AMENDED AND RESTATED LICENSE AGREEMENT BETWEEN ADVAXIS, INC. (COMPANY) AND THE TRUSTEES OF THE UNIVERSITY OF PENNSYLVANIA (PENN) EFFECTIVE DATE: JULY 1, 2002
CONFIDENTIAL
TREATMENT REQUEST
[*]
indicates information that has been omitted
pursuant
to a confidential treatment request and
this
information has been filed under separate
cover
with the Commission.
AMENDED
AND RESTATED LICENSE AGREEMENT
BETWEEN
(COMPANY)
AND
THE
TRUSTEES OF THE UNIVERSITY OF PENNSYLVANIA
(PENN)
_______
EFFECTIVE
DATE: JULY 1, 2002
TABLE
OF CONTENTS
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1.
DEFINITIONS
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2
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|
2.
LICENSE GRANT
|
4
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|
3.
FEES AND ROYALTIES
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6
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4.
CONFIDENTIALITY
|
13
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5.
TERM AND TERMINATION
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14
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6.
PATENT MAINTENANCE AND REIMBURSEMENT
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17
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7.
INFRINGEMENT AND LITIGATION
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20
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8.
DISCLAIMER OF WARRANTIES; INDEMNIFICATION
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21
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9.
USE OF PENN’S NAME
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23
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10.
ADDITIONAL PROVISIONS
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23
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ATTACHMENT
1
-
LIST OF INTELLECTUAL PROPERTY
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26
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ATTACHMENT
2
-
JOINDER AGREEMENT
|
28
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ATTACHMENT
3
-
DEVELOPMENT PLAN
|
29
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ATTACHMENT
4 - STOCK
PURCHASE AGREEMENT
|
30
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|
ATTACHMENT
5
-
SHAREHOLDERS AGREEMENT
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31
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ATTACHMENT
6
-
FORM NDA
|
32
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ATTACHMENT
7
-
CLIENT AND BILLING AGREEMENT
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32
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ATTACHMENT
8
-
REQUIRED TERRITORIES
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33
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AMENDED
AND RESTATED LICENSE
AGREEMENT
This
Amended and Restated License Agreement (“AGREEMENT”) is between The Trustees of
the University of Pennsylvania, a Pennsylvania nonprofit corporation, with
offices located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇ (“PENN”) and Advaxis, Inc., a corporation organized and existing
under the laws of Delaware (“COMPANY”), having a place of business at The
Technology Centre of New Jersey, Suite ▇▇▇, ▇▇▇ ▇.▇. ▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇.
This
AGREEMENT shall be and become effective on the date (the “EFFECTIVE DATE”) on
which COMPANY raises two-hundred fifty thousand dollars ($250,000) of equity
capital or convertible debt, namely, July 1, 2002, whereupon the COMPANY shall
be deemed to have exercised its rights under the Option (as defined below).
BACKGROUND
▇.
▇▇▇▇
owns issued and pending U.S. and foreign patent applications based upon
information in PENN Dockets D751, H1219, H1219 - CIP, J1598, M2244, M2244 -
CIP,
N2483 (which was joined with M2244), O2876 and O2883 naming ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
and colleagues of PENN’s School of Medicine, as inventors; and,
▇.
▇▇▇▇
and COMPANY entered into an Exclusive Negotiation and Option Agreement (the
“Option”) with an effective date of March 15, 2002 and extendable upon agreement
of the parties, which grants COMPANY exclusive rights to negotiate for a license
to such pending U.S. and foreign patents and patent applications;
and,
C.
COMPANY desires to fund further research by ▇▇. ▇▇▇▇▇▇▇▇ relating to therapeutic
vaccines based on LLO-antigen fusion proteins under a SPONSORED RESEARCH
AGREEMENT between PENN and COMPANY; and,
D.
COMPANY desires to obtain the exclusive right and license to use and exploit
the
intellectual property developed by ▇▇. ▇▇▇▇▇▇▇▇, et al, as described in
Attachment 1,
in
accordance with the DEVELOPMENT PLAN (as defined below); and,
|
▇.
|
▇▇▇▇
has determined that commercial exploitation of the intellectual property
developed by ▇▇. ▇▇▇▇▇▇▇▇ in accordance with the terms of this AGREEMENT
is in the best interest of PENN and is consistent with its educational
and
research missions; and,
|
|
F.
|
This
AGREEMENT became effective July 1, 2002 and was amended on August
4, 2003,
April 15, 2004, July 16, 2004, September 9, 2004, and March 29, 2005,
and
is being amended and restated in July 2006 in order to incorporate
all
prior amendments, to make current adjustments to minimum amounts
and due
dates, to add certain new language to the AGREEMENT and to clarify
language and numbering.
|
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33
NOW,
THEREFORE, in consideration of the promises and covenants contained in this
AGREEMENT and intending to be legally bound, the parties agree as
follows:
1.
DEFINITIONS
1.1 AFFILIATE
means any legal entity directly or indirectly controlling, controlled by or
under common control with COMPANY that has executed a Joinder Agreement
substantially in the form of Attachment 2 or such other form as PENN and COMPANY
may hereafter agree in writing. For purposes of this AGREEMENT, “control” means
the direct or indirect ownership of more than fifty percent (50%) of the
outstanding voting securities of a legal entity, or the right to receive more
than fifty percent (50%) of the profits or earnings of a legal entity, or the
right to control the policy decisions of a legal entity.
1.2 CALENDAR
QUARTER means each three calendar month period beginning on January 1, April
1,
July 1 and October 1, or any portion thereof, arising during the term of this
AGREEMENT.
1.3 DEVELOPMENT
PLAN means a plan for the development and/or marketing of the PENN PATENT RIGHTS
and/or PENN LICENSED PRODUCTS that reasonably demonstrates COMPANY’s capability
to bring such patent rights, technical information and/or products to practical
application, as more fully described in Attachment 3, consisting of the
following:
1.3.1 development
activities to be undertaken, including proposed dates of completion of all
major
milestones to develop and commercialize PENN LICENSED PRODUCTS;
1.3.2 a
list of
all government regulatory approvals, including the nature of submissions and
government agencies involved in pre-market clearance;
1.3.3 a
list of
current competitors and their competitive products, including competitors’ known
plans for further development of competing technologies; and
1.3.4 anticipated
dates of first SALE of each PENN LICENSED PRODUCT described in the DEVELOPMENT
PLAN.
1.4 FAIR
MARKET VALUE means the cash consideration which COMPANY, an AFFILIATE, or any
sublicensee would realize from an unaffiliated, unrelated buyer in an arm’s
length sale of an identical item or service, as applicable, sold in the same
quantity and at the same time and place of the transaction.
1.5 FIELD
OF
USE means therapeutic use in humans and other mammals.
1.6 NET
SALES
means the consideration or FAIR MARKET VALUE attributable to the SALE of any
PENN LICENSED PRODUCT(S), less the qualifying costs set forth below that are
directly attributable to such SALE and actually identified on the invoice and
borne by COMPANY, an AFFILIATE, or any sublicensee. Such qualifying costs shall
be limited to the following:
Advaxis/PENNpage
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Amended
and Restated Start-Up License Agreement
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1.6.1
Discounts, in amounts customary in the trade, for quantity purchases, prompt
payments and for wholesalers and distributors.
1.6.2
Credits or refunds, not exceeding the original invoice amount, for claims or
returns.
1.6.3
Prepaid outbound transportation expenses and transportation insurance
premiums.
1.6.4
Sales and use taxes and other fees, duties, and imports imposed by any
governmental agency.
1.7
PENN
LICENSED PRODUCT(S) means products which are made, made for, used or sold by
COMPANY, an AFFILIATE, or any sublicensees and which: (1) in the absence of
this
AGREEMENT would infringe at least one VALID CLAIM or (2) use a process or
machine covered by a VALID CLAIM.
1.8
PENN
PATENT RIGHTS means all patents represented by or issuing from those United
States patent applications listed in Attachment 1, including continuation,
divisional and re-issue applications and any foreign counterparts and extensions
of the foregoing.
1.9 PRIMARY
STRATEGIC FIELD
shall be
Cancer, including Cancer caused by infection.
1.10 SALE
means any bona fide transaction for which consideration is in fact received
by
COMPANY or AFFILIATE or any sublicensee hereunder or expected for the sale,
use,
lease, transfer or other disposition of PENN LICENSED PRODUCT(S). A SALE shall
be deemed completed at the time COMPANY, an AFFILIATE, or any sublicensee
invoices, ships, or receives payment for such PENN LICENSED PRODUCT(S),
whichever occurs first.
1.11 SECONDARY
STRATEGIC FIELDS
includes
(a) Infectious Disease, (b) Allergy, (c) Autoimmune Disease, and (d) any other
therapeutic indications for which PENN LICENSED PRODUCT(S) are
developed.
1.12 SPONSORED
RESEARCH AGREEMENT means a sponsored research agreement between PENN and COMPANY
providing for the conduct of certain research consistent with this AGREEMENT,
all on terms and conditions acceptable to PENN and COMPANY.
1.13 TERRITORY
shall mean any jurisdiction in which a VALID CLAIM persists.
1.14 VALID
CLAIM means any pending, issued or granted claim of the PENN PATENT RIGHTS
that
has not been surrendered, abandoned or declared invalid or unenforceable by
an
unappealed and unappealable decision of a court of competent jurisdiction up
to
the Federal Courts of Appeal level in the United States or equivalent court
in
other jurisdictions, as applicable.
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2. LICENSE GRANT
2.1 PENN
grants to COMPANY for the term of this AGREEMENT an exclusive right and license,
with the right to grant sublicenses, to make, have made, use, import, sell
and
offer for sale PENN LICENSED PRODUCT(S) in the FIELD OF USE in the TERRITORY.
Except for Section 2.6, no other rights or licenses are granted. Intellectual
property created or conceived during the performance of the SPONSORED RESEACH
AGREEMENT shall be governed by the SPONSORED RESEARCH AGREEMENT.
2.2 This
license grant is exclusive except that PENN may use and permit other not-for
profit organizations to use the PENN PATENT RIGHTS for educational and research
purposes.
2.3 COMPANY
acknowledges that pursuant to Public Laws 96-517, 97-256 and 98-620, codified
at
35 U.S.C. 200-212, the United States government retains certain rights in
intellectual property funded in whole or part under any contract, grant or
similar agreement with a Federal agency. Pursuant to these laws, the government
may impose certain requirements regarding such intellectual property, including
but not limited to the requirement that products resulting from such
intellectual property sold in the United States must be substantially
manufactured in the United States. This license grant is expressly subject
to
all applicable United States government rights as provided in the
above-mentioned laws and any regulations issued under those laws, as those
laws
or regulations may be amended from time to time.
2.4 The
right
to sublicense granted to COMPANY under this AGREEMENT is subject to the
following conditions:
2.4.1
In
each such sublicense, COMPANY must prohibit the sublicensee from further
sublicensing and require that the sublicensee is subject to the terms and
conditions of the license granted to COMPANY pursuant to Section 2.1 of this
AGREEMENT, the limitations thereon set forth in Sections 2.2 , 2.3 and 2.4
as
well as sublicensee’s compliance with Sections 3.4.4, 5.5, 5.9 and 9, and
COMPANY shall impose upon its sublicensees obligations comparable to those
obligations imposed upon COMPANY pursuant to Sections 8.2 and 8.4 of this
AGREEMENT. COMPANY may submit a written request to ▇▇▇▇ to obtain the right
to
allow a sublicensee to further sublicense on a case by case basis. Such right
to
allow a sublicensee to further sublicense PENN PATENT RIGHTS shall not be
unreasonably withheld provided that COMPANY can validate to PENN’s satisfaction
that such sublicensee has the financial and resource capabilities to develop
and
commercialize PENN PATENT RIGHTS and further, such sublicensee agrees that
any
sub-sublicense shall be subject to the terms and conditions of the license
granted to COMPANY under this AGREEMENT.
2.4.2
Within thirty (30) days after COMPANY enters into any sublicense, COMPANY shall
deliver to PENN a complete copy of the sublicense written in the English
language. PENN’s receipt of the sublicense shall not constitute an approval of
the sublicense or a waiver of any of PENN’s rights or COMPANY’s obligations
under this AGREEMENT.
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2.4.3
In
the event of a DEFAULT under Section 5.3 hereunder all payments then or
thereafter due to COMPANY from its AFFILIATES or sublicensees in connection
with
rights granted to such third party pursuant to this AGREEMENT shall upon notice
from PENN to any such AFFILIATE or sublicensee become owed directly to PENN
for
the account of COMPANY; provided however, that PENN shall remit to COMPANY
the
amount by which such payments exceed the amounts owed by COMPANY to
PENN.
2.4.4
In
the event that COMPANY enters into sublicenses, COMPANY remains primarily liable
to PENN for all of COMPANY’S duties and obligations contained in this AGREEMENT,
and any act or omission of a sublicensee which would be a breach of this
AGREEMENT if performed by COMPANY shall be deemed to be a breach by COMPANY
of
this AGREEMENT.
2.5 Promptly
after the date of execution of this AGREEMENT, PENN and COMPANY shall in good
faith negotiate the terms of, and enter into, the SPONSORED RESEARCH AGREEMENT;
provided, however, that neither PENN nor COMPANY shall be obligated to enter
into the SPONSORED RESEARCH AGREEMENT on terms that are not acceptable to such
party in all respects.
2.6 PENN
grants to COMPANY a series of exclusive options during [[*]]
following the EFFECTIVE DATE of this AGREEMENT to obtain exclusive licenses
to
new inventions on therapeutic vaccines: (1) involving the use of Listeria
vectors and/or Listeria antigen and/or PEST-containing fusion proteins in the
FIELD OF USE and (2) developed by, under the supervision of, or in collaboration
with ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇; to the extent of PENN’s ownership interest in any
resulting intellectual property and if Penn has no obligation to license or
to
license to any third party any resulting intellectual property. Each option
shall be granted at [*]
to
COMPANY by PENN, and shall extend for a period of [*]
from the
date of disclosure of such new inventions if the disclosure was made after
December 31, 2004 but before [*].
Upon
exercise of the option by COMPANY, PENN and COMPANY agree to negotiate in good
faith a comprehensive license agreement during a period not to exceed ninety
(90) days after COMPANY’s exercise of its option. Such license agreement shall
include a license initiation fee of [*],
subject
to negotiation and agreement of PENN and COMPANY, shall be substantially similar
in form to this AGREEMENT and shall include no financial terms that exceed
or
are not present in this AGREEMENT. All fees, excluding the license initiation
fee and royalty payments, shall be fully creditable against payments made by
COMPANY to PENN under this AGREEMENT. For clarity, such license agreement shall
require reimbursement of all historic and ongoing patent costs relating to
any
licensed new inventions, which patent costs are not creditable against any
other
payments of any kind. Upon the expiration of the option period, or, if later,
the negotiation period, PENN may license such new inventions to any third party
upon such terms and conditions as PENN deems appropriate.
2.7
PENN
grants to COMPANY a series of exclusive options during the [*]
years
following the EFFECTIVE DATE of this AGREEMENT to obtain exclusive licenses
to
new inventions on therapeutic vaccines: (1) involving the use of Listeria
vectors and/or Listeria antigen and/or PEST-containing fusion proteins in the
FIELD OF USE; and (2) developed by, under the supervision of, or in
collaboration with ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇; to the extent of PENN’s ownership interest
in any resulting intellectual property and if Penn has no obligation to license
or to offer to license to any third party any resulting intellectual property
Each option shall be granted at [*]
to
COMPANY by PENN, and shall extend for a period of [*]
from the
date of disclosure of such new inventions if the disclosure was made after
December 31, 2004 [*].
PENN
shall provide COMPANY an accounting of all patent prosecution activities and
expenses relating to said new inventions within a reasonable time after
disclosure of said new invention to COMPANY. Upon
exercise of option by COMPANY, PENN and COMPANY agree to negotiate in good
faith
a comprehensive license agreement during a period not to exceed ninety (90)
days
after COMPANY’s exercise of its option. Such license agreement shall include a
license initiation fee of [*],
subject
to negotiation and agreement of PENN and COMPANY, fully creditable against
license maintenance fees and shall be substantially similar in form to this
AGREEMENT, with financial terms not to exceed those in this AGREEMENT. For
clarity, such license agreement shall require reimbursement of all historic
and
ongoing patent costs relating to the licensed new inventions, which patent
costs
are not creditable against any other payments of any kind. Upon the expiration
of the option period, or, if later, the negotiation period, PENN may license
such new inventions to any third party upon such terms and conditions as PENN
deems appropriate.
Advaxis/PENNpage
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3.
FEES AND ROYALTIES
3.1 LICENSE
INITIATION FEE AND ROYALTIES
3.1.1
In
partial consideration of the exclusive license granted to COMPANY, COMPANY
shall
pay to PENN a non-refundable license initiation fee of [*]
within
thirty (30) days of the date COMPANY receives in the aggregate [*].
The
initiation fee paid to PENN pursuant to this Section shall be creditable against
license maintenance fees payable on the first anniversary of the Effective
Date
pursuant to Section 3.3.6.
3.1.2
In
further consideration of the exclusive license granted to COMPANY, COMPANY
shall
perform its obligations under that certain Stock Purchase Agreement dated April
19, 2002, between COMPANY and PENN (“STOCK
PURCHASE AGREEMENT”),
a
copy of which is attached as Attachment 4.
3.1.3. In
further consideration of the exclusive license granted to COMPANY, COMPANY
must
pay to PENN, on a quarterly basis, royalties on the annual, worldwide NET SALES
of PENN LICENSED PRODUCTS as follows:
|
[*]
on
NET SALES in the TERRITORY.
|
However,
in the event that the PENN royalty rates represent greater than [*]
of any
royalty payable to COMPANY by a sublicensee, PENN’s royalty rate shall be
reduced to [*]
of such
sublicense royalties; provided, however, that at no time will the aggregate
royalty due to PENN for any CALENDAR QUARTER be less than [*]
of
worldwide NET SALES of PENN LICENSED PRODUCTS in the TERRITORY.
Advaxis/PENNpage
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3.1.4.
Following the first commercial SALE of each PENN LICENSED PRODUCT, COMPANY
must
pay to PENN non-refundable minimum royalties in advance on the following dates
and in the corresponding amounts:
|
Date
Payment Becomes Due
|
Amount
|
|
the
first January 1st
arising after the
|
|
|
first
commercial SALE
|
[*]
|
|
the
second January 1st
arising
after
|
|
|
the
first commercial SALE
|
[*]
|
|
the
third and fourth January 1st
|
|
|
arising
after the first commercial SALE
|
[*]
|
The
obligation to pay such Minimum Royalties will not, in respect of each PENN
LICENSED PRODUCT, extend beyond January 1st
of the
[*]
year
following the first commercial sale of that PENN LICENSED PRODUCT. A minimum
royalty payment paid under this Section 3.1.4 shall serve as an advance payment
against royalties due under Section 3.1.3 during the period for which such
minimum royalty payment was paid.
3.1.5
COMPANY will pay PENN, on a quarterly basis, a percentage of any sublicense
initiation fee or any other non-royalty payments received by COMPANY from
sublicensees of PENN PATENT RIGHTS as follows:
|
If
Sublicense Becomes Effective Anytime:
|
Percent
of
Sublicense
Fees
|
|
On
or before the 1st
Anniversary of the EFFECTIVE DATE
|
[*]
|
|
After
the 1st
and on or before the 2nd
Anniversary
|
[*]
|
|
of
the EFFECTIVE DATE
|
|
|
After
the 2nd
and on or before 3rd
Anniversary
|
[*]
|
|
of
the EFFECTIVE DATE
|
|
|
After
the 3rd
and on or before the 4th
Anniversary
|
[*]
|
|
of
the EFFECTIVE DATE
|
|
|
After
the 4th
Anniversary of the EFFECTIVE DATE
|
[*]
|
Such
sublicense payments include but are not limited to: i) upfront cash payments
made to COMPANY in consideration of the sublicense, but excluding funds paid
to
COMPANY for the conduct of research and development of Licensed Products, not
to
exceed the FAIR MARKET VALUE of such services actually performed and documented
to PENN, and equity investments in COMPANY at FAIR MARKET VALUE, and excluding
equity received by COMPANY in affiliates, joint venture partners and
sublicensees; ii) “premium” over the fair market value of equity investments in
COMPANY, where “premium” is defined as the amount by which cash amounts received
by COMPANY for a particular equity security exceed the fair market value of
such
security and, notwithstanding the definition of FAIR MARKET VALUE set forth
in
Section 1.4 above, the fair market value of securities shall, for purposes
of
this Section 3.1.5(ii), be the average of the final “bid” and “ask” price of
COMPANY’s securities as of the close of business on the last business day prior
to the date such securities are transferred to COMPANY if such securities are
publicly traded or, in the event that such securities are not traded in the
public market, the fair market value, as of the date of such securities are
issued to the sublicensee, shall be established in good faith by the COMPANY
Board of Directors; and iii) the fair market value of non-cash consideration
received by COMPANY from a sublicensee (excluding equity received by COMPANY
in
sublicensee), where such fair market value, notwithstanding the definition
of
FAIR MARKET VALUE set forth in Section 1.4 above, is determined as of the date
such consideration is received by COMPANY and equals the fair market value
determined in good faith by the COMPANY Board of Directors
Advaxis/PENNpage
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3.1.6
NET
SALES of any PENN LICENSED PRODUCT shall not be subject to more than one
assessment of the scheduled royalty; such assessment shall be the highest
applicable royalty. Where any PENN LICENSED PRODUCT is the subject of a SALE
by
the COMPANY or any AFFILIATE but the COMPANY concludes in good faith that,
in
the ordinary course of business, the same PENN LICENSED PRODUCT will be the
subject of a subsequent SALE by the COMPANY or any AFFILIATE for an amount
greater than the consideration paid for the previous SALE, the COMPANY may
exclude consideration paid for the previous SALE from NET SALES until the date
arising ninety (90) days after the date of the previous SALE. If a subsequent
SALE for an amount greater than the consideration paid for the previous SALE
arises prior to such date, then the consideration paid for the previous SALE
shall be permanently excluded from NET SALES; if there is no subsequent SALE
for
an amount greater than the consideration paid for the previous SALE prior to
such date, then the consideration paid for the previous SALE shall be included
in NET SALES, but shall still be credited against any subsequent SALE of the
same PENN LICENSED PRODUCT for a higher price.
3.2 MILESTONE
PAYMENTS
The
following milestone payments are non-refundable, non-creditable, and payable
to
PENN by COMPANY as follows:
3.2.1.
In
partial consideration of the exclusive license granted to COMPANY, COMPANY
will
pay PENN the applicable milestone payment listed in the table below within
thirty (30) days after achievement of each milestone event:
|
Milestone
|
Payment
|
|
Initiation
of Phase III clinical trials for first PENN LICENSED PRODUCT in either
the
PRIMARY STRATEGIC FIELD or the SECONDARY STRATEGIC FIELD. For purposes
of
clarification, initiation of Phase III clinical trials means enrollment
of
the first subject in a Phase III clinical trial.
|
[*]
|
|
Regulatory
approval of first PENN LICENSED PRODUCT in either the PRIMARY STRATEGIC
FIELD or the SECONDARY STRATEGIC FIELD, regardless of whether that
approval is granted in the United States or elsewhere in the
TERRITORY
|
[*]
|
Advaxis/PENNpage
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3.2.2 [*]
shall be
due for first commercial SALE of the first PENN LICENSED PRODUCT in the PRIMARY
STRATEGIC FIELD. Such payment shall be payable as follows: [*]
shall be
paid within forty-five (45) days of the date of the first commercial SALE,
[*]
shall be
paid on the first Anniversary of the first commercial SALE; and [*]
shall be
paid on the second Anniversary of the date of the first commercial
SALE.
3.2.3 [*]
shall be
due and payable within forty-five (45) days following the date of the first
commercial SALE of a PENN LICENSED PRODUCT in a SECONDARY STRATEGIC FIELD;
provided,
however,
that
this fee shall only be payable once for each of the SECONDARY STRATEGIC FIELDS
in which PENN LICENSED PRODUCTS are sold.
3.3 DILIGENCE
AND MAINTENANCE FEES
3.3.1
Financial Due Diligence
3.3.1.1 COMPANY
shall, on or before November 12, 2004, raise at least [*]
in
equity financing or convertible debt from reputable investors.
3.3.2
Developmental Due Diligence.
3.3.2.1 COMPANY
will use commercially reasonable efforts to develop, commercialize, and market
PENN LICENSED PRODUCTS as soon as practical, consistent with the terms of the
DEVELOPMENT PLAN and any DEVELOPMENT PLAN PROGRESS REPORTS provided pursuant
to
Section 3.6.1 of this AGREEMENT. The DEVELOPMENT PLAN will be prepared by
COMPANY and delivered to PENN prior to the EFFECTIVE DATE.
3.3.2.2 COMPANY
agrees to commit resources (including relevant resources dedicated by
sublicensees and strategic or collaboration partners and including research
grants for ▇▇. ▇▇▇▇▇▇▇▇) during the term of this AGREEMENT to the development
and commercialization of PENN LICENSED PRODUCTS in the PRIMARY STRATEGIC FIELD
in amounts not less than the following:
|
Anniversary
of
|
Required
Diligence
|
|
EFFECTIVE
DATE
|
Expenditure
|
|
First
|
[*]
|
|
Second
|
[*]
|
|
Third
|
[*]
|
|
Fourth
|
[*]
|
|
Fifth
and thereafter
|
[*]
|
Notwithstanding
the above, COMPANY shall not be obligated to make any due diligence expenditures
at any time after the date the COMPANY first becomes obligated to pay minimum
royalties pursuant to Section 3.1.4. In the event that total expenditures for
the development and commercialization of PENN LICENSED PRODUCTS do not meet
or
exceed the amounts set forth above, COMPANY must pay to PENN the difference
between the mandated amount listed above and the actual amount expended by
COMPANY and/or its sublicensees, strategic or collaboration partner(s). Funds
invested in development in a given year that are in excess of the above amounts
shall be creditable up to [*]
against
the diligence requirements of the following year.
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3.3.2.3 SECONDARY
STRATEGIC FIELDS: By the [*]
anniversary of the EFFECTIVE DATE, COMPANY must either (i) initiate research
and
development programs for the SECONDARY STRATEGIC FIELDS of infectious disease,
allergy, and autoimmune disease, at an initial annual expense level of at least
[*]
per
field, or (ii) partner with or grant one or more third parties rights for the
commercial development of PENN LICENSED PRODUCTS in one or more of such
SECONDARY STRATEGIC FIELDS.
3.3.2.4 In
the
event COMPANY develops PENN LICENSED PRODUCTS in any SECONDARY STRATEGIC FIELDS
pursuant to Section 3.3.2.3, part (i), the parties will negotiate in good faith
due diligence requirements for subsequent years for such SECONDARY STRATEGIC
FIELD under development at that time. If COMPANY fails to complete either part
(i) or (ii) as described in Section 3.3.2.3 above for such SECONDARY STRATEGIC
FIELD(S) by the [*]
anniversary of the EFFECTIVE DATE, COMPANY will forfeit all rights for
development of commercial products in such SECONDARY STRATEGIC FIELDS, and
rights will return to PENN for such SECONDARY STRATEGIC FIELD(S). ▇▇▇▇ will
thereafter be free to enter into agreements for such forfeited rights with
any
third party for commercial development in the respective SECONDARY STRATEGIC
FIELD(S).
3.3.3
Maintenance
Fees. COMPANY
must pay to PENN annual license maintenance fees, according to the following
schedule, on the Due Date:
|
Due
Date
|
Amounts
Due
|
|
12/31/08
|
[*]
|
|
12/31/09
|
[*]
|
|
12/31/10
|
[*]
|
|
12/31/11
|
[*]
|
|
12/31/12
and each December 31st
thereafter for the remainder of the term of the AGREEMENT
|
[*]
|
provided,
however, that such fees shall not be payable on any Due Date which arises at
any
time after the first commercial SALE of a PENN LICENSED PRODUCT.
3.4 REPORTS
AND RECORDS
3.4.1 On
each
December 1 arising during the term of this AGREEMENT, COMPANY must provide
PENN
with written progress reports (each a “DEVELOPMENT PLAN PROGRESS REPORT”),
setting forth COMPANY’S progress regarding its efforts to develop and
commercialize PENN LICENSED PRODUCTS, including activities of AFFILIATES and
sublicensees, for the preceding year. COMPANY shall also notify PENN within
thirty (30) days of the first commercial SALE by the COMPANY, an AFFILIATE,
or
any sublicensee of each PENN LICENSED PRODUCT. Each DEVELOPMENT PLAN PROGRESS
REPORT shall include, without limitation:
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3.4.1.1 The
date
of the DEVELOPMENT PLAN PROGRESS REPORT and the time covered by such
report.
3.4.1.2 Major
activities and accomplishments completed by COMPANY, any AFFILIATE or any
sublicensee since the last DEVELOPMENT PLAN PROGRESS REPORT.
3.4.1.3
Significant research and development projects currently being performed by
COMPANY, any AFFILIATE, or any sublicensee and projected dates of
completion.
3.4.1.4
Future development activities expected to be undertaken by COMPANY, any
AFFILIATE, or any sublicensee during the next reporting period.
3.4.1.5
Current development stage (e.g., pre-clinical, Phase I, Phase II or Phase III)
of each PENN LICENSED PRODUCT and targeted date of NDA or BLA approval, if
any.
3.4.1.6
Significant changes to the DEVELOPMENT PLAN, including the reasons for the
changes.
3.4.1.7
Summary of development efforts related to PENN PATENT RIGHTS being performed
by
third parties including the nature of the relationship between the
COMPANY
and such third parties.
3.4.2 COMPANY
must deliver to PENN within forty-five (45) days after the end of each CALENDAR
QUARTER a report, certified by the chief financial officer of COMPANY, setting
forth the calculation of the royalties due to PENN for such CALENDAR QUARTER,
including, without limitation:
3.4.2.1 Number
of
PENN LICENSED PRODUCTS involved in SALES, listed by country.
3.4.2.2 Gross
consideration for SALES of PENN LICENSED PRODUCTS, including all amounts
invoiced, billed, or received.
3.4.2.3 Qualifying
costs, as defined in Section 1.5, listed by category of cost.
3.4.2.4 NET
SALES
of PENN LICENSED PRODUCTS listed by country.
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3.4.2.5 Royalties
owed to PENN, listed by category, including without limitation earned,
sublicensee-derived, and minimum royalty categories.
3.4.2.6 Earned
royalty amounts credited against minimum royalty payments.
3.4.3 COMPANY
must pay the royalties due under Sections 3.1 and 3.3 within forty-five (45)
days following the last day of the CALENDAR QUARTER in which the royalties
accrue. COMPANY must send with the royalties the report described in Section
3.4.1.
3.4.4 COMPANY
must maintain and cause its AFFILIATES and any sublicensees to maintain,
complete and accurate books and records which enable the royalties, fees, and
payments payable under this AGREEMENT to be verified. The records for each
CALENDAR QUARTER must be maintained for five (5) years after the submission
of
each report provided pursuant to Section 3.4.2. Upon reasonable prior notice
to
COMPANY, COMPANY must provide an independent auditor appointed by PENN and
reasonably acceptable to COMPANY with access to all books and records relating
to the SALES of PENN LICENSED PRODUCTS by COMPANY and its AFFILIATES or any
sublicensees in order to conduct a review or audit of those books and records.
Access to these books and records pertaining to NET SALES must be made available
following the date of the first product sale and then no more than once every
three (3) years following each audit during the term of this AGREEMENT, during
normal business hours, and on two (2) occasions during the three (3) year period
immediately following expiration or termination of this AGREEMENT. If a review
or audit of the books of COMPANY determines that COMPANY has underpaid royalties
by [*],
COMPANY
must reimburse to PENN its actual out-of-pocket costs of employing its auditors
in connection with such review or audit. Notwithstanding the foregoing, COMPANY
agrees to conduct, at its expense, an independent audit of SALES and royalties
at least every five (5) years once annual SALES of a PENN LICENSED PRODUCT
are
greater than [*].
The
audit shall address, at a minimum, the amount of gross sales by or on behalf
of
COMPANY during the audit period, the amount of funds owed to PENN under this
AGREEMENT, and whether the amount owed has been paid to PENN and is reflected
in
the records of the COMPANY. A report by the auditors shall be submitted promptly
to PENN upon completion along with payment of all amounts
outstanding.
3.4.5 COMPANY
shall provide to PENN,
at
least as frequently as they are distributed to the Board of Directors and/or
management of COMPANY, copies of: all Board and managerial reports that relate
to the PENN
PATENT RIGHTS
and
PENN
LICENSED PRODUCTS;
and all
business plans, projections and financial statements that are distributed to
the
Board of Directors and/or management.
▇.▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, INTEREST, PAYMENT OF EXPENSES
3.5.1 All
dollar amounts referred to in this AGREEMENT are expressed in United States
dollars. All payments to PENN under this AGREEMENT must be made in United States
dollars by check payable to “The Trustees of the University of Pennsylvania” and
sent to the following address:
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The
Trustees of the University of Pennsylvania
[*]
[*]
[*]
For
electronic transfer, all payments should be sent to the following
address:
[*]
[*]
[*]
[*]
3.5.2 If
COMPANY receives revenues from SALES of PENN LICENSED PRODUCTS in currency
other
than United States dollars, such revenues shall, for purposes of calculating
NET
SALES, be converted into United States dollars at the conversion rate for the
foreign currency as published in the eastern edition of The Wall Street Journal
as of the last business day of the CALENDAR QUARTER in which such NET SALES
were
accrued.
3.5.3 Any
amounts that become due after the execution date of this AGREEMENT that are
not
paid when due, including, but not limited to, royalties, reimbursement of patent
fees, milestone payments, etc., shall accrue interest from the due date until
paid, at a rate equal to [*]
per
month (or the maximum allowed by law, if less).
4.
CONFIDENTIALITY
4.1 CONFIDENTIAL
INFORMATION means and includes all technical information, inventions,
developments, discoveries, software, know-how, methods, techniques, formulae,
data, processes and other proprietary ideas, whether or not patentable or
copyrightable, that ▇▇▇▇ identifies as confidential or proprietary at the time
it is delivered or communicated to COMPANY.
4.2
COMPANY agrees to maintain in confidence and not to disclose to any third party
any CONFIDENTIAL INFORMATION of PENN. COMPANY agrees to ensure that its
employees have access to CONFIDENTIAL INFORMATION only on a need-to-know basis
and are obligated in writing to abide by COMPANY’s obligations under this
AGREEMENT. The foregoing obligation shall not apply to:
4.2.1
information that is known to COMPANY or independently developed by COMPANY
prior
to the time of disclosure, in each case, to the extent evidenced by written
records promptly disclosed to PENN upon receipt of the CONFIDENTIAL
INFORMATION;
4.2.2
information disclosed to COMPANY by a third party that has a right to make
such
disclosure;
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4.2.3
information that becomes patented, published or otherwise part of the public
domain as a result of acts by ▇▇▇▇ or a third person obtaining such information
as a matter of right; or
4.2.4 information
that is required to be disclosed by order of United States governmental
authority or a court of competent jurisdiction; provided that COMPANY must
use
best efforts to obtain confidential treatment of such information by the agency
or court.
4.2.5 information
disclosed by COMPANY to a third party under the normal course of business,
provided that COMPANY discloses such information under confidentiality
agreements that are substantially in the form of Attachment 6 or such other
form
as PENN may from time-to-time approve.
4.3 PENN
shall not be obligated to accept any confidential information from COMPANY.
PENN
shall use best efforts not to disclose confidential information of COMPANY
that
is received by PENN’s Center for Technology Transfer from COMPANY to any third
party (subject to the exceptions analogous to those in Section 4.2). PENN bears
no institutional responsibility for maintaining the confidentiality of any
CONFIDENTIAL INFORMATION other than (i) reports provided pursuant to Sections
3.4.1. and 3.4.2 and (ii) any information disclosed to PENN’s auditor pursuant
to Section 3.4.4.
4.4 PENN
acknowledges that COMPANY is free to enter into confidentiality agreements
with
any faculty members or other employees or students of PENN provided such
agreements are acceptable to the relevant faculty members, employees or students
and are substantially in the form of Attachment 6 or such other form as PENN
may
from time-to-time approve.
5.
TERM AND TERMINATION
5.1 This
AGREEMENT, unless sooner terminated as provided in this AGREEMENT, terminates
upon the expiration of the last to expire or become abandoned of the PENN PATENT
RIGHTS.
5.2 COMPANY
may, upon sixty (60) days written notice to PENN, terminate this AGREEMENT
by
doing all of the following:
5.2.1
ceasing to make, have made, use, import, sell and offer for sale all PENN
LICENSED PRODUCTS; and
5.2.2
terminating all sublicenses, and causing all AFFILIATES and sublicensees to
cease making, having made, using, importing, selling and offering for sale
all
PENN LICENSED PRODUCTS; and
5.2.3
paying all monies owed to PENN under this AGREEMENT and the SPONSORED RESEARCH
AGREEMENT, if any.
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5.3 PENN
may
terminate this AGREEMENT if any of the following events of default (“DEFAULT”)
occur:
5.3.1
COMPANY is late in paying to PENN royalties, expenses, or any other monies
due
under this AGREEMENT and COMPANY does not pay PENN in full within ten (10)
days
of written demand for such payment (a “Payment Default”); or
5.3.2
COMPANY, experiences a Trigger Event (as defined below); or
5.3.3
COMPANY, or any authorized AFFILIATE is in material breach of this AGREEMENT,
other than a Payment Default, and such breach is not cured within sixty (60)
days after written notice of the breach is provided to COMPANY.
5.4
Trigger
Event means any of the following:
|
5.4.1
|
If
COMPANY,
|
5.4.1.1
becomes insolvent, bankrupt or generally fails to pay its debts as such debts
become due;
5.4.1.2
is adjudicated insolvent or bankrupt; admits in writing its inability to pay
its
debts; or shall suffer a custodian, receiver or trustee for it or substantially
all of its property to be appointed and, if appointed without its consent,
not
be discharged within thirty (30) days; or
5.4.1.3
makes an assignment for the benefit of creditors; or suffers proceedings under
any law related to bankruptcy, insolvency, liquidation or the reorganization,
readjustment or the release of debtors to be instituted against it and, if
contested by it, not dismissed or stayed within ten (10) days;
5.4.1.4 commences
any action against PENN, including an action for declaratory judgment, to
declare or render invalid or unenforceable the PENN LICENSED PATENTS or any
claim thereof;
5.4.2 If
proceedings under any law related to bankruptcy, insolvency, liquidation, or
the
reorganization, readjustment or the release of debtors are instituted or
commenced by COMPANY;
5.4.3 If
any
order for relief is entered relating to any of the proceedings described in
Sections 5.4.1 or 5.4.2;
5.4.4 If
COMPANY shall call a meeting of its creditors with a view to arranging a
composition or adjustment of its debts;
5.4.5 If
any
sublicensee experiences an event comparable to a TRIGGER EVENT or is in material
breach of its sublicense and fails to cure such material breach within sixty
(60) days of COMPANY’s written notice thereof, and (i) such sublicensee is
either (x) responsible for a material amount of NET SALES or (y) primarily
responsible for research and/or development activities relating to any
contemplated PENN LICENSED PRODUCT described in the DEVELOPMENT PLAN and
anticipated to result in commercial SALES having a positive material effect
on
NET SALES, and (ii) COMPANY fails to use commercially reasonable efforts to
exercise its termination rights under the relevant sublicense;
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5.4.6 If
any
AFFILIATE experiences an event comparable to a TRIGGER EVENT and (i) such
AFFILIATE is either (x) responsible for a material amount of NET SALES or (y)
primarily responsible for research and/or development activities relating to
any
contemplated PENN LICENSED PRODUCT described in the DEVELOPMENT PLAN and
anticipated to result in commercial SALES having a positive material effect
on
NET SALES, and (ii) COMPANY fails to use commercially reasonable efforts to
exercise its termination rights under any applicable agreements between COMPANY
and such AFFILIATE implicating the rights granted to COMPANY under this
AGREEMENT or otherwise deprive such AFFILIATE of any responsibility for the
development or commercialization of PENN LICENSED PRODUCTS; or
5.4.7 If,
without ▇▇▇▇’s express prior written consent, COMPANY grants a sublicense to or
otherwise subsequently conducts material business implicating COMPANY’s rights,
duties and obligations under this AGREEMENT with, any AFFILIATE or sublicensee
whose agreement or commercial relationship with COMPANY was previously
terminated by COMPANY as contemplated in Sections 5.4.5 or 5.4.6 above.
5.5 In
the
event of a termination under Section 5.3 above, all duties of PENN and all
rights (but not duties) of COMPANY under this AGREEMENT immediately terminate
without the necessity of any action being taken either by PENN or by COMPANY.
Upon and after any termination of this AGREEMENT, COMPANY, any AFFILIATE, and
any sublicensee shall refrain from further manufacture, sale, marketing,
importation and/or distribution of PENN
LICENSED PRODUCT(s).
If,
upon a termination of this AGREEMENT by PENN, a sublicensee is not in breach
of
its sublicense agreement and did not cause the Trigger Event, then PENN shall
agree to negotiate in good faith with sublicensee a license agreement having
commercially reasonable terms.
5.6 Upon
termination of this AGREEMENT, COMPANY must, at ▇▇▇▇’s request, deliver to PENN
all CONFIDENTIAL INFORMATION in respect of which COMPANY is RECIPIENT together
with one copy of any data generated by COMPANY during the term of this AGREEMENT
which will facilitate the further development of the technology licensed to
COMPANY hereunder and which is related directly to the PENN PATENT RIGHTS or
the
design, manufacture, use, marketing, product development, and/or testing of
PENN
LICENSED PRODUCTS (the “NEW COMPANY DATA”). Upon termination of this AGREEMENT,
COMPANY agrees to negotiate in good faith a license granting to potential
licensees identified by PENN rights in the NEW COMPANY DATA on commercially
reasonable terms.
5.7 COMPANY’s
obligation to pay all monies owed but not yet paid under this AGREEMENT shall
survive termination of this AGREEMENT. In addition, the provisions of Sections
3.4.2, 3.4.3, 3.4.4 and 3.5, Articles 4 - Confidentiality, Article 5 - Term
and
Termination, Article 8 - Disclaimer of Warranties; Indemnification, Article
9 -
Use of PENN’s Name; and Article 10 - Additional Provisions shall survive such
termination in accordance with their respective terms.
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5.8 Upon
termination of this AGREEMENT, COMPANY shall cause physical inventories to
be
taken immediately of: (a) all completed PENN
LICENSED PRODUCT(s)
on
hand under the control of COMPANY, any AFFILIATES, or any sublicensees; and
(b)
such PENN
LICENSED PRODUCT(s)
as
are in the process of manufacture and component parts thereof as of the date
of
termination of this AGREEMENT, which inventories shall be reduced to writing.
COMPANY shall deliver copies of such written inventories, verified by an officer
of COMPANY forthwith to PENN.
PENN
shall
have forty-five (45) days after receipt of such verified inventories within
which to challenge the inventory and request an audit. Upon five (5) days
written notice to COMPANY, PENN
and its
agents shall be given access during business hours to the premises of COMPANY
and/or AFFILIATES or sublicensees for the purpose of conducting an audit. Upon
the termination of this AGREEMENT, COMPANY shall, at its own expense forthwith
remove and promptly upon PENN’s request, efface or destroy all references to
PENN
from all
advertising or other materials used in the promotion of COMPANY’s business or
the business of any AFFILIATE or sublicensee and COMPANY, its AFFILIATES, and
any sublicensee shall not thereafter represent in any manner that it has rights
in or to the PENN
PATENT RIGHTS
or
PENN
LICENSED PRODUCT(s).
5.9 Notwithstanding
the foregoing, if this AGREEMENT terminates other than pursuant to Section
5.4.1
or 5.4.2, COMPANY shall have a period of six (6) months to sell off its
inventory of PENN
LICENSED PRODUCT(s)
existing on the date of termination of this AGREEMENT and shall pay royalties
to
PENN
with
respect to such PENN
LICENSED PRODUCT(s)
within thirty (30) days following the expiration of such six-month
period.
6.
PATENT MAINTENANCE AND REIMBURSEMENT
6.1 Subject
to this Article 6, PENN controls the prosecution and maintenance of PENN PATENT
RIGHTS. COMPANY must reimburse PENN for all documented attorneys fees, expenses,
official fees and other charges incurred on or after the Execution of this
Agreement and incident to the preparation, prosecution maintenance and licensing
of PENN PATENT RIGHTS. Reimbursements shall be paid within thirty (30) days
after COMPANY’S receipt of invoices for such fees, expenses and
charges.
For
purposes of this Article 6, the word “maintenance” includes any interference
negotiations, claims, or proceedings, in any forum, brought by Penn, Company,
a
third party, or the United States Patent and Trademark Office, and any requests
by Penn or Company that the United States Patent and Trademark Office reexamine
or reissue any patent in the Penn Patent Rights. Penn
reserves the right to require the Company to provide a deposit in advance of
incurring out of pocket patent expenses estimated by counsel to exceed $2,500.
If Company fails to reimburse patent expenses under this Paragraph 6.1, or
provide a requested deposit with respect to a Penn Patent Right, then ▇▇▇▇
will
be free at its discretion and expense to either abandon such applications or
patents related to such Penn Patent Right or to continue such preparation,
prosecution and/or maintenance activities, and any patent rights associated
with
such patent action will be automatically excluded from the term “Penn Patent
Rights” hereunder, on a patent by patent or country by country basis, as
applicable.
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6.2 At
or
prior to the Execution of this Agreement, PENN will provide COMPANY a listing
of
monies owed for all historically accrued patent and licensing expenses,
attorneys fees, official fees and all other charges incident to the preparation,
prosecution and maintenance of the PENN PATENT RIGHTS that were incurred and
docketed by ▇▇▇▇ on or before the Execution date (the “Historic Patent
Expenses”). Such reimbursement is currently due and owing, but the payment terms
are hereby extended as follows. Effective ______________ and until paid in
full,
Company will pay interest at a rate equal to one and one-half percent
[*]
per
month, or fraction thereof (or the maximum allowed by law, if less), on the
unpaid balance of the Historic Patent Expenses. Payments will be applied first
to accrued but unpaid interest until paid in full, with any remainder applied
to
the outstanding balance of Historic Patent Expenses. Upon the execution of
this
Agreement,
COMPANY
shall reimburse PENN no less than [*]
of
the
Historic
Patent Expenses. COMPANY shall reimburse a minimum of [*]
of
the
Historic
Patent Expenses (and accrued interest) within ninety [*]
days
after execution of this Agreement, another [*]
of
the
Historic
Patent Expenses (and accrued interest) [*]
after
execution of this Agreement and the remaining balance of
the
Historic
Patent Expenses (and accrued interest) paid in full within [*]
days
after execution of this Agreement, except that Company shall make minimum
payments toward Historic Patent Expenses and accrued interest in an amount
equal
to a minimum of [*],
upon
receipt of such proceeds. Notwithstanding anything herein to the contrary,
Company shall pay the entire remaining balance of Historic Patent Expenses,
including accrued interest, in
full
on or before [*].
In the
event that COMPANY fails to make timely payment, the interest on any outstanding
balance shall be increased to [*]
per
month, calculated from the original due date, until the balance is paid in
full.
The parties acknowledge that the PENN PATENT RIGHTS are being prosecuted in
the
United States and non-US jurisdictions and that US patent counsel works with
foreign correspondents in each of these jurisdictions. This routinely causes
delays in receipt of invoices, over which ▇▇▇▇ has no control. Regardless when
received by PENN and/or forwarded to and/or received by COMPANY, COMPANY will
remain liable for all fees, costs and expenses related to prosecution of the
PENN PATENT RIGHTS for services performed, fees filed or incurred prior to
termination of this Agreement.
6.3 Notwithstanding
Section 6.1, COMPANY may select an attorney to prosecute the PENN PATENT RIGHTS
with ▇▇▇▇’s approval, which shall not be unreasonably withheld. In that event,
during the term of any such CLIENT AND BILLING AGREEMENT, PENN shall be the
client of the attorney, and COMPANY may directly manage the prosecution of
the
PENN PATENT RIGHTS through a fully executed CLIENT AND BILLING AGREEMENT.
COMPANY shall bear all costs of ongoing prosecution of the PENN PATENT RIGHTS.
PENN shall be copied on all correspondence related to the prosecution of the
PENN PATENT RIGHTS between COMPANY and the selected attorney, and retains the
right to advise COMPANY (and to direct patent counsel) regarding patent
prosecution. PENN and COMPANY shall in good faith cooperate to implement the
prosecution and maintenance of PENN PATENT RIGHTS in accordance with the CLIENT
AND BILLING AGREEMENT and COMPANY must promptly pay for all ongoing attorneys
fees, expenses, official fees and all other charges incident to the preparation,
prosecution and maintenance of the PENN PATENT RIGHTS after the execution of
this AGREEMENT in accordance with such CLIENT AND BILLING AGREEMENT. The parties
anticipate entering into a Client and Billing Agreement with patent counsel
upon
execution of this Agreement. However, in the absence of or upon termination
of a
CLIENT AND BILLING AGREEMENT for any reason, the provisions of 6.1 will
apply.
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6.4 COMPANY
hereby covenants and agrees that it shall in good faith prosecute PENN PATENT
RIGHTS in all countries set forth in Attachment 7 (the “REQUIRED TERRITORIES”);
provided, however, that COMPANY will have the right to refuse to pay for any
proposed expenditure related to the filing, prosecution, and maintenance of
PENN
PATENT RIGHTS in the REQUIRED TERRITORIES so long as reasonable notice of such
refusal is provided to PENN to allow PENN to pay such expenditures; If COMPANY
refuses such expenditures under the CLIENT AND BILLING AGREEMENT, or does not
reimburse PENN for expenses related to PENN PATENT RIGHTS, COMPANY’S rights in
the relevant PENN PATENT RIGHTS granted under Section 2.1 of this AGREEMENT
shall thereafter terminate on a patent-by-patent basis. Thereafter, (i) PENN
will be free, at its discretion and expense, to either abandon such applications
or patents or to continue such preparation, prosecution and/or maintenance
activities; and (ii) PENN may license such PENN PATENT RIGHTS to any third
party
upon such terms and conditions as PENN deems appropriate.
6.5 If
COMPANY should desire to abandon any of the PENN PATENT RIGHTS (whether an
already issued patent or an application therefor) in any countries other than
those countries in the REQUIRED TERRITORIES, COMPANY shall give PENN at least
[*]
days
advance written notice of its intention and, upon the written request of the
PENN within said [*]
days,
shall alternatively consent to termination of the license granted pursuant
to
Section 2.1 in respect only of those PENN PATENT RIGHTS COMPANY desires to
abandon. Upon such limited termination of the license, the other provisions
of
this AGREEMENT shall be deemed terminated with regard to such PENN PATENT RIGHTS
only and COMPANY shall have no further rights or obligations in respect of
the
same or subsequently accrued proceeds thereof; provided, however, that (i)
PENN
covenants that it shall not assert such PENN PATENT RIGHTS (whether by way
of
infringement or otherwise) against COMPANY, or any AFFILIATES or sub-licensees
of the PENN PATENT RIGHTS without COMPANY’s express prior written consent; and
(ii) if any third parties continue to hold rights in such PENN PATENT RIGHTS
under any license or other binding agreement previously entered into by or
under
the authority of COMPANY, its AFFILIATES or sublicensees, then both of COMPANY’s
and PENN’s rights and obligations under this AGREEMENT and in respect of
proceeds from such third party agreements shall survive such termination, but
PENN shall be under no obligation to COMPANY or any third parties to file,
prosecute, maintain, defend or enforce PENN PATENT RIGHTS in respect of which
the license has been terminated pursuant to this Section 6.5.
6.6 Nothing
in Sections 6.4 or 6.5 above shall prevent COMPANY from abandoning or
surrendering any of the PENN PATENT RIGHTS, or from canceling or amending any
claim of any of the PENN PATENT RIGHTS, without giving rise to any rights under
Sections 6.4 or 6.5, provided that such abandonment, surrender, cancellation
or
amendment is, in COMPANY’s sole reasonable discretion, necessary or appropriate
in the ordinary course of the prosecution, maintenance and enforcement of the
PENN PATENT RIGHTS. For the purposes of Sections 6.4 and 6.5, COMPANY’s election
not to pursue applications for patents or other rights in respect of the PENN
PATENT RIGHTS in any countries, territories and regions in which, or in
accordance with any treaties, conventions or other multi-national agreements
under which, any applications for patents or other rights in respect of the
PENN
PATENT RIGHTS could in good faith lawfully be applied for or otherwise
prosecuted, shall not constitute or be construed to constitute abandonment
of
any PENN PATENT RIGHTS.
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6.7 COMPANY
may at its sole discretion (i) apply for and obtain such extension, term
restoration or comparable addition to the life of the affected PENN PATENT
RIGHTS and (ii) apply for and obtain such supplemental protection certificates
for the approved product or process covered by the PENN PATENT RIGHTS, all
to
the extent the same are available pursuant to the applicable laws and
regulations of the jurisdiction where such regulatory approval is given. Nothing
herein shall be construed to obligate COMPANY to in fact seek extension or
restoration of any PENN PATENT RIGHTS or supplemental protection for any PENN
LICENSED PRODUCTS. Where COMPANY applies for and obtains supplemental protection
or comparable treatment for any PENN LICENSED PRODUCT, then, subject to
continued payment by COMPANY of its royalty obligations under this AGREEMENT,
this AGREEMENT shall not expire pursuant to Section 5.1(a) prior to the date
of
termination of such supplemental protection or comparable
treatment.
6.8 Notwithstanding
the other provisions of this Article 6, COMPANY shall in good ▇▇▇▇▇ ▇▇▇▇▇▇
with,
and regularly keep PENN apprised of, its patent prosecution, maintenance,
enforcement and defense strategy and plans and shall in good faith consider
▇▇▇▇’s comments regarding such strategy and plans including, without limitation,
the following:
6.8.1 Providing
to PENN, promptly upon PENN’s request, copies of any office actions or proposed
responses to office actions affecting PENN PATENT RIGHTS.
6.8.2 Providing
to PENN, promptly upon PENN’s request, copies of any written communications
alleging infringement of, or responding to allegations of infringement of,
the
PENN PATENT RIGHTS by third parties and any pleadings, motions, briefs or other
substantive papers filed by COMPANY or any third parties or proposed to be
filed
by COMPANY, in connection with any litigation, arbitration or regulatory
proceedings (including interference and opposition proceedings).
7.
INFRINGEMENT AND LITIGATION
7.1 PENN
and
COMPANY are responsible for notifying each other promptly of any infringement
of
PENN PATENT RIGHTS which may come to their attention. PENN and COMPANY shall
consult one another in a timely manner concerning any appropriate response
to
the infringement.
7.2 COMPANY
may prosecute such infringement at its own expense. COMPANY must not settle
or
compromise any such suit in a manner that imposes any obligations or
restrictions on PENN or grants any rights to the or the PENN PATENT RIGHTS,
without ▇▇▇▇’s prior written permission. Financial recoveries from any such
litigation will first be applied to reimburse COMPANY for its litigation
expenditures with additional recoveries being paid to COMPANY, subject to a
royalty due PENN based on the provisions of Article 3.
7.3
(a) Voluntary
Intervention.
▇▇▇▇ reserves the right to voluntarily intervene at ▇▇▇▇’s expense and join
COMPANY in any litigation under Section 7.2. If PENN voluntarily elects to
participate in any such litigation, then financial recoveries from any such
litigation will be shared between COMPANY and PENN as follows: (1) on a
pro rata basis in proportion with their respective shares of the aggregate
Litigation Expenditures by COMPANY and PENN, until the party that spent a lower
amount on its Litigation Expenditures has recovered all of its Litigation
Expenditures; then (2) any amounts remaining shall be paid to the other party
to
this Agreement, until that party has recovered all of its Litigation
Expenditures; and then (3) [*]
of any
amount remaining would be paid to PENN, and [*]
of any
amount remaining would be paid to COMPANY, regardless of respective Litigation
Expenditures.
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For purposes of this Agreement, “Litigation Expenditures” shall be defined
as: reasonable attorneys’ fees, court costs, local counsel fees,
deposition costs, subpoena costs, court reporter costs, expert fees, and other
reasonable expenses directly incurred for investigation or litigation of
claims.
(b) Involuntary
Participation.
If PENN is required to participate involuntarily in any litigation referred
to
under Section 7.3, (such as, for example, but not limited to, being joined
or
named as a defendant, necessary party, involuntary plaintiff, or indispensable
party), then (i) COMPANY will reimburse PENN’s Litigation Expenditures on an
ongoing basis, within 30 days of submission of actual invoices; and (ii)
financial recoveries from any such litigation will be shared between COMPANY
and
PENN as follows: (1) COMPANY will be reimbursed for all Litigation
Expenditures of COMPANY and Litigation Expenses reimbursed by COMPANY to PENN;
then (2) twenty percent (20%) of any amount remaining would be paid to PENN,
and
eighty percent (80%) of any amount remaining would be paid to COMPANY,
regardless of respective Litigation Expenditures.
7.4 Subject
to COMPANY’S obligations under Section 7.2 above, COMPANY shall be free to
determine at its sole discretion when, if at all, and how to assert and
prosecute infringement claims relating to PENN PATENT RIGHTS where such
determinations are based upon bona
fide
strategic issues such as COMPANY’S concerns regarding challenges to the validity
of the PENN PATENT RIGHTS. If COMPANY elects at its sole discretion not to
prosecute or otherwise ▇▇▇▇▇ any infringement for non-strategic reasons, COMPANY
shall so notify PENN. If COMPANY does not prosecute infringement for any reason,
PENN may in its sole discretion prosecute such infringement at its own expense.
In such event, financial recoveries will be entirely retained by
PENN.
7.5 Cooperation.
In any action to enforce any of the PENN PATENT RIGHTS, either party, at the
request and expense of the other party shall cooperate to the fullest extent
reasonably possible. This provision shall not be construed to require either
party to voluntarily join or intervene in any litigation, or to undertake any
activities, including legal discovery, at the request of any third party except
as may be required by lawful process of a court of competent
jurisdiction.
8.
DISCLAIMER OF WARRANTIES; INDEMNIFICATION
8.1 THE
PENN
PATENT RIGHTS, PENN LICENSED PRODUCTS AND ALL OTHER TECHNOLOGY LICENSED UNDER
THIS AGREEMENT ARE PROVIDED ON AN “AS IS” BASIS AND PENN MAKES NO
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT THERETO. BY
WAY
OF EXAMPLE BUT NOT OF LIMITATION, PENN MAKES NO REPRESENTATIONS OR WARRANTIES
(i) OF COMMERCIAL UTILITY; (ii) OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE; OR (iii) THAT THE USE OF THE PENN PATENT RIGHTS, PENN LICENSED PRODUCTS
AND ALL TECHNOLOGY LICENSED UNDER THIS AGREEMENT WILL NOT INFRINGE ANY PATENT,
COPYRIGHT OR TRADEMARK OR OTHER PROPRIETARY RIGHTS OF OTHERS. PENN SHALL NOT
BE
LIABLE TO COMPANY, COMPANY’S SUCCESSORS OR ASSIGNS OR ANY THIRD PARTY WITH
RESPECT TO: ANY CLAIM ARISING FROM COMPANY’S USE OF THE PENN PATENT RIGHTS, PENN
LICENSED PRODUCTS AND ALL TECHNOLOGY LICENSED UNDER THIS AGREEMENT OR FROM
THE
MANUFACTURE, USE OR SALE OF PENN LICENSED PRODUCTS. NEITHER PARTY SHALL BE
LIABLE TO THE OTHER FOR ANY CLAIM FOR LOSS OF PROFITS, LOSS OR INTERRUPTION
OF
BUSINESS, OR FOR INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES OF ANY KIND
REGARDLESS OF THE CAUSE OF ACTION OR THEORY OF LIABILITY UPON WHICH SUCH CLAIM
IS BASED, AND WHETHER OR NOT THE PARTY AGAINST WHOM SUCH CLAIM IS MADE WAS
AWARE
OF THE POSSIBILITY OF SUCH DAMAGES.
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8.2 COMPANY
must defend, indemnify and hold harmless PENN, its trustees, officers, agents
and employees (individually, an “Indemnified Party”, and collectively, the
“Indemnified Parties”), from and against any and all liability, loss, damage,
action, claim or expense suffered or incurred by the Indemnified Parties
(including attorney’s fees) (individually, a “Liability”, and collectively, the
“Liabilities”) that results from or arises out of third-party claims made in
connection with: (a) the development, use, manufacture, promotion, sale or
other
disposition of any PENN PATENT RIGHTS or PENN LICENSED PRODUCTS by COMPANY,
its
assignees, AFFILIATES, sublicensees, vendors or other third parties; (b) any
breach by COMPANY of this AGREEMENT, as well as any Liabilities resulting from
the enforcement by an Indemnified Party of this Section. Without limiting the
foregoing, COMPANY must defend, indemnify and hold harmless the Indemnified
Parties from and against any Liabilities resulting from:
8.2.1
any
product liability or other claim of any kind made by a third party and related
to the use by a third party of a PENN LICENSED PRODUCT that was manufactured,
sold or otherwise disposed by COMPANY, its assignees, AFFILIATES, sublicensees,
vendors or other third parties;
8.2.2
a
claim by a third party that the PENN PATENT RIGHTS or the design, composition,
manufacture, use, sale or other disposition of any PENN LICENSED PRODUCT
infringes or violates any patent, copyright, trademark or other intellectual
property rights of such third party; and
8.2.3
claims made by third parties (including governmental agencies) in connection
with clinical trials or studies conducted by or on behalf of COMPANY relating
to
the PENN PATENT RIGHTS or PENN LICENSED PRODUCTS, including, without limitation,
any claim by or on behalf of a human subject of any such clinical trial or
study.
8.3 COMPANY
is not permitted to settle or compromise any claim or action giving rise to
Liabilities in a manner that imposes any restrictions or obligations on PENN
or
grants any rights to the PENN PATENT RIGHTS or PENN LICENSED PRODUCTS without
PENN’s prior written consent. If COMPANY fails or declines to assume the defense
of any such claim or action within thirty (30) days after notice thereof, ▇▇▇▇
may assume the defense of such claim or action for the account and at the risk
of COMPANY for indemnification, and any Liabilities related thereto shall be
conclusively deemed a liability of the party responsible for indemnification.
The indemnification rights of PENN or any other Indemnified Parties are in
addition to all other rights which such Indemnified Party may have at law or
in
equity or otherwise.
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8.4 INSURANCE
8.4.1
Within ninety (90) days of the EFFECTIVE DATE of this AGREEMENT, COMPANY must
procure and maintain a policy or policies of comprehensive general liability
insurance, including broad form and contractual liability, in a minimum amount
of $2,000,000 combined single limit per occurrence and in the aggregate as
respects personal injury, bodily injury and property damage arising out of
COMPANY’s performance under this AGREEMENT.
8.4.2
COMPANY must, upon commencement of clinical trials involving PENN LICENSED
PRODUCTS, procure and maintain a policy or policies of product liability
insurance in a minimum amount of $3,000,000 combined single limit per occurrence
and in the aggregate as respects bodily injury and property damage arising
out
of COMPANY’s performance under this AGREEMENT.
8.4.3
The
policy or policies of insurance described in this Section 8.4 must be issued
by
an insurance carrier with an AM Best rating of “A” or better and must name PENN
as an additional insured with respect to COMPANY’s performance of this
AGREEMENT. COMPANY must provide PENN within thirty (30) days of the EFFECTIVE
DATE with certificates evidencing the insurance coverage required herein. Such
certificates must provide that COMPANY’s insurance carrier(s) notify PENN in
writing at least thirty (30) days prior to cancellation or material change
in
coverage.
8.4.4
PENN may periodically review the adequacy of the minimum limits specified above
and reserves the right to require COMPANY to adjust the liability coverage,
provided such adjustments do not require COMPANY to obtain coverage in excess
of
those customarily obtained by entities incurring comparable risks in comparable
industries. The specified minimum insurance amounts do not constitute a
limitation on COMPANY’s obligation to indemnify PENN under this
AGREEMENT.
9.
USE OF PENN’S NAME
COMPANY
and its employees and agents must not use and COMPANY must not permit its
AFFILIATES or sublicensees to use PENN’s name or any adaptation thereof, or any
PENN seal, logotype, trademark, or service mark, or the name, mark, or logotype
of any PENN representative or organization in any way without the prior written
consent of PENN.
10.
ADDITIONAL PROVISIONS
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10.1 Nothing
in this AGREEMENT shall be deemed to establish a relationship of principal
and
agent between PENN and COMPANY, nor any of their agents or employees for any
purpose whatsoever, nor shall this AGREEMENT be construed as creating any other
form of legal association or arrangement which would impose liability upon
one
party for the act or failure to act of the other party.
10.2 COMPANY
is not permitted to assign this AGREEMENT or any part of it, either directly
or
by merger or other operation of law, without the prior written consent of PENN,
which consent shall not be unreasonably withheld. A withholding of ▇▇▇▇’s
consent shall be considered as reasonable in the event that the acquiring party
of the assignee of this license is not reputable or is not capable of developing
the PENN PATENT RIGHTS in the FIELD OF USE. Any prohibited assignment of this
AGREEMENT or the rights hereunder shall be null and void. No assignment relieves
COMPANY of responsibility for the performance of any accrued obligations which
it has prior to such assignment.
10.3
A waiver
by either party of a breach of any provision of this AGREEMENT will only be
valid if express, in writing and signed by an authorized representative of
the
waiving party and will not constitute a waiver of any subsequent breach of
that
provision or a waiver of any breach of any other provision of this
AGREEMENT.
10.4 Notices,
payments, statements, reports and other communications under this AGREEMENT
shall be in writing and shall be deemed to have been received as of the date
sent if sent by public courier (e.g. Federal Express) or by Express Mail,
receipt requested, and addressed as follows:
| If for PENN: | with a copy to: |
|
University
of Pennsylvania
|
Office
of General Counsel
|
|
Center
for Technology Transfer
|
University
of Pennsylvania
|
|
[*]
|
[*]
|
|
[*]
|
[*]
|
|
[*]
|
[*]
|
|
If
for COMPANY:
|
with
a copy to:
|
|
[*]
|
|
|
[*]
|
[*]
|
|
[*]
|
[*]
|
|
[*]
|
[*]
|
Either
party may change its official address upon written notice to the other
party.
10.5 This
AGREEMENT shall be construed and governed in accordance with the laws of the
Commonwealth of Pennsylvania, without giving effect to conflict of law
provisions. In the event that a party to this AGREEMENT perceives the existence
of a dispute with the other party concerning any right or duty provided for
herein, the parties will, as soon as practicable, confer in an attempt to
resolve the dispute. If the parties are unable to resolve such dispute amicably,
then the parties hereby submit to the exclusive jurisdiction of and venue in
the
courts located in the Eastern District of the Commonwealth of Pennsylvania
with
respect to any and all disputes concerning the subject of this
AGREEMENT.
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10.6
PENN
and COMPANY shall not discriminate against any employee or applicant for
employment because of race, color, sex, sexual or affectional preference, age,
religion, national or ethnic origin, handicap, or because he or she is a
disabled veteran or a veteran of the Vietnam Era.
10.7 COMPANY
must comply with all prevailing laws, rules and regulations that apply to its
activities or obligations under this AGREEMENT. Without limiting the foregoing,
it is understood that this AGREEMENT may be subject to United States laws and
regulations controlling the export of technical data, computer software,
laboratory prototypes and other commodities, articles and information, including
the Arms Export Control Act as amended in the Export Administration Act of
1979,
and that the parties’ obligations are contingent upon compliance with applicable
United States export laws and regulations. The transfer of certain technical
data and commodities may require a license from the cognizant agency of the
United States Government and/or written assurances by COMPANY that COMPANY
shall
not export data or commodities to certain foreign countries without prior
approval of such agency. ▇▇▇▇ neither represents that a license is not required
nor that, if required, it will issue.
10.8 If
any
provision of this AGREEMENT
shall be
held to be illegal, invalid or unenforceable, then such illegality, invalidity
or unenforceability shall attach only to such provision and shall not in any
manner affect or render illegal, invalid or unenforceable any other provision
of
this AGREEMENT,
and
this AGREEMENT
shall be
carried out as if any such illegal, invalid or unenforceable provision were
not
contained herein.
10.9 This
AGREEMENT
embodies
the entire agreement of the parties with respect to the matters herein
contained, and supersedes all prior oral or written agreements relating thereto
except to the extent expressly addressed in the STOCK
PURCHASE AGREEMENT
or the
STOCKHOLDER’S
AGREEMENT.
Any
modification of this AGREEMENT must be in writing and signed by an authorized
representative of each party.
IN
WITNESS WHEREOF, the parties, intending to be legally bound, have caused this
AGREEMENT to be executed by their duly authorized representatives.
|
THE
TRUSTEES OF THE
UNIVERSITY
OF PENNSYLVANIA
|
ADVAXIS, INC. | |
|
SIGNATURE:____________________________
|
SIGNATURE:____________________________
|
|
|
TYPED
NAME:
▇▇▇▇ ▇▇▇▇▇, PhD
|
TYPED
NAME:___________________________
|
|
|
TITLE:
Managing
Director
Center for Technology Transfer
|
TITLE:_________________________________
|
|
|
DATE:_______________________________
|
DATE:_______________________________
|
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ATTACHMENT
1 - List of Intellectual Property
[*]
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ATTACHMENT
1 - List of Intellectual Property
[*]
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ATTACHMENT
2 - Sponsored Research Agreement
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ATTACHMENT
3 - Development Plan
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ATTACHMENT
4 - Stock Purchase Agreement
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ATTACHMENT
5 - Shareholder’s Agreement
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ATTACHMENT
6 - Form NDA
ATTACHMENT
7 - Client and Billing Agreement
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ATTACHMENT
8 - Required Territories
[*]
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