[CONFIDENTIAL
TREATMENT
REQUESTED]
OPTION AND LICENSE AGREEMENT
Between
SLOAN-KETTERING INSTITUTE FOR CANCER RESEARCH
and
CYTOGEN CORPORATION
Effective the 1st day of July, 1993
OPTION AND LICENSE AGREEMENT BETWEEN
SLOAN-KETTERING INSTITUTE FOR CANCER RESEARCH
AND
CYTOGEN CORPORATION
I. BACKGROUND............................................ 1
A. Heads of Agreement.............................. 1
B. Confidentiality Agreement....................... 1
C. Licensor Representation Regarding Rights Granted 2
II. DEFINITIONS........................................... 2
A. Licensor........................................ 2
B. Licensee........................................ 2
C. Agreement....................................... 2
D. Affiliate....................................... 2
E. Confidential Information........................ 3
F. Covered By...................................... 4
G. Date of Commercialization....................... 4
H. Effective Date.................................. 5
I. Entity.......................................... 5
J. Gene Technology................................. 5
K. Government...................................... 5
L. Know-How........................................ 5
M. Licensed Patent(s).............................. 6
N. Licensed Process................................ 6
O. Licensed Product................................ 6
P. Licensed Technology............................. 6
Q. Net Sales....................................... 7
R. Patent Counsel.................................. 8
S. Sublicensee..................................... 8
T. Territory....................................... 8
U. Use/Using....................................... 8
III. GRANTS................................................ 9
A. Grant of Option................................. 9
B. Exercise of Option.............................. 9
C. Grant of License................................ 9
D. Rights to Sublicense............................ 9
E. Rights Reserved................................. 10
IV. TERM AND TERMINATION.................................. 11
A. Term of Option.................................. 11
B. Term of Agreement............................... 11
C. CYTOGEN'S Rights to Termination................. 11
D. SKI'S Rights to Termination..................... 12
E. Results of Termination..................... 12
V. OPTION AND LICENSING CONSIDERATION................ 13
A. Option Fee................................. 13
B. License Issue Fee.......................... 13
C. Prior Patent Expenses...................... 13
VI. ROYALTIES......................................... 13
A. Earned Royalties........................... 13
B. Minimum Royalties.......................... 14
C. Single Royalty Per Licensed Product........ 14
VII. PAYMENTS AND REPORTS.............................. 15
A. Payments................................... 15
B. Interest................................... 15
C. Payments in U.S. Dollars................... 16
D. Reports.................................... 17
VIII.PERFORMANCE....................................... 18
A. Gene Technology............................ 18
B. Other Technology........................... 19
IX. CONFIDENTIAL INFORMATION RESTRICTIONS............. 19
A. Protection Requirements.................... 19
X. PATENT MAINTENANCE AND MARKINGS................... 19
A. Patent Filing, Prosecution, and Maintenance 19
B. Patent Counsel............................. 20
C. Cooperation Between the Parties............ 20
D. Patent Markings............................ 21
XI. WARRANTIES........................................ 21
A. Warranties, Rights, and Liabilities........ 21
XII. INFRINGEMENT...................................... 22
A. Obligation to Notify....................... 22
B. Infringement by SKI/CYTOGEN................ 22
C. Infringement by Third Parties.............. 23
D. Judgement.................................. 24
XIII.GENERAL PROVISIONS................................ 24
A. Assignment................................. 24
B. Entire Agreement........................... 25
C. Export Control............................. 25
D. Force Majeure.............................. 26
E. Governing Law.............................. 26
F. Headings................................... 26
G. Independence of the Parties 27
H. Notices.................... 27
I. Modifications.............. 28
J. Use of Name................ 28
K. Waiver of Rights........... 28
L. Signatures................. 29
EXHIBIT B. . . . . . LICENSED PATENTS
Option and License Agreement Between
Sloan-Kettering Institute for Cancer Research
and
Cytogen Corporation
Effective the 1st day of July, 1993 (hereinafter the "EFFECTIVE DATE"),
Sloan-Kettering Institute for Cancer Research (hereinafter referred to as
"SKI"), a New York membership corporation with principal offices at 1275 York
Avenue, New York, New York 10021, and
Cytogen Corporation (hereinafter referred to as "CYTOGEN"), a Delaware business
corporation with principal offices at Princeton, New Jersey,
in consideration of the mutual covenants and obligations hereinafter contained,
and other good and valuable consideration, agree as follows:
I. BACKGROUND
A. Heads of Agreement
The parties signed a "Memorandum of Heads of Agreement" dated as of
January 22, 1993, which expressed the parties intention to enter into this
AGREEMENT and the salient points to be set forth in this AGREEMENT. This
AGREEMENT supersedes the Memorandum of Heads of Agreement.
B. Confidentiality Agreement
The parties signed a "Confidentiality Disclosure Agreement" dated as
of April 30, 1992, identified as Exhibit A, which is attached hereto,
merged into and made a part hereof.
1
C. Licensor Representation Regarding Rights Granted
SKI represents that, except for certain rights of the GOVERNMENT, it
has the legal right to grant the Option and License free of legal
encumbrances, restraints or restrictions which could adversely affect the
rights of CYTOGEN and that there are not outstanding agreements,
understandings or arrangements inconsistent with the provisions of this
Agreement.
II. DEFINITIONS
A. Licensor
"Sloan-Kettering Institute for Cancer Research," as abbreviated "SKI,"
means the New York membership corporation by that name having its principal
office at 1275 York Avenue, New York, New York 10021, and shall also
include all SKI AFFILIATES. SKI is the licensor in this AGREEMENT.
B. Licensee
"Cytogen Corporation," as abbreviated "CYTOGEN," means the Delaware
business corporation by that name having its principal office at Princeton,
New Jersey, and shall also include all CYTOGEN AFFILIATES. CYTOGEN is the
licensee in this AGREEMENT.
C. Agreement
"AGREEMENT" means the option and license agreement, defined by the
document in which this paragraph appears. This AGREEMENT is between Sloan-
Kettering Institute for Cancer Research, as licensor, and Cytogen
Corporation, as licensee. Also included in this AGREEMENT are all Exhibits
attached hereto and all amendments which may be made thereto.
D. Affiliate
"AFFILIATE" means, with respect to CYTOGEN, any individual or ENTITY
which directly or indirectly controls, is controlled by, or is under common
control with such party. The term "control" means possession, direct or
indirect, of the
2
powers to direct or cause the direction of the management or policies of a
person or ENTITY; whether through ownership of equity participation, voting
securities, or beneficial interests; by contract; by agreement; or
otherwise.
With regard to SKI, AFFILIATE means Memorial Sloan-Kettering Cancer
Center and Memorial Hospital for Cancer and Allied Diseases.
E. Confidential Information
1. "CONFIDENTIAL INFORMATION" means (i) documented information
originated by the disclosing party which is not generally available to
others; or (ii) information obtained through inspection of the
facilities of the disclosing party, or through equipment or samples of
product supplied by the disclosing party, or through verbal disclosure
by the disclosing party; provided that such information shall be
specifically identified by the disclosing party in written form as
being CONFIDENTIAL INFORMATION; and provided further that any
information that is disclosed orally shall be confirmed in written
summary form by the disclosing party within ten (10) days of the date
of oral disclosure.
2. The confidentiality and non-use obligations of this AGREEMENT
shall not apply to CONFIDENTIAL INFORMATION which either
party shall be able to demonstrate:
(a) was in its possession prior to receipt from the other party,
provided however Proprietary Information disclosed under the
Confidentiality Agreement attached as Exhibit A shall be
considered and treated as Confidential Information under this
Agreement not subject to this subparagraph (i);
(b) was in the public domain at the time of receipt from the
other party;
3
(c) shall have become part of the public domain through no fault
of the party to whom the CONFIDENTIAL INFORMATION was disclosed;
(d) was lawfully received by the party to whom CONFIDENTIAL
INFORMATION was disclosed from a third party not prohibited from
disclosing it to such party;
(e) was subsequently and independently developed by employees of
the party to whom CONFIDENTIAL INFORMATION was disclosed, who had
no knowledge of the CONFIDENTIAL INFORMATION disclosed;
(f) shall be required to be disclosed in a judicial or
administrative proceeding after legal remedies for maintaining
the CONFIDENTIAL INFORMATION in confidence shall have been
exhausted and after notice of such proceeding has been given to
the other party; or
(g) shall be required to be disclosed in a proceeding or activity
to obtain GOVERNMENT agency approvals for developing or marketing
LICENSED PRODUCTS.
F. Covered By
"COVERED BY" means LICENSED PRODUCT(S), the manufacture, USE, sale, or
practice of which would constitute, but for the license rights granted in
this AGREEMENT, an infringement of any valid LICENSED PATENT claim or
claims or other LICENSED TECHNOLOGY intellectual property rights.
G. Date of Commercialization
"DATE OF COMMERCIALIZATION" means the date when the first NET SALE is
made. LICENSED PRODUCT(S) distributed or USED for experimental purposes
only shall not establish the DATE OF COMMERCIALIZATION.
4
H. Effective Date
"EFFECTIVE DATE" means the 1st day of July, which is the date upon
which this AGREEMENT becomes effective.
I. Entity
"ENTITY" means a corporation, an association, a joint venture, a
partnership, a trust, a business, an individual, including an agency, or
any other organization
which can exercise independent legal standing.
J. Gene Technology
"GENE TECHNOLOGY" means that part of LICENSED TECHNOLOGY that pertains
to any DNA encoding the prostate specific membrane ("PSM") antigen or any
portion of the PSM antigen and any DNA, cDNA, and other derivative or
portion of said gene that expresses the PSM antigen, including, but not
limited to, diagnostic methods employing DNA probes or PCR techniques to
detect prostate cancer and gene therapy applications.
K. Government
"GOVERNMENT" means the Federal Government of the UNITED STATES.
L. Know-How
"KNOW-HOW" means the skill or ingenuity based upon the body of
knowledge and data which comprise all of the methods, processes, designs,
engineering information, trade secrets, and other information and data
relating to prostate specific membrane (PSM) antigen recognized by the
monoclonal antibody CYT-356, any subunits of such antigen, any other
monoclonal antibodies or binding proteins or peptides recognizing such
antigen and any gene or gene segment encoding for such antigen or portion
of such antigen, CONFIDENTIAL INFORMATION and GENE TECHNOLOGY which SKI
develops, employs in its own activities, or has available for USE prior to
or during the term of this AGREEMENT.
5
M. Licensed Patent(s)
"LICENSED PATENT(S)" means those patents and/or patent applications
listed in Exhibit B, which is attached hereto and made a part hereof, and
any and all continuations, continuations-in-part, divisions, patents of
addition, reissues, reexaminations, or extensions of the foregoing, or any
patents which shall issue based on the listed patent applications.
LICENSED PATENTS also include future patent applications, and any and all
continuations, continuations-in-part, divisions, patents of addition,
reissues, reexaminations, or extensions thereof, or any patents which
shall issue based on future patent applications, the valid claims of which
shall cover LICENSED TECHNOLOGY developed during the term of this
AGREEMENT.
N. Licensed Process
"LICENSED PROCESS" means any process or method the USE or practice of
which would infringe one or more valid LICENSED PATENT claims or which
incorporates or makes USE of any part of the LICENSED TECHNOLOGY.
O. Licensed Product
1. "LICENSED PRODUCT" means any product, apparatus, method, or service the
production, manufacture, sale, USE, or practice of which would infringe one
or more valid issued LICENSED PATENT claims.
P. Licensed Technology
"LICENSED TECHNOLOGY" means information and data relating to prostate
specific membrane (PSM) antigen recognized by the monoclonal antibody CYT-
356, any subunits of such antigen, any other monoclonal antibodies or
binding proteins or peptides recognizing such antigen and any gene or gene
segment encoding for such antigen or portion of such antigen owned by SKI
as of the EFFECTIVE DATE or acquired during the term of this AGREEMENT;
including without limitations, inventions, biological materials, computer
programs, technical data, apparatus and KNOW-HOW, GENE TECHNOLOGY and
CONFIDENTIAL INFORMATION, whether patentable or unpatentable.
6
Q. Net Sales
1. "NET SALES" means the gross sales price or fees; whether or not
invoiced, billed, or received by CYTOGEN or a SUBLICENSEE from a third
party attributable to CYTOGEN's or its SUBLICENSEE's USE, sale, or transfer
of any LICENSED PRODUCT; less [ Information omitted and filed
separately with the Commission under Rule 24b-2.
]
2. A LICENSED PRODUCT shall be deemed USED, sold, or transferred at
the time CYTOGEN, or its SUBLICENSEE, USES or performs services for
commercial purposes using such LICENSED PRODUCT, bills, invoices, ships, or
receives payment for such LICENSED PRODUCT, whichever event occurs first.
3. In the event that a product is sold in the form of a combination
product containing one or more pharmaceutically or diagnostically active
ingredients in addition to LICENSED PRODUCT, NET SALES for such a
combination product shall be calculated by multiplying the actual NET SALES
by thre fraction A/(A+ B), where A is the invoice price of the given
LICENSED PRODUCT if sold separately by CYTOGEN and B is the total invoice
price of any other such pharmaceutically or diagnostically active
ingredient(s) in the combination if sold separately by CYTOGEN. If the
given LICENSED PRODUCT and the other such active ingredient(s) are not sold
separately by CYTOGEN, NET SALES for purposes of determining royalties
shall be calculated by multiplying NET SALES of the
7
combination by the fraction C/(C+D), where C is CYTOGEN's or SUBLICENSEE's
total actual cost of LICENSED PRODUCT at the point of formulation into the
combination product and D is CYTOGEN's or SUBLICENSEE's total actual cost
of other pharmaceutically or diagnostically active ingredient(s) included
in the combination product at the point of formulation.
4. LICENSED PRODUCT(S) USED in testing, clinical trials, or as marketing
samples to develop or promote the LICENSED PRODUCT(S) shall not be included
as LICENSED PRODUCT(S) USED, sold, or transferred under the definition of
NET SALES; provided the LICENSED PRODUCT(S) are supplied to the user at
no cost. Sales between CYTOGEN and any Affiliate or SUBLICENSEE shall not
be included in NET SALES. No sales of LICENSED PRODUCT shall be counted
more than once in the calculation of NET SALES.
R. Patent Counsel
"PATENT COUNSEL" means any patent attorney representing either CYTOGEN
or SKI, on matters related to the LICENSED PATENTS, where such attorney has
written power of attorney authorizing such representation.
S. Sublicensee
"SUBLICENSEE" means any ENTITY, not an AFFILIATE of CYTOGEN,
which is licensed by CYTOGEN, pursuant to the authority granted in this
AGREEMENT, with rights to the LICENSED PATENT(S) beyond those rights
commonly granted an end user.
T. Territory
"TERRITORY" means the world.
U. Use/Using
"USE" means any form of practice or utilization of the LICENSED
PATENT(S), LICENSED PRODUCT(S), or any portion thereof.
8
III. GRANTS
A. Grant of Option
Subject to the terms and conditions of this AGREEMENT, SKI hereby
grants to CYTOGEN an exclusive option to take an exclusive world-wide
LICENSE under LICENSED PATENTS and LICENSED TECHNOLOGY for a term beginning
at the EFFECTIVE DATE and extending until six (6) months after the issuance
of the first U.S. LICENSED PATENT.
B. Exercise of Option
The option granted herein may be exercised by CYTOGEN at any time
before six months after issuance of the first U.S. LICENSED PATENT by
delivery to SKI of a written notice of exercise of the option and payment
of the license issue fee.
C. Grant of License
Subject to the terms and conditions of this AGREEMENT, upon exercise
by CYTOGEN of its option rights, identified in Article III, Paragraph A
hereinabove CYTOGEN shall have the exclusive rights in the TERRITORY, with
the right to grant sublicenses as hereinafter provided, to make, have made,
use and sell, for the term of this AGREEMENT (i) LICENSED PRODUCTS
utilizing the LICENSED PATENTS and LICENSED TECHNOLOGY and (ii) products
utilizing LICENSED TECHNOLOGY.
D. Rights to Sublicense
1. The license rights granted under this AGREEMENT shall specifically
include the right for CYTOGEN to grant sublicenses, subject to the further
conditions of this AGREEMENT.
2. Any sublicense grant of rights under this AGREEMENT by CYTOGEN shall
be subject to the terms and conditions of this Agreement. The due and
punctual performance of any SUBLICENSEE shall be guaranteed by CYTOGEN.
9
3. Within thirty (30) days after the execution of a sublicense agreement,
as authorized herein, CYTOGEN shall notify SKI of such sublicense agreement
and provide SKI with the name and address of the SUBLICENSEE.
4. Each sublicense shall specifically reference this AGREEMENT and all
rights which revert to SKI upon termination of this Agreement.
5. CYTOGEN shall annually forward to SKI a copy of royalty reports
received by CYTOGEN from its SUBLICENSEE(s) during the preceding twelve
(12) month period. Such reports must contain adequate detail to allow SKI
to confirm the accuracy of royalty payments received from each SUBLICENSEE.
6. All royalty payments made by or on behalf SUBLICENSEES, as required by
this AGREEMENT, shall be made in United States of America currency, unless
otherwise approved in advance by SKI.
7. No sublicense agreement shall relieve CYTOGEN of any of its obligations
under this AGREEMENT, including the obligation to pay SKI royalties on
LICENSED PRODUCT(S).
8. Each sublicense agreement shall include a provision stating that the
sublicense agreement shall automatically be modified or terminated, in
whole or in part, upon any relevant modification or termination, in whole
or in part, of this AGREEMENT. Such modification or termination of the
sublicense agreement shall be consistent with and reflect the relevant
modifications or termination of this AGREEMENT.
E. Rights Reserved
1. Notwithstanding the exclusive license granted herein, SKI specifically
reserves unto itself only, the right to use LICENSED PATENTS and LICENSED
TECHNOLOGY exclusively limited to scientific and clinical research in its
own facilities which shall not be competitive with any LICENSED PRODUCTS
10
developed by CYTOGEN. Any commercially useful or valuable results of such
research shall be included in LICENSED PATENTS and LICENSED
TECHNOLOGY.
2. All rights granted in this AGREEMENT are expressly granted subject to
the rights of the GOVERNMENT, and such rights are specifically reserved by
this AGREEMENT to the GOVERNMENT.
IV. TERM AND TERMINATION
A. Term of Option
The term of the option granted in Article III, Paragraph A hereinabove
shall commence on the EFFECTIVE DATE and shall end six months after the
issuance of the first to issue U.S. LICENSED PATENT, unless it earlier
terminates by acts of the parties in accordance with the terms of this
AGREEMENT.
B. Term of Agreement
The term of this AGREEMENT shall commence on its EFFECTIVE DATE
and shall end on the date of expiration of the last to expire of the
LICENSED PATENTS unless it earlier terminates by operation of law or by
acts of the parties in accordance with the terms of this AGREEMENT. Upon
termination of this Agreement other than due to breach by CYTOGEN or
voluntary termination by CYTOGEN, CYTOGEN shall have a fully paid license
for LICENSED PATENTS and LICENSED TECHNOLOGY.
C. CYTOGEN'S Rights to Termination
CYTOGEN may terminate this AGREEMENT or the License after exercise
of the Option by giving written notice of its intent to terminate at least
sixty (60) days prior to actual termination.
11
D. SKI'S Rights to Termination
1. Upon any material breach of or default under this AGREEMENT by CYTOGEN,
SKI may terminate this AGREEMENT. in which event SKI shall give CYTOGEN,
and all SUBLICENSEE(S) of record, written notice of termination prior to
terminating this AGREEMENT. Such notice shall state with reasonable detail
and clarity the cause(s) for termination. Within forty five (45) days after
the effective date of such notice, if CYTOGEN or a SUBLICENSEE shall not
have remedied the material breach or default, then this AGREEMENT and all
rights granted CYTOGEN and any SUBLICENSEE(S) shall automatically terminate
at the end of the forty fifth (45th) day.
2. Upon termination of this AGREEMENT, any SUBLICENSEE of record
which has not breached, in any material way, its sublicense related to the
LICENSED PATENT(S) and LICENSED TECHNOLOGY, shall have the right to receive
a license to the LICENSED PATENT(S) and LICENSED TECHNOLOGY, directly from
SKI, granting rights substantially the same as those granted in the
sublicense and containing obligations as a licensee similar to those set
forth in this AGREEMENT.
3. Subject to ARTICLE XIII, Paragraph A, in the event CYTOGEN ceases
conducting business in a normal course, becomes insolvent, makes a general
assignment for the benefit of creditors, suffers or permits the appointment
of a receiver for its business or assets, or avails itself of, or becomes
subject to, any proceeding under the Federal Bankruptcy Act or any other
statute of any state or country relating to insolvency or the protection of
creditor rights, this AGREEMENT shall immediately and automatically
terminate at the occurrence of any such event.
E. Results of Termination
Provisions of confidentiality in Section IX and any other right or
obligation incurred by a party that matured prior to termination of this
AGREEMENT shall survive termination.
12
V. OPTION AND LICENSING CONSIDERATION
A. Option Fee
In consideration of the option granted herein, CYTOGEN shall pay to
SKI upon execution of this AGREEMENT, an option fee of [Information omitted
and filed separately with the Commission under Rule 24b-2.] This option fee
shall be nonrefundable and may not be credited toward the payment of any
royalties or other consideration required by this AGREEMENT.
B. License Issue Fee
In partial consideration of the license to be granted herein, the
costs incurred and services rendered by SKI, CYTOGEN shall, upon exercise
of the option granted by this AGREEMENT, pay to SKI a license issue fee of
[Information omitted and filed separately with the Commission under Rule
24b-2.] The license issue fee shall be nonrefundable and may not be
credited toward the payment of any royalties or other consideration
required by this AGREEMENT.
C. Prior Patent Expenses
In partial consideration of the license to be granted herein, the
costs incurred and services rendered by SKI, CYTOGEN shall, within thirty
(30) days of signing this AGREEMENT, pay to SKI the reasonable actual
patent expenses incurred by SKI relating to LICENSED PATENT(S) prior to the
EFFECTIVE DATE of this AGREEMENT, [Information omitted and filed separately
with the Commission under Rule 24b-2.]
VI. ROYALTIES
A. Earned Royalties
In consideration for the license granted in this AGREEMENT, CYTOGEN or
its SUBLICENSEES shall pay to SKI, in the manner designated below, [
Information omitted and filed separately with the Commission under Rule
24b-2.
]
13
B. Minimum Royalties
1. CYTOGEN shall pay to SKI minimum royalties, for as long as this
AGREEMENT is in effect, according to the following schedule:
a. Annual Payments Before Commercial Sales Begin: Starting July 1,
---------------------------------------------
1996, and ending with the end of the first full year in which there
are NET SALES of LICENSED PRODUCTS, Cytogen shall pay SKI [
Information omitted and filed separately with the Commission under
Rule 24b-2.
]
b. Annual Payments After Commercial Sales Begin: Beginning the first
---------------------------------------------
day of the year following the date of the first NET SALES of LICENSED
PRODUCTS, Cytogen shall pay [ Information omitted and filed
separately with the Commission under Rule 24b-2.
]
c. Earned Royalty payments due from SUBLICENSEES shall be paid to SKI
in conjunction with CYTOGEN's earned royalty payments. Such payments
shall be accompanied by written reports, as required with CYTOGEN's
Earned Royalty payments, sufficient to allow SKI to audit the NET
SALES of each SUBLICENSEE.
C. Single Royalty Per Licensed Product
No provision of this AGREEMENT shall be construed as requiring the
payment of more than a single royalty for each NET SALE of a LICENSED
14
PRODUCT regardless of the number of patentable or patented claims or amount
of information incorporated into the LICENSED PRODUCT.
VII. PAYMENTS AND REPORTS
A. Payments
1. Any amount due SKI as the result of each NET SALE of LICENSED PRODUCT
shall accrue at the time such NET SALES occur.
2. Unless otherwise specified in this AGREEMENT, all payment amounts due
SKI under this AGREEMENT shall be paid within sixty (60) days following the
end of the quarter in which such payment accrues or CYTOGEN otherwise
incurs the obligation to pay such amounts.
3. All such payments shall be identified as "Payment Under Contract
SK#786" and be remitted to the following address:
Office of Industrial Affairs
Sloan Kettering Institute for Cancer Research
1275 York Avenue
New York, NY 10021
B. Interest
1. CYTOGEN shall pay to SKI interest on any amounts not paid when due.
Such interest will accrue from the fifteenth (15th) day after the payment
was due at a rate two percent (2%) above the daily prime interest rate, as
determined by The Bank of New York in New York or its successor entity, on
each day the payment is delinquent, and the interest payment will be due
and payable on the first day of each month after interest begins to accrue,
until full payment of all amounts due SKI is made.
15
2. SKI's rights to receive such interest payments shall be in addition to
any other rights and remedies available to SKI.
3. If the interest rate required in this Subsection exceeds the legal rate
in a jurisdiction where a claim for such interest is being asserted, the
required interest rate shall be reduced, for such claim only, to the
maximum interest rate allowable in the jurisdiction.
C. Payments in U.S. Dollars
1. Unless otherwise approved or reasonably directed in writing by SKI, all
payments made by CYTOGEN or a SUBLICENSEE to SKI shall be made in United
States Dollars. Should any deduction or credit be taken under laws of the
country to which such payments are subject, SKI shall be given official
government receipts evidencing all such deductions or credits.
2. With respect to NET SALES made by CYTOGEN or a SUBLICENSEE in currency
other than United States dollars, calculations required to ascertain
amounts due SKI shall be in local currency and any currency conversions
necessary to make payment of amounts due SKI shall be made using the United
States dollar buying price quoted for such conversion into United States
dollars in the Wall Street Journal, on the day transfer of funds is
actually made.
3. If CYTOGEN is unable to convert currency received for NET SALES into
United States dollars because of the laws, regulations or fiscal policy of
the country in which the NET SALES are received, or CYTOGEN is unable to
transmit, to the United States, payments due SKI on NET SALES in foreign
countries, CYTOGEN shall notify SKI in writing and shall make such payments
to SKI in the manner SKI directs; provided SKI's directions are reasonable
and lawful.
4. Foreign taxes, including transfer, remittance, patent or stamp taxes,
lawfully charged by a foreign governmental agency, which are actually
paid by CYTOGEN
16
on NET SALES, collectible within such agency's jurisdiction, shall be
deducted from amounts due SKI on such NET SALES. CYTOGEN shall give SKI
official receipt showing payment of all deducted amounts.
D. Reports
1. CYTOGEN shall keep, at its own expense, accurate books of account,
using its standard accounting procedures, detailing all data necessary to
calculate and reasonably audit any payments due SKI from CYTOGEN under this
AGREEMENT.
2. Each payment made to SKI shall be accompanied by a written report
summarizing, with sufficient detail to allow SKI to verify all payment
amounts, the data used to calculate the amounts paid. Each report
pertaining to royalty payments for the applicable accounting period shall
specifically include the following, as applicable:
(a) Royalties due, broken down by category, including Earned Royalty
and minimum royalty categories.
(b) Minimum royalty amounts credited against earned royalty amounts.
(c) NET SALES broken down by TERRITORY or country.
3. Upon written request by SKI, such books of account shall be made
available for audit at a reasonable time at CYTOGEN's place of business by
an independent auditor of SKI's choice and reasonably acceptable to
CYTOGEN, for the purpose of verifying the payment amounts due. No more than
one such audit shall be made in one calendar year.
4. SKI shall pay all fees and expenses of the agent performing the audit.
Upon written request by SKI, CYTOGEN shall provide an authorized employee,
paid by CYTOGEN, to assist in the audit process, and CYTOGEN shall
cooperate in making the audit process as easy, inexpensive, and accurate as
reasonably possible.
17
5. If an audit shows that CYTOGEN has paid more than required under this
AGREEMENT, any excess amounts shall, at CYTOGEN's option, be promptly
refunded or credited against future royalties. If an audit shows that
CYTOGEN has paid less than required under this AGREEMENT, CYTOGEN shall
promptly pay the additional amount due together with interest as required
under this AGREEMENT for late payments. If the amount of underpayment
exceeds ten percent (10%) of the amount which should have been paid,
CYTOGEN shall also pay the reasonable expense of the audit.
VIII. PERFORMANCE
A. Gene Technology
1. With regard to LICENSED PRODUCTS based upon or incorporating GENE
TECHNOLOGY, CYTOGEN shall use reasonable due diligence to develop LICENSED
PRODUCTS of reasonable commercial value incorporating GENE TECHNOLOGY. In
the development of such LICENSED PRODUCTS, CYTOGEN shall utilize reasonable
scientific and business standards consistent with the same priority as
other products originating within CYTOGEN with similar scientific
feasibility and market potential. Within one year following the EFFECTIVE
DATE, CYTOGEN shall provide SKI with a written plan concerning such
development efforts and on the second and third anniversary of the
EFFECTIVE DATE shall report progress in carrying out that plan to SKI. If
CYTOGEN elects not to, or fails to, comply with that plan, as may be
modified from time to time based on technical and scientific factors or
market potential considerations, the parties agree to collaborate to the
extent necessary for CYTOGEN to sublicense third parties to develop a
LICENSED PRODUCT utilizing GENE TECHNOLOGY.
2. SKI wishes to have GENE TECHNOLOGY developed as quickly as reasonable.
Toward this end, CYTOGEN shall consider requests from third parties to
sublicense GENE TECHNOLOGY. In the event that subsequent to the first
anniversary of the EFFECTIVE DATE, a qualified third party is willing and
can
18
reasonably be expected to be successful in developing GENE TECHNOLOGY,
CYTOGEN may implement a comparable development program in a timely manner,
or shall sublicense the third party so that it may develop the LICENSED
PRODUCT, or shall sublicense back to SKI its rights in GENE TECHNOLOGY to
the extent necessary for SKI to sublicense third parties to develop
LICENSED PRODUCT utilizing GENE TECHNOLOGY.
B. Other Technology
With regard to LICENSED PRODUCTS that are not based upon or
incorporating GENE TECHNOLOGY, performance requirements are satisfied by
the payments provided for in Sections V and VI.
IX. CONFIDENTIAL INFORMATION RESTRICTIONS
A. Protection Requirements
The parties acknowledge that either may be required to disclose to the
other information which is CONFIDENTIAL INFORMATION considered to be its
own intellectual property. The parties agree to take reasonable
precautions to protect such CONFIDENTIAL INFORMATION and preserve its
confidential, proprietary, or trade secret status. The parties shall use at
least the same degree of care and precaution as is customarily used to
protect their own CONFIDENTIAL INFORMATION.
X. PATENT MAINTENANCE AND MARKINGS
A. Patent Filing, Prosecution, and Maintenance
1. Filing, prosecution and maintenance of all LICENSED PATENT(S) shall be
the responsibility of SKI, but shall be at the discretion and expense of
CYTOGEN. In the event that CYTOGEN decides not to file, prosecute or
maintain any part of the LICENSED PATENT(S), SKI may do so at its own
expense. CYTOGEN commits to filing LICENSED PATENTS of commercial
significance in the United States, Canada, Japan and under the European
Patent Convention.
19
2. Within thirty (30) days of receiving notice from SKI stating patent
maintenance fees or costs related to the LICENSED PATENT(S) have been paid,
or within thirty (30) days of receiving an invoice for patent maintenance
fees or costs from SKI's PATENT COUNSEL, CYTOGEN shall reimburse SKI, or
SKI's PATENT COUNSEL, as the case may be, for all such fees and costs.
B. Patent Counsel
CYTOGEN and SKI agree to give notice according to the notification
provisions of this AGREEMENT, of any change from PATENT COUNSEL below:
For CYTOGEN: For SKI:
Pennie & Edmunds Cooper & Dunham
1155 Avenue of the Americas 30 Rockefeller Plaza
New York, New York 10036 New York, New York 10112
Attn: S. Leslie Misrock, Esq. Attn: John P. White, Esq.
C. Cooperation Between the Parties
Upon written request by CYTOGEN, SKI shall provide CYTOGEN with access
to all patent applications listed in Schedule B, and all future-filed
patent applications and all correspondence with the United States Patent
and Trademark Office or corresponding office in foreign countries
applicable thereto. The parties agree to mutually cooperate to obtain
optimal patent protection available. If SKI chooses not to prosecute
and/or maintain certain patent applications/patents under this Agreement,
SKI shall so notify CYTOGEN in writing and CYTOGEN shall, in its sole
discretion, decide whether to assume the responsibility and expenses
therefor for each such patent application or patent. In that event, the
patent applications/patents for which CYTOGEN shall assume responsibility
shall be assigned to CYTOGEN.
20
D. Patent Markings
CYTOGEN shall place in a conspicuous location on any LICENSED PRODUCTS
covered by LICENSED PATENT(S) listed in Exhibit B, a patent notice in
accordance with 35 U.S.C. (S)287, or the patent law of the country where
the patent issues. CYTOGEN agrees to mark any products made using a process
covered by any LICENSED PATENT(S) listed in Exhibit B with the number of
each such patent and, with respect to LICENSED PATENT(S), to respond to any
request for disclosure under 35 U.S.C. (S)287(b)(4)(B) by only notifying
SKI of the request for disclosure.
XI. WARRANTIES
A. Warranties, Rights, and Liabilities
1. SKI MAKES NO REPRESENTATIONS, EXTENDS NO WARRANTIES, EXPRESS OR
IMPLIED, OTHER THAN IN ARTICLE 1, PARAGRAPH C ABOVE AND SUBPARAGRAPH 3 HERE
BELOW, AND ASSUMES NO LIABILITIES OR RESPONSIBILITIES WITH RESPECT TO THE
USE, SALE, OR OTHER DISPOSITION BY CYTOGEN, ANY AFFILIATES, SUBLICENSEES,
VENDEES, OR TRANSFEREES, OF LICENSED PRODUCT(S) OR THE LICENSED PATENT(S).
2. SKI'S OFFICERS, DIRECTORS, AND EMPLOYEES, SHALL NOT ASSUME ANY
LIABILITY RESULTING FROM ANY EXERCISE OF RIGHTS GRANTED UNDER THIS
AGREEMENT.
3. SKI SPECIFICALLY DOES NOT MAKE ANY WARRANTIES OR REPRESENTATIONS,
EXPRESS OR IMPLIED, CONCERNING THE PATENTABILITY OF ANY LICENSED PATENT(S),
THE VALIDITY OF ANY LICENSED PATENT(S), THE SCOPE OF ANY LICENSED PATENT(S)
CLAIMS, OR WHETHER OR NOT THE EXERCISE OF THE RIGHTS LICENSED UNDER THIS
AGREEMENT WILL OR WILL NOT RESULT IN INFRINGEMENT OF ANY PATENT(S),
PROVIDED HOWEVER, AND NOT
21
WITHSTANDING THE FOREGOING, SKI DOES WARRANT AND REPRESENT THAT IT HAS NO
KNOWLEDGE OF ANY FAILURE TO COMPLY WITH 37 CFR 1.56.
XII. INFRINGEMENT
A. Obligation to Notify
Should either party become aware of any infringement or potential
infringement of the LICENSED PATENT(S), such party shall give prompt
written notice to the other party detailing as many facts as possible
concerning such infringement or potential infringement.
B. Infringement by SKI/CYTOGEN.
1. If, as a result of the manufacture, use or sale of LICENSED PRODUCTS,
SKI, or CYTOGEN is sued for patent infringement or threatened with such
lawsuit or other action by a third party, SKI or CYTOGEN, as the case may
be shall promptly notify the other party of such suit. CYTOGEN shall have
the right, at its discretion either:
a. to stop manufacture, use and sale of the subject LICENSED
PRODUCT(S) and to stop all payments thereafter due under this
Agreement; or
b. to actively consult with SKI in its attempts to resolve the same
following evaluation of opinion by CYTOGEN'S legal counsel and the
judgement of CYTOGEN as to the optimal and reasonable course of action
to be taken in the circumstances; or
c. stand suit.
2. Should CYTOGEN be sued by a third party for the reasons set forth
above and elect to stand suit therefor, CYTOGEN shall select defense
counsel, conduct the
22
litigation including settlement; and shall bear [ Information omitted
and filed separately with the Commission under Rule 24b-2.
] SKI shall cooperate fully with CYTOGEN in the conduct of such
suit and may, if it so desires, retain independent counsel at its own
expense to represent its own interest. CYTOGEN and SKI shall consult with
each other during such suit but final determination and course or conduct,
including settlement, shall remain the responsibility of CYTOGEN.
C. Infringement by Third Parties
1. Suit by CYTOGEN. Either party shall promptly notify the other party of
any infringement of any LICENSED PATENTS, and SKI shall notify CYTOGEN of
the declaration of an interference relating to LICENSED PATENTS. Each
party shall provide the other party with all available evidence relating
thereto. CYTOGEN and SKI shall then consult with each other as to the best
manner in which to proceed. CYTOGEN shall have the right, but not the
obligation, to bring, defend and maintain any appropriate suit or action.
If CYTOGEN requests SKI to join CYTOGEN in such suit or action and SKI
agrees to do so, SKI shall execute all papers and perform such other acts
as may be reasonably required and may, at its option and at its expense, be
represented by counsel of its choice. Should CYTOGEN lack standing to bring
any such action, then CYTOGEN may cause SKI to do so upon first undertaking
to indemnify and hold SKI harmless (to the extent permissible by law) from
all consequent liability and to promptly reimburse SKI for all reasonable
Costs (as defined hereinafter stemming therefrom). Absent an agreement
between the parties to jointly bring any action or suit hereunder and to
share the expense thereof, any amount recovered in any such action or suit
shall be retained by the party bringing the suit and bearing its expenses.
23
2. Suit by SKI. In the event CYTOGEN fails to take action with respect to
the matters provided for in Paragraph (a) hereinafter, within a reasonable
period of time, but not more than three (3) months following receipt of
such notice and evidence, SKI shall have the right, but not the obligation,
to bring, defend and maintain any appropriate suit or action. If SKI finds
it necessary to join CYTOGEN in such suit or action, CYTOGEN shall execute
all papers and perform such other acts as may be reasonably required and
may, at its option and expense, be represented by counsel of its choice. In
the event SKI does join CYTOGEN in such suit or action. SKI shall indemnify
and hold CYTOGEN harmless (to the extent permissible by law) from all
consequent liability and to promptly reimburse CYTOGEN for all reasonable
Costs (as defined in hereinabove). Absent an agreement between the parties
to jointly bring any action or suit hereunder and to share the expenses
thereof, any amount recovered in any such action or suit shall be retained
by the party bringing the suit and bearing its expenses.
D. Judgement.
In the event of a judgement in any suit requiring CYTOGEN to pay a
royalty to a third party, or in the event of a settlement of such suit
requiring royalty payments to be made, [ Information omitted and filed
separately with the Commission under Rule 24b-2.
]
XIII. GENERAL PROVISIONS
A. Assignment
Without prior written approval from SKI's authorized
representative,which SKI agrees shall not be unreasonably withheld, this
AGREEMENT or the option granted by this AGREEMENT may not be assigned or
transferred by CYTOGEN, except to the successor or assignee of all or
substantially all of CYTOGEN's business interest relating to the LICENSED
PATENT(S). In the event that all or substantially all of CYTOGEN's business
interest relating to the LICENSED
24
PATENT(S) is assigned or transferred, CYTOGEN shall notify SKI prior to
such assignment or transfer.
B. Entire Agreement
1. This AGREEMENT constitutes the entire agreement and understanding
between SKI and CYTOGEN with respect to the LICENSED PATENT(S) and LICENSED
TECHNOLOGY, and any modification of this AGREEMENT shall be in writing and
shall be signed by a duly authorized representative of both SKI and
CYTOGEN. There are no understandings, representations, or warranties
between SKI and CYTOGEN concerning the LICENSED PATENT(S) and LICENSED
TECHNOLOGY except as expressly set forth in this AGREEMENT.
2. With the exception of any confidential disclosure, nondisclosure,
secrecy or similar agreement(s) between SKI and CYTOGEN concerning the
LICENSED PATENT(S)and LICENSED TECHNOLOGY, this AGREEMENT supersedes all
prior agreements or understandings, whether written or oral, between SKI
and CYTOGEN concerning the LICENSED PATENT(S)and LICENSED TECHNOLOGY.
Should any provision(s) of such confidential disclosure, nondisclosure,
secrecy, or similar agreement(s) be contradictory to terms of this
AGREEMENT, the terms of this AGREEMENT shall supersede and be controlling.
C. Export Control
This AGREEMENT may be subject to certain UNITED STATES laws and
regulations controlling the export of technical data, computer software,
laboratory prototypes, and all other export controlled commodities.
CYTOGEN shall comply with applicable laws and regulations. By granting
rights in this AGREEMENT, SKI does not represent that export authorization
or an export license will not be necessary or, if necessary, that such
authorization or export license will be granted.
25
D. Force Majeure
Neither SKI nor CYTOGEN shall be in default of the terms of this
AGREEMENT because the party delays performance or fails to perform such
terms; provided such delay or failure is not the result of the party's
intentional or grossly negligent acts or omissions, but the result of
causes beyond the reasonable control of such party. Causes reasonably
beyond the control of SKI and CYTOGEN shall include, but not be limited to,
revolutions; civil disobedience; fires; damage or destruction of facilities
or equipment; acts of God, war, or public enemies; blockades; embargoes;
strikes; labor disputes; laws; governmental, administrative or judicial
orders, proclamations, regulations, including but not limited to time for
governmentapprovals relating to LICENSED PRODUCTS, ordinances, demands, or
requirements; delays in transit or deliveries; or inability to secure
necessary permits, permissions, raw materials, or equipment.
E. Governing Law
1. This AGREEMENT shall be deemed to have been made in New York and shall
be governed and construed in accordance with the laws of the state of New
York.
2. All proceedings and matters affecting the validity, construction, or
effect of
the LICENSED PATENT(s) shall be determined in accordance with the laws of
the country which granted the subject LICENSED PATENT(s).
F. Headings
The section and subsection titles and headings contained in this
AGREEMENT are for convenience and reference only. Such titles and headings
do not form a part of this AGREEMENT, shall not define or limit the scope
of the sections or subsections, and shall not affect the construction or
interpretation of any of the sections or subsections.
26
G. Independence of the Parties
SKI and CYTOGEN are independent entities engaged in independent
business, and neither party nor any agent or employee of either party shall
be regarded as an agent or employee of the other. Nothing herein shall be
construed as reserving to either party the right to control the other in
the conduct of its employees or business, nor shall either party have the
authority to make any promise, guarantee, warranty, or representation which
will create any obligation or liability whatsoever, whether express or
implied, on behalf of the other. SKI and CYTOGEN are not joint venturers
or partners in any sense.
H. Notices
All notices, reports, payments, requests, consents, demands and other
communications between SKI and CYTOGEN, pertaining to subjects related to
this AGREEMENT, shall be in writing and shall be deemed duly given and
effective (A) when actually received by mail or personal delivery, or (B)
three days after being mailed by prepaid registered or certified mail, to
the receiving party to the address as set forth below, or to such other
address as may be later designated by written notice from either party to
the other party:
SKI's Notification Address: CYTOGEN's Notification Address:
James S. Quirk, Senior Vice William Ryan, Vice President &
President General Counsel
Research Resources Management Cytogen Corporation
Sloan-Kettering Institute for 600 College Road East
Cancer Princeton, NJ 08540-5308
Research and
1275 York Avenue John D. Rodwell, Ph.D.
New York, NY 10021 Vice President, Research and
Development
(same address)
27
I. Modifications
Either SKI or CYTOGEN may propose a modification to this AGREEMENT.
The proposing party shall give the other party notice which sets forth the
proposed modification. Within thirty (30) days following the effective date
of such notice, the other party shall accept the modification or reject the
modification proposed. SKI and CYTOGEN agree to work in good faith to
modify this AGREEMENT should modification be required to meet the needs of
either party.
J. Use of Name
CYTOGEN shall not, without prior written consent from SKI in each
specific case, use SKI's name, trademark(s), or any adaptations thereof.
K. Waiver of Rights
In order to be effective, any waiver, by either party, of any right
under this AGREEMENT, must be in writing signed by an authorized
representative of the party making the waiver. No such waiver or failure
of SKI or CYTOGEN to enforce a right or strict performance under this
AGREEMENT shall be deemed to be a waiver or forbearance which would in any
way prevent SKI or CYTOGEN from subsequently asserting or exercising any
such rights, making a claim not specifically waived, or requiring strict
performance of this AGREEMENT. No such waiver or failure to enforce shall
affect the validity of this AGREEMENT or be a continuing waiver excusing
compliance with any provision of this AGREEMENT in the future.
28
L. Signatures
IN WITNESS WHEREOF, SKI and CYTOGEN have caused this AGREEMENT to be
executed in duplicate originals by their duly authorized representative.
Sloan-Kettering Institute for Cytogen Corporation
Cancer Research
By: /s/ James S. Quirk By: /s/ William J. Ryan
------------------------------- -------------------------------
Signature Signature
James S. Quirk William J. Ryan
Senior Vice President Vice President
Research Resources Management
Date: August 19 , 1993 Date: August 19 , 1993
----------- -----------
29
EXHIBIT B
Of the Option and License Agreement Between
Sloan-Kettering Institute for Cancer Research and
Cytogen Corporation
LICENSED PATENTS
U. S. Patents/Applications
==========================
Israeli, et al., U.S.S.N. 973,337, filed November 5, 1992, titled "Prostate-
Specific Membrane Antigen".