EXHIBIT 10.17
TO
Targeted Genetics Corporation's
Annual Report on Form 10-K
"[ * ]" = Portions of this exhibit have been omitted based on a request for
confidential treatment filed with the Securities and Exchange Commission. The
omitted material has been filed separately with the SEC.
OPTION AGREEMENT
THIS AGREEMENT is made this 31st day of August, 1999 between The University
of North Carolina at Chapel Hill (hereinafter referred to as "UNIVERSITY"), a
university having an office at CB #4105, 308 Bynum Hall, Chapel Hill, North
Carolina 27599-4105 and Targeted Genetics Corporation (hereinafter referred to
as "COMPANY"), a corporation incorporated under the laws of the State of
Washington and having an office at 1100 Olive Way, Suite 100, Seattle, WA 98181.
W I T N E S S E T H:
WHEREAS, University is the owner of an invention, hereinafter defined,
relating to "rAAV Vectors" an invention by Dr. Christopher E. Walsh,
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(hereinafter referred to as "Inventor(s)")and identified as University File No.
OTD#00-06 (hereinafter referred to as "Invention"); and
WHEREAS, Company wishes to obtain an option for a license under the Patent
Rights and University is willing to grant such option upon the terms and
conditions hereinafter set forth:
NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth, the parties hereto do mutually agree as follows:
1. Definitions
As used in this Option Agreement, the following terms shall have the
following meanings:
(a) "Patent Rights" means any and all patents and applications for patents
covering the Invention that are owned by University during the term of this
Option Agreement, including all patents and reissue patents issuing on said
patent applications and any divisionals, continuations, continuations-in-
part, provisionals, substitutions, renewals, confirmations, supplementary
protection certificates, registrations, reissues or continued prosecution
applications.
(b) "Option Exercise Period" means the period commencing on the Effective
Date of this Option Agreement and expiring either [ * ] months after the
expiration of the Sponsored Research Agreement, or [ * ], whichever is
sooner.
(c) "Effective Date" means the date first above written.
(d) "Confidentiality Agreement" means the mutual Confidentiality Agreement
entered into between University and Company which relates to the Invention
and that was signed by University and Company and dated on 07/12/1999.
(e) "Territory" means the entire world.
2. Disclosure and Evaluation
(a) University shall provide Company with a copy of each U.S. and/or
foreign Patent Application filed on the Invention during or before the
Option Exercise Period. Company shall, based upon such disclosure and/or
any disclosure made in accordance with the Confidentiality Agreement,
evaluate the technical, economic and commercial advantages of the
Invention.
(b) University shall also furnish to Company reasonable opportunity to
confer with the Inventor(s) of the Invention.
(c) The right to evaluate the Patent Rights and granted herein shall not
include the right to sell or otherwise furnish to any third party the
Invention, or any product made thereby, nor shall it include the right to
disclose any product made thereby to any third party.
3. Consideration
(a) As consideration for the Option granted Company in Article 4 hereof,
Company hereby agrees to pay to University all costs, including attorney's
fees, associated with the preparation, filing, prosecution, issuance and
maintenance of a U.S. Patent application on the Invention. Payment for such
shall be due upon receipt of monthly billings from the University.
(b) During the term of this Option Agreement, copies of all filings and
drafts thereof shall be transmitted to Company by University's counsel
simultaneously with the transmittal thereof to University.
(c) As regards filing of foreign patent applications corresponding to the
U.S. applications described in subparagraph (b), above, Company shall also
reimburse University for the costs of such foreign patent filings. If
Company later decides not to reimburse University for the costs of such
foreign patent filings, Company shall no longer have any rights to acquire
a license to jurisdictions covered by such foreign patent filings and
University shall be free to exclusively or nonexclusively license to third
parties. Company shall designate that country or those countries, if any,
in which it desires such corresponding patent application(s) to be filed.
Company shall pay all costs and legal fees associated with the preparation,
filing and maintenance of such designated foreign patent applications and
such applications shall be in the University's name. University may elect
to file corresponding patent applications in countries other than those
designated by Company, but in that event University shall be responsible
for all costs associated with such nondesignated filings. In such event,
Company shall forfeit its rights
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under this license in the country(ies) not designated by Company where
University exercises its option to file such corresponding patent
applications. Company shall make the required designation(s) in good time
prior to any bar dates to allow University time to exercise its option to
make its own filings.
(d) As further consideration for the granting of the Option, Company agrees
to pay to the University, within 30 days of the Effective Date, the amount
of [ * ] U.S. dollars.
(e) Any amounts paid under this Article 3 shall not be refundable under any
circumstances, nor shall such amounts be a credit against future royalties
or other income related to the Invention.
4. Option
(a) Subject to the rights, if any, of the U.S. Government arising out of
its sponsorship of the research leading to the Invention, University grants
to Company and Company accepts, a non-transferable, exclusive Option to
obtain an exclusive license under the Patent Rights in the territory. The
Option may be exercised by Company at any time during the Option Exercise
Period upon written notice to University. In the event that Company
exercises the Option, the parties shall commence good faith negotiations
forthwith regarding the terms of the license.
(b) The Option Exercise Period may be extended if Company continues to
sponsor research directly relating to the Invention for a time period and
at an amount not less than the budget of the existing Sponsored Research
Agreement between Company and University. Such option shall extend for an
additional [ * ] months beyond the expiration of any subsequent Sponsored
Research Agreements, however, in no event shall the Option Exercise period
be greater than [ * ] years from the Effective Date of this Agreement ([ *
]).
(c) If Company wishes to extend the Option Exercise Period without
sponsoring additional research at the University in the Inventor's
laboratory, it may do so at a cost of $[ * ] for each additional year,
however, in no event shall the Option Exercise period be greater than [ * ]
years from the Effective Date of this Agreement ([ * ]).
(d) Any amounts paid under this Article 4 shall not be refundable under any
circumstances, nor shall such amounts be a credit against future royalties
or other income related to the Invention.
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5. Termination
(a) If the Option granted by University pursuant to Article 4 hereof is not
exercised by Company within the Option Exercise Period this Option
Agreement shall terminate on [ * ] (or such other date as is consistent
with any extension of the Option Exercise Period pursuant to Article 4 (b)
hereof). If the Option granted by University pursuant to Article 4 hereof
is exercised by Company within the Option Exercise Period and if University
and Company have not negotiated and executed a license agreement within [ *
] days of the date Company notifies University that it intends to exercise
this Option this Option Agreement shall terminate on the expiration of such
[ * ]-day period, provided that such date may be extended by mutual consent
of the parties in writing, such consent not to be unreasonably withheld by
either party.
(b) Company may terminate the Option Exercise Period at any time by
notifying University in writing of its decision not to exercise said
option. In such event, Company's obligations for reimbursement of patent
expenses under Article 3 hereof shall terminate on the date University
receives written notice of termination; however, Company shall be obligated
to reimburse University for all patent application expenses incurred
through the date of University's receipt of notice of termination, whether
or not Company or University have been billed for such expenses as of said
date.
(c) In the event this Option Agreement expires or is terminated in
accordance with the immediately preceding paragraphs, Company shall
promptly return to University any and all patent applications filed or
drafted pursuant to this Option Agreement, including any complete or
partial copies thereof made by or on behalf of Company.
6. Default
If Company shall fail to perform or fulfill at the time and in the manner
herein provided, any obligation or condition required to be performed or
fulfilled by Company hereunder, and if Company shall fail to remedy such
default within sixty (60) days after written notice thereof from
University, University shall have the right to terminate this Option
Agreement by written notice of termination to Company. Any termination of
this Agreement pursuant to this Article 7 shall be in addition to, and
shall not be exclusive of or prejudicial to, any other rights or remedies
at law or in equity that University may have on account of the default of
Company.
7. Survival of Terms
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The provisions of Articles 11, 12, 13, 14, 15 and 17 shall survive the
termination or expiration of this Option agreement.
8. Governing Law
This Agreement shall be construed as having been entered into in the State
of North Carolina and shall be interpreted and its performance governed by
the laws of said State.
9. Severability
In the event that a court of competent jurisdiction holds any provision of
this Agreement to be invalid, such holding shall have no effect on the
remaining provision of this Agreement, and they shall continue in full
force and effect.
10. Non-assignability
Any assignment by Company of this Agreement or of any of the rights or
licenses granted to it hereunder, without the written consent of
University, shall be void; provided, however, that nothing contained herein
shall restrict the transfer of this Agreement as a part of a merger or
corporate acquisition to which Company may be a party.
11. Notices
It shall be a sufficient giving of any notice, request, report, statement,
disclosure or other communication hereunder, if the party giving the same
shall deposit it with the U.S. Postal Service, postage prepaid, addressed
to the other party at its address hereinafter set forth or at such other
address as the other party shall hereafter designate in writing:
University of North Carolina at Targeted Genetics Corporation
Chapel Hill Ms. H. Stewart Parker
Dr. Francis J. Meyer President and Chief Executive Officer
Associate Vice Provost 1100 Olive Way, Suite 100
Office of Technology Development Seattle, WA 98101
CB #4105, 308 Bynum Hall
Chapel Hill, N.C. 27599-4105
12. Indemnification
Company agrees to indemnify University, its employees and officers and to
hold such parties harmless from any action, claim, or liability, including
without limitation
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liability for death, personal injury, and/or property damage, arising
directly or indirectly from Company's possession, testing, screening,
distribution or other use of Patent Rights provided under this Option
Agreement, and/or from Company's publication or distribution of test
reports, data, and other information relating to said items.
13. Non-Commercial Use
Company promises to allow use of Invention, Patent Rights only by its
authorized personnel and only for the purpose of ascertaining its interest
in pursuing licensing negotiations with University and will not employ same
for any gain prior to exercising its option hereunder. Should Company
market or in any way make or use Invention in a way other than as set forth
herein, Company shall be liable to University in damages.
14. University Use
It is expressly agreed that, notwithstanding any provisions herein,
University is free to use the results of the research performed during the
Option Exercise period for its own research, public service, clinical,
teaching and educational purposes without payment of royalties.
Furthermore, University shall be free to publish University Technology,
pursuant to Section 6 of the Sponsored Research Agreement and during the
Option Exercise Period, as it sees fit.
15. Confidentiality
Company agrees to accept information, samples and other disclosures
hereunder on a confidential basis. The obligations of this article 15 shall
survive and continue for three years after termination of this Agreement.
Specifically excluded from such confidential treatment shall be: (a)
information which, at the time of disclosure, was published, known
publicly, or otherwise in the public domain; (b) information which, after
disclosure, is published, becomes known publicly, or otherwise becomes part
of the public domain through no fault of the Company or its affiliated
companies; (c) information which the Company can establish was in its
possession prior to the time of disclosure; or (d) information which, after
disclosure, is made available to the Company in good faith by a third party
under no obligation of confidentiality to the University. The provisions
of this article 15 shall not modify or supercede the rights and obligations
of University or Company under the Confidentiality Agreement.
16. Transfer
It is expressly agreed that the University does not transfer by operation
of this Option Agreement any rights it now has or hereafter acquires in the
Invention.
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17. Use of University Name
It is agreed that in no circumstances shall Company use the name of the
University or its employees in any advertisement, press release, or
publicity with reference to this Option Agreement, without prior written
approval of the University.
18. Data Sharing
Company agrees that at the end of its evaluation hereunder, it will provide
to the University a detailed, written scientific report including, but not
limited to all data resulting from evaluation and all of its findings about
the Invention. University shall be free to use the results for its own
research, educational and licensing purposes. However, University shall
not publish data provided by Company consistent with the Confidentiality
Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first written above.
UNIVERSITY OF NORTH CAROLINA TARGETED GENETICS CORPORATION
AT CHAPEL HILL
BY: /s/ Francis J. Meyer BY: /s/ Michael T. Burke
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Francis J. Meyer, Ph.D. Michael T. Burke
Associate Vice Provost, Vice President,
Technology Development Corporate Development
Date: September 2, 1999 Date: August 26, 1999
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REVIEWED AND ACCEPTED:
/s/ Christopher E. Walsh
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Christopher E. Walsh, MD
Principal Investigator
Date: August 2, 1999
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