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Exhibit 10.01
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
LICENSE AGREEMENT
This Agreement is made and entered into as of the 16th day of June,
1998 ("Effective Date") by and between HESKA CORPORATION, a Delaware corporation
having its principal place of business at 1825 Sharp Point Drive, Fort Collins,
Colorado 80525 (facsimile: 970-484-9505) ("HESKA") and IMMULOGIC PHARMACEUTICAL
CORPORATION, a Delaware corporation having its principal place of business at
610 Lincoln Street, Waltham, Massachusetts 02154 (facsimile: 781-466-6050)
("IMMULOGIC").
WHEREAS, IMMULOGIC owns the rights to certain biological materials,
certain patent rights and certain related know-how, and has the right to grant
licenses in and to such rights and know-how, respectively; and
WHEREAS, HESKA desires to obtain an exclusive, worldwide license
(except as otherwise set forth herein) under IMMULOGIC's rights and know-how to
develop and commercialize products for use in connection with diagnosis,
prevention and treatment of disease in mammals (including but not limited to
humans) and IMMULOGIC is willing to grant HESKA such a license, all on the terms
contained in this Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1. - DEFINITIONS
1.1 For purposes of this Agreement, the following words and phrases
shall have the following meanings:
1.2 "Affiliate" shall mean, with respect to a party, all entities at
least fifty percent (50%) owned or controlled by such party, an entity which
directly or indirectly owns or controls more than fifty percent (50%) of the
voting stock of such party, and any entity, the majority ownership of which is
directly or indirectly common to the ownership of such party.
1.3 "ALLERVAX(TM) Technology" shall mean any of the patent rights under
the patents and patent applications listed on Exhibit C hereto relating
exclusively to the therapeutic use of T cell reactive synthetic peptides of 30
amino acids or less that have amino acid sequences derived from the
corresponding regions of corresponding natural allergens for cat, ragweed,
ryegrass and dog. Without limiting the generality
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of the foregoing, ALLERVAX(TM) Technology shall not include any of the foregoing
that relate to house dust mites.
1.4 "Biological Materials" shall mean the native and recombinant
allergens covered by the Licensed Patent Rights, including proteins and
peptides, genes and genetic materials encoding such allergens, proteins and
peptides, and antibodies and other inhibitors of such allergens, proteins and
peptides, including those on Exhibit A attached hereto, together with any and
all progeny, mutations or derivatives thereof.
1.5 "Field" shall mean the Human Field and the Veterinary Field.
1.6 "Human Field" shall mean the field of diagnosis, prevention and
treatment of allergic disease (including asthma) in humans.
1.7 "Know-How" shall mean the Biological Materials and all information
and data regarding the Biological Materials or the manufacture or use thereof in
the Field not included in the Licensed Patent Rights (including, but not limited
to, formulae, procedures, protocols, techniques, inventions, methods, processes,
systems, compositions of matter and results of experimentation and testing and
all documentation thereof). Know-How also shall include, but not be limited to
(i) medical, toxicological or other data or information relating to any
Biological Materials (including, without limitation, pre-clinical and clinical
data, notes, reports, models and samples), (ii) information and data with
respect to manufacture, production and purification procedures and processes, as
well as the analytical methodology, used in the development, testing, assaying,
analysis, production and packaging of any product or service based in whole or
in part on such Biological Materials, (iii) regulatory filings, data and
documentation and (iv) any other information and non-patented proprietary rights
with respect to the Biological Materials and the manufacture or use thereof in
the Field.
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1.8 "Licensed Know-How" shall mean all Know-How (a) which is not
generally known, but has actually been disclosed to HESKA by IMMULOGIC, (b)
which is necessary or useful to develop, make, use, sell or otherwise exploit
products or services based in whole or in part on the Biological Materials for
use in the Field, and (c) in which IMMULOGIC or any of its Affiliates has an
ownership or licensable interest during the term of this Agreement. A current
list of all documented Licensed Know-How is attached hereto as Exhibit B.
1.9 "Licensed Patent Rights" shall mean (a) those patents and patent
applications listed on Exhibit C hereto, (b) all patent applications heretofore
or hereafter filed or having legal force in any country which claims the
Biological Materials or the manufacture or use thereof, (c) all patents that
have issued or in the future issue from the applications referenced in (a) or
(b), including without limitation utility, model and design patents and
certificates of invention, and (d) all divisionals, continuations,
continuations-in-part, reissues, renewals, extensions or additions to any such
patent applications and patents, in each case which are directed to subject
matter specifically described in the United States patents and/or patent
applications described in (a), (b) or (c) above; all in which IMMULOGIC or any
of its Affiliates has an ownership or licensable interest during the term of
this Agreement The Licensed Patent Rights shall not include the ALLERVAX(TM)
Technology. IMMULOGIC will periodically update Exhibit C.
1.10 "Licensed Products" shall mean any product or part thereof which
incorporates or has been developed or made using any of the Licensed Technology,
including all Patented Products.
1.11 "Licensed Technology" shall mean, collectively, the Licensed
Patent Rights, the Licensed Know-How and Biological Materials; provided, that
Licensed Technology shall not include the ALLERVAX(TM) Technology.
1.12 "Net Sales" shall mean, with respect to any Patented Products sold
by HESKA, its Affiliates and Sublicensees, the invoiced sales price of such
Patented Products billed to independent customers who are not Affiliates or
Sublicensees of HESKA, less (a) credits, allowances, discounts and rebates to,
and chargebacks from the account of, such customers for damaged, rejected,
outdated or returned product returned in accordance with HESKA policies; (b)
freight and insurance costs incurred in transporting such Patented Products to
such customers; (c) quantity, trade and cash discounts and other price
reductions allowed; (d) discounts, fees and commissions payable to third party
sales agents or distributors (but not HESKA employees) with respect to orders or
sales of such Patented Products; (e) sales, use, value-added and other direct
taxes incurred (to the extent included in such invoiced sales price); and (f)
customs, duties, tariffs, surcharges and other governmental
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charges incurred in connection with the exportation or importation of such
Patented Products (to the extent included in such invoiced sales price).
1.13 "New Technology" shall mean any technology (including but not
limited to patents, patent applications, inventions, formulae, procedures,
protocols, techniques, methods, processes, systems, compositions of matter,
results of experimentation and testing and other know-how) relating to the
diagnosis, prevention or treatment of allergic disease in mammals (including but
not limited to humans), other than the Licensed Technology.
1.14 "Patented Product" shall mean any Licensed Product which, at the
time of sale, but for the licenses granted under this Agreement, would infringe,
or the indicated use of which would infringe, any Valid Issued Claim contained
in the Licensed Patent Rights in the country in which any such Licensed Product
is sold.
1.15 "Sublicensee" shall mean a person or entity other than an
Affiliate to whom HESKA has sublicensed any rights hereunder. "Sublicensee"
shall not include any third party distributors who perform no more than
customary marketing and selling functions (including, in any foreign country,
any regulatory or other activities normally undertaken by third party
distributors in that country).
1.16 "Veterinary Field" shall mean the field of diagnosis, prevention
and treatment of allergic disease in mammals (other than humans).
1.17 "Valid Issued Claim" shall mean a claim of an issued and unexpired
patent included in the Licensed Patent Rights which has not been withdrawn,
canceled or disclaimed, or held permanently revoked, unenforceable or invalid by
the decision of a court or other governmental agency of competent jurisdiction,
unappealable or unappealed within the time allowed for appeal, and which has not
been admitted to be invalid or unenforceable through reissue, disclaimer or
otherwise, in the country where a Licensed Product is sold by HESKA, its
Affiliates or Sublicensees.
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ARTICLE 2. - LICENSE GRANT; REGULATORY
APPROVAL; ASSISTANCE
2.1 License Grant. IMMULOGIC hereby grants to HESKA and its Affiliates
the worldwide license, with the right to sublicense, under the Licensed
Technology to develop, have developed, make, have made, use, sell, have sold and
otherwise exploit Licensed Products, and services utilizing Licensed Products,
in the Field.
2.2 Exclusivity. The rights granted to HESKA in Section 2.1 shall be
exclusive worldwide, except that such rights shall be nonexclusive in Japan to
the extent of the nonexclusive license rights previously granted by IMMULOGIC to
Sankyo Co. Ltd. HESKA's exclusive rights under this Agreement shall also be
exclusive as against IMMULOGIC and its Affiliates with respect to all Licensed
Technology.
2.3 Regulatory Approval. HESKA shall determine in good faith in its
discretion whether regulatory approval or licensure is required in the United
States or any other jurisdiction with respect to any Licensed Product. HESKA
shall be responsible and use commercially reasonable efforts to obtain any
regulatory approval or license HESKA determines is required. All costs of
developing Licensed Products and all costs of obtaining regulatory approval or
licensure from any applicable governmental agency shall be borne by HESKA.
2.4 Assistance; Transfer of Biological Materials. At HESKA's reasonable
request, IMMULOGIC shall use its best efforts and make available its personnel
at reasonable times and places, without charge, to assist HESKA in the transfer
of Licensed Know-How to HESKA personnel, including, without limitation,
manufacturing know-how with respect to the Biological Materials. IMMULOGIC shall
maintain and transfer to HESKA on request the quantities of Biological Materials
set forth on Exhibit A.
2.5 Right of First Negotiation. During the term of this Agreement,
IMMULOGIC shall give HESKA prompt written notice of any New Technology in the
Field in which IMMULOGIC develops or acquires an ownership or licensable
interest during the term of this Agreement, which IMMULOGIC proposes to
commercialize, further develop, license or sell, either alone or in conjunction
with a third party ("New Technology Notice"). For a period of sixty (60) days
following HESKA's receipt of a New Technology Notice ("Negotiation Period"), at
HESKA's election, IMMULOGIC shall negotiate in good faith with HESKA to agree
upon a mutually acceptable arrangement for the commercialization of such New
Technology by HESKA. Such arrangements may include, without limitation, a
license or sale of the New Technology to HESKA, a distribution agreement, joint
development or marketing agreement between HESKA and IMMULOGIC or other mutually
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
acceptable arrangement. Each New Technology Notice shall specify in reasonable
detail all technical data, and other information in IMMULOGIC's possession
relating to the New Technology. IMMULOGIC shall provide HESKA prompt access to
its facilities and personnel during normal business hours and in a manner not
disruptive to IMMULOGIC's normal business operations to conduct reasonable due
diligence review of such New Technology throughout the Negotiation Period. At
HESKA's request, IMMULOGIC also shall supply reasonable research quantities of
any biological materials included within the New Technology. During the
Negotiation Period, IMMULOGIC shall not, and shall cause its Affiliates,
employees and agents not to, solicit, authorize the solicitation of or
participate in any discussion with any third party concerning any offer or
possible offer by a third party to commercialize or otherwise exploit the New
Technology or any interest therein, directly or indirectly, or make any
preparations for any of the foregoing.
2.6 Commercially Reasonable Efforts of HESKA. HESKA shall use its
commercially reasonable efforts to develop Licensed Products and in furtherance
thereof, shall use its commercially reasonable efforts to meet the milestones
for diagnostic product development more particularly described in Exhibit D
attached hereto. HESKA shall provide semi-annual written reports to IMMULOGIC
during the period set forth in Exhibit D with respect to the progress of such
development efforts.
ARTICLE 3. - ROYALTIES AND OTHER LICENSE CONSIDERATION
3.1 License Fees and Milestone Payments. In consideration of the
rights, privileges and licenses granted by IMMULOGIC hereunder, HESKA shall pay
the license and milestone fees as follows:
(a) Initial license fee, nonrefundable and noncreditable
against royalties, of [**], due within five (5) business days after execution of
this Agreement by both parties;
(b) Subject to Section 3.2(c) below, milestone license fees as
follows, nonrefundable and noncreditable against royalties, due within fifteen
(15) days after each of the following milestones:
(i) One-time fee of [**], after the first date
that [**];
(ii) One-time fee of [**], after the [**];
(iii) One-time fee of [**], after the [**].
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
3.2 Royalties. In further consideration of the rights, privileges and
licenses granted by IMMULOGIC hereunder, HESKA shall pay royalties as follows:
(a) Veterinary Field. With respect to Patented Products sold
in the Veterinary Field, royalties calculated as a percentage of quarterly Net
Sales, as follows:
(A) Net Sales in the Veterinary Field for gene
therapy or allergy prophylaxis applications [**]
(B) Net Sales in the Veterinary Field for
diagnostic or standard immunotherapy
applications:
- First [**] million of such Net
Sales in the Veterinary Field [**]
- Such Net Sales in excess of [**]
million up to [**] million in the
Veterinary Field [**]
- Such Net Sales in excess of [**]
million in the Veterinary Field [**]
(b) Human Field. Subject to Section 3.2(c) below, with respect
to Patented Products sold in the Human Field, royalties calculated as a
percentage of quarterly Net Sales as follows:
(A) Net Sales in the Human Field for gene
therapy or allergy prophylaxis applications [**]
(B) Net Sales in the Human Field for diagnostic
or standard immunotherapy applications:
- First [**] million of such Net
Sales in the Human Field [**]
- Such Net Sales in excess of [**]
million up to [**] million in the
Human Field [**]
- Such Net Sales in excess of [**]
million in the Human Field [**]
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
(c) Sublicense in Human Field. Notwithstanding the foregoing,
if HESKA sublicenses its rights to the Licensed Technology under this Agreement
with respect to diagnostic products, therapeutic products or both (as
applicable, the "Sublicensed Products") in the Human Field to one or more
sublicensees (collectively, a "Human Field Sublicensee") in one or more
countries (each, a "Territory'"), then HESKA shall make payments to IMMULOGIC
pursuant to this Section 3.2(c) ("In Lieu Payments"), in lieu of (i) all
royalties otherwise payable pursuant to Section 3.2(b) with respect to Net Sales
of Sublicensed Products in such Territory and (ii) the Pro Rata License Fee (as
defined below) applicable to such Territory otherwise payable pursuant to
Section 3.1(b). The parties shall negotiate in good faith to pro rate any
milestone license fees provided in Section 3.1(b) not previously earned by
IMMULOGIC between any such Human Field Sublicensee's Territory and HESKA's other
markets for Licensed Products, based on the relative size of such markets, and
the amount so determined shall be the "Pro Rata License Fee." In the case of
each sublicense to Human Field Sublicensee(s), the In Lieu Payment shall be an
amount equal to [**] of each license fee, milestone payment or royalty payment
received by HESKA from such Human Field Sublicensee pursuant to such
sublicense(s) for exploitation of the Licensed Technology with respect to
Sublicensed Products in the Human Field in the Territory.
3.3 Combination Products; Services. When any Patented Products are sold
in combination with other allergens or other products for a single unit price,
Net Sales for such Patented Products shall be an amount equal to a percentage of
the unit price determined by dividing the number of individual allergens
included in the combined product that constitute Patented Products by the total
number of individual allergens included in the combined product, adjusted as set
forth in Section 1.11. If any Patented Products are utilized in connection with
diagnostic or testing services performed for compensation by HESKA, its
Affiliates or Sublicensees, Net Sales for such Patented Products shall be an
amount equal to a percentage of the total compensation for such service,
determined by dividing the number of individual allergens utilized in the
service that constitute Biological Materials by the total number of individual
allergens utilized in the service, after the adjustments set forth in Section
1.11 and deduction of HESKA's direct labor cost for such diagnostic services.
3.4 Third Party Royalties.
(a) Stacking. If HESKA, its Affiliates or Sublicensees are
required to pay royalties to third parties on sales of Patented Products in
order to use any process or composition of matter other than the Licensed
Technology to develop, have developed, make, have made, use, sell, have sold or
otherwise exploit Licensed
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Products in any country, and the resulting aggregate royalty rate is [**] or
greater, then the royalty rate under Section 3.2 above will be adjusted so that
the combined royalty payments from HESKA to all of its licensors, including
IMMULOGIC, does not exceed [**] (assuming that such adjustment is also applied
to all third party royalty rates). The royalty rate payable to IMMULOGIC would
be reduced to a rate determined by multiplying the royalty rate under Section
3.2 above by a fraction, the numerator of which is [**] and the denominator of
which is the aggregate royalty rate. For example, if the aggregate royalty rate
was [**] the new royalty rate payable to IMMULOGIC would be determined by
multiplying the royalty rate under Section 3.2 above by [**]. Notwithstanding
the foregoing, if HESKA's agreement with any of such other licensors provides
for a royalty proration formula based on an aggregate royalty rate of greater
than [**], the parties will substitute such greater aggregate royalty rate for
the [**] rate set forth in this Section 3.4.
(b) Freedom to Operate. If HESKA, its Affiliates or
Sublicensees are required to pay royalties to third parties on sales of Licensed
Products in order to have the right to use any of the Licensed Technology to
develop, have developed, make, have made, use, sell, have sold or otherwise
exploit Licensed Products in any country, then HESKA shall have the right to
credit [**] of such third party royalty payments against (i) any royalties or
other payments otherwise owing to IMMULOGIC under Section 3.2 with respect to
sales of such Licensed Products in such country and (ii) any milestone license
fees otherwise owing to IMMULOGIC under Section 3.1(b). HESKA's offset rights
pursuant to this paragraph are in addition to its indemnification rights
pursuant to Article 7 of this Agreement.
(c) Procedure for Adjustments. In any case where both Section
3.4(a) and (b) apply, the royalty rates payable to IMMULOGIC shall first be
adjusted pursuant to Section 3.4(a) and then adjusted again as provided in
Section 3.4(b).
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ARTICLE 4. - REPORTS; PAYMENT
4.1 Royalty Reports; Payment. During the term of the Agreement, HESKA
shall furnish to IMMULOGIC a quarterly written report calculating in reasonably
specific detail the royalties and other payments payable, if any, for such
quarter pursuant to this Agreement. With respect to sales of Patented Products
(or third party payments pursuant to Section 3.2(c)) invoiced in United States
dollars, such calculations shall be expressed in United States dollars. With
respect to sales of Patented Products (or third party payments pursuant to
Section 3.2(c)) invoiced in a currency other than United States dollars, such
calculations shall be expressed in the domestic currency of the party making the
sale together with the United States dollar equivalent of the royalty payable,
at the rate of exchange used by HESKA for financial reporting purposes. Reports
provided in this Section 4.1 and payments provided in Section 3.2 shall be due
on the forty-fifth (45th day following the close of each calendar quarter. HESKA
shall keep complete and accurate records in sufficient detail to enable the
royalties and other payments payable hereunder to be determined.
4.2 Audits. Upon the written request of IMMULOGIC and not more than
once in each calendar year, HESKA shall permit an independent certified public
accounting firm selected by IMMULOGIC and reasonably acceptable to HESKA, at
IMMULOGIC's expense, to have access during normal business hours to such of the
records of HESKA as may be reasonably necessary to verify the accuracy of the
payment reports hereunder for any year ending not more than twenty-four (24)
months prior to the date of such request. The accounting firm shall disclose to
IMMULOGIC only whether the reports are correct or not and the specific details
concerning any discrepancies. No other information shall be shared. If such
accounting firm correctly concludes that additional royalties or other payments
were owed during such period, HESKA shall pay the additional payments plus
interest at the average of the prime rates set forth in the Wall Street Journal
during such period, payable within thirty (30) days of the date IMMULOGIC
delivers to HESKA such accounting firm's written report so concluding. The fees
charged by such accounting firm shall be paid by IMMULOGIC; provided, however,
if the audit correctly discloses that the royalties payable by HESKA for any
audited period are more than one hundred five percent (105%) of the royalties
actually paid for such period, then HESKA shall pay the reasonable fees and
expenses charged by such accounting firm.
4.3 Confidential Financial Information. IMMULOGIC shall treat all
financial information subject to review under this Article 4 as Confidential
Information, and shall cause its accounting firm to treat all such financial
information as Confidential Information, under Article 8 below.
4.4 Exchange Control. If at any time legal restrictions prevent the
prompt remittance of part or all royalties with respect to any country where a
Patented
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Product is sold, HESKA shall have the right, in its sole discretion, to make
such payments by depositing the amount thereof in local currency to IMMULOGIC's
account in a bank or other depository institution in such country. If the
royalty rate specified in this Agreement should exceed the permissible rate
established in any country, the royalty rate for sales in such country shall be
adjusted to the highest legally permissible or government-approved rate.
4.5 Withholding Taxes. To the extent required by law, HESKA shall be
entitled to deduct the amount of any withholding taxes, value-added taxes or
other taxes, levies or charges with respect to amounts payable by HESKA to
IMMULOGIC hereunder. HESKA promptly shall deliver to IMMULOGIC proof of payment
of all such taxes, levies and other charges, together with copies of all
communications from or with such governmental authority with respect thereto.
ARTICLE 5. - COVENANT NOT TO COMPETE
During the term of this Agreement, IMMULOGIC will not, and will cause
its officers, directors, employees, and Affiliates not to, develop, manufacture,
market, sell or otherwise distribute, directly or indirectly, any products or
services that compete with the Licensed Products in the Field worldwide.
IMMULOGIC specifically acknowledges that this covenant not to compete is a
condition precedent to HESKA's entering into this Agreement, that the foregoing
covenant not to compete is reasonable and necessary to protect the legitimate
interests of HESKA and that HESKA would not enter into this Agreement in the
absence of such restrictions. IMMULOGIC further agrees that any breach of the
foregoing covenant not to compete would cause irreparable injury to HESKA, not
fully compensable in damages, and that in addition to any other rights and
remedies available, HESKA shall have the right to seek and obtain injunctive,
declaratory or other equitable relief. The parties agree that, notwithstanding
the foregoing, the development, manufacturing, marketing, sale, distribution or
licensing by IMMULOGIC of any products or services based upon the ALLERVAX(TM)
Technology shall not be a violation of this Article 5.
ARTICLE 6. - PATENT PROSECUTION; INFRINGEMENT ACTIONS
6.1 Patent Prosecution for Licensed Patent Rights. HESKA shall, during
the term of this Agreement, at its sole expense, be responsible for and control
the preparation and filing for, prosecution of and maintenance of Licensed
Patent Rights in the United States and in foreign countries where HESKA, at its
discretion, determines any such filing, prosecution or maintenance should be
made. IMMULOGIC shall cooperate with HESKA, at HESKA's expense, in the filing,
prosecution and maintenance of such Licensed Patent Rights, all of which may be
filed, prosecuted and maintained by HESKA in the name of IMMULOGIC. If IMMULOGIC
requests in writing that HESKA file, prosecute or maintain Licensed
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Patent Rights in any foreign country and HESKA determines, at its reasonable
discretion, not to pursue such filing, prosecution or maintenance within two (2)
months after receipt of such notice, IMMULOGIC may, at its expense, file,
maintain and prosecute such Licensed Patent Rights in said country. During the
term of this Agreement, each party shall, upon request, provide the other with
copies of all correspondence relating to such filing, prosecution and
maintenance.
6.2 Notice of Third-Party Infringement. Each party shall inform the
other party promptly in writing of any alleged infringement of the Licensed
Patent Rights by a third party of which such party becomes aware and of any
available evidence thereof.
6.3 Right to Enforce. During the term of this Agreement, HESKA shall
have the first right, but shall not be obligated, to prosecute at its own
expense all infringements of the Licensed Patent Rights and, in furtherance of
such right, IMMULOGIC hereby agrees that HESKA may include IMMULOGIC as a party
plaintiff in any such suit, without expense to IMMULOGIC. The total cost of any
such infringement action commenced or defended solely by HESKA shall be borne by
HESKA and HESKA shall keep any recovery or damages for past infringement derived
therefrom. HESKA will not enter into any settlement, consent judgment or other
voluntary final disposition of the suit affecting IMMULOGIC's rights under this
Agreement without the consent of HESKA, which consent shall not unreasonably be
withheld.
6.4 IMMULOGIC Right to Enforce. If within one year (1) after having
been notified of or having given notice of any alleged infringement, HESKA shall
have been unsuccessful in persuading the alleged infringer to desist and shall
not have brought and shall not be diligently prosecuting an infringement action,
or if HESKA shall notify IMMULOGIC at any time prior thereto of its intention
not to bring suit against any alleged infringer, then, and in those events only,
IMMULOGIC shall have the right, but shall not be obligated, to prosecute at its
own expense any infringement of the Licensed Patent Rights, and IMMULOGIC may,
for such purposes, use the name of HESKA as party plaintiff. The total cost of
any such infringement action commenced or defended solely by IMMULOGIC shall be
borne by IMMULOGIC and IMMULOGIC shall keep any recovery or damages for past
infringement derived therefrom. IMMULOGIC will not enter into any settlement,
consent judgment or other voluntary final disposition of the suit without the
consent of HESKA, which consent shall not unreasonably be withheld.
6.5 Defense of Certain Actions. In the event that an action or
counterclaim alleging invalidity or noninfringement of any of the Licensed
Patent Rights shall be brought against IMMULOGIC or any third party, IMMULOGIC
will promptly notify HESKA and HESKA shall have the right to participate in the
defense of such action at its own expense. No settlement, consent judgment or
other voluntary final
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disposition of such suit may be entered into without the consent of HESKA, which
consent shall not unreasonably be withheld.
6.6 Cooperation. In any suit brought or defended by either party under
this Article 6, the other party hereto shall, at the request and expense of the
party initiating such suit, cooperate in all respects and, to the extent
possible, have its employees testify when requested and make available relevant
records, papers, information, samples, specimens, and the like.
6.7 ALLERVAX(TM) Each party shall give the other at least sixty (60)
days prior written notice of any decision to stop using Lahive & Cockfield
exclusively as patent counsel with respect to (i) in the case of HESKA, Licensed
Patent Rights or (ii) in the case of IMMULOGIC, preparation and filing for,
prosecution of and maintenance of patents and patent applications in all
jurisdictions that are not included within the Licensed Patent Rights but that
relate directly or indirectly to the ALLERVAX(TM) Technology (the "IMMULOGIC
ALLERVAX Patents"). IMMULOGIC shall give HESKA sixty (60) days' prior written
notice of IMMULOGIC's intent to abandon any of the IMMULOGIC ALLERVAX Patents in
any jurisdiction. IMMULOGIC shall give HESKA five (5) days' notice of any
license of the ALLERVAX(TM) Technology to any third party.
ARTICLE 7. - REPRESENTATIONS; INDEMNIFICATION;
LIMITATION OF LIABILITY
7.1 Representations of IMMULOGIC. IMMULOGIC represents and warrants to
HESKA (a) that it has full right and authority to grant the licenses under this
Agreement, (b) that the execution and delivery of this Agreement will not
conflict with or require any consent under the terms of any other agreement to
which IMMULOGIC is a party or by which it is bound, (c) that the license
agreements, if any, pursuant to which IMMULOGIC licenses any of the Licensed
Technology are listed in Exhibit C hereto, are in full force and effect, no
default exists under such agreements and no event has occurred which (with
notice or the passage of time or both) would give the licensor the right to
terminate any such agreement, (d) that upon any termination of any such license
agreement for the default of IMMULOGIC, the rights granted hereunder to HESKA
shall continue in full force and effect according to their terms, (e) that the
Licensed Know-How listed on Exhibit B includes all the Know-How, except as
expressly set forth therein, (f) that to the best of IMMULOGIC's knowledge, the
Licensed Patent Rights include Valid Issued Claims in the jurisdictions
identified in Exhibit C with respect to all of the Biological Materials
described in Exhibit A hereto and the exploitation thereof to develop, make use
and sell Licensed Products, and (g) that it has no knowledge that any third
person or entity is currently infringing the Licensed Technology or that the
Licensed Technology infringes the intellectual property rights of any third
party. All license
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agreements, if any, pursuant to which IMMULOGIC licenses any of the Licensed
Technology are listed in Exhibit E and IMMULOGIC has provided correct and
complete copies thereof to HESKA.
7.2 HESKA Indemnification. HESKA hereby agrees to defend, indemnify and
hold harmless IMMULOGIC and its directors, officers, employees, agents and
Affiliates against any loss, claim, action, damage, expense or liability
(including defense costs and attorneys' fees) resulting from any third party
claim or suit arising out of or relating to HESKA's breach of any representation
or warranty of HESKA set forth in this Agreement or any third party claim or
suit alleging that any Licensed Product infringes the patent, copyright or other
intellectual property rights of any third party (except to the extent that any
such claim alleges that the Licensed Technology infringes such patent, copyright
or other intellectual property right); provided, however, that the foregoing
indemnity obligation shall not apply where such claim is the result of the
willful misconduct or negligent act of IMMULOGIC or its Affiliates, and there
shall be apportionment in accordance with responsibility when such obligation
derives in part from acts of HESKA and in part from acts of IMMULOGIC and its
Affiliates.
7.3 IMMULOGIC Indemnification. IMMULOGIC hereby agrees,to defend,
indemnify and hold harmless HESKA and its directors, officers, employees,
agents, Affiliates and Sublicensees against any loss, claim, action, damage,
expense or liability (including defense costs and attorneys' fees) resulting
from any third party claim or suit arising out of or relating to (i) IMMULOGIC's
breach of any representation or warranty of IMMULOGIC set forth in this
Agreement, or (ii) any claim that the Licensed Technology (or any portion of any
of the foregoing) infringes the patent, copyright or other intellectual property
rights of any third party; provided, however, that the foregoing indemnity
obligations shall not apply where such claim is the result of the willful
misconduct or negligent act of HESKA or its Affiliates or Sublicensees and in
the case of (i) above, there shall be apportionment in accordance with
responsibility when such obligation derives in part from the acts of IMMULOGIC
and in part from the acts of HESKA, its Affiliates or Sublicensees.
7.4 Indemnification Procedures. In the event that a third-party claim
is made or third-party suit is filed for which either party intends to seek
indemnification from the other party pursuant to this Article 7, the party
seeking indemnification (the "Indemnitee") shall promptly notify the other party
(the "Indemnitor") of said claim or suit The Indemnitor shall have the right to
control, through counsel of its choosing, the defense of such third-party claim
or suit, but may compromise or settle the same only with the consent of the
Indemnitee, which consent shall not be unreasonably withheld. The Indemnitee
shall cooperate fully with the Indemnitor and its counsel in the defense of any
such claim or suit and shall make available to the Indemnitor any books, records
or other documents necessary or appropriate for such defense. The Indemnitee
shall have the right to participate at
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the Indemnitee's expense in the defense of any such claim or suit through
counsel chosen by the Indemnitee.
7.5 Limitation of Warranties. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH
IN THIS AGREEMENT, NEITHER HESKA NOR IMMULOGIC MAKES ANY REPRESENTATIONS OR
EXTENDS ANY WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT
LIMITED TO WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
7.6 Limitation of Liability. EXCEPT FOR THE EXPRESS INDEMNIFICATION
OBLIGATIONS OF THE PARTIES SET FORTH IN THIS AGREEMENT, IN NO EVENT SHALL EITHER
PARTY BE LIABLE TO THE OTHER PARTY OR ANY THIRD PARTY FOR COSTS OF PROCUREMENT
OF SUBSTITUTE PRODUCTS OR SERVICES, LOST PROFITS, LOSS OF GOODWILL, OR ANY
SPECIAL, INDIRECT, CONSEQUENTIAL OR INCIDENTAL DAMAGES, HOWEVER CAUSED AND ON
ANY THEORY OF LIABILITY, ARISING IN ANY WAY OUT OF THIS AGREEMENT. THIS
LIMITATION SHALL APPLY EVEN IF A PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH DAMAGES, AND NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY
LIMITED REMEDY.
ARTICLE 8. - CONFIDENTIALITY
8.1 Maintenance of Confidentiality. Each party agrees to hold all
information given to it by the other party that is identified as confidential
(the "Confidential Information") in confidence with the same degree of care that
it would take with respect to its own proprietary information (but not less than
reasonable care), and not to make the Confidential Information available in any
form to any third party (provided that HESKA may disclose Confidential
Information to its Affiliates and sublicensees under appropriate confidentiality
agreements) or to use the Confidential Information for any purpose other than
the purposes described in this Agreement. Each party agrees to take all
reasonable steps to ensure that Confidential Information is not disclosed or
distributed by its employees or agents in violation of this Agreement, including
limiting disclosure to employees or other persons who have a need to know and
who have signed appropriate confidentiality agreements. This restriction on
disclosure shall not apply to the extent that any Confidential Information (a)
is or becomes a part of the public domain through no act or omission of the
receiving party; (b) was in the receiving party's lawful possession prior to the
disclosure (as may be proved by the receiving party) and had not been obtained
by the receiving party from the disclosing party; (c) is lawfully disclosed to
the receiving party by a third party without restriction on disclosure; (d) is
independently developed by the receiving party by personnel not having access to
the Confidential Information (as may be proved by the receiving party) or (e) is
required to be disclosed by law, order or regulation of a government agency or
court
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of competent jurisdiction; provided, that the disclosing party shall use
reasonable efforts to provide the other party notice in writing of any proposed
disclosure under this subsection (e) and an opportunity to object to the
disclosure or seek confidential treatment thereof. Notwithstanding the
foregoing, the parties agree that this Agreement may be filed as an exhibit to
any report or registration statement filed with the United States Securities and
Exchange Commission (the "SEC") without notice to the other party, provided that
the party filing this Agreement is advised by counsel that this Agreement is
required to be so filed and such party has obtained an order from the SEC
allowing for the confidential treatment of at least (i) the description of the
Licensed Know-How set forth on Exhibit B hereto, and (ii) the license fees,
milestone payments and royalty rates set forth in Article 3 hereof.
8.2 Terms of the Agreement. Except as otherwise provided in Section 8.1
above, IMMULOGIC and HESKA shall not disclose any terms or conditions of this
Agreement to any third party other than HESKA's Affiliates and sublicensees
without the prior consent of the other party, which shall not be unreasonably
withheld. Notwithstanding the foregoing, prior to execution of the Agreement,
HESKA and IMMULOGIC shall agree upon the substance of information that can be
used to describe the terms of this transaction, and HESKA and IMMULOGIC may
disclose such information, as modified by mutual agreement from time to time,
without the other party's consent. In addition, the parties each acknowledge
that the other may have disclosure obligations under applicable securities laws
and accounting principles and agree to cooperate in any disclosure of this
Agreement which one or both parties believe is required under such laws.
ARTICLE 9. - ASSIGNMENT
This Agreement is not assignable without the prior written consent of
the other party, which consent will not be unreasonably withheld; provided,
however, that either party may, without such consent, assign the Agreement and
its rights and obligations hereunder in connection with the transfer or sale of
all or substantially all of its business, or in the event of its merger or
consolidation or change in control or similar transaction. Any permitted
assignee shall assume all obligations of its assignor under the Agreement.
ARTICLE 10. - TERMINATION
10.1 Expiration. This Agreement shall expire upon the expiration of the
last Valid Issued Claim in the United States or Europe.
10.2 Termination for Default. IMMULOGIC shall have the right to
terminate this Agreement upon written notice to HESKA if:
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(a) HESKA shall default in the performance of any of the
material obligations herein contained (including, without limitation, its
obligations pursuant to Section 2.6) and such default has not been cured within
ninety (90) days after receiving written notice thereof from IMMULOGIC, or, if
any default is not capable of being cured within such ninety (90) day period,
such longer period as HESKA is diligently undertaking to cure such default.
(b) HESKA shall cease to carry out its business, shall be
adjudged bankrupt or insolvent, shall apply for or consent to the appointment of
a trustee, receiver or liquidator of its assets or shall voluntarily seek relief
under any law for the aid of debtors.
10.3 Termination for Convenience. HESKA may terminate this Agreement
upon sixty (60) days' prior written notice to IMMULOGIC and upon payment of all
amounts due IMMULOGIC through the effective date of termination.
10.4 Effect of Termination. Upon expiration of this Agreement under
Section 10.1 above, HESKA, its Affiliates and Sublicensees shall have a paid-up,
non-exclusive license under the Licensed Know-How to develop, have developed,
make, have made, use, sell, have sold and otherwise exploit Licensed Products in
the Field worldwide. Upon expiration or termination of this Agreement for any
reason neither party shall be released from any obligation that matured prior to
the effective date of such termination. HESKA, its Affiliates and any
Sublicensee may, however, after the effective date of such termination, sell all
Licensed Products in inventory provided that HESKA shall pay to IMMULOGIC the
royalties thereon as required herein.
10.5 Survival. Articles 6, 7, 8, 10 and 12 shall survive the expiration
or termination of this Agreement
ARTICLE 11. - NOTICES
Any notices required to be given or which shall be given under this
Agreement shall be in writing delivered personally or by first class mail or
facsimile, addressed to the parties at the addresses set forth on the first page
(or such other address as a party shall specify by notice given in accordance
with this paragraph), attention: President. Notices delivered personally or sent
by facsimile shall be deemed to have been given on the date sent; those sent by
mail shall be deemed to have been given three (3) days after mailing.
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ARTICLE 12. - MISCELLANEOUS
12.1 Governing Law. The validity and interpretation of this Agreement
and the legal relation of the parties to it shall be governed by the laws of the
Commonwealth of Massachusetts, without regard to principles of choice of law.
12.2 Entire Agreement; Amendment. The parties acknowledge that this
Agreement sets forth the entire understanding and agreement of the parties
hereto as to the subject matter hereof and supersedes all previous
understandings, agreements or inducements between the parties, written or oral,
regarding such subject matter. This Agreement may be amended only by a written
document signed by both parties.
12.3 Publicity. Nothing contained in this Agreement shall be construed
as conferring any right to use in advertising, publicity or other promotional
activities any name, trade name, trademark, or other designation of the other
party (including any contraction, abbreviation, or simulation of any of the
foregoing). Without the express written approval of the other party, neither
party shall use any designation of the other party in any promotional activity
associated with this Agreement Subject to Section 8.2, neither party shall issue
any press release or make any public statement in regard to this Agreement
without the prior written approval of the other party.
12.4 Severability. If one or more of the provisions of this Agreement
shall be held invalid, illegal or unenforceable, the remaining provisions shall
not in any way be affected or impaired thereby. In the event any provision is
held illegal or unenforceable, the parties shall use reasonable efforts to
substitute a valid, legal and enforceable provision which, insofar as is
practical, implements purposes of the provision held invalid, illegal and
unenforceable.
12.5 No Waiver. Failure at any time to require performance of any of
the provisions herein shall not waive or diminish a party's right thereafter to
demand compliance therewith or with any other provision. Waiver of any default
shall not waive any other default. A party shall not be deemed to have waived
any rights hereunder unless such waiver is in writing and signed by a duly
authorized officer of the party making such waiver.
12.6 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Agreement by their
duly authorized representatives, effective as of the date on which this
Agreement has been duly signed by both parties, which date will be inserted at
the top of this Agreement.
IMMULOGIC PHARMACEUTICAL
CORPORATION
By J. Joseph Marr
Title President and Chief Executive Officer
Date June 17, 1998
HESKA CORPORATION
By [illegible]
Title Vice President, Business Development
Date June 17, 1998
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
EXHIBIT A
Biological Materials Transferred from IMMULOGIC to HESKA
The following is a list of recombinant antigen constructs available for
transfer. Listed are expression vector into which the recombinant protein was
cloned, antibiotic resistance marker, and host bacterial strain. Nucleic acid
sequences coding for the recombinant protein are in the corresponding patent
applications.
Species Protein Vector Resistance Host Reference
Off-Site Storage
[**]
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit A continued
Recombinant proteins
The following is a list of recombinant proteins available for transfer. Unless
specifically indicated, these are frozen solutions.
Protein Lot# Amount Remaining
[**]
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
EXHIBIT B
List of Documented Know-How
There exist written protocols for the expression and partial purification of the
recombinant allergens listed below. In other cases, the information exists as
raw data in archived laboratory notebooks.
Species Protein
[**] [**]
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
EXHIBIT D
Development of Licensed Products:
Milestones
HESKA shall use its commercially reasonable efforts to initiate
clinical trials in humans and animal studies in dogs or cats for diagnostic use
of recombinant allergens by [**].
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
EXHIBIT E
LICENSE AGREEMENTS
1. "License Agreement" between Massachusetts Institute of Technology and
ImmuLogic Pharmaceutical Corporation entered April 3, 1987, as amended
November 1, 1991, October 1, 1992 and April 1, 1994;
2. "License Agreement" between University of Melbourne and ImmuLogic
Pharmaceutical Corporation, entered December 15, 1989, as amended in
"Agreement to Vary License Agreement," entered December 15, 1992;
3. "Agreement" between ImmuLogic Pharmaceutical Corporation and the
University of North Carolina, entered July 27, 1989.
4. "Agreement" between ImmuLogic Pharmaceutical Corporation and Princess
Margaret Children's Medical Research Foundation (INC), entered June 1,
1990, as amended in "Agreement to Vary License Agreement," entered
December 18, 1991;
5. "Agreement" between ImmuLogic Pharmaceutical Corporation and TVW
Telethon Institute for Child Health Research, affiliated with The
University Of Western Australia and Princess Margaret Hospital for
Children, entered July 10, 1995;
6. "License Agreement" between University of Melbourne and Immulogic
Pharmaceutical Corporation, entered August 1, 1995, as amended August
18, 1995.
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