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EXHIBIT 10.23
LICENSE AGREEMENT
BETWEEN
ALLEGRO CELL SYSTEMS, INC.
AND
THE REGENTS OF THE UNIVERSITY OF CALIFORNIA
FOR
Isolation of Novel HIV-2 Proviruses
UC Case No. 1993-032-1,-2,-3,-4
Design of Highly Efficient HIV-Based Packaging System for Gene Delivery
UC Case No. 1995-289-1,-2,-3
Lentiviral Vectors for Antigen Presentation in Dentritic Cells
(UC Case no. 1997-243-1,-2,-3) CASE NO. SD97-079
Feline Immunodeficiency Virus-Based Retroviral Vectors
UC Case No. 1997-254-1
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TABLE OF CONTENTS
<TABLE>
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Article No. Page
<S> <C>
RECITALS............................................................. 1
1. DEFINITIONS...................................................... 3
2. GRANTS........................................................... 5
3. CONSIDERATIONS................................................... 6
4. REPORTS, RECORDS AND PAYMENTS.................................... 10
5. PATENT MATTERS................................................... 13
6. GOVERNMENTAL MATTERS............................................. 15
7. TERMINATION OF THE AGREEMENT..................................... 16
8. LIMITED WARRANTY AND INDEMNIFICATION............................. 17
9. USE OF NAMES AND TRADEMARKS...................................... 19
10. MISCELLANEOUS PROVISIONS......................................... 19
ATTACHMENT 1......................................................... 24
ATTACHMENT 2......................................................... 25
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EXHIBIT C
UC Case Nos. 1993-032
1995-289
1997-243
1997-254
LICENSE AGREEMENT
This agreement ("Agreement") is made by and between ALLEGRO CELL SYSTEMS,
INC., a Delaware corporation having an address c/o Brobeck Phleger & Harrison
LLP, 12390 El Camino Real, San Diego, CA 92130 ("LICENSEE") and THE REGENTS OF
THE UNIVERSITY OF CALIFORNIA, a California corporation having its statewide
administrative offices at 1111 Franklin Street, 12th Floor, Oakland, California
94607-5200 ("THE REGENTS").
This Agreement is effective on the date of the last signature ("Effective
Date").
RECITALS
WHEREAS, the inventions disclosed in the following Case Docket Nos. and
titles ("Inventions"):
UC Case No. 1993-032-1,-2,-3,-4 "Isolation of Novel HIV-2 Proviruses"
UC Case No. 1995-289-1,-2,-3 "Design of Highly Efficient HIV-Based
Packaging System for Gene Delivery",
UC Case No. 1997-243-1,-2,-3 "Lentiviral Vectors for Antigen
(SD97-079) Presentation in Dendtritic Cells",
UC Case No. 1997-254-1 "Feline Immunodeficiency Virus-Based
Retroviral Vectors",
were made in the course of research at The University of California, San Diego
("UCSD") by Dr. Wong-Staal and her associates (hereinafter and collectively, the
"Inventors") and are covered by Patent Rights as defined below;
WHEREAS, the research was sponsored in part by the Government of the United
States of
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America and as a consequence this license is subject to overriding obligations
to the Federal Government under 35 U.S.C. (SS) 200-212 and applicable
regulations;
WHEREAS, the development of the Invention was sponsored in part by The
National Institutes of Health and as a consequence this license is subject to
overriding obligations to the same under the sponsorship agreement;
WHEREAS, Dr. David Looney, an inventor on UC Case No. 1997-254-1, is an
employee of both the Veterans Administration ("VA") and The University of
California, San Diego. In accordance with the policy of the VA, Dr. Looney will
report the invention to the VA for a determination of rights. If the VA returns
rights to Dr. Looney, Dr. Looney will assign his rights to THE REGENTS. However,
the VA is not required to return rights to Dr. Looney.
WHEREAS, the Inventors are employees of UCSD, and they are obligated to
assign all of their right, title and interest in the Invention to THE REGENTS;
WHEREAS, LICENSEE entered into secrecy agreements (UC Control No.
1999-20-0353) with THE REGENTS, effective 28 July, 1998 and 10 June, 1999
("Secrecy Agreement"), for the purpose of evaluating the Invention;
WHEREAS, LICENSEE entered into a Letter of Intent (UC COntrol No.
1999-30-0335) with THE REGENTS, effective 20 April, 1999, ("Letter of Intent"),
for the purpose of negotiating this Agreement;
WHEREAS, THE REGENTS is desirous that the Invention be developed and
utilized to the fullest possible extent so that its benefits can be enjoyed by
the general public;
WHEREAS, LICENSEE is desirous of obtaining certain rights from THE REGENTS
for commercial development, use, and sale of the Invention, and THE REGENTS is
willing to grant such rights; and
WHEREAS, LICENSEE understands that THE REGENTS may publish or otherwise
disseminate information concerning the Invention and Technology (as defined
below) at any time and that LICENSEE is paying consideration thereunder for its
early access to the Invention and Technology, not continued secrecy therein.
NOW, THEREFORE, the parties agree:
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1. DEFINITIONS
The terms, as defined herein, shall have the same meanings in both their
singular and plural forms.
1.1 "Affiliate" means any corporation or other business entity in which
LICENSEE owns or controls, directly or indirectly, at least twenty percent (20%)
of the outstanding stock or other voting rights entitled to elect directors, or
in which LICENSEE is owned or controlled directly or indirectly by at least
twenty percent (20%) of the outstanding stock or other voting rights entitled to
elect directors; but in any country where the local law does not permit foreign
equity participation of at least twenty percent (20%), then an "Affiliate"
includes any company in which LICENSEE owns or controls or is owned or
controlled by, directly or indirectly, the maximum percentage of outstanding
stock or voting rights permitted by local law.
1.2 "Sublicensee" means a third party to whom LICENSEE grants a sublicense
of certain rights granted to LICENSEE under this Agreement.
1.3 "Field" means all uses relating to human and animal therapy of disease
and delivery, screening and manufacture of gene therapy and immunotherapy
products for same, and sales of such products as laboratory reagents for resale
when not certified for human or animal use. "Field" does not include Ribozyme
Products.
1.4 "Ribozyme Products" means Licensed Products and Licensed Methods for
delivering to human patients in need thereof biologically active material which
includes an RNA molecule having catalytic activity (commonly known as ribozyme).
Ribozyme products include the RNA molecules, its vector and delivery system, its
formulation and packaging for commercial sale, and services, in connection with
the treatment of the patient with the ribozyme product.
1.5 "Territory" means worldwide to the extent permitted by law.
1.6 "Term" means the period of time beginning on the Effective Date and
ending on the later of (i) the expiration date of the longest-lived Patent
Rights; or (ii) the twenty-first (21st) anniversary of Effective Date.
1.7 "Patent Rights" means THE REGENTS' interest in any of the following:
those US patent applications listed on ATTACHMENT 1 with their associated titles
and serials, and disclosing and claiming the Invention, filed by Inventors and
assigned to THE REGENTS; and continuing applications thereof including
divisions, substitutions, and continuations-in-part (but only to extent
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the claims thereof are enabled by disclosure of the parent application); any
patents issuing on said applications including reissues, reexaminations and
extensions; and any corresponding foreign applications or patents.
1.8 "Technology" means the written technical information originating at
the University of California at San Diego relating to the Invention which Dr.
Flossie Wong-Staal may provide to LICENSEE up to the Effective Date of this
Agreement.
1.9 "Sponsor Rights" means all the applicable provisions of any license
to the United States Government executed by THE REGENTS and the overriding
obligations to the Federal Government under 35 U.S.C. (SS) 200-212 and
applicable governmental implementing regulations.
1.10 "Licensed Method" means any method that uses Technology, or is covered
by Patent Rights the use of which would constitute, but for the license granted
to LICENSEE under this Agreement, an infringement of any pending or issued and
unexpired claim within Patent Rights.
1.11 "Licensed Product" means any composition or product that uses
Technology, or is covered by the claims of Patent Rights, or that is produced by
the Licensed Method, or the manufacture, use, sale, offer for sale, or
importation of which would constitute, but for the license granted to LICENSEE
by THE REGENTS herein, an infringement of any pending or issued and unexpired
claim within the Patent Rights.
1.12 "Net Sales" means the total of the gross invoice prices of Licensed
Products sold by LICENSEE, its Sublicensee, an Affiliate, or any combination
thereof, less the sum of the following actual and customary deductions where
applicable and separately listed; cash, trade, or quantity discounts; sales,
use, tariff, import/export duties or other excise taxes imposed on particular
sales (except for value-added and income taxes imposed on the sales of Product
in foreign countries); transportation charges; or credits to customers because
of rejections or returns. For purposes of calculating Net Sales, transfers to a
Sublicensee or an Affiliate of Licensed Product under this Agreement for (i) end
use (but not resale) by the Sublicensee or Affiliate shall be treated as sales
by LICENSEE at list price of LICENSEE, or (ii) resale by a Sublicensee or an
Affiliate shall be treated as sales at the list price of the Sublicensee or
Affiliate.
1.13 "Patent Costs" means all out-of-pocket expenses for the preparation,
filing, prosecution, and maintenance of all United States and foreign patents
included in Patent Rights. Patent Costs shall also include reasonable
out-of-pocket expenses for patentability opinions, inventorship
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determination, preparation and prosecution of patent application,
re-examination, re-issue, interference, and opposition activities related to
patents or applications in Patent Rights.
1.14 "Combination Product" means any product which is a Licensed Product
and contains other products(s) or product component(s) that (i) does not use
Invention, Technology or Patent Rights; (ii) the sale, use or import by itself
does not contribute to the infringement of Patent Rights; (iii) can be sold
separately by LICENSEE, its Sublicensee or an Affiliate; and (iv) enhances the
market price of the final product(s) sold, used or imported by LICENSEE, its
Sublicensee, or an Affiliate.
2. GRANTS
2.1 License. Subject to the limitations set forth in this Agreement and
Sponsor's Rights, THE REGENTS hereby grants to LICENSEE, and LICENSEE hereby
accepts, a license under Patent Rights to make, use, sell, offer for sale, and
import Licensed Products and to practice Licensed Methods and to use
Technology, in the field within the Territory and during the Term.
2.2 The license granted herein is exclusive and THE REGENTS shall not
grant to third parties a further license under Patent Rights or to use
Technology in the Field, within the Territory and during the Term. The
Inventors are under no obligation to deliver new technology to the Licensee
after the effective date of this agreement.
2.3 Sublicense.
(a) The license granted in Paragraph 2.1 includes the right of
LICENSEE to grant sublicense to third parties during the Term but only for as
long the license is exclusive.
(b) With respect to sublicense granted pursuant to Paragraph 2.2(a),
LICENSEE shall:
(1) not receive, or agree to receive, anything of value in lieu of
cash as considerations from a third party under a sublicense granted pursuant to
Paragraph 2.2(a) without the express written notice to and written consent of
THE REGENTS, such consent of THE REGENTS not to be unreasonably withheld;
(2) to the extent applicable, include all of the rights of and
obligations due to THE REGENTS (and, if applicable, the Sponsor's Rights) and
contained in this Agreement;
(3) promptly provide THE REGENTS with a copy of each sublicense
issued; and
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(4) collect all payments due, direct or indirectly, to THE
REGENTS from Sublicensees and summarize and deliver all reports due, directly or
indirectly, to THE REGENTS from Sublicensees.
(c) Upon termination of this Agreement for any reason, THE REGENTS, at
its sole discretion, shall decide whether LICENSEE shall cancel or assign to THE
REGENTS any and all sublicenses, such decision respecting continuation of
sublicenses not to be unreasonably withheld.
2.4 Reservation of Rights. THE REGENTS reserves the right to:
(a) use the Invention, Technology and Patent Rights for non-clinical
educational and research purposes;
(b) publish or otherwise disseminate any information about the
Invention and Technology at any time. Dr. Flossie Wong-Stall agrees to make best
efforts to notify LICENSEE at least 60 days in advance by providing a copy of
said public disclosure; and
(c) allow other nonprofit institutions to use Invention, Technology and
Patent Rights for non-clinical educational and non-commercial research purposes
in their facilities.
3. CONSIDERATIONS
3.1 Fees and Royalties. The parties hereto understand that the fees and
royalties payable by LICENSEE to THE REGENTS under this Agreement are partial
considerations for the license granted herein to LICENSEE under Technology, and
Patent Rights. LICENSEE shall pay THE REGENTS:
(a) in recognition of LICENSEE being a startup business and partially
in lieu of cash, a license issue fee in the form of 4,000 shares of common stock
in LICENSEE, which amounts to Four Percent (4%) of the LICENSEE's common stock
which will be outstanding after the issuance to THE REGENTS, and as authorized
in the Article of Incorporation of the LICENSEE) dated November 4, 1998, and a
copy of which is herein incorporated by reference. The stock shall be delivered
to THE REGENTS within thirty (30) days of The execution of this Agreement and in
the following manner:
4,000 shares to THE REGENTS in the name of "Shellwater & Co.", a
nominee of THE REGENTS of The University of California;
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The acceptance of LICENSEE's common stock in this paragraph is subject to the
final approval of the Office of the President of THE REGENTS of The University
of California. In the event that such an approval is not granted, this Agreement
shall remain in effect and LICENSEE and THE REGENTS shall renegotiate in good
faith for a substitution of similar value for consideration.
(b) license maintenance fees of Ten Thousand Dollars ($10,000) per year and
payable on the Third anniversary of the Effective Date and annually thereafter
on the Fourth, Fifth and Sixth anniversaries of the Effective Date; provided
however, that LICENSEE's obligation to pay this fee shall end on the date when
LICENSEE is commercially selling a Licensed Product;
(c) milestone payments in the amounts payable according to the following
schedule or events:
Amount Date or Event
(1) $15,000 First IND filing incorporating any Licensed Product (one
time only)
(2) $25,000 First Phase II Efficacy Study Initiation, any indication,
any geography (one time only)
(3) $50,000 Each Licensed Product Regulatory Approval
(4) $15,000 Each Drug Master File for gene therapy delivery of a third
party product
(d) an earned royalty
(i) of Two Percent (2%) on Net Sales of Licensed Products for human
therapeutics uses by LICENSEE and/or its Affiliate(s); and
(ii) of Two and One half Percent (2.5%) on Net Sales of Licensed
Products for non-human therapeutics uses by LICENSEE and/or its Affiliate(s);
(iii) of Six Percent (6%) on net Sales of Licensed Products for use in
formulation or manufacture of third-party therapeutic products by LICENSEE or by
third parties;
(iv) of Ten percent (10%) on Net Sales of Licensed Products for
non-therapeutic, non-clinical use as laboratory research reagents sold to third
parties provided, however, that the earned royalty due on Net Sales of
Combination Product by LICENSEE and/or its Affiliate(s) shall be calculated as
below:
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Earned Royalties due THE REGENTS = A/(A+B+C...) x Royalty Rate on Net
Sales of the Licensed Products applicable in (i) or (ii) x Net Sales of
Combination Product, where:
A is the separately listed sale price of the Licensed Product or Licensed
Product components; and
B and C ... are the separately listed sale prices of the individual products
or product components, respectively, that satisfied the requirements outlined in
Paragraph 1.13. If LICENSEE does not separately sell any of the B, C ...
products or product components used in Combination Product, the purchase price
paid by LICENSEE in the procurement of said products or product components shall
be used.
(e) forty percent (40%) of all sublicense fees received by LICENSEE from its
Sublicensees that are not earned royalties, except that this percentage shall be
reduced to 25% of all sublicense fees for Licensed Products containing in any
effective amount one royalty-bearing technology not covered by THE REGENTS'
Patent Rights, and reduced to 10% of all sublicense fees for Licensed Products
containing in any effective amount three or more royalty-bearing technologies
not covered by THE REGENTS' Patent Rights;
(f) on each and every sublicense royalty payment received by LICENSEE from
its Sublicensees on sales of Licensed Product by Sublicensee, royalties based on
the royalty rate in Paragraph 3.1(d) as applied to Net Sales of Sublicensee,
plus forty percent (40%) of the excess over the royalty rates described in
Paragraph 3.1(d) received by LICENSEE from Sublicensee, except that this
additional percentage shall be reduced to 25% of the excess over Paragraph
3.1(d) royalty rates for Licensed Products containing in any effective amount
one royalty-bearing technology not covered by Regents patent Rights, and reduced
to 10% of the excess over Paragraph 3.1(d) royalty rates for Licensed products
containing in any effective amount three or more royalty-bearing technologies
covered by Regents' Patent Rights.
(g) beginning on the later of the Sixth anniversary of the Effective Date of
this Agreement or in the calendar year of first commercial sales of the first
License Product by LICENSEE, its Sublicensee, or an Affiliate and if the total
earned royalties paid by LICENSEE
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under Paragraphs 3.1(d) and (f) to THE REGENTS in any such year cumulatively
amounts to less than Twenty-Five Thousand Dollars ($25,000) ("minimum annual
royalty"), LICENSEE shall pay to THE REGENTS a minimum annual royalty on or
before February 28 following the last quarter of such year the difference
between amount noted above and the total earned royalty paid by LICENSEE for
such year under Paragraphs 3.1(d) and (f); provided, however, that for the year
of commercial sales of the first Licensed Product, the amount of minimum annual
royalty payable shall be pro-rated for the number of months remaining in that
calendar year. If clinical trials of Licensed Products have not commenced by the
Eighth anniversary of the Effective date of this Agreement, the minimum annual
royalty shall increase to One Hundred Thousand Dollars ($100,000) per year.
All fees and royalty payments specified in Paragraphs 3.1(a) through 3.1(g)
above shall be paid by LICENSEE pursuant to Paragraph 4.3 and shall be delivered
by LICENSEE to THE REGENTS as noted in Paragraph 10.1.
3.2 Patent Costs. LICENSEE shall reimburse THE REGENTS all past unpaid
Patent Costs (prior to the Effective Date) approximately in the amount of
Eighty-Eight Thousand Dollars ($88,000) and future costs (on or after the
Effective Date) Patent Costs plus a ten percent (10%) patent service fee to be
paid within sixty (60) days following receipt by LICENSEE of an itemized invoice
from THE REGENTS, such invoice for past patent costs accruing prior to the
Effective Date of this Agreement to be divided into four (4) approximately equal
quarterly payments, which shall be invoiced separately from patent costs
accruing after the Effective Date.
Past unpaid Patent Costs as of March 1, 2000 totaling Eighty-Eight Thousand
Dollars ($88,000.00) are listed in ATTACHMENT 2.
3.3 Due Diligence.
(a) LICENSEE shall:
(1) diligently pursue, using commercially reasonable best efforts,
the development, manufacture and sale of Licensed Products, including formation
of suitable
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partnership agreements that achieve these objectives;
(2) reasonably fill the market demand for Licensed Products
following commencement of marketing at any time during the term of this
Agreement;
(3) obtain all necessary governmental approvals for the manufacture,
use and sale of Licensed Products;
(4) identify a Licensed Product within four (4) years of the
effective date of this Agreement; and
(5) for each Licensed Product identified by Licensee, THE REGENTS and
LICENSEE will mutually agree on specific diligence milestones for that
identified License Product.
(b) If LICENSEE fails to perform any of its obligations specified in
Paragraphs 3.3(a) (1)-(5), then THE REGENTS shall have the right and option to
either terminate this Agreement or change LICENSEE's exclusive license to a
nonexclusive license. THE REGENTS shall notify LICENSEE of performance
deficiencies in writing and giving LICENSEE 180 days to cure said performance
failures before exercising THE REGENTS' right to terminate this Agreement or
convert it to a non exclusive license. This right, if exercised by THE REGENTS,
supersedes the rights granted in Article 2.
4. REPORTS, RECORDS AND PAYMENTS
4.1 Reports.
(a) Progress Reports.
(1) Beginning January 1, 2001 and ending on the date of first
commercial sale of a Licensed Product in the United States, LICENSEE shall
submit to THE REGENTS semi-annual progress reports covering LICENSEE's (and
Affiliate's and Sublicensee's) activities to develop and test all Licensed
Products and obtain governmental approvals necessary for marketing the same.
Such reports shall include a summary of work completed; summary of work in
progress; current schedule of anticipated events or milestones; market plans for
introduction of Licensed Products; and summary of resources (dollar value) spent
in the reporting period.
(2) LICENSEE shall also report to THE REGENTS, in its immediately
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subsequent progress report, the date of first commercial sale of a Licensed
Product in each country.
(b) Royalty Reports. After the first commercial sale of a Licensed
Product anywhere in the world, LICENSEE shall submit to THE REGENTS quarterly
royalty reports on or before each February 28, May 31, August 31 and November 30
of each year. Each royalty report shall cover LICENSEE's (and each Affiliate's
and Sublicensee's) most recently completed calendar quarter and shall show:
(1) the gross sales, deductions as provided in Paragraph 1.11,
and Net Sales during the most recently completed calendar quarter and the
royalties, in US dollars, payable with respect thereto;
(2) the number of each type of Licensed Product sold;
(3) sublicense fees and royalties received during the most
recently completed calendar quarter in US dollars, payable with respect thereto;
(4) the method used to calculate the royalties;
(5) the exchange rates used;
(6) or each Licensed Product, a summary of marketing work
completed; summary of marketing work in progress; current schedule of
anticipated marketing events or milestones; summary of resources (dollar value)
spent in the reporting period.
If no sales of Licensed Products has been made and no sublicense revenues has
been received by LICENSEE during any reporting period, LICENSEE shall so report.
4.2 Records & Audits.
(a) LICENSEE shall keep, and shall require its Affiliates and
Sublicensees to keep, accurate and correct records of all Licensed Products
manufactured, used, and sold, and sublicense fees received under this Agreement.
Such records shall be retained by LICENSEE for at least five (5) years following
a given reporting period.
(b) All records shall be available during normal business hours
for inspection at the expense of THE REGENTS by THE REGENTS's Internal Audit
Department or by a Certified Public Accountant selected by THE REGENTS and in
compliance with the other terms of this Agreement for the sole purpose of
verifying reports and payments. Such inspector shall not
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disclose to THE REGENTS any information other than information relating to the
accuracy of reports and payments made under this Agreement or other compliance
issues. In the event that any such inspection shows an under reporting and
underpayment in excess of five percent (5%) for any twelve (12) month period,
then LICENSEE shall pay the cost of the audit as well as any additional sum that
would have been payable to THE REGENTS had the LICENSEE reported correctly, plus
an interest charge at a rate of ten percent (10%) per year. Such interest shall
be calculated from the date the correct payment was due to THE REGENTS up to the
date when such payment is actually made by LICENSEE. For underpayment not in
excess of five percent (5%) for any twelve (12) month period, LICENSEE shall pay
the difference within thirty (30) days without interest charge or inspection
cost.
4.3 Payments.
(a) All fees and royalties due THE REGENTS shall be paid in United
States dollars and all checks shall be made payable to "The Regents of the
University of California", referencing THE REGENTS' taxpayer identification
number, 95-6006144. When Licensed Products are sold in currencies other than
United States dollars, LICENSEE shall first determine the earned royalty in the
currency of the country in which Licensed Products were sold and then convert
the amount into equivalent United States funds, using the exchange rate quoted
in the Wall Street Journal on the last business day of the applicable reporting
period.
(b) Royalty Payments.
(1) Royalties shall accrue when Licensed Products are invoiced,
or if not invoiced, when delivered to a third party or Affiliate.
(2) LICENSEE shall pay earned royalties quarterly on or before
February 28, May 31, August 31 and November 30 of each calendar year. Each
such payment shall be for earned royalties accrued within LICENSEE's most
recently completed calendar quarter.
(3) Royalties earned on sales occurring or under sublicense
granted pursuant to this Agreement in any country outside the United States
shall not be reduced by LICENSEE for any taxes, fees, or other charges imposed
by the government of such country on the payment of royalty income, except that
all payments made by LICENSEE in fulfillment of THE REGENTS' tax liability in
any particular country may be credited against earned royalties or fees due THE
REGENTS for that country. LICENSEE shall pay all bank charges resulting from the
transfer of
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such royalty payments.
(4) If at any time legal restrictions prevent the prompt
remittance of part or all royalties by LICENSEE with respect to any country
where a Licensed Product is sold or a sublicense is granted pursuant to this
Agreement, LICENSEE shall convert the amount owed to THE REGENTS into US
currency and shall pay THE REGENTS directly from its US sources of fund for as
long as the legal restrictions apply.
(5) LICENSEE shall not collect royalties from, or cause to be paid
on Licensed Products sold to the account of the US Government or any agency
thereof as provided for in the license to the US Government.
(6) In the event that any patent or patent claim within Patent
Rights is held invalid in a final decision by a patent office from which no
appeal or additional patent prosecution has been or can be taken, or by a court
of competent jurisdiction and last resort and from which no appeal has or can be
taken, all obligation to pay royalties based solely on that patent or claim or
any claim patentable indistinct therefrom shall cease as of the date of such
final decision. LICENSEE shall not, however, be relieved from paying any
royalties that accrued before the date of such final decision, that are based on
another patent or claim not involved in such final decision, or that are based
on the use of Technology.
(c) Late Payments. In the event royalty, reimbursement and/or fee
payments are not received by THE REGENTS when due, LICENSEE shall pay to THE
REGENTS interest charges at a rate of ten percent (10%) per year. Such interest
shall be calculated from the date payment was due until actually received by THE
REGENTS.
5. PATENT MATTERS
5.1 Patent Prosecution and Maintenance.
(a) Provided that LICENSEE has reimbursed or agreed to reimburse THE
REGENTS for Patent Costs pursuant to Paragraph 3.2, THE REGENTS shall diligently
prosecute and maintain the United States and, if available, foreign patents, and
applications in Patent Rights using counsel of its choice. THE REGENTS shall
provide LICENSEE with copies of all relevant documentation relating to such
prosecution and LICENSEE shall keep this documentation confidential. The
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counsel shall take instructions only from THE REGENTS, and all patents and
patent applications in Patent Rights shall be assigned solely to THE REGENTS,
however, THE REGENTS agrees to reasonably consult with LICENSEE regarding patent
prosecution decisions, including choice of counsel, and to make best efforts to
consider business interests expressed of LICENSEE in making such decisions, to
the extent that no conflict exists with legitimate requirements of THE REGENTS.
LICENSEE shall not be responsible for reimbursement of THE REGENTS for costs of
patent prosecution in countries outside Territory of this Agreement.
(b) THE REGENTS shall consider amending any patent application
in Patent Rights to include claims reasonably requested by LICENSEE to protect
the products contemplated to be sold by LICENSEE under this Agreement.
(c) LICENSEE shall apply for an extension of the term of any
patent in Patent Rights if appropriate under the Drug Price Competition and
Patent Term Restoration Act of 1984 and/or European, Japanese and other foreign
counterparts of this law. LICENSEE shall prepare all documents for such
application, and THE REGENTS shall execute such documents and to take any other
additional action as LICENSEE reasonably requests in connection therewith.
(d) LICENSEE may elect to terminate its reimbursement
obligations with respect to any patent application or patent in Patent Rights
upon three (3) months' written notice to THE REGENTS. THE REGENTS shall use
reasonable efforts to curtail further Patent Costs for such application or
patent when such notice of termination is received from LICENSEE. THE REGENTS,
in its sole discretion and at its sole expense, may continue prosecution and
maintenance of said application or patent, and LICENSEE shall then have no
further license with respect thereto. Non-payment of any portion of Patent Costs
with respect to any application or patent may be deemed by THE REGENTS as an
election by LICENSEE to terminate its reimbursement obligations with respect to
such application or patent.
5.2 Patent Infringement.
(a) If LICENSEE learns of any substantial infringement of Patent
Rights, LICENSEE shall so inform THE REGENTS and provide THE REGENTS with
reasonable evidence of the infringement. Neither party shall notify a third
party of the infringement of Patent Rights without the consent of the other
party. Both parties shall use reasonable efforts and cooperation to terminate
infringement without litigation.
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(b) LICENSEE may request THE REGENTS to take legal action against such
third party for the infringement of Patent Rights. Such request shall be made in
writing and shall include reasonable evidence of such infringement and damages
to LICENSEE. If the infringing activity has not abated ninety (90) days
following LICENSEE's request, THE REGENTS shall elect to or not to commence suit
on its own account. THE REGENTS shall give notice of its election in writing to
LICENSEE by the end of the one-hundredth (100th) day after receiving notice of
such request from LICENSEE. LICENSEE may thereafter bring suit for patent
infringement at its own expense, if and only if THE REGENTS elects not to
commence suit and the infringement occurred in a jurisdiction where LICENSEE has
an exclusive license under this Agreement. If LICENSEE elects to bring suit, THE
REGENTS may join that suit at its own expense.
(c) Recoveries from actions brought pursuant to Paragraph 5.2(b) shall
belong to the party bringing suit. Legal actions brought jointly by THE REGENTS
and LICENSEE and fully participated in by both shall be at the joint expense of
the parties and all recoveries shall be shared jointly them in proportion to the
share of expense paid by each party. Such actions and recoveries shall not
subvert any underlying royalty arrangements and obligations.
(d) Each party shall cooperate with the other in litigation
proceedings at the expense of the party bringing suit. Litigation shall be
controlled by the party bringing the suit, except that THE REGENTS may be
represented by counsel of its choice in any suit brought by LICENSEE.
5.3 Patent Marking. LICENSEE shall mark all Licensed Products made, used or
sold under the terms of this Agreement, or their containers, in accordance with
the applicable patent marking laws.
6. GOVERNMENTAL MATTERS
6.1 Governmental Approval or Registration. If this Agreement or any
associated transaction is required by the laws of any nation to be either
approved or registered with any governmental agency, LICENSEE shall assume all
legal obligations to do so. LICENSEE shall notify THE REGENTS if it becomes
aware that this Agreement is subject to a United States or foreign government
reporting or approval requirement. LICENSEE shall make all necessary filings and
pay all costs including fees, penalties, and all other out-of-pocket costs
associated with such
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<PAGE>
reporting or approval process.
6.2 Export Control Laws. LICENSEE shall observe all applicable United
States and foreign laws with respect to the transfer of Licensed Products and
related technical data to foreign countries, including, without limitation, the
International Traffic in Arms Regulations and the Export Administration
Regulations.
6.3 Preference for United States Industry. If LICENSEE manufactures a
Licensed Product or Combination Product for sale in the US, LICENSEE shall
manufacture said product substantially in the US.
7. TERMINATION OF THE AGREEMENT
7.1 Termination by THE REGENTS. If LICENSEE fails to perform or violates
any term of this Agreement, then THE REGENTS may give written notice of default
("Notice of Default") to LICENSEE. If LICENSEE fails to cure the default within
sixty (60) days of the Notice of Default, THE REGENTS may terminate this
Agreement and the license granted herein by a second written notice ("Notice of
Termination") to LICENSEE. If a Notice of Termination is sent to LICENSEE, this
Agreement shall automatically terminate on the effective date of that notice.
Termination shall not relieve LICENSEE of its obligation to pay any fees owed at
the time of termination and shall not impair any accrued right of THE REGENTS.
7.2 Termination by Licensee.
(a) LICENSEE shall have the right at any time and for any reason to
terminate this Agreement upon a ninety (90) day written notice to THE REGENTS.
Said notice shall state LICENSEE's reason for terminating this Agreement.
(b) Any termination under Paragraph 7.2(a) shall not relieve LICENSEE
of any obligation or liability accrued under this Agreement prior to termination
or rescind any payment made to THE REGENTS or action by LICENSEE prior to the
time termination becomes effective. Termination shall not affect in any manner
any rights of THE REGENTS arising under this Agreement prior to termination.
7.3 Survival on Termination. The following Paragraphs and Articles shall
survive the termination of this Agreement:
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(a) Article 4 (Reports, records and payments)
(b) Paragraph 7.4 (Disposition of Licensed Products on Hand);
(c) Paragraph 8.2 (Indemnification);
(d) Article 9 (Use of names and trademarks);
(e) Paragraph 10.2 hereof (Secrecy); and
(f) Paragraph 10.5 (Failure to Perform).
7.4 Disposition of Licensed Products on Hand. Upon termination of this
Agreement, LICENSEE may dispose of all previously made or partially made
Licensed Product within a period of one hundred and fifty (150) days of the
effective date of such termination provided that the sale of such Licensed
Product by LICENSEE, in Sublicensees, or Affiliates shall be subject to the
terms of this Agreement, including but not limited to the rendering of reports
and payment of royalties required under this Agreement.
8. LIMITED WARRANTY AND INDEMNIFICATION
8.1 Limited Warranty.
(a) THE REGENTS warrants that it has the lawful right to grant this
license.
(b) The license granted herein and the associated Technology are
provide "AS IS" and without WARRANTY OF MERCHANTABILITY or WARRANTY OF FITNESS
FOR A PARTICULAR PURPOSE or any other warranty, express or implied. THE REGENTS
makes no representation or warranty that the Licensed Product, Licensed Method
or the use of Patent Rights or Technology will not, to its best knowledge,
infringe any other patent or other proprietary rights.
(c) In no event shall THE REGENTS be liable for any incidental,
special or consequential damages resulting from exercise of the license granted
herein or the use of the Invention, Licensed Product, Licensed Method or
Technology.
(d) Nothing in this Agreement shall be construed as:
(1) a warranty or representation by THE REGENTS as to the
validity or scope of any Patent Rights;
(2) a warranty or representation that anything made, used, sold
or otherwise disposed of under any license granted in this Agreement is or shall
be free from infringement of
17
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patents of third parties;
(3) an obligation to bring or prosecute actions or suits against
third parties for patent infringement except as provided in Paragraph 5.2
hereof;
(4) conferring by implication, estoppel or otherwise any license
or rights under any patents of THE REGENTS other than Patent Rights as defined
in this Agreement, regardless of whether those patent are dominant or
subordinate to Patent Rights;
(5) an obligation to furnish any know-how not provided in Patent
Rights and Technology; or
(6) an obligation to update Technology.
8.2 Indemnification.
(a) LICENSEE shall indemnify, hold harmless and defend THE REGENTS,
its officers, employees, and agents; the sponsors of the research that led to
the Invention; and the Inventors of the patents and patent applications in
Patent Rights and their employers against any and all claims, suits, losses,
damage, costs, fees, and expenses resulting from or arising out of exercise of
this license or any sublicense. This indemnification shall include, but not be
limited to, any product liability.
(b) Within 30 days from the execution of this Agreement, LICENSEE, at
its sole cost and expense, shall obtain insurance its activities in connection
with the work under this Agreement and obtain, keep in force and maintain
insurance or an equivalent program of self insurance as follows:
(1) comprehensive or commercial general liability insurance
(contractual liability included) with limits of at least: (i) each occurrence,
$1,000,000; (ii) products/completed operations aggregate, $5,000,000; (iii)
personal and advertising injury, $1,000,000; and (iv) general aggregate
(commercial form only), $5,000,000; and
(2) the coverage and limits referred to above shall not in any
way limit the liability of LICENSEE.
(c) LICENSEE shall furnish THE REGENTS with certificates of insurance
showing compliance with all requirements. Such certificates shall: (i) provide
for thirty (30) day advance written notice to THE REGENTS of any modification;
(ii) indicate that THE REGENTS has been endorsed as an additional insured under
the coverage referred to above; and (iii) include a provision
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<PAGE>
that the coverage shall be primary and shall not participate with nor shall be
excess over any valid and collectable insurance or program of self-insurance
carried or maintained by THE REGENTS.
(d) THE REGENTS shall notify LICENSEE in writing of any claim or
suit brought against THE REGENTS in respect of which THE REGENTS intends to
invoke the provisions of this Article. LICENSEE shall keep THE REGENTS informed
on a current basis of its defense of any claims under this Article.
9. USE OF NAMES AND TRADEMARKS
9.1 Nothing contained in this Agreement confers any right to use in
advertising, publicity, or other promotional activities any name, trade name,
trademark, or other designation of either party hereto ( including contraction,
abbreviation or simulation of any of the foregoing). Unless required by law, the
use by LICENSEE of the name, "THE REGENTS of the University of California" or
the name of any campus of the University of California is prohibited, without
the express written consent of THE REGENTS.
9.2 THE REGENTS may disclose to the Inventors the terms and conditions
of this Agreement upon their request. If such disclosure is made, THE REGENTS
shall notify LICENSEE and advise the Inventors not to disclose such terms and
conditions to others, according to relevant THE REGENTS policies respecting
handling of confidential THE REGENTS information.
9.3 THE REGENTS may acknowledge the existence of this Agreement and the
extent of the grant in Article 2 to third parties, but THE REGENTS shall not
disclose the financial terms of this Agreement to third parties, except where
THE REGENTS is required by law to do so, such as under the California Public
Records Act.
10. MISCELLANEOUS PROVISIONS
10.1 Correspondence. Any notice or payment required to be given to
either party under this Agreement shall be deemed to have been properly given
and effective:
(a) on the date of delivery if delivered in person, or
(b) five (5) days after mailing if mailed by first-class or
certified mail, postage paid, to the respective addresses given below, or to
such other address as is designated by
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<PAGE>
written notice given to the other party.
If sent to LICENSEE: Allegro Cell Systems, Inc.
550 West C Street, Suite 1300
c/o Brobeck Phleger & Harrison
San Diego, CA 92101-3532
Attention: Mr. Craig Andrews, Secretary
If sent to THE REGENTS: Office of Technology Transfer
The University of California
1111 Franklin Street; 5th Floor
Oakland, CA 94607
Attention: Executive Director
Research Administration and
Technology Transfer
UC Case Nos. 1993-032, 1985-289-2,
1997-243-2, and 1997-254-1
10.2 Secrecy
(a) "Confidential Information" shall mean information, including
Technology, relating to the Invention and disclosed by THE REGENTS to LICENSEE
during the term of this Agreement, which if disclosed in writing shall be marked
"Confidential", or if first disclosed otherwise, shall within thirty (30) days
of such disclosure be reduced to writing by THE REGENTS and sent to LICENSEE:
(b) Licensee shall:
(1) use the Confidential Information for the sole purpose of
performing under the terms of this Agreement;
(2) safeguard Confidential Information against disclosure to
others with the same degree of care as it exercises with its own data of a
similar nature;
(3) not disclose Confidential Information to others (except to
its employees, agents or consultants who are bound to LICENSEE by a like
obligation of confidentiality) without the express written permission of THE
REGENTS, except that LICENSEE shall not be prevented from using or disclosing
any of the Confidential Information that:
(i) LICENSEE can demonstrate by written records was
previously known to it;
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(ii) is now, or becomes in the future, public knowledge other
than through acts or omissions of LICENSEE; or
(iii) is lawfully obtained by LICENSEE from sources independent
of THE REGENTS; and
(c) The secrecy obligations of LICENSEE with respect to Confidential
Information shall continue for a period ending five (5) years from the
termination date of this Agreement.
10.3 Assignability. This Agreement may be assigned by THE REGENTS, but is
personal to LICENSEE and assignable by LICENSEE only with the written consent of
THE REGENTS, except that LICENSEE may assign this Agreement without such written
consent of THE REGENTS only to a person or entity acquiring all or substantially
all of the assets of LICENSEE or of the line of business of LICENSEE to which
this Agreement relates, whether by sale, merger or otherwise.
10.4 No Waiver. No waiver by either party of any breach or default of any
covenant or agreement set forth in this Agreement shall be deemed a waiver as to
any subsequent and/or similar breach or default.
10.5 Failure to Perform. In the event of a failure of performance due under
this Agreement and if it becomes necessary for either party to undertake legal
action against the other on account thereof, then the prevailing party shall be
entitled to reasonable attorney's fees in addition to costs and necessary
disbursements.
10.6 Governing Laws. THIS AGREEMENT SHALL BE INTERPRETED AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, but the scope and validity
of any patent or patent application shall be governed by the applicable laws of
the country of the patent or patent application.
10.7 Force Majeure. A party to this Agreement may be excused from any
performance required herein if such performance is rendered impossible or
unfeasible due to any catastrophe or other major event beyond its reasonable
control, including, without limitation, war, riot, and insurrection; laws,
proclamations, edicts, ordinances, or regulations; strikes, lockouts, or other
serious labor disputes; and floods, fires, explosions, or other natural
disasters. When such events have abated, the non-performing party's obligations
herein shall resume.
10.8 Headings. The headings of the several sections are inserted for
convenience of reference
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only and are not intended to be a part of or to affect the meaning or
interpretation of this Agreement.
10.9 Entire Agreement. This Agreement embodies the entire understanding of
the parties and supersedes all previous communications, representations or
understandings, either oral or written, between the parties relating to the
subject matter hereof.
10.10 Amendments. No amendment or modification of this Agreement shall be
valid or binding on the parties unless made in writing and signed on behalf of
each party.
10.11 Severability. In the event that any of the provisions contained in
this Agreement is held to be invalid, illegal, or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provisions of this Agreement, and this Agreement shall be construed as if the
invalid, illegal, or unenforceable provisions had never been contained in it.
-remainder of page left blank deliberately-
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10.12 Publication. Dr. Flossie Wong-Stall agrees to use best efforts to
notify LICENSEE at least 60 days in advance of any first publication by the
Investors describing Inventions of this Agreement, to allow LICENSEE to review
the subject matter of such publications during this 60 day period. LICENSEE may
request that THE REGENTS file additional patents relating to the technologies of
this Agreement, subject to the conditions and limitations of Article 5.
IN WITNESS WHEREOF, both THE REGENTS and LICENSEE have executed this
Agreement, in duplicate originals, by their respective and duly authorized
officers on the day and year written.
ALLEGRO CELL SYSTEMS, INC.: THE REGENTS OF THE UNIVERSITY
OF CALIFORNIA:
By: /s/ Craig S. Andrews By: /s/ Alan B. Bennett
------------------------------ ----------------------------
(Signature) (Signature)
Name: Craig S. Andrews Name: Alan B. Bennett
----------------------------
(Please Print)
Title: Secretary Title: Executive Director
--------------------------- Research Administration and
Technology Transfer
Date: April 27, 2000 Date: 5/8/00
---------------------------- --------------------------
ATTEST: ATTEST:
By /s/ Kandace W. Richardson By
------------------------------ ----------------------------
(Signature) (Signature)
Name: Kandace W. Richardson Name:
---------------------------- --------------------------
(Please Print)
Date April 27, 2000 Date
---------------------------- --------------------------
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ATTACHMENT 1
INVENTIONS
UC Case Number U.S. Application Number or Filing or Issue Date
U.S. Patent Number
-------------- -------------------------- --------------------
1993-032-1 60/001,441 Abandoned
1993-032-2 5,883,081 March 16, 1999
1993-032-3 09/256,490 February 23, 1999
1993-032-4 Application Authorized September 13, 1999
1995-289-1 60/015,055 Abandoned
1995-289-2 08/822,516 March 24, 1997
1995-289-3 09/131,684 August 10, 1998
1997-243-1 60/043,264 Abandoned
1997-243-2 09/061,986 April 17, 1998
1997-243-3 09/384,719 August 27, 1999
1997-254-1 08/936,633 September 24, 1997
<PAGE>
ATTACHMENT 2
Past unpaid Patent Costs as of March 1, 2000
<TABLE>
<CAPITON>
US Case Nos. Amount
------------ ----------
<S> <C>
1993-032-1 $6,403.23
1993-032-2
1993-032-3
------------ ------------
1995-289-2 $27,199.79
------------ ------------
1997-243-2 $26,840.60
------------ ------------
1997-254-1 $27,594.98
------------ ------------
TOTAL $88,038.60
</TABLE>
