EXHIBIT 10.58
COAGULATION PATENT LICENSE AGREEMENT
BETWEEN UNIVERSITY OF TEXAS SYSTEM
AND
TECHNICLONE CORPORATION
THIS COAGULATION PATENT LICENSE AGREEMENT ("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 a principal place of business located at 14282 Franklin Avenue, Tustin,
CA 92780.
W I T N E S S E T H:
Whereas BOARD and SCRIPPS RESEARCH INSTITUTE (SCRIPPS) jointly created
certain COAGULATION PATENT RIGHTS and COAGULATION 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;
Whereas BOARD and Peregrine Pharmaceuticals, Inc. (PEREGRINE) entered
into a coagulation patent license agreement dated January 9, 1995 (1995
COAGULATION PATENT LICENSE AGREEMENT) for LICENSED SUBJECT MATTER;
Whereas LICENSEE acquired PEREGRINE in April 1997, and under Article IX
of 1995 COAGULATION PATENT LICENSE AGREEMENT, has obtained assignment of 1995
COAGULATION PATENT LICENSE AGREEMENT from PEREGRINE;
Whereas BOARD and LICENSEE wish to terminate the 1995 COAGULATION
PATENT LICENSE AGREEMENT and enter into this AGREEMENT simultaneously on the
EFFECTIVE DATE of this 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 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:
I. TERMINATION OF 1995 COAGULATION PATENT LICENSE AGREEMENT
--------------------------------------------------------
The parties mutually agree to terminate the 1995 COAGULATION PATENT
LICENSE AGREEMENT as of the EFFECTIVE DATE of this AGREEMENT.
II. EFFECTIVE DATE
--------------
This AGREEMENT shall be effective as of the date the last party
executes this AGREEMENT (EFFECTIVE DATE).
III. DEFINITIONS
-----------
As used in this AGREEMENT, the following terms shall have the meanings
indicated:
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3.1 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
any reissues, reexaminations or extensions thereof.
Notwithstanding anything to the contrary in this Section 3.2,
it is hereby acknowledged and agreed that COAGULATION PATENT RIGHTS for purposes
of this AGREEMENT do not include BOARD's rights in PATENT RIGHTS, which are
licensed to LICENSEE under the PATENT LICENSE AGREEMENT executed by LICENSEE and
BOARD concurrently with the execution of this AGREEMENT.
3.2 COAGULATION TECHNOLOGY RIGHTS shall mean BOARD's rights in any
technical information, know-how, process, procedure, composition, or 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 COAGULATION PATENT RIGHTS but
which are necessary or useful for practicing any inventions at any time covered
by COAGULATION PATENT RIGHTS.
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.
3.4 INVENTORS (or singly INVENTOR) shall mean Philip Thorpe, Francis
Burrows, Thomas Edgington, Steven W King and Boning Gao.
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3.5 LICENSED FIELD shall mean targeting compounds to or acting on tumor
vasculature or any other component of a tumor for therapeutic or diagnostic use.
3.6 LICENSE PRODUCT shall mean any product SOLD by LICENSEE comprising
LICENSED SUBJECT MATTER pursuant to this AGREEMENT.
3.7 LICENSED SUBJECT MATTER shall mean inventions and discoveries
covered by COAGULATION PATENT RIGHTS or COAGULATION TECHNOLOGY RIGHTS within the
LICENSED FIELD.
3.8 LICENSED TERRITORY shall mean the world.
3.9 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).
3.10 PATENT LICENSE AGREEMENT shall mean that certain PATENT LICENSE
AGREEMENT dated as of even date herewith by and between LICENSEE and BOARD
pursuant to which BOARD has licensed the PATENT RIGHTS to LICENSEE.
3.11 PATENT RIGHTS shall mean BOARD's rights in information or
discoveries covered by the patents and/or patent applications listed in Appendix
II 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.
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3.12 PHASE I TRIAL INITIATION shall mean the commencement of a Phase I
Clinical Trial on a LICENSED PRODUCT.
3.13 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.
3.14 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.
3.15 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.
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3.16 SUBSIDIARY shall mean any business entity more than 50% owned by
LICENSEE, any business entity which owns more than 50% of LICENSEE, or any
business entity that is more than 50% owned by a business entity that owns more
than 50% of LICENSEE.
IV. WARRANTY; SUPERIOR RIGHTS
-------------------------
4.1 BOARD represents and warrants that it is the owner of all right,
title, and interest in and to 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 I lists the
patents and patent applications in the LICENSED FIELD to which the BOARD has the
rights and which arise from work at UT SOUTHWESTERN involving INVENTORS (other
than patents and patent applications covered by PATENT RIGHTS), and that the
patent applications set forth in Appendix I were duly filed in the United States
on the date indicated therein or was duly filed in such foreign jurisdictions as
are listed in Appendix I on the dates indicated therein.
V. LICENSE
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5.1 BOARD hereby grants to LICENSEE a royalty-bearing, exclusive
license under both COAGULATION PATENT RIGHTS and COAGULATION TECHNOLOGY RIGHTS
to manufacture, have manufactured, use, and/or SELL LICENSED PRODUCTS within
LICENSED TERRITORY for use within LICENSED FIELD. This grant shall be subject to
the payment by LICENSEE to BOARD of all consideration as provided in this
AGREEMENT, and shall be further subject to rights retained by BOARD to:
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(a) Publish the general scientific findings from research
related to LICENSED SUBJECT MATTER; PROVIDED, that, in order to avoid
possible loss of rights in the COAGULATION 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.
(b) 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 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 a 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 practicable, consistent with
sound and reasonable business practice and judgment. Upon exercise of LICENSEE's
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option, such IMPROVEMENT shall become subject to the terms and conditions of
this 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 the terms and conditions thereof are not, in general, more favorable
than those terms and conditions provided under this 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
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 AGREEMENT. LICENSEE agrees to deliver to
BOARD a true and correct copy of such sublicense granted by LICENSEE, and any
modification or termination thereof, within thirty (30) days after execution,
modification, or termination. If any sublicense 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 AGREEMENT whether or not paid to LICENSEE by such
sublicensee. Upon termination of this 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 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 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
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DATE of this 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 COAGULATION PATENT RIGHTS or COAGULATION TECHNOLOGY RIGHTS
within such jurisdiction shall be deemed satisfactory evidence.
VI. PAYMENTS AND REPORTS
--------------------
6.1 Subject to Section 6.1(g) of this AGREEMENT, in consideration of
rights granted by BOARD to LICENSEE under this AGREEMENT, LICENSEE agrees to pay
BOARD the following:
(a) A PHASE II TRIAL COMPLETION milestone payment of one
hundred thousand dollars ($100,000) payable within thirty (30) days of
the earlier of: (i) February 1, 2001, or (ii) PHASE II TRIAL
COMPLETION.
(b) 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.
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(c) A running earned royalty equal to four percent (4%) of NET
SALES of LICENSED PRODUCTS incorporating COAGULATION PATENT RIGHTS. In
the event any LICENSED PRODUCT incorporating COAGULATION 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 6.1(c) be
reduced to less than two percent (2%) of NET SALES of LICENSED PRODUCTS
incorporating COAGULATION PATENT RIGHTS. No royalties shall be payable
to BOARD under this Section 6.1(c) with respect to SALES for which a
royalty has been paid under the PATENT LICENSE AGREEMENT.
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(d) A running earned royalty equal to one percent (1%) of NET
SALES of LICENSED PRODUCTS covered by COAGULATION TECHNOLOGY RIGHTS
only. No royalty shall be payable to BOARD under this Section 6.1(d)
with respect to SALES for which a royalty is has been paid under
Section 6.1(c) or under the PATENT LICENSE AGREEMENT.
(e) 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 COAGULATION
PATENT RIGHTS, the running royalty to be paid under this Section 6.1(e)
shall be reduced to ten percent (10%) of SUBLICENSEE GROSS REVENUES of
SALES of LICENSED PRODUCTS. In the event any LICENSED PRODUCT
incorporating COAGULATION 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
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
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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(e) be reduced to less than ten percent (10%) of SUBLICENSEE GROSS
REVENUES of SALES of LICENSED PRODUCTS incorporating COAGULATION PATENT
RIGHTS. No royalties shall be payable to BOARD under this Section
6.1(e) with respect to SALES for which a royalty has been paid under
the PATENT LICENSE AGREEMENT.
(f) 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 this 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.
(g) Notwithstanding anything to the contrary in this
AGREEMENT, it is hereby acknowledged and agreed by the parties hereto
that (i) the amount payable by LICENSEE pursuant to Section 6.1(a) of
this 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 PATENT LICENSE
AGREEMENT.
6.2 During the term of this 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 AGREEMENT in sufficient detail to enable the
royalties payable hereunder to be determined. LICENSEE shall permit BOARD or its
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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 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 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.
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.
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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.
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:
UT Southwestern Medical Center
Office for Technology Transfer Development
5323 Harry Hines Boulevard
Dallas, Texas 75235-9094
Attn: Ray Wheatley
VII. TERM AND TERMINATION
--------------------
7.1 The Term of this AGREEMENT shall extend from the EFFECTIVE DATE set
forth hereinabove to the full end of the term or terms for which COAGULATION
PATENT RIGHTS have not expired and if only COAGULATION TECHNOLOGY RIGHTS are
licensed and no COAGULATION 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 AGREEMENT will earlier terminate:
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(a) 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;
(b) 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;
(c) upon ninety (90) days written notice if LICENSEE shall
breach or default on any obligation under this 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
(d) Under the provisions of Section 5.6 if invoked.
7.3 Upon termination of this 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 AGREEMENT.
VIII. INFRINGEMENT BY THIRD PARTIES
-----------------------------
8.1 Each party shall inform the other promptly in writing of any
alleged infringement of the COAGULATION 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
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LICENSEE. If 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 incurred to 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.
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 COAGULATION 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
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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 COAGULATION 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 If any infringement suit that either party brings to enforce the
COAGULATION 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.
IX. ASSIGNMENT
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This 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 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 COAGULATION
PATENT RIGHTS or any COAGULATION TECHNOLOGY RIGHTS, and (ii) any entities
controlled by, controlling, or under common control with LICENSEE.
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X. PATENT MARKING
--------------
LICENSEE agrees to mark permanently and legibly all products and
documentation manufactured or sold by it under this AGREEMENT with such patent
notice as may be permitted or required under Title 35, United States Code.
XI. INDEMNIFICATION
---------------
LICENSEE shall hold harmless and indemnify BOARD, INVENTORS, SYSTEM, UT
SOUTHWESTERN, 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 COAGULATION PATENT RIGHTS or the COAGULATION
TECHNOLOGY RIGHTS. Except as otherwise provided in this 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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XII. USE OF NAME
-----------
LICENSEE shall not use the name of UT SOUTHWESTERN, INVENTORS, SYSTEM,
BOARD 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 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.
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 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 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 the at least same degree of care with the other party's confidential
information it uses to protect its own confidential information. This obligation
shall exist while this AGREEMENT is in force and for a period of three (3) years
thereafter.
XIV. PATENTS AND INVENTIONS
----------------------
14.1 UT SOUTHWESTERN shall be responsible for the preparation, filing,
prosecution and maintenance of all patent applications and patents included in
COAGULATION 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 COAGULATION 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 A 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
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 COAGULATION 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.
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14.2 At any time during the term of this 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.
XV. GENERAL
-------
15.1 This 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.
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15.2 Any notice required by this 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
Ph. 512-499-4462
Fax 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
Ph. 214-648-3572
Fax 214-648-3944
and
UT SOUTHWESTERN
Ray Wheatley
Director, Technology Development
Office for Technology Development
6000 Harry Hines Boulevard, Rm NB2200
Dallas, TX 75235-9094
Ph. 214-648-1888
Fax 214-648-1889
or in the case of LICENSEE to:
Techniclone Corporation
14282 Franklin Avenue
Tustin, California 92780
Attention: John N. Bonfiglio, Ph.D.
Ph. (949) 508-6000
Fax (949) 838-4094
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with copies to:
Stradling Yocca Carlson & Rauth
660 Newport Center Drive, Suite 1600
Newport Beach, California 92660
Attention: R.C. Shepard, Esq.
Ph. (949) 725-4000
Fax (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 AGREEMENT.
15.4 This AGREEMENT shall be construed and enforced in accordance with
the laws of the United States of America and of the State of Texas.
15.5 Failure of BOARD to enforce a right under this 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 AGREEMENT.
15.7 If any provision of this 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 not so confirmable, so as not to affect the
validity or enforceability of this AGREEMENT.
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IN WITNESS WHEREOF, parties hereto have caused their duly authorized
representatives to execute this 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 Vice President, Business
Business Affairs 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:
By: /s/ Dennis K. Stone
-----------------------------------
Dennis K. Stone
Vice President for Technology Development
Date: Sept. 17, 1998
-----------------------------------
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