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EXHIBIT 10.4
MEDICAL COLLEGE OF HAMPTON ROADS
D/B/A EASTERN VIRGINIA MEDICAL SCHOOL,
MCGILL UNIVERSITY
AND
GMP ENDOTHERAPEUTICS, INC.
LICENSE AGREEMENT
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LICENSE AGREEMENT
THIS AGREEMENT (the "Agreement"), dated as of the 31st day of
January, 2000 is by and among GMP ENDOTHERAPEUTICS, INC.("Licensee"), One East
Broward Blvd, Suite 1701 Fort Lauderdale, Fl 33301, Medical College of Hampton
Roads d/b/a Eastern Virginia Medical School, 358 Mowbray Arch, Suite 401,
Norfolk, Virginia 23507 ("EVMS") and McGill University, 3550 University Street,
Montreal, Quebec, Canada H3A 2A7 ("McGill") (EVMS and McGill jointly referred
to as Licensor).
RECITALS
1. EVMS and McGill possess information and intellectual property
rights concerning human Pancreatic Beta Cell Growth Factor.
2. EVMS and McGill jointly, or EVMS individually, are the owners
of certain patents and patent applications identified in Appendix A, along with
any divisions, continuations, reissues, reexaminations, continuations-in-part
("CIPs"), and any foreign applications and patents issuing therefrom directed
to formulations of islet neogenesis associated proteins ("INGAP"), INGAP genes,
reagents for regulating INGAP expression or activity, and uses thereof
(collectively herein the "Licensed Patent Rights");
3. Licensee is in the business of developing and commercializing
therapeutic and diagnostic products and desires to obtain an exclusive,
worldwide, license with respect to the compounds, processes, and uses which are
the subject matter of the Patents and related technology; and
4. EVMS, McGill and Global Medical Products, Inc.("GMP"), an
Affiliate of Licensee, have entered into a Letter of Intent as the same has
been extended by the parties (the "Letter of Intent") and now wish to enter
into a binding license agreement that includes the concepts stated in the
Letter of Intent.
NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties agree as follows:
Article I
Definitions
Section 1.0. General. Terms defined in this Article I, and
parenthetically elsewhere, shall have the same meaning throughout this
Agreement. Defined terms may be used in the singular or plural.
Section 1.1. "Affiliate" means any entity that directly or indirectly
controls, is controlled by or is under common control with Licensee. The term
"control" as used herein means the possession of the power to direct or cause
the direction of the management and the policies of an entity, whether through
the ownership of a majority of the outstanding voting securities or by
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contract or otherwise.
Section 1.2. "Confidential Information" means all materials, Know-How
or other information directly related to INGAP, including, without limitation,
proprietary information, designs, methods, processes, specifications and
materials (whether or not patentable) regarding a party's technology, products,
business information or objectives.
Section 1.3. "Controlled" means the ability to grant a license or
sublicense as provided herein without violating the terms of any agreement with
a Third Party.
Section 1.4. "Compound" means mammalian Islet Neogenesis Associated
Protein (INGAP) together with all derivatives, peptides, analogs and fusion
proteins or peptides thereof, nucleic acids encoding any of the above and small
molecule modulators (agonist or antigonist) of any of the above which is
covered by one or more Valid Claims of the Licensed Patent Rights.
Section 1.5. "Know-How" means all information, data or materials
directly related to INGAP, including without limitation: instructions;
processes; formulae; biological and chemical materials; and biological,
chemical, pharmacological, toxicological, pharmaceutical, physical and
analytical, clinical, safety, manufacturing and quality control data and
information, all of which is unpatented.
Section 1.6. "Licensed Know-How" means Know-How necessary to make, use
or sell a Licensed Product that is owned or Controlled by either Licensor as of
the date of this Agreement. Licensed Know-How does not include Licensed Patent
Rights.
Section 1.7. "Licensed Patent Right" means a Patent Right that is
owned or Controlled, or becomes owned or Controlled, by either Licensor during
the term of this Agreement covering a method, apparatus, material, or
manufacture that is based upon, or claims priority from or has claims dependent
upon, or corresponds to United States Patents 5,840,531; 5,834,590; or
5,804,421or any patent application upon which these patents are based or claim
priority to, including all corresponding foreign and international patent
applications and patents issuing therefrom. Licensed Patent Rights existing as
of the date of this Agreement are listed in Appendix A which is attached hereto
and made a part of this Agreement. Licensed Patent Rights do not include
Licensed Know-How.
Section 1.8. "Licensed Product" means a composition intended for use
as a therapeutic, pharmaceutical or diagnostic comprising a Compound or any
product otherwise covered by a valid claim of Licensed Patent Rights.
Section 1.9. "Licensed Technology" means the Licensed Patent Rights
and Licensed Know-How.
Section 1.10 "Licensee" means GMP ENDOTHERAPEUTICS, INC.
Section 1.11. "Licensor" means EVMS and/or McGill.
Section 1.12. "Net Sales" means the gross amount received by Licensee
or its Affiliates from their sales to Third Parties of Licensed Product less:
(a) Trade, quantity and cash discounts allowed;
(b) Discounts, refunds, rebates, chargebacks, and retroactive
price adjustments;
(c) Licensed Product returns and allowances;
(d) Any tax imposed on the product that is appropriately deducted
from sales under generally accepted accounting principles;
(e) Any other reasonable and customary deductions which according
to generally
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accepted accounting principles ("GAAP") are bona fide
deductions from gross sales to determine net sales, which
deductions shall be subject to audit in accordance with
Section 4.9 of this Agreement; and
(f) Any shipping, freight, storage, insurance and other
transportation and handling charges
Such amounts shall be determined from the books and records of
Licensee maintained in accordance with GAAP, consistently applied.
Section 1.13 "Patent Right" means an unexpired patent or pending
patent application and all patents issuing therefrom and all divisions,
continuations, continuations-in-part, reissues, re-examination applications,
extensions, supplementary protection certificates, certificates of additions,
inventor's certificates, and any similar intellectual property, including all
foreign and international counterparts thereof.
Section 1.14. "Phase I Clinical Trials" means small scale human
clinical trials approved by the FDA conducted in volunteers in the United
States and designed to indicate product safety. Successful completion of such
Phase I Clinical Trials shall be deemed to have occurred if, based on the
results of such Phase I Clinical Trials, Licensee decides to conduct Phase II
Clinical Trials on such Licensed Products.
Section 1.15. "Phase II Clinical Trials" means small scale human
clinical trials conducted by or through Licensee in patients and designed to
indicate a statistically significant level of efficacy in the particular
indication tested, as well as to obtain some indication of the dosage regimen
required.
Section 1.16. "Phase III Clinical Trials" means large scale human
clinical trials approved by the FDA conducted by Licensee in patients in the
United States and designed to establish efficacy of a Licensed Product in the
particular indication tested and required to obtain clinical registration of a
Licensed Product with health regulatory authorities.
Section 1.17. "Registration Approval" means in relation to a Licensed
Product, such approval by the appropriate governmental authorities of the
United States, such approval being legally required before such Licensed
Product may be commercialized or sold for use in humans.
Section 1.18. "Sublicense Fees" means the net amounts received by
Licensee from non Affiliates based upon the sale, use or manufacture of
Licensed Products less any discounts, rebates, credits, allowances, taxes or
other bona fide deductions from gross receipts to determine net revenues, which
deductions shall be subject to audit in accordance with Section 4.9 of this
Agreement.
Section 1.19. "Third Party" means any person or entity other than
Licensee, EVMS or McGill, or an Affiliate or Sublicensee of Licensee, EVMS or
McGill.
Section 1.20. "Valid Claim" means any claim(s) in a pending patent
application or in an unexpired issued patent which has not been denied or held
unenforceable, unpatentable or invalid by a decision of a court or other
governmental agency of competent jurisdiction, unappealable or unappealed
within the time allowed for appeal, and which has not been admitted to be
invalid or unenforceable through reissue, reexamination ,disclaimer or similar
procedure. If in any country there should be two or more such decisions
conflicting with respect to the validity of the same claim, the decision of the
higher or highest tribunal shall thereafter control; however, should the
tribunals be of equal rank, then the decision or decisions upholding the claim
shall prevail when the decisions are equal in number, and the majority of
decisions shall prevail when the
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conflicting decisions are unequal in number.
Article II
Initiation and Development
Section 2.0. Prior Information. All EVMS and McGill Know-How or
Confidential Information received by Licensee prior to the date of this
Agreement shall be considered to be Licensed Know-How and treated in accordance
with the terms and conditions of this Agreement.
Section 2.1. Administration. For purposes of administering,
interpreting or otherwise carrying out the terms and conditions of this
Agreement, EVMS and McGill have mutually designated EVMS as the administrator
of this Agreement (the "Administrator"). The Administrator shall be Licensee's
contact for compliance with any terms or conditions hereof. However, all
correspondence, notices and reports to the Licensor shall be directed to both
EVMS and McGill. as set forth in Section 10.7 below. Any action to be taken or
notices under this Agreement which specifically stipulate that such action is
to be taken jointly by the Licensors rather than the Administrator must be
evidenced by the signatures of each of the representatives designated under
Section 10.7 by EVMS and McGill.
Section 2.2. Responsibilities. Licensee shall have responsibility for
the registration submission, registration approval, manufacturing, and
marketing of all Compounds and Licensed Products, and for payment of all costs,
associated therewith. Licensee shall be entitled to consult with Drs. Aaron
Vinik and Georges of Eastern Virginia Medical School as such entities and
persons may agree, regarding Licensee's efforts to develop, approve and market
Licensed Products.
Section 2.3. Reports. Licensee shall submit written reports to the
Licensor at the request of the Licensor summarizing the status of Licensee's
efforts in regard to Licensed Products and Licensee's planned efforts for the
following six months. The Licensor may request such written reports no more
than two (2) times per calendar year. Such reports shall be subject to the
confidentiality and non-use obligations set forth in Article VI.
Section 2.4. Compliance. Licensee shall comply with all United States
federal rules, regulations and guidelines applicable to the use of Licensed
Technology and assume full responsibility for any claims or liabilities which
may arise as a result of Licensee's use or possession of Licensed Technology.
Section 2.5. Diligence. Licensee agrees to exercise reasonably
diligent efforts toward commercializing Licensed Products according to its
usual business practices for products of similar potential and value.
Article III
License Grant
Section 3.0. License Grant. Subject to the terms and conditions of
this Agreement, Licensor hereby grants to Licensee : (i) a worldwide, exclusive
license to use the Licensed Patent Rights and to make, have made, use, have
used, develop, have developed, import, market, offer for sale, sell, and have
sold Compound and Licensed Products; and (ii) a worldwide, non-
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*** CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
exclusive license to use the Licensed Know How in connection with the
exploitation of the Licensed Patent Rights granted to Licensee hereunder.
The license granted to Licensee hereunder in the Licensed Patent Rights shall
be exclusive in all respects, except that Licensor specifically reserves the
right to use the Licensed Patent Rights for their continuing research only,
such research to include research sponsored by any non-commercial Third Party.
For the sake of clarity, Licensor confirms that its reserved right under this
paragraph shall not include the right to grant other licenses of the Licensed
Patent Rights.
During the term of this Agreement and from time to time the Licensor shall,
from time to time, upon written request of Licensee, disclose, or in the case
of materials, provide to Licensee, any Licensed Know How, provided that
Licensee shall pay all reasonable costs incurred by Licensor in providing such
information.
Section 3.1. Sublicense. Licensee shall have the right to grant
sublicenses to any entity not an affiliate with respect to the rights conferred
upon Licensee under this Agreement to make, have made, use, have used, import,
market, offer for sale, sell, and have sold Compound and Licensed Products.
Licensee shall provide a copy of any such sublicenses to the Licensor.
Article IV
Commercial Terms
Section 4.0. License Fees. Subject to the terms and conditions of this
Agreement, Licensee shall pay Licensor the following license fees:
(a) [***] upon the date of this Agreement;
(b) [***] upon the first anniversary of the date of this
Agreement; and
(c) reimbursement for all patent fees incurred prior to the date
of this Agreement in connection with the grant of the Patents
for which reimbursement has not previously been made; which
amounts shall not exceed $ 39,000.
Section 4.1. Milestones. Subject to the terms and conditions of this
Agreement, including Section 4.3(b) hereof, Licensee shall make the following
non-refundable and non-creditable milestone payments to the Licensor:
(a) [***] upon receipt of the first approval of the use of a
product covered by a Valid Claim (herein "Patented Product")
in animals by the USDA or other regulatory agencies of the
United States;
(b) [***] upon initiation of the first Phase I Clinical
Trials;
(c) [***] upon successful completion of Phase III Clinical
Trials of a Licensed Product;
(d) [***] upon Registration Approval;
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*** CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Section 4.2. Stock.
Licensee has this date issued to Licensor shares of its common stock
in such amounts that after issuance of those shares Licensor
shall own in the aggregate, [***] of the total outstanding
shares of the common stock of Licensee, on a fully diluted
basis. Such shares are being issued this even date in
accordance with the terms and conditions of the Stock
Purchase Agreements between Licensee and each Licensor.
Section 4.3. Payments.
(a) Any payment accruing under Sections 4.0 and 4.1 shall be made
to the Administrator within thirty (30) days of such accrual.
The Administrator shall distribute to McGill within two (2)
business days any share of payments due to McGill.
(b) The milestone payments under Section 4.1 shall be payable by
Licensee only one time, regardless of the number of Licensed
Products developed or sold by Licensee or any Sublicensee.
(c) In the event that Licensee does not make the payments to the
Licensor in accordance with Sections 4.1 (a), (b) and (c)
within five (5) years from the date of this Agreement, the
Licensor shall thereafter have the right to terminate this
Agreement in accordance with Section 7.1 below (including the
notice and right to cure by Licensee), unless Licensee makes
a payment to the Licensor of [***] United States dollars, less
any amounts paid by Licensee under such Sections, within 60
days after receiving written notice of such election. If such
payment is made, the remaining payments under Sections 4.1
(a), (b) and (c) shall be waived.
Section 4.4. Royalties. Subject to the terms and conditions of this
Agreement, Licensee shall:
Pay royalties to Licensor on Licensed Products equal to [***] of Net
Sales during the term of this Agreement. EVMS and McGill shall each
independently have the option to exchange with GMP their proportionate
interest in such royalty stream for shares of Licensee common stock
representing, in the aggregate, [***] shares of Common Stock of the
Licensee (the "Total Option Shares") (which is in addition to the [***]
of the Common Stock of the Licensee issued to the Licensor this even
date provided that the Licensors exercise this option to exchange by
the earlier of [***] years from the date of this Agreement or 30 days
after receiving written notice from Licensee to the Administrator that
the Licensee has entered into a Letter of Intent with an underwriter
for an initial public offering of Licensee securities or such other
periods as the parties may agree, in writing. In the event that one of
the Licensors, but not both, elect shares in lieu of royalties
pursuant to this Section (the "Electing Licensor"), that Licensor
shall receive its pro-rata share of the Total Option Shares based upon
the ratio that the royalty rate percentage of Net Sales to which that
Licensor is entitled bears to the total [***] Royalty Rate (the
"Electing Licensor Percentage"). If after such exchange there remains
a Licensor that has not exercised this exchange right, the royalty
rate due from Licensee on
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*** CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Net Sales and Sublicense Fees shall be reduced by the Electing
Licensor Percentage; which remaining sums shall be paid to the non
Electing Licensor through the Administrator. For example, if one
Licensor was entitled to 40% of the royalty fees (i.e [***] of Net
Sales and [***] of Sublicense Fees) and elected to exchange that
interest for shares of Common Stock, that Electing Licensor would
receive 40% of the [***] shares and the royalty rate on the Net Sales
and Sublicensing Fees would be reduced by 40% which would result in an
on- going royalty on Net Sales of [***] and on Sublicense Fees, [***].
Any such election shall be made by the respective Licensor acting
through the Administrator who shall notify Licensee of such election
and provide Licensee with the name of the Electing Licensor and the
Electing Licensor Percentage. Any shares of Common Stock issued under
this Section shall have the same restrictions and limitations imposed
on the securities of Licensee issued to each Licensor this even date
and the Electing Licensor agrees to execute such documents as are
necessary to evidence such fact.
(b) Pay Licensor [***] of all Sublicense Fees for so long as
Licensee is obligated to pay Licensor any ongoing royalty fees as
described above in Section 4.4 (a), but subject to adjustment as
provided in that Section if only one Licensor exercises the exchange
for stock option.
Section 4.5. Term of Royalty Payment. Royalties paid by Licensee
pursuant to Section 4.4 shall be payable on a country-by-country basis from the
date of the first commercial sale of each Licensed Product in a particular
country until expiration of the last to expire Licensed Patent Right in such
country with respect to which a Valid Claim covers such Licensed Product.
Section 4.6. Single Royalty. Royalties under Section 4.4 will be
payable only once on a Licensed Product regardless of the existence of more
than one Licensed Patent Right applicable to such Licensed Product.
Section 4.7. Stacking Provisions. Royalties payable under Section 4.4
shall be reduced by the amount of any royalty payments due by Licensee on the
Licensed Products with respect to other patent rights; provided, however, that
such payments shall not reduce the amount of the royalties due Licensor by more
than 50% of the royalty otherwise due to Licensor under Section 4.4, and
further provided such payments shall not reduce the percentage ownership of
stock that either McGill or EVMS owns or may elect to own under Section 4.4.
Section 4.8. Payments. Royalty payments hereunder shall be made to the
Administrator quarterly within sixty (60) days following the end of each
calendar quarter for which royalties are due and shall be made in United States
dollars. Each royalty payment shall be accompanied by a statement stating the
Net Sales of Licensed Product and Sublicense Fees during the relevant three (3)
month period. Licensee's then current standard exchange rate methodology will
be employed for the translation of foreign currency sales into United States
dollars. This methodology is used by Licensee in the translation of its foreign
currency operating results for external reporting, is consistent with generally
accepted accounting principles, and is audited by Licensee's independent
certified public accountants in connection with the audit of the consolidated
financial statement of Licensee.
Section 4.9. Records. Licensee shall keep and maintain records of
sales of Licensed Product. Such records shall be open to inspection not more
than once per year upon at least ten (10) days written notice to Licensee at
any reasonable time within one (1) year after the royalty
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*** CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
period to which such records relate, by an independent certified public
accountant that is acceptable to both parties and such inspection shall be at
Licensor's expense. The independent certified public accountant shall have the
right to examine the records kept pursuant to this Section 4.9 and report to
the Licensor the findings of said examination of records insofar as necessary
to verify the statements made pursuant to Section 4.8. Said findings shall be
considered Confidential Information of Licensee.
Section 4.10. Taxes. Any and all taxes levied on royalties accruing
under this Article shall be paid by Licensor. If laws or regulations require
withholding of said taxes, such taxes will be deducted by Licensee from such
remittable royalty and will be paid by Licensee to the proper taxing authority,
and proof of payment shall be sent to Licensor annually within ninety (90) days
following December 31st of each reporting year.
Section 4.11. Foreign Sales. The remittance of royalties payable on
sales outside the United States shall be payable to Licensor in United States
Dollar equivalents in accordance with the rate of exchange provided in Section
4.8 hereof for the last business day of the calendar quarter in which the
royalties are payable. If the transfer of or the conversion into the United
States Dollar equivalents of any such remittance in any such instance is not
lawful or possible, the payment of such part of the royalties as is necessary
shall be made by the deposit thereof, in the currency of the county where the
sale was made on which the royalty was based to the credit and account of
Licensor or its nominee in any commercial bank or trust company of Licensor's
choice located in that country, prompt written notice of which shall be given
by Licensee to Licensor.
Section 4.12. Other Financial Commitments. The Licensee and EVMS have
this date entered into a Research Funding Agreement pursuant to which Licensee
agrees to provide sponsored research and development activities with EVMS
related to the Licensed Products in the annual amount of [***], for [***]
years, for a total of [***] USD. The failure of Licensee to fund such
research shall constitute a material breach of this Agreement, subject to the
provision of Section 7.1 below.
Article V
Intellectual Property Matters
Section 5.0. Patent Prosecution. The Licensee, at its own expense,
shall be responsible for filing, prosecuting and maintaining all patents and
patent applications specified under Licensed Patent Rights, and the Licensee
shall be licensed there under as provided herein. Title to all such patents and
patent applications shall reside in EVMS or McGill, jointly or solely based on
ownership.. Licensor owned patents and patent applications which are filed,
prosecuted or maintained by other than Licensor retained counsel shall be
filed, prosecuted and maintained in the best interest of Licensor. Such counsel
shall acknowledge that they represent Licensor. The Administrator shall be
copied directly on all patent correspondence, provided copies of all
correspondence received from any patent office and provided drafts of any
papers or applications to be filed at least two weeks prior to patent office
submission for Licensor comment. Based on ownership of the application or
patent, EVMS and/or McGill comments shall be considered and reasonably
incorporated. The Licensor having ownership of the application or patent shall,
at its own expense, reasonably cooperate with patent counsel by providing
reasonable consultations in
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connection with such matters. Such patent counsel shall not file any
applications which incorporate new matter or new applications in which
inventorship has been changed from that of the originally filed patents within
Licensed Patent Right without written permission of the Administrator. Should
applications not be prosecuted in Licensor's best interest, as reasonably
determined by the Administrator, the Administrator may revoke the power of
attorney granted to the non-Licensor retained counsel. In any country where
the Licensee elects not to have a patent application filed or to pay expenses
associated with filing, prosecuting, or maintaining a patent application or
patent, EVMS and or McGill, based on ownership of the invention, may file,
prosecute, and/or maintain a patent application or patent at its own expense
and for its own exclusive benefit and the Licensee thereafter shall not be
licensed under such patent or patent application in that country.
Section 5.1. Third Party Infringement. In the event Licensee shall
have received actual notice of a substantial infringement of a Licensed Patent
Right, Licensee shall have the first right, within six months of receiving
notice, to either (i) initiate the appropriate steps to stop the infringement,
(ii) file suit against the infringer, or (iii) provide Licensor with reasonable
evidence showing that the infringer intends to enter into a settlement
agreement in which future infringement will be halted. Any recoveries from such
infringement actions will first be applied to reimbursement of the reasonable
expenses incurred by the Licensee in the prosecution of the case and the
remainder shall be treated as Sublicense Fees. Should Licensee decide not to
enforce the Licensed Patent Rights against such infringement, Licensor shall
have the right, at its own expense and for its own benefit, to bring any action
it deems necessary to stop the infringement and recover for its own benefit
damages, profits, and awards which might be obtained. In any infringement
action instituted by either party under this Section, the other party agrees to
cooperate, to the extent reasonably required in such action and shall be
entitled to reimbursement of reasonable third party costs incurred by it and
and other direct costs incurred in connection with such activities which
require substantial efforts. No settlement or consent judgment or other
voluntary final disposition of a suit under this Section 5.1 may be entered
into without the joint consent of Licensor and Licensee (which consent shall
not be withheld unreasonably).
Section 5.2. Patent Term Extensions. The parties shall cooperate with
each other in gaining patent term extensions wherever applicable to Licensed
Patent Rights covering a Licensed Product. Licensee shall determine which
patents shall be extended. All filings for such extension shall be made by
Licensor after consultation with Licensee, provided, however, that in the event
that Licensor elects not to file for an extension, Licensor shall (i) inform
Licensee of its intention not to file and (ii) grant Licensee the right to file
for such extension.
Article VI
Confidentiality
Section 6.0. Licensee Obligations. Licensee agrees to maintain in
strict confidence all Confidential Information pertaining to this Agreement
received from Licensor to the same extent and in the same manner Licensee
maintains its own confidential information and not to use Confidential
Information received from Licensor during the term of the Agreement, except as
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otherwise provided for in this Agreement. The obligations of confidentiality
and non-use shall expire five (5) years from the date of disclosure of the
Confidential Information.
Section 6.1. Licensor Obligations. Licensor agrees to maintain in
strict confidence all Confidential Information pertaining to this Agreement
received from Licensee to the same extent and in the same manner Licensor
maintains its own confidential information and not to use Confidential
Information received from Licensee during the term of the Agreement, except as
otherwise provided for in this Agreement. The obligations of confidentiality
and non-use shall expire five (5) years from the date of disclosure of the
Confidential Information.
Section 6.2. Exceptions. Non-disclosure and non-use obligations of
Licensee and the Licensor shall not apply to Confidential Information that:
a) was known to the receiving party or to the public prior to
the disclosure by the disclosing party; or
b) becomes known to the public from a source other than the
receiving party; or
c) is disclosed to the receiving party by a third party having a
legal right to make the disclosure;
d) is required by law to be disclosed; or
e) is independently developed by the recipient.
Section 6.3. Publications. Licensor agrees to provide Licensee with
written notice of any press releases or other publication or dissemination of
information by Licensor or either of them that makes reference to this
Agreement, the relationship to Licensee or the Licensed Patent Rights, which
notice shall be given to Licensee as soon as reasonably possible, it being the
desire of the Licensee to be able to knowledgeably respond to inquires
resulting from the Licensor's disclosures.
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Article VII
Term and Termination
Section 7.0. Agreement Term. This Agreement shall become effective on
the date of this Agreement and shall terminate on the later of (a) the last to
expire of the Licensed Patent Rights, or (b) the expiration of all royalty
obligations pursuant to Article IV unless terminated earlier pursuant to this
Agreement.
Section 7.1. Early Termination. If any party is in default of any of
its material obligations under this Agreement and fails to remedy that default
within ninety (90) days after the other party sends written notice of the
default, the party not in default may terminate this Agreement immediately by
giving written notice of the termination. The termination date shall be the
date of the notice of termination. If either or both Licensor has defaulted,
the licenses granted hereunder shall survive. If Licensee has defaulted, the
licenses granted hereunder shall terminate upon termination for default.
Licensee may terminate this Agreement on the fifth anniversary date of
the date of this Agreement by giving written notice of such election to the
Licensor at least sixty (60) days before such date.
Section 7.2. Effect of Termination. Termination of this Agreement
shall not affect the rights and obligations of the parties accrued under this
Agreement prior to termination. In particular, the following survive expiration
or termination of this Agreement:
(a) Obligations to pay all License Fees in Section 4.0, and
royalties, milestone payments and other sums accruing
hereunder up to the date of termination;
(b) The right to complete the manufacture and sale of Licensed
Products, which qualify as "work in process" under generally
accepted cost accounting standards or which are in stock at
the date of termination, and the obligation to pay royalties
on Net Sales or Sublicense Fees of such Products;
(c) The obligations of confidentiality set forth in Article VI
for the period stated therein;
(d) The obligations for record keeping and accounting reports for
so long as Licensed Products are sold. At such time after
termination of this Agreement when sales or other
dispositions of Licensed Products have ceased, Licensee shall
render a final report along with any royalty payment due;
(e) Licensors' right to inspect books and records as described in
Article IV;
(f) Licensor's ownership of stock in Licensee.
7.3 Section 7.3. Sublicensees. In the event this Agreement is terminated
as a result of a breach by Licensee hereunder, any Sublicense
Agreement shall continue in force if such Sublicensee agrees to make
all future payments to the Administrator and cures all monetary
defaults of the Licensee hereunder.
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7.4 Section 7.4. Estoppel Certificates. The Administrator, acting on
behalf of the Licensor, shall, from time to time, upon written request
of Licensee, any of its Affiliates or sublicensees or potential
sublicensees, issue an estoppel certificate to the requesting entity
setting forth the status of this Agreement, and, if in default,
stipulating the actions necessary to cure such default.
7.5 Section 7.5. Data. Upon termination of this Agreement, Licensee shall
provide the Administrator all data developed by Licensee related to
the Compound or Licensed Product, including all data necessary or
helpful to obtain or maintain required government approvals to
commercialize the Compound or Licensed Product.
ARTICLE VIII
COMPLIANCE WITH EXPORT LAWS
Section 8.0. Authority. This Agreement is subject to any restrictions
concerning the export of products or technical information from the United
States, which may be imposed upon Licensor or Licensee from time to time by the
government of the United States. Furthermore, all parties hereto agree that
they will not export, directly or indirectly, any technical information
acquired from another under this Agreement or any products using such technical
information to any country for which the United States government or any agency
thereof at the time of export requires an export license or other governmental
approval, without first obtaining the written consent to do so from the
Department of Commerce or other agency of the United States government when
required by an applicable statute or regulation. Licensor make no
representation that an export license or other approval for the export of
Licensed Products is available.
<PAGE> 14
Article IX
Indemnification
Licensee shall indemnify, defend and hold Licensor harmless from and
against any losses, claims, liabilities, costs, and expenses (including
reasonable attorneys' fees) that may be imposed upon or asserted against
Licensor as a result of the manufacture, use, or sale of any Licensed Product,
or the use of any Licensed Technology, by Licensee, its authorized agents or
sublicensees, except for those arising from intentional torts or negligence on
the part of Licensor. Either Licensor seeking such indemnification agrees to
give Licensee written notice of any such matters promptly after learning of
such claims or the possible assertions of the same and will cooperate in the
defense of such matters; which defense will be provided and paid for by
Licensee. At such time as the Licensee begins to sell or distribute Licensed
Products for commercial use it shall procure and maintain Products Liability
insurance in coverage amounts of not less than $5,000,000 and naming the
Licensors as additional insureds.
Article X
Miscellaneous Provisions
Section 10.0. Disclosure Rights. Subject to applicable laws and
regulations, and anything to the contrary contained in this Agreement
notwithstanding, Licensee shall have the right to publish and otherwise
disseminate information concerning this Agreement and the Licensed Technology
that Licensee determines is appropriate in order to comply with applicable
governmental orders or governing laws and regulations without prior approval by
Licensor. Licensor agrees to review and, if requested, consider an approval, in
writing of any materials presented by Licensee for dissemination, which
approval shall not be unreasonably withheld and shall be responded to within 5
business days of the written request.
Section 10.1. Representations and Warranties. Each Licensor represents
and warrants to Licensee that; (i ) as of the date of this Agreement such
Licensor does not have any inventions or discoveries, including pending patent
application or issued patents, relating to INGAP proteins or their use in
therapeutic, diagnostic or pharmaceutical applications that are not listed on
Appendix A; (ii) it and the other Licensor are the sole and/or joint and
exclusive owners of the respective Licensed Patent Rights listed on Appendix A
and that the interests therein conveyed under this Agreement are free and clear
of any liens, claims, options, licenses or other encumbrances of any nature
except those granted to Licensee hereunder; (iii)it has the requisite power and
authority to convey the interests in the Licensed Technology as provided in
this Agreement; (iv) the entering into and performance under this Agreement by
such Licensor will not create a default under or breach of any agreements with
third parties; (v) in reliance upon the opinion of Foley and Lardner, Eli Lilly
has no rights, options or other interest in, or claim to, any of the Licensed
Patent Rights: and (vi) without having conducted any investigation into the
matter, such Licensor is not aware of any facts that could give rise to any
claim that any of the Licensed Patent Rights infringes upon any third party's
intellectual property or aware of any infringement by any
<PAGE> 15
third party upon any of the License Patent Rights. EXCEPT AS PROVIDED ABOVE,
LICENSOR MAKE NO WARRANTIES CONCERNING ANY LICENSED TECHNOLOGY, OR LICENSED
PATENT RIGHTS THAT MAY BE SUBJECT TO THIS AGREEMENT. WITHOUT LIMITING THE
FOREGOING, LICENSOR DO NOT REPRESENT OR WARRANT SUCCESSFUL COMMERCIALIZATION OF
LICENSED PRODUCTS OR THE SAFETY OR EFFICACY OF LICENSED PRODUCTS. LICENSOR MAKE
NO EXPRESS OR IMPLIED WARRANTY, INCLUDING BUT NOT LIMITED TO ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AS TO ANY LICENSED
PRODUCT, LICENSED PATENT OR LICENSED TECHNOLOGY. LICENSOR MAKE NO WARRANTY OR
REPRESENTATION AS TO THE VALIDITY OR SCOPE OF ANY LICENSED PATENT RIGHTS OR
THAT ANY LICENSED PRODUCT WILL BE FREE FROM ANY INFRINGEMENT OF PATENTS OF
THIRD PARTIES, OR THAT NO THIRD PARTIES ARE IN ANY WAY INFRINGING LICENSED
PATENT RIGHTS.
Section 10.2. Use of Name. In any publications or publicity concerning
the Licensed Technology, Licensee will collaborate and consult with each
Licensor to ensure that each Licensor is provided appropriate recognition for
its contributions to the Licensed Technology. However, except as otherwise
permitted under this Agreement, the use of the name of either Licensor or any
variation thereof in connection with the advertising or sale of Licensed
Products is expressly prohibited without advance consent in writing from each
Licensor. Procedurally, the above policies shall be implemented by the
Licensee sending, in writing, to each Licensor of the proposed language. Each
Licensor agrees to promptly review and respond to the proposal from Licensee.
If no written response is received from a Licensor within 10 days following the
sending of such notice by Licensee, such Licensor shall be deemed to have
consented, in writing, to the proposed language.
Section 10.3. No Agency. It is understood and agreed that nothing in
this Agreement shall be construed as authorization for Licensee, McGill, or
EVMS to act as agent for any other party to this Agreement. Licensee shall not
incur any liability for any act or failure to act by employees of EVMS or
McGill. EVMS or McGill shall not incur any liability for any act or failure to
act by employees of Licensee.
Section 10.4. Dispute Resolution. Any dispute, controversy or claim
arising out of or relating to this Agreement shall be settled by arbitration
under the rules of the American Arbitration Association. All awards of the
arbitrators shall be final and binding on the parties and enforceable in any
court of competent jurisdiction. Nothing herein shall prevent a party from
seeking injunctive relief, where appropriate, from a court of competent
jurisdiction pending the outcome of any arbitration concerning the subject of
such arbitration or when authorized by an arbitrator's award or when emergency
relief is required.
Section 10.5 Force Majeure. All parties to the Agreement shall be
excused from the performance of their obligations under this Agreement if such
performance is prevented by Force Majeure and the non-performing party promptly
provides notice of the prevention to the other parties. Such excuse shall be
continued so long as the condition constituting Force Majeure continues and the
non-performing party takes reasonable efforts to remove the condition.
<PAGE> 16
For purposes of this Agreement, Force Majeure shall include conditions
beyond the control of the parties, including without limitation, an act of God,
voluntary or involuntary compliance with any regulation, law, or order of any
government, war, civil commotion, epidemic, failure or default of public
utilities or common carriers, destruction of production facilities or materials
by fire, earthquake, storm, or like catastrophe.
Section 10.6. Amendment. This Agreement may not be amended,
supplemented, or otherwise modified except by an instrument in writing signed
by all parties.
Section 10.7. Notices. Any notice required or permitted to be given
under this Agreement shall be in writing and shall be deemed to have been
sufficiently given for all purposes if mailed by first class certified or
registered mail, postage prepaid. Unless otherwise specified in writing, the
mailing addresses of the parties shall be as described below:
For Licensor: Office of the Vice President
Eastern Virginia Medical School
358 Mowbray Arch, Suite 401
Norfolk, Virginia 23507
Attention: Mr. David Thiel
Office of Technology Transfer
McGill University
3550 University Street
Montreal, Quebec, Canada, H3A 2A7
Attention: Dr. A. Navarre, Director For McGill:
For Licensee GMP ENDOTHERAPEUTICS, INC.
One East Broward Blvd.
Suite 1701
Fort Lauderdale, Florida 33301
Attention: Dr. Bart Chernow
Copy to: Ms. Beth Arnold
Foley, Hoag & Eliot LLP
One Post Office Square
Boston, Massachusetts 02109
<PAGE> 17
Section 10.8. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Virginia, excluding any
choice of law rules which may direct the application of the law of any other
jurisdiction. Questions affecting the construction and affect of any Patent
Rights shall be determined by the laws of the country in which the Patent Right
has been applied for and granted.
Section 10.9. Assignment. The parties may not assign their rights and
obligations under this Agreement without the prior written consent of the
others, except Licensee may make such an assignment without the consent of
Licensor in connection with any merger, reorganization, or sale of all or
substantially all of its assets to which this Agreement relates. This Agreement
shall be binding upon and shall inure to the benefit of the successors and
permitted assigns of the parties.
Section 10.10. Consents Not Unreasonably Withheld. Whenever provision
is made in this Agreement for any party to secure the consent or approval of
another, that consent or approval shall not unreasonably be withheld, and
whenever in this Agreement provisions are made for one party to object to or
disapprove a matter, such objection or disapproval shall not unreasonably be
exercised.
Section 10.11. No Strict Construction. This Agreement has been
prepared jointly and shall not be strictly construed against any party.
Section 10.12. Headings. The captions or headings of the Sections or
other subdivisions hereof are inserted only as a matter of convenience or for
reference and shall have no effect on the meaning of the provisions hereof.
Section 10.13. Severance of Clauses. All parties agree that, should
any provision of this Agreement be determined by a court of competent
jurisdiction to violate or contravene any applicable law or policy, such
provision will be severed or modified by the court to the extent necessary to
comply with the applicable law or policy, and such modified provision and the
remainder of the provisions hereof will continue in full force and effect.
Section 10.14. No Waiver. The waiver of a breach hereunder may be
effected only by a writing signed by the waiving party and shall not constitute
a waiver of any other breach.
Section 10.15. Entire Agreement. This Agreement and the attachments
hereto and other agreements executed by the parties or affiliates entities this
even date constitute the entire agreement of the parties relating to the
subject matter and supercede any prior agreements relating to the subject
matter hereof.
Section 10.16. Counterparts. This Agreement has been executed in three
(3) counterparts, all of which shall constitute an original, but which together
shall constitute the same instrument.
Section 10.17. Surviving Rights. Termination, expiration, or
cancellation of this Agreement by any party shall not relieve the parties of
any rights or obligations accrued hereunder prior to such termination,
expiration, or cancellation.
<PAGE> 18
IN WITNESS WHEREOF, the parties by their respective authorized
officers, have executed this Agreement.
MEDICAL COLLEGE OF HAMPTON ROADS
d/b/a EASTERN VIRGINIA MEDICAL SCHOOLGMP ENDOTHERAPEUTICS, INC.
By: By:
------------------------------- -------------------------------
David L. Thiel, Vice President Bart Chernow, M.D., President
for Administration and Finance
McGILL UNIVERSITY
By:
-------------------------------
Dr. Pierre E'langer
Vice Principal for Research
Dean of Graduate Studies
Appendix A - Schedule of Patents
<PAGE> 19
APPENDIX A
TITLE: INGAP PROTEIN INVOLVED IN PANCREATIC ISLET NEOGENESIS
Inventors: Aaron I. Vinik, Gary L. Pittenger, Ronit Rafaeloff, Lawrence
Rosenberg and William P. Duguid
<TABLE>
<S> <C> <C> <C>
---------------- ---------------------------- ---------------------- --------------------------------------------
Country Patent/ Filing Date Assignee(s)
Application No.
---------------- ---------------------------- ---------------------- --------------------------------------------
U.S. 5,834,590 2/22/95 EVMS & McGill University
---------------- ---------------------------- ---------------------- --------------------------------------------
U.S. 5,840,531 9/9/96 EVMS & McGill University
---------------- ---------------------------- ---------------------- --------------------------------------------
PCT PCT/US96/01528 2/12/96 EVMS & McGill University
---------------- ---------------------------- ---------------------- --------------------------------------------
Australia 49149/96 2/12/96 EVMS & McGill University
---------------- ---------------------------- ---------------------- --------------------------------------------
Canada 2,213,610 2/12/96 EVMS & McGill University
---------------- ---------------------------- ---------------------- --------------------------------------------
EPO 969053685 2/12/96 EVMS & McGill University
---------------- ---------------------------- ---------------------- --------------------------------------------
Japan 525702/96 2/12/96 EVMS & McGill University
---------------- ---------------------------- ---------------------- --------------------------------------------
Mexico 976418 2/12/96 EVMS & McGill University
---------------- ---------------------------- ---------------------- --------------------------------------------
</TABLE>
TITLE: HIGH LEVEL OF EXPRESSION OF INGAP
Inventors: Aaron I. Vinik, Gary L. Pittenger, Ronit Rafaeloff and
Scott W. Barlow
<TABLE>
<S> <C> <C> <C>
----------------- --------------------------- ---------------------- --------------------------------------------
Country Patent/ Filing Date Assignee(s)
Application No.
----------------- --------------------------- ---------------------- --------------------------------------------
U.S. 5,804,421 8/12/97 EVMS
----------------- --------------------------- ---------------------- --------------------------------------------
PCT PCT/US97/19415 10/30/97 N/A
----------------- --------------------------- ---------------------- --------------------------------------------
Australia 50007/97 2/12/96 EVMS
----------------- --------------------------- ---------------------- --------------------------------------------
Canada 2280412 2/12/96 EVMS
----------------- --------------------------- ---------------------- --------------------------------------------
EPO 97912942.6 2/12/96 EVMS
----------------- --------------------------- ---------------------- --------------------------------------------
Japan 520665/98 2/12/96 EVMS
----------------- --------------------------- ---------------------- --------------------------------------------
Mexico 9904079 2/12/96 EVMS
----------------- --------------------------- ---------------------- --------------------------------------------
</TABLE>
