EXHIBIT 10.57
PATENT LICENSE AGREEMENT
BETWEEN UNIVERSITY OF TEXAS SYSTEM
AND
TECHNICLONE CORPORATION
THIS PATENT LICENSE AGREEMENT ("LICENSE AGREEMENT") is made by and
between the BOARD OF REGENTS (BOARD) OF THE UNIVERSITY OF TEXAS SYSTEM (SYSTEM),
an agency of the State of Texas, whose address is 201 West 7th Street, Austin,
Texas 78701 and TECHNICLONE CORPORATION (LICENSEE), a Delaware corporation,
having its a principal place of business located at 14282 Franklin Avenue,
Tustin, CA 92780.
WITNESSETH:
Whereas BOARD and IMPERIAL CANCER RESEARCH TECHNOLOGY, LTD. (ICRT)
jointly created certain PATENT RIGHTS and TECHNOLOGY RIGHTS related to LICENSED
SUBJECT MATTER, which were developed at The University of Texas Southwestern
Medical Center at Dallas (UT SOUTHWESTERN), located at 5323 Harry Hines
Boulevard, Dallas, Texas 75235, a component institution of SYSTEM, and ICRT;
Whereas ICRT has assigned the necessary rights in PATENT RIGHTS and TECHNOLOGY
RIGHTS to BOARD under an Inter-Institutional Intellectual Property Management
Agreement under which BOARD assumes ownership and all licensing responsibilities
for LICENSED SUBJECT MATTER;
Whereas pursuant to the Inter-Institutional Intellectual Property
Management Agreement, BOARD obtained ICRT's assent to the ICRT ASSIGNMENT (as
hereinafter defined);
Whereas BOARD and Peregrine Pharmaceuticals, Inc. (PEREGRINE) entered
into a patent license agreement dated January 9, 1995 (1995 PATENT LICENSE
AGREEMENT) for LICENSED SUBJECT MATTER;
Whereas LICENSEE acquired PEREGRINE in April 1997, and, under Article
IX of 1995 PATENT LICENSE AGREEMENT, has obtained assignment of 1995 PATENT
LICENSE AGREEMENT from PEREGRINE;
Whereas BOARD and LICENSEE wish to terminate the 1995 PATENT LICENSE
AGREEMENT and enter into this LICENSE AGREEMENT simultaneously on the EFFECTIVE
DATE of this LICENSE AGREEMENT;
Whereas BOARD desires to have the LICENSED SUBJECT MATTER developed and
used for the benefit of LICENSEE, the INVENTORS (as hereinafter defined), BOARD,
UT SOUTHWESTERN, ICRT and the public as outlined in the Intellectual Property
Policy promulgated by the BOARD; and
Whereas LICENSEE wishes to obtain a license from BOARD to practice
LICENSED SUBJECT MATTER;
NOW, THEREFORE, in consideration of the mutual covenants and premises
herein contained, the parties hereto agree as follows:
ARTICLE I
TERMINATION OF 1995 PATENT LICENSE AGREEMENT
The parties mutually agree to terminate the 1995 PATENT LICENSE
AGREEMENT as of the EFFECTIVE DATE of this LICENSE AGREEMENT.
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ARTICLE II
EFFECTIVE DATE
This LICENSE AGREEMENT shall be effective as of the date the last party
executes this LICENSE AGREEMENT (EFFECTIVE DATE).
ARTICLE III
DEFINITIONS
As used in this LICENSE AGREEMENT, the following terms shall have the
meanings indicated:
3.1 COAGULATION PATENT LICENSE AGREEMENT shall mean that certain
COAGULATION PATENT LICENSE AGREEMENT dated as of even date herewith by and
between LICENSEE and BOARD pursuant to which BOARD has licensed the COAGULATION
PATENT RIGHTS to LICENSEE.
3.2 COAGULATION PATENT RIGHTS shall mean BOARD's rights in information
or discoveries covered by the patent applications listed in Appendix I, as well
as all divisions, continuations, and continuations-in-part arising from research
funded in whole or in part by LICENSEE, or previously by PEREGRINE, as well as
reissues, reexamination or extensions thereof.
3.3 COMMERCIAL INTRODUCTION shall mean the date of the first commercial
SALE of a LICENSED PRODUCT by LICENSEE or any sublicensee in any country.
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3.4 ICRT ASSIGNMENT shall mean that certain assignment executed by ICRT
in favor of SYSTEM pursuant to which ICRT assigned its rights in PATENT RIGHTS
and TECHNOLOGY RIGHTS to SYSTEM.
3.5 INVENTORS (or singly INVENTOR) shall mean Philip Thorpe, Francis
Burrows, Thomas Edgington, Steven W. King and Boning Gao.
3.6 LICENSED FIELD shall mean targeting compounds to or acting on tumor
vasculature or any other components of a tumor for therapeutic or diagnostic
use.
3.7 LICENSED PRODUCT shall mean any product SOLD by LICENSEE comprising
LICENSED SUBJECT MATTER pursuant to this LICENSE AGREEMENT.
3.8 LICENSED SUBJECT MATTER shall mean inventions and discoveries
covered by PATENT RIGHTS, LINKER PATENT RIGHTS, LINKER TECHNOLOGY RIGHTS, or
TECHNOLOGY RIGHTS within the LICENSED FIELD.
3.9 LICENSED TERRITORY shall mean the world.
3.10 LINKER PATENT RIGHTS shall mean BOARD's rights in information or
discoveries covered by the patents listed in Appendix II which relate to the
LICENSED FIELD, as well as reissues, reexaminations or extensions thereof.
3.11 LINKER TECHNOLOGY RIGHTS shall mean BOARD's rights in any
technical information, know-how, process, procedure, composition, device,
method, formula, protocol, technique, software design, drawing, data, biological
and other materials developed by Philip Thorpe at UT SOUTHWESTERN and which are
useful in targeting therapeutic and diagnostic compounds to tumor vasculature in
humans and which are not covered by LINKER PATENT RIGHTS but which are necessary
or useful for practicing any inventions at any time covered by LINKER PATENT
RIGHTS.
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3.12 NET SALES shall mean the gross revenues received by LICENSEE from
the SALE of LICENSED PRODUCTS less sales and/or use taxes actually paid, import
and/or export duties actually paid, outbound transportation prepaid or allowed,
and amounts allowed or credited due to returns (not to exceed the original
billing or invoice amount).
3.13 PATENT RIGHTS shall mean BOARD's rights in information or
discoveries covered by the patents and/or patent applications listed in Appendix
III, whether domestic or foreign, as well as all divisions, continuations and
continuations-in-part arising from research funded in whole or in part by
LICENSEE, or previously by PEREGRINE, as well as any reissues, reexaminations or
extensions thereof. Notwithstanding anything to the contrary in this Section
3.13, it is hereby acknowledged and agreed that PATENT RIGHTS for purposes of
this LICENSE AGREEMENT do not include BOARD's rights in COAGULATION PATENT
RIGHTS, which are licensed to LICENSEE under the COAGULATION PATENT LICENSE
AGREEMENT executed by LICENSEE and BOARD concurrently with the execution of this
LICENSE AGREEMENT.
3.14 PHASE I TRIAL INITIATION shall mean the commencement of a Phase I
Clinical Trial on a LICENSED PRODUCT.
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3.15 PHASE II TRIAL COMPLETION shall mean the submission to the US Food
and Drug Administration (FDA) of the final data resulting from completion of a
Phase II Clinical Trial on a LICENSED PRODUCT.
3.16 SALE, SELL or SOLD shall mean the transfer or disposition of a
LICENSED PRODUCT for value to a party other than LICENSEE or a SUBSIDIARY.
3.17 SUBLICENSEE GROSS REVENUES shall mean the gross revenues and other
consideration received by LICENSEE from any sublicensees of LICENSEE
incorporating LICENSED SUBJECT MATTER, excluding (a) payments made by any
sublicensee in consideration for the issuance of equity or debt securities of
LICENSEE, (b) payments made by any sublicensee to support or fund research
activities to be undertaken by LICENSEE, (c) up-front payments made in
consideration or recognition of prior research and development efforts
undertaken by LICENSEE, and (d) payments made by any sublicensee upon the
achievement of specified milestones or benchmarks relating to the development of
the LICENSED PRODUCTS sublicensed to sublicensee, other than royalty payments.
Notwithstanding subpart (d) above, if the royalty rate charged by LICENSEE for
sublicensing any LICENSED PRODUCT is less than four percent (4%), then the
parties will mutually agree to an equitable sharing arrangement with respect to
license fee, milestone, benchmark or other payments. If non-monetary
consideration is so received, then a commercially reasonable monetary value will
be assigned for purposes of calculating BOARD's share of SUBLICENSEE GROSS
REVENUES.
3.18 SUBSIDIARY shall mean any business entity more than fifty percent
(50%) owned by LICENSEE, any business entity which owns more than fifty percent
(50%) of LICENSEE, or any business entity that is more than fifty percent (50%)
owned by a business entity that owns more than fifty percent (50%) of LICENSEE.
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3.19 TECHNOLOGY RIGHTS shall mean BOARD's rights in any technical
information, know-how, process, procedure, composition, device, method, formula,
protocol, technique, software, design, drawing, data, biological and other
materials developed by Philip Thorpe at UT SOUTHWESTERN and which are useful in
targeting therapeutic and diagnostic compounds to tumor vasculature in humans
and which are not covered by PATENT RIGHTS but which are necessary or useful for
practicing any inventions at any time covered by PATENT RIGHTS.
ARTICLE IV
WARRANTY; SUPERIOR-RIGHTS
4.1 Except for the rights, if any, of the third parties described in
Section 4.3 and Exhibit A attached hereto, BOARD represents and warrants that it
is the owner of the entire right, title, and interest in and to the LICENSED
SUBJECT MATTER and that it has the sole right to grant licenses thereunder, and
that it has not granted licenses thereunder to any other entity that would
restrict rights granted hereunder except as stated herein.
4.2 BOARD hereby represents and warrants that Appendix II and Appendix
III list the patents and patent applications in the LICENSED FIELD to which the
BOARD has rights and which arise from work at UT SOUTHWESTERN involving Philip
Thorpe (other than patents and patent applications covered by COAGULATION PATENT
RIGHTS), and that each of the patent applications listed in Appendix II and
Appendix III was duly filed in the United States on the date indicated therein
or was duly filed in such foreign jurisdictions as are listed in Appendix III on
the dates indicated therein.
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4.3 LICENSEE understands that the LICENSED SUBJECT MATTER has been
developed under the funding agreements with the third parties listed on Exhibit
A attached hereto and that such parties have the rights relative thereto
specified in such Exhibit A. This LICENSE AGREEMENT is explicitly made subject
to the rights of such parties, which are described in Exhibit A. To the extent
that there is a conflict between the rights set forth on Exhibit A and this
LICENSE AGREEMENT, the rights set forth on Exhibit A prevail.
ARTICLE V
LICENSE
5.1 BOARD hereby grants to LICENSEE a royalty-bearing, exclusive
license under both PATENT RIGHTS and TECHNOLOGY RIGHTS to manufacture, have
manufactured, use, and/or SELL LICENSED PRODUCTS within LICENSED TERRITORY for
use within LICENSED FIELD. BOARD also hereby grants to LICENSEE a
royalty-bearing, exclusive license under LINKER PATENT RIGHTS and LINKER
TECHNOLOGY RIGHTS to manufacture, have manufactured, use, and/or SELL LICENSED
PRODUCTS within LICENSED TERRITORY for use within LICENSED FIELD, with the
exception of those uses related to immunotoxins directed against neoplastic
cells, in which case the license granted to LICENSEE herein shall be
non-exclusive. These grants shall be subject to the payment by LICENSEE to BOARD
of all consideration as provided in this LICENSE AGREEMENT, and shall be further
subject to rights retained by BOARD and ICRT to:
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5.1.1 Publish the general scientific findings from research related
to LICENSED SUBJECT MATTER; provided, that, in order to avoid possible loss of
rights in the PATENT RIGHTS, BOARD hereby agrees to submit any materials
relating to a planned publication to LICENSEE at least sixty (60) days prior to
the date of planned submission for publication. If, within thirty (30) days of
receipt of such materials, LICENSEE notifies BOARD that it desires to file
patent applications pertaining to any inventions contained in such materials,
BOARD shall defer publication or other disclosure for an additional period, not
to exceed ninety (90) days, sufficient to permit such desired patent
applications to be filed.
5.1.2 Use LICENSED SUBJECT MATTER for research, teaching and other
educationally-related purposes at any institution within the SYSTEM.
5.2 BOARD hereby also grants to LICENSEE a first option to obtain a
royalty bearing exclusive license to any inventions in the LICENSED FIELD which
arise from work funded by LICENSEE, or previously by PEREGRINE, in which
INVENTORS, singly or jointly, participate while affiliated with UT SOUTHWESTERN
and which have applications in the LICENSED FIELD (collectively,
"IMPROVEMENTS"). The option for any such IMPROVEMENTS shall extend for a period
of ninety (90) days from the date LICENSEE receives written notice from BOARD
disclosing such IMPROVEMENTS. During such ninety (90) day period, BOARD shall
reasonably make available to LICENSEE any other information in its possession or
control which would be useful to LICENSEE in evaluating the IMPROVEMENT, subject
to such reasonable confidentiality undertakings as BOARD shall require. LICENSEE
may exercise its option by informing BOARD in writing during such ninety (90)
day period that it intends to commercialize the IMPROVEMENT as soon as
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practicable, consistent with sound and reasonable business practice and
judgment. Upon exercise of LICENSEE's option, such IMPROVEMENT shall become
subject to the terms and conditions of this LICENSE AGREEMENT. In the event that
LICENSEE fails to exercise its option with respect to any IMPROVEMENT as
provided herein, BOARD shall have the right to enter into license agreements
concerning such IMPROVEMENT with third parties provided that the terms and
conditions thereof are not more favorable than those terms and conditions
provided under this LICENSE AGREEMENT unless BOARD has offered the new terms and
conditions to LICENSEE and LICENSEE has refused to accept them.
5.3 BOARD hereby also grants to LICENSEE a first option to negotiate
and acquire an exclusive, worldwide, royalty-bearing license to any inventions
outside the LICENSED FIELD which arise from work funded by LICENSEE in which
INVENTORS, singly or jointly, participate while affiliated with UT SOUTHWESTERN.
The option for any such inventions shall extend for a period of ninety (90) days
from the date LICENSEE receives written notice from BOARD disclosing such
invention. LICENSEE may exercise its option by informing BOARD in writing during
such ninety (90) day period that it intends to commercialize the invention as
soon as practicable, consistent with sound and reasonable business judgment.
Upon exercise of LICENSEE's option, BOARD and LICENSEE shall enter into good
faith negotiations regarding the terms and conditions of said license and
further agree to negotiate license rates and other payments which are fair and
reasonable to both parties. If BOARD and LICENSEE are unable to agree on the
terms of a license within ninety (90) days following the exercise of LICENSEE's
option, BOARD shall have the right to enter into license agreements concerning
the invention with third parties; provided, however, such licensing agreements
shall be on terms no less favorable to BOARD than BOARD's final offer to
LICENSEE, unless BOARD has offered the new terms and conditions to LICENSEE and
LICENSEE has refused to accept them.
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5.4 LICENSEE shall have the right to extend the license granted herein
to any SUBSIDIARY provided that such SUBSIDIARY consents to be bound by this
LICENSE AGREEMENT to the same extent as LICENSEE.
5.5 LICENSEE shall have the right to grant sublicenses in accordance
with the terms and conditions of this LICENSE AGREEMENT. LICENSEE agrees to
deliver to BOARD a true and correct copy of each sublicense granted by LICENSEE,
and any modification or termination thereof, within thirty (30) days after
execution, modification, or termination. If any sublicensee fails to pay any
royalty payment to LICENSEE on the date provided in such sublicense, LICENSEE
shall, within thirty (30) days of such scheduled payment date, take steps to
require such sublicensee to cure such default. If such default is not cured by
such sublicensee within an additional ninety (90) day period, LICENSEE shall
terminate such sublicense. If LICENSEE fails to terminate any sublicense as
provided herein, LICENSEE shall be responsible for the payment of royalties owed
by such sublicensee under this LICENSE AGREEMENT whether or not paid to LICENSEE
by such sublicensee. Upon termination of this LICENSE AGREEMENT, any and all
existing sublicenses granted by LICENSEE shall be assigned to BOARD.
5.6 BOARD shall have the right at any time after five (5) years from
the EFFECTIVE DATE of this LICENSE AGREEMENT, to terminate the exclusivity of
the license granted herein in any national jurisdiction within LICENSED
TERRITORY if LICENSEE, within ninety (90) days after written notice from BOARD
as to such intended termination of exclusivity, fails to provide written
evidence that it has commercialized or is actively attempting to commercialize
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an invention licensed hereunder within such jurisdiction. BOARD agrees to
negotiate in good faith with LICENSEE for adjusting terms under such a
non-exclusive arrangement. BOARD shall have the right at any time after seven
(7) years from the EFFECTIVE DATE of this LICENSE AGREEMENT to terminate the
license completely in any national jurisdiction if LICENSEE, within ninety (90)
days after written notice from BOARD of such intended termination, fails to
provide written evidence that it has commercialized or is actively attempting to
commercialize an invention licensed hereunder within such jurisdiction. Evidence
provided by LICENSEE that it has an ongoing and active research, development,
manufacturing, marketing or licensing program as appropriate, directed toward
production and SALE of products based on PATENT RIGHTS, LINKER PATENT RIGHTS,
TECHNOLOGY RIGHTS or LINKER TECHNOLOGY RIGHTS within such jurisdiction shall be
deemed satisfactory evidence.
ARTICLE VI
PAYMENTS AND REPORTS
6.1 Subject to Section 6.1.7 of this LICENSE AGREEMENT, in
consideration of rights granted by BOARD to LICENSEE under this LICENSE
AGREEMENT, LICENSEE agrees to pay BOARD the following:
6.1.1 A PHASE II TRIAL COMPLETION milestone payment of One Hundred
Thousand Dollars ($100,000) payable within thirty (30) days of the earlier of
(a) February 1, 2001 or
(b) Phase II Trial Completion.
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6.1.2 A milestone payment for COMMERCIAL INTRODUCTION of each
LICENSED PRODUCT in the amount of Three Hundred Thousand Dollars ($300,000)
payable to BOARD within thirty (30) days of COMMERCIAL INTRODUCTION of the
LICENSED PRODUCT. All COMMERCIAL INTRODUCTION milestone payments shall be
credited against royalty payments due under Section 6.1 on a LICENSED
PRODUCT-by-LICENSED PRODUCT basis.
6.1.3 A running earned royalty equal to four percent (4%) of NET
SALES of LICENSED PRODUCTS incorporating PATENT RIGHTS or LINKER PATENT RIGHTS.
In the event any LICENSED PRODUCT incorporating PATENT RIGHTS or LINKER PATENT
RIGHTS is SOLD as a component of a combination of active elements, NET SALES for
purposes of determining royalty payments on such combination shall be calculated
by multiplying NET SALES of such combination by the fraction A over A+B, in
which "A" is the gross selling price of the LICENSED PRODUCT portion of the
combination when SOLD separately during the accounting period in which the SALE
was made, and "B" is the gross selling price of the non-LICENSED PRODUCT portion
of the combination SOLD separately during the accounting period in question. In
the event that no separate SALE of either such above-designated LICENSED PRODUCT
or such above-designated non-LICENSED PRODUCT portion of the combination is made
during the accounting period in which the SALE was made, NET SALES shall be
calculated by multiplying NET SALES of such combination by the fraction C over
C+D, in which "C" is the standard fully-absorbed cost of the LICENSED PRODUCT
portion of such combination, and "D" is the standard fully absorbed cost of the
other component(s), such costs being arrived at using the standard accounting
procedures of LICENSEE which will be in accord with generally accepted
accounting practices. Notwithstanding the foregoing, under no circumstances
shall the royalty provided for in this Section 6.l.3 be reduced to less than two
percent (2%) of NET SALES of LICENSED PRODUCTS incorporating PATENT RIGHTS or
LINKER PATENT RIGHTS. No royalties shall be payable to BOARD under this Section
6.1.3 with respect to SALES for which a royalty has been paid under the
COAGULATION PATENT LICENSE AGREEMENT.
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6.1.4 A running earned royalty equal to one percent (1 %) of NET
SALES of LICENSED PRODUCTS covered by TECHNOLOGY RIGHTS or LINKER TECHNOLOGY
RIGHTS only. No royalty shall be payable to BOARD under this Section 6.l.4 with
respect to SALES for which a royalty has been paid under Section 6.l.3 or under
the COAGULATION PATENT LICENSE AGREEMENT.
6.1.5 Twenty percent (20%) of the SUBLICENSEE GROSS REVENUES of
SALES of LICENSED PRODUCTS; provided, however, if a LICENSED PRODUCT is
sublicensed and incorporates technology not covered by PATENT RIGHTS or LINKER
PATENT RIGHTS, the running royalty to be paid under this Section 6.1.5 shall be
reduced to ten percent (10%) of SUBLICENSEE GROSS REVENUES of SALES of LICENSED
PRODUCTS. In the event any LICENSED PRODUCT incorporating PATENT RIGHTS or
LINKER PATENT RIGHTS is sublicensed as a component of a combination of active
elements, SUBLICENSEE GROSS REVENUES of SALES of LICENSED PRODUCTS for purposes
of determining royalty payments on such combination shall be calculated by
multiplying SUBLICENSEE GROSS REVENUES of SALES of LICENSED PRODUCTS of such
combination by the fraction A over A+B, in which "A" is the gross selling price
of the LICENSED PRODUCT portion of the combination when SOLD separately during
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the accounting period in which the SALE was made, and "B" is the gross selling
price of the non-LICENSED PRODUCT portion of the combination SOLD separately
during the accounting period in question. In the event that no separate SALE of
either such above-designated LICENSED PRODUCT or such above-designated
non-LICENSED PRODUCT portion of the combination is made during the accounting
period in which the SALE was made, SUBLICENSEE GROSS REVENUES of SALES of
LICENSED PRODUCTS shall be calculated by multiplying SUBLICENSEE GROSS REVENUES
of SALES of LICENSED PRODUCTS of such combination by the fraction C over C+D, in
which "C" is the standard fully-absorbed cost of the LICENSED PRODUCT portion of
such combination, and "D" is the standard fully absorbed cost of the other
component(s), such costs being arrived at using the standard accounting
procedures of LICENSEE which will be in accord with generally accepted
accounting practices. Notwithstanding the foregoing, under no circumstances
shall the royalty provided for in this Section 6.1.5 be reduced to less than ten
percent (10%) of SUBLICENSEE GROSS REVENUES of SALES of LICENSED PRODUCTS
incorporating PATENT RIGHTS or LINKER PATENT RIGHTS. No royalties shall be
payable to BOARD under this Section 6.1.5 with respect to SALES for which a
royalty has been paid under the COAGULATION PATENT LICENSE AGREEMENT.
6.1.6 The parties hereto agree that if economic or political
conditions change sufficiently so as to affect the continued applicability of
the assumptions made in negotiating the dates of the milestone payments agreed
to in Section 6.1, they will negotiate in good faith a reasonable extension of
the dates of such milestone payments in accordance with such changed economic or
political conditions.
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6.1.7 Notwithstanding anything to the contrary in this LICENSE
AGREEMENT, it is hereby acknowledged and agreed by the parties hereto that (i)
the amount payable by LICENSEE pursuant to Section 6.1.1 of this LICENSE
AGREEMENT is a one-time license fee payable by LICENSEE only with respect to the
first LICENSED PRODUCT of LICENSEE and (ii) no amounts shall be paid by LICENSEE
pursuant to such Sections to the extent that such payments have been made by
LICENSEE under the COAGULATION PATENT LICENSE AGREEMENT.
6.2 During the term of this LICENSE AGREEMENT and for one (1) year
thereafter, LICENSEE shall keep complete and accurate records of its SALES and
NET SALES of LICENSED PRODUCTS and all SUBLICENSEE GROSS REVENUES received by
LICENSEE under the license granted in this LICENSE AGREEMENT in sufficient
detail to enable the royalties payable hereunder to be determined. LICENSEE
shall permit BOARD or its representatives, at BOARD's expense, to periodically
examine its books, ledgers, and records during regular business hours for the
purposes of and to the extent necessary to verify any report required under this
LICENSE AGREEMENT. If any such inspection reveals that the aggregate of
royalties paid during any four (4) consecutive calendar quarters was less than
the amount that should have been paid under this LICENSE AGREEMENT, LICENSEE
shall remit to BOARD the amount of such deficiency; provided, that, if such
deficiency is more than five percent (5%) of the amount that should have been
paid, LICENSEE shall remit to BOARD, in addition to the amount of such
deficiency, the reasonable expenses of the inspection conducted by BOARD. If
LICENSEE or BOARD disputes any deficiency or expenses provided in this Section
6.2 the dispute shall be referred to an independent accountant selected by
mutual agreement of BOARD and LICENSEE, whose decision will be binding and final
on the parties hereto. If a decision is entered against LICENSEE by such
independent accountant for the amount of such deficiency or expenses, LICENSEE
agrees to remit to BOARD, in addition to any other amounts provided for in this
Section 6.2, accrued interest on such deficiency through the date of such
decision at the highest allowable rate.
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6.3 Within forty-five (45) days after March 31, June 30, September 30,
and December 31 of each year, LICENSEE shall deliver to BOARD a true and
accurate report which shall describe (a) the quantities of LICENSED SUBJECT
MATTER that it has produced; (b) the total SALES; (c) the calculation of
royalties thereon; and (d) the total royalties so computed and due.
Simultaneously with the delivery of each such report, LICENSEE shall pay to
BOARD the amount, if any, due for the period covered by such report. If no
payments are due, it shall be so reported.
6.4 Upon the request of BOARD but not more often than once per calendar
year, LICENSEE shall deliver to BOARD a written report as to LICENSEE's efforts
and accomplishments during the preceding year in commercializing LICENSED
SUBJECT MATTER in various parts of the LICENSED TERRITORY and its
commercialization plans for the upcoming year.
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6.5 All amounts payable hereunder by LICENSEE shall be payable in
United States funds without deductions for taxes, assessments, fees, or charges
of any kind. Checks shall be made payable to UT SOUTHWESTERN and sent to:
U.T. Southwestern Medical Center
Office for Technology Development
5323 Harry Hines Boulevard
Dallas, Texas 75235-9094
Attn: Ray Wheatley
ARTICLE VII
TERM AND TERMINATION
7.1 The Term of this LICENSE AGREEMENT shall extend from the EFFECTIVE
DATE set forth hereinabove to the full end of the term or terms for which PATENT
RIGHTS or LINKER PATENT RIGHTS have not expired or if only TECHNOLOGY RIGHTS or
LINKER TECHNOLOGY RIGHTS are licensed and no PATENT RIGHTS or LINKER PATENT
RIGHTS are applicable, then, on a per-product basis, (i) with respect to
LICENSED PRODUCTS which have an FDA-approved therapeutic indication for humans,
for a term of seven (7) years from the date of COMMERCIAL INTRODUCTION of any
such product and (ii) with respect to LICENSED PRODUCTS which have an
FDA-approved diagnostic indication for humans, for a term of seven (7) years
from the date of COMMERCIAL INTRODUCTION of such product.
7.2 This LICENSE AGREEMENT will earlier terminate:
7.2.1 upon thirty (30) days written notice if LICENSEE shall
default in its obligation to make payments, if any are due, in accordance with
Article VI or Article XIV hereunder; provided, however, LICENSEE may avoid such
termination if before the end of such notice period LICENSEE cures its default;
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7.2.2 automatically if LICENSEE shall become bankrupt or insolvent
and/or if the business of LICENSEE shall be placed in the hands of a receiver,
assignee, or trustee, whether by voluntary act or LICENSEE or otherwise;
7.2.3 upon ninety (90) days written notice if LICENSEE shall breach
or default on any obligation under this LICENSE AGREEMENT except as provided in
Article VI or Article XIV; provided, however, LICENSEE may avoid such
termination if before the end of such period LICENSEE notifies BOARD that such
breach has been cured, states the manner of such cure and in fact the breach has
been cured; or
7.2.4 Under the provisions of Section 5.6 if invoked.
7.3 Upon termination of this LICENSE AGREEMENT for any cause, nothing
herein shall be construed to release either party of any obligation matured
prior to the effective date of such termination. LICENSEE may, after the
effective date of such termination, SELL all LICENSED PRODUCT and parts therefor
that it may have on hand at the date of termination, provided that it pays
running royalty earned thereon as provided in this LICENSE AGREEMENT.
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ARTICLE VIII
INFRINGEMENT BY THIRD PARTIES
8.1 Each party shall inform the other promptly in writing of any
alleged infringement of the PATENT RIGHTS or LINKER PATENT RIGHTS by a third
party, including all details then available. LICENSEE shall have the right, but
shall not be obligated, to prosecute at its own expense any such infringements,
and BOARD agrees that LICENSEE may join BOARD as a plaintiff at the expense of
LICENSEE. In any infringement action commenced or defended solely by LICENSEE,
all expenses and all recovery for infringement shall be those of LICENSEE. In
any such action by LICENSEE, BOARD shall be entitled to receive an amount equal
to the applicable royalties on any recovery of profits and damages that is in
excess of LICENSEE's reasonable costs and expenses, including, but not limited
to actual costs and expenses paid non-affiliated accountants, lawyers and
consultants. No settlement, consent judgment or other voluntary final
disposition of the suit may be entered into without BOARD's consent, which
consent shall not be unreasonably withheld, delayed or conditioned.
8.2 If LICENSEE has not commenced legal action or been successful in
obtaining cessation of the infringement within ninety (90) days of written
notification from BOARD of such infringement, or if LICENSEE elects not to
continue prosecuting any legal action against an infringer, BOARD shall have the
right, but shall not be obligated, to prosecute at its own expense any such
infringement. BOARD may join LICENSEE as a plaintiff in any such infringement
suit at BOARD's expense. No settlement, consent judgment or other voluntary
final disposition of the suit may be entered into without LICENSEE's consent,
which consent shall not be unreasonably withheld, delayed or conditioned.
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8.3 In the event that LICENSEE and/or BOARD do not file suit against,
conclude settlement negotiations with, or grant a license to a substantial
infringer of PATENT RIGHTS or LINKER PATENT RIGHTS within one (1) year of
knowledge thereof, then the parties will consult with one another in an effort
to determine whether a reasonably prudent licensee would institute litigation,
conclude settlement negotiations, and/or grant a license within the one (1) year
time period described above in order to enforce the patent in question in light
of all relevant business and economic factors (including, but not limited to,
the projected cost of such litigation, the likelihood of success on the merits,
the probable amount of any damage award, the prospects for satisfaction of any
judgment against the alleged infringer, the possibility of counterclaims against
LICENSEE and BOARD, the diversion of LICENSEE's human and economic resources,
the impact of any possible adverse outcome on LICENSEE, and the effect any
publicity might have on the respective reputations and goodwill of the parties).
If after such consultation, the parties have not reached agreement and LICENSEE
does not forthwith file suit against, enter into settlement negotiations with or
grant a license to the substantial infringer, then BOARD shall have the right to
enforce any PATENT RIGHT or LINKER PATENT RIGHT, licensed hereunder on behalf of
itself and LICENSEE (BOARD retaining all recoveries from such enforcement), and
BOARD shall have the right to reduce the license granted hereunder to
nonexclusive in the national jurisdiction in which suit is brought.
8.4 In any infringement suit that either party brings to enforce the
PATENT RIGHTS or LINKER PATENT RIGHTS, the other party shall at the request and
expense of the party bringing the suit, cooperate in all reasonable respects,
including, to the extent possible, obtaining the testimony of its employees and
agents and making available physical evidence in the possession of that party.
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ARTICLE IX
ASSIGNMENT
This LICENSE AGREEMENT shall not be assignable or otherwise
transferable by LICENSEE without the prior written consent of BOARD, which
consent shall not be unreasonably withheld, except that LICENSEE may assign or
otherwise transfer its rights under this LICENSE AGREEMENT to the following
parties without obtaining BOARD's consent: (i) a successor to LICENSEE's
business, or a successor to that portion of LICENSEE's business that pertains to
the subject matter of the PATENT RIGHTS or LINKER PATENT RIGHTS or any
TECHNOLOGY RIGHTS or LINKER TECHNOLOGY RIGHTS, and (ii) any entities controlled
by, controlling, or under common control with LICENSEE.
ARTICLE X
PATENT MARKING
LICENSEE agrees to mark permanently and legibly all products and
documentation manufactured or sold by it under this LICENSE AGREEMENT with such
patent notice as may be permitted or required under Title 35, United States
Code.
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ARTICLE XI
INDEMNIFICATION
LICENSEE shall hold harmless and indemnify BOARD, INVENTORS, SYSTEM, UT
SOUTHWESTERN, ICRT, and their respective Regents, officers, employees and agents
(each, an "INDEMNITEE") from and against any liability, loss or damage they may
suffer as a result of claims, demands, or causes of action whatsoever, including
without limitation those arising on account of any injury or death of persons or
damage to property caused by, or arising out of or resulting from, the exercise
or practice of the license granted hereunder by LICENSEE or its officers,
employees, agents or representatives; provided, however, that LICENSEE shall not
be required to indemnify or hold harmless any INDEMNITEE, from any losses or
claims attributable to any infringement or alleged infringement of patents,
technology, trade secrets, or confidential or proprietary know-how or
information of third parties by the PATENT RIGHTS or LINKER PATENT RIGHTS or the
TECHNOLOGY RIGHTS or LINKER TECHNOLOGY RIGHTS. Except as otherwise provided in
this LICENSE AGREEMENT, the obligations of LICENSEE under this Section shall
apply in full force whether or not the claims and any losses resulted, or are
alleged to have resulted, in whole or in part from the acts or omissions of any
INDEMNITEE; PROVIDED, HOWEVER, that the foregoing indemnity shall not apply to
any claims or losses arising out of any act or omission constituting gross
negligence, willful malfeasance, misconduct or bad faith of any INDEMNITEE.
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ARTICLE XII
USE OF NAME
LICENSEE shall not use the name of UT SOUTHWESTERN, INVENTORS, SYSTEM,
BOARD, ICRT or their respective Regents in any advertising, promotional or sales
literature, or in any other form of publicity without prior written consent
obtained from each such party in each case. The foregoing notwithstanding,
LICENSEE shall have the right to identify such parties and to disclose the terms
of this LICENSE AGREEMENT in any prospectus, offering memorandum or other
document or filing required by applicable securities laws or other applicable
law or regulation, provided that LICENSEE shall have given each such affected
party at least ten (10) business days prior written notice of the proposed text
of any such identification or disclosure for the purpose of giving each such
affected party the opportunity to comment on and suggest amendments to such
proposed text.
ARTICLE XIII
CONFIDENTIAL INFORMATION
13.1 BOARD and LICENSEE each agree that all information contained in
documents marked "confidential" which are forwarded to one by the other shall be
received in strict confidence, used only for the purposes of this LICENSE
AGREEMENT, and not disclosed by the recipient party (except as required by law
or court order), its agents or employees without the prior written consent of
the other party, unless such information (a) was in the public domain at the
time of disclosure, (b) later became part of the public domain through no act or
omission of the recipient party, its employees, agents, successors or assigns,
(c) was lawfully disclosed to the recipient party by a third party having the
right to disclose it, (d) was already known by the recipient party at the time
of disclosure, (e) was independently developed or (f) is required by law or
regulation to be disclosed.
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13.2 Each party's obligation of confidence hereunder shall be fulfilled
by using at least the same degree of care with the other party's confidential
information as it uses to protect its own confidential information. This
obligation shall exist while this LICENSE AGREEMENT is in force and for a period
of three (3) years thereafter.
ARTICLE XIV
PATENT AND INVENTIONS
14.1 UT SOUTHWESTERN shall be responsible for the preparation, filing,
prosecution and maintenance of all patent applications and patents included in
PATENT RIGHTS and LINKER PATENT RIGHTS. LICENSEE shall reimburse UT SOUTHWESTERN
for all reasonable attorneys' fees (i) incurred by UT SOUTHWESTERN subsequent to
the EFFECTIVE DATE, or (ii) incurred by UT SOUTHWESTERN prior to the EFFECTIVE
DATE and for which invoices have been submitted to LICENSEE in connection with
the preparation, filing and maintenance of all patent applications and patents
included in PATENT RIGHTS and LINKER PATENT RIGHTS; provided that patent counsel
selected by UT SOUTHWESTERN is reasonably acceptable to LICENSEE. Subsequent to
the EFFECTIVE DATE, UT SOUTHWESTERN shall consult with LICENSEE as to the
preparation, filing, prosecution and maintenance of all such patent applications
and patents in accordance with the procedures set forth on Exhibit B hereto and
incorporated herein by reference, and shall furnish to LICENSEE copies of
documents relevant to such preparation, filing, prosecution or maintenance,
including without limitation invoices providing detailed descriptions of all
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costs and expenses incurred by UT SOUTHWESTERN's patent counsel in connection
therewith, sufficiently prior to filing such documents or making any payment due
thereunder to allow for review and comment by LICENSEE. If, at any time,
LICENSEE shall elect not to pay the expenses of any patent application or patent
included in PATENT RIGHTS or LINKER PATENT RIGHTS, LICENSEE shall so notify UT
SOUTHWESTERN within thirty (30) days of such consultation and shall thereby
surrender its rights under such patent application or patent; provided, however,
that LICENSEE shall remain obligated to reimburse UT SOUTHWESTERN for any costs
incurred with respect to such patent application or patents prior to said
election.
14.2 At any time during the term of this LICENSE AGREEMENT, LICENSEE
may petition BOARD in writing to transfer prosecution or maintenance of any
PATENT RIGHTS licensed hereunder to another law firm. Such petition shall state
LICENSEE's reason(s) for its desire to transfer prosecution or maintenance to
another law firm and include information about the law firm and individual
patent attorneys, patent agents, and/or scientific advisors that may be assigned
to the files by the patent firm. BOARD shall first seek to meet the needs of
LICENSEE through meeting with existing patent counsel. If the petition is
granted by BOARD, LICENSEE or outside counsel shall provide BOARD and UT
SOUTHWESTERN with copies of all documents received or filed during prosecution
and/or maintenance thereof in a timely manner. In any event, LICENSEE shall
consult UT SOUTHWESTERN prior to abandonment of any claims of any patent
application for LICENSED SUBJECT MATTER at least sixty (60) days prior to
abandonment.
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ARTICLE XV
GENERAL
15.1 This LICENSE AGREEMENT and the Exhibits and Appendices attached
hereto constitute the entire and only agreement between the parties for LICENSED
SUBJECT MATTER and all other prior negotiations, representations, agreements,
and understandings are superseded hereby. No agreements altering or
supplementing the terms hereof may be made except by means of a written document
signed by the duly authorized representatives of the parties.
15.2 Any notice required by this LICENSE AGREEMENT shall be given by
facsimile and confirmed by overnight delivery service, addressed in the case of
BOARD to:
BOARD OF REGENTS
The University of Texas System
201 West Seventh Street
Austin, Texas 78701
ATTENTION: Office of General Counsel
Telephone: 512/499-4462
Facsimile: 512/499-4523
with copies to:
UT SOUTHWESTERN
Peter H. Fitzgerald, Ph.D.
Executive Vice President for Business Affairs
5323 Harry Hines Boulevard
Dallas, TX 75235-9013
Telephone: 214/648-3572
Facsimile: 214/648-3944
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and
UT SOUTHWESTERN
Ray Wheatley
Director, Technology Development
Office for Technology Development
6000 Harry Hines Boulevard, Room NB2.200
Dallas, Texas 75235-9094
Telephone: 214/648-1888
Facsimile: 214/648-1889
or in the case of LICENSEE to:
TECHNICLONE CORPORATION
14282 Franklin Avenue
Tustin, CA 92780
ATTENTION: John N. Bonfiglio, Ph.D.
Telephone: 949/508-6000
Facsimile: 949/838-4094
with copies to:
Stradling Yocca Carlson & Rauth
660 Newport Center Drive
Suite 1600
Newport Beach, California 92660
ATTENTION: R.C. Shepard
Telephone: 949/725-4000
Facsimile: 949/725-4100
or such other address as may be given from time to time under the terms of this
notice provision.
15.3 LICENSEE shall comply with all applicable federal, state and local
laws, regulations, and ordinances in connection with its activities pursuant to
this LICENSE AGREEMENT.
15.4 This LICENSE AGREEMENT shall be construed and enforced in
accordance with the laws of the United States of America and of the State of
Texas.
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15.5 Failure of BOARD to enforce a right under this LICENSE AGREEMENT
shall not act as a waiver of that right or the ability to later assert that
right relative to the particular situation involved.
15.6 Headings included herein are for convenience only and shall not be
used to construe this LICENSE AGREEMENT.
15.7 If any provision of this LICENSE AGREEMENT shall be found by a
court to be void, invalid or unenforceable, the same shall be reformed to comply
with applicable law or stricken if no so conformable, so as not to affect the
validity or enforceability of this LICENSE AGREEMENT.
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IN WITNESS WHEREOF, parties hereto have caused their duly authorized
representative to execute this LICENSE AGREEMENT.
BOARD OF REGENTS OF THE TECHNICLONE CORPORATION
UNIVERSITY OF TEXAS SYSTEM
By: /s/ Peter H. Fitzgerald, Ph.D. By: /s/ John N. Bonfiglio, Ph.D.
------------------------------------ ----------------------------
Peter H. Fitzgerald, Ph.D. John N. Bonfiglio, Ph.D.
Executive Vice President for Business Vice President,
Affairs Business Development
UT Southwestern Medical Center at Dallas
Date: OCT-8 1998 Date: 9/8/98
------------------------------------ ----------------------------
APPROVED AS TO FORM:
By: /s/ BethLynn Maxwell, Ph.D., J.D.
------------------------------------
BethLynn Maxwell, Ph.D., J.D.
Office of General Counsel
Date: 11 Sept., 98
------------------------------------
APPROVED AS TO CONTENT:
UT SOUTHWESTERN
By: /s/ Dennis K. Stone, M.D.
------------------------------------
Dennis K. Stone, M.D.
Vice President for Technology Development
Date: Sept. 17, 1998
------------------------------------
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