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EXHIBIT 10.18
CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. SECTIONS 200.80(b)(4), 200.83
AND 230.406 * INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL
TREATMENT REQUEST THAT IS FILED SEPARATELY WITH THE COMMISSION
NONEXCLUSIVE LICENSE
AGREEMENT
THIS NONEXCLUSIVE LICENSE AGREEMENT (the "AGREEMENT") is made and
entered into this 17th day of June, 1996 (the "EFFECTIVE DATE"), by and between
ALANEX CORPORATION, a California corporation having its principal place of
business at 3550 General Atomics Court, San Diego, CA 9212-1994 ("ALANEX"), and
the MOUNT SINAI SCHOOL OF MEDICINE OF THE CITY UNIVERSITY OF NEW YORK, a New
York corporation having its principal place of business at One Gustave L. Levy
Place, New York, New York 10029-6574 ("LICENSOR").
WHEREAS, Licensor owns rights to certain inventions and technologies
regarding the human GnRH receptor; and
WHEREAS, Alanex desires to obtain a nonexclusive license to such
inventions and technologies in accordance with the terms and conditions
contained herein; and
WHEREAS, Licensor is willing to grant a nonexclusive license to Alanex
in accordance with the terms and conditions contained herein;
NOW, THEREFORE, Licensor and Alanex hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 "AFFILIATE" means any entity that directly or indirectly owns, is
owned by or is under common ownership, with Alanex, where "owns" or "ownership"
means direct or indirect possession of at least 50% of the outstanding voting
securities of Alanex.
1.2 "FIELD" shall mean the research and development of novel ligands
to the GnRH receptor, using the GnRH receptor, for the diagnosis, prevention or
treatment of human diseases and disorders.
1.3 "LICENSED KNOW-HOW" means all know-how, technology, data,
processes, protocols, procedures, methods, formulas, compositions of matter,
materials (including biological materials, such as cell lines, vectors, reagents
or assays), information and other subject matter which is related to the
inventions claimed in the Licensed Patents.
1.4 "LICENSED PATENTS" means (i) the patent applications listed on
the attached Exhibit A (ii) all patents issuing from such patent applications,
(iii) all divisionals, substitute applications, continuations and
continuations-in-part derived from such patent applications, (iv)
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all reissues, renewals, re-examinations and inventors' certificates derived from
patents issuing on such applications and (v) all foreign counterparts of the
foregoing.
1.5 "LICENSED PRODUCT" means any product discovered, developed or
manufactured by Alanex, its Affiliates or sublicensees using any Licensed
Know-how or any invention covered by a Licensed Patent.
1.6 "LICENSED TECHNOLOGIES" means the Licensed Patents and Licensed
Know-how.
1.7 "NET SALES" means the gross receipts received by Alanex, its
Affiliates or sublicensees, as appropriate, for the commercial sale of Licensed
Products to independent third parties, less the following: transportation
charges, discounts actually allowed (including distributor discounts), credits
allowed for defective or returned goods, and other allowances (actually paid or
allowed, including but not limited to, prompt payment and volume discounts,
charge backs from wholesalers and other allowances granted to the end commercial
customer of the Licensed Product, whether in cash or trade), costs of insurance
and sales and other taxes based on sales prices when included in gross sales,
but not including taxes assessed on income derived from such sales.
ARTICLE 2
TECHNOLOGY RIGHTS AND TRANSFER
2.1 LICENSE GRANT. Licensor hereby grants to Alanex a non-exclusive
license, worldwide license under the Licensed Technologies to discover, develop,
manufacture, use, offer for sale, sell and import Licensed Products in the
Field. Alanex may sublicense such rights in connection with other rights owned
or held by Alanex as part of strategic transactions for the development of
Licensed Products. Alanex may not sublicense such rights separately, apart from
Alanex technology. Licensor shall have the right to approve the identity of any
sublicensee that is not a "Fortune 500" pharmaceutical company or on Fortune
Magazine's comparable international list. Licensor shall not unreasonably
withhold or delay any such approval.
Alanex acknowledges that the United States Government may retain
certain rights under 35 U.S.C. 200-212 with respect to the Licensed
Technologies. The license granted to Alanex hereunder is subject to such rights.
Alanex agrees to use its reasonable best efforts to cause Licensed Products to
be manufactured in the United States.
2.2 DISCLOSURE OF LICENSED KNOW-HOW. Promptly following the
Effective Date, Licensor shall use reasonable efforts to provide Alanex with all
tangible and intangible components of the Licensed Know-how.
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*CONFIDENTIAL TREATMENT REQUESTED
ARTICLE 3
CONSIDERATION
3.1 MILESTONE PAYMENTS. Alanex agrees to pay to Mount Sinai an amount
equal to **************** of any milestone payments which Alanex may receive
from third party sublicensees upon the achievement of human clinical or
regulatory milestones with Licensed Products. Such milestones shall include the
filing of an IND with the U.S. FDA, events during Phase I, II or III clinical
trials, and the filing or approval of an application for regulatory approval of
a Licensed Product. License fees, equity investments, at bona fide loans,
payments for research and development by Alanex and payments other than the
milestones described above shall not be subject to this Section 3.1. If Alanex
receives consideration in a form other than cash, Alanex may pay Licensor
pursuant to this Section 3.1 either in kind or in cash based upon the fair
market value of such consideration.
3.2 ROYALTIES. Alanex agrees to pay Licensor during the term of this
Agreement a royalty equal to ************************** of Net Sales of
Licensed Products.
3.3 PAYMENTS; REPORTS. Payments made pursuant to Sections 3.1 and 3.2
above shall be payable in U.S. dollars. Payments made under Section 3.1 above
shall be made within thirty (30) days of Alanex' receipt of milestone payments
from its third party sublicensees. The first royalty payment under Section 3.2
shall cover all royalties due on Net Sales of Licensed Products during the
calendar quarter when such sales commence and shall be made forty-five (45) days
after the end of such quarter. Thereafter royalty payments shall be due
forty-five (45) days after each succeeding calendar quarter and shall cover the
royalties earned during such calendar quarter. Alanex agrees to provide written
reports to Licensor with such royalty payments setting forth the total number of
Licensed Products sold during the applicable period. In the event that Alanex is
required to withhold taxes imposed on such payments in any country, Alanex will
remit such taxes to the proper authorities, reduce payment to Licensor
accordingly and supply Licensor with all relevant documentation in Alanex's
possession so that Licensor may recover such taxes to the extent permissible.
3.4 RECORDS RETENTION. Alanex will keep, and will cause its
Affiliates and sublicensees to keep, complete and accurate records pertaining to
the sale of Licensed Products in sufficient detail to permit Licensor to confirm
the accuracy of calculations of all payments due hereunder. Such records will be
maintained for a three (3) year period following the year in which any such
payments were made hereunder.
3.5 AUDIT REQUEST. No more frequently than once a year, Licensor will
have the right to engage, at its own expense, an independent certified public
accountant reasonably acceptable to Alanex to examine Alanex's records to
determine, with respect to any calendar year, the correctness of any report or
payment made under this Agreement. Any such audit will be conducted under
reasonable confidentiality restrictions. In the event that any such examination
reveals that payments made to Licensor hereunder are incorrect by more than
seven percent (7%) in any audited period, Alanex shall reimburse Licensor for
the costs of such audit in addition to promptly remitting the amount of any
underpayment with interest at the prime rate
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reported in the Wall Street Journal on the last day of the month prior to the
date of such remittance.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
4.1 DUE AUTHORIZATION. Each party represents and warrants that it is
duly authorized to execute and deliver this Agreement and to perform its
obligations hereunder.
4.2 BINDING AGREEMENT. Each party represents and warrants that this
Agreement is a legal and valid obligation binding upon it and enforceable in
accordance with its terms. Licensor has all rights to the Licensed Patents, and
no such rights have been granted to any third party.
ARTICLE 5
TERM; TERMINATION
5.1 TERM. This Agreement will commence as of the Effective Date and,
unless sooner terminated as provided in this Article 5, will expire upon the
later of (a) ten (10) years from first commercial sale of any Licensed Product
or (b) the date of expiration of the last-to-expire patent included in the
Licensed Patents.
5.2 TERMINATION BY ALANEX. Alanex will have the right to terminate
this Agreement for any reason upon sixty (60) days prior written notice to
Licensor. In the event of material breach by Licensor, Alanex may elect to
terminate this Agreement upon sixty (60) days prior written notice or continue
this Agreement while pursuing its legal remedies, including the receipt of
damages related to such breach. Any damages finally awarded may, at Alanex's
option, be deducted from any payments owed to Licensor pursuant to Article 3
hereof.
5.3 TERMINATION BY LICENSOR. Licensor will have the right to
terminate this Agreement, in addition to pursuing any remedies available under
law or in equity, upon sixty (60) days written notice to Alanex if Alanex is in
material breach of this Agreement, unless within such sixty (60) day period
Alanex cures such breach.
5.4 EFFECT OF TERMINATION; SURVIVAL. Upon any termination of this
Agreement, Alanex will pay Licensor all accrued payments due Licensor through
the expiration or termination date and all licenses shall revert to Licensor.
Sections 3.4 and 3.5 shall survive for three (3) years following termination,
and Articles 6 and 7 shall survive indefinitely.
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ARTICLE 6
CONFIDENTIALITY
6.1 CONFIDENTIALITY.
(a) For purposes of this Agreement, "Confidential
Information" means any information or material disclosed or provided by Alanex
to Licensor pursuant to Article 3 of this Agreement, except:
(1) information that is known to or
independently developed by Licensor prior to the time of disclosure, as
evidenced by Licensor's records;
(2) information disclosed to Licensor by a third
party that has a right to make such disclosure;
(3) information that becomes patented, published
or otherwise part of the public domain other than through breach of this
Agreement; or
(4) information that is required to be disclosed
by law.
(b) Licensor shall, for the term of this Agreement, maintain
Confidential Information in confidence and shall not disclose Confidential
Information to any third party or use Confidential Information for any purpose
not contemplated under this Agreement, except with the written consent of
Alanex.
ARTICLE 7
INDEMNIFICATION AND INSURANCE
Alanex agrees to indemnify, hold harmless and defend Licensor, its
trustees, officers, medical and professional staff, employees, students and
agents, and their respective successors and assigns (the "Indemnitees"), against
any liability, damage, loss or expense (including reasonable attorneys fees and
expenses of litigation) incurred or imposed upon Indemnitees in connection with
any claims, suits, actions, demands or judgments resulting or arising out of the
development, distribution, possession, manufacture, use, sale or administration
of Licensed Products by Alanex, its Affiliates or sublicensees, or by any third
party. Alanex or its sublicensees agree to carry and keep in force commercial
general liability insurance of not less than $1 million per occurrence and $2
million in aggregate to cover liability for damages on account of bodily or
personal injury or death to any person or damage to property of any person. In
addition, Alanex or its sublicensees shall keep in force product liability
insurance of not less than $2 million per occurrence and $4 million in aggregate
prior to any commercial distribution of Licensed Products; provided, however,
such limits shall be increased if Licensor can demonstrate that higher amounts
are customary for businesses the size of Alanex or engaged in the business in
which Alanex is engaged. Licensor will be named as an additional insured on
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any such insurance and such insurance shall not be canceled without at least
thirty (30) days notice to Licensor. Alanex shall provide a certificate of
insurance evidencing that all required coverage is in effect stating the limits
of such coverage. Such insurance shall be written to include coverage for any
claims incurred in connection with the matters which are the subject of this
Agreement regardless of when such claims are brought. Licensor shall promptly
notify Alanex of any claim for which Licensor may seek indemnification under
this Article 7. Alanex shall have the right to control the defense of such claim
and may enter into any settlement that does not adversely affect the rights of
Licensor. Licensor shall fully cooperate with Alanex in the defense of such
claim, with out-of-pocket costs reimbursed by Alanex as part of the
indemnification.
ARTICLE 8
GENERAL
8.1 GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the State of California, as applied to contracts
executed and performed entirely within the State of California, without regard
to conflicts of laws rules.
8.2 USE OF NAME. Alanex agrees that it will not use the name,
trademark or any other identifier of Licensor in any advertising or promotion
without the prior approval of Licensor, except to disclose the existence of this
Agreement and as otherwise required by law.
8.3 NOTICES. All notices or communications to either party by the
other party shall be delivered personally or sent by first-class or express
mail, postage prepaid, addressed to such party at the following addresses for
each and shall be deemed given on the date so delivered.
If to Licensor,
Mount Sinai School of Medicine of
the City University of New York
One Gustave L. Levy Place
New York, New York 10029-6574
Attn: Director, Office of Science
and Technology Development
If to Alanex,
Alanex Corporation
3550 General Atomics Court
San Diego, CA 92121
Attn: Chief Executive Officer
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8.4 ASSIGNMENT. Neither party to this Agreement may assign or
transfer any rights or obligations arising from this Agreement without the prior
written consent of the other party, not to be unreasonably withheld; provided,
however, that Alanex may assign all of its rights and obligations under this
Agreement in connection with a merger, sale of assets or other transaction
involving a change of control of Alanex's business.
8.5 AMENDMENT. No amendment, modification or supplement of any
provision of the Agreement will be valid or effective unless made in writing and
signed by an authorized representative of each party.
8.6 WAIVER. No waiver of any provision of this Agreement in a
particular instance shall be deemed to be a waiver of any provision of this
Agreement in a later instance.
8.7 SEVERABILITY. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of the Agreement is held to be prohibited by or
invalid under applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
the Agreement.
8.8 ENTIRE AGREEMENT OF THE PARTIES. This Agreement will constitute
and contain the complete, final and exclusive understanding and agreement of the
parties and cancels and supersedes any and all prior negotiations,
correspondence, understandings and agreements, whether oral or written, between
the parties respecting the subject matter hereof.
8.9 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which together shall constitute one instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the Effective Date.
ALANEX CORPORATION MOUNT SINAI SCHOOL OF MEDICINE
OF THE CITY UNIVERSITY OF NEW YORK
By: /s/ Marvin R. Brown By: /s/ Nathan Kase, M.D.
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Name: Marvin R. Brown Name: Nathan Kase, M.D.
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Title: President & CEO Title: Dean
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EXHIBIT A
LICENSED PATENTS
Title: GnRH RECEPTOR
Serial No.: 07/938,189
Filed: August 28, 1992
Status: Abandoned In Favor Of CIP
Title: CLONING AND EXPRESSION OF GONADOTROPIN-RELEASING
HORMONE RECEPTOR
Pat. Type: CIP
Serial No.: 08/080,386
Filed: June 21, 1993
Status: Pending
Title: CLONING AND EXPRESSION OF GONADOTROPIN-RELEASING
HORMONE RECEPTOR
Pat. Type: CIP
Serial No.: 08/390,000
Filed: February 17, 1995
Status: Pending
Titled: CLONING AND EXPRESSION OF GONADOTROPIN-RELEASING
HORMONE RECEPTOR
Appln. No.: PCT/US93/05965
Filed: June 23, 1992
Status: Published on January 6, 1994
Publ. No.: W094/00590
Title: CLONING AND EXPRESSION OF GONADOTROPIN-RELEASING
HORMONE RECEPTOR
Country: Canada
Appln. No.: 2,138,999
Filed: June 22, 1993
Status: Request For Examination Due: June 22, 2000
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Title: CLONING AND EXPRESSION OF GONADOTROPIN-RELEASING
HORMONE RECEPTOR
Country: Japan
Appln. No.: 6-502535
Filed: June 22, 1993
Status: Request For Examintation Due: June 22, 2000
Title: CLONING AND EXPRESSION OF GONADOTROPIN-RELEASING
HORMONE RECEPTOR
Country: EPC (designating Austria, Belgium, France, Germany, Italy,
Lulxembourg, Netherlands, Sweden, Switzerland, United
Kingdom, Greece, Spain, Liechtenstein, Denmark, Ireland,
Monaco, and Portugal)
Appln. No.: 9315447.2
Filed: June 22, 1993
Status: Request For Examination Filed
ii.