REDACTED VERSION
EXHIBIT 10.14
To
Targeted Genetics Corporation's
Form 10-K
For the Year Ended
December 31, 1997
"[ * ]" = omitted, confidential material, which material has been
separately filed with the Securities and Exchange Commission pursuant to a
request for confidential treatment.
TGC EXCLUSIVE LICENSE AGREEMENT
EXHIBIT 10.14
EXCLUSIVE LICENSE AGREEMENT
This Agreement is entered into as of the 23rd day of March, 1994 by and
between the Fred Hutchinson Cancer Research Center, a Washington non-profit
corporation ("FHCRC") and Targeted Genetics Corporation, 1100 Olive Way, Suite
100, Seattle, WA 98101 ("TGC"), a Washington corporation.
RECITALS
Whereas, FHCRC and the National Institutes of Health/Alcohol, Drug Abuse
and Mental Health Administration (NIH/ADAMHA) are the owners by assignment from
Drs. A. Dusty Miller, J. Victor Martinez, Carolyn A. Wilson and Maribeth V.
Eiden of the LICENSED PATENT RIGHTS as defined in this Agreement, and FHCRC and
NIH/ADAMHA have entered into an agreement that allows FHCRC to act as licensing
agent of NIH/ADAMHA;
Whereas FHCRC is committed to a policy that ideas or creative works
produced at FHCRC should be used for the greatest possible public benefit and
believes that every reasonable incentive should be provided for the prompt
introduction of such ideas into public use, all in a manner consistent with the
public interest;
Whereas TGC desires to obtain an exclusive worldwide license in order to
practice the above referenced invention covered by LICENSED PATENT RIGHTS in the
United States and in certain foreign countries, and to manufacture, use and sell
in the commercial market the products made in accordance therewith; and
Whereas FHCRC is willing to grant such a license to TGC subject to the
terms and conditions of this Agreement.
AGREEMENT
NOW THEREFORE, in consideration of the foregoing premises and the mutual
covenants as set forth herein, the parties agree as follows:
ARTICLE 1 - DEFINITIONS
1.1 LICENSED PATENT RIGHTS shall mean rights and claims in and to the
inventions described in, and rights covered by, the issued United States patents
and patent applications listed in Appendix A attached to this Agreement and made
a part hereof, as well as all continuations, continuations-in-part, divisions
and renewals thereof, which will automatically be deemed incorporated in and
added to this Agreement and shall periodically be added to Appendix A.
TGC EXCLUSIVE LICENSE AGREEMENT
1.2 LICENSED PROCESSES shall mean processes the relevant practice of which
would in the applicable jurisdiction, in the absence of this License, infringe
upon either an unexpired valid claim under LICENSED PATENT RIGHTS or a claim in
a then-pending patent application under LICENSED PATENT RIGHTS (treating such
application, for such purposes, as having been issued as a patent in such
jurisdiction).
1.3 LICENSED PRODUCTS shall mean products the relevant manufacture, use or
sale of which would in the applicable jurisdiction, in the absence of this
License, infringe upon either an unexpired valid claim under LICENSED PATENT
RIGHTS or a claim in a then-pending patent application under LICENSED PATENT
RIGHTS or (treating such application, for such purposes, as having been issued
as a patent in such jurisdiction), or products made in accordance with or by
means of LICENSED PROCESSES.
1.4 NET SALES shall mean the amount billed or invoiced on sales of
LICENSED PRODUCTS less:
(a) Customary trade, quantity or cash discounts and non-affiliated
brokers' or agents' commissions actually allowed and taken;
(b) Amounts repaid or credited by reason of rejection or return;
and/or
(c) To the extent separately stated on purchase orders, invoices or
other documents of sales, taxes levied on and/or other
governmental charges made as to production, sale, transportation,
delivery or use and paid by or on behalf of TGC.
1.5 AFFILIATES shall mean any company, corporation, or business in which
TGC owns or controls at least a fifty percent (50%) ownership interest or which
directly or indirectly owns or controls more than a fifty percent (50%)
ownership interest in TGC.
1.6 TECHNOLOGY shall mean any and all information or LICENSED PATENT
RIGHTS supplied by FHCRC to TGC.
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TGC EXCLUSIVE LICENSE AGREEMENT
ARTICLE 2 - GRANT
2.1 FHCRC hereby grants to TGC and TGC accepts, subject to the terms and
conditions hereof, an exclusive worldwide license, under LICENSED PATENT RIGHTS,
to make, to use, to sell the LICENSED PRODUCTS, and to practice the LICENSED
PROCESSES, for the Term permitted in Article 3 of this Agreement (the
"License"). The License granted to TGC by FHCRC hereunder is limited to those
fields of use relevant for the prophylaxis and treatment of human disease in the
methods described under LICENSED PATENT RIGHTS. Any license in any other field
shall be the subject of a separate agreement and shall require TGC's submission
of evidence demonstrating its willingness and ability to develop and
commercialize the kinds of products or processes likely to be encompassed in
such other field. Such license shall include the right to grant sublicenses,
subject to the provisions of Section 2.2 below. In order to provide TGC with a
period of exclusivity, FHCRC agrees it will not grant licenses to others except
as permitted in Section 2.2 below. TGC agrees during the period of exclusivity
of this license in the United States that any LICENSED PRODUCT produced for sale
in the United States will be manufactured substantially in the United States.
2.2 The License is subject to the following policies, obligations and/or
conditions:
(a) FHCRC's Patents and Inventions Policy adopted September 30, 1983,
Public Law 98-620 and FHCRC's obligations under agreements with
other sponsors of research. Any right granted in this Agreement
greater than that permitted under Public Law 98-620 shall be
subject to modification as may be required to conform to the
provisions of the statute.
(b) For research purposes only and not for any commercial purpose,
FHCRC shall have the right to make and to use the TECHNOLOGY.
(c) TGC shall use reasonable effort to introduce the LICENSED
PRODUCTS into the commercial market as soon as practicable,
consistent with sound and reasonable business practices and
judgment, and thereafter endeavor to keep LICENSED PRODUCTS
reasonably available to the public.
(d) FHCRC shall have the right to terminate or render this Agreement
nonexclusive at any time after three (3) years from the date
hereof if, in FHCRC's reasonable judgment, TGC:
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TGC EXCLUSIVE LICENSE AGREEMENT
(i) has not put the licensed subject matter into commercial use
in the country or countries where licensed, directly or
through a sublicense, and is not keeping the licensed
subject matter reasonably available to the public, or
(ii) is not demonstrably engaged in research, development,
manufacturing, marketing or licensing program, as
appropriate, directed toward these ends; or
(iii) has not expended at least three hundred thousand dollars
($300,000) in the twelve (12) month period beginning (3)
years from the EFFECTIVE DATE, or in any (12) twelve month
period beginning anytime thereafter, on internal and
external personnel, their benefits, supplies and equipment
related to research and development of the LICENSED PRODUCTS
In making this determination FHCRC shall take into account the
normal course of such programs conducted with sound and
reasonable business practices and judgment and shall take into
account the reports provided hereunder by TGC.
(e) TGC shall not grant any sublicense without FHCRC's prior written
consent. All sublicenses granted by TGC hereunder shall include
a requirement that the sublicensee use its best efforts to bring
the subject matter of the sublicense into commercial use as
quickly as is reasonably possible and shall expressly bind the
sublicensee to meet TGC's obligations to FHCRC under this
Agreement. Copies of all sublicense agreements shall promptly be
provided to FHCRC.
(f) In the event FHCRC becomes aware of third parties that wish to
license the LICENSED PATENT RIGHTS in specific fields of use that
would not result in direct or indirect competition to TGC, FHCRC
shall notify TGC and TGC shall exercise one of the following
options:
(i) commence active research and development of LICENSED
PRODUCTS under the LICENSED PATENT RIGHTS in that field of
use;
4
TGC EXCLUSIVE LICENSE AGREEMENT
(ii) grant a sublicense to said third parties to make, use and
sell LICENSED PRODUCTS under the LICENSED PATENT RIGHTS in
that field of use; or
(iii) grant the right to FHCRC to directly license said third
parties to make, use and sell LICENSED PRODUCTS under the
LICENSED PATENT RIGHTS in that field of use.
2.3 Notwithstanding the foregoing provisions of Article 2, TGC shall have
the right to assign the license granted under Article 2 to an AFFILIATE or to
any organization that acquires all or substantially all of TGC's business,
subject to the terms and conditions hereof.
2.4 This Agreement shall have no effect upon any and all rights reserved
to the United States Government and others under Public Law 98-620.
ARTICLE 3 - TERM OF AGREEMENT
3.1 This Agreement becomes effective as of the date first above written
(the "Effective Date"), and, subject to earlier termination as provided in
Article 9 shall remain in effect until the last to expire of the LICENSED PATENT
RIGHTS (the "Term").
ARTICLE 4 - ROYALTIES
4.1 In consideration for the granting of the License, TGC shall pay to
FHCRC a non-refundable license fee ("License Fee") in the sum of [ * ] of such
License Fee shall be payable within thirty days of the Effective Date and
[ * ] shall be payable one (1) year from the Effective Date.
4.2 During the Term, TGC shall pay to FHCRC a royalty in the amount of
[ * ] of the NET SALES of all LICENSED PRODUCTS and all products using LICENSED
PROCESSES and all services utilizing LICENSED PRODUCTS or LICENSED PROCESSES
which are manufactured or used by TGC and its AFFILIATES or sublicensees in the
United States, and leased or sold by TGC and its AFFILIATES or sublicenses in
the United States, except, however, that the foregoing royalty rate may be
reduced by one half the amount of third party royalties payable on
[*] Confidential Treatment Requested
5
TGC EXCLUSIVE LICENSE AGREEMENT
licenses required to make, use or sell LICENSED PRODUCTS or to practice a
LICENSED PROCESS, but in no case shall the royalty rate be reduced to less than
[ * ] of NET SALES.
4.3 During the Term, TGC shall pay to FHCRC a royalty in the amount of
[ * ] of the NET SALES of all LICENSED PRODUCTS and all products using LICENSED
PROCESSES and all services utilizing LICENSED PRODUCTS or LICENSED PROCESSES
which are manufactured or used by TGC and its AFFILIATES or sublicensees in the
United States, and leased or sold by TGC and its AFFILIATES or sublicenses
outside of the United States, except, however, that the foregoing royalty rate
may be reduced by one half the amount of third party royalties payable on
licenses required to make, use or sell LICENSED PRODUCTS or to practice a
LICENSED PROCESS, but in no case shall the royalty rate be reduced to less than
[ * ] of NET SALES.
4.4 No multiple royalties shall be payable because any LICENSED PRODUCT
which TGC manufactures, uses, leases or sells is covered by multiple claims
under the LICENSED PATENT RIGHTS.
4.5 TGC shall pay to FHCRC at least the following amounts in royalties in
the following contract years (the "Maintenance Royalties"):
(i) [ * ] upon the earlier of the issuance of the first patent
included in the LICENSED PATENT RIGHTS or [ * ];
(ii) [ * ] upon the earlier of approval to commence Phase 2 (as
defined by 21 Code of Federal Regulations, Chapter 1) clinical
trials for the first LICENSED PRODUCT or [ * ]; and
(iii) [ * ] upon approval of the New Drug Application ("NDA") or
Product License Application ("PLA") (as defined by 21 Code of
Federal Regulations, Chapter 1) for the first LICENSED PRODUCT or
[ * ].
4.6 If TGC transfers or otherwise sublicenses LICENSED PATENT RIGHTS to a
third party, for value other than NET SALES, TGC shall also pay FHCRC a
percentage of [ * ] of all proceeds including, but not limited to, licensing
fees, receivable by TGC in connection therewith ("Non-Royalty Fees").
[*] Confidential Treatment Requested
6
TGC EXCLUSIVE LICENSE AGREEMENT
Any such payment to FHCRC shall be made within thirty (30) days after receipt of
such proceeds by TGC. Any such sale or transfer shall not affect TGC's
obligations to pay royalties under Sections 6.2 and 6.3 above. In no event
shall Non-Royalty Fees include any payment or other value due to or received by
TGC from a third party as, for example, an upfront fee, research and development
payments, milestone payments, equity, or any equivalent of the foregoing, or of
any payment that is not explicitly due to or received by TGC in consideration
for a grant by TGC to a third party to make, have made, use and sell LICENSED
PRODUCTS, or practice LICENSED PROCESSES, under LICENSED PATENT RIGHTS.
In the event that TGC transfers or otherwise sublicenses LICENSED PATENT
RIGHTS to a third party in combination with patents(s) and/or other rights(s) of
a third party(ies) and TGC is due and receives Non-Royalty Fees, then TGC shall
pay FHCRC an equitable portion of such Non-Royalty Fees as to be determined by
the good faith negotiations of TGC and FHCRC.
ARTICLE 5 - REPORTING AND ROYALTY PAYMENT TERMS
5.1 Upon or before execution of this Agreement, TGC shall provide to FHCRC
a written research and development plan pursuant to which TGC intends to bring
the subject matter of the License granted hereunder into commercial use,
including projections of sales and proposed marketing efforts.
5.2 TGC shall report to FHCRC the date of first sale of LICENSED PRODUCTS
(or results of LICENSED PROCESSES) in each country within thirty (30) days of
occurrence.
5.3 TGC shall provide written annual reports within sixty (60) days after
June 30 of each calendar year which shall include the following information:
reports of progress on research and development, regulatory approvals,
manufacturing, sublicensing, marketing and sales during the preceding twelve
(12) months as plans for the coming year. If TGC's progress differs from that
anticipated in the plan provided to FHCRC under Section 5.1, TGC shall explain
the reasons for the difference and propose a modified plan for FHCRC's review
and approval. TGC shall also provide any reasonable additional data FHCRC
requires to evaluate TGC's performance.
5.4 Beginning after the first NET SALES, TGC shall submit to FHCRC within
sixty (60) days after June 30 and December 31 of each calendar year during the
Term, and upon the effective termination of this Agreement, reports for the
preceding six (6) month period identifying the amount of the LICENSED PRODUCTS
sold by TGC, its AFFILIATES and sublicensees in each country, the sales volume
and NET
7
TGC EXCLUSIVE LICENSE AGREEMENT
SALES, and the amount of royalty due to FHCRC together with payment of such
royalty amount. Such report shall be certified as correct by an officer of TGC
and shall include a detailed listing of all deductions from NET SALES,
sublicensee income or from royalties as specified herein. If no royalties are
due to FHCRC for any reporting period, the written report shall so state. All
royalties due hereunder shall be payable in United States dollars. Conversion of
foreign currency to U.S. dollars shall be made at the conversion rate existing
in the United States on the date of royalty payments by TGC as quoted in the
Wall Street Journal for that day.
5.5 All such reports shall be maintained in confidence by FHCRC, except as
required by law, including Public Law 98-620.
ARTICLE 6 - RECORD KEEPING
6.1 TGC shall maintain complete and accurate books of account and records
showing all sales of LICENSED PRODUCTS and all NET SALES (broken down by gross
sales and allowable deductions) attributable to such sales. For purposes of
verifying the accuracy of the royalties paid by TGC pursuant to this Agreement
or verifying performance of TGC of any other obligation to FHCRC hereunder, such
books and records shall be open to inspection and copying, during usual business
hours, by an independent certified public accountant or by employees of FHCRC.
Such accountant shall not disclose to FHCRC any information other than
information relating to accuracy of reports and calculations of amounts due to
FHCRC made under this Agreement. In the event that any such inspection shows
any underreporting and underpayment by TGC in excess of five percent (5%) for
any twelve (12) month period, then TGC shall pay the cost of such examination.
Such books and records shall be maintained for at least two (2) full years after
the termination of this Agreement.
ARTICLE 7 - DOMESTIC AND FOREIGN PATENT FILING AND MAINTENANCE
7.1 TGC shall reimburse FHCRC for all reasonable expenses FHCRC has
incurred for the preparation, filing, prosecution and maintenance of LICENSED
PATENT RIGHTS and shall reimburse FHCRC for all such future expenses ("PATENT
EXPENSES"). With respect to PATENT EXPENSES incurred prior to the Effective
Date, TGC shall reimburse FHCRC for fifty percent (50%) of such expenses no
later than June 30, 1994, and shall reimburse FHCRC for fifty percent (50%) of
such expenses no later than June 30, 1995. TGC shall reimburse FHCRC for all
PATENT EXPENSES incurred subsequent to the Effective Date as they are invoiced
by FHCRC. FHCRC shall take responsibility for the preparation, filing,
prosecution and maintenance of any and all patent applications and patents
included
8
TGC EXCLUSIVE LICENSE AGREEMENT
in LICENSED PATENT RIGHTS, provided however that FHCRC shall first consult with
TGC as to the preparation, filing, prosecution and maintenance of such patent
applications and patents and shall furnish to TGC copies of documents relevant
to any such preparation, filing, prosecution or maintenance. Notwithstanding the
foregoing, FHCRC may consent subsequent to the Effective Date for TGC to assume
such responsibilities with respect to the LICENSED PATENT RIGHTS.
7.2 FHCRC and TGC shall cooperate fully and in good faith in the
preparation, filing, prosecution and maintenance of LICENSED PATENT RIGHTS and
of all patents and patent applications licensed to TGC hereunder, including the
execution of all papers and instruments so as to enable FHCRC to apply for, to
prosecute and to maintain patent applications and patents in FHCRC's name in any
country. Each party shall provide to the other prompt notice as to all matters
which come to its attention and which may affect the preparation, filing,
prosecution or maintenance of any such patent applications or patents.
7.3 If TGC elects not to pay the expenses of a patent application or
patent included within LICENSED PATENT RIGHTS, TGC shall notify FHCRC not less
than sixty (60) days prior to such action and shall thereby surrender its rights
under Article 2.1 of this Agreement with regard to such patent or patent
application.
ARTICLE 8 - INFRINGEMENT
8.1 Each party agrees to notify the other promptly of any infringement of
the LICENSED PATENT RIGHTS of which such party becomes aware. TGC shall have
the option to commence legal proceedings with respect to such infringement.
Before TGC commences legal proceedings (an "Action") with respect to any
infringement of such patents, TGC shall give careful consideration to the views
of FHCRC and to potential effects on the public interest in making its decision
whether or not to commence such an Action.
8.2 If TGC elects to commence an Action as described above, TGC may
reduce, by up to fifty percent (50%), the royalty due to FHCRC earned under the
patent subject to suit by the amount of the expenses and costs of such Action,
including attorney fees. In the event such expenses and costs exceed the amount
of royalties withheld by TGC for any calendar year, TGC may to that extent
reduce the royalties due to FHCRC from TGC in succeeding calendar years, but
never by more than fifty percent (50%) of the royalty due in any one year. Any
unused royalty credit amount may be carried forward until the full amount of the
credit has been exhausted.
8.3 Recoveries or reimbursements from such Action shall first be applied
to reimburse TGC and FHCRC for litigation costs not paid from royalties (if any)
and
9
TGC EXCLUSIVE LICENSE AGREEMENT
then to reimburse FHCRC for royalties withheld. Any remaining recoveries or
reimbursements shall be shared equally by TGC and FHCRC.
8.4 In the event that TGC elects not to exercise its option to prosecute
an infringement of the LICENSED PATENT RIGHTS pursuant to this Agreement, FHCRC
may do so at its own expense, controlling such Action and retaining all
recoveries therefrom.
ARTICLE 9 - TERMINATION OF AGREEMENT
9.1 Unless terminated earlier in accordance with the terms hereof, this
Agreement will expire upon the expiration of the Term as provided in Article 3.
Upon termination, a final report shall promptly be submitted in accordance with
the provisions of Section 5.4, together with any royalty payments and
unreimbursed patent expenses due to FHCRC.
9.2 At FHCRC's option, FHCRC may terminate this Agreement sixty (60) days
after giving written notice to TGC of any default in payments due hereunder and
subsequent failure by TGC to remedy any such default within such period,
provided that FHCRC is not then in breach of any provision hereof.
9.3 This Agreement may be terminated by either party upon breach of a
material obligation or condition by the other (other than a breach according to
Section 9.2), effective ninety (90) days after giving written notice to the
other of such termination under this Article and specifying such breach,
provided however, that if the breach is cured or shown to be non-existent within
the ninety (90) day period, the notice shall be deemed automatically withdrawn
and of no effect. If the parties do not agree whether a breach has occurred or
been cured or whether it is "material", the dispute shall be resolved through
arbitration under Article 13.
9.4 Subject to any provisions of the federal bankruptcy laws limiting
rights of termination, this Agreement will automatically terminate if TGC files
for protection under federal bankruptcy laws, becomes insolvent, makes an
assignment for the benefit of creditors, appoints or suffers appointment of a
receiver or trustee over its property, files a petition under any bankruptcy or
insolvency act or has any such petition filed against it or files for
dissolution.
9.5 Any sublicenses granted by TGC under this Agreement shall provide for
termination or assignment to FHCRC, at the option of FHCRC, of TGC's interest
therein upon termination of this Agreement.
10
TGC EXCLUSIVE LICENSE AGREEMENT
9.6 TGC shall have the right to terminate this Agreement effective thirty
(30) days after giving written notice to FHCRC of termination under this
Article.
9.7 Upon termination of this Agreement, TGC shall have the right for three
(3) months to sell all LICENSED PRODUCTS on hand at the time of notification of
termination if the royalties from such sales and any and all other payments due
FHCRC are paid to and statements rendered to FHCRC with respect to such LICENSED
PRODUCTS when due in accordance with this Agreement.
9.8 Upon termination of the Agreement for any reason, and subject to TGC's
rights under Section 9.7, TGC shall return to FHCRC and thereafter continue to
maintain the confidentiality thereof, and refrain from use thereof or the
disclosure thereof to any third party as required by Article 15, and all other
rights in LICENSED PROCESSES and LICENSED PRODUCTS granted to TGC under Article
2 shall expire and revert to FHCRC. Immediately upon cessation of discussions
between TGC and FHCRC during the Term, or upon request by one of the parties,
TGC and FHCRC will return all Proprietary Information of the other, and all
documents or data storage media containing any such Proprietary Information and
any and all copies thereof, and TGC and FHCRC will delete all Proprietary
Information of the other from its documents or data storage media, except that
the parties shall maintain one copy of such Proprietary Information in their
legal or corporate development files.
9.9 Should either party terminate this Agreement as permitted herein, the
other party shall not be able to claim from the terminating party any damages or
compensation for losses or expenses incurred solely as a result of the
termination.
9.10 Provisions hereof and accrued rights hereunder which by their terms
or nature survive the termination or expiration of this Agreement shall so
survive such termination or expiration.
ARTICLE 10 - REPRESENTATIONS AND COVENANTS
10.1 FHCRC represents and warrants that all right, title, and interest in
the patent applications or patents comprising the LICENSED PATENT RIGHTS have
been assigned to it and that FHCRC has the authority to issue licenses under
said LICENSED PATENT RIGHTS. FHCRC disclaims all implied or express warranties
of any nature whatsoever concerning the validity of the LICENSED PATENT RIGHTS
licensed hereunder. TGC acknowledges and agrees that neither FHCRC nor anyone
acting on its behalf has made any representations whatsoever with regard to the
scope of the LICENSED PATENT RIGHTS or that such LICENSED PATENT RIGHTS may be
exploited by TGC, an AFFILIATE, or sublicensee without infringing other patents.
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TGC EXCLUSIVE LICENSE AGREEMENT
10.2 FHCRC EXPRESSLY DISCLAIMS ANY AND ALL EXPRESS WARRANTIES, EXCEPT
THOSE STATED IN THIS ARTICLE 10, AND FURTHER DISCLAIMS ANY AND ALL IMPLIED
WARRANTIES OF MERCHANTABILITY OR FITNESS OF THE TECHNOLOGY, LICENSED PROCESSES
OR LICENSED PRODUCTS FOR ANY PARTICULAR USE OR PURPOSE.
10.3 TGC represents and warrants to FHCRC that it has obtained and will at
all times during the Term of this Agreement, hold and comply with all licenses,
permits and authorizations necessary to TGC'S complete and timely performance of
its obligations under this Agreement which are required under any applicable
statutes, laws, ordinances, rules and regulations of the United States as well
as those of all applicable foreign governmental bodies, agencies and
subdivisions, having, asserting or claiming jurisdiction over TGC or TGC's
performance of the terms of this Agreement. In particular, TGC:
(a) will be responsible for obtaining all necessary United States
Food and Drug Administration approvals and all approvals required
by similar governmental bodies or agencies of all applicable
foreign countries; and
(b) understands and acknowledges that the transfer of certain
commodities and technical data is subject to United States laws
and regulations controlling the export of such commodities and
technical data, including all Export Administration Regulations
of the United States Department of Commerce. These laws and
regulations, among other things, prohibit or require a license
for the export of certain types of technical data to certain
specified countries. TGC hereby agrees and gives written
assurance that it will comply with all United States laws and
regulations controlling the export of commodities and technical
data, that it will be solely responsible for any violation of
such by TGC or its AFFILIATES or sublicensees, and that it will
defend and hold FHCRC harmless in the event of any legal action
of any nature occasioned by such violation.
ARTICLE 11 - LEGAL ACTION
11.1 In the event any legal action is commenced against TGC involving
TECHNOLOGY or a LICENSED PRODUCT or otherwise relating to this Agreement,
whether or not FHCRC is named as a party to the legal action, TGC shall keep
FHCRC or its attorney nominee fully advised of the progress of the legal action
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TGC EXCLUSIVE LICENSE AGREEMENT
and shall reimburse FHCRC for its reasonable legal costs (including attorney's
fees) incurred as a result of FHCRC's monitoring of such action, FHCRC's being
named a party to any such legal action, or when FHCRC's employees or agents are
called as witnesses therein or asked to testify for or consult with TGC in
connection therewith.
11.2 FHCRC agrees to cooperate with TGC, to the extent reasonably
possible, in any legal action brought pursuant to this Article 11.
ARTICLE 12 - HOLD HARMLESS
12.1 TGC assumes responsibility for and shall defend, indemnify and hold
FHCRC, its directors, officers, managers, agents, students, doctors and
employees harmless from any and all liability, losses, expenses, damages,
assessments and claims arising out of or resulting from (i) the use, sale or any
disposition of LICENSED PRODUCTS, (ii) the practice of the LICENSED PROCESSES by
TGC or its AFFILIATES, or (iii) the use, sale or other disposition of the
LICENSED PRODUCT or LICENSED PROCESSES by others who receive LICENSED PRODUCTS
or LICENSED PROCESSES directly or indirectly from TGC, its AFFILIATES, agents or
representatives.
ARTICLE 13 - ARBITRATION
13.1 Any dispute, other than a question relating to patent validity,
between the parties hereunder which cannot be resolved by good faith negotiation
between the parties over a period of at least sixty (60) days shall be resolved
by arbitration before a panel of three arbitrators under the then current rules
and procedures of the American Arbitration Association (the "AAA"), or other
rules and procedures as the parties may agree. Each party shall bear its own
costs incurred in connection with such arbitration and the fees, expenses and
costs of the AAA, the arbitrator(s) and the arbitration proceeding not incurred
solely by one party shall be divided equally between the parties. The arbitral
award shall be binding and conclusive on both parties and may be enforced in any
court of competent jurisdiction.
ARTICLE 14 - NOTICES
14.1 All communications, including payments, notices, demands or requests
required or permitted to be given hereunder, shall be given in writing and shall
be: (a) personally delivered; (b) sent by facsimile or other electronic means
of transmitting written documents; or (c) sent to the parties at their
respective addresses indicated herein by registered or certified U.S. mail,
return receipt requested and postage prepaid, or by private overnight mail
courier service. The respective
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TGC EXCLUSIVE LICENSE AGREEMENT
addresses to be used for all such payments, notices, demands or requests are as
follows:
If to FHCRC: Fred Hutchinson Cancer Research Center
1124 Columbia Street, C2M-027
Seattle, Washington 98104
Attention: Catherine J. Hennings, Manager, Technology Transfer
Facsimile: (206) 667-4732
With copies to: Douglas J. Shaeffer, Esq.
Fred Hutchinson Cancer Research Center
1124 Columbia Street, LY-240
Seattle, Washington 98104
Facsimile: (206) 667-6590
If to TGC: Targeted Genetics Corporation
1100 Olive Way, Suite 100
Seattle, WA 98101
Attention: President
Facsimile: (206) 223-0288
ARTICLE 15 - CONFIDENTIALITY AND NON-DISCLOSURE
15.1 Any and all information relating to the TECHNOLOGY furnished to
either party (or its agents or employees) by the other party (or its
laboratories or agents or employees), including but not limited to information
regarding or relating to devices, cell lines, monoclonal antibodies, methods,
processes, data regarding testing and experiments, drawings, documentation,
patent applications and patents (when issued) and product development plans, is
confidential, proprietary, trade secret information and any and all such
information is hereinafter referred to as "Proprietary Information."
(a) As used herein, "Proprietary Information" includes the following:
(i) written material which is clearly designated on its face as
confidential and patent applications;
(ii) oral disclosures, the content of which is within thirty (30)
days after communication designated in writing as
confidential, or which is so designated as confidential
orally during oral disclosures or in contemporaneous written
memoranda; and
14
TGC EXCLUSIVE LICENSE AGREEMENT
(iii) specimens, samples, and other physical materials which are
prior to or at the time of disclosure designated in writing
as confidential.
(b) As used herein, "Proprietary Information" does not include:
(i) information which at the time of disclosure to the receiving
party is generally available to the public, or which after
such disclosure becomes generally available to the public by
publication or otherwise;
(ii) information that is demonstrated to have been in the
receiving party's possession prior to the time of disclosure
by the disclosing party;
(iii) information that is demonstrated by a preponderance of the
evidence to have been independently developed by the
receiving party's personnel without reference to Proprietary
Information disclosed by the disclosing party; and
(iv) information received from a third party unless such
information is obtained subject to a confidential disclosure
agreement.
15.2 Each party agrees: (a) to hold in strict confidence and trust and
maintain as confidential all Proprietary Information disclosed by the other
party and any information derived therefrom; (b) not to disclose any such
Proprietary Information or any information derived therefrom to any person,
except to those employees or legal counsel of the receiving party who are
required to receive the Proprietary Information for the purposes described in
this Agreement and who are bound by the provisions of this Agreement; (c) not to
export or otherwise disclose any such Proprietary Information to any person who
is, or who the receiving party believes may be, located or may use the
Proprietary Information outside the United States; and (d) to use the
Proprietary Information only for the purposes described in this Agreement.
15.3 Each party agrees that: all Proprietary Information disclosed by the
other party will at all times be and remain the sole property of the disclosing
party and the disclosing party is the sole owner of all patents, copyrights and
other intellectual property rights and other proprietary rights related to the
Proprietary Information disclosed by it. Nothing in this Agreement shall be
construed as granting to or
15
TGC EXCLUSIVE LICENSE AGREEMENT
permitting to the receiving party any implied license in, or right or option to,
license or use any intellectual property right (including but not limited to any
patent right obtained by the disclosing party) relating to the Proprietary
Information disclosed by it or any other right to use such Proprietary
Information except as expressly provided herein and for any reason other than
for the purposes described in this Agreement.
15.4 Immediately upon the termination of this Agreement, or upon either
disclosing party's request, the receiving party will deliver to the disclosing
party all Proprietary Information disclosed by the disclosing party and all
documents and data storage media containing any such Proprietary Information and
any and all copies thereof, and will delete all such Proprietary Information
from its documents and data storage media.
15.5 The obligations of confidentiality provided herein shall continue in
force and effect for five (5) years from the date of termination of this
Agreement, whether by lapse of the Term hereof or otherwise, unless extended or
limited by mutual agreement executed in writing by an officer of each party.
ARTICLE 16 - PATENT MARKING
16.1 Subsequent to the issuance of any patent based on the application(s)
covered by LICENSED PATENT RIGHTS and provided FHCRC advises TGC of the patent
number or numbers of any such issued patents, TGC agrees to mark and to have
marked by its sublicensees every LICENSED PRODUCT manufactured, used or sold by
TGC, its AFFILIATES or its sublicensees in accordance with the statutes of the
United States relating to the marking of patented articles.
ARTICLE 17 - RIGHT TO PUBLISH
17.1 Nothing in this Agreement shall be construed as prohibiting FHCRC or
its researchers from publishing any of the results of research on the TECHNOLOGY
in reputable scientific journals. Notwithstanding the foregoing, it is expected
the FHCRC shall take such measures to obtain appropriate patent or other
protection for any inventions which FHCRC reasonably knows will be incorporated
into the LICENSED PATENT RIGHTS as a continuation or a continuation-in-part.
ARTICLE 18 - MISCELLANEOUS
18.1 The rights and obligations of the parties under this Agreement shall
be governed by and construed in accordance with the laws of the State of
Washington.
16
TGC EXCLUSIVE LICENSE AGREEMENT
18.2 This Agreement may not be amended except by an instrument in writing
signed by both parties.
18.3 The Agreement shall be binding on the parties hereto and upon their
respective heirs, administrators, successors and assigns. This Agreement may not
be assigned or sublicensed by TGC or by operation of law without the prior
written consent of FHCRC.
18.4 TGC acknowledges that FHCRC is a non-profit organization qualifying
for and holding the status of an exempt organization under Section 501(c)(3) of
the United States Internal Revenue Code. If the Internal Revenue Service
determines, or a determination by FHCRC based on advice of legal or tax counsel
is reasonably made, that any part or all of this Agreement will jeopardize
FHCRC's Section 501(c)(3) status, the parties agree to meet and confer in good
faith to amend this Agreement to the extent necessary to satisfy Internal
Revenue Service requirements for retention of FHCRC'S Section 501(c)(3) status.
If FHCRC and TGC cannot agree within 30 days after commencing negotiations
regarding the amendments to be made to this Agreement in order for FHCRC to
retain its Section 501(c)(3) status, FHCRC may terminate this Agreement
effective upon giving written notice to TGC of termination under this Article
18.
18.5 TGC understands and acknowledges that agreements between FHCRC and
agencies of the United States Government funding FHCRC's programs may contain
clauses granting patent and/or other rights to the agencies or the U.S.
Government; TGC agrees that the rights granted to it under this Agreement shall
be subject to any rights of the agencies and the U.S. Government. In the event
of a conflict between any of the provisions of this Agreement and the provisions
of any U.S. Government agency funding agreement and/or regulation shall prevail
and FHCRC will have no liability to TGC as a result of such conflict.
18.6 Except as otherwise provided herein, FHCRC and its employees,
including but not limited to the INVESTIGATORS, shall not use the name of TGC,
its employees or agents, and TGC, including its employees, shall not use the
name of FHCRC or any of its employees or agents in any advertising, publicity,
news release, promotional materials or any public disclosure, whatsoever, EITHER
WRITTEN OR ORAL, related to the existence of this Agreement or any actions or
work undertaken pursuant to terms of this Agreement without the prior written
consent of the other party. FHCRC shall have three (3) business days from the
time it receives a proposed disclosure ("Review Period") to approve and/or
provide comments to TGC with respect to such disclosure. In the event that TGC
receives no communications from
17
TGC EXCLUSIVE LICENSE AGREEMENT
FHCRC regarding such disclosure within the Review Period, then FHCRC's consent
of the public release of such disclosure shall be deemed to have been granted.
18.7 Upon the earlier of any: (i) testing or use in human subjects or
(ii) sale of a LICENSED PRODUCT, TGC will have FHCRC named as an additional
insured on TGC'S product liability insurance policies, with limits of at least
$1,000,000 per claim and $5,000,000 annual aggregate. Such policies shall not be
terminated without thirty (30) days prior written notice to FHCRC. If FHCRC's
insurance costs can be shown to have increased solely because of this Agreement,
and such increases are verified by an independent certified public accountant,
TGC shall reimburse FHCRC for such increase within twenty (20) days of receiving
written notice from FHCRC requesting such reimbursement and the parties shall
attempt to agree to changes and revisions of this Agreement. If the parties fail
to arrive at agreement within a reasonable time, or TGC does not reimburse
FHCRC, FHCRC may by written notice terminate this Agreement.
18.8 All letters, documents, or other materials of a written or physical
nature, required by or relating to this Agreement shall be in English and sent
to the party at the address given in Article 14.
18.9 The parties to this Agreement recognize and agree that each is
operating as an independent contractor and not as an agent of the other. This
Agreement shall not constitute a partnership or joint venture, and neither party
may be bound by the other to any contract, arrangement or understanding except
as specifically stated herein.
18.10 Should a court of competent jurisdiction later consider any
provision of this Agreement to be invalid, illegal, or unenforceable, it shall
be considered severed from this Agreement. All other provisions, rights and
obligations shall continue without regard to the severed provision, provided
that the remaining provisions of this Agreement are in accord with the intention
of the parties.
18.11 In the event any party to this Agreement commences any action or
proceeding, including an appeal of an action or proceeding, against the other,
or otherwise retains an attorney, by reason of any breach or claimed breach of
any provision of this Agreement, or to seek a judicial declaration of rights
hereunder or judicial or equitable relief, the prevailing party in such action
or proceeding shall be entitled to recover its reasonable attorneys' fees and
costs. At the option of FHCRC, venue of any such legal or equitable action shall
lie in Seattle, Washington. TGC hereby submits to the jurisdiction of the
Federal District Court of Western Washington located in Seattle, Washington, and
hereby agrees to accept service of process by certified mail, return receipt
requested, effective upon delivery to TGC.
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TGC EXCLUSIVE LICENSE AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Agreement through duly
authorized representatives as of the date first above written.
FRED HUTCHINSON CANCER RESEARCH CENTER TARGETED GENETICS CORPORATION
By Catherine J. Hennings By H. Stewart Parker
------------------------------ ----------------------
Name Catherine J. Hennings Name H. Stewart Parker
------------------------------ ----------------------
Title Manager, Technology Transfer Title President and CEO
------------------------------ ----------------------
Date March 24, 1994 Date March 23, 1994
------------------------------ ----------------------
19
APPENDIX A
PATENT APPLICATIONS AND PATENTS
PATENT FILE OR
PATENT NO. APPLCTN NO. COUNTRY ISSUE DATE TITLE/INVENTOR
---------- ----------- ------- ---------- --------------
07/660,616 U.S. 2/22/91 RETROVIRUS PACKAGING CELL
LINES BASED ON GIBBON APE
LEUKEMIA VIRUS (Miller,
Wilson, Eiden, Garcia-Martinez)
20