the original by ordinary
mail, in any event to the following addresses:
If to LICENSEE:
KOSAN Biosciences, Inc.
1450 Rollins Road
Burlingame, CA 94010
Attention: Chief Executive Officer
Fax No.: 650-343-2931
If to Harvard to:
Office for Technology and
Trademark Licensing
Harvard University
124 Mt. Auburn Street, Suite 410 South
Cambridge, MA 02138
Fax No.: 617-495-9568
and to:
Harvard Medical School
Office of Technology Licensing and
Industry-Sponsored Research
220 Longwood Avenue
Room 159
Boston, MA 02115
Fax No.: 617-432-2788
By such notice either party may change their address for future
notices.
Notices delivered in person shall be deemed given on the date
delivered. Notices sent by fax shall be deemed given on the date faxed.
Notices mailed shall be deemed given on the date postmarked on the
envelope.
10.10 Should a court of competent jurisdiction later hold any provision of
this Agreement to be invalid, illegal, or unenforceable, and such
holding is not reversed on appeal, it shall be considered severed from
this Agreement. All other provisions, rights and obligations shall
continue without regard to the severed provision, provided that the
remaining provisions of this Agreement are in accordance with the
intention of the parties.
10.11 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, 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.
10.12 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.
10.13 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.
10.14 In the event of any controversy or claim arising out of or relating to
any provision of this Agreement or the breach thereof, the parties
shall try to settle such conflict amicably between themselves. Subject
to the limitation stated in the final sentence of this section, any
such conflict which the parties are unable to resolve promptly shall be
settled through arbitration conducted in accordance with the rules of
the American Arbitration Association. The demand for arbitration shall
be filed within a reasonable time after the controversy or claim has
arisen, and in no event after the date upon which institution of legal
proceedings based on such controversy or claim would be barred by the
applicable statute of limitation. Such arbitration shall be held in
Boston, Massachusetts. The award through arbitration shall be final and
binding. Either party may enter any such award in a court having
jurisdiction or may make application to such court for judicial
acceptance of the award and an order of enforcement, as the case may
be. Notwithstanding the foregoing, either party may, without recourse
to arbitration, assert against the other party a third-party claim or
cross-claim in any action brought by a third party, to which the
subject matter of this Agreement may be relevant.
10.15 This Agreement constitutes the entire understanding between the parties
and neither party shall be obligated by any condition or representation
other than those expressly stated herein or as may be subsequently
agreed to by the parties hereto in writing.
10.16 At any time or from time to time on and after the date of this
Agreement, HARVARD shall at the written request of LICENSEE (i) deliver
to LICENSEE 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 LICENSEE may reasonably deem necessary or desirable in
order for LICENSEE to obtain the full benefits of this Agreement and
the transactions contemplated hereby.
10.17 This Agreement may be executed in two (2) counterparts, each of which
shall be deemed an original and which together shall constitute one
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized representatives.
PRESIDENT AND FELLOWS OF
HARVARD COLLEGE
Signature: /s/ Joyce Brinton 11/20/98
---------------------------------------------------
Name: Joyce Brinton
Title: Director
Office for Technology and
Trademark Licensing
Date: 11/20/98
--------------------------------------------------------
LICENSEE
Signature: /s/ Michael Ostrach
---------------------------------------------------
Name: Michael Ostrach
Title: Chief Operating Officer
KOSAN Biosciences Inc
Date: 12/2/98
--------------------------------------------------------
APPENDIX A
INTERINSTITUTIONAL ADMINISTRATION AGREEMENT
HARVARD CASE # 1185
U.C. CASE # SF-97-133
N.D. 4/18/97
Effective this 10TH day of APRIL 1997, (the "Effective Date") the President and
Fellows of Harvard College, a charitable corporation of the Commonwealth of
Massachusetts, having an address at University Place, Fourth Floor South, 124
Mt. Auburn Street, Cambridge, MA 02138, hereinafter referred to as "Harvard,"
and The Regents of the University of California, a California corporation having
its corporate offices located at 300 Lakeside Drive, 22nd floor, Oakland, CA
94612 acting through its offices located at Office of Technology Management,
University of California San Francisco, 745 Parnassus Ave. Box 1209, San
Francisco, CA 94143-1209, hereinafter referred to as "The Regents" agree as
follows:
1. BACKGROUND
1.1 Harvard and The Regents, with support from the National Institutes of
Health, have conducted certain research in the field of isolated and
purified natural and recombinant phosphopantethenyl transferases. Such
research resulted in an invention, generally characterized as
"Phosphopantethenyl Transferases and Uses Thereof", (hereinafter the
"Invention"), and is covered by Patent Rights, as defined below.
1.2 The Invention was invented jointly by Ralph H. Lambalot, Amy M. Gehring
and Christopher T. Walsh of Harvard and Ralph Reid of The Regents,
hereinafter referred to as the "Inventors." Lambalot, Gehring and Walsh
have assigned or will assign their undivided Patent Rights and interest
in the Invention to Harvard, and Reid has assigned or will assign his
undivided Patent Rights and interest in the Invention to The Regents.
1.3 It is the mutual desire of the parties to this Agreement that the
Patent Rights be administered by Harvard, subject to any overriding
obligations to the aforesaid sponsors of the research, and that Harvard
manage the marketing and licensing efforts of said Patent Rights.
2. DEFINITIONS
2.1 "Patent Rights" means the subject matter of a United States patent
application filed October 11, 1996 entitled "Phosphopantethenyl
Transferases and Uses Thereof" (Serial No. to be determined), assigned
to The Regents (Case No. SF 97-133) and to Harvard (Harvard Case No.
1185); any continuations, divisions or extensions; any patents issuing
on said applications including reissues and reexaminations; any
continuations-in-part for which Inventors are legally listed among the
legal inventors on the U.S. patent application and any foreign
(non-U.S.) counterparts including continuations, divisions or
extensions and all patents which issue therefrom in any country; all of
which will be automatically incorporated in and added to this Agreement
from time to time, and to the extent now existing are identified in
Appendix A attached to the Agreement and made a part thereof.
2.2 "Sponsor" means NIH under Grant Nos. HL-43821 awarded to The Regents
and the National Institutes of Health under Grant Nos. GM 20011 and GM
16583 awarded to Harvard.
2.3 "Revenues" mean every receipt, royalty, commission, fee or
reimbursement of patent prosecution costs (previously split with The
Regents) by licensees arising from the ownership or licensing of Patent
Rights, but excludes recoveries resulting from infringement litigation,
less any direct expenses incurred by Harvard or The Regents in the
licensing or marketing of Patent Rights.
2.4 "Patent Costs" mean all reasonable and actual out-of-pocket past,
present and future costs incurred for the preparation, filing,
prosecution, maintenance and litigation (other than infringement
litigation) of Patent Rights, exclusive of any salaries, administrative
or other indirect costs.
3. PATENT PROSECUTION AND PROTECTION
3.1 Upon execution of this Agreement, Harvard shall assume responsibility
for the prosecution and maintenance of the Patent Rights. Such Patent
Rights shall be held in the names of Harvard and The Regents and shall
be obtained with counsel of Harvard's choice. Harvard shall promptly
provide to The Regents all serial numbers and filing dates, together
with copies of all such applications or patents, including copies of
all Office Actions, Responses and all other Patent Office
communications to allow The Regents to comment on such prior to filing.
Any comments or suggestions by The Regents shall be given due
consideration by Harvard.
3.2 Notwithstanding any other provision of this Agreement, Harvard shall
not abandon the prosecution of any patent application (except for
purposes of filing continuation or continuation-in-part applications)
or the maintenance of any patent contemplated by this Agreement without
sixty (60) days prior written notice to The Regents. Within thirty (30)
days of receipt of notice of proposed abandonment, The Regents must, in
writing, either (a) concur in the abandonment or (b) elect to assume
responsibility for the prosecution and maintenance of all Patent Rights
that Harvard proposes to abandon. Lack of written response to Harvard
within thirty (30) days shall be deemed to constitute concurrence.
3.3 All Patent Costs shall be shared on a [**] proprtionate basis by The
Regents and Harvard, respectively. Harvard shall submit quarterly
itemized statements
[**] 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.
to The Regents of Patent Costs incurred by Harvard. The Regents shall
reimburse Harvard for [**] percent ([**]%) of the incurred Patent Costs
within [**] of receipt of such itemized statements.
3.4 Upon execution of this Agreement, Harvard shall submit statements of
itemized Patent Costs incurred by Harvard (and not previously
reimbursed by an optionee or licensee) prior to the Effective Date. The
Regents shall reimburse Harvard for [**] percent ([**]%) of the Patent
Costs within [**] of receipt of such itemized statements.
3.5 If The Regents should fail to reimburse Harvard for its share of Patent
Costs according to Paragraph 3.3 or 3.4, Harvard may give written
notice of default to The Regents pursuant to Article 7 (Governing Laws,
Settling Disputes) of this Agreement. If The Regents should fail to
repair such default within thirty (30) days from the receipt of such
notice, Harvard may construe such default as termination pursuant to
Article 13 (Termination by Harvard), provided that in the case where
The Regents has identified discrepancies in billing, payment for the
contested item(s) may be delayed pending resolution. All such disputes
shall be resolved by good faith negotiation between the parties and, if
that fails, then by arbitration in accordance with Article 7 (Governing
Laws, Settling Disputes).
3.6 In the event that Harvard anticipates the possibility of any
extraordinary expenditures arising from the preparation, filing,
prosecution, licensing or defense of any patent application or patent
contemplated by this Agreement, Harvard shall provide The Regents with
full particulars and shall discuss with The Regents a mutually
acceptable course of action prior to incurrence of such expenditures.
4. LICENSING
4.1 Harvard shall use reasonable efforts to seek licensee(s) for the
commercial development of the Patent Rights and shall administer the
Patent Rights for the mutual benefit of the parties and in the best
public interest. The parties shall consult and mutually agree prior to
the granting of any licenses, which shall be signed by Harvard on
behalf of Institution. Harvard shall promptly provide copies of all
fully executed licenses issued on said Patent Rights to The Regents.
4.2 Harvard shall not negotiate any paid-up licenses, other than pursuant
to the patent provisions of Sponsor's grant as cited in Paragraph 1.1
or unless restricted to research use only. Further, Harvard shall not
assign patent rights to any third party, notwithstanding any other
provision of this Agreement or Sponsor consent, without prior written
notice to The Regents.
[**] 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.
4.3 Harvard shall distribute Revenues on the basis of [**] percent ([**]%)
to the Regents and [**] percent ([**]%) to Harvard not later than [**]
for Revenues received in the preceding calendar year.
4.4 Each party shall be solely responsible for calculating and distributing
to its respective Inventors a share of Revenues in accordance with its
respective patent policy.
5. RECORDS AND REPORTS
5.1 Harvard shall keep complete, true and accurate accounts of all Patent
Costs and of all Revenues received by it from each licensee and, at the
request of The Regents, shall permit a reasonably acceptable certified
public accounting firm to examine its books and records in order to
verify the payments due or owing under this Agreement.
6. INFRINGEMENT
6.1 In the event Harvard or The Regents learns of the substantial
infringement of any patent contemplated by this Agreement, the party
who learned of the infringement shall promptly inform the other party
in writing and shall provide the other party with evidence of such
infringement. Harvard, in cooperation with The Regents and any
licensee(s), shall attempt to terminate such infringement without
litigation. If the efforts of Harvard are not successful in abating the
infringement within ninety (90) days after the infringer has been
formally notified of the infringement, the parties shall confer among
themselves regarding mutually acceptable possible courses of action,
with or without any licensee(s), at the discretion of Harvard. Harvard
shall not be obligated to bring any infringement action; however, The
Regents may not unilaterally prevent Harvard from bringing such an
action. Any recovery resulting from a settlement or judgment on such an
infringement action shall be divided between Harvard and The Regents
based on the percentage of involvement by the respective parties. Both
parties agree to do all things reasonably necessary to assist with
litigation. In the event the terms of a license agreement conflict with
this clause, the terms of the license agreement will prevail.
7. GOVERNING LAWS, SETTLING DISPUTES
7.1 This Agreement shall be governed and interpreted according to the laws
of the Commonwealth of Massachusetts, but the scope and validity of any
patent or patent application shall be governed by the applicable laws
of the country of such patent or patent application.
7.2 Any controversy or any disputed claim by either party against the other
arising under or related to this Agreement shall be settled by
arbitration, upon the
[**] 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.
request of either party, in accordance with the then current Licensing
Agreement Arbitration Rules of the American Arbitration Association.
Judgment upon the award rendered by the Arbitrator(s) shall be binding
on the parties.
Any arbitration under Paragraph 7.2 shall be held at a place chosen by
the party receiving the request for arbitration, and judgment upon the
award rendered by the arbitration may be entered by any court having
jurisdiction thereof. The costs of such arbitration shall be shared by
the parties.
8. NOTICES
8.1 Any notice required or permitted to be given to the parties shall be
deemed to have been properly given if delivered, in writing, in person
or by facsimile, airmail or air express delivery to the following
addresses:
To Harvard:
Office for Technology and Trademark Licensing
University Plase, Fourth Floor South
124 Mt. Auburn Street
Cambridge, MA 02138
ATTENTION: Director
with a copy to:
Office of Technology Licensing
and Industry-Sponsored Research
Harvard Medical School
333 Longwood Avenue, Suite 640
Boston, MA 02115
ATTENTION: Nan Doyle
To The Regents:
Office of Technology Management
University of California, San Francisco
745 Parnassus Ave., Box 1209
San Francisco, CA 94143-1209
ATTENTION: Director
9. WAIVER
9.1 It is agreed that no waiver by any party hereto of any breach or
default of any of the covenants or agreements herein set forth shall be
deemed a waiver as to any subsequent and/or similar breach or default.
10. ASSIGNABILITY
10.1 This Agreement is binding upon and shall inure to the benefit of the
parties hereto, their successors or assigns, but this Agreement may not
be assigned by any party without the prior notification of the other
parties and the Sponsor.
11. TERM OF AGREEMENT
11.1 This Agreement shall be in full force and effect from the Effective
Date and shall remain in effect for the life of the last-to-expire
patent contemplated by this Agreement, unless otherwise terminated by
operation of law or by acts of the parties in accordance with the terms
of this Agreement or Sponsor's requirements.
12. USE OF NAMES
12.1 No party may use the name of the other party in any way for advertising
or publicity without the express written consent of the other party,
provided, however, that Harvard has the right to use The Regents' name
within the context of a licensing agreement.
13. TERMINATION BY HARVARD
13.1 Harvard may terminate this Agreement upon at least sixty (60) days'
written notice to The Regents, but in any event not less than sixty
(60) days prior to the date on which action upon any pending Patent
Office action needs to be taken to preserve Patent Rights.
13.2 If Harvard terminates this Agreement, The Regents may elect to
assume responsibility for administration of Patent Rights and any
licenses. The Regents shall advise Harvard in writing of its
election within thirty (30) days after receipt of notice of
termination; Harvard shall thereupon convey to The Regents any
licenses and shall do all things necessary to transfer the wrappers
and other files related to the Patent Rights and licenses. In the
event The Regents elects not to assume responsibility for
administration of Patent Rights and any licenses, then Harvard shall
be free to dispose of said Patent Rights in accordance with any
obligations to the Sponsor, and this Agreement shall terminate, with
Harvard having no further obligation to The Regents.
13.3 Upon termination of this Agreement, Harvard shall have no further
rights or obligations under this Agreement, except that The Regents
shall reimburse Harvard, pursuant to Paragraph 3.3, for The Regents'
twenty-percent share of Patent Costs incurred prior to the termination
date and for which Harvard has not yet received reimbursement.
14. TERMINATION BY THE REGENTS
14.1 The Regents may terminate this Agreement for any reason upon sixty
(60) days' written notice to Harvard. Thereafter, The Regents shall
have no further rights or obligations under this Agreement, except
that The Regents shall be obligated to reimburse Harvard for The
Regents' share of Patent Costs incurred prior to the termination
date, and for which The Regents has not yet made reimbursement, and
to make any necessary assignments of patent and/or license rights to
Harvard.
15. COMPLETE AGREEMENT
15.1 It is understood and agreed by Harvard and The Regents that this
Agreement embodies the entire understanding of the parties and shall
supersede all previous communications, representations or
understanding, either oral or written, between the parties relating to
the subject matter hereof. This Agreement shall not be amended except
by written consent of both parties in the form of an Addendum to this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in duplicate
originals by their respective officers.
PRESIDENT AND FELLOWS THE REGENTS
OF HARVARD COLLEGE
/s/ Joyce Brinton /s/ Jeffrey Labovitz
- ---------------------------------------------- -----------------------------------
Joyce Brinton, Director Signature
Office for Technology and Trademark Licensing
Jeffrey Labovitz
-----------------------------------
Name
Senior Licensing Officer OTM. UCSF
-----------------------------------
Title
3/7/97 4/10/97
------------------------------------- -----------------------------------
Date Date