EXHIBIT 10.1
PUBLIC HEALTH SERVICE
PHS PATENT LICENSE AGREEMENT--EXCLUSIVE
COVER PAGE
For PHS internal use only:
Patent License Number: L-354-98/0, which relates to OTT Reference
Number E-016-96/0.
Serial Numbers of Patent Applications: 60/016,628, filed May 1, 1996,
entitled "21-substituted Progesterone Derivatives as New
Anti-Progestational Agents." Inventors for this application: Drs. Hyun
K. Kim (NICHD), Richard P. Blye (NICHD) and Drs. Pemmaraju Narasinha
Rao, James W. Cessac, and Carmie Kirk Acosta, all of Southwest
Foundation for Biomedical Research (SFBR).
LICENSEE: Zonagen, Inc., a Delaware corporation, having its principal
office at 2408 Timberloch Place, Suite B-4, The Woodlands, Texas 77380.
Cooperative Research and Development Agreement (CRADA) Number: None.
Additional Remarks: The terms of this AGREEMENT shall be considered
CONFIDENTIAL.
Public Benefit(s): The principal benefit of this invention is its
potential to treat diseases of hormonal or endocrine tissues.
This exclusive patent license agreement (hereinafter referred to as the
("AGREEMENT"), made effective the first date upon which all the Parties have
subscribed their signatures hereunto ("EFFECTIVE DATE"), consists of this Cover
Page, an attached AGREEMENT, a Signature Page, Appendix A (List of Patent(s)
and/or Patent Application(s)), Appendix B (LICENSED FIELDS-OF-USE and LICENSED
TERRITORY), Appendix C (Royalties), Appendix D (Modifications), Appendix E
(BENCHMARKS), and Appendix F (COMMERCIAL DEVELOPMENT PLAN). The Parties to this
AGREEMENT are:
1) The National Institutes of Health ("NIH"), the Centers for
Disease Control and Prevention ("CDC"), or the Food and Drug
Administration ("FDA"), hereinafter singly or collectively
referred to as ("PHS"), agencies of the United States Public
Health Service within the Department of Health and Human
Services ("DHHS"); and
2) The person, corporation, or institution identified above
and/or on the Signature Page, having offices at the address
indicated on the Signature Page (hereinafter referred to as
("LICENSEE").
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April 5, 1999 - Final Page 1 of 22
PHS PATENT LICENSE AGREEMENT-EXCLUSIVE
PHS and LICENSEE agree as follows:
1. BACKGROUND
1.01 In the course of conducting biomedical and behavioral
research, PHS investigators and investigators at the Southwest
Foundation for Biomedical Research ("SFBR") made inventions
that may have commercial applicability.
1.02 By assignment of rights from PHS employees, DHHS, on behalf of
the United States Government, owns intellectual property
rights claimed in any United States and/or foreign patent
applications or patents corresponding to the assigned
inventions. DHHS also owns any tangible embodiments of these
inventions actually reduced to practice by PHS.
1.03 The Secretary of DHHS has delegated to PHS the authority to
enter into this AGREEMENT for the licensing of rights to these
inventions.
1.04 PHS and SFBR, entered into an Inter-institutional Agreement
May 1, 1998 whereby SFBR granted PHS an exclusive license
including the right to grant sublicenses, under U.S. Patent
Application 60/016,628 and any divisions or continuations
thereof, all foreign counterpart applications, and any U.S.
and foreign patents issued thereon or reissues or extensions
thereof.
1.05 PHS desires to transfer these inventions to the private sector
through commercialization licenses to facilitate the
commercial development of products and processes for public
use and benefit.
1.06 LICENSEE has represented to PHS, to induce PHS to enter this
AGREEMENT, that LICENSEE has or shall acquire the necessary
research, development, manufacturing, distribution, marketing
and sales capabilities and expertise and will use its
reasonable best efforts to develop and commercialize LICENSED
PRODUCT(S) and LICENSED PROCESS(ES) in the LICENSED
FIELDS-OF-USE in the LICENSED TERRITORY for public use and
benefit.
2. DEFINITIONS
2.01 "BENCHMARKS" shall mean the performance milestones that are
set forth in Appendix E.
2.02 "COMMERCIAL DEVELOPMENT PLAN" shall mean the written
commercialization plan attached as Appendix F.
2.03 "FIRST COMMERCIAL SALE" shall mean the initial transfer by or
on behalf of LICENSEE, its AFFILIATES or its SUBLICENSEES of
LICENSED PRODUCTS or the initial practice of a LICENSED
PROCESS by or on behalf of LICENSEE, its AFFILIATES, or its
SUBLICENSEES in exchange for cash or some equivalent to which
value can be assigned for the purpose of determining NET
SALES.
2.04 "GOVERNMENT" means the GOVERNMENT of the United States of
America.
2.05 "LICENSED FIELDS-OF-USE" means the fields of use identified in
Appendix B.
2.06 "LICENSED PATENT RIGHTS" shall mean:
a) Patent applications (including provisional patent
applications and Patent Cooperation Treaty (PCT)
patent applications) and/or patents listed in
Appendix A, all divisions and continuations of these
applications, all patents issuing from such
applications, divisions, and continuations, and any
reissues, reexaminations, and extensions of all such
patents;
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April 5, 1999 - Final Page 2 of 22
b) To the extent that the following contain one or more
claims directed to the invention or inventions
disclosed in a) above: i) continuations-in-part of a)
above; ii) all divisions and continuations of these
continuations-in-part; iii) all patents issuing from
such continuations-in-part, divisions, and
continuations; iv) priority patent application(s) of
a) above; and v) any reissues, reexaminations, and
extensions of all such patents;
c) To the extent that the following contain one or more
claims directed to the invention or inventions
disclosed in a) above: all counterpart foreign and
U.S. patent applications and patents to a) and b)
above, including those listed in Appendix A.
LICENSED PATENT RIGHTS shall not include b) or c) above to the
extent that they contain one or more claims directed to new
matter which is not the subject matter disclosed in a) above.
2.07 "LICENSED PROCESS(ES)" shall mean processes which, in the
course of being practiced would, in the absence of this
AGREEMENT, infringe one or more claims of the LICENSED PATENT
RIGHTS that have not been held invalid or unenforceable by an
unappealed or unappealable judgment of a court of competent
jurisdiction.
2.08 "LICENSED PRODUCT(S)" shall mean tangible materials which, in
the course of manufacture, use, offer to sell, sale, or
importation would, in the absence of this AGREEMENT, infringe
one or more claims of the LICENSED PATENT RIGHTS that have not
been held invalid or unenforceable by an unappealed or
unappealable judgment of a court of competent jurisdiction.
2.09 "LICENSED TERRITORY" shall mean the geographical area
identified in Appendix B.
2.10 "NET SALES" for the purposes of computing the full royalty
contemplated under the provisions of Article 6 below, shall
mean the total gross receipts for sales of LICENSED PRODUCTS
or practice of LICENSED PROCESSES by or on behalf of LICENSEE,
its AFFILIATES and its SUBLICENSEES, and from leasing,
renting, or otherwise making LICENSED PRODUCTS available to
others without sale or other dispositions, whether invoiced or
not, less returns and allowances, packing costs, insurance
costs, freight out, taxes or excise duties imposed on the
transaction (if separately invoiced), and wholesaler and cash
discounts in amounts customary in the trade to the extent
actually granted. No deductions shall be made for commissions
paid to individuals, whether they shall be with independent
sales agencies or regularly employed by LICENSEE, its
AFFILIATES, or its SUBLICENSEES and on its payroll, or for the
cost of collections. It is the Parties' intention in all
transactions involving LICENSED PRODUCT(S) and/or LICENSED
PROCESS(ES), that PHS shall receive a royalty not less than
that which would have been generated in an arm's length
transaction.
2.11 "AFFILIATES" shall mean any company or other legal entity,
other than LICENSEE, in whatever country organized, controlled
by, controlling, or under common control with LICENSEE. The
term "control" shall mean possession, direct or indirect, of
the powers to direct or cause the direction of the management
and policies of an entity, whether through the ownership of
voting securities, by contract, or otherwise, and the term
"entity" includes an individual, corporation or other entity.
2.12 "PRACTICAL APPLICATION" shall mean to manufacture in the case
of a composition or product, to practice in the case of a
process or method, or to operate in the case of a machine or
system; and in each case, under such conditions as to
establish that the invention is being utilized and that its
benefits are to the extent permitted by law or GOVERNMENT
regulations available to the public on reasonable terms.
2.13 "RESEARCH LICENSE" shall mean a nontransferable, nonexclusive
license to make and to use the LICENSED PRODUCTS or LICENSED
PROCESSES under the LICENSED PATENT RIGHTS for purposes of
research and not for purposes of commercial manufacture or
distribution or in lieu of purchase.
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2.14 "VALID CLAIM" shall mean the claim of a patent or pending
patent application which has not been held invalid or
otherwise unenforceable by a court of competent jurisdiction
from which no further appeal has or can be taken, or has not
otherwise finally been held unpatentable by the appropriate
administrative agency.
2.15 "SUBLICENSEE" shall mean any third party who is not an
AFFILIATE and who is licensed by LICENSEE to manufacture or
sell any LICENSED PRODUCT.
3. GRANT OF RIGHTS
3.01 PHS hereby grants and LICENSEE accepts, subject to the terms
and conditions of this AGREEMENT, an exclusive license under
the LICENSED PATENT RIGHTS in the LICENSED TERRITORY to make
and have made, to use and have used, to sell and have sold, to
offer to sell, and to import any LICENSED PRODUCTS in the
LICENSED FIELDS-OF-USE and to practice and have practiced any
LICENSED PROCESSES in the LICENSED FIELDS-OF-USE.
3.02 This AGREEMENT confers no license or rights by implication,
estoppel, or otherwise under any patent applications or
patents of PHS other than LICENSED PATENT RIGHTS regardless of
whether such patents are dominant or subordinate to LICENSED
PATENT RIGHTS. The Office of Technology Transfer is unaware of
any such patents.
4. SUBLICENSING
4.01 Upon written approval by PHS, which approval will not be
unreasonably withheld, LICENSEE may enter into sublicensing
agreements under the LICENSED PATENT RIGHTS.
4.02 LICENSEE agrees that any sublicenses granted by it shall
provide that the obligations to PHS of Paragraphs 5.01-5.04,
8.01, 10.01, 10.02, 12.05, and 13.07-13.09 of this AGREEMENT
shall be binding upon the SUBLICENSEE as if it were a party to
this AGREEMENT. LICENSEE further agrees to attach copies of
these Paragraphs to all such sublicense agreements.
4.03 Any sublicenses granted by LICENSEE shall provide for the
termination of the sublicense, or the conversion to a license
directly between such SUBLICENSEES and PHS, at the option of
the SUBLICENSEE, upon termination of this AGREEMENT under
Article 13. Such conversion is subject to PHS approval and
contingent upon acceptance by the SUBLICENSEE of the remaining
provisions of this AGREEMENT.
4.04 LICENSEE shall forward to PHS a copy of each fully executed
sublicense agreement postmarked within thirty (30) days of the
execution of such agreement. To the extent permitted by law,
PHS agrees to maintain each such sublicense agreement in
confidence.
5. STATUTORY AND PHS REQUIREMENTS AND RESERVED GOVERNMENT RIGHTS
5.01 (a) PHS reserves on behalf of the GOVERNMENT an
irrevocable, nonexclusive, nontransferable,
royalty-free license for the practice of all
inventions licensed under the LICENSED PATENT RIGHTS
throughout the world by or on behalf of the
GOVERNMENT and on behalf of any foreign government or
international organization pursuant to any existing
or future treaty or agreement to which the GOVERNMENT
is a signatory. Upon request by PHS, LICENSEE agrees
to provide PHS reasonable quantities of LICENSED
PRODUCTS or materials made through the LICENSED
PROCESSES for PHS research use.
(b) In the event that LICENSED PATENT RIGHTS are Subject
Inventions made under a Cooperative Research and
Development Agreement ("CRADA"), LICENSEE grants to
the Government, pursuant to 15 U.S.C. 3710a(b)(1)(A),
a nonexclusive, nontransferable, irrevocable, paid-up
license to practice LICENSED PATENT RIGHTS or have
LICENSED PATENT
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April 5, 1999 - Final Page 4 of 22
RIGHTS practiced throughout the world by or on behalf
of the GOVERNMENT. In the exercise of such license,
the GOVERNMENT shall not publicly disclose trade
secrets or commercial or financial information that
is privileged or confidential within the meaning of 5
U.S.C. 552(b)(4) or which would be considered as such
if it had been obtained from a non-Federal party.
Prior to the FIRST COMMERCIAL SALE, LICENSEE agrees
to provide PHS reasonable quantities of LICENSED
PRODUCTS or materials made through the LICENSED
PROCESSES for PHS research use.
5.02 LICENSEE agrees that products used or sold in the United
States embodying LICENSED PRODUCTS or produced through use of
LICENSED PROCESSES shall be manufactured substantially in the
United States, unless a written waiver is obtained in advance
from PHS. PHS does not represent that such a waiver shall be
granted.
5.03 LICENSEE acknowledges that PHS may enter into future CRADAs
under the Federal Technology Transfer Act of 1986 that relate
to the subject matter of this AGREEMENT. LICENSEE shall not
unreasonably deny requests for a grant of a RESEARCH LICENSE
from such future collaborators with PHS when acquiring such
rights is necessary to make such a CRADA project feasible.
LICENSEE may request an opportunity to join as a party to the
proposed CRADA.
5.04 (a) In addition to the reserved license of Paragraph 5.01
above, PHS reserves the right to grant nonexclusive
RESEARCH LICENSEs directly or to require LICENSEE to
grant nonexclusive RESEARCH LICENSEs on reasonable
terms. The purpose of any such RESEARCH LICENSE shall
be to encourage basic research, whether conducted at
an academic or corporate facility. In order to
safeguard the LICENSED PATENT RIGHTS, however, PHS
shall consult with LICENSEE and reasonably consider
LICENSEE's views before making a decision to grant to
commercial entities a RESEARCH LICENSE or providing
to them research samples of materials made through
the LICENSED PROCESSES.
(b) In exceptional circumstances, and in the event that
Licensed Patent Rights are Subject Inventions made
under a CRADA, the GOVERNMENT, pursuant to 15 U.S.C.
3710a(b)(1)(B), retains the right to require the
LICENSEE to grant to a responsible applicant a
nonexclusive, partially exclusive, or exclusive
sublicense to use LICENSED PATENT RIGHTS in
LICENSEE's field-of-use on terms that are reasonable
under the circumstances; or if LICENSEE fails to
grant such a license, the GOVERNMENT retains the
right to grant the license itself. The exercise of
such rights by the GOVERNMENT shall only be in
exceptional circumstances and only if the GOVERNMENT
determines (i) the action is necessary to meet health
or safety needs that are not reasonably satisfied by
LICENSEE; (ii) the action is necessary to meet
requirements for public use specified by Federal
regulations, and such requirements are not reasonably
satisfied by the LICENSEE; or (iii) the LICENSEE has
failed to comply with an agreement containing
provisions described in 15 U.S.C. 3710a(c)(4)(B). The
determination made by the GOVERNMENT under this
Article is subject to administrative appeal and
judicial review under 35 U.S.C. 203(2).
6. ROYALTIES AND REIMBURSEMENT
6.01 LICENSEE shall pay PHS a noncreditable, nonrefundable license
issue royalty as set forth in Appendix C.
6.02 LICENSEE shall pay PHS noncreditable, nonrefundable patent
reimbursement royalty as set forth in Appendix C.
6.03 LICENSEE shall pay PHS annual earned royalties as set forth in
Appendix C.
6.04 LICENSEE shall pay PHS Benchmark royalties as set forth in
Appendix C.
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April 5, 1999 - Final Page 5 of 22
6.05 LICENSEE shall pay PHS sublicensing royalties as set forth in
Appendix C.
6.06 For the purpose of capturing the full value of the license
granted herein and for ease of calculating royalties earned
and due PHS, LICENSEE agrees to pay adjusted annual earned
royalties on its NET SALES in countries in which a VALID CLAIM
does not exist. Adjusted royalties payable to PHS under such
circumstances are set forth in Appendix C.
6.07 No multiple royalties shall be payable because any LICENSED
PRODUCTS or LICENSED PROCESSES are covered by more than one
patents or patent applications under the LICENSED PATENT
RIGHTS.
6.08 On sales of LICENSED PRODUCTS by LICENSEE made in other than
an arm's-length transaction, the value of the NET SALES for
the purpose of calculating royalties owed and due under this
Article 6 shall be that which would have been received in an
arm's-length transaction, based on sales of like quantity and
quality products on or about the time of such transaction.
6.09 PHS, at its sole option, may require LICENSEE to pay patent
expenses directly to the law firm employed by PHS to file,
prosecute and maintain patents and patent applications under
the LICENSED PATENT RIGHTS. In such an event, PHS and not
LICENSEE shall be the client of such law firm.
6.10 In limited circumstances, LICENSEE may be given the right to
assume responsibility for the preparation, filing,
prosecution, or maintenance of any patent application or
patent included with the LICENSED PATENT RIGHTS. In that
event, LICENSEE shall directly pay the attorneys or agents
engaged to prepare, file, prosecute, or maintain such patent
applications or patents and shall provide to PHS copies of
each invoice associated with such services as well as
documentation that such invoices have been paid.
6.11 LICENSEE, as provided for under Paragraph 13.04, may elect to
terminate this AGREEMENT or its license rights in any country
in the LICENSED TERRITORY. In such an event, on a country by
country basis, LICENSEE shall have no obligation to pay PHS a
patent reimbursement royalty or patent expenses incurred by
PHS after expiration of the sixty (60) day written notice
period required under Paragraph 13.04.
7. PATENT FILING, PROSECUTION, AND MAINTENANCE
7.01 Except as otherwise provided in this Article 7, PHS agrees to
take responsibility for, but to consult with, the LICENSEE in
the preparation, filing, prosecution, and maintenance of any
and all patent applications or patents included in the
LICENSED PATENT RIGHTS and shall furnish copies of relevant
patent-related documents to LICENSEE.
7.02 Upon PHS's written request, LICENSEE shall assume the
responsibility for the preparation, filing, prosecution, and
maintenance of any and all patent applications or patents
included in the LICENSED PATENT RIGHTS and shall on an ongoing
basis promptly furnish copies of all patent-related documents
to PHS. In such event, LICENSEE shall, subject to the prior
approval of PHS, select registered patent attorneys or patent
agents to provide such services on behalf of LICENSEE and PHS.
PHS shall provide appropriate powers of attorney and other
documents necessary to undertake such actions to the patent
attorneys or patent agents providing such services. LICENSEE
and its attorneys or agents shall consult with PHS in all
aspects of the preparation, filing, prosecution and
maintenance of patent applications and patents included within
the LICENSED PATENT RIGHTS and shall provide PHS sufficient
opportunity to comment on any document that LICENSEE intends
to file or to cause to be filed with the relevant intellectual
property or patent office.
7.03 At any time, PHS may provide LICENSEE with written notice that
PHS wishes to assume control of the preparation, filing,
prosecution, and maintenance of any and all patent
applications or patents
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included in the LICENSED PATENT RIGHTS. If PHS elects to
assume such responsibilities, LICENSEE shall cooperate fully
with PHS, its attorneys, and agents in the preparation,
filing, prosecution, and maintenance of any and all patent
applications or patents included in the LICENSED PATENT RIGHTS
and provide PHS with complete copies of any and all documents
or other materials that PHS deems necessary to undertake such
responsibilities. LICENSEE shall be responsible for all costs
associated with transferring patent prosecution
responsibilities to an attorney or agent of PHS's choice.
7.04 Each Party shall promptly inform the other as to all matters
that come to its attention that may affect the preparation,
filing, prosecution, or maintenance of the LICENSED PATENT
RIGHTS and permit each other to provide comments and
suggestions with respect to the preparation, filing,
prosecution, and maintenance of LICENSED PATENT RIGHTS, which
comments and suggestions shall be considered by the other
Party.
8. RECORD KEEPING
8.01 LICENSEE shall keep full, true and accurate books of accounts
and records, including work papers, containing particulars
that may be necessary for the purposes of showing the amounts
payable to PHS hereunder. Such books of account and records,
including working papers, shall be kept at LICENSEE's
principal place of business of the appropriate division of
LICENSEE to which this AGREEMENT relates, for a period of at
least five (5) years following the calendar year to which they
pertain, to the inspection of PHS or its agents, during normal
working hours, for the purpose of verifying the accuracy and
completeness of LICENSEE's royalty statement and/or compliance
in other aspects with this AGREEMENT. The full cost of any
such audit shall be borne by LICENSEE in the event that the
sum of royalties, fees and any other amounts actually reported
by LICENSEE for any twelve (12) month period are underreported
by more than five percent (5 % ) of the sum of royalties, fees
and other amounts determined payable by such audit. LICENSEE
shall pay the full cost of any such audit and all
underreported and/or unpaid amounts earned and due discovered
by such audit, including any late charges as required by
Paragraph 9.08 hereinbelow, within thirty (30) days of the
date PHS provides LICENSEE with written notice of the amounts
earned and due. PHS auditors or its designated independent
auditors shall only disclose to PHS information relating to
the accuracy of reports and underreporting and/or underpayment
of royalties, fees and any other amounts earned and due under
this AGREEMENT. PHS agrees to provide LICENSEE with at least
ten (10) days notice of an audit under this Paragraph 8.01.
PHS or its agents shall audit LICENSEE no more often than once
in any twelve month period.
8.02 LICENSEE shall instruct its independent auditors to conduct an
annual royalty audit each calendar year for the term of this
AGREEMENT and to report their findings to PHS within thirty
(30) days of completing each such annual royalty audit. This
annual royalty audit shall include, on a country by country,
LICENSED PRODUCT by LICENSED PRODUCT basis, gross sales,
adjustments made to gross sales figures to determine NET
SALES, NET SALES, calculations applied to NET SALES figures to
determine earned royalties due PHS, earned royalties owed and
due PHS, and any other royalties earned and due PHS under this
AGREEMENT for the period audited. Such audit shall also
include a listing of gross sales, NET SALES and royalties
attributed to LICENSEE, each Affiliate and each SUBLICENSEE,
individually.
9. REPORTS ON PROGRESS, BENCHMARKS, SALES, AND PAYMENTS
9.01 Prior to signing this AGREEMENT, LICENSEE has provided to PHS
the COMMERCIAL DEVELOPMENT PLAN at Appendix F, under which
LICENSEE intends to bring the subject matter of the LICENSED
PATENT RIGHTS to the point of PRACTICAL APPLICATION. This
COMMERCIAL DEVELOPMENT PLAN is hereby incorporated by
reference into this AGREEMENT. Based on this plan, performance
BENCHMARKS are determined as specified in Appendix E.
9.02 LICENSEE shall provide written annual reports on its product
development progress or efforts to commercialize under the
COMMERCIAL DEVELOPMENT PLAN for each of the LICENSED
FIELDS-OF-USE
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within sixty (60) days after December 31 of each calendar
year. These progress reports shall include, but not be limited
to: progress on research and development, status of
applications for regulatory approvals, manufacturing,
sublicensing, marketing, importing, and sales during the
preceding calendar year, as well as plans for the present
calendar year. PHS also encourages these reports to include
information on any of LICENSEE's public service activities
that relate to the LICENSED PATENT RIGHTS. If reported
progress differs from that projected in the COMMERCIAL
DEVELOPMENT PLAN and BENCHMARKS, LICENSEE shall explain the
reasons for such differences. In any such annual report,
LICENSEE may propose amendments to the COMMERCIAL DEVELOPMENT
PLAN, acceptance of which by PHS may not be denied
unreasonably. LICENSEE agrees to provide any additional
information reasonably required by PHS to evaluate LICENSEE's
performance under this AGREEMENT. LICENSEE may amend the
BENCHMARKS at any time upon written consent by PHS. PHS shall
not unreasonably withhold approval of any request of LICENSEE
to extend the time periods of this schedule if such request is
supported by a reasonable showing by LICENSEE of diligence in
its performance under the COMMERCIAL DEVELOPMENT PLAN and
toward bringing the LICENSED PRODUCTS to the point of
PRACTICAL APPLICATION as defined in 37 CFR 404.3(d). LICENSEE
shall amend the COMMERCIAL DEVELOPMENT PLAN and BENCHMARKS at
the request of PHS to address any LICENSED FIELDS-OF-USE not
specifically addressed in the plan originally submitted.
9.03 LICENSEE shall report to PHS the dates for achieving
BENCHMARKS specified in Appendix E and the FIRST COMMERCIAL
SALE in each country in the LICENSED TERRITORY within sixty
(60) days of such occurrences.
9.04 LICENSEE shall submit to PHS within sixty (60) days after each
calendar half-year ending June 30 and December 31 a royalty
report setting forth for the preceding half-year period the
amount of the LICENSED PRODUCTS sold or LICENSED PROCESSES
practiced by or on behalf of LICENSEE in each country within
the LICENSED TERRITORY, the NET SALES, and the amount of
royalty accordingly due. With each such royalty report,
LICENSEE shall submit payment of the earned royalties due. If
no earned royalties are due to PHS for any reporting period,
the written report shall so state. The royalty report shall be
certified as correct by an authorized officer of LICENSEE and
shall include a detailed listing of all deductions made under
Paragraph 2.10 to determine NET SALES and the calculation of
royalties due under Article 6. Notwithstanding the above, the
first such royalty report shall be due the first calendar half
year period LICENSED PRODUCT(S) are sold by LICENSEE,
AFFILIATES, or SUBLICENSEES.
9.05 LICENSEE agrees to forward semi-annually to PHS a copy of such
reports received by LICENSEE from its SUBLICENSEES during the
preceding half-year period as shall be pertinent to a royalty
accounting to PHS by LICENSEE for activities under the
sublicense.
9.06 Royalties due under Article 6 shall be paid in U.S. dollars.
For the purposes of calculating the conversion of foreign
currency to U.S. dollars, the conversion rate to be used for
such calculation shall be the New York foreign exchange rate
quoted in The Wall Street Journal (U.S. Edition) on the last
day of each calendar half-year reporting period ending on June
30 and December 31, respectively. All checks and bank drafts
shall be drawn on United States banks and shall be payable, as
appropriate, to "NIH/Patent Licensing." All such payments
shall be sent to the following address: NIH, P.O. Box 360120,
Pittsburgh, PA 15251-6120. Any loss of exchange, value, taxes,
or other expenses incurred in the transfer or conversion to
U.S. dollars shall be paid entirely by LICENSEE. The royalty
report required by Paragraph 9.04 of this AGREEMENT shall
accompany each such payment, and a copy of such report shall
also be mailed to PHS at its address for notices indicated on
the Signature Page of this AGREEMENT.
9.07 LICENSEE shall be solely responsible for determining if any
tax on royalty income is owed outside the United States and
shall pay any such tax and be responsible for all filings with
appropriate agencies of foreign governments.
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April 5, 1999 - Final Page 8 of 22
9.08 Interest and penalties may be assessed by PHS on any overdue
payments in accordance with the Federal Debt Collection Act.
The payment of such late charges shall not prevent PHS from
exercising any other rights it may have as a consequence of
the lateness of any payment.
9.09 All plans and reports required by this Article 9 and marked
"confidential" by LICENSEE shall, to the extent permitted by
law, be treated by PHS as commercial and financial information
obtained from a person and as privileged and confidential, and
any proposed disclosure of such records by PHS under the
Freedom of Information Act (FOIA), 5 U.S.C. Section 552 shall
be subject to the pre-disclosure notification requirements of
45 CFR Section 5.65(d).
10. PERFORMANCE
10.01 LICENSEE shall use its reasonable best efforts to bring the
LICENSED PRODUCTS and LICENSED PROCESSES to PRACTICAL
APPLICATION. "Reasonable best efforts" for the purposes of
this provision shall include adherence to the COMMERCIAL
DEVELOPMENT PLAN at Appendix F and performance of the
BENCHMARKS at Appendix E. The efforts of a SUBLICENSEE shall
be considered the efforts of LICENSEE.
10.02 Upon the FIRST COMMERCIAL SALE, until the expiration or
earlier termination of this AGREEMENT, LICENSEE shall use its
reasonable best efforts to make LICENSED PRODUCTS and LICENSED
PROCESSES reasonably accessible to the United States public.
11. INFRINGEMENT AND PATENT ENFORCEMENT
11.01 PHS and LICENSEE shall notify each other promptly of each
infringement or possible infringement of the LICENSED PATENT
RIGHTS, as well as any facts which may affect the validity,
scope, or enforceability of the LICENSED PATENT RIGHTS of
which either Party becomes aware.
11.02 Pursuant to this AGREEMENT and the provisions of Chapter 29 of
title 35, United States Code, LICENSEE may: a) bring suit in
its own name, at its own expense, and on its own behalf for
infringement of presumably valid claims in the LICENSED PATENT
RIGHTS; b) in any such suit, enjoin infringement and collect
for its use, damages, profits, and awards of whatever nature
recoverable for such infringement; and c) settle any claim or
suit for infringement of the LICENSED PATENT RIGHTS provided,
however, that PHS and appropriate GOVERNMENT authorities shall
have the first right to take such actions at its sole expense.
If LICENSEE desires to initiate a suit for patent
infringement, LICENSEE shall notify PHS in writing. If PHS
does not notify LICENSEE of its intent to pursue legal action
within sixty (60) days, LICENSEE will be free to initiate
suit. PHS shall have a continuing right to intervene in such
suit. LICENSEE shall take no action to compel the GOVERNMENT
either to initiate or to join in any such suit for patent
infringement. LICENSEE may request the GOVERNMENT to initiate
or join in any such suit if necessary to avoid dismissal of
the suit. Should the GOVERNMENT be made a party to any such
suit, LICENSEE shall reimburse the GOVERNMENT for any costs,
expenses, or fees which the GOVERNMENT incurs as a result of
such motion or other action, including any and all costs
incurred by the GOVERNMENT in opposing any such motion or
other action. In all cases, LICENSEE shall keep PHS apprised
of the status and progress of any litigation. Before LICENSEE
commences an infringement action, LICENSEE shall notify PHS
and give careful consideration to the views of PHS and to any
potential effects of the litigation on the public health in
deciding whether to bring suit.
11.03 In the event that a declaratory judgment action alleging
invalidity or non-infringement of any of the LICENSED PATENT
RIGHTS shall be brought against LICENSEE or raised by way of
counterclaim or affirmative defense in an infringement suit
brought by LICENSEE under Paragraph 11.02, pursuant to this
AGREEMENT and the provisions of Chapter 29 of Title 35, United
States Code or other statutes, LICENSEE may: a) defend the
suit in its own name, at its own expense, and on its own
behalf for presumably valid claims in the LICENSED PATENT
RIGHTS; b) in any such suit, ultimately to enjoin infringement
and to collect for its use, damages, profits, and awards of
whatever nature recoverable for such infringement; and c)
settle any claim or suit for declaratory judgment
Zonagen/PHS Exclusive Patent License L-354-98/0
April 5, 1999 - Final Page 9 of 22
involving the LICENSED PATENT RIGHTS; provided, however, that
PHS and appropriate GOVERNMENT authorities shall have the
first right to take such actions and shall have a continuing
right to intervene in such suit. If PHS does not notify
LICENSEE of its intent to respond to the legal action within
sixty (60) days, LICENSEE will be free to do so. LICENSEE
shall take no action to compel the GOVERNMENT either to
initiate or to join in any such declaratory judgment action.
LICENSEE may request the GOVERNMENT to initiate or to join any
such suit if necessary to avoid dismissal of the suit. Should
the GOVERNMENT be made a party to any such suit by motion or
any other action of LICENSEE, LICENSEE shall reimburse the
GOVERNMENT for any costs, expenses, or fees which the
GOVERNMENT incurs as a result of such motion or other action.
If LICENSEE elects not to defend against such declaratory
judgment action, PHS, at its option, may do so at its own
expense. In all cases, LICENSEE shall keep PHS reasonably
apprised of the status and progress of any litigation. Before
LICENSEE commences an infringement action, LICENSEE shall
notify PHS and give careful consideration to the views of PHS
and to any potential effects of the litigation on the public
health in deciding whether to bring suit.
11.04 In any action under Paragraphs 11.02 or 11.03, the expenses
including costs, fees, attorney fees, and disbursements, shall
be paid by LICENSEE. Up to fifty percent (50%) of such
expenses may be credited against earned royalties payable to
PHS under Paragraph 6.03 under the LICENSED PATENT RIGHTS in
the country in which such a suit is filed. In the event that
fifty (50%) of such expenses exceed the amount of earned
royalties payable by LICENSEE in any calendar year in such
country, the expenses in excess may be carried over as a
credit on the same basis into succeeding calendar years. Such
a credit against litigation expenses, however, shall not apply
to royalties other than earned royalties for the country in
which a suit is brought. Any recovery made by LICENSEE,
through a court judgement or settlement, first shall be
applied to reimburse PHS for royalties withheld as a credit
against litigation expenses and then to reimburse LICENSEE for
its litigation expense. Any remaining amount shall be treated
as NET SALES and earned royalties on such amounts shall be
calculated based on the royalty rate that would have applied
to NET SALES in the year in which such loss occurred.
11.05 PHS shall cooperate fully with LICENSEE in connection with any
action under Paragraphs 11.02 or 11.03. PHS agrees promptly to
provide access to all necessary documents and to render
reasonable assistance in response to a request by LICENSEE.
12. NEGATION OF WARRANTIES AND INDEMNIFICATION
12.01 PHS offers no warranties other than those specified in Article
1.
12.02 PHS does not warrant the validity of any patents or patent
application under the LICENSED PATENT RIGHTS and makes no
representations whatsoever with regard to the scope of the
LICENSED PATENT RIGHTS, or that the LICENSED PATENT RIGHTS may
be exploited without infringing other patents or other
intellectual property rights of third parties.
12.03 PHS MAKES NO WARRANTIES, EXPRESSED OR IMPLIED, OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF ANY
SUBJECT MATTER DEFINED BY THE CLAIMS OF THE LICENSED PATENT
RIGHTS OR TANGIBLE MATERIALS RELATED THERETO.
12.04 PHS does not represent that it will commence legal actions
against third parties infringing the LICENSED PATENT RIGHTS.
12.05 LICENSEE shall indemnify and hold PHS, its employees,
students, fellows, agents, and consultants harmless from and
against all liability, demands, damages, expenses, and losses,
including but not limited to death, personal injury, illness,
or property damage in connection with or arising out of: a)
the use by or on behalf of LICENSEE, its AFFILIATES, its
SUBLICENSEES, directors, employees, or third parties of any
LICENSED PATENT RIGHTS; or b) the design, manufacture,
distribution, or use of any LICENSED PRODUCTS, LICENSED
PROCESSES or materials by LICENSEE, or other products or
Zonagen/PHS Exclusive Patent License L-354-98/0
April 5, 1999 - Final Page 10 of 22
processes developed in connection with or arising out of the
LICENSED PATENT RIGHTS. LICENSEE agrees to maintain a
liability insurance program consistent with sound business
practice.
13. TERM, TERMINATION, AND MODIFICATION OF RIGHTS
13.01 This AGREEMENT shall begin on the EFFECTIVE DATE and shall
extend to the expiration of the last to expire of the LICENSED
PATENT RIGHTS unless sooner terminated as provided in this
Article 13.
13.02 In the event that LICENSEE is in default in the performance of
any material obligations under this AGREEMENT, including but
not limited to the obligations listed in Paragraph 13.05, and
if the default has not been remedied within ninety (90) days
after the date of notice in writing of such default, PHS may
terminate this AGREEMENT by written notice and pursue
outstanding amounts owed through procedures provided by the
Federal Debt Collection Act.
13.03 In the event that LICENSEE becomes insolvent, files a petition
in bankruptcy, has such a petition filed against it,
determines to file a petition in bankruptcy, or receives
notice of a third party's intention to file an involuntary
petition in bankruptcy, LICENSEE shall immediately notify PHS
in writing. Furthermore, PHS shall have the right to terminate
this AGREEMENT immediately upon LICENSEE's receipt of written
notice.
13.04 LICENSEE shall have a unilateral right to terminate this
AGREEMENT and/or any licenses in any country or territory by
giving PHS sixty (60) days written notice to that effect.
13.05 PHS shall specifically have the right to terminate or modify,
at its option, this AGREEMENT, if PHS determines that the
LICENSEE: 1) is not executing the COMMERCIAL DEVELOPMENT PLAN
submitted with its request for a license and the LICENSEE
cannot otherwise demonstrate or reasonably justify to PHS's
satisfaction that the LICENSEE has taken, or can be expected
to take within a reasonable time, effective steps to achieve
PRACTICAL APPLICATION of the LICENSED PRODUCTS or LICENSED
PROCESSES; 2) has not achieved the BENCHMARKS as may be
modified under Paragraph 9.02; 3) has willfully made a false
statement of, or willfully omitted, a material fact in the
license application or in any report required by the license
AGREEMENT; 4) has committed a material breach of a covenant or
agreement contained in the license; 5) is not keeping LICENSED
PRODUCTS or LICENSED PROCESSES reasonably available to the
public after commercial use commences; 6) cannot reasonably
satisfy unmet health and safety needs; or 7) cannot reasonably
justify a failure to comply with the domestic production
requirement of Paragraph 5.02 unless waived. In making this
determination, PHS will take into account the normal course of
such commercial development programs conducted with sound and
reasonable business practices and judgment and the annual
reports submitted by LICENSEE under Paragraph 9.02. Prior to
invoking this right, PHS shall give written notice to LICENSEE
providing LICENSEE specific notice of, and a ninety (90) day
opportunity to respond to, PHS's concerns as to the previous
items 1) to 7). If LICENSEE fails to alleviate PHS's concerns
as to the previous items 1) to 7) or fails to initiate
corrective action to PHS's satisfaction, PHS may terminate
this AGREEMENT.
13.06 When the public health and safety so require, and after
written notice to LICENSEE providing LICENSEE a sixty (60) day
opportunity to respond, PHS shall have the right to require
LICENSEE to grant sublicenses to responsible applicants, on
reasonable terms, in any LICENSED FIELDS-OF-USE under the
LICENSED PATENT RIGHTS, unless LICENSEE can reasonably
demonstrate that the granting of the sublicense would not
materially increase the availability to the public of the
subject matter of the LICENSED PATENT RIGHTS. PHS will not
require the granting of a sublicense unless the responsible
applicant has first negotiated in good faith with LICENSEE.
13.07 PHS reserves the right according to 35 U.S. C. Section
209(f)(4) to terminate or modify this AGREEMENT if it is
determined that such action is necessary to meet requirements
for public use specified by federal regulations issued after
the EFFECTIVE DATE of this AGREEMENT and such requirements are
not reasonably satisfied by LICENSEE.
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April 5, 1999 - Final Page 11 of 22
13.08 Within thirty (30) days of receipt of written notice of PHS's
unilateral decision to modify or terminate this AGREEMENT,
LICENSEE may, consistent with the provisions of 37 CFR 404.11,
appeal the decision by written submission to the designated
PHS official. The decision of the designated PHS official
shall be the final agency decision. LICENSEE may thereafter
exercise any and all administrative or judicial remedies that
may be available.
13.09 Within ninety (90) days of expiration or termination of this
AGREEMENT under this Article 13, LICENSEE shall submit a final
report. Any royalty payments, including those incurred but not
yet paid, and those related to patent expense, due to PHS
shall become immediately due and payable upon termination or
expiration. If terminated under this Article 13, SUBLICENSEES
may elect to convert their sublicenses to direct licenses with
PHS pursuant to Paragraph 4.03. Unless otherwise specifically
provided for under this AGREEMENT, upon termination or
expiration of this AGREEMENT, LICENSEE shall return all
LICENSED PRODUCTS or other materials included within the
LICENSED PATENT RIGHTS to PHS or provide PHS with
certification of their destruction thereof.
14. GENERAL PROVISIONS
14.01 Neither Party may waive or release any of its rights or
interests in this AGREEMENT except in writing. The failure of
either Party to assert a right hereunder or to insist upon
compliance with any term or condition of this AGREEMENT shall
not constitute a waiver of that right or excuse a similar
failure to perform any such term or condition by the other
Party.
14.02 This AGREEMENT constitutes the entire and only agreement and
understanding between the Parties relating to the subject
matter of this AGREEMENT, and all prior negotiations,
representations, promises, agreements, and understandings,
whether written or oral, are merged into, extinguished by, and
completely expressed by this AGREEMENT.
14.03 The provisions of this AGREEMENT are severable, and in the
event that any provision of this AGREEMENT shall be determined
to be invalid or unenforceable under any controlling body of
law, such determination shall not in any way affect the
validity or enforceability of the remaining provisions of this
AGREEMENT.
14.04 If either Party desires a modification to this AGREEMENT, the
Parties shall, upon reasonable notice of the proposed
modification by the Party desiring the change, confer in good
faith to determine the desirability of such modification. No
modification shall be effective until a written amendment is
signed by the signatories to this AGREEMENT or their
designees.
14.05 The construction, validity, performance, and effect of this
AGREEMENT shall be governed by Federal law as applied by the
Federal courts in the District of Columbia.
14.06 All notices required or permitted by this AGREEMENT shall be
given by prepaid, first class, registered or certified mail or
by an express/overnight delivery service provided by a
commercial carrier, properly addressed to the other Party at
the address designated on the following Signature Page, or to
such other address as may be designated in writing by such
other Party. Notices shall be considered timely if such
notices are received on or before the established deadline
date or sent on or before the deadline date as verifiable by
U.S. Postal Service postmark or dated receipt from a
commercial carrier. Parties should request a legibly dated
U.S. Postal Service postmark or obtain a dated receipt from a
commercial carrier or the U.S. Postal Service. Private metered
postmarks shall not be acceptable as proof of timely mailing.
14.07 This AGREEMENT shall not be assigned by LICENSEE except: a)
with the prior written consent of PHS, such consent not to be
withheld unreasonably; or b) as part of a sale or transfer of
substantially the entire business of LICENSEE relating to
operations which concern this AGREEMENT. LICENSEE shall notify
PHS within ten (10) days of any assignment of this AGREEMENT
by LICENSEE.
Zonagen/PHS Exclusive Patent License L-354-98/0
April 5, 1999 - Final Page 12 of 22
14.08 LICENSEE shall in its use of any PHS-supplied materials comply
with all applicable statutes, regulations, and guidelines,
including PHS and DHHS regulations and guidelines. LICENSEE
agrees not to use the materials for research involving human
subjects or clinical trials in the United States without
complying with 21 CFR Part 50 and 45 CFR Part 46. LICENSEE
agrees not to use the materials for research involving human
subjects or clinical trials outside of the United States
without notifying PHS, in writing, of such research or trials
and complying with the applicable regulations of the
appropriate national control authorities. Written notification
to PHS of research involving human subjects or clinical trials
outside of the United States shall be given no later than
sixty (60) days prior to commencement of such research or
trials.
14.09 LICENSEE acknowledges that it is subject to and agrees to
abide by the United States laws and regulations (including the
Export Administration Act of 1979 and Arms Export Control Act)
controlling the export of technical data, computer software,
laboratory prototypes, biological material, and other
commodities. The transfer of such items may require a license
from the cognizant Agency of the GOVERNMENT or written
assurances by LICENSEE that it shall not export such items to
certain foreign countries without prior approval of such
agency. PHS neither represents that a license is or is not
required or that, if required, it shall be issued.
14.10 LICENSEE shall mark the LICENSED PRODUCTS or their packaging
sold in the United States with all applicable U.S. patent
numbers and similarly to indicate "Patent Pending" status in
such a fashion to preserve PHS's patent rights. All LICENSED
PRODUCTS manufactured in, shipped to, or sold in other
countries shall be marked in such a manner as to preserve
PHS's patent rights in each such country.
14.11 By entering into this AGREEMENT, PHS does not directly or
indirectly endorse any product or service provided, or to be
provided, by LICENSEE whether directly or indirectly related
to this AGREEMENT. LICENSEE shall not state or imply that this
AGREEMENT is an endorsement by the GOVERNMENT, PHS, any other
GOVERNMENT organizational unit, or any GOVERNMENT employee.
Additionally, LICENSEE shall not use the names of NIH, CDC,
PHS, or DHHS or the GOVERNMENT or their employees in any
advertising, promotional, or sales literature without the
prior written consent of PHS.
14.12 The Parties agree to attempt to settle amicably any
controversy or claim arising under this AGREEMENT or a breach
of this AGREEMENT, except for appeals of modifications or
termination decisions provided for in Article 13. LICENSEE
shall first appeal any such unsettled claims or controversies
to the designated PHS official, or designee, whose decision
shall be considered the final agency decision. Thereafter,
LICENSEE may exercise any administrative or judicial remedies
that may be available.
14.13 Nothing relating to the grant of a license, nor the grant
itself, shall be construed to confer upon any person any
immunity from or defenses under the antitrust laws or from a
charge of patent misuse, and the acquisition and use of rights
pursuant to 37 CFR Part 404 shall not be immunized from the
operation of state or Federal law by reason of the source of
the grant.
14.14 LICENSEE agrees to assign its rights, title, and interest in
the Drug Master File and related FDA documents such as IND's
and the like to NIH within thirty (30) days of termination of
this AGREEMENT.
14.15 Paragraphs 4.03, 8.01, 9.05-9.07, 12.01-12.05, 13.08, 13.09,
14.12, and 14.14 of this AGREEMENT shall survive termination
of this AGREEMENT.
SIGNATURES BEGIN ON NEXT PAGE
Zonagen/PHS Exclusive Patent License L-354-98/0
April 5, 1999 - Final Page 13 of 22
PHS PATENT LICENSE AGREEMENT -- EXCLUSIVE
SIGNATURE PAGE
For PHS:
/s/ Jack Spiegel, Ph.D. 4/16/99
- ----------------------------------------------------- --------
Jack Spiegel, Ph.D Date
Director, Division of Technology Development and Transfer
Office of Technology Transfer
National Institutes of Health
Mailing Address for Notices:
Office of Technology Transfer
National Institutes of Health
6011 Executive Boulevard, Suite 325
Rockville, Maryland 20852-3804 U.S.A.
For LICENSEE (Upon, information and belief, the undersigned expressly certifies
or affirms that the contents of any statements of LICENSEE made or referred to
in this document are truthful and accurate.):
By:
/s/ Michael T. Redman 4/6/99
- ----------------------------------------------------- --------
Signature of Authorized Official Date
Michael T. Redman
- -----------------------------------------------------
Printed Name
Vice President, Business Development
- -----------------------------------------------------
Title
Official and Mailing Address for Notices:
Zonagen, Inc.
2408 Timberloch Place B-4
The Woodlands, Texas 77380
Any false or misleading statements made, presented, or submitted to the
GOVERNMENT, including any relevant omissions, under this AGREEMENT and during
the course of negotiation of this AGREEMENT are subject to all applicable civil
and criminal statutes including Federal statutes 31 U.S.C. Sections 3801-3812
(civil liability) and 18 U.S.C. Section 1001 (criminal liability including
fine(s) and/or imprisonment).
Zonagen/PHS Exclusive Patent License L-354-98/0
April 5, 1999 - Final Page 14 of 22
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act
of 1934, as amended, and Rule 406 under the Securities Act of 1933, as amended.
These omitted portions have been marked with "*" and have been filed separately
with the Securities and Exchange Commission.
APPENDIX A-PATENT(S) OR PATENT APPLICATION(S)
PATENT(S) OR PATENT APPLICATION(S):
1. 60/016,628, filed May 1, 1996, entitled "21 Substituted Progesterone
Derivatives as New Anti-Progestational Agents."
2. PCT/US97/01636
3. [ ** ]
4. [ ** ]
5. [ ** ]
6. [ ** ]
7. [ ** ]
8. [ ** ]
Zonagen/PHS Exclusive Patent License L-354-98/0
April 5, 1999 - Final Page 15 of 22
APPENDIX B--LICENSED FIELDS-OF-USE AND LICENSED TERRITORY
LICENSED FIELDS-OF-USE: Treatment of human endocrinologic pathologies or
conditions in steroid-sensitive tissues.
LICENSED TERRITORY: Worldwide
Zonagen/PHS Exclusive Patent License L-354-98/0
April 5, 1999 - Final Page 16 of 22
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act
of 1934, as amended, and Rule 406 under the Securities Act of 1933, as amended.
These omitted portions have been marked with "*" and have been filed separately
with the Securities and Exchange Commission.
APPENDIX C-ROYALTIES
ROYALTIES:
1.) For the rights, privileges and license granted herein,
LICENSEE shall pay royalties to PHS on the LICENSED PATENT
RIGHTS to practice LICENSED PROCESSES and/or sell LICENSED
PRODUCTS in the LICENSED TERRITORY in the manner herein
provided until the expiration of this AGREEMENT or until this
AGREEMENT shall be terminated, whichever shall occur first:
(i) LICENSEE shall pay PHS a noncreditable, nonrefundable
license issue royalty in the amount of [ ** ] within
thirty (30) days from the EFFECTIVE DATE of this
AGREEMENT.
(ii) LICENSEE shall pay the following Benchmark royalties:
a. [ ** ] within thirty (30) days of initiation
of the first Phase I clinical study of the
first LICENSED PRODUCT in the United States
(including, its Territories and
Possessions), any European country or Japan.
b. [ ** ]within thirty (30) days of initiation
of the first Phase III clinical study of the
first LICENSED PRODUCT in the United States
(including its Territories and Possessions),
any European country, or Japan.
c. [ ** ] within thirty (30) days of filing the
first New Drug Application for a LICENSED
PRODUCT with the United States FDA.
d. [ ** ] within thirty (30) days of filing the
first new drug application for a LICENSED
PRODUCT with the appropriate agency or
regulatory body of any European country.
e. [ ** ] within thirty (30) days of receipt of
an "approvable" letter for the first
LICENSED PRODUCT from the FDA. LICENSEE may
offset up to fifty percent (50%) of this [
** ] Benchmark royalty at a rate no greater
than fifty percent (50%) of annual earned
royalties.
f. [ ** ] within thirty (30) days of receipt of
notice of approval to market the first
LICENSED PRODUCT in any European country.
g. [ ** ] within thirty (30) days of receipt of
notice of approval to market the first
LICENSED PRODUCT in Japan.
(iii) Licensee shall pay PHS a patent reimbursement royalty
equal to, a.) costs incurred by PHS prior to the
EFFECTIVE DATE of this AGREEMENT attributable to the
filing, prosecution and maintenance of foreign patent
applications and patents, and b.) costs incurred by
PHS on or after the EFFECTIVE DATE of this AGREEMENT
attributable to the filing, prosecution and
maintenance of U.S. and foreign patent applications
and patents. LICENSEE shall pay any such patent
reimbursement royalties within sixty (60) days of the
date of invoice.
(iv) If LICENSEE or its AFFILIATE(S) is the direct
marketer, LICENSEE and its AFFILIATES shall pay PHS
earned royalties on NET SALES in countries in which a
VALID CLAIM exists as follows:
1. [ ** ] of annual NET SALES on the
first [ ** ] of NET SALES each
calendar year.
2. [ ** ] of annual NET SALES greater
than [ ** ] NET SALES each calendar
year.
Zonagen/PHS Exclusive Patent License L-354-98/0
April 5, 1999 - Final Page 17 of 22
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act
of 1934, as amended, and Rule 406 under the Securities Act of 1933, as amended.
These omitted portions have been marked with "*" and have been filed separately
with the Securities and Exchange Commission.
(v) If SUBLICENSEE sells LICENSED PRODUCT(S), LICENSEE shall pay
PHS an annual earned royalty on SUBLICENSEE NET SALES equal to
the greater of [ ** ] of all SUBLICENSEE NET SALES, or [ ** ]
of all earned royalties on SUBLICENSEE NET SALES payable to
LICENSEE by its SUBLICENSEES.
The annual earned royalty rate applied to NET SALES of LICENSEE, its AFFILIATES,
and SUBLICENSEES for the purpose of calculating annual earned royalties earned
and due PHS under Paragraphs (iv) and (v) shall be reduced under the following
terms and conditions:
1. [ ** ]
The annual earned royalty rate applied to NET SALES of LICENSEE and its
AFFILIATES, for the purpose of calculating annual earned royalties earned and
due PHS under Paragraph (iv) shall be reduced under the following terms and
conditions:
2. [ ** ]
(vi) LICENSEE and its AFFILIATES shall pay PHS an additional
royalty equal to [ ** ] of all other consideration LICENSEE
and its AFFILIATES receive or shall receive from each
SUBLICENSEE. Any such additional royalty payments are
independent and additional to any and all other royalty
payments due hereunder.
Zonagen/PHS Exclusive Patent License L-354-98/0
April 5, 1999 - Final Page 18 of 22
APPENDIX D--MODIFICATIONS
PHS and LICENSEE agree to the following modifications to the Articles and
Paragraphs of this AGREEMENT: None
Zonagen/PHS Exclusive Patent License L-354-98/0
April 5, 1999 - Final Page 19 of 22
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act
of 1934, as amended, and Rule 406 under the Securities Act of 1933, as amended.
These omitted portions have been marked with "*" and have been filed separately
with the Securities and Exchange Commission.
APPENDIX E--BENCHMARKS AND PERFORMANCE
LICENSEE agrees to the following BENCHMARKS for the purpose of measuring its
performance under this AGREEMENT. LICENSEE shall notify PHS in writing within
thirty (30) days of achieving all such BENCHMARKS. They are:
BENCHMARK DATE
---------
1. Select first lead compound for development [ ** ]
2. Initiate acute toxicology studies [ ** ]
3. Complete acute toxicology studies [ ** ]
4. Initiate Sub-acute toxicology studies [ ** ]
5. Initiate chronic toxicology studies [ ** ]
6. Complete chronic toxicology studies (6 month) [ ** ]
7. Complete chronic toxicology studies (1 year) [ ** ]
8. Initiate two year carcinogenicity study [ ** ]
9. Complete two year carcinogenicity study [ ** ]
10. Initiate Phase I clinical trial. [ ** ]
11. Initiate Phase II/III clinical trial. [ ** ]
12. File NDA in the U.S. [ ** ]
13. File for approval to market first LICENSED PRODUCT in Japan [ ** ]
14. File for approval to market first LICENSED PRODUCT in Europe [ ** ]
Additional BENCHMARKS corresponding to the development of LICENSED PRODUCTS for
labor induction/cervical ripening, male contraception, meningiomas and breast
cancer, as discussed in the COMMERCIAL DEVELOPMENT PLAN (See Charts A through
D), shall be updated within 12 months of the EFFECTIVE DATE of this AGREEMENT.
Notwithstanding the above, the parties recognize that such BENCHMARKS may be
reasonably be modified from time to time.
Zonagen/PHS Exclusive Patent License L-354-98/0
April 5, 1999 - Final Page 20 of 22
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act
of 1934, as amended, and Rule 406 under the Securities Act of 1933, as amended.
These omitted portions have been marked with "*" and have been filed separately
with the Securities and Exchange Commission.
APPENDIX E--BENCHMARKS AND PERFORMANCE
LICENSEE agrees to the following BENCHMARKS for the purpose of measuring its
performance under this AGREEMENT. LICENSEE shall notify PHS in writing within
thirty (30) days of achieving all such BENCHMARKS. They are:
BENCHMARK DATE
---------
1. Select first lead compound for development [ ** ]
2. Initiate acute toxicology studies [ ** ]
3. Complete acute toxicology studies [ ** ]
4. Initiate Sub-acute toxicology studies [ ** ]
5. Initiate chronic toxicology studies [ ** ]
6. Complete chronic toxicology studies (6 month) [ ** ]
7. Complete chronic toxicology studies (1 year) [ ** ]
8. Initiate two year carcinogenicity study [ ** ]
9. Complete two year carcinogenicity study [ ** ]
10. Initiate Phase I clinical trial. [ ** ]
11. Initiate Phase II/III clinical trial. [ ** ]
12. File NDA in the U.S. [ ** ]
13. File for approval to market first LICENSED PRODUCT in Japan [ ** ]
14. File for approval to market first LICENSED PRODUCT in Europe [ ** ]
Zonagen/PHS Exclusive Patent License L-354-98/0
April 5, 1999 - Final Page 21 of 22
APPENDIX F--COMMERCIAL DEVELOPMENT PLAN
Zonagen/PHS Exclusive Patent License L-354-98/0
April 5, 1999 - Final Page 22 of 22
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act
of 1934, as amended, and Rule 406 under the Securities Act of 1933, as amended.
These omitted portions have been marked with "*" and have been filed separately
with the Securities and Exchange Commission.
L-354-98/1
AMENDMENT TO PATENT LICENSE AGREEMENT
Effective the date of signature of the last party to sign this
amendment to license L-354-98/0 ("AMENDMENT"), the Public Health Service
("PHS"), through the Office of Technology Transfer of the National Institutes of
Health, having its principle office at 6011 Executive Boulevard, Suite 325,
Rockville, MD 20852, U.S.A., and Zonagen, Inc. ("LICENSEE"), a Delaware
corporation, having its principle office at 2408 Timberloch Place, Suite B-4,
The Woodlands, Texas 77280, agree as follows:
1. BACKGROUND
1.1 PHS and LICENSEE entered into a license agreement
(L-354-98/0) on April 16, 1999 (hereinafter referred to as
"AGREEMENT").
1.2 The AGREEMENT by and between PHS and LICENSEE granted
LICENSEE an exclusive license under the LICENSED PATENT RIGHTS
in the LICENSED TERRITORY to make and have made, to use and
have used, to sell and have sold, to offer to sell, and to
import LICENSED PRODUCTS in the LICENSED FIELDS-OF-USE and to
practice and have practiced any LICENSED PROCESSES in the
LICENSED FIELD-OF-USE.
1.3 The LICENSEE and PHS now wish to amend the AGREEMENT
to facilitate the development of LICENSED PRODUCTS under the
LICENSED PATENT RIGHTS.
2. AMENDMENT TO THE AGREEMENT
Insert a new paragraph 14.16 as follows:
"If available, on a one-time basis, PHS agrees to supply
LICENSEE with material produced under the LICENSED PATENT
RIGHTS for LICENSEE use under the terms and conditions of the
AGREEMENT. For purposes of this AMENDMENT such material shall
mean five (5) grams of [ ** ], as supplied by the National
Institute of Child Health and Human Development at the
National Institutes of Health."
SIGNATURES BEGIN ON NEXT PAGE
NIH Office of Technology Transfer- L-354-98/1
Amendment to Patent License Agreement
Page 1 - Zonagen, Inc. - June 24, 1999 Final
IN WITNESS WHEREOF, PHS and the LICENSEE have caused this AMENDMENT to be signed
below by their duly authorized representatives on the day and year set forth
below.
Public Health Service (PHS)
By: /s/ Jack Spiegel, Ph.D. Date: 6/24/99
---------------------------------------- -------------
Jack Spiegel, Ph.D
Director, Division of Technology Development and Transfer
Office of Technology Transfer
National Institutes of Health
For Zonagen, Inc.
By: /s/ Michael T. Redman Date: 6/25/99
---------------------------------------- -------------
Michael T. Redman
- --------------------------------------------
Typed Name
VP, Business Development
- --------------------------------------------
Title:
NIH Office of Technology Transfer- L-354-98/1
Amendment to Patent License Agreement
Page 2 - Zonagen, Inc. - June 24, 1999 Final
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act
of 1934, as amended, and Rule 406 under the Securities Act of 1933, as amended.
These omitted portions have been marked with "**" and have been filed separately
with the Securities and Exchange Commission.
L-354-98/2
SECOND AMENDMENT TO PATENT LICENSE AGREEMENT
Effective the date of signature of the last party to sign this second
amendment to license L-354-98/0 ("SECOND AMENDMENT"), the Public Health Service
("PHS"), through the Office of Technology Transfer of the National Institutes of
Health, having its principal office at 6011 Executive Boulevard, Suite 325,
Rockville, MD 20852, U.S.A., and Zonagen, Inc. ("LICENSEE"), a Delaware
corporation, having its principal office at 2408 Timberloch Place, Suite B-4,
The Woodlands, Texas 77280, agree as follows:
WHEREAS:
PHS and LICENSEE entered into a license agreement (L-354-98/0) on April
16, 1999 (hereinafter referred to as "AGREEMENT"), which was amended
June 25, 1999.
The AGREEMENT by and between PHS and LICENSEE granted LICENSEE an
exclusive license under the LICENSED PATENT RIGHTS in the LICENSED
TERRITORY to make and have made, to use and have used, to sell and have
sold, to offer to sell, and to import LICENSED PRODUCTS in the LICENSED
FIELDS-OF-USE and to practice and have practiced any LICENSED PROCESSES
in the LICENSED FIELD-OF-USE.
The LICENSEE and PHS now wish to amend the AGREEMENT a second time to
facilitate the development of LICENSED PRODUCTS under the LICENSED
PATENT RIGHTS.
NOW THEREFORE:
Insert a new paragraph 14.17 as follows:
"Upon receipt of a [ ** ] royalty, PHS agrees to supply
LICENSEE with 2 grams of material produced under the LICENSED
PATENT RIGHTS, for LICENSEE use, under the terms and
conditions of the AGREEMENT. For purposes of this SECOND
AMENDMENT, such material shall mean two (2) grams of
[ ** ], as supplied by the National Institute of Child Health
and Human Development at the National Institutes of Health."
Unless otherwise defined in this SECOND AMENDMENT, terms in bold print shall
have meaning as defined in the AGREEMENT. In all other respects, the AGREEMENT
is confirmed and ratified.
SIGNATURES BEGIN ON NEXT PAGE
NIH Office of Technology Transfer- L-354-98/2
Second Amendment to Patent License Agreement
Zonagen, Inc. - June 6, 2000 Final
IN WITNESS WHEREOF, PHS and the LICENSEE have caused this SECOND AMENDMENT to be
signed below by their duly authorized representatives on the day and year set
forth below.
Public Health Service (PHS)
By: /s/ Jack Spiegel, Ph.D. Date: 8/7/00
---------------------------------------- -------------
Jack Spiegel, Ph.D
Director, Division of Technology Development and Transfer
Office of Technology Transfer
National Institute of Health
For Zonagen, Inc.
By: /s/ Michael T. Redman Date: 6/29/00
--------------------------------------- -------------
Michael T. Redman
- -------------------------------------------
Typed Name
VP, Business Development
- -------------------------------------------
Title:
NIH Office of Technology Transfer- L-354-98/2
Second Amendment to Patent License Agreement
Zonagen, Inc. - June 6, 2000 Final
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act
of 1934, as amended, and Rule 406 under the Securities Act of 1933, as amended.
These omitted portions have been marked with "*" and have been filed separately
with the Securities and Exchange Commission.
L-354-98/3
THIRD AMENDMENT TO PATENT LICENSE AGREEMENT
Effective the date of signature of the last party to sign this third
amendment to license L-354-98/0 ("THIRD AMENDMENT"), the Public Health Service
("PHS"), through the Office of Technology Transfer of the National Institutes of
Health, having its principal office at 6011 Executive Boulevard, Suite 325,
Rockville, MD 20852, U.S.A., and Zonagen, Inc. ("LICENSEE"), a Delaware
corporation, having its principal office at 2408 Timberloch Place, Suite B-4,
The Woodlands, Texas 77280, agree as follows:
WHEREAS:
PHS and LICENSEE entered into a license agreement (L-354-98/0) on April 16, 1999
(hereinafter referred to as "AGREEMENT"), which was amended June 25, 1999 and
August 7, 2000.
The AGREEMENT by and between PHS and LICENSEE granted LICENSEE an exclusive
license under the LICENSED PATENT RIGHTS in the LICENSED TERRITORY to make and
have made, to use and have used, to sell and have sold, to offer to sell, and to
import LICENSED PRODUCTS in the LICENSED FIELDS-OF-USE and to practice and have
practiced any LICENSED PROCESSES in the LICENSED FIELD-OF-USE.
The LICENSEE and PHS now wish to amend the AGREEMENT a third time to facilitate
the development of LICENSED PRODUCTS under the LICENSED PATENT RIGHTS.
NOW THEREFORE:
1. Replace APPENDIX E- BENCHMARKS AND PERFORMANCE as follows:
LICENSEE agrees to the following BENCHMARKS for the purpose of measuring its
performance under this AGREEMENT. LICENSEE shall notify PHS in writing within
thirty (30) days of achieving all such BENCHMARKS. They are as follows:
BENCHMARK DATE
1. Select lead compound [ ** ]
2. Complete synthesis development (pending successful synthesis development) [ ** ]
3. Complete development of pilot scale synthesis
(pending successful synthesis development) [ ** ]
4. Prepare GMP test material (pending successful synthesis development) [ ** ]
5. Preclinical toxicity test (Ames etc.) [ ** ]
6. Design / Schedule preclinical safety studies [ ** ]
7. Start acute toxicology studies [ ** ]
8. Complete acute toxicology studies [ ** ]
9. Start sub-acute toxicology studies [ ** ]
10. Complete sub-acute toxicology studies [ ** ]
11. Initiate chronic toxicology studies [ ** ]
12. Compete chronic toxicology studies (6 month) [ ** ]
13. Complete chronic toxicology studies (1 year) [ ** ]
14. Initiate 2-year carcinogenicity study [ ** ]
15. Complete 2-year carcinogenicity study [ ** ]
16. IND submission - uterine fibroids [ ** ]
17. Initiate Phase I Clinical trial [ ** ]
18. Initiate Phase II/III Clinical trials [ ** ]
19. File NDA in the US [ ** ]
20. File for approval LICENSED PRODUCT in Japan [ ** ]
21. File for approval LICENSED PRODUCT in Europe [ ** ]
NIH Office of Technology Transfer- L-354-98/3
Third Amendment to Patent License Agreement
Zonagen, Inc. - May 9, 2002
Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment pursuant to Rule 24b-2 under the Securities Exchange Act
of 1934, as amended, and Rule 406 under the Securities Act of 1933, as amended.
These omitted portions have been marked with "**" and have been filed separately
with the Securities and Exchange Commission.
Additional BENCHMARKS corresponding to the development of LICENSED PRODUCTS for
labor induction/cervical ripening, male contraception, meningiomas and breast
cancer, as discussed in the COMMERCIAL DEVELOPMENT PLAN (See Charts A through
D), shall be updated at the time of IND submission (July 2004). Notwithstanding
the above, the parties recognize that such BENCHMARKS may be reasonably
modified.
2. A noncreditable, nonrefundable amendment royalty of [ ** ]
shall be due and payable within 30 days of execution of this
AMENDMENT;
3. This Amendment shall become effective immediately upon
execution by all Parties;
4. Except as set forth herein, the AGREEMENT shall continue
unchanged and in full force and effect; and
5. This AMENDMENT may be executed in multiple counterparts, each
of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and
the same AMENDMENT.
Unless otherwise defined in this THIRD AMENDMENT, terms in bold print shall have
meaning as defined in the AGREEMENT. In all other respects, the AGREEMENT is
confirmed and ratified.
SIGNATURES BEGIN ON NEXT PAGE
NIH Office of Technology Transfer- L-354-98/3
Third Amendment to Patent License Agreement
Zonagen, Inc. - May 9, 2002
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have caused this AMENDMENT to be executed
by their duly authorized representatives as of the last signature date below.
FOR PUBLIC HEALTH SERVICE:
By: /s/ Jack Spiegel, Ph.D. 7/8/2002
---------------------------------------- -------------------------
Jack Spiegel, Ph.D Date
Director, Division of Technology
Development and Transfer
National Institutes of Health
Mailing Address for Notices: Office of Technology Transfer
National Institutes of Health
6011 Executive Boulevard
Rockville, Maryland 20852-3804
FOR LICENSEE:
By: /s/ Joseph S. Podolski 7/11/2002
----------------------------- --------------------------
Signature Date
Joseph S. Podolski
-----------------------------
Printed Name
President and CEO
-----------------------------
Title
Mailing Address for Notices:
------------------------------
------------------------------
------------------------------
------------------------------
NIH Office of Technology Transfer- L-354-98/3
Third Amendment to Patent License Agreement
Zonagen, Inc. - May 9, 2002