EXHIBIT 10.10
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN
PORTIONS OF THIS DOCUMENT. SUCH PORTIONS HAVE BEEN
REDACTED AND MARKED WITH ASTERISKS (**). THE NON-
REDACTED VERSION OF THIS DOCUMENT HAS BEEN SENT TO
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
AN APPLICATION FOR CONFIDENTIAL TREATMENT.
LICENSE AGREEMENT
This License Agreement ("Agreement") is entered into effective as of
the 17th day of October, 1996, between Indiana University Foundation, a
not-for-profit Indiana corporation with offices at Xxxxxxxxx Xxxxx, X.X. Xxx
000, Xxxxxxxxxxx, XX 00000 (hereinafter referred to as "LICENSOR") and Praecis
Pharmaceuticals, Inc., a Delaware corporation with offices at Xxx Xxxxxxxxx
Xxxxxx, Xxxxxxxxx, XX 00000 (hereinafter referred to as "LICENSEE").
WITNESSETH:
WHEREAS, LICENSOR, by agreement with The Trustees of Indiana
University, is the owner of proprietary rights in intellectual property
resulting from research at Indiana University (hereinafter referred to as "IU");
WHEREAS, Xxxxx Xxxxxx (hereinafter referred to as "INVENTOR") while
an employee of IU created the "Inventions" as described and attached hereto as
Exhibit A.
WHEREAS, LICENSOR is the owner of said patent applications and
know-how related to LHRH antagonist compounds as claimed in United States Patent
Application number 08/480,494 filed June 7, 1995 and foreign, PCT application
number PCT/US96/09852 filed June 7, 1996 included in Exhibit A.
WHEREAS, the parties recognize that the research of the INVENTOR
demonstrated preliminary evidence of usefulness of the Inventions on a
commercial basis, and further recognize that technical knowledge, production
scale-up, market development, and state and federal regulatory approval of the
Inventions shall be required for commercialization;
WHEREAS, LICENSEE desires to acquire a license to the INVENTIONS and
related technologies and know-how
2
in order to engage in further product development and sales activities related
to LICENSEE's activity in the biomedical products field, including but not
limited to, oncology and reproductive endocrinology treatments, including but
not limited to cancer (prostate and breast), reproductive endocrinology
(endometriosis, uterine fibroid, female and male fertility), polycystic ovarian
disease, precocious puberty; and
WHEREAS, LICENSEE has exercised the option granted to LICENSEE under
the Option Agreement Dated June 13, 1995.
Now, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, and other good valuable consideration, the receipt
of which is hereby acknowledged, the parties agree as follows.
ARTICLE I
Definitions
1.1 "Invention Rights" shall mean the patented process, patent
applications, disclosures of inventions, technology and know-how involving the
use of certain LHRH antagonist compounds. The technologies are disclosed in
Exhibit A and summarized as follows:
(a) United States Patent Application number 08/480,494 filed
June 7, 1995 and foreign, PCT application number PCT/US96/09852 filed June 7,
1996.
(b) the existing technical know-how related to the patent
applications and the underlying research.
1.2 "Patent Rights" shall mean:
(a) Subject matter within the scope of any valid claim of
LICENSOR to any patent or patent application relating to the Inventions;
including, without limitation, any continuations, continuations-in-part,
provisionals, divisions, derivations, foreign counterparts, patents of addition,
reissues, renewals, or extensions thereof.
(b) Subject matter within the scope of any valid claim of a
LICENSOR owned or controlled patent or patent applications of the Inventor which
dominates the subject matter of the Inventions: including, without limitation,
any continuations, continuations-in-part,
3
provisionals, divisions, derivations, foreign counterparts, patents of addition,
reissues, renewals, or extensions thereof.
1.3 "Licensed Products" shall mean the therapeutic and/or
prophylactic product or part thereof which is manufactured or sold in whole or
in part directly or indirectly by LICENSEE that are covered by any one valid
claim in Patent Rights or include any Invention Rights.
1.4 "Technical Information" shall mean all present and future
technical information and know-how which relates to the Inventions and shall
include, without limitation, all information relating to the Inventions, the
Patent Rights and the Licensed Products and useful for the development and
commercialization of the Inventions.
1.5 "Licensee" shall mean Praecis Pharmaceuticals, Inc. or any
Affiliate or assignee thereof.
1.6 "Improvements" shall mean all improvements including but not
limited to revisions, modifications and enhancements developed by LICENSEE
and/or Sublicensee independently of LICENSOR with respect to any technology,
patent applications, and/or patents related to Invention Rights, Patent Rights,
Technical Information or Licensed Products.
1.7 "Licensed Patents" shall mean Patent Rights.
1.8 "Licensor" shall mean Indiana University Foundation.
1.9 "Affiliate" shall mean any corporation, subsidiary, firm,
partnership or other entity, whether de jure or de facto, which directly or
indirectly owns, is owned by or is under common ownership with a party to this
Agreement to the extent of at least fifty percent (50%) of the equity having the
power to vote on or direct the affairs of the entity and any person, firm,
partnership, corporation, or other entity actually controlled by, controlling,
or under common control of a party to this Agreement.
1.10 "License Fee" shall mean all amounts collected from a
Sublicensee of LICENSEE, in lieu of royalty and in pursuant to any sublicense
granted by
4
LICENSEE to such sublicensee with respect to any Patent Rights and/or
Inventions.
1.11 "Net Sales" shall mean the gross receipts from sales of
Licensed Products less all (i) transportation charges, including insurance; (ii)
sales and excise taxes and duties paid or allowed by any selling party, together
with any other governmental charges or taxes imposed upon the production,
importation, use, or sale of any Licensed Products; (iii) normal and customary
trade, quantity, and cash discounts allowed; and (iv) allowances or credits to
customers or on account of rejection or return of any Licensed Products subject
to royalty under this Agreement or on account of retroactive price reductions
affecting such Licensed Products.
1.12 "Sublicense" shall mean the conveyance of rights to any Third
Party to use the Inventions or any part thereof, for its purpose of developing
its own product, in return for any option fee, License Fees or other "front-end
payment" and/or royalties based upon said Third Party's Net Sales.
1.13 "Sublicensee" shall mean any Third Party to whom or which
LICENSEE has granted a Sublicense.
1.14 "Third Party" shall mean any person or entity other than
LICENSOR, IU, LICENSEE and its Affiliates.
1.15 "License Year" shall mean the twelve-month period beginning on
the first day of the month after execution of this Agreement, and each
anniversary of such date thereafter.
1.16 "Development Costs" shall mean, with respect to any Licensed
Products sold by a Sublicensee which is covered in whole or in part by a
Sublicense, any internal or out-of-pocket charges, costs or expenses incurred by
LICENSEE in connection with research and development activities related to such
Licensed Products.
ARTICLE II
Assignment of Patent Rights
2.1 Ownership of Intellectual Property. LICENSOR, by virtue of its
contractual relationships with IU and the Patent Policy of IU, is the sole and
exclusive owner of all Inventions and Invention Rights covered by this
agreement.
5
ARTICLE III
Grant of License
3.1 License. LICENSOR hereby grants a license to LICENSEE:
(a) an exclusive, worldwide license under the Invention Rights
and/or Patent Rights, together with an express right to grant sublicenses to
Affiliates or Third Party, to make, have made, further develop, research,
improve, use, process, offer for sale, import, sell, and distribute products
embodying Invention Rights and/or Patent Rights;
(b) a first right to acquire an exclusive license, on
substantially the same terms as this Agreement with respect to any LHRH related
compounds developed by Inventor.
This grant of rights is subject to the rights of the United States Government,
if any, that arise out of United States Government sponsorship of research that
led to Invention. LICENSEE agrees during the period of exclusivity of this
license in the United States that any Licensed Products produced for sale in the
United States will be manufactured substantially in the United States. If
manufacturing of any product, substantially in the United States, is not
commercially feasible, LICENSOR will use best efforts to cooperate with LICENSEE
in obtaining a waiver of the United States manufacturing requirement from the
United States Government.
3.2 Reservation. LICENSOR hereby reserves an irrevocable,
nontransferable, royalty-free license to make, further develop, improve and use
but not to have made or commercialize the subject matter of Patent Rights and
Improvements thereon and Technical Information for research and educational
purposes to be conducted at facilities owned and/or operated by IU.
Notwithstanding the reservation contained in this paragraph 3.2, LICENSOR hereby
acknowledges that its right to use the Patent Rights, Improvements and Technical
Information for research and educational purposes is limited by the
confidentiality provisions contained in Article VII below. LICENSOR agrees to
submit to LICENSEE copies of publications related to allow LICENSEE to make
appropriate patent filings with respect to such Invention Rights prior to any
such publication or other distribution of Invention Rights, thirty (30) days
prior to submission for publication or other distribution.
6
ARTICLE IV
Payments and Royalties
4.1 Initial Fee. In exchange for the exclusive license granted under
this agreement LICENSEE agrees to pay to LICENSOR an initial fee of fifty
thousand U.S. dollars ($50,000.00) upon execution of this Agreement. This
commitment is designed to partially reimburse the Licensor and IU for the costs
of the research leading to the Invention Rights licensed hereunder. ** (**) of
this Initial Fee, all payments under the Option Agreement and all patent-related
fees and expenses may be credited toward future fees, (including License Fees)
the Milestone Payments referred to in paragraph 4.2, and/or royalties payable to
IUF; however, such credit for fees and/or royalty, in any period, for any
country, shall not exceed ** of the fees or royalty due IUF for such period in
respect of such country, provided that any unused credit may be carried forward
to subsequent periods.
4.2 Milestone Payments. LICENSEE shall pay three (3) Milestone
Payments, reduced by credits allowed under paragraph 4.1 as follows:
(a) ** U.S. dollars ($**) upon **;
(b) ** U.S. dollars ($**) upon **; and
(c) ** U.S. dollars ($**) upon **.
4.3 Royalty. LICENSEE shall pay a ** percent (**%) royalty to
LICENSOR on all Net Sales of Licensed Products covered by paragraph 1.3,
commencing with first commercial sale where Licensed Products are not sold in
combination with depot formulation and ** percent (**%) royalties where Licensed
Products are sold in combination with depot formulation.
4.4 Accrual of Royalties. Royalties shall accrue when Licensed
Products are sold or otherwise transferred by LICENSEE to a Third Party, and
Licensed Products shall be considered sold when LICENSEE invoice is issued.
LICENSEE shall make payments to LICENSOR in accordance with the requirements of
Article VIII.
4.5 Sublicense License Fees and Royalties. LICENSEE shall pay to
LICENSOR the following:
7
(a) *** percent (***%) royalties on Net Sales of Licensed
Products by Sublicensee commencing with first commercial sale where Licensed
Products are not sold in combination with depot formulation and *** percent
(***%) royalties where Licensed Products are sold in combination with depot
formulation. Sublicensee shall not pay royalties on the Net Sale of any Licensed
Products by a Sublicensee that is paying LICENSEE License Fees, in lieu of
royalty payments; and
(b) *** percent (***%) of License Fees received by LICENSEE
after deduction of documented and reasonable Development Costs with respect to
Licensed Products covered by such Sublicense, provided that no amount shall be
payable under this clause 4.5(b) until the earlier of the following:
(c) LICENSEE's cessation of development activities with
respect to the specific Licensed Products indication pursuant to the terms of
the Sublicense under which a License Fee was paid; or
(d) the first commercial sale of the specific Licensed
Products indication covered by such Sublicense.
ARTICLE V
Additional Covenants of LICENSEE
5.1 Market Development. LICENSEE agrees to diligently pursue the
development, scale-up, manufacturing and marketing of the Licensed Products in
the United States and such countries as it shall determine is economically and
practically desirable in a manner that is consistent with manufacture, scale-up,
development and marketing efforts for similar products by businesses comparable
to LICENSEE in size and resources.
5.2 Performance Standards. LICENSEE agrees to comply with the
following Licensed Products performance standards and time periods:
(a) LICENSEE shall use commercially reasonable efforts to
submit and prosecute Licensed Products approval requests with the government
agencies having jurisdiction over Licensed Products. LICENSOR and IU hereby
agrees to provide LICENSEE with all existing data, reports and interpretation of
data as LICENSEE may
8
request in order to aid it in securing government approval.
(b) LICENSEE agrees to prepare and submit to LICENSOR
semi-annual progress reports, the first of which shall be submitted within
thirty (30) days following the end of the first full one-hundred-eighty (180)
day period of this Agreement.
(c) upon obtaining required regulatory approvals, to use
commercially reasonable efforts to exercise reasonable business practices to
make Licensed Products available on world-wide basis.
(d) Licensee's development program will serve to identify
appropriate milestones against which to gauge due diligence (Exhibit C);
provides that the failure of LICENSEE to meet such milestones within the time
periods contemplated by Exhibit C shall not constitute a material breach of this
License Agreement (and accordingly, LICENSOR shall not be entitled to terminate
this License Agreement due to such failure), unless LICENSEE shall have failed
to use commercially reasonable efforts (consistent with development, scale-up,
manufacture and marketing efforts for similar products by businesses comparable
to LICENSEE in size and resources) to meet such milestone within such time
periods. If LICENSOR believes that a report provided to LICENSOR pursuant to
paragraph 5.2(b) does not reflect such commercially reasonable efforts and gives
notice to such effect to LICENSEE of such a report, LICENSEE shall, within sixty
(60) days of receipt of such notice, address in writing the concerns raised by
LICENSOR in its notification. If LICENSOR remains dissatisfied, the matter shall
be resolved by mediation.
5.3 Use of Improvements by LICENSOR. LICENSEE agrees to grant to
LICENSOR and IU on a royalty-free, nonexclusive license, to use for research and
educational purposes only, and without the right to Sublicense, to any and all
Improvements.
9
ARTICLE VI
Covenants of LICENSOR
6.1 Technical Information. Promptly upon execution of this
Agreement, LICENSOR shall deliver to LICENSEE all (a) Technical Information and
all marketing information pertaining to the Inventions, the Patent Rights and
the Licensed Products in its possession or with respect to which it has control.
LICENSOR shall promptly report to LICENSEE any information or facts of serious
or unexpected reactions related to any application of the Inventions.
6.2 Prototype Tests and Governmental Approvals. At LICENSEE's
request, and subject to LICENSOR's concurrence with said request, which will not
be unreasonably withheld LICENSOR through IU shall assist LICENSEE in the design
and/or conduct of prototype evaluation and such other testing and review
procedures as may be necessary in order to obtain requisite federal, state and
foreign governmental regulatory agency approval with respect to the use,
manufacture or sale of any Licensed Products. LICENSEE shall provide adequate
financial support for tests conducted by LICENSOR through IU, such support shall
be the subject of a budget approved by both parties.
6.3 Invention Agreements. LICENSOR represents and warrants to
LICENSEE that the Inventor and all personnel that have worked on the development
of the Inventions have assigned all rights with respect thereto to LICENSOR
pursuant to duly executed Invention Agreements. LICENSOR agrees to cause any
personnel that may hereafter be assigned to perform research with respect to the
Inventions, the Patent Rights or the Licensed Products pursuant to this
Agreement or any research agreements to assign rights to it pursuant to the IU
Patent Policy and all such rights shall be deemed to be automatically included
within the scope of the license granted hereby, without further action or
consideration.
6.4 Research Materials. LICENSOR agrees to provide, as available and
mutually agreed upon, during the term of this Agreement, LICENSEE with research
quantities of materials relating to Inventions. The material will be provided by
IU to LICENSEE with a fee to reimburse IU for its distribution costs. The terms
of this material transfer from IU to LICENSEE will be mutually agreed upon under
a separate Uniform Biological Material
10
Transfer Agreement (UBMTA) in substantially the form of Exhibit D.
6.5 Referrals. LICENSOR shall use its best efforts to refer to both
LICENSEE and the second Licensee any and all prospects having an interest in the
Invention Rights.
ARTICLE VII
Confidentiality
7.1 Confidentiality. LICENSOR and LICENSEE agree to maintain as
confidential any information which may be disclosed by the other and is
designated in writing as confidential. Such information shall not be considered
confidential if the recipient can show that such information is: 1) generally
known or readily available to the public; 2) was already known to LICENSOR or
LICENSEE from other sources at the time of the receipt thereof without a breach
of any obligation of confidentiality; 3) becomes available to the public
independent of LICENSOR or LICENSEE; 4) is disclosed to LICENSOR or LICENSEE by
a Third Party having legal rights to information and not bound by this Agreement
or 5) is subsequently and independently developed by an employee of LICENSOR or
LICENSEE who had no knowledge of the information disclosed by LICENSOR or
LICENSEE. Notwithstanding any of the foregoing, any confidential information
disclosed by either party to the other shall be maintained in confidence five
(5) years from the date of such disclosure unless mutually agreed otherwise.
ARTICLE VIII
Payments and Reports
8.1 Semi-Annual Payments. Payments of royalties from LICENSEE to
LICENSOR hereunder shall be made by LICENSEE to LICENSOR on a semi-annual basis,
not later than ninety (90) days after the last day of each semi-annual period
for as long as such obligations continue under this Agreement. Payments shall be
accompanied by reports which shall set forth units sold and a calculation of the
amounts owed to LICENSOR on a country-by-country basis for the applicable
semi-annual period. Late payment shall bear interest at the maximum rate
allowable by Indiana Usury Law; however, said rate shall not exceed the prime
rate plus two percent (2%).
8.2 Exchange Rate. All Payments hereunder shall be made in U.S.
dollars in the United States. In
11
the event LICENSEE receives payment for Licensed Products in currency other than
U.S. dollars, payments payable to LICENSOR shall be computed using the official
rate of exchange as reported in The Wall Street Journal prevailing on the date
the payment to LICENSEE is actually collected from the Third Party.
8.3 Single Royalty Liability. LICENSEE and its Affiliates shall be
liable for one royalty with respect to any given Licensed Products or product
embodying any part of the Invention Rights.
8.4 Deduction for Taxes. Any tax paid or required to be withheld by
LICENSEE on any Net Sales for which Payments are payable to LICENSOR under this
Agreement shall be deducted from the total amount of Payments otherwise due.
LICENSEE shall secure and send to LICENSOR proof of any such taxes withheld and
paid by LICENSEE or its sublicensees.
ARTICLE IX
Record Keeping and Auditing
9.1 Records. LICENSEE shall maintain full, true and accurate records
containing all information which may be necessary for a determination of the
various amounts to be paid to LICENSOR under the terms of this Agreement. Said
records shall be maintained for no less than four (4) years from the date of
creation and shall be open and available upon reasonable notice during regular
business hours for review by LICENSOR or any independent certified public
accountant, retained and paid for by LICENSOR for the purpose of verifying
LICENSEE's compliance with its payment obligations hereunder. This includes the
right to inspect LICENSEE documentation of reasonable Development Costs deducted
under paragraph 4.5. In the event LICENSEE has failed to pay royalty due
LICENSOR, and such deficit exceeds five percent (5%) or five hundred dollars
($500.00), whichever is greater, for any one (1) year time period, LICENSEE
agrees to pay all reasonable and documented audit expenses.
ARTICLE X
Patent Protection
10.1 Prosecution of Patent Applications. Upon full execution of this
Agreement, LICENSEE agrees to continue to prosecute, at its own expense, the
applications for United States Letters Patent identified in
12
Exhibit A. With respect to any given patent application filed in the United
States and arising out of research evaluations conducted pursuant to this
Agreement, LICENSEE shall further file and diligently prosecute corresponding
foreign applications and maintain any patent issuing therefrom, in such
additional countries throughout the world as set forth in Exhibit B, always
attempting to obtain the best available claim coverage, at LICENSEE's own
expense.
10.2 LICENSOR decides not to file. In the event LICENSEE decides not
to file and/or diligently prosecute the application for Letters Patent
identified in Exhibit A, LICENSEE shall notify LICENSOR at least thirty (30)
days prior to taking, or not taking, action and LICENSOR may, at its election
and expense, but without obligation on its part, undertake such actions, and in
that event, LICENSEE shall give up all rights to such patent or patent
application and shall do all other acts reasonably required by LICENSOR to
exercise LICENSOR's rights under this paragraph 10.2.
10.3 Disclosure of Patent Prosecution Information. LICENSOR and
LICENSEE shall disclose to each other the complete texts of all patent
applications filed by LICENSOR and LICENSEE included in the Patent Rights.
Prior to taking any action with respect to the United States or any
foreign Patent Office or with respect to any other governmental or regulatory
body having jurisdiction over the subject matter of this Agreement, LICENSEE
shall present to LICENSOR and shall afford LICENSOR the opportunity to make such
comments as it may deem desirable to the texts of all patent applications
intended to be filed by LICENSEE which relate to the Inventions or the Patent
Rights. LICENSEE shall also afford LICENSOR the prior right to review and
comment on all information received or prepared by LICENSEE concerning the
institution or possible institution or any interference, opposition,
re-examination, reissue, revocation, nullification or any official proceeding
involving Patent Rights anywhere in the world. LICENSEE shall keep LICENSOR
fully informed of the course of all patent prosecution or other proceedings and
shall permit LICENSOR the full right to participate in such proceedings at its
own expense.
13
10.4 Patent Infringement Notification. LICENSOR and LICENSEE shall
promptly inform each other in writing of any alleged infringement of which it
shall have notice committed by a Third Party regarding any patents within the
Patent Rights and each shall provide the other with any available evidence of
such infringement. Within thirty (30) days after receipt of the notice of
alleged infringement, LICENSOR and LICENSEE shall meet and mutually agree on a
procedure for resolving the alleged infringement.
10.5 LICENSOR's Option Regarding Infringement. If within four (4)
months after the notice of alleged infringement specified in paragraph 10.4
above, LICENSEE shall have been unsuccessful in resolving the alleged
infringement in a manner mutually acceptable to LICENSOR and LICENSEE, then
LICENSOR shall have the right, but shall not be obligated, to prosecute at its
own expense any infringement of the Patent Rights, and LICENSOR may, for such
purposes, use the name of LICENSEE as party plaintiff; provided, however, that
such right to bring an infringement action in LICENSEE's name shall remain in
effect only so long as the license granted herein remains exclusive. Without
LICENSEE's prior written consent, LICENSOR will not consent to any settlement,
consent judgment or other voluntary disposition of such suit if the same
involves any liability of, or admission of culpability of LICENSEE.
10.6 LICENSEE's Option Regarding Infringement. In the event that
LICENSEE shall undertake the enforcement and/or defense of the Patent Rights by
litigation, LICENSOR shall allow LICENSEE to withhold up to fifty percent (50%)
of the royalties from royalty payments due to LICENSOR from Net Sales in the
country in which the litigation occurs, and may apply the same toward
reimbursement of its expenses, including reasonable attorneys' fees, in
connection therewith.
Any recovery of damages by LICENSEE for any such suit shall be
applied first in satisfaction of any unreimbursed expenses and legal fees of
LICENSEE and LICENSOR relating to the suit, and next toward reimbursement of
LICENSOR for any royalties past due or withheld and applied pursuant to this
Article X. The balance remaining from any such recovery shall be retained by
LICENSEE.
10.7 Cooperation During Infringement Proceedings. In any
infringement suit either party may insti-
14
tute to enforce the Patent Rights pursuant to this Agreement, the other party
hereto shall, at the request and expense of the party initiating such suit,
cooperate in all respects and, to the extent possible, have its employees
testify when requested and make available relevant records, papers, information,
samples, specimens, and the like.
ARTICLE XI
Sublicenses
11.1 Authority to Sublicense. The terms and conditions under which
LICENSEE may grant sublicenses under the Patent Rights shall rest solely in
LICENSEE's discretion as long as the relevant requirements set forth in this
Agreement are met.
11.2 Required Provisions. LICENSEE shall include as a provision in
the Sublicense Agreement that if LICENSEE enters into an arrangement of
creditors and/or bankruptcy that one (1) week prior to such arrangement of
creditors and/or bankruptcy that any and all Sublicensees have the right to be
notified by LICENSEE of such arrangement and/or bankruptcy and such Sublicenses
shall further state that any and all license fees owed directly to LICENSEE
shall thereafter be paid directly to LICENSOR at the same royalty rate set forth
in any and all existing Sublicensee Agreements.
11.3 Accounting. LICENSEE shall provide LICENSOR an accounting of
all License Fees and royalties received from Sublicensees. Such accounting shall
accompany the Semi-Annual Report as provided in paragraph 8.1.
11.4 Sublicense Agreements. LICENSEE agrees to deliver to LICENSOR a
true and correct copy of each and every sublicense entered into by LICENSEE
within thirty (30) days after execution thereof and shall promptly advise
LICENSOR in writing of any modification (and supply a copy of same) or
termination of each sublicense. Upon termination of this Agreement, LICENSEE's
rights in all sublicenses shall be determined according to paragraph 12.5.
ARTICLE XII
Term and Termination
12.1 Term. This Agreement and LICENSEE's obligations shall be in
effect until the date of the last to expire of Licensed Patents and shall remain
in effect
15
unless terminated earlier in accordance with the provisions of this Article XII.
In the event that this Agreement terminates at the date of the last to expire
Licensed Patents, then LICENSEE shall not be precluded from continuing to make,
have made, further develop, improve, use and sell Licensed Products, and use of
the Technical Information. Such request for continuation shall be presented to
LICENSOR by LICENSEE in writing and continuation shall be by mutual consent.
LICENSOR agrees that consent shall not be unreasonably withheld.
12.2 Voluntary Termination. LICENSEE shall have the right to
terminate this Agreement upon giving LICENSOR ninety (90) days prior to written
notice to that effect.
12.3 Termination for Breach. In the event that LICENSEE shall at any
time fail to make required payments or otherwise materially breach the terms of
this Agreement, LICENSOR shall notify LICENSEE of such breach and shall indicate
that it intends to terminate this Agreement unless such breach is corrected or
terminated. LICENSEE shall have ninety (90) days following its receipt of such
notice to correct such breach. In the event of unforeseen delay, justification
for delay shall be presented to LICENSOR by LICENSEE and termination shall be
delayed to some agreed time if it is determined that diligence by LICENSEE
existed.
12.4 Payment of Accrued Royalties. The termination of this Agreement
for any reason shall be without prejudice to LICENSOR's right to receive all
amounts payable and unpaid at the date of the termination of this Agreement.
12.5 Survival of Sublicenses. Any sublicense granted by LICENSEE
pursuant to this Agreement prior to any termination of this Agreement shall
survive the termination of this Agreement. Upon termination of this Agreement
for any reason during the term of any Sublicenses, LICENSEE shall assign to
LICENSOR all of LICENSEE's rights in such Sublicenses and LICENSOR shall assume
all obligations of LICENSEE under any such Sublicense.
12.6 Sales of Licensed Products Inventory. Upon termination of this
Agreement, other than pursuant to paragraph 12.1, LICENSEE shall notify LICENSOR
of the amount of Licensed Products LICENSEE and its various distributors then
have on hand, the sale of which would,
16
but for such termination, be subject to royalty, and thereafter LICENSEE and its
various distributors shall be permitted to sell such quantities of Licensed
Products, and LICENSEE shall pay LICENSOR the applicable royalty in the manner
required hereby.
12.7 Assignment of Patent Rights Upon Termination. In the event this
Agreement is terminated for any reason other than the expiration of Licensed
Patents, LICENSEE hereby agrees to reassign to LICENSOR any ownership rights in
patents acquired by it by virtue of this Agreement.
12.8 Survival of Covenants. Expiration or termination of this
Agreement for any reason shall terminate all outstanding obligations and
liabilities between the parties arising from this Agreement except those
described in paragraph 5.3 and Article VII.
12.9 Partial Termination. Termination of this Agreement with respect
to any particular country or territory shall not affect this Agreement with
respect to any other country or territory.
12.10 Additional Termination Rights. This Agreement may be
terminated by LICENSOR at its option and without prejudice to any other remedy
to which it may be entitled at law or in equity, or elsewhere under this
Agreement, by giving written notice of termination to LICENSEE in the event that
LICENSEE (a) shall become "Insolvent" (as such term is defined in the Bankruptcy
Code of the United States of America, as amended from time-to-time), (b) shall
fail to pay its debts generally as they become due, (c) shall voluntarily seek,
consent, or acquiesce in the benefits of any bankruptcy or similar debtor-relief
laws, or (d) shall become a party to or is made the subject of any proceeding
provided for by any debtor-relief law that could suspend or otherwise alter
LICENSOR's rights under this Agreement.
ARTICLE XIII
Representations and Indemnity
13.1 LICENSOR Representations. LICENSOR hereby represents to
LICENSEE as follows:
(a) LICENSOR has sole and exclusive ownership rights in and to
the Invention Rights, the Patent Rights, and the Technical Information granted
to LICENSEE;
17
(b) LICENSOR has the full right, power, and authority to
assign, free and clear of any liens, claims or encumbrances of any kind,
ownership and grant the license set forth in Articles II and III;
(c) There are no outstanding agreements, assignments, or
encumbrances inconsistent with the provisions of this Agreement.
(d) LICENSOR has no knowledge of any infringement or of any
pending or threatened claim relating in any manner to the Inventions, the Patent
Rights or the Licensed Products;
(e) LICENSOR has no knowledge of or reason to believe that any
of the Patent Rights are invalid or unenforceable or that their exercise would
infringe the patent rights of any Third Party.
(f) LICENSOR MAKES NO OTHER REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, NOR DOES LICENSOR ASSUME ANY OBLIGATIONS WITH RESPECT TO THE
INFRINGEMENT OF PATENTS OF OTHERS ARISING AS A RESULT OF LICENSEE'S ACTIVITIES
UNDER THIS AGREEMENT.
13.2 LICENSEE's Representations and Indemnity. LICENSEE agrees to
indemnify and hold LICENSOR, IU, and their Trustees, Directors, officers and
employees harmless from and against any and all claims, demands, losses or
causes of action related in any way to marketing, commercialization or other
rights granted under this Agreement, except to the extent that such claims,
demands, losses or causes of action result (a) from negligent or intentional
actions or misrepresentations on the part of LICENSOR and/or IU, or (b) from
patent infringement claims involving the Invention Rights, the Patent Rights or
the Licensed Products.
13.3 Cooperation in Defending Claims. In the event of the
institution of any suit by a Third Party against LICENSOR and/or IU or LICENSEE
or its sublicensees for patent infringement involving the manufacture, use,
sale, distribution or marketing of Licensed Products, the party sued shall
promptly notify the other party in writing. LICENSOR and LICENSEE shall assist
one another and cooperate in any such litigation at the other's request without
expense to the requesting party; provided, however, that LICENSOR and LICENSEE
shall each recover its costs of litigation from any recovery, award or
settlement as provided in paragraph 10.7.
18
ARTICLE XIV
Third Party and Compulsory Licenses
14.1 Third Party Licenses. Without limitation of paragraph 4.3 (and
the royalty reduction provided therein), in the event that LICENSEE deems it
necessary to pay royalties to any Third Party on account of making, having made,
using or selling Licensed Products by virtue of Third Party having rights under
a patent, or to know-how where no patents are applicable, which dominate the
rights granted to LICENSEE hereunder, LICENSEE shall give written notice thereof
to LICENSOR and LICENSOR and LICENSEE shall renegotiate in good faith a lowering
of the royalty rates required to be paid under this Agreement.
14.2 Compulsory License. In the event that a governmental agency in
any country or territory, except as referred to in Article III hereunder, grants
or compels LICENSOR to grant a license to it or to any Third Party for any
Licensed Products, LICENSEE shall have the benefit in such county or territory
of the terms granted to such Third Party to the extent that such terms are more
favorable than those of this Agreement.
ARTICLE XV
Export Controls
15.1 Export Controls. It is understood that LICENSOR and IU are
subject to United States laws and regulations controlling the export of
technical data, computer software, laboratory prototypes and other commodities
(including the Arms Export Control Act, as amended, and the Export
Administration Act of 1979), and that its obligations hereunder are contingent
on 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 LICENSEE and LICENSEE shall not export data commodities to certain foreign
countries without prior approval of such agency. LICENSOR neither represents
that a license pursuant to such law and regulations shall not be required nor
that, if required, it shall be issued.
ARTICLE XVI
Use of Name
19
16.1 Use of Name. No advertising or publicity concerning the subject
matter of this Agreement and having or containing any reference to LICENSOR, IU
or any inventor or other employee of either shall be made use of by either party
hereto unless and until the same shall have been first submitted to and shall
have received the approval of the authorized representative of the parties
hereto, appointed pursuant to Paragraph 17.1 hereof, which approval shall not be
unreasonably withheld, provided that LICENSEE shall be entitled to refer to
LICENSOR, IU and this Agreement in disclosure or similar documents used in
connection with financing transactions and that LICENSOR and/or IU shall review
and approve all such language, such approval not to be unreasonably withheld.
ARTICLE XVII
Miscellaneous
17.1 Notices or Other Communications. Any payment, notice or other
communication required or permitted to be made or to be given to either party
under this Agreement shall be sufficiently made or given three business days
after the date of mailing if sent to such party by certified first class U.S.
mail, postage prepaid, the date of transmission (or the next business day
thereafter if such date is not a business day) by telecopier (to the respective
numbers set forth below) with answer back to confirm or upon receipt if
personally delivered (including by reputable overnight carrier) at the address
as shall be designated by written notice given to the other party.
If to LICENSOR:
Attn: Vice President, Office of Technology Transfer
Advanced Research & Technology Institute
Indiana University
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000
telecopier number: (000) 000-0000
If to LICENSEE:
Attn: Director of Business Development
Praecis Pharmaceuticals, Inc.
Xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
telecopier number: (000) 000-0000
20
In the event of a change of address, the party changing must notify
the other party.
17.2 Assignability. Licensee may assign or otherwise transfer this
Agreement and the License granted hereby and the rights acquired by it to and
only to the assignee or transferee of Licensee's entire business or of that part
of Licensee's business to which the License granted hereby relates, provided,
however, that such assignee or transferee agrees in writing to be bound by the
terms and conditions of this Agreement. Licensee will give IU Foundation thirty
days prior notice of such assignment and transfer and if IU Foundation raises no
reasonable objection in writing to such assignment or transfer within fifteen
days after IU Foundation receives such notice, then IU Foundation will be deemed
to have approved such assignment or transfer so long as the assignee or
transferee agrees in writing to be bound by the terms and conditions of this
Agreement. If Licensee sells or otherwise transfers its entire business or that
part of its business to which the license granted hereby relates and the
assignee or transferee does not agree in writing to be bound by the terms and
conditions of this Agreement within fifteen days of such sale or transfer, IU
Foundation will have the sole right to terminate this License by providing
written notice of termination to such transferee or assignee.
17.3 Governing Law. This Agreement and its effects are subject to
and shall be construed and enforced within the internal laws of the State of
Indiana and the United States of America.
17.4 Entire Agreement and Amendments. This Agreement embodies the
entire understanding of the parties and supersedes and replaces any and all pre-
existing agreements or understandings between LICENSEE and LICENSOR and/or IU
relating to the subject matter hereof. No amendment or modification of this
Agreement shall be valid or binding upon LICENSEE or LICENSOR unless made in
writing and signed on behalf of each of the parties by their respective duly
authorized representative.
17.5 Specific Performance. Each of the parties hereto acknowledges
and agrees that its respective rights and opportunities arising out of the
obligations under this Agreement are of a unique nature. To the extent permitted
by the laws and constitution of the State of Indiana, in order to preclude any
dispute regarding the determinability of damages resulting from a
21
failure or breach in performance by any party hereto, each of the parties hereby
agrees that they shall be entitled to xxx in equity for specific performance or
to obtain any injunction against continued or future violations of this
Agreement, and each of the parties to this Agreement expressly waives the
defense that a remedy in damages would be adequate.
17.6 Waiver. A waiver by any party hereto as to any particular
breach of this Agreement shall not constitute or be considered a waiver of any
similar breach thereafter.
17.7 Headings. The headings of the paragraphs are inserted for
convenience of reference and not for interpretation of this Agreement.
17.8 Multiple Counterparts. This Agreement is executed in duplicate
and each executed duplicate is deemed an original.
17.9 Pre-existing Agreements. LICENSOR and LICENSEE represent that
there are no other outstanding agreements relating to the Inventions set forth
in paragraph 1.1.
IN WITNESS WHEREOF, each party hereto has executed this Agreement as
of the day and year first above written.
INDIANA UNIVERSITY FOUNDATION PRAECIS
PHARMACEUTICALS, INC.
By /s/ Xxxxxx X. Xxxx, Xx. By /s/ Xxxx X. Silver
--------------------------------- -------------------------------------
Xxxxxx X. Xxxx, Xx.
Senior Vice President, Title Vice President
Investments ----------------------------------
Date January 30, 1997 Date February , 1997
------------------------------- -----------------------------------
22
EXHIBIT A
Patent(s) and Patent Application(s)
United States patent Application number 08/480,494 filed June 7, 1995 PCT
application number PCT/US96/09852 filed June 7, 1996
23
EXHIBIT B
List of Countries in Which to File for Patents
Europe
Canada
Japan
Australia
24
EXHIBIT C
Pharmaceutical Peptides, Inc. Development Plan
[NOT INCLUDED AS AN EXHIBIT TO ORIGINAL AGREEMENT]
EXHIBIT D
Uniform Biological Material Transfer Agreement
Non-Profit to Profit
I. Definitions:
1. PROVIDER: Organization providing the ORIGINAL MATERIAL. (Name and
address).
2. PROVIDER SCIENTIST: (Name and address).
3. RECIPIENT: Organization receiving the ORIGINAL MATERIAL (Name and
address).
4. RECIPIENT SCIENTIST (Name and address):
5. ORIGINAL MATERIAL (Description of the material being transferred):
6. MATERIAL: ORIGINAL MATERIAL, PROGENY, and UNMODIFIED DERIVATIVES.
The MATERIAL shall not include: (a) MODIFICATIONS, or (b) other
substances created by the RECIPIENT through the use of the MATERIAL
which are not MODIFICATIONS, PROGENY, or UNMODIFIED DERIVATIVES.
7. PROGENY: Unmodified descendant from the MATERIAL, such as virus from
virus, cell from cell, or organism from organism.
8. UNMODIFIED DERIVATIVES: Substances created by the RECIPIENT which
constitute an unmodified functional subunit or product expressed by
the ORIGINAL MATERIAL. Some examples include: subclones of
unmodified cell lines, purified or fractionated subsets of the
ORIGINAL MATERIAL, proteins expressed by DNA/RNA supplied by the
PROVIDER, or monoclonal antibodies secreted by a hybridoma cell
line.
9. MODIFICATIONS: Substances created by the RECIPIENT which
contain/incorporate the MATERIAL.
10. COMMERCIAL PURPOSES: The sale, lease, license, or other transfer of
the MATERIAL or MODIFICATIONS to a for-profit organization.
COMMERCIAL PURPOSES shall also include uses of the MATERIAL or
MODIFICATIONS by any organization, including RECIPIENT, to perform
contract research, to screen compound libraries, to produce or
manufacture products for general sale, or to conduct research
activities that result in any sale, lease, license, or transfer of
the MATERIAL or MODIFICATIONS to a for-profit organization. However,
industrially sponsored academic research shall not be considered a
use of the MATERIAL or MODIFICATIONS for COMMERCIAL PUR-
25
POSES per se, unless any of the above conditions of this definition
are met.
11. NONPROFIT ORGANIZATION(S): A university or other institution of
higher education or an organization of the type described in section
501(c)(3) of the Internal Revenue Code of 1954 (26 U.S.C. 501(c))
and exempt from taxation under section 501(a) of the Internal
Revenue Code (26 U.S.C. 501(a)) or any nonprofit scientific or
educational organization qualified under a state nonprofit
organization statute. As used herein, the term also includes
government agencies.
II. Terms and Conditions of this Agreement.
1. The PROVIDER retains ownership of the MATERIAL, including any
MATERIAL contained or incorporated in MODIFICATIONS.
2. The RECIPIENT retains ownership of: (a) MODIFICATIONS (except that,
the PROVIDER retains ownership rights to the MATERIAL included
therein), and (b) those substances created through the use of the
MATERIAL or MODIFICATIONS, but which are not PROGENY, UNMODIFIED
DERIVATIVES or MODIFICATIONS (i.e., do not contain the ORIGINAL
MATERIAL, PROGENY, UNMODIFIED DERIVATIVES). If either 2(a) or 2(b)
results from the collaborative efforts of the PROVIDER and the
RECIPIENT, joint ownership may be negotiated.
3. The RECIPIENT and the RECIPIENT SCIENTIST agree that the MATERIAL:
(a) is to be used solely for research purposes;
(b) will not be used in human subjects, in clinical trials, or for
diagnostic purposes involving human subjects without the
written consent of the PROVIDER;
(c) is to be used only at the RECIPIENT organization and only in
the RECIPIENT SCIENTIST's laboratory under the direction of
the RECIPIENT SCIENTIST or others working under his/her direct
supervision; and
4. The RECIPIENT and the RECIPIENT SCIENTIST agree to refer to the
PROVIDER any request for the MATERIAL from anyone other than those
persons working under the RECIPIENT SCIENTIST's direct supervision.
5. (a) The RECIPIENT and/or the RECIPIENT SCIENTIST shall have the
right, without restriction, to distribute substances created
by the RECIPIENT through the use of the ORIGINAL MATERIAL only
if those substances
26
are not PROGENY, UNMODIFIED DERIVATIVES, or MODIFICATIONS.
(b) Without written consent from the PROVIDER, the RECIPIENT
and/or the RECIPIENT SCIENTIST may NOT provide MODIFICATIONS
for COMMERCIAL PURPOSES. It is recognized by the RECIPIENT
that such COMMERCIAL PURPOSES may require a commercial license
from the PROVIDER and the PROVIDER has no obligation to grant
a commercial license to its ownership interest in the MATERIAL
incorporated in the MODIFICATIONS. Nothing in this paragraph,
however, shall prevent the RECIPIENT from granting commercial
licenses under the RECIPIENT's intellectual property rights
claiming such MODIFICATIONS, or methods of their manufacture
or their use.
6. The RECIPIENT acknowledges that the MATERIAL is or may be the
subject of a patent application. Except as provided in this
Agreement, no express or implied licenses or other rights are
provided to the RECIPIENT under any patents, patent applications,
trade secrets or other proprietary rights of the PROVIDER, including
any altered forms of the MATERIAL made by the PROVIDER. In
particular, no express or implied licenses or other rights are
provided to use the MATERIAL, MODIFICATIONS, or any related patents
of the PROVIDER for COMMERCIAL PURPOSES.
7. If the RECIPIENT desires to use or license the MATERIAL or
MODIFICATIONS for COMMERCIAL PURPOSES, the RECIPIENT agrees, in
advance of such use, to negotiate in good faith with the PROVIDER to
establish the terms of a commercial license. It is understood by the
RECIPIENT that the PROVIDER shall have no obligation to grant such a
license to the RECIPIENT, and may grant exclusive or non-exclusive
commercial licenses to others, or sell or assign all or part of the
rights in the MATERIAL to any third party(ies), subject to any pre-
existing rights held by others and obligations to the Federal
Government.
8. The RECIPIENT is free to file patent application(s) claiming
inventions made by the RECIPIENT through the use of the MATERIAL but
agrees to notify the PROVIDER upon filing a patent application
claiming MODIFICATIONS or method(s) of manufacture or use(s) of the
MATERIAL.
9. Any MATERIAL delivered pursuant to this Agreement is understood to
be experimental in nature and may have hazardous properties. The
PROVIDER MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY
KIND, EITHER EXPRESSED OR IMPLIED. THERE ARE NO EXPRESS OR IMPLIED
WARRANTIES OR MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE,
OR THAT
27
THE USE OF THE MATERIAL WILL NOT INFRINGE ANY PATENT, COPYRIGHT,
TRADEMARK, OR OTHER PROPRIETARY RIGHTS.
10. Except to the extent prohibited by law, the RECIPIENT assumes all
liability for damages which may arise from its use, storage or
disposal of the MATERIAL. The PROVIDER will not be liable to the
RECIPIENT for any loss, claim or demand made by the RECIPIENT, or
made against the RECIPIENT by any other party, due to or arising
from the use of the MATERIAL by the RECIPIENT, except to the extent
permitted by law when caused by the gross negligence or willful
misconduct of the PROVIDER.
11. This Agreement shall not be interpreted to prevent or delay
publication of research findings resulting from the use of the
MATERIAL or the MODIFICATIONS. The RECIPIENT SCIENTIST agrees to
provide appropriate acknowledgement of the source of the MATERIAL in
all publications.
12. The RECIPIENT agrees to use the MATERIAL in compliance with all
applicable statutes and regulations, including Public Health Service
and National Institutes of Health regulations and guidelines such
as, for example, those relating to research involving the use of
animals or recombinant DNA.
13. This Agreement will terminate on the earliest of the following
dates:
(a) When the MATERIAL becomes generally available from third
parties, for example, through reagent catalogs or public
depositories, or
(b) on completion of the RECIPIENT's current research with the
MATERIAL, or (c) on thirty (30) days written notice by either
party to the other:
(i) If termination should occur under 13(a), the RECIPIENT
shall be bound to the PROVIDER by the least restrictive
terms applicable to the MATERIAL obtained from the
then-available sources; and
(ii) If termination should occur under 13(b) above, the
RECIPIENT will discontinue its use of the MATERIAL and
will, upon direction of the PROVIDER, return or destroy
any remaining MATERIAL. The RECIPIENT, at its
discretion, will also either destroy the MODIFICATIONS
or remain bound by the terms of this agreement as they
apply to MODIFICATIONS; and
28
(iii) In the event the PROVIDER terminates this Agreement
under 13(c) other than for breach of this Agreement or
for cause such as an imminent health risk or patent
infringement, the PROVIDER will defer the effective date
of termination for a period of up to one year, upon
request from the RECIPIENT, to permit completion of
research in progress. Upon the effective date of
termination, or if requested, the deferred effective
date of termination, RECIPIENT will discontinue its use
of the MATERIAL and will, upon direction of the
PROVIDER, return or destroy any remaining MATERIAL. The
RECIPIENT, at its discretion, will also either destroy
the MODIFICATIONS or remain bound by the terms of this
agreement as they apply to MODIFICATIONS.
14. Paragraphs 6, 9, and 10 shall survive termination.
15. The MATERIAL is provided at a cost of ______ dollars ($____.00) to
reimburse the PROVIDER for its preparation and distribution costs.
16. The PROVIDER and RECIPIENT acknowledge that MATERIAL is being
provided to recipient in connection with an option agreement between
Indiana University Foundation (IUF) and RECIPIENT effective date
June , 1995 (hereinafter referred to as "Option Agreement") or a
license agreement between IUF and RECIPIENT entered into pursuant to
the Option Agreement (hereinafter referred to as "License
Agreement"). It is understood and agreed that the provisions of this
agreement shall be subject to the Option Agreement or the License
Agreement, as applicable, and in the event of any conflict or
inconsistency between the terms of this Agreement and the
29
AGREED:
PROVIDER: Organization providing the ORIGINAL MATERIAL:
Organization:
-------------------------------------------------------------------
Address:
------------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
Authorized Official:
Name:
---------------------------------------------------------------------------
Title:
--------------------------------------------------------------------------
Signature: Date:
--------------------------------------------- --------------------
Provider's Scientist:
Name:
---------------------------------------------------------------------------
Title:
--------------------------------------------------------------------------
Signature: Date:
--------------------------------------------- --------------------
RECIPIENT: Organization receiving the ORIGINAL MATERIAL:
Organization:
-------------------------------------------------------------------
Address:
------------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
Authorized Official:
Name:
---------------------------------------------------------------------------
Title:
--------------------------------------------------------------------------
Signature: Date:
--------------------------------------------- --------------------
Recipient's Scientist:
Name:
---------------------------------------------------------------------------
Title:
--------------------------------------------------------------------------
Signature: Date:
--------------------------------------------- --------------------
30
Amendment
This Amendment ("Amendment"), effective as of the date last written below,
amends the license agreement between Indiana University Foundation, now assigned
to Indiana University's Advanced Research and Technology Institute, Inc.
(hereinafter referred to as "LICENSOR"), and Praecis Pharmaceuticals, Inc.
(hereinafter referred to as "LICENSEE") dated October 17, 1996 ("Agreement").
Provisions Replaced. The following provisions replace the corresponding
provisions of the Agreement in their entirety.
"1.11 'Net Sales' shall mean the amount calculated by subtracting
from Adjusted Gross Sales a lump sum deduction of *** (***%) percent
of Adjusted Gross Sales for those sales related deductions which are
not accounted for on a product-by-product basis."
"Adjusted Gross Sales" shall mean the gross sales amount invoiced by
LICENSEE, its Affiliates, or sublicensees for the Licensed Products
to Third Party purchasers less, to the extent such amounts are
included in the amount of gross sales invoiced, deductions of
returns (including withdrawals and recalls), rebates (price
reductions, including Medicaid or performance based and similar
types of rebates e.g. chargebacks or retroactive price deductions),
volume (quantity) discounts, discounts granted at the time of
invoicing, sales taxes and other taxes directly linked to the gross
sales amount as computed on a product-by-product basis in
LICENSEE's, its Affiliate's or sublicensee's sales statistics for
the countries concerned.
"ARTICLE IV
Payments and Royalties
4.01 Initial Fee. In exchange for the exclusive license granted under this
agreement LICENSEE agrees to pay to LICENSOR an initial fee of *** U.S. dollars
($***) upon execution of this Agreement.
31
4.02. Milestone Payment. LICENSEE shall pay Milestone Payments as follows:
(a) two hundred and fifty thousand dollars ($250,000) within
thirty (30) days of the execution of this Amendment;
(b) two hundred and fifty thousand dollars ($250,000) upon ***;
(c) ***;
(d) ***;
(e) ***;
(f) ***; and
(g) ***.
4.03 Royalty. LICENSEE shall pay to LICENSOR the following royalties:
(a) for the first *** dollars ($***) in Net Sales per year:
(i) *** (***%) of Net Sales where Net Sales are not sold in
combination with depot formulation; and
(ii) *** (***%) of Net Sales where Net Sales are sold in
combination with depot formulation; and
(b) for Net Sales above *** dollars ($***) per year:
(i) *** (***%) of Net Sales where Net Sales where Net Sales
are not sold in combination with depot formulation; and
(ii) *** (***%) of Net Sales where Net Sales are sold in
combination with depot formulation.
32
4.04 Accrual of Royalties
Royalties shall accrue when Licensed Products are sold or otherwise
transferred by LICENSEE to a Third Party, and Licensed Products
shall be considered when LICENSEE invoice is issued. LICENSEE shall
make payments to LICENSOR in accordance with the requirements of
Article VIII.
10.5
In any event, for so long as the license granted hereunder remains
exclusive. LICENSEE or its Affiliates or its sublicensee shall have ninety
(90) days after the notice of the alleged infringement specified in
paragraph 10.04 above to initiate prosecution at its own expense of the
alleged infringement of the Patent Rights. In such case, LICENSEE shall,
before initiation of such prosecution by LICENSEE or its Affiliates or its
sublicensee, provide prior written notice to LICENSOR. At LICENSEE's
request, LICENSOR shall immediately (1) become party to the suit and
LICENSEE or its Affiliate or its sublicensee may use the name of LICENSOR
as a party plaintiff, or (2) at LICENSOR's option, assign the Patent Right
to LICENSEE.
If, after ninety (90) days after the notice of alleged infringement
specified in paragraph 10.04 above, LICENSEE or its Affiliate or its
sublicensee shall not have initiated prosecution at its own expense of the
alleged infringement of the Patent Rights, then LICENSOR shall have the
right, but shall not be obligated, to prosecute at its own expense the
alleged infringement of the Patent Rights. In such case, LICENSOR shall,
before the filing of such suit by LICENSOR, provide prior written notice
to LICENSEE. At LICENSOR's request, (1) LICENSEE shall immediately become
a party to the suit and/or cause its Affiliate or sublicensee to become a
party to the suit, and (2) LICENSOR may use the name of LICENSEE as a
party plaintiff and/or LICENSEE shall cause its Affiliate or its
sublicensee to allow LICENSOR to use the name of its Affiliate or
sublicensee as a party plaintiff.
Without LICENSEE's prior written consent, LICENSOR will not consent to any
settlement, consent judgement or other voluntary disposition of such suit
if the same involves any liability of, or admission of culpability of
LICENSEE or its Affiliate or its sublicensee.
Without LICENSOR'S prior written consent, LICENSEE will not consent to any
settlement, consent judgment or other voluntary disposition of such suit
if the same involves any liability of, or admission of culpability of
LICENSOR or its Affiliate or its sublicensee.
33
Provision Added. The following provision added to the Agreement.
"10.8 Notwithstanding anything to the contrary, should a party or
its Affiliate or sublicensee receive a certification pursuant to the
Drug Price Competition and Patent Restoration Act of 1984 (Public
Law 98-417) as amended, or its equivalent in a country other than
the United States of America, with respect to a Patent Right, then
(1) such party shall immediately provide the other party with a copy
of such certification and the date on which such party, its
Affiliate or sublicensee received such certification ("Certification
Date"), and (2) LICENSEE, or its Affiliate or its sublicensee, will
have the first right to immediately bring a suit for infringement of
the Patent Right, at its expense. In such case, LICENSEE shall,
before the filing of such suit by LICENSEE or its Affiliate or its
sublicensee, provide prior written notice to LICENSOR. At LICENSEE's
request, LICENSOR shall immediately (1) become party to the suit and
LICENSEE, or its Affiliate or sublicensee may use the name of
LICENSOR as a party plaintiff, or, (2) at LICENSOR's option, assign
the Patent Right to LICENSEE.
Should a period of thirty (30) days after the Certification Date pass
without LICENSEE or its Affiliate or sublicensee initiating suite, then
LICENSOR shall be free to immediately bring suit for patent infringement
in its name, at its expense. In such case, LICENSOR shall, before the
filing of such suit by LICENSOR, provide prior written notice to LICENSEE.
At LICENSOR's request, (1) LICENSEE shall immediately become a party to
the suit and/or cause its Affiliate or sublicensee to become a party to
the suit, and (2) LICENSOR may use the name of LICENSEE as a party
plaintiff and/or LICENSEE shall cause its sublicensee to allow LICENSOR to
use the name of its Affiliate or sublicensee as a party plaintiff."
All other terms and conditions shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
and seals and duly executed this Amendment as of the day and year set
forth below.
Advanced Research and Technology Institute, Inc. Praecis Pharmaceuticals, Inc.
BY: /s/ Xxxxxxx Xxxxxx By: /s/ Xxxx X. Silver
------------------------- -------------------------
NAME: Xxxxxxx Xxxxxx NAME: Xxxx X. Silver
TITLE: President TITLE: Vice President
DATE: DATE: June 3, 1998
34